Loading...
HomeMy WebLinkAbout1993 Audit Report1 0 1 1 n ii CITY OF ST. JOSEPH, MINNESOTA Stearns County AUDITED FINANCIAL STATEMENTS As of December 31, 1993 1 ' CITY OF ST. JOSEPH, MINNESOTA TABLE OF CONTENTS ' ELECTED OFF ................. ICIALS AND ADMINISTRATION ................ 3 INDEPENDENT AUDITORS' REPORT ......................................... 4 GENERAL PUR POSE FINANCIAL STATEMENTS - Combined Balance Sheet - All Fund Types and Account Groups......... 5 ' Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types ........... ...... ...... .. ~ 6 Combined Statement of Revenues, Expenditures and Changes in Fund ' Balance - Budget and Actual - General Fund ........................ 7 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types..... .... ..<. .......... • 8 Combined Statement of Cash Flows - All Proprietary Fund Types...... 9 Notes to the Financial Statements .................................. 10 ' COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS - General Fund - Comparative Balance Sheets ....................................... 33 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ............................................... 34 Special Revenue Fund - Combining Balance Sheet .......................................... 40 Combining Statement of Revenues, Expenditures and Changes in Fund Balance .................................................... 41 Debt Service Funds - - Combining Balance Sheet .......................................... 42 ' Combining Statement of Revenues, Expenditures and Changes in Fund Balance ......................................................... 43 Capital Projects Funds - Combining Balance Sheet .......................................... 45 ' Combining Statement of Revenues, Expenditures and Changes in Fund Balance ......................................................... 46 Enterprise Funds - ' Combining Balance Sheet .......................................... 47 Combining Statement of Revenues, Expenses and Changes in Retained Earnings ........................................................ 48 Combining Statement of Cash Flows ................................ 49 ' Statement of General Long-Term Debt ................................ 50 ' SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE ............................. 51 REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT ' AUDITING STANDARDS ... ............................................... 52 SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ' ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS ................. 54 SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS ................. 58 ' CITY OF ST. JOSEPH, MINNESOTA TABLE OF CONTENTS ' (Continued) ' SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS............ 60 REPORT ON COMPLIANCE BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND MINNESOTA STATUTES ............................................... 62 ' FINDINGS ON COMPLIANCE WITH MINNESOTA STATUTES ........................ 64 0 C [! Citv Council Donald Reber Stephanie Hazen Bob Loso Ross Rieke Ken Hiemenz Administration Rachel Stapleton Judy Weyrens CITY OF ST. JOSEPH, MINNESOTA ELECTED OFFICIALS AND ADMINISTRATION December 31, 1993 Term Position Expires Mayor January, 1995 Councilmember January, 1995 Councilmember January, 1995 Councilmember January, 1997 Councilmember January, 1997 City Clerk/ Treasurer/ Administrator Deputy Clerk Appointed Appointed 3 ' Alvin M. Kern Duane N. DeWenter Loren M. Viere Kern, DeWenter, I/iere, ~~~. GKeith W. Judson Dwayne B. Dockendorf Certified Public Accountants David H. Hinnenkamp INDEPENDENT AUDITORS' REPORT March 10, 1994 Honorable Mayor and City Council ' City of St. Joseph St. Joseph, Minnesota We have audited the general purpose financial statements of the City of St. Joseph, Minnesota as of and for the year ended December 31, 1993, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. ' We conducted our audit in accordance with generally accepted auditing standards and government auditing standards. Those standards require that we plan and per- form the audit to obtain reasonable assurance about whether the financial state- , ments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall finan- cial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of St. Joseph, Minnesota, as of December 31, 1993, and the results of its operations and cash flows of its proprietary fund type for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose ' financial statements taken as a whole. The combining and individual fund finan- cial statements and schedule of federal financial assistance listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of City of St. Joseph, Minnesota. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. ~, KERN, DEWENTER, VIERS, ITD. ' 4 220 Park Avenue South P.O. Box 1304 St. Cloud, MN 56302 ' 612-251-7010 fAX 612-251-1784 CITY OF ST. JOSEPH, MINNESOTA COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1993 Governmental Fund Types Special Debt Capital ASSETS AND OTHER DEBITS General Revenue Service Projects ASSETS: Cash and Investments (Including Cash Equivalents) $ 1,312,100 $ 33,007 $ 954,019 $ 275,488 Taxes Receivable - Delinquent 6,066 - - - Special Assessments Receivable - Deferred 57,068 - 611,135 - Delinquent 262 - 1,023 - Accounts Receivable 4,000 70,000 - - Interest Receivable 13,224 - - - Due from Other Funds - - - - Due from Other Governmental Units 22,989 - - 302,860 Loans Receivable 7,220 - - - Fixed Assets - Net - - - - OTHER DEBITS: Amount Available in Debt Service Funds - - - - Amount to be Provided from Special Assessments - - - - Amount to be Provided for Compensated Absences Payable - - - - Amount to be Provided for Retirement of General Long-Term Debt - - - - TOTAL ASSETS AND OTHER DEBITS $ 1,422,929 $ 103,007 $ 1,566,177 $ 578,348 LIABILITIES, EQUITY ANO OTHER CREDITS LIABILITIES: Cash Overdraft $ - $ - $ - $ 243,927 Accounts Payable 40,425 - 265 17,750 Due to Other Governmental Units 14,620 - - - Contracts Payable - - - 72,956 Due to Other Funds - - - - Deferred Revenue 63,396 - 612,158 - Compensated Absences Payable 28,255 - - - Capital Lease Obligation - - - - Bonds Payable - - - - Total Liabilities 146,696 - 612,423 334,633 EQUITY AND OTHER CREDITS: Investment in General Fixed Assets - - - - Contributed Capital - - - - Retained Earnings {Deficit) - - - - Fund Balance - Reserved 339,574 - - - Unreserved - Designated 787,972 - 953,754 243,715 Undesignated (Deficit) 148,687 103,007 - - Total Equity and Other Credits 1,276,233 103,007 953,754 243,715 TOTAL LIABILITIES, EQUITY AND OTHER CREDITS $ 1,422,929 $ 103,007 $ 1,566,177 $ 578,348 The notes to the financial statements are an integral part of this statement. ' Proprietary Fund Types Account Groups General General Totals Fixed Long-Term (Memorandum Only) Enterprise Assets Debt 1993 1992 $ 401,858 $ - $ - $ 2,976,472 $ 3,108,497 - - - 6,066 4,275 - - - 668,203 298,385 1,285 644 64,544 - - 138,544 59,281 - - - 13,224 55,909 - - - - 20,000 - - - 325,849 15,716 - - - 7,220 7,220 3,543,746 1,050,163 - 4,593,909 2,832,537 - - 953,754 953,754 1,200,610 - - 612,158 612,158 252,228 - - 31,665 31,665 18,492 - - 557,681 557,681 194,037 $ 4,010,148 $ 1,050,163 $ 2,155,258 $ 10,886,030 $ 8,067,831 $ - $ - $ - $ 243,927 $ 109,279 10,545 - - 68,985 104,496 6,757 - - 21,377 5,848 - - - 72,956 38,503 - - - - 20,000 - - - 675,554 303,304 12,131 - 31,665 72,051 56,447 - - 13,593 13,593 21,875 - - 2,110,000 2,110,000 1,625,000 29,433 - 2,155,258 3,278,443 2,284,752 - 1,050,163 - 1,050,163 999,560 4,075,441 - - 4,075,441 2,299,315 (94,726) - - (94,726) (118,945) - - - 339,574 302,700 - - - 1,985,441 1,824,192 - - - 251,694 476,257 3,980,715 1,050,163 - 7,607,587 5,783,079 $ 4,010,148 $ 1,050,163 $ 2,155,258 $ 10,88fi,030 $ 8,067,831 5 CITY OF ST. JOSEPH, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES Year Ended December 31, 1993 Governmental Fund Types Special Debt General Revenue Service REVENUES: Taxes $ 150,024 $ - $ - Special Assessments 23,215 - 69,114 Licenses and Permits 40,223 - - Intergovernmental 466,154 - - Charges for Services 109,725 - - Fines 39,559 - - Miscellaneous 35,745 2,076 146,246 Total Revenues 864,645 2,076 215,360 EXPENDITURES: Current - General Government 195,183 - - Public Safety 382,640 2,115 - Public Works 174,410 - - Culture and Recreation 61,470 - - Miscellaneous 2,567 - - Capital Outlay - - - Debt Service - - 173,202 7ota1 Expenditures 8~ 2,115 173,202 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 48,375 (39) 42,158 OTHER FINANCING SOURCES (USES): Operating Transfers In - 79,057 110,500 Operating Transfers Out (297,130) (11,927) - Proceeds From the Saie of Bonds - - 15,990 Total Other Financing Sources (Uses) 297,130) 67,130 126,490 EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES (248,755) 67,091 168,648 FUND BALANCE - January 1 1,270,943 35,916 1,200,610 RESIDUAL EQUITY TRANSFER 254,045 - 415,504) FUND BALANCE - December 31 $ 1,276,233 $ 103,007 $ 953,754 The notes to the financial statements are an integral part of this statement. Totals Capital (Memorandum Only) Projects 1993 1992 $ - $ 150,024 $ 117,224 162,327 254,656 142,222 - 40,223 33,436 870,019 1,336,173 481,852 - 109,725 105,679 - 39,559 33,689 14,028 198,095 278,319 1,046,374 2,128,455 1,192,421 - 195,183 191,113 - 384,755 368,961 - 174,410 165,113 - 61,470 74,529 - 2,567 53,373 1,722,072 1,722,072 908,807 173,202 291,071 1,722,072 2,713,659 2,052,967 (675,698) (585,204) (860,546) 200,000 389,557 - - (309,057) - 524,438 540,428 1,018,225 724,438 620,928 1,018,225 48,740 35,724 157,679 95,680 2,603,149 2,445,470 99,295 62,164) - $ 243,715 $ 2,576,709 $ 2,603,149 6 1 r n 1 n I~ n L i CITY OF ST. JOSEPH, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND Year Ended December 31, 1993 REVENUES: Taxes Special Assessments Licenses and Permits Intergovernmental Charges for Services Fines Miscellaneous Total Revenues EXPENDITURES: Current - General Government Public Safety Public Works Culture and Recreation Miscellaneous Total Expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES: Operating Transfers Out EXCESS OF REVENUES (UNDER) EXPENDITURES AND OTHER FINANCING USES FUND BALANCE - January 1, 1993 RESIDUAL EQUITY TRANSFER FUND BALANCE - December 31, 1993 General Fund Over (Under) Budget Actual Budget $ 246,000 $ 150,024 $ (95,976) 4,000 23,215 19,215 27,000 40,223 13,223` 367,788 466,154 98,366 99,850 109,725 9,875 29,100 39,559 10,459 44,200 35,745 8,455) 817,938 864,645 46,707 183,799 195,183 11,384 389,854 382,640 (7,214) 245,404 174,410 (70,994) 90,630 61,470 (29,160) 1,000 2,567 1,567 910,687 816,270 94,417) (92,749) 48,375 141,124 - 297,130) (297,130) $ 92,749) (248,755) $(156,006) 1,270,943 254,045 $ 1,276,233 The notes to the financial statements are an integral part of this statement. 