HomeMy WebLinkAbout2003 [07] Jul 31 {Book 28}
· . www.Cityofstjoseph.eom ity of St. Joseph
51. Joseph City Council
July 31, 2003
25 College Avenue North 7:00PM
PO Box 668
St. Joseph, MN 56374 1. Call to Order
(320) 363-7201
Fax: (320) 363-0342 2. Public Bond Sale - Northland Securities
ADMINISTRATOR 3. Maintenance Worker - Accept Recommendation of the Hiring Committee
Judy Weyrens 4. Adjourn
MAYOR
Larry J. Hosch
COUNCILORS
Alan Rassier
Ross Rieke
Gary Utsch
Dale Wick
·
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TABLE OF CONTENTS
. Page
Summary of Offering................................................................................................................................ 2
Principal City Officials............................................................................................................................. 3
Official Terms of Bond Sale ............................... ............................................ .... ............... ...... ... .... ......... 4-8
Description of Bonds................................................................................................................................... 9 -10
Authority and Purpose............................ .................................................................................................. 9
Security and Estimated Source and Uses of Funds .................................................................................. 9
Official Statement...................................... .................. ........................ ........................ ............................. 9
Future Financing.................................................. ............................ ......................................................... 12
Bond Rating......................................................................................................... ..................................... 12
Litigation.................................................................................... .............................................................. 12
Certification............................................................................................................................................. . 12
Legality............................................................................................................................................ ......... 12
. Financial Advisor ..................................................................................................................................... 12
Continuing Disclosure Undertaking......................................................................................................... 13
Tax Exemption......................................................................................................................................... 14
City of St. Joseph (General Information) ................................................................................................. 15 - 20
Minnesota Valuations; Property Tax Classifications .......... ................................ .................... ........... ...... 21 - 23
City of St. Joseph (Economic and Financial Information) ....................................................................... . 24 - 32
Summary of Debt and Debt Statistics. ..................... ..... .......... ........... .............. ....... ......... .............. .......... 33
Proposal Form .......................................................................................................................................... 34
Appendix A - Proposed Form of Legal Opinion
Appendix B - Form of Continuing Disclosure Undertaking
Appendix C - City's Financial Statements
.
SUMMARY OF OFFERING
$2,135,000
GENERAL OBLIGATION BONDS OF 2003 ·
(Book-Elltry Only)
AMOUNT- $2,135,000.
ISSUER - City of St Joseph, Minnesota (The "City").
SALE DATE - Thursday, July 31, 2003.
OPENING - 11:00 AM. Central Time, at Northland Securities, 45 South 7th Street, Suite 2500, Minneapolis, Minnesota 55402,
telephone: (612) 851-5900 or (800) 851-2920.
AWARD - 7:00 P.M., Central Time, at the St. Joseph City Hall, 25 College Avenue N, St. Joseph, Minnesota 56374-0668.
TYPE OF ISSUE - General Obligation Bonds of 2003 (the "Bonds"). See Authority and Purpose and Security and Estimated Source and
Uses of Funds herein for additional information.
AUTHORITY, PURPOSE
& SECURITY - The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429, 444 and 475, as amended. Proceeds will be
used to provide moneys, along with other available City funds, to finance various assessable improvements within the
City including but not limited to streets, sanitary sewer, water main & line extensions, storm sewer, sidewalks and curb
& gutter. Bonds are payable from a combination of special assessments against all benefited property (approximately
75.64%) and net revenues of the municipal storm sewer and water utility systems (approximately 24.36%). The full
faith and credit of the City is pledged to their payment and the City has validly obligated itself to levy ad valorem taxes
in the event of any deficiency in the Debt Service Account established for this issue. Taxes may be levied upon all of
the taxable property within the City and without limitation of amount. See Authority and Purpose as well as Security
and Estimated Source and Uses of Funds herein for additional information.
DATE OF ISSUE- August 1,2003.
INTEREST PAY ABLE DATES - June 1, 2004, and semiannually thereafter on December 1 and June 1 to registered owners of the Bonds appearing of
record in the bond register as of the close of business on the fifteenth (151~ day (whether or not a business day) of the
immediately preceding month.
DENOMINATIONS - $ 5 ,000. ·
MATURITIES -
12/01104 $685,000 12/01/07 $ 400 ,000
12/01105 240,000 12/01/08 415,000
12/01/06 395,000
REDEMPTION FEATURE- Bonds shall not be subject to prior redemption.
BOOK-ENTRY SYSTEM - Bonds will be issued as fully registeted and, when issued, will be registered in the name of Cede & Co., as nominee of
the Depository Trust Company, New York, New York, to which principal and interest payments will be made.
Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any whole multiple
thereof. Purchasers will not receive physical delivery of bonds.
REGISTRAR/PAYING AGENT - U.S. Bank National Association, St. Paul, Minnesota.
METHOD OF SALE - Sealed proposals only, accompanied by a good faith deposit in the amount of $42,700 at a price of not less than
$2,108,313 and aeçrued interest. See Official Terms of Bond Sale herein for additional information.
TAX DESIGNATIONS- NOT Private Activity Bonds - Bonds are not "private activity bonds" as defined in Section 141 of the Internal Revenue
Code of 1986, as amended (the Code).
Qualified Tax-Exempt Obligations - The City will designate the Bonds "qualified tax-exempt obligations" for purposes
of Section 265(b )(3) of the Code.
LEGAL OPINION - Briggs and Morgan, Professional Association, St. Paul and Minneapolis, Minnesota (the "Bond Counsel").
RATING/INSURANCE - The City currently has a general obligation bond rating of Baa2 assigned by Moody's Investors Service. The City will
ªIm.!x for a rating and bond insurance at Purchaser's Option on this issue.
CLOSING DATE- Estimate~ to be August 21, 2003.
PRIMARY CONTACf- Judy We)'Tens, Administrator-Clerk, City of St. Joseph, (320) 363-7201.
Monte Eastvold, Vice President, Northland Securities, (612) 851-5900 or (800) 851-2920. ·
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CITY OF ST. JOSEPH
. PRINCIPAL CITY OFFICIALS
Elected Officials
City Council
Name Position Term Expires
Larry Hosch Mayor 01/01/05
Alan Rassier Council Member 01/01/05
Ross Rieke Council Member 01/01/07
Gary Utsch Council Member 01/01/05
Dale Wick Council Member 01/01/07
Appointed Officials
. JudyWeyrens Administrator-Clerk
Tom Jovanovich - Rajkowski Hansmeier Ltd. Consulting Attorney
Short Elliot Hendrickson & Associates -
Joe Bettendorf Engineer
Bond Counsel
Briggs and Morgan, Professional Association
S1. Paul and Minneapolis, Minnesota
Financial Consultant
Northland Securities, Inc.
Minneapolis, Minnesota
.
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OFFICIAL TERMS OF BOND SALE .
$2,135,000 GENERAL OBLIGATION BONDS OF 2003
CITY OF ST. JOSEPH, STEARNS COUNTY, MINNESOTA
(Book Entry Only)
NOTICE IS HEREBY GIVEN that these bonds will be offered for sale according to the
following terms:
TIME AND PLACE: Sealed proposals will be opened by the City Administrator,
or designee, on Thursday, July 31, 2003, at 11:00 A.M.,
Central Time, at the offices of Northland Securities, Inc.
("Northland"), 45 South Seventh Street, Suite 2500,
Minneapolis, Minnesota 55402. Consideration of the
proposals for award of the sale will be by the City Council
at its meeting in the S1. Joseph City Hall beginning at 7:00
P.M., on the same day.
SUBMISSION OF PROPOSALS: Sealed proposals may be:
a) submitted to the office of Northland;
b) faxed to Northland at (612) 851-5917,
c) for proposals submitted prior to the sale, the final price
and interest rates may be submitted to Northland by .
telephone at (612) 851-5900; or
d) proposals may be submitted electronically.
Notice is hereby given that electronic proposals will be
receiVed via PARITY, in the manner described below, until
11:00 A.M., Central Time on July 31, 2003. Proposals may
be submitted electronically via PARITY pursuant to this
Official Terms of Bond Sale until 11:00 A.M., Central
Time, but no proposal will be received after the time for
receiving proposals specified above. To the extent any
instructions or directions set forth in PARITY conflict with
this Official Terms of Bond Sale, the terms of this Official
Terms of Bond Sale shall control. For further information
about PARITY, potential bidders may contact Northland or
Dalcomp at 40 West 23rd Street, 5th floor, New York, NY
10010, telephone (212) 404-8102.
Neither the Issuer or Northland assume any liability if there
is a malfunction of PARITY. All bidders are advised that
each proposal shall be deemed to constitute a contract
between the bidder and the Issuer to purchase the bonds
regardless of the manner of the proposal submitted.
BOOK ENTRY SYSTEM: The bonds will be issued by means of a book entry system .
with no physical distribution of bond certificates made to
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· the public. The bonds will be issued in fully registered
form and one bond certificate, representing the aggregate
principal amount of the bonds maturing in each year, will
be registered in the name of Cede & Co. as nominee of
Depository Trust Company ("DTC"), New York, New
York, which will act as securities depository of the bonds.
Individual purchases of the bonds may be made in the
principal amount of $5,000 or any multiple thereof of a
single maturity through book entries made on the books and
records of DTC and its participants. Principal and interest
are payable by the Issuer through U.S. Bank National
Association, in St. Paul, Minnesota (the "Registrar") to
DTC or its nominee as registered owner of the bonds.
Transfer of principal and interest payments to participants
of DTC will be the responsibility of DTC; transfer of
principal and interest payments to beneficial owners by
participants will be the responsibility of such participants
and other nominees of beneficial owners. The successful
purchaser, as a condition of delivery of the bonds, will be
required to deposit the bond certificates with DTC. The
Issuer will pay reasonable and customary charges for the
services of the Registrar.
· DATE OF ORIGINAL
ISSUE OF BONDS: August 1, 2003.
PURPOSE: For the purpose of providing money to finance various
streets, sidewalks, curb, gutter, sewer and water
improvements for a residential improvement.
INTEREST PAYMENTS: June 1, 2004, and semiannually thereafter on December 1
and June 1 to registered owners of the bonds appearing of
record in the bond register as of the close of business on the
fifteenth day (whether or not a business day) of the
immediately preceding month.
MATURITIES: December 1 in each of the years and amounts as follows:
Year Amount Year Amount
2004 $685,000 2007 $400,000
2005 240,000 2008 415,000
2006 395,000
All dates are inclusive.
·
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Proposals for the bonds may contain a maturity schedule .
providing for any combination of serial bonds and te~
bonds, subject to mandatory redemption, so long as the
amount of principal maturing or subject to mandatory
redemption in each year conforms to the maturity schedule
set forth above.
NO REDEMPTION: The bonds are not subject to redemption and prepayment
prior to their stated maturity dates.
CUSIP NUMBERS: If the bonds qualify for assignment of CUSIP numbers such
numbers will be printed on the bonds, but neither the failure
to print such numbers on any bond nor any error with
respect thereto shall constitute cause for a failure or refusal
by the purchaser thereof to accept delivery of and pay for
the bonds in accordance with terms of the purchase
contract. The CUSIP Service Bureau charge for the
assignment of CUSIP identification numbers shall be paid
by the purchaser.
DEliVERY: Forty days after award subject to approving legal opinion of
Briggs and Morgan, Professional Association, of S1. Paul
and Minneapolis, Minnesota. Legal opinion will be paid by .
the Issuer and delivery will be anywhere in the continental
United States without cost to the purchaser at DTC.
TYPE OF PROPOSAL: Sealed proposals of not less than $2,108,313 and accrued
interest on the principal sum of $2,135,000 from date of
original issue of the bonds to date of delivery must be filed
with the undersigned prior to the time of sale. Proposals
must be unconditional except as to legality. A certified or
cashier's check (the "Deposit") in the amount of $42,700
payable to the order of the Administrator of the Issuer, or a
Financial Surety Bond complying with the provisions
below, must accompany each proposal, to be forfeited as
liquidated damages if the purchaser fails to comply with
accepted proposal. Proposals for the bonds should be
delivered to Northland and addressed to:
Judy Weyrens
Administrator
S1. Joseph City Hall
25 College Avenue North
S1. Joseph, Minnesota 56374-0668
If a Financial Surety Bond is used, it must be from an e
insurance company licensed to issue such a bond in the
State of Minnesota, and pre approved by the Issuer. Such
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· bond must be submitted to Northland, prior to the opening
of the proposals. The Financial Surety Bond must identify
each bidder whose Deposit is guaranteed by such Financial
Surety Bond. If the bonds are awarded to the bidder using a
Financial Surety Bond, then that purchaser is required to
submit its Deposit to Northland in the form of a certified or
cashier's check or wire transfer as instructed by Northland
not later than 3:30 P.M., Central Time, on the next business
day following the award. If such Deposit is not received by
that time, the Financial Surety Bond may be drawn by the
Issuer to satisfy the Deposit requirement. The Issuer will
deposit the check of the successful purchaser, the amount of
which will be deducted at settlement and no interest will
accrue to the successful purchaser. In the event the
successful purchaser fails to comply with the accepted
proposal, said amount will be retained by the Issuer. No
proposal can be withdrawn after the time set for receiving
proposals unless the meeting of the Issuer scheduled for
award of the bonds is adjourned, recessed, or continued to
another date without award of the bonds having been made.
AWARD: The bonds will be awarded on the basis of the lowest
· interest rate to be determined on a true interest cost (TIC)
basis. The Issuer's computation of the interest rate of each
proposal, in accordance with customary practice, will be
controlling. In the event of a tie, the sale of the bonds will
be awarded by lot. The Issuer will reserve the right to: (i)
waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the
bonds, (ii) reject all proposals without cause, and, (iii)
reject any proposal which the Issuer determines to have
failed to comply with the terms herein.
RATES: All rates must be in integral multiples of 1/20th or 1/8th of
1%. No limitation is placed upon the number of rates
which may be used. All bonds of the same maturity must
bear a single uniform rate from date of issue to maturity.
INFORMATION FROM The successful purchaser will be required to provide, in a
PURCHASER: timely manner, certain information relating to the initial
offering price of the bonds necessary to compute the yield
on the bonds pursuant to the provisions of the Internal
Revenue Code of 1986, as amended.
CONTINUING DISCWSURE The Issuer will covenant in the resolution awarding the sale
· UNDERTAKING: of the bonds and in a Continuing Disclosure Undertaking to
provide, or cause to be provided, annual financial
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information, including audited financial statements of the .
Issuer, and notices of certain material events, as required by
SEC Rule 15c2-12.
OFFICIAL STATEMENT: The Official Statement, when further supplemented by an
addendum or addenda specifying the maturity dates,
principal amounts and interest rates of the bonds, together
with any other information required by law, shall constitute
a "Final Official Statement" of the Issuer with respect to the
bonds, as that term is defined in SEC Rule 15c2-12. By
awarding the bonds to any undetwriter or undetwriting
syndicate submitting a proposal therefor, the Issuer agrees
that, no more than seven business days after the date of
such award, it shall provide without cost to the senior
managing undetwriter of the syndicate to which the bonds
are awarded copies of the Official Statement and the
addendum or addenda.
QUALIFIED TAX-EXEMPT The Issuer will designate the bonds as qualified tax
OBUGATIONS: exempt obligations for purposes of Section 265(b )(3) of the
Internal Revenue Code of 1986, as amended.
The Issuer reserves the right to reject any and all proposals, to waive informalities and to adjourn .
the sale.
Dated: July 2, 2003. BY ORDER OF THE CITY COUNCIL
/s/ Judy Weyrens
City Administrator
Additional information may be obtained from:
Northland Securities, Inc.
45 South Seventh Street
Suite 2500
Minneapolis, Minnesota 55402
Telephone No.: 612- 851-5900
e
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DESCRIPTION OF BONDS
· Details of Certain Terms
The Bonds will be dated, as originally issued, as of August 1, 2003, and will be issued as fully registered bonds
in the denominations of $5,000 or any integral multiple thereof. Interest on the Bonds will be payable
semiannually on each June 1 and December 1, commencing June 1, 2004. The Bonds when issued, will be
registered in the name of Cede & Co. (the "Registered Holder"), as nominee of The Depository Trust Company,
New York, New York ("DTC"), the initial custodian for the Bonds, to which principal and interest payments on
the Bonds will be made so long as Cede & Co. is the Registered Holder of the Bonds. See "Book-Entry System"
in Description of Bonds herein for additional information. So long as the Book-Entry Only System is used,
individual purchases of the Bonds will be made in book-entry form only, in the principal amount of $5,000 or
any integral multiple thereof ("Authorized Denominations"). Individual purchasers ("Beneficial Owners") of
the Bonds will not receive physical delivery of bond certificates, and registration, exchange, transfer, tender and
redemption of the Prior Bonds with respect to Beneficial Owners shall be governed by the Book-Entry Only
System.
