HomeMy WebLinkAbout1994 Audit Report
CITY 0 S
F T. JOSEPH, MINNESOTA
1 Stearns County
' AUDITED FINANCIAL STATEMENTS
As of
December 31, 1994
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CITY OF ST. JOSEPH, MINNESOTA
TABLE OF CONTENTS
ELECTED OFFICIALS AND ADMINISTRATION ................................. 3
INDEPENDENT AUDITORS' REPORT ......................................... 4
GENERAL PURPOSE 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 and Special Revenue Fund
Types ............................................................. 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 ....................................... 37
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual ............................................... 38
Special Revenue Fund -
Combining Balance Sheet .......................................... 44
Combining Statement of Revenues, Expenditures and Changes in
Fund Balance .................................................... 45
Debt Service Funds -
Combining Balance Sheet .......................................... 46
Combining Statement of Revenues, Expenditures and Changes in Fund
Balance ......................................................... 47
Capital Projects Funds -
Combining Balance Sheet .......... ...... ....... ........... .. 48
Combining Statement of Revenues, Expenditures and Changes in~Fund
Balance ......................................................... 49
Enterprise Funds -
Combining Balance Sheet .......................................... 50
Combining Statement of Revenues, Expenses and Changes in Retained
Earnings ........................................................ 51
Combining Statement of Cash Flows ................................ 52
Statement of General Long-Term Debt ................................ 53
SUPPLEMENTARY SCHEDULE -
Schedule of Sources and Uses of Public Funds for Municipal
Development District No. 1, A Tax Increment Financing District.... 54
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE ............................. 55
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CITY OF ST. JOSEPH, MINNESOTA
TABLE OF CONTENTS
(Continued)
REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF THE
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS ..................................................
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN
ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS .................
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS
APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS .................
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS
APPLICABLE TO NON-MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM
TRANSACTIONS ........................................................
REPORT ON COMPLIANCE BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
AND MINNESOTA STATUTES ...............................................
FINDINGS ON COMPLIANCE WITH MINNESOTA STATUTES ........................
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62
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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, 1994
Position
Mayor
Councilmember
Councilmember
Councilmember
Councilmember
City Clerk/
Treasurer/
Administrator
Deputy Clerk
Term
Expires
December 31, 1994
December 31, 1994
December 31, 1994
December 31, 1996
December 31, 1996
Appointed
Appointed
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' ,4/vin M. Kern
Duane N. DeWenter
Loren M. Viere
Kern, De Venter, Viere, ~ ~~^ Gerald A. Stover
Keith W. Julson
yy,, Dwayne 8. Dockendorf
C2Cflfled PLIU~IC ACC~UI]td17tS David H. Ninnenkamp
IN0I=PENDENT AUDITORS' REPORT
March 9, 1995
Honorable Mayor and City Council
City of St. Joseph
St. Joseph, Minnesota
We h ve
a audited the general purpose financial statements of the City of St.
' Joseph, Minnesota as of and for the year ended December 31, 1994, 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.
i 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, 1994, 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.
1 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
financial statements, supplementary schedule., 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.
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KERN, DEWENTER, VIERE, LTD.
220 Park Avenue South P.O. Box 1304 St. Cloud, MN 56302 4
612-251-7010 FAX 612-251-1784
CITY OF ST. JOSEPH, MINNESOTA.
COMBINED BALANCE SHEET -
ALL FUND TYPES AND ACCOUNT GROUPS
December 31, 1994
Governmental Fund Types
Special Debt Capital
ASSETS AND OTHER DEBITS General Revenue Service Projects
ASSETS:
Cash and Investments (Including
Cash Equivalents) $ 1,250,883 $ 34,874 $ 1,055,781 $ 35,582
Investments - - _ _
Taxes Receivable -
Delinquent 4,527 - 168 -
Special Assessments Receivable -
Deferred 47,844 - 536,796 -
Delinquent 178 - 1,758 -
Accounts Receivable 32,657 70,000 - -
Interest Receivable 13,279 - - -
Due from Other Governmental Units 47,418 - 82,426 -
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 $ 1,404,006 $ 104,874 $ 1,676,929 $ 35,582
LIABILITIES, EQUITY AND-OTHER CREDITS
LIABILITIES:
Cash Overdraft
Accrued Liabilities
Due to Other Governmental Units
Contracts Payable
Deferred Revenue
Compensated Absences Payable
Capital Lease Obligation
Bonds Payable
Total Liabilities
EQUITY AND OTHER CREDITS:
Investment in General Fixed Assets
Contributed Capital
Retaine@ Earnings (Deficit)
Fund Balance -
Reserved
Unreserved -
Designated
Undesignated
Total Equity and Other Credits
TOTAL LIABILITIES, EQUITY
$ - $ - $ - $ -
141,150 10 270 21
10,681 - - -
- - - 35,561
52,549 - 538,722 -
28,255 - - -
232,635 10 538,992 35,582
365,944 - - -
606,016 - 1,137,937 -
199,411 104,864 - -
1,171,371 104,864 1,137,937 -
AND OTHER CREDITS $ 1,404,006 $ 104,874 $ 1,676,929 $ 35,582
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 1994 1993
$ 306,248 $ - $ - $ 2,683,368 $ 2,976,472
156,007 - - 156,007 -
- - - 4,695 6,066
- - - 584,640 668,203
- - - 1,936 1,285
98,232 - - 200,889 138,544
- - - 13,279 13,224
- - - 129,844 325,849
- - - 7,220 7,220
3,528,334 1,219,934 - 4,748,268 4,593,909
- - 1,117,126 1,117,126 953,754
- - 538,554 538,554 612,158
- - 34,621 34,621 31,665
- - 314,015 314,015 557,681
$ 4,088,821 $ 1,219,934 $ 2,004,316 $ 10,534,462 $ 10,886,030
$ - $ - $ - $ - $ 243,927
12,529 - - 153,980 68,985
6,801 - - 17,482 21,377
- - - 35,561 72,956
591,271 675,554
11,949 - 34,621 74,825 72,051
- - 4,695 4,695 13,593
- 1,965,000 1,965,000 2,110,000
31,279 - 2,004,316 2,842,814 3,278,443
- 1,219,934 - 1,219,934 1,050,163
4,137,239 - - 4,137,239 4,075,441
(79,697) - - (79,697) (94,726)
- - - 365,944 339,574
- - - 1,743,953 1,985,441
- 304,275 251,694
4,057,542 1,219,934 - 7,691,648 7,607,587
$ 4,088,821 $ 1,219,934 $ 2,004,316 $ 10,534,462 $ 10,886,030
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CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES
Year Ended December 31, 1994
Governmental Fund Types
REVENUES:
General Property 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
Capital Outlay
Debt Service
Total Expenditures
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES):
Operating Transfers In
Operating Transfers Out
Proceeds From the Sale of Bonds
Total Other Financing Sources (Uses)
EXCESS OF REVENUES AND OTHER FINANCING
SOURCES OVER (UNDER) EXPENDITURES
AND OTHER USES
FUND BALANCE - January 1
RESIDUAL EQUITY TRANSFERS
FUND BALANCE - December 31
Special Debt
General Revenue Service
$ 167,539 $ - $ 6,831
21,169 - 106,954
56,920 - -
505,888 - -
109,689 - -
54,239 - -
118,814 2,264 130,160
1,034,258 2,264 243,945
302,619 - -
410,562 407 -
311,791 - -
112,150 - -
1,998 - 2,153
- - 271,088
1,139,120 407 273,241
(104,862) 1,857 (29,296)
(104,862) 1,857 (29,296)
1,276,233 103,007 953,754
- - 213,479
$ 1,171,371 $ 104,864 $ 1,137,937
The notes to the financial statements are an integral part of this statement. '
Totals
Capital (Memorandum Only)
Projects 1994 1993
$ - $ 174,370 $ 150,024
- 128,123 254,656
- 56,920 40,223
64,884 570,772 1,336,173
- 109,689 109,725
- 54,239 39,559
5,024 256,262 198,095
69,908 1,350,375 2,128,455
- 302,619 195,183
- 410,969 384,755
- 311,791 174,410
- 112,150 61,470
- 4,151 2,567
100,144 100,144 1,722,072
- 271,088 173,202
100,144 1,512,912 2,713,659
(30,236) (162,537) (585,204)
- - 389,557
- - (309,057)