7 r C C C n C CITY OF ST. JOSEPH, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - ENTERPRISE FUNDS Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 OPERATING REVENUES: Charges for Services OPERATING EXPENSES: Salaries and Related Taxes and Benefits Utilities Supplies Sewer Use Rental Postage Repairs and Maintenance Fees and Tests Dues and Subscriptions Refuse Disposal Depreciation Insurance Miscellaneous Total Operating Expenses OPERATING INCOME (LOSS) NON-OPERATING REVENUES (EXPENSES): Interest Loss on Disposal of Fixed Asset Total Non-Operating Revenues (Expenses) INCOME BEFORE OPERATING TRANSFERS ' Operating Transfers Out NET INCOME (LOSS) ' RETAINED EARNINGS (DEFICIT) - January 1 RESIDUAL EQUITY TRANSFER ' RETAINED EARNINGS (DEFICIT) - December 31 C Totals 1993 1992 $ 382,283 $ 346,051 83,153 75,041- 19,520 17,571 14,589 18,281 63,068 52,354 1,049 1,006 11,277 57,338 10,254 4,694 238 238 67,732 64,358 69,968 69,205 8,628 - 210 688 349,686 360,774 32,597 (14,723) 9,958 20,481 - 653) 9,958 19,828 42,555 5,105 80,500) - (37,945) 5,105 (118,945) (124,050) 62,164 - $ 94,726) $(118,945) The notes to the financial statements are an integral part of this statement. 1 8 C r ~II CITY OF ST. JOSEPH, MINNESOTA ENTERPRISE FUNDS COMBINED STATEMENT OF CASH FLOWS Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 Totals 1993 1992 CASH FLOWS FROM OPERATING ACTIVITIES: Operating Income (Loss) $ 32,597 $ (14,723) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities: Depreciation 69,968 69,205 Change in Assets and Liabilities: (Increase) in Accounts Receivable (5,263) (9,546) Decrease in Interest Receivable - 3,341 Decrease in Special Assessments Receivable - 328 Decrease in Due from Other Governmental Units - 1,660 Increase (Decrease) in Accounts Payable (20,084) 11,442 Increase in Due to Other Governmental Units 994 5,763 (Decrease) in Due to Other Funds (20,000) - (Decrease) in Deferred Revenue - (2,818) Increase in Compensated Absences Payable 2,431 3,339 Total Adjustments 28,046 82,714 Net Cash Provided by Operating Activities 60,643 67,991 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating Transfers to Other Funds (80,500) - Residual Equity Transfers 62,164 - Net Cash Used by Noncapital Financing Activities 18,336) - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital Expenditures (4,611) (4,890) CASH FLOWS FROM INVESTING ACTIVITIES: Interest on Investments 9,958 20,481 Net Increase in Cash and Cash Equivalents 47,654 83,582 Cash and Cash Equivalents, January 1 354,204 270,622 Cash and Cash Equivalents, December 31 $ 401,858 $ 354,204 The notes to the financial statements are an integral part of this statement. 9 Li CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of St. Joseph, Minnesota, has a mayor-council form of government. A mayor and four council members are elected by the voters of the City for two-year and four-year terms, respectively. The accounting policies of the City of St. Joseph conform to generally accepted accounting principles. A. Financial Reporting Entity ' As required by generally accepted accounting principles, these financial statements present the City of St. Joseph, the primary government. The City has no component units. B. Fund Accounting ' The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, ' revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which expending activities are ' controlled. The various funds are grouped, in the financial statements in this report, into five generic fund types and two broad fund categories, described below. Governmental Funds The General Fund is the general operating fund of the City. It is used to ' account for all financial resources except those required to be accounted for in another fund. ' Special Revenue Funds are used to account for the proceeds of specific revenue sources other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. The City has three Special Revenue Funds. Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. The City has five Debt Service Funds. 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). The City has four Capital Projects Funds. ' 10 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) ' NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Fund Accounting (Continued) ' 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 determination of reve Hues 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. ' C. Fixed Assets and Long-Term Liabilities The accounting and reporting treatment applied to the fixed assets and long- term liabilities associated with a fund are determined by its measurement ' focus. All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current lia- bilities 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 bui]dings, including roads, curbs and gutters, streets and sidewalks, are not capitalized by the City. No depreciation has been provided on general fixed assets. All fixed assets are valued at their historical cost or estimated historical cost if actual historical"cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. ' Long-term liabilities accounted for in the governmental funds. expected to be financed from governmental funds are General Long-Term Debt Account Group, not in the 11 I', L L r~ f] 0 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTLNG POLICIES (Continued) C. Fixed Assets and Long-Term Liabilities (Continued) The two account groups are not ufunds". They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non- current 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. Al] proprietary funds are accounted for on a flow of economic resources meas- urement focus. This means that all assets and all liabilities (whether cur- rent or non-current) 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. Depreciation of all exhaustible fixed assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has been provided over the assets' estimated useful lives, which range from five to fifty years, using the straight-line method. D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting, in which revenues are recognized when they become measurable and available as net current assets. The more significant revenues which have been accrued are intergovernmental revenues and interest earnings. Expenditures are generally recognized in the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include sick pay and principal and interest on general long-term debt, which are recognized when due. 12 ' CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued} ' D. Basis of Accounting (Continued} 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 estab- ' lishing the budgetary data reflected in the financial statements. 1. In August of each year, the City Administrator submits to the City Council ' a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them for the upcoming year. ' 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 budget ary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. Budgetary control for Capital Projects Funds ' is accomplished through the use of project controls. 5. The Budgets for the General and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). F. Encumbrances Encumbrances represent outstanding purchase orders and unfulfilled commitments that are issued to outside vendors and budgeted in the current year but do not include amounts that are set up as liabilities, amounts for personal services ' to be performed by City employees and purchase orders applicable to the subsequent year's budget. As of December 31, 1993, no outstanding encumbrances existed. u 13 u r J L C CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. Cash and Investments (Including Cash Equivalents) (See Note 3) Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are carried at cost which approximates market. Any premiums or discounts are amortized over the maturity of the investment. For purposes of the Statement of Cash Flows of proprietary fund types, cash equivalents are defined as short-term, highly liquid investments that are both: a. readily convertible to known amounts of cash, or b. so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City's policy considers cash equivalents to be those that meet the above criteria and have original maturities of three months or less. H. Taxes Receivable Delinquent taxes receivable represent the past six years of uncollected tax levies. I. Special Assessments Receivable Delinquent special assessments represent the past six years of uncollected special assessments. Deferred special assessments are those assessments to property owners for improvements made by the City. These assessments are made at various times by City resolution and are collectible over periods ranging from ten to thirty years and bear annual interest of 8 percent to 11.5 percent and are to be received in 1994 and years thereafter. Deferred special assessments represent the principal portion of those assessments to property owners for improvements made by the City and are to be paid in 1994 and years thereafter. 