So long as the Book-Entry Only System is used, payments from Cede & Co., as the Record Holder, to the
Beneficial Owners shall be governed by the Book-Entry Only System. If the Book-Entry Only System is
discontinued, the principal of and premium, if any, on the Bonds will be payable upon presentation and
surrender at the Paying Agent and Bond Registrar or a duly appointed successor. Interest on the Bonds will be
paid by check or draft mailed by the Bond Registrar to the registered holders thereof as such appear on the
registration books maintained by the Bond Registrar as of the close of business on the fifteenth day (whether or
not a business day) of the calendar month preceding each interest payment date (the "Record Date").
Registration, Transfer and Exchange
· So long as the Book-Entry Only System is used, payments from Cede & Co., as the Record Holder, to the
Beneficial Owners shall be governed by the Book-Entry Only System. If the Book-Entry Only System is
discontinued, the Bonds may be transferred upon surrender of the Bonds at the principal office of the Bond
Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or
his or her attorney duly authorized in writing. The Bonds, upon surrender thereof at the principal office of the
Bond Registrar may also be exchanged for other Bonds of the same series, of any authorized denominations
having the same form, terms, interest rates and maturities as the Bonds being exchanged. The Bond Registrar
will require the payment by the Bondholder requesting such exchange or transfer of any tax or governmental
charge required to be paid with respect to such exchange or transfer. The Bond Registrar is not required to (i)
issue, transfer or exchange any Bond during a period beginning at the opening of business fifteen days before
any selection of Bonds of a particular stated maturity for redemption in accordance with the provisions of the
General Resolution and Series Resolution and ending on the day of the first mailing of the relevant notice of
redemption or (ii) to transfer any Bond or portion thereof selected for redemption.
Optional Redemption
The Bonds are not subject to optional redemption.
Book-Entry System
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds.
Upon issuance of the Bonds, one fully registered Bond will be registered in the name of Cede & Co., as nomi-
nee for DTC, for each maturity of the Bonds as set forth on the cover page hereof, each in the aggregate princi-
pal amount of such maturity. So long as Cede & Co. is the registered owner of the Bonds, references herein to
· the Owners of the Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Bonds.
DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
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Code and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange
Act of 1934, as amended.
DTC was created to hold securities of its participants (the "DTC Participants") and to facilitate the clearance .
and settlement of securities transactions among DTC Participants in such securities through electronic book-
entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of secu-
rities Bonds. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corpora-
tions, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the
DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or
maintain a custodial relationship with DTC Participants, either directly or indirectly (the "Indirect Par-
ticipants").
The interest of each of the Beneficial Owners of the Bonds will be recorded through the records of a DTC Par-
ticipant or Indirect Participant. Each DTC Participant will receive a credit balance on the records of DTC.
Individual purchases will be made in the denomination of $5,000 or any whole multiple thereof. Beneficial
owners of Bonds will receive a written confirmation of their purchases providing details of the Bonds acquired.
Beneficial owners of Bonds will not receive Bonds representing their ownership interest in the Bonds, except as
specifically provided below.
Transfers of beneficial ownership interest in the Bonds will be accomplished by book entries made by DTC
and, in turn, by the DTC Participants who act on behalf of the Indirect Participants and the Beneficial Owners
of Bonds. For every transfer and exchange of beneficial ownership of Bonds, the beneficial owner may be
charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation
thereto. The City will make payments of principal and interest on the Bonds to DTC or its nominee, Cede &
Co., as registered owner of the Bonds. Upon receipt of moneys, DTC's current practice is to immediately credit
the accounts of the DTC Participants in accordance with their respective holdings shown on the records of
DTC. Payments by DTC Participants and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices such as those which are now the case for municipal securities .
held in bearer form or registered in "street name" for the accounts of customers and will be the responsibility of
such DTC Participants or Indirect Participants and not the responsibility of DTC or the Issuer, subject to any
statutory and regulatory requirements as may be in effect from time to time.
(Remainder of page left intentionally blank)
.
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AUTHORITY AND PURPOSE
. The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429, 444 and 475. Proceeds will be used
to provide moneys for the financing of various assessable improvements, water utility and storm sewer utility
improvements within the City including, but not limited to, streets, sanitary sewer, water main & line
extensions, storm sewer, sidewalks and curb & gutter.
SECURITY AND ESTIMATED SOURCE AND USES OF FUNDS
Security
At closing Bond Counsel will render an opinion that the Bonds are valid and binding general obligations of the
City of St. Joseph, Minnesota. Bonds are payable from a combination of special assessments against all
benefited property (approximately 75.64%) and net revenues of the municipal storm sewer and water utility
systems (approximately 24.36%). The full faith and credit of the City is pledged to their payment and the City
has validly obligated itself to levy additional ad valorem taxes in the event of any deficiency in the Debt Service
Account established for this issue. Taxes may be levied upon all of the taxable property within the City and
without limitation of amount.
I. Source of Funds
General Obligation Bonds of 2003 $2.135.000
II. Uses of Funds
Estimated Improvement Costs to be Financed:
. Northland project construction $ 360,300
Contingencies 16,800
Engineering, plans, specifications 58,100
Liberty Pointe construction 855,000
Contingencies 85,000
Engineering, plans, specifications 153.000
Subtotal of improvement projects $1,528,200
Estimated Storm Sewer and Water System Costs to be Financed:
16" watermain construction $ 265,000
test well construction/protection 36,300
engineering, plans, specifications 27,000
stormwater management plan 125,000
stormwater distribution plan 15,000
stormwater GIS system/mapping 35.000
Subtotal of storm sewer and water projects 503,300
Add Estimated Issuance Costs:
issuance costs $ 47,940
capitalized interest (11 months) 32,095
underwriter's discount (1.25% of par) 26.688
Total Estimated Issuance Costs 106.723
Subtotal $2,138,223
. Less: Investment Income ( 1,500)
Rounding ( 1.723)
Par Amount of Bond Issue $2.135.000
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OFFICIAL STATEMENT
No Final Official Statement will be prepared. The Issuer will provide the successful Underwriter with an .
addendum that together with this Preliminary Official Statement will be deemed the Final Official Statement by
the Issuer.
FUTURE FINANCING
The City does not anticipate the need to finance any capital improvements with the issuance of general
obligation bonds within the next two months.
BOND RATINGIINSURANCE
As of the date of this Preliminary Official Statement, the City has a general obligation bond rating of Baa2
assigned by Moody's Investors Service. The City will apply for a rating and bond insurance at Purchaser's
Option on this issue.
LmGATION
On June 11, 2003, the consulting Attorney, Rajkowski Hansmeier Ltd. Thomas G. Jovanovich, has indicated
that no litigation is pending or threatened that would jeopardize the creditworthiness of the City of St. Joseph.
Claims or other actions in which the City is a defendant are covered by insurance or of insignificant amounts.
CERTIFICATION
The City will furnish, upon request, a statement to the effect that this Official Statement to the best of their
knowledge and belief, as of the date of sale and the date of delivery, is true and correct in all material respects,
and does not contain any untrue statements of a material fact or omit to state a material fact necessary in order .
to make the statements made therein, in light of the circumstances under which they were made, not misleading.
LEGALITY
Legal matters incident to the authorization and issuance of the Bonds are subject to the approving opinion of
Bond Counsel, as to validity and tax exemption. A copy of such opinion will be available at the time of the
delivery of the Bonds. See Appendix A - Legal Opinion.
Bond Counsel has not participated in the preparation of the Official Statement and is not passing upon its
accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine, or verify,
any of the financial or statistical statements or data contained in this Official Statement, and will express no
opinion with respect thereto.
FINANCIAL ADVISOR
The Issuer has retained Northland Securities as financial advisor (the "Financial Advisor") in connection with
the issuance of the Bonds. In preparing the Official Statement, the Financial Advisor has relied upon
governmental officials, and other sources that have access to relevant data to provide accurate information for
the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently
verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been
engaged by the Issuer to compile, review, examine or audit any information in the Official Statement in
accordance with accounting standards. Pursuant to Rule G-23 of the Municipal Securities Rulemaking Board,
the Issuer reserves the right to invite the Financial Advisor to participate in the underwriting of the Bonds. If
any entity or company associated with the Financial Advisor submits a competitive bid, it shall fax said bid to e
the Issuer (Fax No. 320-363-0342) at least fifteen (15) minutes prior to the deadline otherwise established for
the receipt of such a bid.
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CONTINUING DISCLOSURE UNDERTAKING
. In order to assist the Underwriter(s) in complying with SEC Rule 15c2-12 (the "Rule"), pursuant to the Award
Resolution and a Continuing Disclosure Undertaking (the "Undertaking ") to be executed on behalf of the City
on or before Bond Closing, the City has and will covenant for the benefit of holders of the Obligations to
provide certain financial information and operating data relating to the City to certain information repositories
annually, and to provide notices of the occurrence of certain events enumerated in the Rule to certain
information repositories or the Municipal Securities Rulemaking Board and to any state information depository.
The specific nature of the Undertaking, as well as the information to be contained in the annual report or the
notices of material events is set forth in the Continuing Disclosure Undertaking in substantially the form
attached hereto as Appendix B. The City has never failed to comply in all material respects with any previous
undertakings under the Rule to provide annual reports or notices of material events. A failure by the City to
comply with the Undertaking will not constitute an event of default on the Obligations (although holders will
have an enforceable right to specific performance). Nevertheless, such a failure must be reported in accordance
with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending
the purchase or sale of the Obligations in the secondary market. Consequently, such a failure may adversely
affect the transferability and liquidity of the Obligations and their market price.
The Issuer will covenant in the resolution awarding the sale of the Obligations and in a Continuing Disclosure
Undertaking to provide, or cause to be provided, annual financial information, including audited financial
statements of the Issuer, and notices of certain material events, as required by SEC Rule 15c2-12. Please see
Appendix B - Continuing Disclosure Undertaking herein for additional information.
.
(Remainder of page left blank intentionally.)
.
-13-
TAX EXEMPTION
General .
In the opinion of Bond Counsel, under federal and Minnesota laws, regulations, rulings and decisions in effect
on the date of issuance of the Bonds, interest on the Bonds is not includable in gross income for federal income
tax purposes or in taxable net income of individuals, estates and trusts for Minnesota income tax purposes.
Interest on the Bonds is includable in taxable income of corporations and financial institutions for purposes of
the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), however, impose continuing requirements that must be met after the issuance of the Bonds in order for
interest thereon to be and remain not includable in federal gross income and in Minnesota taxable net income.
Noncompliance with such requirements by the Issuer may cause the interest on the Bonds to be includable in
gross income for purposes of federal income taxation and in taxable net income for purposes of Minnesota in-
come taxation, retroactive to the date of issuance of the Bonds, irrespective in some cases of the date on which
such noncompliance is ascertained. No provision has been made for redemption of or for an increase in the in-
terest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross income or
Minnesota taxable income.
Interest on the Bonds is not an item of tax preference includable in alternative minimum taxable income for pur-
poses of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum
tax applicable to individuals, estates and trusts, but is includable in adjusted current earnings in determining the
federal alternative minimum taxable income of corporations for purposes of the federal alternative minimum
tax. Interest on the Bonds may be includable in the income of a foreign corporation for purposes of the branch
profits tax imposed by Section 884 of the Code and is includable in the net investment income of foreign
insurance companies for purposes of Section 842(b) of the Code. In the case of an insurance company subject to
the tax imposed by Section 831 of the Code, the amount which otherwise would be taken into account as losses
incurred under Section 832(b)(5) of the Code must be reduced by an amount equal to fifteen percent of the
interest on the Bonds that is received or accrued during the taxable year. Section 86 of the Code requires .
recipients of certain Social Security and railroad retirement benefits to take into account, in determining the tax-
ability of such benefits, receipts or accruals of interest on the Bonds.
Passive Investment Income of S Corporations
Passive investment income, including interest on the Bonds, may be subject to federal income taxation under
Section 1375 of the Code for a Subchapter S corporation that has Subchapter C earnings and profits at the close
of the taxable year if greater than twenty-five percent of the gross receipts of such Subchapter S corporation is
passive investment income. Section 265 of the Code denies a deduction for interest on indebtedness incurred or
continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of the holder's in-
terest expense allocated to interest on the Bonds, except with respect to certain financial institutions (within the
meaning of Section 265(b) of the Code).
The above is not a comprehensive list of all federal tax consequences that may arise from the receipt of interest
on the Bonds. The receipt of interest on the Bonds may otherwise affect the federal or State of Minnesota in-
come tax liability of the recipient based on the particular taxes to which the recipient is subject and the particu-
lar tax status of other items or deductions. Bond Counsel expresses no opinion regarding any such
consequences. All prospective purchasers of the Bonds are advised to consult their own tax advisors as to the
tax consequences of, or tax considerations for, purchasing or holding the Bonds.
Qualified Tax-Exempt Obligations
The Issuer will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b )(3) of
the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes, .
interest expense that is allocable to carrying and acquiring tax-exempt obligations. "Qualified tax-exempt
obligations" are treated as acquired by a financial institution before August 8, 1986. Interest allocable to such
obligations remains subject to the 20% disallowance under prior law.
-14-
CITY OF ST. JOSEPH
. GENERAL INFORMATION
Location/Access/Transportation
St. Joseph, situated in Steams County, is located in the east-central portion of Minnesota. The City lies approxi-
mately eight miles west of St. Cloud and 70 miles northwest of the Minneapolis-St. Paul Metropolitan Area.
Access is provided via County Roads 2 and 75. In addition, Interstate Highway 94 lies just one mile west of the
City, U.S. Highway 10 lies ten miles east of the City, and State Highways 15 and 23 lie eight and five miles
south of the City, respectively. Principal truck lines serving the City include Scherer & Sons Trucking and
Anderson Trucking. Burlington Northern-Santa Fe Railroad provides freight rail access through the City. There
are approximately twenty-five miles of paved streets within the City's corporate limits.
Tax Base
For taxes collectable in 2003, the tax breakdown is 60.71% residential homestead (non-agriculture), .69%
agricultural, 22.43% commercial & industrial, .57% public utility, .16% railroad operating property, 11.63%
non-homestead residential, 1.78% other, and 2.03% personal property.
Area
1,805.86 Acres
(2.822 Square Miles)
Population
. 1970 Census 1,786 2000 Census 4,681
1980 Census 2,994 2002 Estimate * 5,074
1990 Census 3,367
Municipal Enterprise Services
The Water Utility System has approximately 1,012 connections served by a 550,000 gallon elevated storage
facility along with three municipal wells that have the capacity to pump 1,000 gallons per minute or 1,440,000
gallons per day. In addition, the City also has a reconstructed (1996) water filtration plant. Average demand is
290,000 gallons per day while peak demand reaches 675,000 gallons per day. Total tap water hardness is 20
parts per million.
The 2002 audited operating revenues were $190,212 with the average charge per year per household and com-
mercial at approximately $188.
The Sewer Utility System has approximately 1,065 connections served by a 13,000,000 gallon per day waste-
water treatment facility along with four lift stations. The City became part of the St. Cloud Interceptor System
in 1986 and all wastewater is pumped to St. Cloud. Average demand is 9,500,000 gallons per day while peak
demand reaches 11,000,000 gallons per day.
The 2002 audited operating revenues were $304,718 with the average charge per year per connection at ap-
proximately $286.
Refuse Sanitation System. The City contracts privately for its waste management system, providing weekly
. pick-up to all City residents. The 2002 audited operating revenues were $151,255 with net income before oper-
ating transfers of $26,898.
* Source: City of St. Joseph.
-15-
Other Municipal Services
Fire and Rescue Department. The City currently has a 29-member volunteer fire department consisting of two .
various size pumper/ladder trucks, two tankers, one grass rig, one snowmobile with rescue sled, one emer-
gency/rescue vehicle as well as other miscellaneous fire fighting and rescue equipment.
Police Department. The City operates its own police department providing 24-hour coverage. Staff includes one
chief of police, one sergeant, eight officers, four full-time and four part-time, along with six reserve members.
The city owns three fully equipped patrol cars rotated on a three-year basis, all fully computerized, as well as
other miscellaneous equipment. The Stearns County Sheriffs Department provides all dispatching services. In
addition, the City also provides mutual aid to the cities of Waite Park and Sartell.
Park and Recreational Facilities. The City currently operates six municipal parks encompassing approximately
75 acres. Facilities include two tot lots, two baseball/softball fields, sheltered picnic areas with a fireplace,
walking paths, wildlife areas, a camping area with ten electrical hookup sites, and general playground
equipment. In addition, the City provides summer recreation programs for children of all ages with varied
activities. The combination of these parks and facilities provides a complete park and recreation system
throughout the City.
City Government/Comprehensive Plan
St. Joseph, organized on January 17, 1890, is a Minnesota Statutory City with an 'Optional Plan A' form of
government. It has a mayor elected at large for a two-year term and four council members also elected at large
for four-year terms. The professional staff is appointed and consists of an administrator-clerk, finance officer,
consulting attorney, and engineer. In addition, the City has hired a consulting firm to coordinate the activities of
the EDA.