- - 540,428
- - 620,928
(30,236) (162,537) 35,724
243,715 2,576,709 2,603,149
(213,479) - 62,164)
$ - $ 2,414,172 $ 2,576,709
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CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES FUND BALANCE - BUDGET AND ACTUAL
GENERAL AND SPECIAL REVENUE FUND TYPES
Year Ended December 31, 1994
General Fund
REVENUES:
General Property 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
FUND BALANCE - January 1, 1994
FUND BALANCE - December 31, 1994
Over
(Under)
Budget Actual Budget
$ 157,742 $ 167,539 $ 9,797
15,150 21,169 6,019
29,800 56,920 27,120
480,315 505,888 25,573
105,500 109,689 4,189
33,300 54,239 20,939
44,000 118,814 74,814
865,807 1,034,258 168,451
295,831 302,619 6,788
423,304 410,562 (12,742)
302,946 311,791 8,845
114,796 112,150 (2,646)
400 1,998 1,598
1,137,277 1,139,120 1,843
$ 271,470) (104,862) $ 166,608
1,276,233
$ 1,.171,371
The notes to the financial statements are an integral part of this statement. '
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Totals
Special Revenue Funds (Memorandum Only)
Over Over
(Under) {Under)
Budget Actual Budget Budget Actual Budget
$ - $ - $ - $ 157,742 $ 167,539 $ 9,797
- - - 15,150 21,169 6,019
- - - 29,800 56,920 27,120
- - - 480,315 505,888 25,573
- - - 105,500 109,689 4,189
33,300 54,239 20,939
1,000 2,264 1,264 45,000 121,078 76,078
1,000 2,264 1,264 866,807 1,036,522 169,715
1,444 407
1,444 407
$ 444) 1,857
103,007
$ 104,864
- 295,831 302,619 6,788
(1,037) 424,748 410,969 (13,779)
- 302,946 311,791 8,845
- 114,796 112,150 (2,646)
400 1,998 1,598
(1,037) 1,138,721 1,139,527 806
$ 2,301 $ 271,914) (103,005) $ 168,909
1,379,240
$ 1,276,235
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' CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF REVENUES, EXPENSES AND
' CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993
Totals
1994 1993
' OPERATING REVENUES:
Charges for Services $ 371,801 $ 334,333
OPERATING EXPENSES:
Salaries and Related Taxes and Benefits 78,378 83,153
Utilities 20,363 19,520
Supplies 13,958 14,589
' Sewer Use Rental 63,236 63,068
Postage 1,367 1,049
Repairs and Maintenance 4,266 11,277
Professional Fees 13,040 1,978
' Fees and Tests 9,246 8,276
Dues and Subscriptions 275 238
Refuse Disposal 70,614 67,732
' Depreciation 85,936 69,968
Insurance 8,730 8,628
Miscellaneous 545 210
Total Operating Expenses 369,954 349,686
OPERATING INCOME (LOSS) 1,847 (15,353)
NON-OPERATING REVENUES:
Interest 13,032 9,958
Other Revenues 150 47,950
' Total Non-Operating Revenues 13,182 57,908
INCOME BEFORE OPERATING TRANSFERS 15,029 42,555
' Operating Transfers Out - 80,500)
' NET INCOME (LOSS) 15,029 (37,945)
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RETAINED EARNINGS (DEFICIT) January 1 (94,726) (118,945)
RESIDUAL EQUITY TRANSFER - 62,164
RETAINED EARNINGS (DEFICIT) - December 31 $ 79,697) $ 94,726)
The notes to the financial statements are an integral part of this statement.
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CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF CASH FLOWS
' ALL PROPRIETARY FUND TYPES
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993
Totals
1994 1993
' CASH FLOWS FROM OPERATING ACTIVITIES:
Operating Income (Loss) $ 1,847 $ (15,353)
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided by Operating Activities:
' Depreciation 85,936 69,968
Other Non-Operating Revenues 150 47,950
Change in Assets and Liabilities:
' (Increase) in Accounts Receivable (33,688) (5,263)
Increase (Decrease) in Accrued Liabilities 1,984 (20,084)
Increase in Due to Other Governmental Units 44 994
(Decrease) in Due to Other Funds - (20,000)
' Increase (Decrease) in Compensated Absences
.Payable 182) 2,431
Total Adjustments 54,244 75,996
Net Cash Provided by Operating Activities 56,091 60,643
' CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating Transfers to Other Funds -
(80,500)
Residual Equity Transfers - 62,164
Net Cash Used for Noncapital Financing Activities - 18,336)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
' Capital Expenditures (5,001) (4,611)
Repayment of Contributed Capital 3,725)
Net Cash Used for Capital and Related Financing
' Activities (8,726) (4,611)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on Investments 13,032 9,958
' Net Purchase of Investments (156,007)
Net Cash Used for Investing Activities (142,975) 9,958
Net Increase in Cash and Cash Equivalents (95,610) 47,654
Cash and Cash Equivalents, January 1 401,858 354,204
Cash and Cash Equivalents, December 31 $ 306,248 $ 401,858
The notes to the financial statements are an integral part of this statement.
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' CITY OF ST. JOSEPH, MINNESOTA
t NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
' 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 financia l
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 two Capital
Projects Funds.
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
' December 31, 1994
(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
1 balance (net current assets) is considered a measure of "available spendable.
resources." Governmental fund operating statements present increases
(revenues and other financing sources) and decreases (expenditures and other
' financing uses) in net current assets. Accordingly, they are said to present
a summary of sources and uses of available spendable resources during a
period.
Fixed assets used in governmental fund. type operations (general fixed assets)
are accounted for in the General Fixed Assets Account Group, rather than in
governmental funds. Public domain ("infrastructure") general fixed assets
consisting of certain improvements other than buildings, including roads,
curbs and gutters, streets and sidewalks, are not capitalized by the City. No
depreciation has been provided on general fixed assets.
' All fixed assets are valued at their historical cost or estimated historical
cost if actual historical cost is not available. Donated fixed assets are
valued at their estimated fair value on the date donated.
' Long-term liabilities expected to be financed from governmental funds are
accounted for in the General Long-Term Debt Account Group, not in the
governmental funds.
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Fixed Assets and Long-Term Liabilities {Continued)
The two account groups are not "funds". 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.
All 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 Accountin
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.
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' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
' NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1 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
t 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, 1994, no outstanding encumbrances existed.
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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 specia] 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 1995 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 1995 and years thereafter.
14
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE fINANCIAL STATEMENTS
December 31, 1994
(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 fora 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
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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 the tax capacity of individual
properties, to arrive at the actual tax for each property. The County
Auditor also collects all special assessments, except for certain
prepayments paid directly to the City.
The County Auditor turns over 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
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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°~6 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, 1994
(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-
' Hying 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 adjusted to reflect reclassifications.
' NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
' A. Fund Deficits
The following fund has deficit retained earnings at December 31, 1994:
' Enterprise Fund -
Sewer $ 299,017
' This deficit will be eliminated by transfers from other funds and future user
charges.