14 C 1 ii CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 90 days) at 50% of the current regular rate of pay, provided the City's notice of termination 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 subdivided as follows: The reserved account represents the portion of retained earnings set aside for specific purposes. Unreserved retained earnings is available for expending in future periods. - Fund balance accounts are subdivided as follows: Reserved accounts indicate the portion of fund balance which has been reserved for a specific purpose. Unreserved, designated accounts indicate the portion of fund balance which has been designated for a specific purpose. The unreserved, undesignated account is the portion of fund balance which is available for budgeting and expending in future periods. 15 ~i r~ C C C~ i C CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Revenues, Expenditures and Expenses 1. Revenues Property taxes and special assessment principal and interest are recog- nized as revenue when measurable and available. Portions of taxes paid by the State in the form of HACA and other tax credits are included in inter- governmental 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. 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. December 28 is the last day the City can certify a tax levy to the County Auditor for collection the following year. The County Auditor makes up the tax list for all taxable property in the City, applying the applicable tax rate to tfie 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 aver a 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. 16 u ' CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) ' NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Revenues, Expenditures and Expenses (Continued) ' 2. Property Tax Collection Calendar (Continued) ' Property owners are required to pay one-half of their real estate taxes due by May 15 and the balance by October 15. If taxes due May 15 are not paid on time:, a penalty of 3% 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 prop- erty until January 1. If the taxes are not paid by January 1, further penalties are added. Penalties and interest apply to both taxes and special assessments. There are some exceptions to the above penalties, but they are not material. Within 30 days after the tax settlement date, the County Treasurer is required to pay 70~ of the estimated collections of taxes and special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60 days after settlement, provided ' that after 45 days interest accrues at the rate of 8% per annum. 3. Expenditures Expenditure recognition for governmental fund types includes only amounts represented by current liabilities. Since noncurrent liabilities do not ' affect net current assets, they are not recognized as governmental fund expenditures or fund liabilities. They are reported as liabilities in the General Long-Term Debt Account Group. ' 4. Expenses Enterprise funds recognize expenses when they are incurred. ' N. Interfund Transactions Quasi-external transactions are accounted for as revenues, expenditures or ' expenses. Transactions that constitute reimbursements to a fund for expendi- tures 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 permanent transfers of equity are reported as residual equity transfers. All other Interfund trans- fers are reported as operating transfers. 17 ' CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) ' NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 0. Total Columns on General Purpose Statements Total columns on the general purpose financial statements are captioned "memorandum only" to indicate that they. are presented only to facilitate ' financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of these data. P. Comparative Data Comparative total data for the prior year have been presented in the accompa- nying 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 inclu- sion would make the statements unduly complex and difficult to read. Comparative data have been restated to reflect reclassifications. NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY ' A. Fund Deficits The following fund has deficit retained earnings at December 31, 1993: Enterprise Fund - Sewer $ 282,975 ' The deficit of this fund will be eliminated by transfers from other funds and future user charges. NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS ' A. Assets 1. Cash and Investments (Including Cash Equivalents) ' Cash balances of the City's funds are combined (pooled) and invested to the extent available in various investments authorized by Minnesota State Statutes. Each fund's portion of this pool (or pools) is displayed on the financial statements as "cash and investments (including cash equivalents)." For purposes of identifying risk of investing public funds, the balances and related restrictions are summarized below: ' 18 ' CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) ' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) A. Assets (Continued) 1. Cash and Investments (Including Cash Equivalents} (Continued) a. Deposits - Minnesota Statutes require that all deposits with financial institutions must be collateralized in an amount equal to 110% of deposits in excess of FDIC insurance (140% if collateralized with notes secured by first mortgages). ' Category 1 - Deposits covered by Federal Depository Insurance (FDIC) and those deposits collateralized with securities held ' by the City or by its agent in the City's name. Category Bank Carrying 1 2 3 Balance Amount. Bank Accounts $ 528,631 $ - $ - $ 528,631 $ 520,042 Certificates of Deposit 850,517 = = 850,517 850,517 Total Deposits $ 1,379,148 $ ~ $ _ $ 1,379,148 $ 1,370,559 b. Investments - Minnesota State Statutes authorize the City to invest in obligations of the U.S. Treasury, agencies, and instrumentalities, shares of investment companies whose only investments are in the forementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future contracts, repurchase and reverse repurchase agreements, and commercial paper of the highest quality with a maturity of no longer than 270 days. Investments held by the City at year end classified as to credit risk are as follows: Category 1 - Insured or registered, or securities held by the City's agent in the City's name. ' Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the City's name. Category 3 - Uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the City's name. 19 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) LI u u 1 NOTE 3 - DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Assets 1. Cash and Investments (Including Cash Equivalents) (Continued) b. Investments (Continued) U.S. Government and Federal Agency Notes and Bonds U.S. Treasury Bills Negotiable Certificates of Deposit Mutual Funds Total Investments Total Deposits (See Note 3 A.l.a.) Petty Cash Not Subject to Risk Classification: Open End Mutual Funds Total Cash and Investments (Including Cash Equivalents) Category Carrying Market 1 2 3 Amount Value $ 448,179 $ - $ - 60,782 - - 593,656 - - 250,161 - - $ 1,352,778 $ - $ - $ 448,179 $ 448,179 60,782 60,782 593,656 593,656 250,161 250,161 1,352,778 1,352,778 1,370,559 1,370,559 220 220 8,988 8,988 $ 2,732,545 $ 2,732,545 The carrying amount is classified on the combined balance sheet as follows: Carrying Amount Cash and Investments (Including Cash Equivalents) $ 2,976,472 Cash Overdraft 243,927 Total $ 2,732,545 20 r1 ~~ CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) ' A. Assets (Continued) 2. Due from Other Governmental Units n n n The following is a summary of due from other governmental units at December 31, 1993: Stearns County General Fund - Fines and Property Taxes $ 22,989 West Minnesota Street Capital Projects Fund - County Share 302,860 Total $ 325,849 3. Fixed Assets A summary of changes in general fixed assets follows: Balance 1-1-93 Additions Disposals Land $ 79,837 $ - $ - Buildings 252,350 835 - Improvements Other than Buildings 68,559 9,856 - Machinery and Equipment 343,284 10,211 - Office Furniture 41,158 5,819 2,070 Motor Vehicles 69,123 19,121 - Other Equipment 145,249 6,831 - Total $ 999,560 $ 52,673 $ 2,070 Balance 12-31-93 $ 79,837 253,185 78,415 353,495 44,907 88,244 152,080 $ 1,050,163 A summary of Enterprise Fund fixed assets at December 31, 1993, is as follows: Water Land and Land Improvements Treatment Plant and Lines Buildings Machinery and Equipment Construction in Progress Total Cost Less: Accumulated Depreciation Net Fixed Assets $ 12,996 488,344 34,969 1,321,592 1,857,901 194,433) $ 1,663,468 Sewer Fund $ 4,940 1,391,599 517,983 116,234 457,148 2,487,904 607,626) $ 1,880,278 Total $ 17,936 1,879,943 517,983 151,203 1,778,740 4,345,805 802,059) $ 3,543,746 21 CITY OF ST. JOSEPH, MINNESOTA ' NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) ' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) ' B. Liabilities - 1. Defined Benefit Pension Plans Statewide ' a. Plan Description All full-time and certain part-time employees of the City of St. Joseph are covered by defined benefit pension plans administered by ' the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund;(PEPFF) which are cost-sharing multiple-employer retirement plans. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, ' firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. The payroll for employees covered by PERF and PEPFF for the year ended December 31, 1993 was $ 180,225 and ' $ 147,743, respectively; the City's total payroll was $ 425,752. 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 average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for Coordinated and Basic members. The retiring member receives the higher of step-rate benefit ' accrual formula (Method 1) or a level accrual formula (Method,2). Under Method 1, the annuity accrual rate fora Basic member is 2 per- cent of average salary for each of the first 10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the ' annuity accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PEPFF members, the annuity accrual rate is 2.5 percent for each year of service. (Effective July 1, 1993, the annual accrual rate for PEPFF is 2.65 percent.) For PERF members whose annuity is calculated using Method ' 1, and for all PEPFF members, a full annuity is available when age plus years of service equal 90. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are ' also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annu- ity is payable over joint lives. Members may also leave their contri- butions in the fund upon termination of public service, in order to qualify fora deferred annuity at retirement age. Refunds of contri- butions are available at any time to members who leave public service, but before retirement benefits begin. 22 C C L CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 1. Defined Benefit Pension Plans - Statewide (Continued) b. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The City makes annual contributions to the pension plans equal to the amount required by State statutes. According to Minnesota Statutes Chapter 356.215, Subd. 4(g), the date of full funding required for the PERF and PEPFF is the year 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a "required" contribution rate. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: Statutory Rates Required Employees Employer Rates* PERF (Basic and Coordinated) 4.39 4.67 9.95 PEPFF 8.00 12.00 18.60 * The recommended rates scheduled above represent the required rates for fiscal year 1993 contributions as reported in the. July 1, 1992, actuarial valuation reports. Total contributions made by the City during fiscal year 1993 were: Amounts Employees Em to er PERF $ 7,623 $ 8,074 PEPFF 11,820 17,729 Totals $ 19,443 $ 25,803 Percentage of Covered Payroll Employees Employer 4.23 4.4816 8.00 12.00 The City's contribution for the year ended December 31, 1993 to the PERF represented .007 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended December 31, 1993, represented .058 percent of total contribu- tions required of all participating entities. 23 ' CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) ' NOTE 3 - DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 1. Defined Benefit Pension Plans - Statewide (Continued) c. Funding Status and Progress 1. Pension Benefit Obligation ' The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, t estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess PERA's funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems and among employers. PERA does not make separate measurements of assets and pension benefit obligation for individual employers. The pension benefit obligations as of June 30, 1993, are shown below: (In Thousands) ' PERF PEPFF Total Pension Benefit Obligation $ 5,163,766 $ 932,333 ' Net Assets Available for Benefits, at Cost (Market Values for PERF = $ 4,515,052; PEPFF = $ 1,173,312) 4,304,163 1,090,857 ' Unfunded (Assets in Excess of) Pension Benefit Obligation $ 859,603 $ 158,524) ' The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1993. Net assets available to ' pay pension benefits were valued as of June 30, 1993. 24 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 --DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 1. Defined Benefit Pension Plans - Statewide (Continued) c. Funding Status and Progress (Continued) 2. Changes in Benefit Provisions Three bills enacted during the 1993 legislative session improved benefits for many members without a material effect on the pension benefit obligation in the PERF or the PEPFF. The early retirement incentive bill permitted a public employer to offer PERA's Basic and Coordinated members an increase of one-fourth percent (.25°~) in the formula multiplier for each year of service, up to the first 30 years, or health insurance coverage to age 65. Also, the survivor protection bill provided benefits to either a surviving spouse or children of PERF Coordinated Plan members who die before age 50. Lastly, the Police and Fire benefit increase bill, which became effective July 1, 1993, permanently increased the PEPFF formula multiplier from 2.5 percent to 2.65 percent of an individual's average salary over the five highest consecutive years of earnings. d. Ten-Year Historical Trend Information Ten-year historical trend information is presented in PERA's Component Unit Financial Report for the year ended June 30, 1993. This~informa- tion is useful in assessing the pension plan's accumulation of suffi- cient assets to pay pension benefits as they become due. e. Related Party Investments As of June 30, 1993, and for the fiscal year then ended, PERA held no securities issued by the City or other related parties. 2. Defined Contribution Lump Sum Service Pension Plan - Volunteer Fire Relief Association a. Plan Description The City contributes to the St. Joseph Fire Department Relief Association ("Association"), a single-employer public employee retire- ment system that acts as a common investment and administrator for the City's firefighters. 25 1 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS ' December 31, 1993 (Continued) NOTE 3 - DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 2. Defined Contribution Lum Sum Service Pension Plan - Volunteer Fire Relief Association Continued a. Plan Description (Continued) Volunteer firefighters of the City are members of the St. Joseph Fire Department Relief Association. Members are eligible for service pensions and disability pensions at a pro-rate amount after 20 years of service and after arriving at age 50. Pension benefits are ' determined by multiplying the accrued liability, as set forth in Minnesota Statute 69.772, Subdivision 2, by the ratio of the lump sum service pension amount provided in the bylaws of the Association to a service pension of $ 100 per year of service. As of December 31, 1992, the bylaws provided an amount of $ 950 per year of service. The bylaws do not provide for early vesting. ' These benefit provisions and all other requirements are consistent with enabling state statutes. The City levies property taxes at the discretion of and for the benefit of the fire relief association and passes through state aids allocated to the plan, all in accordance with enabling state statutes. ' b. Related Party Investments During 1992 and as of December 31, 1992, the association held no ' securities issued by the City or other related parties. c. Funding Status and Progress ' The amount shown below as the "pension benefit obligation" is computed in accordance with Minnesota Statutes using the formula as explained above. Pension Benefit Obligation $ 371,768 Net Assets Available for Benefits at Market 325,266 Unfunded Pension Benefit Obligation $ 46,502 ' As of the issuance of this report, amounts for December 31, 1993, were not available. 26 0 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) Z. Defined Contribution Lum Sum Service Pension Plan - Volunteer Fire Relief Association Continued d. Contributions Required and Contributions Made Financial requirements of the relief association are determined in accordance with Minnesota Statutes as follows: Normal Cost for Next Year (Increase in Pension Benefit Obligation) Plus: Estimated Expenses for Next Year and 10% of Any Deficits Less: Anticipated Income Next Year and 10% of Any Surplus Total contributions to the association in 1992 were $ 6,536. 3. Defined Contribution - Statewide The City provides pension benefits for its elected local government offi- cials 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 nat 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°,6 of the elected local government official's salary. There is no vesting period required to receive benefits in the PEDCP. The City's total payroll in the year 1993 was $ 425,752. The City's con- tributions were calculated using the base salary amount of $ 11,360. Both the City and the elected local government official made the required 5.6 contribution, amounting to $ 568 from each source, or $ 1,136 in total. As of June 30, 1993, and for the fiscal year then ended, PERA held no securities issued by the City or other related parties. 27 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 4. Deferred Revenue Deferred revenue at December 31, 1993, consisted of: Taxes Receivable - Delinquent Assessments Receivable - Deferred Delinquent Total Debt General Service Total $ s,oss $ - $ s,oss 57,068 611,135 668,203 262 1,023 1,285 $ 63,396 $ 612,1.58 $ 675,554 5. Bonds Payable The following is a summary of bond transactions for the year ended December 31, 1993: Bonds Payable - January 1, 1993 Bonds Issued Bonds Retired Bonds Payable - December 31, 1993 General Obligation General Special Obligation Assessment Revenue Total $ 1,150,000 $ 475,000 $ 1,625,000 550,000 - 550,000 65,000) - 65,000) $ 1,635,000 $ 475,000 $ 2,110,000 28 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 1993 (Continued) NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 5. Bonds Payable (Continued) Bonds outstanding at December 31, 1993, comprise the following issues: General Obligation Special Assessment Bonds: $ 1,400,000 General Obligation Improvement Bonds of 1986 due in annual installments of $ 65,000 through 2001, interest at 5.25 to 7.75 percent $ 520,000 $ 200,000 General Obligation Improvement ' Bonds of 1992 due in annual installments of $ 10,000 to $ 20,000 through December 1, 2007, interest at 4.60 to 6.40 percent 200,000 $ 365,000 General Obligation Improvement Bonds of 1992 - Series B due in annual installments of $ 15,000 to $ 35,000 through December 1, 2008, ' interest at 4.50 to 6.60 percent 365,000 $ 550,000 General Obligation Improvement Bonds of 1993 due in annual installments of $ 25,000 to $ 50,000 through December 1, 2008, interest at 3.00 to 5.30 percent 550,000 Total General Obligation Special Assessment Bonds 1,635,000 General Obligation Revenue Bonds: ' $ 475,000 General Obligation Water Revenue Bonds of 1992 due in annual installments of $ 30,000 to $ 50,000 through December 1, 2005, interest at 4.00 to 6.00 percent 475,000 Total Bonds Payable $ 2,110,000 The annual requirements to amortize all bonded debt outstanding as of December 31, 1993, including interest payments of $ 920,211 are: 29 1 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 5. Bonds Payable (Continu ed) General Obligation General Year Ending Special Obligation December 31, Assessment Revenue Total 1994 $ 215,427 $ 55,177 $ 270,604 1995 211,737 53,978 265,715 1996 209,685 52,717 262,402 1997 202,195 56,397 258,592 1998 194,505 54,753 249,258 1999-2003 541,170 282,585 823,755 2004-2008 790,885 109,000 899,885 Totals $ 2,365,604 $ 664,607 $ 3,030,211 6. vital Lease Obligati on During 1991, the City entered into a capital lease for equipment. Future minimum lease payments together with the present value of the net minimum ' lease payments are as follows for the years ending December 31: 1994 $ 9,588 1995 4,794 Future Minimum Lease Payme nts 14,382 Less: Amou nt Representing Interest (789) Present Val ue of Minimum L ease Payments $ 13,593 ' C. Fund Equity Fund equity balances are classified as follows to reflect the limitations and ' restrictions of the respective funds: 30 1 1 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAILED NOTES ON ALL FUNOS AND ACCOUNT GROUPS (Continued) C. Fund Equity (Continued) 1. Fund Balance a. Reserved Fund Balance - Reserved fund balance is comprised of the following: General Fund Reserved for Fire $ 325,982 Reserved for Street Maintenance 19,530 Reserved for Police 5,938) Total $ 339,574 b. Unreserved fund balance is comprised of the following: Special Debt Capital General Revenue Service Pro ects _ Designated for Capital Expenditures $ 530,638 $ - $ - $ 243,715 $ Designated for Debt Service 257,334 - 953,754 - Undesignated 148,687 100,007 - - Total Unreserved 774,353 1,211,088 251,694 Fund Balance $ 936,659 $ 103,007 $ 953,754 $ 243,715 $ 2,237,135 2. Contributed Capital Contributed capital in the Enterprise Funds represents fixed assets which were purchased by other funds and transferred to the Enterprise Funds. Changes in contributed capital for the year-ended December 31, 1993, are as follows: 31 CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 1993 (Continued) NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) C. Fund Equity (Continued) 2. Contributed Capital (Continued) Contributed Capital - January 1, 1993 Add: 1993 Contributions Contributed Capital - December 31, 1993 NOTE 4 - STATEMENT OF CASH FLOWS Refuse Water Sewer Fund Fund Fund Total $ 3,725 $ 265,135 $ 2,030,455 $ 2,299,315 1,318,978 457,148 1,776,126 $ 3,725 $ 1,584,113 $ 2,487,603 $ 4,075,441 During 1992, the City had transactions in the Water and Sewer Enterprise Funds which affected recognized assets, but did not result in cash receipts or cash payments. Construction in Progress was contributed to these enterprise funds in the follow- ing amounts: Water Fund $ 1,318,978 Sewer Fund 457,148 Total $ 1,776,126 1 NOTE 5 - SEGMENT INFORMATION FOR ENTERPISE FUNDS The City maintains three Enterprise Funds which provide refuse, water and sewer services. Segment information for the year ended December 31, 1993, is: Operating Revenues Depreciation Operating Income (Loss} Net Income (Loss) Fixed Assets - Additions Deletions Net Working Capital Total Assets Total Equity Refuse Water Sewer Fund Fund Fund Total $ 79,359 $ 152,592 $ 150,332 $ 382,283 - 11,705 58,263 69,968 9,747 49,322 (26,472) 32,597 9,747 20,738 (68,430) (37,945) - 1,320,278 460,459 1,780,737 29,657 82,962 324,350 436,969 35,478 1,757,491 2,217,179 4,010,148 29,657 1,746,430 2,204,628 3,980,715 32 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS L u 1 CITY OF ST. JOSEPH, MINNESOTA THE GENERAL FUND The General Fund accounts for all revenues and expenditures of a governmental unit which are not accounted for in other funds, and it is usually the largest and most important accounting activity for state and local governments. It normally receives a greater variety and number of taxes and other general revenues than any other fund. This fund has flowing into it such revenues as general property taxes, licenses and permits, fines and penalties, rents, charges for current services, state-shared taxes, and interest earnings. The fund's resources also finance a wider range of activities than any other fund. Most of the current operations of governmental units will be financed from this fund. C 1 1 CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND COMPARATIVE BALANCE SHEETS Cash and Investments Taxes Receivable - Delinquent Special Assessments Receivable - Deferred Delinquent Accounts Receivable Interest Receivable Due from Other Governmental Units Loans Receivable TOTAL ASSETS ASSETS ___December 31^^^ $ 1,312,100 6,066 57,068 262 4,000 13,224 22,989 7,220 $ 1,422,929 $ 1,269,428 4,275 46,801 55,909 15,716 7,220 $ 1,399,349 LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable $ Due to Other Governmental Units Deferred Revenue Compensated Absences Payable Total Liabilities Fund Balance: Reserved Unreserved - Designated Undesignated Total Fund Balance TOTAL LIABILITIES AND FUND BALANCE 40,425 $ 48,990 14,620 85 63,396 51,076 28,255 28,255 146,696 128,406 339,574 787,972 148,687 1,276,233 302,700 830,000 138,243 1,270,943 $ 1,422,929 $ 1,399,349 33 n C r C n CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1993 REVENUES: General Property Tax Special Assessments Licenses and Permits Intergovernmental - State - Local Government Aid HACA Equalization Aid Disparity Aid Police Aid Fire Aid County Grants Total Intergovernmental Charges for Services - General Government Public Safety Culture and Recreation Total Charges for Services Budget _ $ 246,000 $ 4,000 27,000 330,788 19,800 13,800 3,400 367,788 6,250 90,000 3,600 99,850 Fines Miscellaneous - Sale of Property Interest Refunds and Reimbursements Contributions Other ' Total Miscellaneous TOTAL REVENUES 29,1OD 150,024 23,215 40,223 330,777 64,555 39,775 583 26,252 299 3,913 466,154 9,970 92,591 7,164 109,725 39,559 33,000 8,000 1,500 1,700 44,200 817,938 390 16,573 9,551 7,575 1,656 35,745 864,645 Over (Under) Budget $ (95,976) 19,215 13,223 (11) 64,555 39,775 583 6,452 (13,501) 513 98,366 3,720 2,591 3,564 9,875 10,459 390 (16,427) 1,551 6,075 44) 8,455) 46,707 34 CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1993 (Continued) Over (Under) Budget Actual Budget EXPENDITURES: General Government: Mayor and Council - Salaries and Benefits Supplies $ 15,745 350 $ 19,304 245 $ 3,559 (105) Travel and Conferences 2,500 616 (1,884) Advertising 1,400 2,166 766 Insurance 550 475 (75) Dues and Subscriptions 6,000 5,371 (629) Other 500 48 (452) Legislative Committees - Legislative Bodies 2,500 3,130 630 Other 300 545 245 Elections - Supplies 75 15 (60) Professional Services - 200 200 Capital Expenditures " 100 - (100) Assessing - Salaries and Benefits 6,785 8,935 2,150 Supplies 150 104 (46) Travel and Conferences 100 40 (60) Insurance 10 - (10) Other 100 22 (78) Administration - Salaries and Benefits 53,210 58,762 5,552 Supplies and Maintenance 3,300 3,397 97 Telephone 2,000 2,036 36 ' Travel and Conferences Insurance 800 1,500 399 1,125 (401) (375) Capital Expenditures 6,372 4,260 (2,112) Other 1,225 1,986 761 Accounting - Salaries and Benefits 29,762 34,723 4,961 Supplies ~ 595 1,717 1,122 Travel and Conferences 700 265 (435) Other 400 308 (92) Independent Auditing - Services and Charges 7,500 6,200 (1,300) ' Legal - Services and Charges 8,000 17,005 9,005 Planning and Zoning - Professional Services 5,000 185 (4,815) Consolidation Study 10,800 (2,220) (13,020) 35 ~i f u n 1 CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1993 (Continued) Over (Under) Budget Actual Budget EXPENDITURES: (Continued) General Government: {Continued) General Government Buildings - Salaries and Benefits $ 1,945 $ 1,857 $ (88) Supplies and Maintenance 1,375 5,433 4,058 Insurance 2,400 1,687 (713) Utilities 5,800 6,222 422 Professional Services 2,000 - (2,000) Other 1,950 8,620 6,670 Total General Government 183,799 195,183 11,384 Public Safety: Police - Salaries and Benefits 185,250 203,817 18,567 Supplies and Maintenance 4,900 6,883 1,983 Professional Services 15,475 19,038 3,563 Capital Expenditures 8,232 3,999 (4,233) Travel and Conferences 600 301 (299) Insurance 3,600 3,544 (56) Advertising 600 180 (420) Other 725 949 224 Fire Protection - Salaries and Benefits 11,565 5,804 (5,761) Supplies and Maintenance 13,565 11,728 {1,837) Professional Services 1,750 3,096 1,346 Utilities 3,350 2,325 (1,025) Travel and Conferences 3,500 4,978 1,478 Fire Protection 60,650 57,221 (3,429) Insurance 9,500 4,446 (5,054) State Aid Reimbursement 14,600 - (14,600) Pension Relief Fund 6,668 22,802 16,134 Capital Expenditures 10,391 3,854 (6,537) Other 5,840 2,801 (3,039) Building Inspection - Professional Services 4,550 8,241 3,691 Supplies 450 64 {386) Other 520 2,385 1,865 Communication Service - Telephone 2,000 2,728 728 Supplies and Maintenance 500 279 (221) Capital Expenditures 3,988 2,605 (1,383) 36 n ii 1 CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1993 (Continued) EXPENDITURES: (Continued) Public Safety: (Continued) Automotive Service - Salaries and Benefits Supplies and Maintenance Insurance Motor Vehicle Emergency Management Service - Professional Services Travel Capital Expenditures Other Animal Control - Supplies Professional Services _ Other Total Public Safety Public Works: Ordinance and Enforcement - Salaries and Benefits Professional Services Street Maintenance - Salaries and Benefits Supplies and Maintenance Utilities Capital Expenditures Professional Services Travel and Conferences Insurance Other Ice and Snow Removal - Salaries and Benefits Supplies and Maintenance Capital Expenditures Engineering - Professional Services Over (Under) Budget Actual Budget $ 920 $ - $ (920) 7,400 7,898 498 500 - (500) 7,000 - (7,000) 300 375 75 400 - {400) 315 165 (150) 100 44 (56) 20 90 70 130 - 130) 389,854 382,640 7,214) 290 - (290) - 278 278 60,625 59,139 (1,486) 13,725 12,571 (1,154) 3,150 2,951 (199) 95,034 35,739 (59,295) 13,500 1,043 (12,457) 200 80 {120) 6,500 5,430 (1,070) 550 425 (125) 8,980 8,914 (66) 7,300 8,672 1,372 675 - (675) 11,000 12,272 1,272 37 1 CI' C 1 CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET ANO ACTUAL Year Ended December 31, 1993 (continued) EXPENDITURES: (Continued) Public Works: (Continued) Street Lighting - Supplies and Maintenance Utilities Capital Expenditures Street Cleaning - Salaries and Benefits Supplies and Maintenance Other Total Public Works Culture and Recreation: Participant Recreation - Salaries and Benefits Supplies and Maintenance Professional Services Travel and Conferences Insurance Advertising Other Ball Park and Skating Rink - Salaries and Benefits Supplies and Maintenance Utilities Capital Expenditures Hockey Rink - Salaries and Benefits Supplies and Maintenance Utilities Maintenance Shop - Supplies and Maintenance Utilities Other Park Areas - Salaries and Benefits Supplies and Maintenance Insurance Utilities Capital Expenditures Other Over {Under) Budget Actual Budget $ 425 $ - $ (425) 18,000 19,317 1,317 2,200 2,472 272 1,720 3,183 1,463 1,180 1,730 550 350 194 156) 245,404 174,410 70,994) 130 130 325 - (325) 4,400 4,400 - 300 (300) 775 435 (340) 200 - (200) 150 769 619 2,340 2,269 (71) 800 119 (681) 1,150 537 (613) 1,520 - (1,520) 1,670 1,386 (284) 475 2,923 2,448 500 75 (425) 2,100 2,072 (28) 1,410 1,335 (75) 625 360 (265) 32,205 24,728 (7,477) 8,825 6,493 (2,332) 500 556 56 2,110 3,040 930 26,100 8,331 (17,769) 375 - (375) 38 CITY OF ST. JOSEPH, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1993 (Continued) EXPENDITURES: (Continued) Culture and Recreation: (Continued) Shade Tree Disease Control - Supplies and Maintenance Travel and Conferences Other Boy Scout and RSVP - Supplies and Maintenance Insurance Other Total Culture and Recreation Miscellaneous: Other TOTAL EXPENDITURES REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES: Operating Transfers Out EXCESS OF REVENUES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES FUND BALANCE - January 1 RESIDUAL EQUITY TRANSFER FUND BALANCE - December 31 Over {Under) Budget Actual Budget $ 50 $ - $ (50) 125 35 (90) 100 - (100) 252 252 400 125 (275) 1,100 1,100 - 90,630 61,470 (29,160) 1,000 2,567 1,567 910,687 816,270 94,417) (92,749) 48,375 141,124 - 297,130) (297,130) $ 92,749) (248,755) $(156,006) 1,270,943 254,045 $ 1,276,233 39 ' CITY OF ST. JOSEPH, MINNESOTA SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes ' or other earmarked revenue sources. They are usually required by statute, charter provision, or local ordinance to finance particular functions or activities of government. CITY OF ST. JOSEPH, MINNESOTA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 1993 With Comparative Totals for December 31, 1992 ASSETS Cash and Investments Accounts Receivable TOTAL ASSETS Recreation DARE Minnesota Totals Center Pro ram Beautification 1993 1992 $ 24,507 $ 500 $ 24,507 $ 500 $ 8,000 $ 33,007 $ 35,916 70,000 70,000 - $ 78,000 $ 103,007 $ 35,916 $ 78,000 $ 103,007 $ 35,916 LIABILITIES AND FUND BALANCE Fund Balance: Unreserved - Undesignated $ 24,507 $ 500 40 CITY OF ST. JOSEPH, MINNESOTA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 Recreation DARE Minnesota Totals Center Program Beautification 1993 1992 REVENUES: Miscellaneous - Interest $ 518 $ - Contributions - 1,558 Total Revenues 518 1,558 EXPENDITURES: Public Safety - Salaries and Benefits - 839 Supplies - 1,211 Travel and Conference - 65 Miscellaneous - Reimbursement of Prior Years' Donations - Total Expenditures - 2,115 EXCESS OF REVENUES (UNDER) EXPENDITURES 518 (557) OTHER FINANCING SOURCES (USES): Operating Transfers In - 1,057 Operating Transfers Out (11,927) - Total Other Financing Sources (Uses) (11,927) 1,057 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES (USES) (11,409) 500 FUND BALANCE - January 1 35,916 - FUND BALANCE - December 31 $ 24,507 $ 500 $ - $ 518 $ 4,282 - 1,558 - - 2,076 4,282 - 839 - - 1,211 - - 65 - - - 50,798 - 2,115 50,798 - (39) (46,516) 78,000 79,057 - - 11,927) - 78,000 67,130 - 78,000 67,091 (46,516) - 35,916 82,432 $ 78,000 $ 103,007 $ 35,916 41 i~ CITY OF ST. JOSEPH, MINNESOTA DEBT SERVICE FUNDS Debt Service Funds are created to account for the a ment of interest and Py ' principal on long-term, general obligation debt other than debt issued for and serviced primarily by a governmental enterprise. 0 C CITY OF ST. JOSEPH, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1993 With Comparative Totals for December 31, 1992 ASSETS Cash and Investments Special Assessments Receivable - Deferred Delinquent Due From Other Funds TOTAL ASSETS LIABILITIES AND FUND BALANCE Liabilities: Cash Overdraft Accounts Payable Deferred Revenue Total Liabilities Fund Balance: Unreserved - Designated for Debt Service Undesignated (Deficit) Total Fund Balance TOTAL LIABILITIES AND FUND BALANCE General General General Obligation Obligation Obligation Water Improvement Improvement Revenue Bonds Bonds Bonds of 1986 of 1992 of 1992 $ 742,187 $ 56,138 $ 129 113,696 54,501 - 1,023 - - $ 856,906 $ 110,639 $ 129 $ - $ - $ - 265 - - 114,719 54,501 - 114,984 54,501 - 741,922 56,138 129 741,922 56,138 129 $ 856,906 $ 110,639 $ 129 i General Obligation Improvement Bonds of 1992-B $ 39,575 255,220 $ 294,795 General Obligation Improvement Bonds of 1993 $ 115,990 187,718 $ 303,708 Totals $ 954,019 $ 1,213,423 611,135 251,584 1,023 644 - 20,000 $ 1,566,177 $ 1,485,651 $ - $ - $ - $ 32,703 265 110 255,220 187,718 612,158 252,228 255,220 187,718 612,423 285,041 39,575 115,990 953,754 821,422 379,188 39,575 115,990 953,754 1,200,610 $ 294,795 $ 303,708 $ 1,566,177 $ 1,485,651 42 CITY OF ST. JOSEPH, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 REVENUES: Special Assessments Miscellaneous - Interest Other Total Revenues EXPENDITURES: Miscellaneous Debt Service - Bond Principal Bond Interest and Fiscal Charges Total Expenditures EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES: Operating Transfers In Proceeds from the Sale of Bonds Total Other Financing Sources EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES FUND BALANCE (DEFICIT) - January 1 RESIDUAL EQUITY TRANSFER FUND BALANCE - December 31 General General General Obligation Obligation Obligation Improvement Improvement Improvement Bonds Bonds Bonds of 1972 of 1978 of 1978-A $ 286 $ 1,601 $ 259 999 8,139 449 1,285 9,740 .708 1,285 9,740 708 1,285 9,740 708 60,879 332,668 18,344 (62,164) (342,408) (19,052) $ - $ - $ - 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 General General General Obligation Obligation Obligation Improvement Improvement Improvement Bonds Bonds Bonds of 1983 of 1986 of 1992 $ 7,032 $ 37,736 $ 8,854 17,657 1,985 18,533 58,700 - 25,565 114,093 10,839 General Obligation General Water Obligation Revenue Improvement Bonds Bonds $ - 87 15,000 15,087 $ 13,346 987 23,710 38,043 65,000 - - - 982 44,423 11,715 29,374 21,708 982 109,423 11,715 29,374 21,708 24,583 4,670 (876) (14,287) 16,335 - - - 10,500 - - - - 10,500 - 24,583 4,670 (876) (3,787) 16,335 (32,703) 737,252 57,014 3,916 23,240 8,120 - - - $ - $ 741,922 $ 5fi,138 $ 129 $ 39,575 (Continued...) 43 CITY OF ST. JOSEPH, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 (Continued) REVENUES: Special Assessments Miscellaneous - Interest Other Total Revenues EXPENDITURES: Miscellaneous Debt Service - 8ond Principal Bond Interest and Fiscal Charges Total Expenditures EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES: Operating Transfers In Proceeds from the Sale of Bonds Total Other Financing Sources EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES FUND BALANCE - January 1 RESIDUAL EQUITY TRANSFER FUND BALANCE - December 31 General Obligation Improvement Bonds of 1993 $ - 100,000 15,990 115,990 115,990 $ 115,990 Totals 1993 1992 $ 69,114 $ 132,800 30,303 85,084 115,943 70,304 215,360 288,188 65,000 108,202 173,202 2,138 226,000 65,071 293,209 42,158 110,500 15,990 126,490 16$,648 1,200,610 415,504) $ 953,754 (5,021) 17,413 17,413 12,392 1,188,218 $ 1,200,610 44 CITY OF ST. JOSEPH, MINNESOTA CAPITAL PROJECTS FUNDS ' Ca ital Pro'ects Funds are created to account for all resources used for the P J acquisition of capital facilities by a governmental unit except those financed by ' enterprise funds. n I' ~i L C L CITY OF ST. JOSEPH, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET December 31, 1993 With Comparative Totals for December 31, 1992 ASSETS Cash and Investments Due from Other Governmental Units TOTAL ASSETS LIABILITIES AND FUND BALANCE Liabilities: Cash Overdraft Accounts Payable Construction Contracts Payable Total Liabilities Fund Balance: Unreserved - Designated for Capital Improvements Undesignated (Deficit) Total Fund Balance TOTAL LIABILITIES AND FUND BALANCE Water DBL Storage Labs Project Project $ 59,794 $ 86,768 $ 59,794 $ 86,768 East Minnesota Street Project $ 128,926 $ 128,926 $ - $ - $ - 3,408 - 10,875 36,885 - 13,682 40,293 - 24,557 19,501 86,768 104,369 19,501 86,768 104,369 $ 59,794 $ 86,768 $ 128,926 West Minnesota Street Totals Project 1993 1992 $ - $ 275,488 $ 235,526 302,860 302,860 - $ 302,860 $ 578,348 $ 235,526 $ 243,927 $ 243,927 $ 76,576 3,467 17,750 24,767 22,389 72,956 38,503 269,783 334,633 139,846 33,077 243,715 172,770 - - 77,090) 33,077 243,715 95,680 $ 302,860. $ 578,348 $ 235,526 45 CITY OF ST. JOSEPH, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 REVENUES: Special Assessments Intergovernmental - Federal Grant County Grants/Aids Miscellaneous - Contributions Interest Total Revenues EXPENDITURES: Capital Outlay - Construction Costs Other Total Expenditures EXCESS OF REVENUES (UNDER) EXPENDITURES OTHER FINANCING SOURCES: Operating Transfers In Proceeds from the Sale of Bonds Total Other Financing Sources EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES FUND BALANCE (DEFICIT) - January 1 RESIDUAL EQUITY TRANSFER FUND BALANCE - December 31 Baker/ Water DBL 7th Avenue Storage Labs Project Project Project $ - $ - $ - - 535,116 - - 1,789 .5,045 - 536,905 5,045 - 799,512 8,939 794 - - 794 799,512 8,939 (794) (262,607) (3,894) - 200,000 - - 200,000 - (794) (62,607) (3,894) (32,495) 82,108 90,662 33,289 - - $ - $ 19,501 $ 86,768 East West 91st Minnesota Minnesota Avenue Street Street Totals Project Project Project 1993 1992 $ - $ 145,896 $ 16,431 $ 162,327 $ - - - - 535,116 - - - 334,903 334,903 - - - 