The City adopted a new Comprehensive Plan in December 2002. The Plan illustrates the following areas: com- .
munity characteristics and settings; trends and assumptions; land use; housing; transportation; public utilities
[wastewater (sewer) and water]; municipal buildings and public services; park and recreation; economic
development; and implementation. The Plan includes Land Use Planning Goals and objectives including social,
economic and transportation issues, as well as Projected Growth Areas outlining desired growth and statistical
demographics. In addition, the City achieved Star City status that includes short-term as well as long-term
goals. As a result, St. Joseph formed an Economic Development Authority and hired a full-time Economic
Development Director. Further, the City and Township of St. Joseph have signed and adopted a joint
merger/consolidation agreement that will consolidate the majority of St. Joseph Township with the City of
St. Joseph. The plan identifies annexation areas in 5, 10, 15 and 20-year increments.
Employee Pension Programs
The City employs thirty people; sixteen full-time, five part-time, and nine seasonal part-time. The pension plan
currently covers twenty of the City's employees.
The City participates in contributory pension plans through the Public Employees Retirement Association
(PERA) under Minnesota Statutes, Chapters, 353 and 356, which covers all full-time and certain part-time
employees. 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. Benefits are established by
State Statute, and vest after three years of credited service. State Statute requires the City to fund current ser-
vice pension cost as it accrues. 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.
.
-16-
City contributions to PERF and PEPFF for the past ten years have been as follows:
. Year Amount Year Amount
2002 $47,245 1997 $35,186
2001 43,444 1996 32,947
2000 41,862 1995 30,826
1999 39,581 1994 25,964
1998 38,774 1993 25,803
Volunteer firefighters of the City are eligible for pension benefits through membership in the
S1. Joseph Fire Relief Association organized under Minnesota Statutes, Chapter 69, and administered by a sepa-
rate Board elected by the membership. This plan is funded by state aids as well as contributions from the City
of S1. Joseph, S1. Joseph Township and S1. Wendell Township. The City is obligated to contribute to the Fund
according to a formula that compares growth in the estimated pension liability to the annual estimated state aid
and interest earnings of the pension fund. State statute requires this plan to fund current service cost as it ac-
crues and prior service cost amortized over a period of ten years.
Labor Force Data
Comparative average labor force and unemployment rate figures for May 2003 and year-end 2002 from the
Minnesota Department of Economic Security, Research and Statistics Office, are listed below. Figures are not
seasonally adjusted and numbers of people are estimated by place of residence.
May 2003 December 2002
Civilian Unemployment Civilian Unemployment
Labor Force Rate Labor Force Rate
. Stearns County 84,073 4.8% 84,299 4.3%
Minnesota 2,896,719 4.7 2,918,058 4.4
Residential Development
There are approximately 1,084 single-family homes and 216 multifamily units (112 structures) located within
the City. In addition, there have been 67 single-family homes and one multifamily dwelling constructed within
the past twelve months.
The status of residential subdivisions constructed or planned within the past three years is as follows:
Total Number of Remaining
Subdivision Number of Lots/Units Lots/Units
Name Lots/Units Completed Available
Graceview Estates 105 23 82
Liberty Point 83 Under Construction 83
Northland Five 54 54 0
Northland Six 49 43 6
Northland Seven 28 Under Construction 28
Pondview Six 22 22 0
Pondview Seven 18 Under Construction 18
.
-17-
Industrial Parkes)
There is an approximate 165-acre industrial park located within the City with a capacity of 39 enterprises. .
Currently there are 22 enterprises occupying the park, the larger of which include DBL Labs Inc., W. Gohman
Construction Co., Vic West Steel, MCO Lens Crafting, and Borgert Concrete. The City installed utility services
to the industrial park in 1999 in anticipation of further development.
The City currently contracts with a private firm to continue adding new development in both the existing indus-
trial park as well as obtaining land for additional industrial park development.
CommerciallIndustrial Development
Building construction and commercial/industrial growth completed within the past three years, as reported by
the City, is as follows:
Description
Name Product/Service of Construction
American Manufacturing Commercial Building Supplies Addition
DBL Labs Lens Crafting Remodel
Lemmer Commercial Trucking Addition
IndividuaIl Retail/Apartments Building
Individual1 Mini-storage Building
Knight Builders1 Commercial Building Building
MN Home Improvements1 Contractor Building
St. Joseph Business Center 1 Multiple Commercial Retail Building
St. Joseph Gas & Bait Convenience Store Addition
St. Joseph Veterinary Clinic Veterinary Services Addition .
Sisters of St. Benedicts Monastery Remodel
Sunset Manufacturing Metal Fabricating Services Plant Addition
Tanner Systems De-icing Material Span crete Building
Vic West Steel 1 Fabricated Structural Metal Remodeling
Building Permits
Building permits issued for the past ten years and a portion of the current year is as follows:
Commercial/
Industrial Residential Total Total
Number Number Number Permit
Year of Permits of Permits of Permits Valuation
2003
(as of 7/14/03) 6 164 170 $14,917,627
2002 6 67 73 11,344,840
2001 17 119 136 7,416,389
2000 5 64 69 8,718,600
1999 4 62 66 3,872,735
1998 15 85 100 6,558,780
1997 6 35 41 5,697,300
1996 0 27 27 4,386,375
1995 5 82 87 5,785,700
1994 6 85 91 11,192,000 .
1993 7 65 72 2,714,955
1 Building construction and commercial/industrial growth completed within the past twelve months.
-18-
Financial Institutions
. Banking and financial services are provided by First State Bank of St. Joseph. Reported deposits as of
December 31, 2002, were $52,052,000 as obtained from the latest edition (spring 2003) of the McFadden
Upper Midwest Financial DirectoryTM.
Education
St. Joseph is served by Independent School District No. 742, St. Cloud. ISD No. 742 is headquartered in the
City of St. Cloud, with portions of the District situated in four counties: Benton, Sherburne, Stearns, and
Wright. The District includes the cities of St. Cloud, Waite Park, St. Joseph, Pleasant Lake, Clear Lake, and
Clearwater as well as all or a portion of 18 townships. The District encompasses approximately 240 square
miles and has an estimated population of 87,174. The District operates eleven elementary schools; two junior
high schools, grades seven and eight; two secondary schools, grades nine through twelve; and an alternative
learning center. Directly located within City limits is one elementary school, grades kindergarten through four,
with an estimated enrollment of 370. Combined enrollment at the sixteen schools for the 2002/2003 school year
was approximately 10,754.
In addition, there is one parochial school located within the City, St. Joseph Laboratory, which offers grades
kindergarten through six. Further, the school is accredited by the Minnesota Nonpublic School Accrediting
Association.
Post secondary education is available at the following schools:
Distance
from
School Tvpe Location St. Joseph
. St. Cloud Technical College V ocationalffechnical St. Cloud, Minnesota 8 Miles
St. Cloud Business College Business College St. Cloud, Minnesota 7 Miles
St. Cloud Beauty School Beauty School St. Cloud, Minnesota 7 Miles
St. Cloud State University State University St. Cloud, Minnesota 10 Miles
College of St. Benedict Private College St. Joseph, Minnesota o Miles
St. John's University Private University Collegeville, Minnesota 2 Miles
Major Employers
The City has 22 retail or commercial enterprises in the downtown area employing an estimated 158 people.
Following are the twelve largest employers within the City as reported by the City:
Number of
Commercial J>roduct/Service Emplovees
College of St. Benedict Private College 440
DBL Labs Inc. Ophthalmic Lens Crafting 177
Convent of St. Benedict Monastery 102
W. Gohman Construction Co. Nonresidential Construction 40
Vic West Steel Fabricated Structural Metal 36
MCO Lens Crafting Ophthalmic Lens Crafting 31
City of St. Joseph1 City Government 30
AccuServ Data Processing Services 26
La Playette Bar & Restaurant BarlRestaurant 25
. St. Joseph Parish School ChurchlPrivate Education 23
Borgert Concrete Concrete Products 20
1 Constitutes sixteen full-time, five part-time, and nine seasonal part-time employees.
-19-
Largest Taxpayers
Following are the ten largest taxpayers within the City as reported by Stearns County: ·
Percent of
2002/2003 Real Property
Estimated 2002/2003 to Net Tax
Market Net Tax Capacity
Name Service Value Capacity ($1,484,932)1
Individual Trust Apartments $2,295,400 $34,431 2.32%
Xcel Energy Utility 1,637,000 32,663 2.20
First State Bank of St. Joseph Commercial 1,120,400 21,658 1.46
St. Joseph's Assisted Living Inc. Apartments 1,372,300 20,585 1.39
SKN Industrial 946,300 18,176 1.22
Individual Apartments 1,146,200 17,194 1.16
DSG Enterprises Commercial 820,600 15,662 1.05
Cloverdale Properties Commercial 1,361,200 13,612 .92
Individual Commercial 523,900 9,728 .66
Yaksich Properties LLC Commercial 522,500 9,700 .65
·
(Remainder of page left intentionally blank)
·
1 Before tax increment adjustment.
-20-
MINNESOTA VALUATIONS: PROPERTY TAX CLASSIFICATIONS
. Market Value
According to Minnesota Statutes, Chapter 273, all real property subject to taxation is to be appraised at maxi-
mum intervals of four years. All real property becoming taxable in any year is listed at its estimated market
value on January 2 of that year. The estimated market value is the County Assessor's appraisal of the worth of
the property.
Indicated Market Value
The Minnesota Department of Revenue conducts the Real Estate Sales Assessment Ratio Study to accomplish
equalization of property valuation in the State of Minnesota and to determine the probable selling price of a
property. The study is a three-year average of sale prices as related to the latest assessor's estimated market
value. The indicated market value is determined by dividing the estimated market value by the Sales
Assessment Ratio for the city as determined by the Department of Revenue.
Tax Cycle
Minnesota local government ad valorem property taxes are extended and collected by the various counties
within the state. The process begins in the fall of every year with the certification, to the county auditor, of all
local taxing districts' property tax levies. Local tax rates are calculated by dividing each taxing district's levy
by its net tax capacity. One percentage point of local tax rate represents one dollar of tax per $100 net tax
capacity. A list of taxes due is then prepared by the county auditor and turned over to the county treasurer on or
before the first Monday in January.
The county treasurer is responsible for collecting all property taxes within the county. Real estate tax statements
. are to be mailed out no later than January 31 and personal property tax statements no later than February 15.
The due dates for payment of real property taxes are one-half on or before May 15 and one-half on or before
October 15. Personal property taxes become due one-half on or before February 28 and one-half on or before
June 30.
Following each settlement (February, June, and December of each year), the county treasurer must redistribute
property tax revenues to the local taxing districts in proportion to their tax capacity ratios. Delinquent property
taxes are penalized at various rates depending on the type of property and the length of delinquency.
Tax Credits
Prior to 1990, taxes on homestead residential and agricultural property were reduced by a direct subsidy to the
taxpayer. Beginning in 1990, the homestead credit has been eliminated. The state subsidy is now accomplished
through lower class rates to homesteaded classifications of property and increased state aids paid directly to lo-
cal taxing districts as well as a new market value credit, which is phased out with different levels of property
values. This new system is intended to have generally the same impact as the former homestead credit system.
Tax Levies for General Obligation Bonds
(Minnesota Statutes, Section 475.61)
The governing body of any municipality issuing general obligations shall, prior to delivery of the obligations,
levy by resolution a direct general ad valorem tax upon all taxable property in the municipality to be spread
upon the tax rolls for each year of the term of the obligations. The tax levies for all years shall be specified and
such that if collected in full they, together with estimated collections of special assessments and other revenues
. pledged for the payment of said obligations, will produce at least five percent in excess of the amount needed to
meet when due the principal and interest payments on the obligations. Such resolution shall irrevocably appro-
priate the taxes so levied and any special assessments or other revenues so pledged to the municipality's debt
service fund or a special debt service fund or account created for the payment of one or more issues of
obligations.
-21-
The governing body may, at its discretion, at any time after the obligation have been authorized, adopt a resolu-
tion levying only a portion of such taxes, to be filed, assessed, extended, collected and remitted as hereinafter
provided, and the amount or amounts therein levied shall be credited against the tax required to be levied prior .
to delivery of the obligations.
The recording officer of the municipality shall file in the office of the county auditor of each county in which
any part of the municipality is located a certified copy of the resolution, together with full information regard-
ing the obligations for which the tax is levied. No further action by the municipality is required to authorize the
extension, assessment and collection of the tax, but the municipality's liability on the obligations is not limited
thereto and its governing body shall levy and cause to be extended, assessed and collected any additional taxes
found necessary for full payment of the principal and interest. The auditor shall annually assess and extend
upon the tax rolls the amount specified for such year in the resolution, unless the amount has been reduced as
authorized below or, if the municipality is located in more than one county, the portion thereof that bears the
same ratio to the whole amount as the tax capacity value of taxable property in that part of the municipality lo-
cated in his county bears to the tax capacity value of all taxable property in the municipality.
Tax levies so made and filed shall be irrevocable, except that if the governing body in any year makes an ir-
revocable appropriation to the debt service fund of moneys actually on hand or if there is on hand any excess
amount in the debt service fund, the recording officer may certify to the county auditor the fact and amount
thereof and the auditor shall reduce by the amount so certified the amount otherwise to be included in the rolls
next thereafter prepared.
All such taxes shall be collected and remitted to the municipality by the county treasurer as other taxes are col-
lected and remitted, and shall be used only for payment of the obligations on account of that levied or to repay
advances from other funds used for such payments, except that any surplus remaining in the debt service fund
when the obligations and interest thereon are paid may be appropriated to any other general purpose by the
municipality.
Class Rate .
The factors (class rates) for converting estimated market value to net tax capacity represent a basic element of
the State's property tax relief system and are therefore subject to annual revisions by the State Legislature.
(Remainder of page left intentionally blank)
.
-22-
The following is a partial summary of these factors:
. Property Tax Classifications
Class Rate Schedule
1998/ 1999/ 2000/ 2001/ 2002/
Class Tvve of Property 1999 2000 2001 2002 2003
1a Residential Homestead Under $75,000 LOOO%
Over $75,001 1.700
Under $76,000 1.000% 1.000% 1.000% 1.000%
$76,001-$500,000 1.650 1.650 1.000 1.000
Over $500,001 1.650 1.650 1.250 1.250
2a Agricultural Land & Buildings
Homestead: Under $115,000 .350 .350 .350 .550
$115,000-$600,000 Under 320 Acres .800 .800 .800 .550
Over 320 Acres 1.250 .800 .800 .550
Over $600,001 Under 320 Acres .800 1.200 1.200 1.000
Over 320 Acres 1.250 1.200 1.200 LOOO
Agricultural Homestead - House. Garage. One Acre:
First $500,000 1.000 1.000
Over $500,000 1.250 1.250
Remainder of Farm- - First $600,000 .550 .550
Over $600,000 1.000 1.000
2b Non-Homestead Agricultural Land' 1.250 1.200 1.200 1.200 1.000
3a CommerciallIndustrial PubÍic Utilityt
First $150,000 2.450 2.400 2.400 1.500 1.500
Over $150,000 3.500 3.400 3.400 2.000 2.000
. Residential Non-Homestead Apartments:
4bb(1) 1 Unit First $500,000 1.000
1 Unit Over $500,000 1.250
1 unit 1.000 1.000 1.000 .900
4d 1 to 3 units 1.000
2 or 3 units 1.000 1.000 1.000 .900 1.000
4a 4 or more units 2.500 2.400 2.400 1.800 1.500
Cities of population < 5,000 - 4 or more units 2.150 2.150 2.150 1.800
Four or more units built after 6/30/01 1.250
4bb(2) Under $75,000 1.250
Over $75,001 1.700
Under $76,000 1.200 1.200 1.000 1.000
$76,001-$500,000 1.650 1.650 1.000 1.000
Over $500,000 1.650 1.650 1.250 1.250
4b(4) Vacant Land 1.700 1.650 1.650 1.500 1.250
4c(1) Seasonal Recreational Residentialt, a
'Non-Commercial: Under $75,000 1.250
Over $75,001 2.200
'Under $76,000 1.200 1.200 1.000 1.000
$76,001-$500,000 1.650 1.650 1.000 1.000
Over $500,001 1.650 1.650 1.250 1.250
Resorts: Homestead
1c Under $500,000 1.000 1.000 1.000 1.000 1.000
Over $500,000 1.000 1.000 1.000 1.000 1.000
Qualifying golf courses
4c(2) Under $500,000 1.800 1.650 1.650 1.000 1.000
Over $500,000 1.800 1.650 1.650 1.250 1.000
.
· Exempt from referendum market value based taxes.
t Subject to the state general property tax.
a Note: For purposes of the state !!eneral propertv tax only. the net tax capacity of non-commercial class 4c(1) seasonal recreational residential property has the following class
rate structure: FIrSt $16,000 0.40%, $16,001-$500,000 1.00% and over $500,000 1.25%.