' B. Expenditures in Excess of Appropriations
Expenditures exceeded appropriations in the following fund for the year ended
December 31, 1994:
Expenditures Appropriations
General $ 1,139,120 $ 1,137,277
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUN
T 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
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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 $ 225,311 $ - $ - $ 225,311 $ 186,360
Certificates of
Deposit 950,000 = = 950,000 950,000
Total Deposits $ 1,175,311 $ $ _ $ 1,175,311 $ 1,136,360
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, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
' A. Assets
1. Cash and Investments (Including Cash Equivalents) (Continued)
' b. Investments (Continued)
Category Carrying Market
1 2 3 Amount Value
U.S. Government and
Federal Agency Notes
and Bonds $ 641,804 $ - $ - $ 704,907 $ 641,804
U.S. Treasury Bills 60,782 - - 60,782 60,782
Negotiable Certificates
of Deposit 640,381 - - 643,940 640,381
Mutual Funds 250,896 283,679 250,896
=
Money Market 9,487 =
9,487 9,487
Total Investments $ 1,603,350 $ _ $ = 1,702,795 1,603,350
'
Total Deposits (See
Note 3 A.i.a.) 1,136,360 1,136,360
Petty Cash 220 220
' Total Cash and Investments
(Including Cash Equivalents)
$ 2,839,375
$ 2,739,930
' The carrying amount is classified on the comb ined balance sheet as
follows:
Carrying
Amount
Cash and Investments (Including Cash
Equivalents) $ 2,683,368
' Investments 156,007
Total $ 2,839,375
20
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
2. Due from Other Governmental Units
The following is a summary of due from other governmental units at
December 31, 1994:
General Fund -
Fines, Property Taxes
and Federal Grant
Debt Service Funds -
G.O. Bonds of 1986 -
Property Taxes
G.O. Bonds of 1992 -
Federal Grant
G.O. Bonds of 1993 -
Special Assessments
and Property Taxes
Total
3. Fixed Assets
State of Stearns St. Joseph
Minnesota County Township Total
$ 3,843 $ 43,575 $ - $ 47,418
- 616 - 616
64,884 - - 64,884
- 138 16,788 16,926
$ 68,727 $ 44,329 $ 16,788 $ 129,844
A summary of changes in general fixed assets follows:
Balance Balance
1-1-94 Additions Disposals 12-31-94
Land $ 79,837 $ 87,589 $ - $ 167,426
Buildings 253,185 - - 253,185
Improvements Other
than Buildings 78,415 40,750 - 119,165
Machinery and
Equipment 353,495 4,645 - 358,140
Office Furniture 44,907 13,560 1,580 56,887
Motor Vehicles 88,244 25,903 9,290 104,857
Other Equipment 152,080 11,048 2,854 160,274
Total $ 1,050,163 $ 183,495 $ 13,724 $ 1,219,934
21
' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
' December 31, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
3. Fixed Assets (Continued)
' A summary of Enterprise Fund fixed assets at December 31, 1994, is as
follows:
Water Sewer
' Fund Fund Total
Land and Land Improvements $ 12,996 $ 4,940 $ 17,936
' Treatment Plant and Lines 648,145 1,874,045 2,522,190
Buildings 517,983 517,983
Machinery and Equipment 34,969 116,234 151,203
' Water Storage Facility 1,207,017 - 1,207,017
Total Cost 1,903,127 2,513,202 4,416,329
Less: Accumulated Depreciation 217,657) 670,338) 887,995)
' Net Fixed Assets $ 1,685,470 $ 1,842,864 $ 3,528,334
' 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, 1994 was $ 193,253 and
$ 152,974, respectively; the City's total payroll was $ 431,532.
22
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
' December 31, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
' 1. Defined Benefit Pension Plans - Statewide (Continued)
' a. Plan Description (Continued)
PERA provides retirement benefits as well as disability benefits to
members, and benefits to survivors upon death of eligible members.
Benefits are established by State Statute, and vest after three years
of credited service. The defined retirement benefits are based on a
member's highest average salary for any five successive years of
' allowable service, age, and years of credit at termination of service.
Two methods are used to compute benefits for 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 2.65 percent for each year of service.
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 for a 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.
i
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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) 4.30% 4.60% 9.58°~
PEPFF 7.90 11.70 17.45
* The recommended rates scheduled above represent the required
rates for fiscal year 1994 contributions as reported in the
July 1, 1993, actuarial valuation reports.
Total contributions made by the City during fiscal year 1994 were:
Amounts
PERF
PEPFF
Totals
Employees Employer
$ 8,175 $ 8,658
11,626 17,439
$ 19,801 $ 26,097
Percentage of
Covered Payroll
Employees Employer
4.23% 4.48%
7.60 11.40
The City's contribution for the year ended December 31, 1994 to the
PERF represented .007 percent of total contributions required of all
participating entities. For the PEPFF, contributions for the year
ended December 31, 1994, represented .053 percent of total contribu-
tions required of all participating entities.
24
' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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
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,
' 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, 1994, are shown
' below:
(In Thousands)
PERF PEPFF
Total Pension Benefit Obligation $ 5,625,598 $ 1,020,950
Net Assets Available for Benefits,
' at Cost (Market Values for PERF =
$ 4,762,519; PEPFF = $ 1,237,484) 4,733,845 1,229,769
' Unfunded (Assets in Excess of) Pension
Benefit Obligation $ 891,753 $ 208,819)
The measurement of the pension benefit obligation is based on an
actuarial valuation as of June 30, 199 4. Net assets available to
' pay pension benefits were valued as of June 30, 1994.
' 25
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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)
1. Pension Benefit Obligation (Continued)
For the PERF, significant actuarial assumptions used in the
calculation of the pension benefit obligation include (a) a rate
of return on the investment of present and future assets of 8.5
percent per year, compounded annually, prior to retirement, and 5
percent per year, compounded annually, following retirement; (b)
projected salary increases taken from a select and ultimate table;
(c) payroll growth at 6 percent per year, consisting of 5 percent
for inflation and 1 percent due to growth in group size; (d) post-
retirement benefit increases that are accounted for by the 5
percent rate of return assumption following retirement; and (e)
mortality rates based on the 1983 Group Annuity Mortality Table
set forward one year for retired members and set back five years
for each active member.
Actuarial assumptions used in the calculation of the PEPFF
include (a) a rate of return on the investment of present and
future assets of 8.5 percent per year, compounded annually, prior
to retirement, and 5 percent per year, compounded annually,
following retirement; (b) projected salary increases of 6.5
percent per year, compounded annually, attributable to the effects
of inflation; (c) post-retirement increases that are accounted for
by the 5 percent rate of return assumption following retirement;
and (d) mortality rates based on the 1971 Group Annuity Mortality
Table projected to 1984 for males and females.
2. Changes in Plan Provisions
The 1994 legislative session did not include any benefit
improvements which would impact funding costs for the PERF and the
PEPFF.
26
' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(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}
3. Changes in Actuarial Assumptions
' Prior to fiscal year 1994, the salary increase assumption and the
morta]ity tables used in the calculation of pension benefit
obligation for the PERF were the same as those specified for the
PEPFF. For the July 1, 1994 actuarial valuation, PERA's board of
trustees approved new mortality rates updated to the 1983 Group
Annuity Mortality Table, salary increases which were changed to a
1 select and ultimate table and a new payroll growth assumption
which was changed from 6.5 percent to 6 percent. These changes
were made to reflect actual experience of the plan.
With the adoption of the actuarial assumption changes and the new
mortality tables for the PERF, the pension benefit obligation
increased $ 56,596,000. The actuarial assumption changes also
necessitated a $ 81,201,000 transfer from the PERF Benefit Reserve
' to the PERF Minnesota Post Retirement Investment Fund (MPRIF)
Reserve to finance the increased obligation for future retirement
benefits. The change in the mortality rate assumption increased
' the PERF's costs because pensioners are living longer than assumed
previously. The change in the salary increase assumption,
however, offset some of the additional costs because lower salary
increases general]y translate into lower benefit liabilities in
' the future.