5,800 5,800 - - 1,394 - 8,228 3,675 - 147,290 357,134 1,046,374 3,675 20,052 357,584 529,226 1,715,313 908,807 1,359 - 4,606 6,759 - 21,411 357,584 533,832 1,722,072 908,807 (21,411) (210,294) (176,698) (675,698) (905,132) - 200,000 - 314,663 209,775 524,438 1,000,812 - 314,663 209,775 724,438 1,000,812 (21,411) 104,369 33,077 48,740 95,680 (44,595) - - 95,680 - 66,006 - - 99,295 - $ - $ 104,369 $ 33,077 $ 243,715 $ 95,680 46 CITY OF ST. JOSEPH, MINNESOTA ENTERPRISE FUNDS Enterprise Funds are established to account for the financing of self-supporting activities of governmental units which render services on a user charge basis to the general public. The most universal type of governmental enterprise is the public utility engaged in the provision of such basic services as water, electricity, and natural gas. Sanitary sewer systems financed by user charges have also assumed the status of public utility operations in many urban areas, and many cities have combined water and sewer systems under the same management. CITY OF ST. JOSEPH, MINNESOTA ENTERPRISE FUNDS COMBINING BALANCE SHEET December 31, 1993 With Comparative Totals for December 31, 1992 ASSETS Current Assets: Cash and Cash Equivalents Accounts Receivable Total Current Assets Fixed Assets: Land and Land Improvements Treatment Plant and Lines Buildings Machinery and Equipment Construction in Progress Less: Accumulated Depreciation Net Fixed Assets TOTAL ASSETS LIABILITIES AND FUNb EQUITY Current Liabilities: Accounts Payable Due to Other Governmental Units Due to Other Funds Compensated Absences Payable Total Current Liabilities Fund Equity: Contributed Capital Retained Earnings - Unreserved (Deficit) Total Fund Equity TOTAL LIABILITIES AND FUND EQUITY Refuse Water Sewer Fund Fund Fund $ 19,449 $ 74,071 $ 308,338 16,029 19,952 28,563 35,478 94,023 336,901 - 12,996 4,940 - 488,344 1,391,599 - - 517,983 - 34,969 116,234 - 1,321,592 457,148 - 1,857,901 2,487,904 - 194,433) 607,626) - 1,663,468 1,880,278 $ 35,478 $ 1,757,491 $ 2,217,179 $ 5,821 $ 2,650 $ 2,074 - 1,097 5,660 - 7,314 4,817 5,821 11,06 1 12,551 3,725 1,584,113 2,487,603 25,932 162,317 282,975) 29,657 1,746,430 2,204,628 $ 35,478 $ 1,757,491 $ 2,217,179 Totals 1993 1992 $ 401,858 $ 354,204 64,544 59,281 466,402 413,485 17,936 17,936 1,879,943 1,879,943 517,983 517,983 151,203 146,592 1,778,740 2,614 4,345,805 2,565,068 802,059) 732,091) 3,543,.746 1,832,977 $ 4,010,148 $ 2,246,462 $ 10,545 $ 30,629 6,757 5,763 - 20,000 12,131 9,700 29,433 66,092 4,075,441 2,299,315 94,726) 118,945) 3,980,715 2,180,370 $ 4,010,148 $ 2,246,462 47 CITY OF ST. JOSEPH, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 OPERATING REVENUES: Charges for Services OPERATING EXPENSES: Salaries and Related Taxes and Benefits Utilities Supplies Sewer Use Rental Postage Repairs and Maintenance Fees and Tests Dues and Subscriptions Refuse Disposal Depreciation Insurance Miscellaneous Total Operating Expenses OPERATING INCOME (LOSS) NON-OPERATING REVENUES (EXPENSES): Interest Loss on Disposal of Fixed Asset Total Non-Operating Revenues (Expenses) INCOME (LOSS) BEFORE OPERATING TRANSFERS Operating Transfers Out NET INCOME (LOSS) RETAINED EARNINGS (DEFICIT) - January 1 RESIDUAL EQUITY TRANSFERS RETAINED EARNINGS (DEFICIT) - December 31 Refuse Water Sewer Fund Fund Fund $ 79,359 $ 152,592 $ 150,332 1,218 48,185 33,750 - 13,238 6,282 268 11,253 3,068 - - 63,068 261 450 338 - 9,188 2,089 232 5,.030 4,992 - 223 15 66,666 - 1,066 - 11,705 58,263 875 3,975 3,778 92 23 95 69,612 103,270 176,804 9,747 49,322 (26,472) - 1,916 8,042 1,916 8,042 9,747 51,238 (18,430) - 30,500) 50,000) 9,747 20,738 (68,430) 16,185 113,679 (248,809) - 27,900 34,264 $ 25,932 $ 162,317 $(282,975) Totals 1993 1992 $ 382,283 $ 346,051 83,153 75,041 19,520 17,571 14,589 18,281 63,068 52,354 1,049 1,006 11,277 57,338 10,254 4,694 238 238 67,732 64,358 69,968 69,205 8,628 - 210 688 349,686 360,774 32,597 (14,723) 9,958 20,481 - 653) 9,958 19,828 42,555 5,105 80,500) - (37,945) 5,105 (118,945) (124,050) 62,164 - $ 94,726) $(118,945) 48 CITY OF ST. JOSEPH, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1993 With Comparative Totals for the Year Ended December 31, 1992 CASH FLOWS fROM OPERATING ACTIVITIES: Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities: Depreciation Change in Assets and Liabilities: (Increase)-in Accounts Receivable Decrease in Interest Receivable Decrease in Special Assessments Receivable Decrease in Due from Other Governmental Units Increase (Decrease) in Accounts Payable Increase in Due to Other Governmental Units (Decrease) in Due to Other Funds (Decrease) in Deferred Revenue Increase in Compensated Absences Payable Total Adjustments Net Cash Provided by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating Transfers to Other Funds Residual Equity Transfers Net Cash Used by Noncapitai Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital Expenditures CASH FLOWS FROM INVESTING ACTIVITIES: Interest on Investments Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, January 1 Cash and Cash Equivalents, December 31 Refuse Water Fund Fund $ 9,747 $ 49,322 - 11,705 (1,656) (876) 356 83 - 77 - (20,000) - 1,736 1,300) 7,275) 8,447 42,047 - (30,500) - 27,900 (2,600) - (1,300) - 1,916 8,447 40,063 11,002 34,008 $ 19,449 $ 74,071 Sewer Totals Fund 1993 1992 $ (26,472) $ 32,597 $ {14,723) 58,263 69,968 69,205 (2,731) (5,263) (9,546) - - 3,341 - - 328 - - 1,660 (20,523) (20,084) 11,442 917 994 5,763 - (20,000) - {2,818) 695 2,431 3,339 36,621 28,046 82,714 10,149 60,643 67,991 (50,000) {80,500) - 34,264 62,164 - 15,736) (18,336) - {3,311) (4,611) (4,890) 8,042 9,958 20,481 (856) 47,654 83,582 309,194 354,204 270,622 $ 308,338 $ 401,858 $ 354,204 49 CITY OF ST. JOSEPH, MINNESOTA STATEMENT OF GENERAL LONG-TERM DEBT December 31, 1993 1993 1992 AMOUNT AVAILABLE AND TO BE PROVIDED FOR THE PAYMENT OF GENERAL LONG-TERM DEBT: Amount Available in Debt Service Funds $ 953,754 $ 1,200,610 Amount to be Provided from Special Assessments 612,158 252,228 Amount to be Provided for Compensated Absences Payable 31,665 18,492 Amount to be Provided for Retirement of General Long-Term Debt 557,681 194,037 TOTAL AVAILABLE AND TO BE PROVIDED $ 2,155,258 $ 1,665,367 GENERAL LONG-TERM DEBT: Compensated Absences Payable $ 31,665 $ 18,492 Capital Lease Obligation 13,593 21,875 Bonds Payable 2,110,000 1,625,000 TOTAL GENERAL LONG-TERM DEBT $ 2,155,258 $ 1,665,367 50 CITY OF ST. JOSEPH, MINNESOTA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Year Ended December 31, 1993 Federal Assistance Number CFDA No. 14.228 Funding Source Grant Name Project Time Period U.S. Department of Community April 16, 1992 to Housing and Urban Development December 31, 1993 Development Biock Grant - Comprehensive Improvement Project Audit Report This Period January 1, 1993 to December 31, 1993 Revenues Expenditures This This Report Report $ 535,116 $ 535,116 51 ' CITY OF ST. JOSEPH, MINNESOTA ' REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS March 10, 1994 ' Honorable Mayor and City Council City of St. Joseph St. Joseph, Minnesota We have audited the financial statements of the City of St. Joseph, Minnesota, as ' of and for the year ended December 31, 1993, and have issued our report thereon dated March 10, 1994. We conducted our audit in accordance with generally accepted auditing standards ' and Government Auditing Standards, issued by the Comptroller General of the Untied States. Those standards require that we plan and perform the audit to obtain rea- sonable assurance about whether the financial statements are free of material ' misstatement. In planning and performing our audit of the financial statements of City of St. Joseph, Minnesota, for the year ended December 31, 1993, we considered its inter- , nal control structure in order to determine our auditing procedures for the pur- pose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. ' The management of City of St. Joseph, Minnesota, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits ' and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss ' from an authorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of the financial statements. Because of inherent limitations in any ' internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of 1 policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal con- , trot structure policies and procedures in the following categories: cash receipts, cash disbursements, cash and investment balances, payrolls, receivables, payables, other assets and liabilities and general ledger. ' 52 n For all of the internal control structure categories listed on the previous page, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. We noted certain matters involving the internal control structure and its opera- tion that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City's ability to record, process, summarize, and report financial data consistent with the assertions of management in the finan- cial statements. ' 1. The City does not have adequate segregation of duties due to a limited number of office employees. Management has determined that this weakness is not practical to correct. ~'~ A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we do not believe the reportable condition described above is a material weakness. We also noted other matters involving the internal control structure and its oper- ation that we have reported to the management of City of St. Joseph, Minnesota, in a separate letter dated March 10, 1994. This report is intended for the information of management and the City Council. However, this report is a matter of public record and its distribution is not limited. KERN, DEWENTER, VIERE, LTD. 53 fl ii u CITY OF ST. JOSEPH, MINNESOTA SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS March 10, 1994 Honorable Mayor and City Council City of St. Joseph St. Joseph, Minnesota We have audited the financial statements of the City of St. Joseph, Minnesota, as of and for the year ended December 31, 1993, and have issued our report thereon dated March 10, 1994. We have also audited the compliance of the City of St. Joseph, Minnesota, with requirements applicable to major federal financial assistance programs and have issued our report thereon dated March 10, 1994. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the finan- cial statements are free of material misstatement and about whether the City of St. Joseph, Minnesota, complied with laws and regulations, noncompliance with which would be material to a major federal financial assistance program. In planning and performing our audit for the year ended December 31, 1993; we con- sidered the City's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the City's financial statements, and on compliance of the City of St. Joseph, Minnesota, with require- ments applicable to major programs, and to report on the internal control struc- ture in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the financial statements in a separate report dated March 10, 1994. 54 The management of the City of St. Joseph, Minnesota, is responsible for establish- ing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide man- agement with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed ' in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted account- ing principles, and that the federal financial assistance program is managed in ' compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncom- pliance may nevertheless occur and not be detected. Also, projection of any eval- uation of the structure to future periods is subject to the risk that procedures ' may become inadequate because of changes in conditions or that the effectiveness, of the design and operation of policies and procedures may deteriorate. ' For the purpose of this report, we have classified the significant internal con- trol structure policies and procedures used in administering the federal financial assistance program in the following categories: ACCOUNTING CONTROLS: Activity Cycles - ' Treasury or financing Revenue/receipts Purchases/disbursements ' External financial reporting Payroll/personnel Financial Statement Captions - Cash and investments Receivables Prepaid items Payables and accrued liabilities Debt Fund equity I Accounting Applications - Biilings Receivables Cash receipts Purchasing and receiving Accounts payable Cash disbursements Payroll Inventory control Fixed assets ' General ledger 55 1 ADDITIONAL CONTROLS USED IN ADMINISTERING FEDERAL PROGRAMS: ' General Requirements - Political activity Davis-Bacon Act Civil rights Cash management Federal financial reports Allowable costs/cost principles Drug-free workplace Administrative requirements Specific Requirements - Types of costs allowed or unallowed Matching, level of effort, or earmarking Reporting Special tests and provisions: none Claims for Reimbursements ' Amounts Claimed or Used for Matching For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended December 31, 1993, the City of St. Joseph, Minnesota, - expended 100 percent of its total federal financial assistance under the following major federal financial assistance program: Community Development Block Grant Comprehensive Improvement Project. We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements, and requirements governing claims for reimbursements and amounts claimed or used. for matching that are applicable to the aforementioned major program. Our .procedures were less in scope than would be necessary to render an opinion on these internal control structure ..policies and procedures. Accordingly, we do not express such an opinion. We noted certain matters involving the internal control structure and its opera- tion that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City's ability to administer federal financial ' assistance programs in accordance with applicable laws and regulations. 1. The City does not have adequate segregation of accounting duties due to a lim- ited number of office employees. Management has determined that this weakness is not practical to correct. 56 1 0 A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a rela- tively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure policies and procedures used in administering federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined on the previous page. However, we do not believe the reportable condition described on the previous page is a material weakness. We also noted other matters involving the internal control structure and its oper- ation that we have reported to the management of the City of St. Joseph, Minnesota, in a separate letter dated March 10, 1994. This report is However, this limited. intended for the information of management and the City Council. report is a matter of public record and its distribution is not r KERN, DEWENTER, VIERE, LTD. 57 ' CITY OF ST. JOSEPH, MINNESOTA SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS March 10, 1994 ' Honorable Mayor and City Council City of St. Joseph St. Joseph, Minnesota ' We have audited the financial statements of the City of St. Jose h Minnesota as p > of and for the year ended December 31, 1993, and have issued our report thereon ' dated March 10, 1994. We have applied procedures to test the City's compliance with the following requirements applicable to its federal financial assistance program, which is identified in the schedule of federal financial assistance, for the year ended December 31, 1993. ' General Requirements - Po]itical activity Davis-Bacon Act Civil rights Cash management federal financial reports ' Allowable coststcost principles Drug-free workplace Administrative requirements ' Our procedures were limited to the applicable procedures described in the Office of Management and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of St. Joseph, Minnesota, had not complied, in all material respects, with those requirements. Also, the results of our procedures did not disclose any immaterial instances of noncompli- ance with those requirements. 58 ' This report is intended for the information of management and the City Council. However, this report is a matter of public record and its distribution is not limited. KERN, DEWENTER, VIERE, LTD. 1 0 ' 59 CITY OF ST. JOSEPH, MINNESOTA SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS March 10, 1994 Honorable Mayor and City Council City of St. Joseph St. Joseph, Minnesota We have audited the general purpose financial statements of the City of St. Joseph, Minnesota, as of and for the year ended December 31, 1993, and have issued our report thereon dated March 10, 1994. We have audited City of St. Joseph, Minnesota, compliance with the requirements governing types of services allowed or unallawed; eligibility; matching, level of effort or earmarking; reporting; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to its major federal financial assistance program, which is identified in the accompanying schedule of federal financial assistance, for the year ended December 31, 1993. The manage- ment of City of St. Joseph,~Minnesota, is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on compli- ance with those requirements based on our audit. We conducted our audit of compliance with those requirements in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments.-.Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the City of St. Joseph, Minnesota's, compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. The results of our audit procedures did not disclose any immaterial instances of noncompliance with the requirements referred to above. 60 1 ' In our opinion, the City of St. Joseph, Minnesota, complied, in all material respects, with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort or earmarking; reporting; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to its major federal financial assistance program for the year ended December 31, 1993. This report is intended for the information of management and the City Counci]. However, this report is a matter of public record and its distribution is not limited. KERN, DEWENTER, VIERE, LTD. 61 i CITY OF ST. JOSEPH, MINNESOTA REPORT ON COMPLIANCE BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND MINNESOTA STATUTES March 10, 1994 Honorable Mayor and City Council City of St. Joseph St. Joseph, Minnesota We have audited the financial statements of the City of St. Joseph, Minnesota, for the year ended December 31, 1993, and have issued our report thereon dated March 10, 1994. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the Legal Compliance Task Force pursuant to Minnesota Statutes Sec. 6.65. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Financial Statements Compliance with laws, regulations, contracts, and grants applicable to the City of St. Joseph, Minnesota, is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the financial statements are free of ' material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests indicate that, with res ect to the items tested the Cit P ~ y of St. Joseph, Minnesota, complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City had not complied, in all material respects, with those provisions. ' 62 1 fl 0 Legal Compliance The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, and claims and disbursements. Our study included all of the listed categories and other statutes as we considered necessary in the circumstances. The results of our tests indi- cate that for the items tested the City complied with the material terms and con- ditions of applicable legal provisions. Further, for the items not tested, based on our audit and the procedures referred to above, nothing came to our attention to indicate that the City had not complied with such legal provisions. This report is intended for the information of management and the City Council. However, this report is a matter of public record and its distribution is not limited. KERN, DEWENTER, VIERE, LfD. 63 1 CITY OF ST. JOSEPH, MINNESOTA FINDINGS ON COMPLIANCE WITH MINNESOTA STATUTES CURRENT YEAR FINDINGS: None PRIOR YEAR FINDINGS: None CI'~ 1 r 1 64