-23-
CITY OF ST. JOSEPH
ECONOMIC AND FINANCIAL INFORMATION ·
Valuations
Estimated Net Tax
Marlœt Value Capacity
2002/2003 2002/2003
Real Property $ 135,080,600 $1,484,932
Personal Property 1,575,400 30,758
Less Tax Increment Deduction ( 14,362)
Total Valuation $ 136.656.000 $1.501.328
Market Value after Sales Assessment Ratio
The Minnesota Department of Revenue conducts the Real Estate Sales Assessment Ratio Study to accomplish
equalization of property valuations in the State and to determine the probable selling price of a property. The
Study is a three-year average of sale prices as related to the latest assessor's market value. The latest Sales
Assessment Ratio (2001) in St. Joseph is 86.1 % meaning the County Auditor's recorded real property market
value of $135,080,600 is 86.1 % of the probable resale market value. We have made the following computations
in deriving the market value figure used in the "Summary of Debt and Debt Statistics."
$ 135,080,600 County Auditor's recorded real property market value. ·
86.1% Latest Composite Ratio from the Real Estate Sales Assessment Ratio
Study of the Minnesota Department of Revenue.
= $ 156,880,037 Indicated market value of real property.
+ 1.575.400 Personal property.
= $ 158.463.437 Indicated market value of real and personal property used in
"Summary of Debt and Debt Statistics."
Sales Assessment Ratios
Sales assessment ratios over the past ten years have been as follows1:
Year Ratio Year Ratio
2002 N/A% 1997 90.7%
2001 86.1 1996 90.3
2000 89.7 1995 91.4
1999 90.2 1994 92.6
1998 89.2 1993 92.8
·
1 The 2002 Sales Assessment Ratio is not available until late July to mid August from the Minnesota Department of Revenue, Property
Tax Division.
-24-
Valuation Trends (Real and Personal Property)
· Valuation trends over the past ten years have been as follows:
Net Tax Net Tax
Capacity Capacity
Levy Year/ Indicated Estimated Before Tax After Tax
Collection Year Market Value Market Value Increments Increments
2002/2003 $158,463,437 $136,656,000 $1,515,690 $1,501,328
2001/2002 134,506,810 116,026,800 1,323,601 1,309,995
2000/2001 109,872,478 98,697,300 1,418,123 1,417,637
1999/2000 97,950,303 87,514,500 1,234,989 1,234,635
1998/1999 87,072,654 77,808,700 1,089,251 1,089,251
1997/1998 77,892,338 69,615,700 1,065,687 1,063,403
1996/1997 71,277,331 64,758,400 1,101,470 1,098,843
1995/1996 67,904,520 61,428,100 1,048,424 1,045,798
1994/1995 60,714,661 55,493,200 940,486 940,486
1993/1994 52,537,473 48,649,700 825,087 825,087
Breakdown of Valuations
2002/2003 Estimated Market Value, Real and Personal Property:
Real Property 1 $ 135,080,600 98.85%
Personal Property 1.575.400 1.15
· Total $ 136.656.000 100.00%
2002/2003 Net Tax Capacity, Real and Personal Property (before tax increment deduction):
Residential Homestead $ 920,157 60.71%
Agricultural 10,497 .69
Commercial & Industrial 339,998 22.43
Public Utility 8,618 .57
Railroad Operating Property 2,468 .16
Non-Homestead Residential 176,179 11.63
Other 27,015 1.78
Personal Property 30.758 2.03
Total $ 1.515.690 100.00%
·
1 Breakdown of Real Property Estimated Market Value is not available from Stearns County.
-25-
Tax Capacity Rates
Tax capacity rates over the past five-assessable/collection years have been as follows: ·
1998/99 1999/00 2000/01 2001102 2002103
Tax Tax Tax Tax Tax
Levy Year/ Capacity Capacity Capacity Capacity Capacity
Collection Year Rates Rates Rates Rates Rates
Stearns County 42.122% 42.841 % 42.417% 54.974% 53.513%
City of St. Joseph 42.786 42.433 46.718 44.640 48.327
ISD No. 724, St. Cloud 53.279 52.737 47.565 17.131 t 20.717t
Sauk River Watershed .230 .567 .365 .824 1.206
Stearns County HRA .606 .568 .497 .601 .536
Totals: 139.023 139.146 137.562 118.170 124.299
Tax .Levies and Collections!
Levy Year/ 1998/ 1999/ 2000/ 20011
Collection Year 1999 2000 2001 2002
Original Gross Tax Levy $ 466,047 $ 523,893 $ 662,292 $ 497,269
Property Tax Credits2 N/A N/A N/A N/A
Levy Adjustments ( 75) ( 0) ( 6 .317) ( 39)
Net Tax Levy $ 465,972 $ 523,893 $ 655,975 $ 497,230 ·
Amount Collected during Collection
Year $ 461,263 $ 517,492 $ 648,525 $ 489,493
Percent of Net Tax Levy Collected 98.99% 98.78% 98.86% 98.44%
Amount Delinquent at end of
Collection Year $ 4,709 $ 6,401 $ 7,450 $ 7,737
Delinquencies Collected as of
(12/31/02) ( 4,414) ( 6,401) ( 7,387) ( 0)
Delinquencies Abated or Cancelled
as of (12/31/02) ( 0) ( 0) ( 0) ( 0)
Total Delinquencies Outstanding
as of (12/31/02) $ 295 $ 0 $ 63 $ 7,737
Percent of Net Tax Levy Collected 99.94% 100.00% 99.99% 98.44%
Note: 2002/2003 Gross Tax Levy $N/A
2002/2003 Net Tax Levy N/A
t Effective in 2002, the State of Minnesota took over most of the funding for the school districts, including the general fund, ·
transportation, etc. The only funding that remains for school districts is community service, general debt service, and general net tax
capacity.
! 2002/2003 property taxes are currently in the process of collection/reporting and no updated figures are available from Stearns County.
2 Property tax credits are aids provided by the State of Minnesota and paid directly to the City.
-26-
Overlapping Debt
. 2002/2003
2002/2003 Net Tax
Net Tax Capacity Percentage Taxpayer's
Capacity Value Applicable Share
Issuer Value(l) in City(1) in City Net Debt of Debt
Stearns County $72,420,556 $1,501,328 2.07% $19,877,566(2) $ 411,466
ISD No. 742, St. Cloud 46,512,277 1,501,328 3.23 14,691,760(3) 474,544
Stearns County HRA 46,192,786 1,501,328 3.25 1,070,000(4) 34,775
Total Overlapping Debt: $ 920.785
Cash and Investment Balances as of June 30, 2003 (Unaudited)
Fund
General Fund $ 616,974
Special Revenue Funds 296,153
Debt Service Funds 3,620,813
Capital Project Funds 1,926,315
Enterprise Funds 1.208,394
. Total Cash and Investment Balances $ 7.668.649
. (1) Taxable Net Tax Capacity value after tax increment adjustment.
(2) Stearns County reported bond indebtedness of $23,485,000 and sinking funds of $3,607,434 as of December 31, 2002.
(3) ISD No. 742, St Cloud, reported bond indebtedness of $29,345,000 and sinking funds of $14,653,240 as of December 31, 2002.
(4) Steams County HRA has bond indebtedness of $1,070,000 and sinking funds of $0 as of December 31,2002, as reported by Stearns
County.
-27-
Statutory Debt Limit1
Minnesota Statutes, Section 475.53, states that a city may not incur or be subject to a net debt in excess of two ·
percent (2%) of its estimated market value. Net debt is, with limited exceptions, debt paid solely from ad
valorem taxes.
Computation of Legal Debt Margin as of July 16,2003, plus this issue:
2002/2003 Estimated Market Value $ 136,656,000
Times 2% of Estimated Market Value x .02
Statutory Debt Limit $ 2.733.120
Amount of debt applicable to debt limit:
Total Bonded Debt2 $ 14,560,000
Less: General Obligation Improvement Bonds ( 8,150,000)
General Obligation Sewer Revenue Bonds ( 615,000)
General Obligation Water Revenue Refunding Bonds ( 810,000)
General Obligation Improvement Crossover Refunding Bonds ( 750,000)
General Obligation Bonds (this issue only) ( 2.135.000)
Total debt applicable to debt limit $ 2.100.000
Legal debt margin $ 633.120
·
1 Pursuant to Minnesota Statutes 465.71, any lease revenue or public project revenue bond issues/agreements over $999,999 are subject
to the statutory debt limit. Lease revenue or public project revenue bond issues/agreements under $999,999 are not subject to the
statutory debt limit.
2 The (i) $75,000 of the outstanding $90,000 of the $200,000 General Obligation Improvement Bonds of 1992, dated July 1, 1992,
maturities 2004 through 2007, inclusive, (ii) $225,000 of the $265,000 outstanding of the $550,000 General Obligation Improvement
Bonds of 1993, dated November 1, 1993, maturities 2004 through 2008, inclusive, (Hi) $795,000 of the $875,000 outstanding of the
$1,280,000 General Obligation Improvement Bonds of 1996, dated June 1, 1996, maturities 2005 through 2011, inclusive, that will be
cross refunded by the $750,000 General Obligation Improvement Crossover Refunding Bonds of 2003 dated July 1,2003 and called ·
for redemption on December 1, 2003 at a price of par plus accrued interest, and (iv) $945,000 of the $1,040,000 outstanding of the
$1,235,000 General Obligation Bonds of 1997, dated April 1, 1997, maturities 2005 through 2017, inclusive, that will be cross
refunded by the $815,000 General Obligation Fire Hall Crossover Refunding Bonds of 2003, dated July 1, 2003 and called for
redemption on December 1, 2004 at a price of par plus accrued interest have not been deducted from the above total bonded debt
summary. However, the above-indicated bonds will be deducted from debt ratio computations since (i) through (iv) above will be cross
refunded.
-28-
CITY OF ST. JOSEPH, MINNESOTA
· GENERAL OBLIGATION DEBT
(As of July 16, 2003, Plus This Issue)
Purpose: G.O. G.O. 6.0. G.O. G.O. G.O.
Improvement Improvement Improvement Bonds Improvement Improvement
Bonds Bonds Bonds of Bonds Bonds
of of of 1997 of of
1992 1993 1996 1998 1999
Dated: 07/01/92 11101/93 06/01/96 04/01/97 11101/98 10/01/99
Original Amount: $200,000 $550,000 $1,280,000 $1,235,000 $545,000 $1,330,000
Maturity: I-Dee I-Dee I-Dee I-Dee I-Dee I-Dee
Interest Rates: 4.00-6.25% 3.00-5.30% 4.30-5.90% 4.00-5.75% 3.90-5.00% 4.875-5.20%
2003 $15,000 $40,000 $80,000 $45,000 $35,000 $70,000 2003
2004 15,000 40,000 85,000 50,000 35,000 75,000 2004
2005 20,000 45,000 85,000 50,000 35,000 80,000 2005
2006 20,000 45,000 90,000 55,000 35,000 80,000 2006
2007 20,000 45,000 95,000 55,000 35,000 85,000 2007
2008 0 50,000 100,000 60,000 35,000 90,000 2008
2009 ° ° 105,000 65,000 45,000 95,000 2009
2010 ° ° 115,000 65,000 45,000 100,000 2010
2011 ° ° 120,000 70,000 45,000 105,000 2011
2012 0 ° ° 75,000 45,000 110,000 2012
2013 ° ° 0 80,000 50,000 115,000 2013
2014 ° 0 ° 85,000 ° 125,000 2014
2015 ° ° ° 90,000 ° ° 2015
· 2016 ° ° ° 95,000 ° ° 2016
2017 ° ° 0 100,000 ° 0 2017
2018 ° ° ° ° ° ° 2018
2019 ° 0 0 ° ° 0 2019
2020 ° ° ° ° ° 0 2020
2021 ° 0 0 ° ° ° 2021
$90,000 $265,000 $875,000 $1,040,000 $440,000 $1,130,000
(1) (2) (1) (3) (1) (4) (5) (6) (1) (7) (1) (7) (8)
·
-29-
CITY OF ST. JOSEPH, MINNESOTA
GENERAL OBLIGATION DEBT ·
(As of July 16, 2003, Plus This Issue)
Purpose: G.O. G.O. G.O. G.O. G.O.
Improvement Sewer Certificates Improvement Water
Bonds Revenue of Bonds Revenue
of Bonds of Indebtedness of Refunding
2001 2001 of 2002 2002 Bonds of 2002
Dated: 09/01/01 10/01/01 01/01/02 08/01/02 09/01/02
Original Amount: $810,000 $640,000 $245,000 $4,700,000 $810,000
Maturity: I-Dee I-Dee I-Dee I-Dee I-Dee
Interest Rates: 3.00-3.85% 3.30-5.15% 2.75-4.20% 2.00-4.30% 1.75-4.80%
2003 $160,000 $25,000 $60,000 $405,000 $70,000 2003
2004 160,000 25,000 60,000 405,000 80,000 2004
2005 165,000 25,000 60,000 405,000 85,000 2005
2006 165,000 I 25,000 I 65,000 235,000 40,000 2006
2007 01 25,000 I ° 240,000 40,000 2007
2008 oj 25,000 I 0 250,000 40,000 2008
2009 0: 25,000 I ° 260,000 50,000 2009
2010 ¡'------ ........-------..-; ° 270,000 50,000 2010
° 1 30,000 :
, I
2011 01 30,000 ! 0 280,000 50,000 2011
,
2012 0: 30,000 ¡ 0 295,000 55,000 2012
I
2013 I ,
01 30,000 1 0 310,000 55,000 2013
2014 ° 35,000 ° 315,000 60,000 2014
2015 ° 35,000 0 330,000 65,000 2015
2016 ° 35,000 ° 345,000 70,000 2016 ·
2017 0 40,000 0 355,000 0 2017
2018 0 40,000 ° ° 0 2018
2019 ° 45,000 0 0 ° 2019
2020 ° 45,000 ° ° ° 2020
2021 0 45,000 0 0 0 2021
$650,000 $615,000 $245,000 $4,700,000 $810,000
(1) (9) (10) (5) (1) (11) (12)
·
-30-
CITY OF ST. JOSEPH, MINNESOTA
e GENERAL OBLIGATION DEBT
(As of July 16, 2003, Plus This Issue)
This Issue
Purpose: G.O. G.o.! 6.0.
Fire Hall Improvement 1 Bonds
Crossover Crossover 1 of
Refunding Refunding! 2003
Bonds of 2003 Bonds of 20031
Dated: 07/01/03 07/01/03 1 08/01/03
Original Amount: $815,000 $750,000 1 $1,615,000 $520,000 !
Maturity: 1-Dee 1-Dee I 1-Dee I
Interest Rates: 1.50-4.40% 1.25-3.15%! ------- j TOTALS:
!
I ~
2003 $0 $01 i $1,005,000 2003
i
2004 ° 115,000 ! $585,000 $100,000 I 1,830,000 2004
2005 50,000 115,000 1 140,000 100,000 1 1,460,000 2005
2006 55,000 120,000 I 290,000 105,000 ~ 1,425,000 2006
2007 50,000 120,000 1 295,000 105,000 I 1,210,000 2007
2008 55,000 100,000 1 305,000 110,000 i 1,220,000 2008
2009 60,000 55,000 ! ° 01 760,000 2009
2010 L ~~~ 60,000 I ° 01 790,000 2010
2011 65,000 ! 0 Oi 825,000 2011
2012 1 65,000 1 °1 ° 01 675,000 2012
. .
2013 1 ____~5l!~OJ ° 1 ° °1 705,000 2013
2014 I 70,000 I °1 ° 01 690,000 2014
. 2015 I 75 000 I °1 ° 01 595,000 2015
!_____________1_____1
2016 I 75,000 ! °1 ° °1 620,000 2016
I
I
I 80,000 !
2017 I 01 ° °1 575,000 2017
I
.-------------------. O!
2018 ° ° O! 40,000 2018
2019 ° ° ! ° °1 45,000 2019
;
2020 ° °1 ° °1 45,000 2020
2021 ° O! 0 01 45,000 2021
i I
$815,000 $750,000 I $1,615,000 $520,000 I $14,560,000
(5) (13) (14) (1) (15) (16) I (1) (17) I
Less (2,040,000) (2) (3) (4) (6)
Net G.O. Debt: $12,520,000
NOTE: 76.92% OF GENERAL OBLIGATION DEBT WILL BE RETIRED WITHIN TEN YEARS.
.
-31-
CITY OF ST. JOSEPH, MINNESOTA
GENERAL OBLIGATION DEBT ·
(As of July 16, 2003, Plus This Issue)
(1) These bonds are payable primarily from special assessments and additionally secured by ad valorem taxes on all taxable property within
the City and without limitation of amount.
(2) These bonds will be cross refunded by the $750,000 General Obligation Improvement Crossover Refunding Bonds of 2003, dated July 1,
2003. Maturities 2004 through 2007, inclusive, in aggregate of $75,000, will be called for redemption on December 1, 2003 at a price of
par plus accrued interest.