Potential changes in the assumptions used for the PEPFF may be
made in the future after completion of a special experience study
for that fund. Completion of the PEPFF experience study is
expected by February 1, 1995.
' d
Ten-Year Hist
rical T
d I
f
ti
.
o
ren
n
orma
on
Ten-year historical trend information is presented in PERA's
Comprehensive Annual Financial Report for the year ended June 30,
1994. This information is useful in assessing the pension plan's
accumulation of sufficient assets to pay pension benefits as they
become due.
27
' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
' December 31, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
' 1. Defined Benefit Pension Plans - Statewide (Continued)
' e. Related Party Investments
As of June 30, 1994, 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.
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,
1993, 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
1 allocated to the plan, all in accordance with enabling state statutes.
=e
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
t NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
r 2. Defined Contribution Lum Sum Service Pension Plan - Volunteer Fire
Relief Association Continued
b. Related Party Investments
During 1993 and as of December 31, 1993, 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 $ 380,945
Net Assets Available for Benefits at Market 333,009
' Unfunded Pension Benefit Obligation $ 47 936
As of the issuance of this report, amounts for December 31, 1994,
were not available.
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 1993 were $ 8,921.
29
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
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 not eligible to participate in the PEDCP.
Plan benefits depend solely on amounts contributed to the plan plus
investment earnings. Minnesota Statutes, Chapter 353D.03 requires that
both the elected local government official and the City contribute an
amount equal to 5% 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 1994 was $ 431,532. The City's con-
tributions were calculated using the base salary amount of $ 10,800. Both
the City and the elected local government official made the required 5%
contribution, amounting to $ 540 from each source, or $ 1,080 in total.
As of June 30, 1994, and for the fiscal year then ended, PERA held no
securities issued by the City or other related parties.
4. Deferred Revenue
Deferred revenue at December 31, 1994, consisted of:
Taxes Receivable -
Delinquent
Assessments Receivable -
Deferred
Delinquent
Total
Debt
General Service Total
$ 4,527 $ 168 $ 4,695
47,844 536,796 584,640
178 1,758 1,936
$ 52,549 $ 538,722 $ 591,271
30
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
5
Bonds Pa
able
.
y
The following is a summary of bond transactions for the year
December 31
1994: ended
,
General
Obligation General
Special Obligation
Assessment Revenue Total
Bonds Payable -
' January 1, 1994 $ 1,635,000 $ 475,000 $ 2,110,000
Bonds Retired 115,000) 30,000) 145,000)
Bonds Payable -
December 31, 1994 $ 1,520,000 $ 445,000 $ 1,965,000
'
Bonds ou a
tst nding at December 31, 1994, comprise
the following issues:
' General Obligation Special Assessment Bonds:
$ 1,400,000 General Obligation Improvement
~
Bonds of 1986 due in annual installments ~`b
of $ 65,000 through December 31, 2001,
interest at 5.25 to 7.75 percent $ 455,000
' $ 200,000 General Obligation Improvement
Bonds of 1992 d
i
l i
k `~~~~J
ue
n annua
nstallments ~u
of $ 10,000 to $ 20,000 through December 1,
' 2007, interest at 4.60 to 6.40 percent 190,000
$ 365,000 General Obligation Improvement Bonds
' of 1992 - Series B due in annua] installments o
$ 15,000 to $ 35
000 through December 1
2008 f ~
~
,
,
, ~~
~
interest at 4.50 to 6.60 percent ~,a 350,000
1 ,~
31
C
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued) ~(
5. Bonds Payable (Continued) ~,Q~1
General Obligation Special Assessment Bonds: (Continued) r~~
$ 550,000 General Obligation Improvement Bonds l~~
of 1993 due in annual installments of $ 25,000
to $ 50,000 through December 1, 2008, interest
at 3.00 to 5.30 percent $ 525,000
Total General Obligation Special Assessment Bonds 1,520,000
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 ;~ 445,000
Total Bonds Payable $ 1,965,000
r
r
The annual requirements to amortize all bonded debt outstanding as of
December 31, 1994, including interest payments of $ 794,608 are:
Year Ending
' December 31,
' 1995
1996
1997
1998
1999
' 2000-2004
2005-2008
Totals
General
Obligation General
Special Obligation
Assessment Revenue Total
$ 211,737 $ 53,978 $ 265,715
209,685 52,717 262,402
202,195 56,397 258,592
194,505 54,753 249,258
196,630 58,003 254,633
706,080 280,583 986,663
429,345 53,000 482,345
$ 2,150,177 $ 609,431 $ 2,759,608
32
' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
' December 31, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
' 6. Capital Lease Obligation
' 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 year ending December 31, 1994:
' Future Minimum Lease Payments $ 4,794
Less: Amount Representing Interest 99)
' Present Value of Minimum Lease
Payments $ 4,695
C. Fund Equity
Fund equity balances are classified as follows to reflect the limitations and
' restrictions of the respective funds:
1. Fund Balance
' a. Reserved Fund Balance -
Reserved fund balance is comprised of the following:
' General
Fund
' Reserved for Fire $ 358,926
Reserved for Street Maintenance 14,044
' Reserved for Police 7,026)
Total $ 365,944
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33
C
' CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
' December 31, 1994
(Continued)
' NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
C. Fund Equity (Continued)
'
1. Fund Balance (Continued)
' b. Unreserved fund balance is comprised of the following:
Special Debt
t General Revenue
Designated for Capital Service Total
Expenditures $ 431,271 $ $ $ 431,271
Designated for Debt
' Service 174,745 - 1,137,937 1,312,682
Undesignated 199,411 104,864 304,275
Total Unreserved
Fund Balance $ 805,427 $ 104,864 $ 1,137,937 $ 2,048,228
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, 1994, are
as follows:
' Refuse Water Sewer
Fund Fund Fund Total
Contributed Capital - January 1,
' 1994 $ 3,725 $ 1,584,113 $ 2,487,603 $ 4,075,441
' Add: 1994 Contributions - 40,225 25,298 65,523
Less: Repayment of Contributed
Capital (3,725) - - 3,725)
'
Contributed Capital - December 31,
1994 $ - $ 1,624,338 $ 2,512,901 $ 4,137,239
G
34
' CITY OF ST. JOSEPH, MINNESOTA
' NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
' NOTE 4 - STATEMENT OF CASH FLOWS
During 1994, 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.
' Water storage facility and treatment plant/lines were contributed to these
enterprise funds in the following amounts:
' Water Fund $ 40,225
Sewer Fund 25,298
Total $ 65,523
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, 1994, is:
Operating Revenues
Depreciation
Operating Income (Loss)
Net Income (Loss)
Contributed Capital
Fixed Assets -
Additions
Deletions
Net Working Capital
Total Assets
total Equity
Refuse Water
fund Fund _
$ 78,645 $ 130,015 $
- 23,224
5,693 21,681
5,693 25,378
- 40,225
45,226
31,625 126,563
37,545 1,824,136
31,625 1,812,033
Sewer
Fund Total
163,141 $ 371,801
62,712 85,936
(25,527) 1,847
(16,042) 15,029
25,298 65,523
25,298 70,524
371,020 529,208
2,227,140 4,088,821
2,213,884 4,057,542
35
CITY OF ST. JOSEPFl, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994
(Continued)
NOTE 6 - TAX INCREMENT DISTRICT
' The City of St. Joseph is the administering authority for the following tax
increment financing district:
1. Name of District: .Tax Increment District No. 1
Type of District: Economic Development
Authorizing Law: Minnesota Statutes Sections 469.124 to 469.179
Established: December 15, 1994
Duration of District: No later than November 14, 2005
Original Tax Capacity $ 12,177
Current Net Tax Capacity 12,177
Captured Tax Capacity
Retained by the city $ -
Tax increments will be used to finance a loan payable to DBL Labs, Inc., in the
amount of $ 81,270. The loan has an eleven year maximum term with a net interest
cost rate of 8 percent. Payments will be funded utilizing a "pay-as-you-go" con-
cept in which payments to DBL Labs, Inc., will be made only upon remittance of tax
increments to the City of St. Joseph from Stearns County.