(3) These bonds will be cross refunded by the $750,000 General Obligation Improvement Crossover Refunding Bonds of2003, dated July 1,
2003. Maturities 2004 through 2008, inclusive, in aggregate of $225,000, will be called for redemption on December 1, 2003 at a price of
par plus accrued interest.
(4) These bonds will be cross refunded by the $750,000 General Obligation Improvement Crossover Refunding Bonds of 2003, dated July 1,
2003. Maturities 2004 through 2011, inclllSive, in aggregate of$795,000, will be called for redemption on December 1, 2003 at a price of
par plus accrued interest.
(5) These bonds are payable solely from ad valorem taxes on all taxable property within the City and without limitation of amount.
(6) These bonds will be cross refunded by the $815,000 General Obligation Fire Hall Crossover Refunding Bonds of 2003, dated July 1,
2003. Maturities 2005 through 2017, inclusive, in aggregate of $945,000, will be called for redemption on December 1, 2004 at a price of
par plus accrued interest.
(7) Maturities of these bonds 2011 through 2013, inclllSive, are subject to mandatory redemption on December 1 of their respective years.
(8) These bonds have been additionally secured by AMBAC Idemnity Corporation and are rated Aaa.
(9) These bonds are payable primarily from net revenues of the municipal sewer utility system and additionally secured by ad valorem taxes on
all taxable property within the City and without limitation of amount.
(10) Maturities of these bonds (i) 2002 through 2005, inclusive, (ii) 2006 through 2009, inclusive, (iii) 2010 through 2013, inclusive, (iv) 2014
through 2017, inclusive, and (v) 2018 through 2021, inclusive, are subject to mandatory redemption on December 1 of their respective years.
(11) These bonds are payable primarily from net revenues of the municipal water utility system and additionally secured by ad valorem taxes on
all taxable property within the City and without limitation of amount.
(12) These bonds current refunded (i) $145,000 of the $475,000 General Obligation Water Revenue Bonds of 1992, dated October 1,1992. ·
Maturities 2003 through 2005, inclusive, were called for redemption on December 1, 2002, at a price of par plus accnœd interest and (ii)
$645,000 of the $780,000 General Obligation Water Revenue Bonds of 1996, dated June 1, 1996. Maturities 2003 through 2016, inclusive,
were called for redemption on December 1, 2002, at a price of par plus accrued interest.
(13) These bonds will cross refund $945,000 of the $1,040,000 outstanding of the $1,235,000 General Obligation Bonds of 1997, dated April 1,
1997. Maturities 2005 through 2017, inclusive, will called for redemption on December 1, 2004, at a price of par plus accrued interest.
(14) Maturities of these bonds (i) 2010 through 2011, inclusive, (ii) 2012 through 2013, inclusive, (iii) 2014 through 2015, inclusive, and (iv)
2016 through 2017, inclusive, are subject to mandatory redemption on December 1 of their respective years.
(15) These bonds will cross refund (i) $75,000 of the $90,000 General Obligation Improvement Bonds of 1992, dated July 1, 1992. Maturities
2004 through 2007, inclusive, will be called for redemption on December 1,2003, at a price of par plus accrued interest; (ii) $225,000 of
the $265,000 outstanding of the $550,000 General Obligation Improvement Bonds of 1993, dated November 1, 1993. Maturities 2004
through 2008, inclusive, will be called for redemption on December 1, 2003, at a price of par plus accrued interest; and (iii) $795,000 of
the $875,000 outstanding of the $1,280,000 General Obligation Improvement Bonds of 1996, dated June 1, 1996. Maturities 2004 through
2011, inclusive, will be called for redemption on December 1, 2003, at a price of par plus accrued interest.
(16) Maturities of these bonds, 2010 through 2011, inclusive, are subject to mandatory redemption on December 1 of their respective years.
(17) These bonds are payable primarily from net revenues of the municipal water and storm sewer utility system and additionally secured by ad
valorem taxes on all taxable property within the City and without limitation of amount.
·
-32-
SUMMARY OF DEBT AND DEBT STATISTICS
· General Obligation Debt
Bonds secured by special assessments (including part of this issue) $ 10,515,000
Bonds secured by ad valorem taxes 2,100,000
Bonds secured by sewer revenues 615,000
Bonds secured by water revenues 810,000
Bonds secured by storm sewer and water revenues (including part of this issue) 520.000
Total General Obligation Direct Debt $ 14,560,000
Less refunded maturities1 ( 2,040,000)
Less debt service funds ( 3.620.813)
Net Direct General Obligation Debt $ 8,899,187
Add City's share of net overlapping debt 920.785
Total Net Direct and Net Overlapping Debt $ 9.819.972
Special Obligations
$960,000 Public Project Revenue Bonds of 2000 $ 875,000
$700,000 Public Project Revenue Bonds of 2003 $ 700,000
· Facts for Ratio Computations
2002/2003 Indicated Market Value (real and personal property) $158,463,437
2002/2003 Net Tax Capacity (real and personal property, after
tax increment adjustment) $1,501,328
Population (2002 Estimate) 5,074
Debt Ratios
Net Direct
Net Net and Net
Direct Direct Overlapping Overlapping
Debt Debt Debt Debt
To Indicated Market Value 7.90% 5.62% 0.58% 6.20%
Per Capita $2,467 $1,754 $181 $1,935
Per Capita Adjusted2 $1,896 $1,348 $139 $1,487
1 Includes the (i) $75,000 of the outstanding $90,000 of the $200,000 General Obligation Improvement Bonds of 1992, dated July 1,
1992, maturities 2004 through 2007, inclusive, (ii) $225,000 of the $265,000 outstanding of the $550,000 General Obligation
Improvement Bonds of 1993, dated November 1, 1993, maturities 2004 through 2008, inclusive, (iii) $795,000 of the $875,000
outstanding of the $1,280,000 General Obligation Improvement Bonds of 1996, dated June 1, 1996, maturities 2005 through 2011,
· inclusive, that will be cross refunded by the $750,000 General Obligation Improvement Crossover Refunding Bonds of 2003 dated
July 1, 2003 and called for redemption on December 1, 2003 at a price of par plus accrued interest, and (iv) $945,000 of the
$1,040,000 outstanding of the $1,235,000 General Obligation Bonds of 1997, dated April 1, 1997, maturities 2005 through 2017,
inclusive, that will be cross refunded by the $815,000 General Obligation Fire Hall Crossover Refunding Bonds of 2003, dated July 1,
2003 and called for redemption on December 1, 2004 at a price of par plus accrued interest.
2 The City's tax base is 22.43% commercial & industrial, .57% public utility, and .16% railroad operating property, which has been
deducted.
-33-
PROPOSAL FORM
TO: City of St. Joseph, Minnesota Sale Date: July 31, 2003 .
C/O Northland Securities, Inc.
45 South 7th Street, Suite 2500
Minneapolis, Minnesota 55402
Phone: (612) 851-5900, Fax: (612) 851-5917
For all or none of the $2,135,000 General Obligation Bonds of 2003, in accordance with the Official Terms of
Bond Sale, we will pay you $ , (not less than $2,108,313.00) plus accrued interest
to date of delivery for fully registered Bonds bearing interest rates and maturing on December 1 in the stated
years as follows:
% - 2004 % - 2007
% - 2005 % - 2008
% - 2006
True interest cost: Net interest cost: $
Term Bond Option: Bonds maturing in the years through , to be accumulated into
a Term Bond maturing in year
Bonds maturing in the years through , to be accumulated into .
a Term Bond maturing in year
If our bid is not accepted, our good faith deposit in the amount of $42,700 will be promptly returned to us. This
bid is for prompt acceptance and is conditional upon deposit of said Bonds to a named registrar within 40 days
from the date hereof, or thereafter at our option.
We have received and reviewed the Preliminary Official Statement and have submitted our requests for
additional information or corrections to the Official Statement dated July 22, 2003. As Syndicate Manager, we
agree to provide the City with the reoffering price of the Bonds within 24 hours of the bid acceptance.
Account Members:
Account Manager: By:
The foregoing offer is hereby accepted by and on behalf of the City of St. Joseph, Minnesota on July 31, 2003.
City Administrator Mayor
.
-34-
APPENDIX A
·
Proposed Form of Legal Opinion
·
·
BRIGGS AND MORGAN W2200 First National Bank Building
332 Minnesota Street.
Saint Paul, MN 55101-1396
Telephone 651-808-6600
Facsimile 651-808-6450
PROFESSIONAL ASSOCIA nON www.briggs.com
PROPOSED FORM OF LEGAL OPINION
$2,135,000
GENERAL OBLIGATION BONDS OF 2003
CITY OF ST. JOSEPH
STEARNS COUNTY
MINNESOTA
We have acted as bond counsel in connection with the issuance by the City of St. Joseph,
Stearns County, Minnesota (the "Issuer"), of its $2,135,000 General Obligation Bonds of 2003,
bearing a date of original issue of August 1,2003 (the "Bonds"). We have examined the law and
such certified proceedings and other documents as we deem necessary to render this opinion.
We have not been engaged or undertaken to review the accuracy, completeness or .
sufficiency of the Official Statement or other offering material relating to the Bonds, and we
express no opinion relating thereto.
As to questions of fact material to our opinion, we have relied upon the certified
proceedings and other certifications of public officials furnished to us without undertaking to
verify the same by independent investigation.
Based upon such examinations, and assuming the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such documents, and the
accuracy of the statements of fact contained in such documents, and based upon present
Minnesota and federal laws (which excludes any pending legislation which may have a
retroactive effect on or before the date hereof), regulations, rulings and decisions, it is our
opinion that:
(1) The proceedings show lawful authority for the issuance of the Bonds according to
their terms under the Constitution and laws of the State of Minnesota now in force.
.
1541141vl ML.'\,'NEAPOLIS OFFICE' IDS CENTER' \V\\\\'.BRIGGS.cm.!
lYIEMBER - LEX MUNDI, A GLOBAL ASSOCL-\TION OF INDEPENDENT LAW FIRMS
·
BRIGGS AND MORGAN
PROPOSED FORM OF LEGAL OPINION
(2) The Bonds are valid and binding general obligations of the Issuer and all of the
taxable property within the Issuer's jurisdiction is subject to the levy of an ad valorem tax to pay
the same without limitation as to rate or amount; provided that the enforceability (but not the
validity) of the Bonds and the pledge of taxes for the payment of the principal and interest
thereon is subject to the exercise of judicial discretion in accordance with general principles of
equity, to the constitutional powers of the United States of America and to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors' rights
heretofore or hereafter enacted.
(3) At the time of the issuance and delivery of the Bonds to the original purchaser, the
interest on the Bonds is excluded from gross income for United States income tax purposes and
is excluded, to the same extent, from both gross income and taxable net income for State of
Minnesota income tax purposes (other than Minnesota franchise taxes measured by income and
· imposed on corporations and fmancial institutions), and is not an item of tax preference for
purposes of the federal alternative minimum tax imposed on individuals and corporations or the
Minnesota alternative minimum tax applicable to individuals, estates or trusts; it should be noted,
however, that for the purpose of computing the federal alternative minimum tax imposed on
corporations, such interest is taken into account in determining adjusted current earnings. The
opinions set forth in the preceding sentence are subject to the condition that the Issuer comply
with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied
subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be,
excluded from gross income for federal income tax purposes and from both gross income and
taxable net income for State of Minnesota income tax purposes. Failure to comply with certain
of such requirements may cause the inclusion of interest on the Bonds in gross income and
taxable net income retroactive to the date of issuance of the Bonds.
We express no opinion regarding other state or federal tax consequences caused by the
receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds.
BRIGGS AND MORGAN
Professional Association
·
1541141vl
. FORM OF CONTINUING DISCLOSURE UNDERTAKING
This Continuing Disclosure Undertaking (the "Disclosure Undertaking") is executed and
delivered by the City of St. Joseph, Minnesota (the "Issuer"), in connection with the issuance of
$2,135,000 General Obligation Bonds of2003 (the "Bonds"). The Bonds are being issued
pursuant to a Resolution adopted on July 31, 2003 (the "Resolution"). Pursuant to the Resolution
and this Undertaking, the Issuer covenants and agrees as follows:
SECTION 1. Purpose of the Disclosure Undertaking. This Disclosure Undertaking is
being executed and delivered by the Issuer for the benefit of the Owners and in order to assist the
Participating Underwriters in complying with SEC Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the defmitions set forth in the Resolution,
which apply to any capitalized term used in this Disclosure Undertaking unless otherwise
defined in this Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any annual financial information provided by the Issuer
pursuant to, and as described in, Sections 3 and 4 of this Disclosure Undertaking.
"Audited Financial Statements" shall mean the financial statements of the Issuer audited
annually by an independent certified public accounting firm, prepared pursuant to generally
accepted accounting principles promulgated by the Financial Accounting Standards Board,
. modified by governmental accounting standards promulgated by the Government Accounting
Standards Board.
"Dissemination Agent" shall mean such party from time to time designated in writing by
the Issuer to act as information dissemination agent and which has filed with the Issuer a written
acceptance of such designation.
"Fiscal Year" shall be the fiscal year ofthe Issuer.
"Governing Body" shall, with respect to the Bonds, have the meaning given that term in
Minnesota Statutes, Section 475.51, Subdivision 9.
"MSRB" shall mean the Municipal Securities Rulemaking Board.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. Currently, the following are National
Repositories:
.
1541141vl
Bloomberg Municipal Repository ·
100 Business Park Drive
Skillman, NJ 08558
Phone: (609) 279-3225; Fax: (609) 279-5962
E-mail: Munis@Bloomberg.com
FT Interactive Data
Attn: Repository
100 Williams Street
New York, NY 10038
Phone: (212) 771-6899; Fax: (212) 771-7390
E-mail: NRMSIR@FTID.com
Standard & Poor's J.1. Kenny Repository
55 Water Street - 45th Floor
New York, NY 10041
Attn: Repository Services
Phone: (212) 438-4595; Fax: (212) 438-3975
E-mail: nrmsir Jepository@sandp.com
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024 ·
Phone: (201) 346-0701; Fax: (20 I) 947-0107
E-Mail: Nrmsir@dpcdata.com
"Occurrence(s)" shall mean any of the events listed in Section 5.A. of this Disclosure
Undertaking.
"Official Statement" shall be the Official Statement dated July _,2003, prepared in
connection with the Bonds.
"Owners" shall mean the registered holders and, ifnot the same, the beneficial owners of
any Bonds.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds
required to comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean each National Repository and each State Depository.
"Resolution" shall mean the resolution or resolutions adopted by the Governing Body of
the Issuer providing for, and authorizing the issuance of, the Bonds.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time or interpreted by the Securities and Exchange Commission.
"State" shall mean the State of Minnesota. ·
1541141vl
. "State Depository" shall mean any public or private repository or entity designated by the
State as a state depository for the purpose of the Rule. As of the date of this Disclosure
Undertaking, there is no State Depository in Minnesota.
SECTION 3. Provision of Annual Reports.
A. Beginning in connection with the Fiscal Year ending on December 31, 200_, the
Issuer shall, or shall cause the Dissemination Agent to, as soon as available, but in any event not
later than December 31, _, and by December 31 of each year thereafter, provide to each
Repository an Annual Report which is consistent with the requirements of Section 4 ofthis
Disclosure Undertaking.
B. If the Issuer is unable to provide to the Repositories an Annual Report by the date
required in subsection A, the Issuer shall send a notice of such delay and estimated date of
delivery to each Repository or to the MSRB and to the State Depository, if any.
SECTION 4. Content and Format of Annual Reports. The Issuer's Annual Report shall
contain or incorporate by reference the financial information and operating data pertaining to the
Issuer listed below as of the end of the preceding Fiscal Year. The Annual Report may be
submitted to each Repository as a single document or as separate documents comprising a
package, and may cross-reference other information as provided in this Disclosure Undertaking.
. The following financial information and operating data shall be supplied:
A. an update of the operating and financial data of the type of information contained
in the Official Statement under the captions ECONOMIC AND FINANCIAL INFORMATION;
SUMMARY OF DEBT AND DEBT S:rATISTICS; GENERAL INFORMATION -"Major
Employers" and "Building Permits".
B. Data extracted from preliminary, unaudited financial statements of the Issuer and
from past audited financial statements of the Issuer in the form and of the type contained in the
Appendix of the Official Statement.
C. Audited Financial Statements of the Issuer. The Audited Financial Statements of
the Issuer may be submitted to each Repository separately from the balance of the Annual
Report. In the event Audited Financial Statements of the Issuer are not available on or before the
date for filing the Annual Report with the appropriate Repositories as set forth in Section 3.A.
above, unaudited financial statements shall be provided as part of the Annual Report. The
accounting principles pursuant to which the financial statements will be prepared will be
pursuant to generally accepted accounting principles promulgated by the Financial Accounting
Standards Board, as such principles are modified by the governmental accounting standards
promulgated by the Government Accounting Standards Board, as in effect from time to time. If
Audited Financial Statements are not provided because they are not available on or before the
date for filing the Annual Report, the Issuer shall promptly provide them to the Repositories
when available.
.
1541141vl
.
SECTION 5. Reporting of Significant Events.
A. This Section 5 shall govern the giving of notices of the occurrence of any of the
following events with respect to the Bonds, if material:
(I) principal and interest payment delinquency;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting fmancial difficulties;
(4) unscheduled draws on credit enhancements reflecting fmancial difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events affecting the tax-exempt status of the security;
(7) modifications to rights of security holders;
(8) Bond calls;
(9) defeasances;
(10) release, substitution or sale of property securing repayment of the Bonds; and
(11) rating changes.
B. Whenever an event listed in Section 5.A. above has occurred, the Issuer shall as
soon as possible determine if such event would constitute material information for Owners of
Bonds. Ifknowledge of the Occurrence would be material, the Issuer shall promptly file a notice
of such Occurrence with each National Repository or the MSRB and with the State Depository, .
if any.
C. The Issuer agrees to provide or cause to be provided, in a timely manner, to each
National Repository or the MSRB and to the State Depository, if any, notice of a failure by the
Issuer to provide the Annual Reports described in Section 4.
SECTION 6. Termination of Reporting Obligation. The Issuer's obligations under this
Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment
in full of all of the Bonds.
SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or
engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Undertaking, and may discharge any such Agent, with or without appointing a successor
Dissemination Agent.
SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this
Disclosure Undertaking, the Issuer may amend this Disclosure Undertaking, and any provision of
this Disclosure Undertaking may be waived, if (a) a change in law or change in the ordinary
business or operation of the Issuer has occurred, (b) such amendment or waiver would not, in and
of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been
effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule, and (c) such amendment or waiver is supported by an opinion of
counsel expert in federal securities laws to the effect that such amendment or waiver would not
materially impair the interests of Owners. .
1541141 vl
. SECTION 9. Additional Information. Nothing in this Disclosure Undertaking shall be
deemed to prevent the Issuer from disseminating any other information, using the means of
dissemination set forth in this Disclosure Undertaking or any other means of communication, or
including any other information in any Annual Report or notice of an Occurrence, in addition to
that which is required by this Disclosure Undertaking. If the Issuer chooses to include any
information in any Annual Report or notice of an Occurrence in addition to that which is
specifically required by this Disclosure Undertaking, the Issuer shall have no obligation under
this Disclosure Undertaking to update such information or include it in any future Annual Report
or notice of an Occurrence.
SECTION 10. Default. In the event of a failure of the Issuer to provide information
required by this Disclosure Undertaking, any Owner may take such actions as may be necessary
and appropriate, including seeking mandamus or specific performance by court order, to cause
the Issuer to comply with its obligations to provide information under this Disclosure
Undertaking. A default under this Disclosure Undertaking shall not be deemed an Event of
Default under the Resolution, and the sole remedy under this Disclosure Undertaking in the
event of any failure of the Issuer to comply with this Disclosure Undertaking shall be an action
to compel performance.
SECTION 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the
benefit of the Issuer, the Participating Underwriters and Owners from time to time of the Bonds,
and shall create no rights in any other person or entity.
. SECTION 12. Reserved Rights. The Issuer reserves the right to discontinue providing
any information required under the Rule if a final determination should be made by a court of
competent jurisdiction that the Rule is invalid or otherwise unlawful or, subject to the provisions
of Section 8 hereof, to modify the undertaking under this Disclosure Undertaking if the Issuer
determines that such modification is required by the Rule or by a court of competent jurisdiction.
Date: , 2003. CITY OF ST. JOSEPH, MINNESOTA
By
Its Mayor
By
Its Administrator
.
154114lvl
APPENDIX C
·
City's Financial Report
The following fmancial statements are excerpts from the annual financial report for the year ended
December 31, 2002. The complete fmancial report for the year 2001 and the prior two years are available for
inspection at the St. Joseph City Hall and the office of Northland Securities. The reader of this Official
Statement should be aware that the complete financial report may have further data relating to the excerpts
presented in the appendix which may provide additional explanation, interpretation or modification of the
excerpts.
Excerpts from the Financial Report
~ Combined Balance Sheet - All Fund Types and Account Groups
~ Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund
Types
~ Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
General and Special Revenue Fund Types
~ Combined Statement of Revenues, Expenses and Changes in Retained Earnings· - All Proprietary Fund
Types
~ Combined Statement of Cash Flows - All Proprietary Fund Types
· ~ Notes to the Financial Statements
·
CITY OF ST. JOSEPH, MINNESOTA
COMBINED BALANCE SHEET - ·
ALL FUND TYPES AND ACCOUNT GROUPS
December 31, 2002
Governmental Fund Types
Special Debt Capital
ASSETS AND OTHER DEBITS General Revenue Service Projects
ASSETS:
Cash and Investments (Including Cash
Equivalents) $ 1,466,090 $ 96,637 $ 3,456,204 $ 1,072,195
Taxes Receivable -
Delinquent 4,037 0 3,852 0
Special Assessments Receivable -
Deferred 3,469 0 3,244,027 0
Delinquent ° ° 23,894 0
Accounts Receivable 42,226 ° 77,101 0
Notes Receivable 10,000 ° ° 0
Interest Receivable 7,949 437 43,289 1,570
Due from Other Governmental Units 98,068 0 88,059 57,964
Fixed Assets - Net 0 0 0 0
OTHER DEBITS:
Amount Available in Debt Service Funds ° 0 0 0
Amount to be Provided from Special
Assessments ° ° 0 0
Amount to be Provided for Compensated
Absences Payable ° 0 0 0
Amount to be Provided for Retirement of ·
General Long-Term Debt ° ° 0 0
TOTAL ASSETS AND OTHER DEBITS $ 1,631,839 $ 97,074 $ 6,936,426 $ 1,131,729
LIABILITIES, EQUITY AND OTHER CREDITS
LIABILITIES:
Cash Overdraft $ ° $ 13,493 $ 34,464 $ °
Accrued Liabilities 167,231 10,497 9,924 24,054
Contracts Payable ° ° ° 179,552
Deferred Revenue 7,506 ° 3,271,773 0
Compensated Absences Payable 14,525 0 0 0
Bonds Payable 0 0 0 0
Loans Payable ° ° 0 0
Total Liabilities 189,262 23,990 3,316,161 203,606
EQUITY AND OTHER CREDITS:
Investment in General Fixed Assets 0 ° 0 0
Contributed Capital 0 0 ° 0
Retained Earnings (Deficit) 0 0 0 0
Fund Balance -
Reserved 10,000 ° 3,620,265 0
Umeserved -
Designated 677,727 0 0 0
Undesignated 754,850 73,084 0 928,123
Total Equity and Other Credits 1,442,577 73,084 3,620,265 928,123
TOTAL LIABILITIES, EQUITY
AND OTHER CREDITS $ 1,631,839 $ 97,074 $ 6,936,426 $ 1,131,729
·
The notes to the financial statements are an integral part of this statement.
.
Proprietary
Fund Types Account Groups
General General Totals
Fixed Long-Tenn (Memorandum Only)
Enterprise Assets Deþt 2002 2001
$ 1,133,728 $ 0 $ 0 $ 7,224,854 $ 5,095,203
0 0 0 7,889 7,102
0 0 0 3,247,496 1,752,457
0 0 0 23,894 3,299
131,449 0 0 250,776 329,788
0 0 0 10,000 20,000
9,647 0 0 62,892 106,263
0 0 0 244,091 266,519
8,195,743 4,146,673 0 12,342,416 9,019,091
0 0 3,620,265 3,620,265 2,494,904
0 0 3,267,921 3,267,921 1,602,431
. 0 0 58,005 58,005 54,584
0 0 5,042,974 5,042,974 3,465,749
$ 9,470,567 $ 4,146,673 $ 11,989,165 $ 35,403,473 $ 24,217,390
$ 0 $ 0 $ 0 $ 47,957 $ 62,896
43,498 0 0 255,204 276,437
0 0 0 179,552 0
0 0 0 3,279,279 1,762,858
35,404 0 58,005 107,934 102,235
0 0 11,735,000 11,735,000 7,340,000
0 0 196,160 196,160 223,084
78,902 0 11,989,165 15,801,086 9,767,510
0 4,146,673 0 4,146,673 3,540,296
9,570,807 0 0 9,570,807 6,683,167
(179,142) 0 0 (179,142) (206,535)
0 0 0 3,630,265 2,514,904
0 0 0 677,727 972,398
0 0 0 1,756,057 945,650
9,391,665 4,146,673 0 19,602,387 14,449,880
. $ 9,470,567 $ 4,146,673 $ 11,989,165 $ 35,403,473 $ 24,217,390
CITY OF ST. JOSEPH, MINNESOTA ·
COMBINED STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES
Year Ended December 31, 2002
Governmental Fund Types
Special Debt
General Revenue Service
REVENUES:
General Property Taxes $ 257,694 $ 0 $ 241,588
Special Assessments 2,570 0 1,171,543
Licenses and Permits 142,198 0 0
Intergovemmen tal 915,247 0 341,164
Charges for Services 174,986 0 0
Fines 56,299 0 0
Miscellaneous 171,886 95,192 289,328
Total Revenues 1,720,880 95,192 2,043,623
EXPENDITURES:
Current -
General Government 393,060 0 0
Public Safety 1,141,743 41,782 0
Public Works 285,279 0 0
Culture and Recreation 132,156 0 0
Economic Development 0 77,230 0 ·
Miscellaneous 103,641 0 0
Capital Outlay 0 0 0
Debt Service 0 0 1,862,133
Total Expenditures 2,055,879 119,012 1,862,133
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES (334,999) (23,820) 181,490
OTHER FINANCING SOURCES (USES):
Operating Transfers In 0 52,222 35,309
Operating Transfers Out (87,531) 0 0
Sale of Surplus Property 165,592 0 0
Proceeds from the Sale of Bonds 0 0 908,492
Total Other Financing Sources (Uses) 78,061 52,222 943,801
EXCESS OF REVENUES AND OTHER
FINANCING SOURCES OVER EXPENDITURES
AND OTHER FINANCING USES (256,938) 28,402 1,125,291
FUND BALANCE - January 1 1,699,515 44,682 2,494,904
RESIDUAL EQUITY TRANSFER 0 0 70
FUND BALANCE - December 31 $ 1,442,577 $ 73,084 $ 3,620,265
·
The notes to the financial statements are an integral part of this statement.
.
Totals
Capital (Memorandum Only)
Projects 2002 2001
$ 0 $ 499,282 $ 658,119
0 1,174,113 923,880
0 142,198 90,366
75,091 1,331,502 744,210
45,318 220,304 194,081
0 56,299 80,512
17,241 573,647 400,572
137,650 3,997,345 3,091,740
0 393,060 298,701
0 1,183,525 721,188
0 285,279 337,298
0 132,156 156,382
. 0 77 ,230 48,866
0 103,641 222
4,139,459 4,139,459 1,721,820
0 1,862,133 729,149
4,139,459 8,176,483 4,013,626
(4,001,809) (4,179,138) (921,886)
0 87,531 297,000
0 (87,531) 0
0 165,592 69,471
4,736,151 5,644,643 1,436,398
4,736,151 5,810,235 1,802,869
734,342 1,631,097 880,983
193,851 4,432,952 3,551,969
(70) 0 0
$ 928,123 $ 6,064.049 $ 4.432.952
.
CITY OF ST. JOSEPH, MINNESOTA ·
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL -
GENERAL AND SPECIAL REVENUE FUND TYPES
Year Ended December 31, 2002
General Fund
Over
(Under)
Budget Actual Budget
REVENlÆS:
General Property Taxes $ 266,717 $ 257,694 $ (9,023)
Special Assessments 21,000 2,570 (18,430)
Licenses and Pennits 67,350 142,198 74,848
Intergovernmental 842, III 915,247 73,136
Charges for Services 166,505 174,986 8,481
Fines 77,100 56,299 (20,801)
Miscellaneous 70,500 171,886 101,386
Total Revenues 1,511,283 1,720,880 209,597
EXPENDITURES:
Current -
General Government 336,755 393,060 56,305
Public Safety 774,811 1,141,743 366,932
Public Works 291,850 285,279 (6,571) ·
Culture and Recreation 160,533 132,156 (28,377)
Economic Development 0 0 0
Miscellaneous 500 103,641 103,141
Total Expenditures 1,564,449 2,055,879 491,430
REVENlÆS OVER (UNDER) EXPENDITURES (53,166) (334,999) (281,833)
OTHER FINANCING SOURCES (USES):
Operating Transfers In 900 0 (900)
Operating Transfers Out 0 (87,531) (87,531)
Sale of Surplus Property 0 165,592 165,592
Total Other Financing Sources (Uses) 900 78,061 77,161
EXCESS OFREVENlÆS OVER (UNDER)
EXPENDITURES AND OTHER
FINANCING USES $ (52,266) (256,938) $ (204,672)
FUND BALANCE - January 1 1,699,515
FUND BALANCE - December 31 $ 1,442,577
·
The notes to the financial statements are an integral part of this statement.
.
Special Revenue Funds
Over
(Under)
Budget Actual Budget
$ 33,280 $ 0 $ (33,280)
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 95,192 95,192
33,280 95,192 61,912
0 0 0
0 41,782 41,782
:. 0 0 0
0 0 0
35,130 77 ,230 42,100
0 0 0
35,130 119,012 83,882
(1,850) (23,820) (21,970)
0 0 0
0 52,222 52,222
0 0 0
0 52,222 52,222
$ (l,850) 28,402 $ 30,252
44,682
$ 73,084
.
CITY OF ST. JOSEPH, MINNESOTA .
COMBINED STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES
Year Ended December 31, 2002
With Comparative Totals for the Year Ended December 31, 2001
Totals
2002 2001
OPERATING REVENUES:
Charges for Services $ 646,185 $ 656,677
OPERATING EXPENSES:
Salaries and Benefits 180,619 136,203
Utilities 28,841 28,748
Supplies 16,546 14,638
Sewer Use Rental 125,374 123,898
Postage 1,521 1,890
Repairs and Maintenance 31,301 32,649
Professional Fees 0 765
Fees and Tests 10,065 12,535
Dues and Subscriptions 626 610
Refuse Disposal 109,544 96,745
Depreciation 164,346 142,395
Insurance 10,800 8,734
Miscellaneous 4,639 5,292 .
Total Operating Expenses 684,222 605,102
OPERATING INCOME (LOSS) (38,037) 51,575
NON-OPERATING REVENUES (EXPENSES):
Investment Income 56,722 60,011
Other Revenues 16,615 19,891
Loss on Disposal of Fixed Assets (7,907) 0
Total Non-Operating Revenues (Expenses) 65,430 79,902
INCOME BEFORE OPERATING TRANSFERS 27,393 131,477
Operating Transfers Out 0 (297,000)
NET INCOME (LOSS) 27,393 (165,523)
RETAINED EARNINGS (DEFICIT) - January 1 (206,535) (41,012)
RETAINED EARNINGS (DEFICIT) - December 31 $ (179,142) $ (206,535)
.
The notes to the financial statements are an integral part of tills statement.
· CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF CASH FLOWS -
ALL PROPRIETARY FUND TYPES
Year Ended December 31, 2002
With Comparative Totals for the Year Ended December 31, 2001
Totals
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating Income (Loss) $ (38,037) $ 51,575
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation 164,346 142,395
Other Non-operating Revenues 16,615 19,891
Change in Assets and Liabilities:
Accounts Receivable 47,360 (1,119)
Accrued Liabilities (14,047) 16,725
Due to Other Governmental Units 0 (17, 11 7)
Compensated Absences Payable 3,469 3,720
Total Adjustments 217,743 164,495
Net Cash Provided by Operating Activities 179,706 216,070
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
· Operating Transfers to Other Funds 0 (297,000)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
Capital Acquisitions (1,560) (9,295)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment Income 66,902 60,791
Net Increase (Decrease) in Cash and Cash Equivalents 245,048 (29,434)
Cash and Cash Equivalents, January 1 888,680 918,114
Cash and Cash Equivalents, December 31 $ 1,133,728 $ 888,680
·
The notes to the financial statements are an integral part of this statement.
CITY OF ST. JOSEPH, MINNESOTA ·
NOTES TO THE FINANCIAL STATEMENTS
December 31,2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of St. Joseph, Minnesota, has a mayor-council fonn of government. A mayor and four
council members are elected by the voters of the City for two-year and four-year tenns,
respectively.