36
n
' 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.
[,
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ii
L~
u
l
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r~
0
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
December 31
1994 1993
ASSETS
$ 1,250,883 $ 1,312,100
4,527 6,066
47,844 57,068
178 262
32,657 4,000
13,279 13,224
47,418 22,989
7,220 7,220
$ 1,404,006 $ 1,422,929
LIABILITIES AND FUND BALANCE
Liabilities:
Accrued Liabilities $
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
141,150 $ 40,425
10,681 14,620
52,549 63,398
28,255 28,255
232,635 146,696
365,944
606,016
199,411
1,171,371
339,574
787,972
148,687
1,276,233
$ 1,404,006
$ 1,422,929
37
r
r
ri
u
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1994
Over
(Under)
Budget Actual Budget
REVENUES:
General Property Tax $ 157,742 $ 155,184 $ (2,558)
Tax Forfeit Property - 12,355 12,355
Total General Property Tax 157,742 167,539 9,797
Special Assessments 15,150 21,169 6,019
Licenses and Permits 29,800 56,920 27,120
Intergovernmental -
State -
Local Government Aid 377,689 377,689 -
HACA 63,596 65,914 2,318
DNR 500 1,000 500
Police Aid 19,800 28,648 8,848
Fire Aid 15,330 28,794 13,464
Federal Grant - 3,843 3,843
County Grants 3,400 - 3,400)
Total Intergovernmental 480,315 505,888 25,573
Charges for Services -
General Government 7,600 9,286 1,686
Public Safety - Fire 94,500 96,700 2,200
Culture and Recreation 3,400 3,703 303
Total Charges for Services 105,500 109,689 4,189
Fines 33,300 54,239 20,939
Miscellaneous -
Sale of Surplus Property - 3,394 3,394
Interest 33,000 81,953 48,953
Refunds and Reimbursements 6,000 6,311 311
Contributions 5,000 20,931 15,931
Other - 6,225 6,225
Total Miscellaneous 44,000 118,814 74,814
TOTAL REVENUES 865,807 1,034,258 168,451
38
1
n
~~
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r
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1994
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES:
General Government:
Mayor and Council -
Salaries and Benefits $ 18,025 $ 18,956 $ 931
Supplies 450 140 (310)
Travel and Conferences 1,775 2,853 1,078
Advertising 1,800 3,207 1,407
Insurance 550 529 (21)
Dues and Subscriptions 6,550 11,206 4,656
Other 650 2,048 1,398
Legislative Committees -
Legislative Bodies 2,500 3,855 1,355
Other 300 625 325
Elections -
Salaries and Benefits 3,850 2,050 (1,800)
Supplies 700 54 (646)
Professional Services 2,700 2,758 58
Other 1,300 128 (1,172)
Assessing -
Salaries and Benefits 8,040 8,210 170
Supplies 150 107 (43)
Travel and Conferences 100 40 (60)
Other 175 - (175)
Administration -
Salaries and Benefits 60,717 57,163 (3,554)
Supplies and Maintenance 5,600 3,612 (1,988)
Telephone 3,500 1,928 (1,572)
Travel and Conferences 800 401 (399)
Insurance 1,125 1,110. (15)
Capital Expenditures 11,966 12,570 604
Other 1,705 1,975 270
Accounting -
Salaries and Benefits 36,026 36,733 707
Supplies 895 1,275 380
Travel and Conferences 350 - (350)
Other 100 222 122
Independent Auditing -
Services and Charges 6,500 9,650 3,150
Legal -
Services and Charges 10,000 17,774 7,774
Planning and Zoning -
Annexation Fee 800 381 (419)
Consolidation Study 5,000 1,414 (3,586
Star City Program 5,000 3,049 (1,951)
39
L
1
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1994
(Continued)
EXPENDITURES: (Continued)
General Government: (Continued)
General Government Buildings -
Salaries and Benefits
Supplies and Maintenance
Insurance
Utilities
Professional Services
Other
Land
Total General Government
Public Safety:
Police -
Salaries and Benefits
Supplies and Maintenance
Professional Services
Capital Expenditures
Travel and Conferences
Insurance
Advertising
Other
Budget Cuts
Fire Protection -
Salaries and Benefits
Supplies and Maintenance
Professional Services
Utilities
Travel and Conferences
Fire Protection
Insurance
State Aid Reimbursement
Pension Relief Fund
Capital Expenditures
Other
Building Inspection -
Professional Services
Supplies
Other
Communication Service -
Telephone
Supplies and Maintenance
Capital Expenditures
Over
(Under)
Budget Actua] Budget
$ 2,257 $ - $ (2,257)
1,420 1,273 (147)
2,065 1,852 (213)
6,450 6,147 (303)
1,856 1,856
950 2,879 1,929
82,990 82,589 401)
295,831 302,619 6,788
198,689 205,589 6,900
4,300 4,339 39
18,475 32,987 14,512
9,333 783 (8,550)
500 2,411 1,911
3,450 3,439 (11)
800 126 (674)
900 900
(7,768) - 7,768
12,242 5,606 (6,636)
16,823 8,778 (8,045)
1,840 - (1,840)
5,818 3,335 (2,483)
3,700 4,475 775
63,612 55,181 (8,431)
10,000 4,232 (5,768)
15,330 14,913 (417)
7,622 - (7,622)
17,450 12,346 (5,104)
3,875 1,987 (1,888)
350 - (350)
450 79 (371)
7,100 20,781 13,681
2,500 4,104 1,604
300 287 (13)
1,483 822 (661)
' 40
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r
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1994
{Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES: (Continued)
Public Safety: (Continued)
Automotive Service -
Supplies and Maintenance $ 9,000 $ 9,190 $ 190
Insurance 500 - (500)
Motor Vehicle 14,000 12,980 (1,020)
Emergency Management Service -
Professional Services 300 300
Travel 400 - (400)
Capital Expenditures 100 24 (76)
Other 200 - (200)
Animal Control -
Supplies 100 56 (44)
Professional Services 200 432 232
Other 230 80 150)
Total Public Safety 423,304 410,562 12,742)
Public Works:
Ordinance and Enforcement -
Salaries and Benefits 290 - (290)
Professional Services 250 456 206
Other - 908 908
Street Maintenance -
Salaries and Benefits 59,307 64,892 5,585
Supplies and Maintenance 9,625 7,976 (1,649)
Utilities 3,750 4,396 646
Capital Expenditures 164,429 140,945 (23,484)
Travel and Conferences 200 100 (100)
Insurance 5,700 5,312 (388)
Other 475 427 (48)
Ice and Snow Removal -
Salaries and Benefits 8,966 11,641 2,675
Supplies and Maintenance 8,550 17,514 8,964
Capital Expenditures 1,675 - (1,675)
Other (Budget Cuts) (2,088) - 2,088
Engineering -
Professional Services 15,000 29,219 14,219
41
CITY OF ST, JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1994
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES: (Continued)
Public Works: (Continued)
Street Lighting -
Supplies and Maintenance $ 425 $ 36 $ (389)
Utilities 19,375 17,772 (1,603)
Capital Expenditures 2,200 4,890 2,690
Street Cleaning -
Salaries and Benefits 2,817 3,286 469
Supplies and Maintenance 1,700 1,819 119
Other 300 202 (98)
Total Public Works 302,946 311,791 8,845
Culture and Recreation:
Participant Recreation -
Supp]ies and Maintenance 1,776 1,702 (74)
Professional Services 5,800 5,484 (316)
Insurance 565 615 50
Advertising 100 105 5
Other 100 8 (92)
Ball Park and Skating Rink -
Salaries and Benefits 2,340 1,839 (501)
Supplies and Maintenance 800 677 (123)
Utilities 1,250 600 (650)
Capital Expenditures 3,040 4,501 1,461
Maintenance Shop -
Supplies and Maintenance 2,600 2,647 47
Utilities 1,580 1,618 38
Other 359 - (359)
Park Areas -
Salaries and Benefits 25,546 30,255 4,709
Supplies and Maintenance 8,850 5,910 (2,940)
Insurance 600 529 (71)
Utilities 1,935 2,581 646
Capital Expenditures 55,430 50,584 (4,846)
Other 375 - (375)
42
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1994
(Continued)
EXPENDITURES: (Continued)
Culture and Recreation: (Continued)
Shade Tree Disease Control -
Supplies and Maintenance
Travel and Conferences
Other
Community Support -
Supplies and Maintenance
Insurance
Other
Total Culture and Recreation
Miscellaneous:
Other
TOTAL EXPENDITURES
REVENUES OVER (UNDER) EXPENDITURES
FUND BALANCE - January 1
FUND BALANCE - December 31
Over
(Under)
Budget Actual Budget
$ 50 $ - $ (50)
100 93
7)
100 - (100)
375 375
300 77 (223)
1,200 1,950 750
114,796 112,150 (2,646)
400 1,998 1,598
1,137,277 1,139,120 1,843
$ 271,470) (104,862) $ 166,608
1,276,233
$ 1,171,371
43
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.