The accounting policies of the City confonn to accounting principles generally accepted in the
United States of America as applicable to governments. With respect'to proprietary activities,
the City has adopted GASB No. 20, "Accounting and Financial Reporting for Proprietary Funds
and Other Governmental Entities that use Proprietary Fund Accounting". The City has elected to
apply all applicable GASB pronouncements as well as Financial Accounting Standards Board
(FASB) pronouncements, Accounting Principles Board (APB) Opinions and Accounting
Research Bulletins (ARB), issued on or before November 30, 1989 unless those pronouncements
conflict with or contradict GASB pronouncements. In addition, the City has elected not to apply
F ASBs, APBs and ARBs issued after November 30, 1989. The following is a summary of the
City's more significant accounting policies.
A. Financial Reporting Entity
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
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 perfonned or provided by the organization, or there is a potential for the
organization to provide specific financial benefits to, or impose specific financial burdens on,
the City.
As a result of applying the component unit definition criteria above, the City ofSt. Joseph's
component unit is presented in this report as follows:
Blended Component Unit - 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 ofSt. Joseph. The Authority is
governed by a five member board appointed by the City Council. The EDA is included as a
blended component unit ofthe City because the EDA is financially accountable to the City,
and the Authority provides services almost entirely for the City. The St. Joseph EDA is
presented as a special revenue fund, the City Hall Project Capital Project Fund and the EDA
Public Project Revenue Bonds of2000 Debt Service fund. Separate financial statements ate
not prepared for the EDA. ·
· CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Fund Accounting
The accounts ofthe City are organized on the basis of funds and account groups, each of
which is considered a separate accounting entity. The operations of each fund are accounted
for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund
equity, revenues and expenditures or expenses, as appropriate. Government resources are
allocated to and accounted for in individual funds based upon the purposes for which they are
to be spent and the means by which expending activities are controlled. The various funds
are grouped, in the financial statements in this report, into five generic fund types and two
broad fund categories, described below.
GovenunentalFunds
The General Fund is the general operating fund ofthe City. It is used to account for all
financial resources except those required to be accounted for in another fund.
· Special Revenue Funds are used to account for the proceeds of specific revenue sources
(other than expendable trusts or major capital projects) that are legally restricted to
expenditures for specified purposes.
Debt Service Funds are used to account for the accumulation of resources for, and the
payment of, generallong-tenn debt principal, interest, and related costs.
Capital Projects Funds are used to account for financial resources to be used for the
acquisition or construction of major capital facilities (other than those financed by
enterprise funds).
Proprietary Funds
Enterprise Funds are used to account for operations (a) that are financed and operated in a
manner similar to private business enterprises--where the intent of the governing body is
that the costs (expenses, including depreciation) of providing goods or services to the
general public on a continuing basis be financed or recovered through user charges; or
(b) where the governing body has decided that periodic detennination of revenues earned,
expenses incurred, or net income is appropriate for capital maintenance, public policy,
management control, accountability, or other purposes. The City maintains Refuse,
Water and Sewer Enterprise Funds.
·
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Fixed Assets and Long-Term Liabilities
The accounting and reporting treatment applied to the fIxed assets and long-term liabilities
associated with a fund are determined by its measurement focus. All governmental funds are
accounted for on a spending or "financial flow" measurement focus. This means that only
current assets and current liabilities are generally included on their balance sheets. Their
reported fund balance (net current assets) is considered a measure of "available spendable
resources". Governmental fund operating statements present increases (revenues and other
financing sources) and decreases (expenditures and other financing uses) in net current
assets. Accordingly, they are said to present a summary of sources and uses of available
spendable resources during a period.
Fixed assets used in governmental fund type operations (general fixed assets) are accounted
for in the General Fixed Assets Account Group, rather than in governmental funds. Public
domain ("infrastructure") general fixed assets consisting of certain improvements other than
buildings, including roads, curbs and gutters, streets and sidewalks, are not capitalized by the
City. No depreciation has been provided on general fixed assets. .
All fIxed assets are valued at their historical cost or estimated historical cost if actual
historical cost is not available. Donated fixed assets are valued at their estimated fair value
on the date donated.
Because of their spending measurement focus, expenditure recognition for governmental
fund types is limited to exclude amounts represented by noncurrent liabilities. Since they do
not affect net current assets, such long-term amounts are not recognized as governmental
fund type expenditures or fund liabilities. They are instead reported as liabilities in the
General Long-Term Debt Account Group.
The two account groups, General Fixed Assets and General Long-Term Debt, are not
"funds". They are concerned only with the measurement of fInancial position. They are not
involved with measurement of results of operations.
All proprietary funds are accounted for on a flow of economic resources measurement focus.
This means that all assets and all liabilities (whether current or noncurrent) associated with
the funds' activity are included on their balance sheets. Proprietary fund type operating
statements present increases (revenues) and decreases (expenses) in net total assets.
.
e CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Fixed Assets and Long- Tenn Liabilities (Continued)
Major outlays for capital assets and improvements are capitalized in proprietary funds as
projects are constructed. Interest incurred during the construction phase of proprietary fund
fixed assets is reflected in the capitalized value of the asset constructed. Capital assets
constructed in governmental funds for proprietary funds are recorded as contributed capital.
Depreciation of all exhaustible fixed assets used by proprietary funds is charged as an
expense against their operations. Accumulated depreciation is reported on proprietary fund
balance sheets. Depreciation has been provided over the assets' estimated useful lives, which
range from five to fifty years, using the straight-line method. Depreciation expense for the
years ended December 31, 2002 and 2001 is $ 164,346 and $ 142,395, respectively.
D. Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized in
. the accounts and reported in the financial statements. Basis of accounting relates to the
timing of the measurement made, regardless of the measurement focus applied.
All governmental funds are accounted for using the modified accrual basis of accounting, in
which revenues are recognized when they become measurable and available as net current
assets.
The more significant revenues which have been accrued are intergovernmental revenues and
interest earnings.
Expenditures are generally recognized in the modified accrual basis of accounting when the
related fund liability is incurred. Exceptions to this general rule include sick pay and
principal and interest on generallong-tenn debt, which are recognized when due.
All proprietary funds are accounted for using the accrual basis of accounting; revenues are
recognized when they are earned and expenses are recognized when they are incurred.
E. Budgetary Data
The City Council adopts an annual budget. The amounts shown in the financial statements as
"budget" represent the original budgeted amount and all revisions made during the year. The
City follows these procedures in establishing the budgetary data reflected in the financial
statements.
.
CITY OF ST. JOSEPH, MINNESOTA ·
NOTES TO THE FINANCIAL STATEMENTS
December 31,2002
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Budgetary Data (Continued)
I. In August of each year, the City Administrator submits to the City Council a proposed
operating budget for the fiscal year commencing the following January 1. The operating
budget. includes proposed expenditures and the means of financing them for the
upcommg year.
2. Public hearings are conducted to obtain taxpayer comment.
3. Prior to December 31, the budget is legally enacted through passage of a resolution.
4. Formal budgetary integration is employed as a management control device during the
year for the General and Special Revenue Funds. Formal budgetary integration is not
employed for Debt Service Funds because effective budgetary control is alternatively
achieved through general obligation bond indenture provisions. Budgetary control for
Capital Projects Funds is accomplished through the use of project controls.
5. The Budgets for the General and Special Revenue Funds are adopted on a basis ·
consistent with accounting principles generally accepted in the United States of America.
F. Encumbrances
Encumbrances represent outstanding purchase orders and unfulfilled commitments that are
issued to outside vendors and budgeted in the current year but do not include amounts that
are set up as liabilities, amounts for personal services to be perfonned by City employees and
purchase orders applicable to the subsequent year's budget.
As of December 31, 2002, no outstanding encumbrances existed.
G. Cash and Investments (Including Cash Equivalents) (See Note 3)
Cash balances from all funds are combined and invested to the extent available in authorized
investments. Earnings from such investments are allocated to the respective funds on the
basis of applicable cash balance participation by each fund. Investments are carried at fair
value.
For purposes of the statement of cash flows, the City considers all short-tenn, highly liquid
investments with original maturity dates of three months or less from the date of purchase to
be cash equivalents. In addition, cash invested in the City's cash management pool is
considered to be cash equivalents. Based on this policy, the total cash and investments of the
proprietary fì.mds are considered to be cash equivalents.
·
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. Taxes Receivable
Delinquent taxes receivable represent the past six years of uncollected tax levies.
1. Special Assessments Receivable
Delinquent special assessments represent the past six years of uncollected special
assessments.
Deferred special assessments represent the principal portion of those assessments to property
owners for improvements made by the City. These assessments are made at various times by
City resolution and are collectible over periods ranging from ten to thirty years and bear
annual interest of 7 percent to 8 percent and are to be received in 2003 and years thereafter.
J. Deferred Revenue
. Deferred revenue represents delinquent taxes and deferred and delinquent assessments
receivable. This revenue is deferred until it is measurable and available as net current assets.
K. Compensated Absences
The City compensates employees who leave City service in good standing for all earned,
unused vacation. In addition, employees are compensated for unused sick leave (up to a
maximum of 720 hours) at 50% of the current regular rate of pay, provided the City's notice
oftenninatÌon policy has been complied with.
L. Fund Equity
Fund equity is divided into sections as follows:
- Contributed capital represents fixed assets purchased by other funds and contributed to
the enterprise funds.
- Investment in General Fixed Assets represents the City's equity in general fixed assets.
- Retained earnings of enterprise funds are available for expending in future periods.
.
CITY OF ST. JOSEPH, MINNESOTA ·
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Fund Equity (Continued)
- Fund balance accounts are subdivided as follows:
Reserved accounts indicate the portion of fund balance which has been reserved for a
specific purpose.
Unreserved, designated accounts indicate the portion of fund balance which has been
designated for a specific purpose.
The unreserved, undesignated account is the portion of fund balance which is
available for budgeting and expending in future periods.
M. Revenues, Expenditures and Expenses
1. Revenues
Property taxes and special assessment principal and interest are recognized as revenue ·
when measurable and available. Portions of taxes paid by the State in the fonn of HAC A
and other tax credits are included in intergovernmental revenue. Intergovernmental
revenues are reported under the legal and contractual requirements of the individual
programs.
Licenses and permits, charges for services, fines and forfeits, and miscellaneous revenues
(except investment earnings) are recorded as revenues when received in cash because
they are generally not measurable until then. Investment earnings are recorded when
earned because they are measurable and available.
2. Property Tax Collection Calendar
The City levies its property tax for the subsequent year during the month of December.
December 28 is the last day the City can certify a tax levy to the County Auditor for
collection the following year. 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. Taxes not collected as of December 31 each
year are shown as delinquent taxes receivable.
·
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Revenues, Expenditures and Expenses (Continued)
2. Property Tax Collection Calendar (Continued)
The County Auditor creates the tax list for all taxable property in the City, applying the
applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax
for each property. The County Auditor also collects all special assessments, except for
certain prepayments paid directly to the City. The County Auditor turns over the list of
taxes and special assessments to be collected on each parcel of property to the County
Treasurer in January of each year.
The County Treasurer collects all taxes, and all special assessments, except as noted
above. The County Treasurer is required to mail copies of all personal property tax
statements by April 15, and copies of all real estate tax statements by April 15, of each
year.
. Property owners are required to pay one-half of their real estate taxes due by May 15 and
the balance by October 15. If taxes due May 15 are not paid on time, a penalty of3% is
assessed on homesteaded property, and 7% on non-homesteaded property. An additional
1 % penalty is added each month the taxes remain unpaid, until October 15. If the taxes
due May 15 are not paid by October 15, a 2% penalty per month is added to homesteaded
property and 4% per month to non-homesteaded property until January 1.
If the taxes are not paid by January I, further penalties are added. Penalties and interest
apply to both taxes and special assessments. There are some exceptions to the above
penalties, but they are not material.
Within 30 days after the tax settlement date, the County Treasurer is required to pay 70%
of the estimated collections of taxes and special assessments to the City Treasurer. The
County Treasurer must pay the balance to the City Treasurer within 60 days after
settlement, provided that after 45 days interest accrues.
3. Expenditures
Expenditure recognition for governmental fund types includes only amounts represented
by current liabilities. Since noncurrent liabilities do not affect net current assets, they are
not recognized as governmental fund expenditures or fund liabilities. They are reported
as liabilities in the General Long-Tenn Debt Account Group.
4. Expenses
Enterprise funds recognize expenses when they are incurred.
.
CITY OF ST. JOSEPH, MINNESOTA ·
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
N. Interfund Transactions
Quasi-external transactions are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures or expenses initially
made from it that are properly applicable to another fund are recorded as expenditures or
expenses in the fund that is reimbursed.
All other interfund transactions, except quasi-external and reimbursements, are reported as
transfers. Nonrecurring or nonroutine pennanent transfers of equity are reported as residual
equity transfers. All other interfund transfers are reported as operating transfers.
O. Total Columns on General Purpose Statements
Total columns on the general purpose financial statements are captioned "memorandum
only" to indicate that they are presented only to facilitate financial analysis. Data in these
columns do not present financial position, results of operations, or cash flows in conformity
with accounting principles generally accepted in the United States of America. Interfund ·
eliminations have not been made in the aggregation of these data.
P. Comparative Data
Comparative total data for the prior year have been presented in the accompanying financial
statements in order to provide an understanding of changes in the City's financial position
and operations. However, prior year totals by fund type have not been presented in each of
the statements since their inclusion would make the statements unduly complex and difficult
to read.
Comparative data have been restated to reflect reclassifications.
Q. Use of Estimates
The preparation of general purpose financial statements in confonnity with accounting
principles generally accepted in the United States of America 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.
·
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Fund Deficits
The following funds have deficit fund balance/retained earnings at December 31,2002:
Debt Service Fund -
General Obligation Sewer Revenue Bonds of2001 $ (32,666)
Enterprise Fund -
Sewer (575,951)
These deficits will be eliminated by future revenues, user charges or transfers from other
funds.
B. Expenditures in Excess of Appropriations
Expenditures exceeded appropriations in the following funds for the year ended
December 31, 2002:
. Expenditures Appropriation
General Fund $ 2,055,879 $ 1,564,449
Special Revenue Funds:
TIP #1-3 Borgert 30,445 0
TIF #1-4 S1. Joseph Development 12,200 0
DARE Program 250 0
City Beautification 41,532 0
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
A. Assets
1. Cash and Investments (Including Cash Equivalents)
Cash balances of the City's funds are combined (pooled) and invested to the extent
available in various investments authorized by Minnesota Statutes. Each fund's portion
ofthis pool (or pools) is displayed on the financial statements as "cash and investments
(including cash equivalents)". For purposes ofidentitying risk of investing public funds,
the balances and related restrictions are summarized below:
a. Deposits - Minnesota Statutes require that aU deposits with [mancial institutions must
be collateralized in an amount equal to 110% of deposits in excess of Federal
Depository Insurance Corporation (FDIC) insurance.
.
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
1. Cash and Investments (Including Cash Equivalents) (Continued)
a. Deposits - (Continued)
Category 1 - Deposits covered by FDIC and those deposits collateralized with
securities held by the City or by its agent in the City's name.
Category 2 - Collateralized with securities held by the pledging institutions trust
department or agent in the District's name.
Category 3 - Deposits which are not insured or collateralized; or those deposits where
collateral assignment has not been perfected.
Category Bank Carrying
1 2 3 Balance Amount .
-
Bank Accounts $ 2,232,029 $0 $ 653,594 $ 2,885,623 $ 2,007,796
Certificates of Deposit 2,267,882 0 0 2,267,882 2,267,882
-
Total Deposits $ 4,499,911 $0 $ 653,594 $ 5,153,505 $ 4,275,678
b. Investments - Minnesota Statutes authorize the City to invest in obligations of the
u.s. Treasury, agencies, and instrumentaJities, shares of investment companies whose
only investments are in the aforementioned securities, obJigations of the State of
MÌm1esota or its municipalities, bankers' acceptances, future contracts, repurchase
and reverse repurchase agreements, and commercial paper of the highest quality with
a maturity of no longer than 270 days. Investments held by the City at year end
classified as to credit risk are as follows:
Category 1 - Insured or registered, or securities held by the Citis agent in the City's
name.
Category 2 - Uninsured and unregistered, with securities held by the counterparty's
trust department or agent in the City's name.
Category 3 - Uninsured and unregistered, with securities held by the counterparty or
by its trust department or agent but not in the City's name.
.
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
1. Cash and Investments Oncluding Cash Equivalents) (Continued)
b. Investments - (Continued)
Category Carrying and
1 2 3 Fair Value
U.S. Government and
Federal Agency Notes
and Bonds $ 657,707 $ 0 $ 0 $ 657,706
Negotiable Certificates
of Deposit 1,338,819 0 0 1,338,819
Repurchase Agreements 798,087 0 0 798,087
Total Investments $ 1,996,526 $ 0 $ 0 2,794,612
. Unclassified as to Risk:
Money Market Mutual Funds 106,287
Total Deposits (See
Note 3 A.l.a.) 4,275,678
Petty Cash 320
Total Cash and Investments
(Including Cash Equivalents) $ 7,176,897
Cash and investment balances are presented in the general purpose financial
statements as follows:
Cash and Cash Investments (Including Cash Equivalents) $ 7,224,854
Cash Overdraft (47,957)
Total $ 7,176,897
.