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CITY OF ST. JOSEPH, MINNESOTA
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
December 31, 1994
With Comparative Totals for December 31, 1993
A5SETS
Cash and Investments
Accounts Receivable
TOTAL ASSETS
Recreation DARE Minnesota Totals
Center Program Beautification 1994 1993
$ 25,235 $ 1,639
$ 25,235 $ 1,639
LIABILITIES AND FUND BALANCE
Liabilities:
Accrued Liabilities $ -
Fund Balance:
Unreserved -
$ 8,000 $ 34,874 $ 33,007
70,000 70,000 70,000
$ 78,000 $ 104,874 $ 103,007
$ 10 $ - $ 10 $ -
Undesignated 25,235 1,629
TOTAL
LIABILITIES
AND FUND
BALANCE $ 25,235 $ 1,639
78,000 104,864 103,007
$ 78,000 $ 104,874 $ 103,007
44
CITY OF ST. JOSEPH, MINNESOTA
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993
REVENUES:
Miscellaneous -
Interest
Contributions
Total Revenues
EXPENDITURES:
Public Safety -
Salaries and Benefits
Supplies
Other
Total Expenditures
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES
(USES):
Operating Transfers In
Operating Transfers Out
Total Other Financing
Sources (Uses)
EXCESS OF REVENUES AND OTHER
FINANCING SOURCES OVER
EXPENDITURES AND OTHER
FINANCING USES
FUND BALANCE - January 1
FUND BALANCE - December 31
Recreation DARE Minnesota Totals
Center Program Beautification 1994 1993
$ 728 $ - $ - $ 728 $ 518
1,536 - 1,536 1,558
728 1,536 - 2,264 2,076
- 111 - lil 839
- 271 - 271 1,211
- 25 - 25 65
- 407 - 407 2,115
728 1,129 - 1,857 (39j
- - - - 79,057
- - - - 11,927)
- - - - 67,130
728 1,129 - 1,857 67,091
24,507 500 78,000 103,007 35,916
$ 25,235 $ 1,629 $ 78,000 $ 104,864 $ 103,007
45
CITY OF ST. JOSEPH, MINNESOTA
DEBT SERVICE FUNDS
1
Debt Service Funds are created to account for the payment of interest and
' principal on long-term, general obligation debt other than debt issued for and
serviced primarily by a governmental enterprise.
CITY OF ST. JOSEPH, MINNESOTA
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET
December 31, 1994
With Comparative Totals for December 31, 1993
ASSETS
Cash and Investments
Taxes Receivable -
Delinquent
Special Assessments Receivable -
Deferred
Delinquent
Due From Other Governmental Units
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities:
Accrued Liabilities
Deferred Revenue
Total Liabilities
Fund Balance:
Unreserved -
Designated for Debt Service
TOTAL LIABILITIES AND FUND
BALANCE
General
General General Obligation
Obligation Obligation Water
Improvement Improvement Revenue
Bonds Bonds Bonds
of 1986 of 1992 of 1992
$ 732,223 $ 46,140 $ 4
- 168 -
97,944 53,391 -
328 - -
616 - 64 , 884
$ 831,111 $ 99,699 $ 64,888
$ 270 $ - $ -
98,272 53,559 -
98,542 53,559 -
732,569 46,140 64,888
$ 831,111 $ 99,699 $ 64,888
General General
Obligation Obligation
Improvement Improvement
Bonds Bonds Totals
of 1992-B of 1993 1994 1993
$ 134,736 $ 142,678 $ 1,055,781 $ 954,019
- - 168 -
238,028 147,433 536,796 611,135
625 805 1,758 1,023
- 16,926 82,426 -
$ 373,389 $ 307,842 $ 1,676,929 $ 1,566,177
$ - $ - $ 270 $ 265
238,653 148,238 538,722 612,158
238,653 148,238 538,992 612,423
134,736 159,604 1,137,937 953,754
$ 373,389 $ 307,842 $ 1,676,929 $ 1,566,177
46
CITY OF ST. JOSEPH, MINNESOTA
DEBT SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993 ~:~ ~,::`
~ ~ ~ ~ ~ q:.
c~~ `;~ U~~ ti~ .~
General
General General Obligation
Obligation Obligation Water
Improvement Improvement Revenue
Bonds Bonds Bonds
REVENUES:
General Property Taxes $ - $ 6,831 $ -
Special Assessments 25,146 3,261 -
Miscellaneous -
Interest 22,290 1,625 2,160
Other 48,085 - 56,000
Total Revenues 95,521 11,717 58,160
EXPENDITURES:
Miscellaneous - -
Debt Service -
Bond Principal 65,000 10,000 30,000
Bond Interest and Fiscal Charges 39,874 11,715 25,177
Total Expenditures 104,874 21,715 55,177
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES (9,353) (9,998) 2,983
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 (9,353) (9,998) 2,983
FUND BALANCE - January 1 741,922 56,138 129
RESIDUAL EQUITY TRANSFERS - - 61,776
FUND BALANCE - December 31 $ 732,569 $ 46,140 $ 64,888
,,;,
General
General
Obligation Obligation
Improvement Improvement
Bonds Bonds
of 1992-B of 1993
$ - $ -
44,471 34,076
44,471 34,076
958 1,195
15,000 25,000
21,708 27,614
37,666 53,809
6,805 (19,733)
6,805 (19,733)
39,575 115,990
88,356 63,347
$ 134,736 $ 159,604
Totals
$ 6,831 $
106,954 69,114
26,075 30,303
104,085 115,943
243,945 215,360
2,153 -
145,000 65,000
126,088 108,202
273,241 173,202
(29,296) 42,158
- 110,500
- 15,990
- 126,490
(29,296) 168,648
953,754 1,200,610
213,479 415,504)
$ 1,137,937 $ 953,754
47
CITY OF ST. JOSEPH, MINNESOTA
CAPITAL PROJECTS FUNDS
Capital Projects Funds are created to account for all resources used for the
acquisition o'f capital facilities by a governmental unit except those financed by
enterprise funds.