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
2. Due from Other Governmental Units
The following is a surmnary of due from other governmental units at December 31, 2002:
St. Wendel St. Joseph Steams State of Federal
Township Township County MN Government Total
General Fund -
Fines $ 0 $ 0 $ 0 $ 4,624 $ 0 $ 4,624
Property Taxes/Special Assessments 0 0 85,792 0 0 85,792
Miscellaneous 2,312 1,664 0 3,676 0 7,652
-
Total General Fund 2,312 1,664 85,792 8,300 0 98,068
Debt Service Funds -
G.O. Improvement Bonds of .
1993 - Property Taxes/Special
Assessments 0 0 5,029 0 0 5,029
G.O. Improvement Bonds of
1996 - Property Taxes/Special
Assessments 0 0 10,773 0 0 10,773
G.O. Improvement Bonds of
1998 - Property Taxes/Special
Assessments 0 0 4,433 0 0 4,433
G.O. Improvement Bonds of
1999 - Property Taxes/Special
Assessments 0 0 12,118 0 0 12,118
G.O. Bonds of2001 . Property
Taxes/Special Assessments 0 0 53,327 0 0 53,327
G.O. Sewer Revenue Bonds of
2001 - Special Assessments 0 0 2,379 0 0 2,379
Total Debt Service 0 0 72,257 0 0 88,059
Capital Projects Funds -
2002 Street Improvements
Federal Grant 0 0 0 0 57,964 57,964
Total $ 2,312 $ 1,664 $ 158,049 $ 8,300 $ 57,964 $ 244,091
.
· CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
3. Fixed Assets
A summary of changes in general fixed assets follows:
Balance Balance
1-1-02 Additions Disposals 12-31-02
Land $ 157,544 $ 0 $ 32,089 $ 125,455
Buildings 1,630,758 3,375 0 1,634,133
Improvements Other
than Buildings 386,463 52,359 0 438,822
Machinery and Equipment 732,303 585,344 25,411 1,292,236
Office Furniture 108,097 26,716 0 134,813
Motor Vehicles 246,717 25,374 50,726 221,365
· Other Equipment 278,414 21,434 0 299,848
$ 108,226 $ 4,146,672
Total $ 3,540,296 $ 714,602
A summary of Enterprise Fund fixed assets at December 31, 2002, is as follows:
Water Sewer
Fund Fund Total
Land and Land Improvements $ 12,996 $ 4,941 $ 17,937
Treatment Plant and Lines 3,340,767 4,702,757 8,043,524
Buildings 0 517,983 517,983
Water Storage Facility 1,236,542 0 1,236,542
Machinery and Equipment 91,464 179,918 271,382
Total Cost 4,681,769 5,405,599 10,087,368
Less: Accumulated Depreciation 633,011 1,258,614 1,891,625
Net Fixed Assets $ 4,048,758 $ 4,146,985 $ 8,195,743
·
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities
1. Defined Benefit Pension Plans - Statewide
A. Plan Description
All full-time and certain part-time employees of the City of St. Joseph are covered by
defined benefit plans administered by the Public Employees Retirement Association
ofMiIll1esota (PERA). PERA administers the Public Employees Retirement Fund
(PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-
sharing, multiple-employer retirement plans. These plans are established and
administered in accordance with Minnesota Statutes, Chapters 353 and 356.
PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated
Plan members are covered by Social Security and Basic Plan members are not. All
new members must participate in the Coordinated Plan. All police officers, fire-
fighters and peace officers who qualify for membership by statute are covered by the .
PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and
benefits to survivors upon death of eligible members. Benefits are established by
State Statute, and vest after three years of credited service. The defined retirement
benefits are based on a member's highest average salary for any five successive years
of allowable service, age, and years of credit at termination of service.
Two methods are used to compute benefits for PERF's Coordinated and Basic Plan
members. The retiring member receives the higher of a step-rate benefit accrual
formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the
annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each
of the first 10 years of service and 2.7 percent for each remaining year. The annuity
accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each
ofthe first 10 years and 1.7 percent for each remaining year. Under Method 2, the
annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7
percent for Coordinated Plan members for each year of service. For PEPFF
members, the annuity accrual rate is 3.0 percent for each year of service. For all
PEPFF members and for PERF members hired prior to July 1, 1989 whose annuity is
calculated using Method 1, a full annuity is available when age plus years of service
equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and
Coordinated members hired prior to July 1, 1989. Normal retirement age for
unreduced social security benefits capped at 66 for Coordinated members hired on or
after July 1, 1989. A reduce retirement annuity is also available to eligible members
seeking early retirement.
.
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DET AlLED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
1. Defined Benefit Pension Plans - Statewide (Continued)
A. Plan Description (Continued)
There are different types of annuities available to members upon retirement. A
single-life annuity is a lifetime annuity that ceases upon the death ofthe 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 ofthis section are current
provisions and apply to active plan participants. Vested, terminated employees who
. are entitled to benefits but are not receiving them yet are bound by the provisions in
effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements
and required supplementary infOlmation for PERF and PEPFF. That report may be
obtained online at mupera.com or by writing to PERA, 60 Empire Drive #200, St.
Paul, Minnesota, 55103-2088 or by calling (651) 296-7460 or 1-800-652-9026.
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
are required to contribute 9.10 percent and 5.10 percent, respectively, of their annual
covered salary. PEPFF members are required to contribute 6.20 percent of their
annual covered salary. The City ofSt. Joseph is required to contribute the following
percentages of annual covered payroll: 11.78 percent for Basic Plan PERF members,
5.53 percent for Coordinated Plan PERF members, and 9.30 percent for PEPFF
members. Member and employer contribution rates for Basic and Coordinated
members will increase by 0.35 percent effective January 2002. The City's
contributions to the Public Employees Retirement Fund for the years ending
December 31, 2002, 2001 and 2000 were $ 20,462, $ 17,465 and $ 17,887,
respectively. The City's contributions to the Public Employees Police and Fire Fund
for the years ending December 31, 2002, 2001, and 2000 were $ 26,783, $ 25,979 and
$ 23,975, respectively. The City's contributions were equal to the contractually
. required contributions for each year as set by state statute.
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
2. Defined Contribution - Statewide
The City provides pension benefits for its elected local government officials through a
defined contribution plan administered by the Public Employees Retirement Association
(PERA). The Public Employees Defined Contribution Plan (PEDCP) is a multi-employer
deferred compensation plan. Elected officials who are covered by a public or private
pension plan because of their employment are not eligible to participate in the PEDCP.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings.
Minnesota Statutes, Chapter 353D.03 requires that both the elected local government
official and the City contribute an amount equal to 5% ofthe elected local government
official's salary. There is no vesting period required to receive benefits in the PEDCP.
The City's total payroll in the year 2002 was $ 774,062. The City's contributions were
calculated using the base salary amount of $ 20,800. Both the City and the elected local
government official made the required 5% contribution, amounting to $ 1,040 from each .
source, or $ 2,080 in total.
3. Deferred Revenue
Deferred revenue at December 31, 2002, consisted of:
Debt
General Service Total
Taxes Receivable -
Delinquent $ 4,037 $ 3,852 $ 7,889
Special Assessments Receivable -
Deferred 3,469 3,244,027 3,247,496
Delinquent 0 23,894 23,894
Total $ 7,506 $ 3,271,773 $ 3,279,279
.
· CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
4. Bonds Payable
The following is a summary of bond transactions for the year ended December 31,2002:
General
Obligation General
General Special Obligation
Obligation Assessment Revenue Revenue Total
Bonds Payable -
January 1, 2002 $ 1,085,000 $ 3,835,000 $ 1,500,000 $ 920,000 $ 7,340,000
Bonds Issued 245,000 4,700,000 810,000 0 5,755,000
Bonds Retired (45,000) (385,000) (885,000) (45,000) (1,360,000)
Bonds Payable -
· December 31, 2002 $ 1 ,285 ,000 $ 8,150,000 $ 1,425,000 $ 875,000 $ 11,735,000
Bonds outstanding at December 31, 2002, comprise the following issues:
General Obligation Bonds:
$ 1,235,000 General Obligation Bonds of 1997
due in annual installments of$ 35,000 to $ 100,000
through December 1,2017, interest at 4.00 to 5.75
percent $ 1,040,000
$ 245,000 General Obligation Equipment
Certificates of Indebtedness of2002 due in
annual installments of $ 60,000 to $ 65,000 through
December 1,2006, interest at 2.75 to 4.20 percent 245,000
Total General Obligation Bonds 1,285,000
General Obligation Special Assessment Bonds:
$ 200,000 General Obligation Improvement Bonds of
1992 due in annual installments of$ 10,000 to $ 20,000
through December 1,2007, interest at 4.60 to 6.40 percent 90,000
·
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31,2002
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
4. Bonds Payable (Continued)
General Obligation Special Assessment Bonds: (Continued)
$ 550,000 General Obligation Improvement Bonds of 1993
due in annual installments of$ 25,000 to $ 50,000 through
December 1, 2008, interest at 3.00 to 5.30 percent $ 265,000
$ l,280,000 General Obligation Improvement Bonds of 1996
due in arumal installments of $ 60,000 to $ 120,000 through
December 1, 2011, interest at 4.30 to 5.90 percent 875,000
$ 545,000 General Obligation Improvement Bonds of 1998
due in annual installments of $ 25,000 to $ 50,000 through
December 1,2013, interest at 3.85 to 5.00 percent 440,000
$ 1,330,000 General Obligation Improvement Bonds of 1999 .
due in annual installments of$ 65,000 to $ 125,000 through
December 1, 2014, interest at 4.875 to 5.20 percent 1,130,000
$ 810,000 General Obligation Improvement Bonds of2001
due in annual installments of$ 160,000 to $ 165,000
through December 1, 2006, interest at 3.00 to 3.85 percent 650,000
$ 4,700,000 General Obligation Improvement Bonds of 2002
due in annual installments of$ 235,000 to $ 405,000 through
December 1, 2017, interest at 2.00 to 4.30 percent 4,700,000
Total General Obligation Special Assessment Bonds 8,150,000
General Obligation Revenue Bonds:
$ 640,000 General Obligation Sewer Revenue Bonds of2001
due in an annual installments of$ 25,000 to $ 45,000 through
December 1, 2021, interest at 3.30 to 5.15 percent 615,000
$ 810,000 General Obligation Water Revenue Refunding
Bonds or 2002 due in annual installments of $ 40,000
to $ 85,000 through December 1,2016, interest
at 1.75 to 4.80 percent 810,000
Total General Obligation Revenue Bonds 1,425,000 .
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
4. Bonds Payable (Continued)
Revenue Bonds:
$ 960,000 EDA Public Project Revenue Bonds of 2000
due in arumal installments of $ 40,000 to $ 95,000 through
December 1,2015, interest at 5.60 to 6.60 percent $ 875,000
TOTAL BONDS PAYABLE $11,735,000
The annual requirements to amortize all bonded debt outstanding as of December 31,
2002, including interest payments of$ 3,907,295 are:
General
General
Year Obligation General
. Ending General Special Obligation
December 31, Obligation Assessment Revenue Revenue Total
2003 $ 169,865 $ 1,137,524 $ 159,609 $ 99,435 $ 1,566,433
2004 171,100 1,112,427 160,280 101,825 1,545,632
2005 166,600 1,106,200 162,735 98,900 1,534,435
2006 171,750 911,439 114,700 100,950 1,298,839
2007 101,270 735,256 112,475 102,678 1,051,679
2008 - 2012 518,675 3,305,154 581,600 505,281 4,910,710
2013 - 2017 529,625 2,179,145 527,250 300,630 3,536,650
2018 - 2022 0 0 197,917 0 197,917
Totals $ 1,828,885 $ 10,487,145 $ 2,016,566 $ 1,309,699 $ 15,642,295
5. Loans Payable
The following is a summary ofJoan transactions for the year ended December 31, 2002:
Steams
Electric
Loans Payable -
January I, 2002 $ 223,084
Loans Issued 0
Loans Retired (26,924)
. Loans Payable -
December 31, 2002 $ 196,160
.
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DET AlLED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
5. Loans Payable (Continued)
The arumal requirements to amortize all loans outstanding as of December 31, 2002,
including interest payments of $ 7,925 are:
2003 $ 29,155
2004 29,155
2005 29,155
2006 29,155
2007 29,155
2008 - 2009 58,310
Totals $ 204,085
6. Conduit Debt Obligations .
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 ofthe City.
As of December 31,2002, the City's conduit debt consisted of the following:
Outstanding
Balance
12/31/02
Commercial Development Revenue Note (Independence
Center) Series 2001 $ 605,000
Industrial Revenue Bonds (St. Joseph Development, LLC)
Series 2002 3,800,000
$ 4,405,000
.
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
C. Fund Equity
Fund equity balances are classified as follows to reflect the limitations and restrictions of the
respective funds:
1. Fund Balance
a. Reserved Fund Balance is comprised ofthe following:
General Debt Service Total
Notes Receivable $ 10,000 $ 0 $ 10,000
Debt Service 0 3,620,265 3,620,265
Total $ 10,000 $ 3,620,265 $ 3,630,265
. b. Unreserved fund balance is comprised of the following:
Special Capital
General Revenue Projects Total
Designated for Fire $ 308,354 $ 0 $ 0 $ 308,354
Designated for Capita]
Expenditures (55,372) 0 0 (55,372)
Designated for Debt Service 174,745 0 0 174,745
Designated for Working Capital 250,000 0 0 250,000
Undesignated 754,850 73,084 928,123 1,756,057
Total Unreserved
Fund Balance $ 1,432,577 $ 73,084 $ 928.123 $ 2,433,784
.
CITY OF ST. JOSEPH, MINNESOTA .
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
C. Fund Equity (Continued)
2. Contributed Capital
Contributed capital in the Enterprise Funds represents fixed assets which were purchased
by other funds and transferred to the Enterprise Funds. Contributed capital is as follows:
Balance December 31, 2001 $ 6,683,167
Capital Contributed in 2002 2,887,640
Balance December 31, 2002 $ 9,570,807
NOTE 4 - SEGMENT INFORMATION FOR ENTERPRISE FUNDS
The City maintains three Enterprise Funds which provide refuse, water and sewer services.
Segment infonnation for the year ended December 31, 2002, is:
Refuse Water Sewer .
Fund Fund Fund Total
Operating Revenues $ 151,255 $ 190,212 $ 304,718 $ 646,185
Depreciation 0 67,610 96,736 164,346
Operating Income (Loss) 19,992 (31,946) (26,083) (38,037)
Net Income (Loss) 26,898 178 317 27,393
Contributed Capital 0 4,210,693 5,360,114 9,570,807
Fixed Assets -
Acquisitions 0 780 780 1,560
Net Working Capital 183,791 374,953 637,178 1,195,922
Total Assets 196,770 4,453,124 4,820,673 9,470,567
Total Equity 183,791 4,423,711 4,784,163 9,391,665
NOTE 5 - RISK MANAGEMENT
The City is exposed to various risk of loss related to torts; theft of, damage to and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. In order to protect
against these risks of loss, the City purchases commercial insurance through the League of
Minnesota Cities Insurance Trust, a public entity risk pool. This pool currently operates
common risk management and insurance programs for municipal entities. The City pays an
annual premium to the League for its insurance coverage. The League of Minnesota Cities
Insurance Trust is self-sustaining through commercial companies for excess claims. The City is
covered through the pool for any claims incurred but unreported, however, retains risk for the .
deductible portion of its insurance policies. The amounts of these deductibles are considered
material to the financial statements.
. CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
NOTE 5 - RISK MANAGEMENT (Continued)
The City's workers compensation insurance policy is retrospectively rated. With this type of
policy, final premiums are determined after loss experience, workers compensation rates and
salaries for the year are known. The final premium adjustment was recorded in the year the
adjustment was made.
During the year ended December 31, 2002, there were no significant reductions in insurance
coverage from the prior year. Settled claims have not exceeded the City's commercial coverage
in any ofthe past three years.
NOTE6-CONllifiTMENTS
The City plans to construct a new maintenance facility. The total estimated cost to complete the
construction is approximately $ 400,000. Construction is scheduled to begin April 15, 2003.
. NOTE 7 - GASB STATEMENT NO. 34
In June 1999, the Governmental Accounting Standards Board (GASB) unanimously approved
Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for
State and Local Governments (Statement). Significant changes in the Statement include the
following:
. For the first time the financial statements will include:
- A Management Discussion and Analysis (MD&A) section providing an analysis of the
City's overall financial position and results of operations.
- Financial statements prepared using full accrual accounting for all of the City's activities,
including reporting infrastructure assets (roads, bridges, etc.).
. A change in the fund financial statements to focus on the major funds.
The general provisions of GASB Statement No. 34 must be implemented by City of St. Joseph
no later than the fiscal year ending December 31; 2004.
.