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CITY OF ST. JOSEPH, MINNESOTA
CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
December 31, 1994
With Comparative Totals for December 31, 1993
ASSETS
Cash and Investments
Due from Other Governmental Units
TOTAL ASSETS
LIABILITIES AND FUNO BALANCE
Liabilities:
Cash Overdraft
Accrued Liabilities
Construction Contracts Payable
Total Liabilities
Fund Balance:
Unreserved -
Designated for Capital Improvements
TOTAL LIABILITIES AND
FUND BALANCE
West
Water Minnesota
Storage Street
Project Project
$ 10,767 $ 24,815
$ 10,767 $ 24,815
$ - $ -
21 -
10,746 24,815
10,767 24,815
$ 10,767 $ 24,815
Totals
1994 1993
$ 35,582 $ 275,488
- 302,860
$ 35,582 $ 578,348
$ - $ 243,927
21 17,750
35,561 72,956
35,582 334,633
- 243,715
$ 35,582 $ 578,348
48
CITY OF ST. JOSEPH, MINNESOTA
CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993
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 - January 1
RESIDUAL EQUITY TRANSFERS
FUND BALANCE -December 31
East
Water DBL Minnesota
Storage Labs Street
Project Project Project
$ - $ - $ -
64,884 - -
849 1,735 2,029
65,733 1,735 2,029
23,458 147 63,849
- - 8,500
23,458 147 72,349
42,275 1,588 (70,320)
42,275 1,588 (70,320)
19,501 86,768 104,369
(61,776) (88,356) 34,049)
$ - $ - $ -
West
Minnesota
Street Totals
Project 1994 1993
$ - $ - $ 162,327
- 64,884 535,116
- - 334,903
- - 5,800
411 5,024 8,228
411 69,908 1,046,374
4,190 91,644 1,715,313
- 8,500 6,759
4,190 100,144 1,722,072
(3,779) (30,236) (fi75,698)
- - 200,000
- - 524,438
- - 724,438
(3,779) (30,236) 48,740
33,077 243,715 95,680
(29,298) (213,479) 99,295
$ - $ - $ 243,715
49
0
' 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 mast 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.
u
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11
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNDS
COMBINING BALANCE SHEET
December 31, 1994
With Comparative Totals for December 31, 1993
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments
Accounts Receivable
Totai Current Assets
Fixed Assets:
Land and Land Improvements
Treatment Plant and Lines
Buildings
Machinery and Equipment
Water Storage. Facility
Construction in Progress
Less: Accumulated
Depreciation
Net Fixed Assets
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
Current Liabilities:
Accrued Liabilities
Due to Other Governmental
Units
Compensated Absences Payabie
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
$ 13,875 $ 69,663 $ 222,710
7,339 35,220 113,448
16,331 33,783 48,118
37,545 138,666 384,276
- 12,996 4,940
- 648,145 1,874,045
- - 517,983
- 34,969 116,234
- 1,207,017 -
- 1,903,127 2,513,202
- 217,657) fi70,338)
- 1,685,470 1,842,864
$ 37,545 $ 1,824,136 $ 2,227,140
$ 5,897 $ 4,526 $ 2,106
23 679 6,099
- 6,898 5,051
5,920 12,103 13,256
- 1,624,338 2,512,901
31,625 187,695 299,017)
31,625 1,812,033 2,213,884
$ 37,545 $ 1,824,136 $ 2,227,140
Totals
$ 306,248 $ 401,858
156,007 -
98,232 64,544
560,487 466,402
17,936
2,522,190
517,983
151,203
1,207,017
4,416,329
887,995)
3_,528,334
17,936
1,879,943
517,983
151,203
1,778,740
4,345,805
802,059)
3,543,746
$ 4,088,821 $ 4,010,148
$ 12,529
6,801
11,949
31,279
4,137,239
79,697)
4,057,542
$ 10,545
6,757
12,131
29,433
4,075,441
94,726)
3,980,715
$ 4,088,821 $ 4,010,148
50
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993
OPERATING REVENUES:
Charges for Services
OPERATING EXPENSES:
Salaries and Re]ated Taxes
and Benefits
Utilities
Supplies
Sewer Use Rental
Postage
Repairs and Maintenance
Professional Fees
Fees and Tests
Dues and Subscriptions
Refuse Disposal
Depreciation
Insurance
Miscellaneous
Total Operating Expenses
OPERATING INCOME {LOSS)
NON-OPERATING REVENUES:
Interest
Other Revenues
Total Non-Operating Revenues
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
$ 78,645 $ 130,015 $ 163,141
1,576 42,402 34,400
- 13,935 6,428
93 10,232 3,633
- - 63,236
418 481 468
- 2,307 1,959
- 5,276 7,764
201 6,232 2,813
- 256 19
69,425 - 1,189
- 23,224 62,712
794 3,968 3,968
445 21 79
72,952 108,334 188,668
5,693 21,681 (25,527)
- 3,547 9,485
- 150 -
- 3,697 9,485
5,693 25,378 (16,042)
5,693 25,378 (16,042)
25,932 162,317 (282,975)
$ 31,625 $ 187,695 $(299,017)
Totals
1994 1993
$ 371,801 $ 334,333
78,378 83,153
20,363 19,520
13,958 14,589
63,236 63,068
1,367 1,049
4,266 11,277
13,040 1,978
9,246 8,276
275 238
70,614 67,732
85,936 69,968
8,730 ,8,628 -:-,-,
545 210
369,954 349,686
1,847 (15,353)
13,032 9,958
150 47,950
13,182 57,908
15,029 42,555
- 80,500)
15,029 (37,945)
(94,726) (118,945)
- 62,164
$ 79,697) $ 94,726)
51
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNDS
COMBINING STATEMENT OF CASH FLOWS
Year Ended December 31, 1994
With Comparative Totals for the Year Ended December 31, 1993
Refuse Water
Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating Income (Loss) $ 5,693 $ 21,681
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation - 23,224
Other Non-Operating Revenues - 150
Change in Assets and Liabilities:
(Increase) in Accounts Receivable (302) (13,831)
Increase (Decrease) in Accrued Liabilities 76 1,876
Increase (Decrease) in Due to Other Governmental
Units 23 (418)
(Decrease) in Due to Other Funds - -
Increase (Decrease) in Compensated Absences
Payable - 416)
Total Adjustments 203) 10,585
Net Cash Provided by Operating Activities 5,490 32,266
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating Transfers to Other Funds
Residual Equity Transfers
Net Cash Used for Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES: -
Capital Expenditures - (5,001)
Repayment of Contributed Capital 3,725)
Net Cash Used by Capital and Related Financing Activities ,725) (5,001)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on Investments - 3,547
Net Purchase of Investments 7,339) (35,220)
Net Cash Provided (Used) by Investing Activities 7,339) (31,673)
Net Increase (Decrease) in Cash and Cash Equivalents (5,574) (4,408)
Cash and Cash Equivalents, January 1 19,449 74,071
Cash and Cash Equivalents, December 31 $ 13,875 $ 69,663
Sewer Totals
Fund 1994 1993
$ (25,527) $ 1,847 $ (15,353)
62,712 85,936 69,968
- 150 47,950
(19,555) (33,688) (5,263)
32 1,984 (20,084)
439 44 994
- - (20,000)
234 182) 2,431
43,862 54,244 75,996
18,335 56,091 60,643
- - (80,500)
- - 62,164
- - 18,336)
- (5,001) (4,611)
- 3,725)
- (8,726) 4,611)
9,485 13,032 9,958
(113,448) (156,007)
(103,963) (142,975) 9,958
(85,628) (95,610) 47,654
308,338 401,858 354,204
$ 222,710 $ 306,248 $ 401,858
52
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF GENERAL LONG-TERM DEBT
December 31, 1994
1994 1993
AMOUNT AVAILABLE AND TO BE PROVIDED FOR
THE PAYMENT OF GENERAL LONG-TERM DEBT:
Amount Available in Debt Service Funds $ 1,117,126 $ 953,754
Amount to be Provided from Special
Assessments 538,554 612,158
Amount to be Provided for Compensated
Absences Payable 34,621 31,665
Amount to be Provided for Retirement of
General Long-Term Debt 314,015 557,681
TOTAL AVAILABLE AND TO BE PROVIDED $ 2,004,316 $ 2,155,258
GENERAL LONG-TERM DEBT:
Compensated Absences Payable $ 34,621 $ 31,665
Capital Lease Obligation 4,695 13,593
Bonds Payable 1,965,000 2,110,000
TOTAL GENERAL LONG-TERM DEBT $ 2,004,316 $ 2,155,258
53
CITY OF ST. JOSEPH, MINNESOTA
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR MUNICIPAL DEVELOPMENT DISTRICT N0. 1 -
TAX INCREMENT FINANCING DISTRICT N0. 1
December 31, 1994
SOURCES OF FUNDS:
Tax Increments
Note Proceeds
Total Sources of Funds
USES OF FUNDS:
Site Excavation
Utility Improvements
Site Improvements
Professional Services -
City Engineer Consultant
Legal Expense
Planning Consultant -
Stearns County HRA
Contingencies
Administrative Expenses -
General Administration
Miscellaneous
Debt Service -
Principal
Interest
Finance Costs -
Capitalized Interest
Other Construction
Total Uses of Funds
DISTRICT BALANCE
Accounted
Original for in Current Amount
Budget Prior Years Year Remaining
$ 128,395 $ - $ - $ 128,395
81,270 - - 81,270
209,665 - - 209,665
20,000 - - 20,000
20,000 - - 20,000
10,000 - - 10,000
10,000 - - 10,000
3,000 - - 3,000
3,500 - - 3,500
1,000 - - 1,000
1,470 - - 1,470
500 - - 500
81,270 - - 81,270
34,286 - - 34,286
11,800 - - 11,800
12,839 - - 12,839
209,665 - - 209,665
$ - $ - $ - $ -
54
CITY OF ST. JOSEPH, MINNESOTA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Year Ended December 31, 1994
Federal Assistance
Number Funding Source Grant Name Project Time Period
CFDA No. 14.228 U.S. Department of Community April 16, 1992 to
Housing and Urban Development December 31, 1994
Development Block Grant -
Comprehensive
Improvement
Project
CFDA No. 20.600 U.S. Department of Safe and Sober October 1, 1994 to
Transportation September 30,-1995
Audit Report
This Period
January 1, 1994 to
December 31, 1994
January 1, 1994 to
December 31, 1994
Revenues Expenditures
This This
Re ort Report
$ 64,884 $ 64,884
$ 3,843 $ 3,843
55
' 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 9, 1995
' 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, 1994, and have issued our report thereon
' dated March 9, 1995.
We conducted our audit in accordance with generally accepted auditing standards
' and Government Auditing Standards, issued by the Comptroller General of the United
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, 1994, 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 unauthorized use or disposition, and that transactions are executed in accor-
' dance with management's authorization and recorded properly to permit the prepara-
tion of the financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal control structure,
' errors or irregularities may nevertheless occur and not be detected. Also, pro-
jection 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 policies and procedures may
deteriorate.
For the purpose of this report, we have classified the significant internal con-
trol 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.
' 56
n
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' 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 a certain matter involving the internal control structure and its opera-
tion that we consider to be a reportable condition 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 9, 1995.
' 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.
57
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CITY OF ST. JOSEPH, MINNESOTA
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL
STRUCTURE USED IN ADMINISTERING FEDERAL
FINANCIAL ASSISTANCE PROGRAMS
March 9, 1995
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, 1994, and have issued our report thereon
dated March 9, 1995.
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 federal financial assistance program.
In planning and performing our audit for the year ended December 31, 1994, 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 to report on the internal control structure in accordance with
OMB Circular A-128. This report addresses our consideration of internal control
structure policies and procedures relevant to compliance with requirements appli-
cable to federal financial assistance programs. We have addressed internal con-
trol structure policies and procedures relevant to our audit of the financial
statements in a separate report dated March 9, 1995.
58
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 federal financial assistance programs are 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
Payables and accrued liabilities
Fund equity
Accounting Applications -
Billings
Receivables
Cash receipts
Purchasing and receiving
Accounts payable
Cash disbursements
Payrol 1
General ledger
59
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ADDITIONAL CONTROLS USED IN ADMINISTERING FEDERAL PROGRAMS:
General Requirements -
Political activity
Davis-Bacon Act
Civil rights
Cash management
Federal financial reports
Allowable costsJcost 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, 1994, the City of St. Joseph, Minnesota, had no
major federal financial assistance programs and expended 95 percent of its total
federal financial assistance under the following nonmajor federal financial assis-
tance 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 nonmajor 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 a certain matter involving the internal control structure and its opera-
tion that we consider to be a reportable condition 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 assis-
tance 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.
60
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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 9, 1995.
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.
r.
61
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CITY OF ST. JOSEPH, MINNESOTA
SINGLE AUDIT REPORT ON COMPLIANCE WITH
THE GENERAL REQUIREMENTS APPLICABLE TO
FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Honorable Mayor and City Council
City of St. Joseph
St. Joseph, Minnesota
March 9, 1995
We have audited the financial statements of the City of St. Joseph, Minnesota, as
of and for the year ended December 31, 1994, and have issued our report thereon
dated March 9, 1995.
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, 1994.
General Requirements -
Political activity
Davis-Bacon Act
Civil rights
Cash management
Federal financial reports
Allowable costs/cost 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 Sing le 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
with the requirements listed in the preceding paragraph. the City'
According s compliance
ly, we do not
express such an opinion.
~I
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.
62
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.
n
~I
KERN, DEWENTER, VIERE, LTD.
63
[7
CI
r
CITY OF ST. JOSEPH, MINNESOTA
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO NON-MAJOR FEDERAL
FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
March 9, 1995
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, 1994, and have issued our report thereon
dated March 9, 1995.
In connection with our audit of the financial statements of the City of St.
Joseph, Minnesota, and with our consideration of the City's internal control
structure used to administer federal financial assistance programs, as required by
Office of Management and Budget Circular A-128, "Audits of State and Local
Governments," we selected certain transactions applicable to certain nonmajor fed-
eral financial assistance programs for the year ended December 31, 1994. As
required by OMB Circular A-128, we have performed auditing procedures to test com-
pliance with the requirements governing types of services allowed or unallowed;
eligibility; matching, level of effort; reporting; special tests and provisions;
claims for advances and reimbursements and amounts claimed or used for matching
that are applicable to those transactions. 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 these requirements. 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 preceding
paragraph. With respect to items not tested, nothing came to our attention that
caused us to believe that 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 noncompliance with those
requirements.
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.
64
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 9, 1995
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, 1994, and have issued our report thereon dated March
9, 1995.
' 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 respect to the items tested, the City
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.
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' 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, except as explained on the following page.
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.
' I 'KERN, DEWENTER, VIERE, LTD.
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CITY OF ST. JOSEPH, MINNESOTA
FINDINGS ON COMPLIANCE WITH MINNESOTA STATUTES
Year Ended December 31, 1994
CURRENT YEAR AUDIT FINDING
None
PRIOR YEAR AUDIT FINDINGS
None
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