HomeMy WebLinkAbout2010 Audit ReportCITY OF ST. JOSEPH
Stearns Country, Minnesota
AUDITED FINANCIAL STATEMENTS
For the Fiscal Year Ended December 31!, 2010
CITY OF ST. JOSEPH
TABLE OF CONTENT
ELECTED OFFICIALS AND ADMINISTRATION
I
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INDEPENDENT AUDITOR' REPORT r...■++ th.., t+ Wass■.. aa■. ra■ a. a#t FFri...,,■ e.......■. �l t +FWa....,..•a.r.......traa *r.■
MANAGEMENT'S DISCUSSION AND ANALYSIS
BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements:
Statementof Net Assets ■ tt tWOar. , ■
24
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Fund FMnaneial Statements:
Balance Sheet ` Governmental Funds attttr +rra. ■.... a■ r.. a.... �ttrr....■..■ r..... .. ■ttt +rr........ar...... #.tta. *0000..
6
Reconciliation of the Balance Sheet to the Statement of Net Assets —
Governmental Funds tt. ro*.......■ a... rtl ti. .rr., ■a....r■.....a +4t „r *ro...■ ■.......a.tt +rrr........ a +0000.■ Ott + *.a r.......... a.
29
Statement of revenues, Expenditures and Changes in Fund Balances
GovernmentalFunds ■ ........... g a 1 .... 1* l l .... a a 0 a 0 a a i t t. 1 + r l a .. * ..... r a 0 0 0 a a 0 4 4* r r a a a 0 0
30
a 0 0 a a x ...... 0 4 4 4* r r ... r ....... a r r t t 0 a a a
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances to the Statement of Activities — Govenunental Funds .... ....... *aa...............11r +00,,,00..
Statement of Revenues, Expenditures and Changes in Fund Balances — Budget
and Actual - General Fund ....
aa.t .** ......ta..... #ttt,a *rr......... aarr. *ttti „ * *a.......,.aa
Statement of Net Assets - Propria etar Funds ■.■.. a.,■ a...■ ... aa..... aa, ttftoo .....ea.......a�tt, * *r.......
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4
Reconciliation of the Statement of Net Assets — Business -Type Activities . , , , * r 0000 a r 0000. a . t t t 0000
Statement of Revenues, Expenses and Changes in Fund Net Assets -- Propriety
t... *tt +tr..a. * *..........a ##!,+* rr.■■.,.. aso■
36
ttarWro. * *......... a a r 4 t t t a a o a.... ■a■
Reconciliation of the Statement of Revenues, Expenses and Changes in Net
Assets Business-Type Activities .............. a..attt.4*V0aa0.a■■aa0a4 4ttr0aaa09.*... ■a ■a0■ai . a F F r a.■ 0000. ■■ 0000... � �
37
Statement of Cash Flows Proprietary 77
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8
Statements
Notes to the Financial ■■.........a a...rtl.t WWa*00 0a *.a,a.i....a.attr.rr■.*...■■. 0 a am a ti t t t Woos am me 1090 a a a 0 0 a 0 4 4 0 0 0 W W 0 &
39
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress — Other Post Employment Benefits .......... t t t t +............... a a,tt t t r 0000...
66
SUPPLEMENTARY INFORMATION
Combining Balance Sheet — Nonmajar governmental Funds ............. a,04 4■ . * *.....r....a.4ttto....,,..r.a
68
Combining Statement of Revenues, Expenditures and Changes in Fund Balances —
i loiJ.LiIajo Governmental Funds .4090Woass002....a000a04 *at t ar. *..... a.. a...air* tl. *.r..* *0000. r 0000 as
d tttta......s..a.r.... *iii
74
Schedule of revenues, Expenditures and Changes in Fund Balances — Budget
and Actual - Governmental Panda .. aa....aaa 1. 4ii,* r.... e..... &0a041 titra..., *ass ....aama#ttt t Woa...... a r. r.....*** 4, *r.....
80
CITY OF ST. JOSEPH
ELECTED OFFICIALS AND ADMINISTRATION
December 319 2010
Elected Officials
Position
Tern E fires
Alan Rassier
Mayor
January 2011
Steve Frank
Council Member
January 2 011
Dale Wick
Council Member
January 2011
Robert Loco
Council Member
,January 2013
Renee ymam' etz
Council Member
January 2013
Administration
Judy Weyrens
City Administrator
Appointed
Lori Bartlett
Finance Director
Appointed
11
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INDEPENDENT AUDITOR"S REPORT
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining find information of the City of St. Joseph,
Minnesota, as of and for the year ended December 31, 2010, which collectively comprise the City's
basic financial statements as listed in the Table of Contents. These financial statements are the
responsibility of the City's management. Our responsibility is to express opinions on these financial
statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards
applicable to financial audits contained in Government A edit ng Standards, issued by the Comptroller
General of the United States. Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. we believe our
audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the City of St. Joseph, Minnesota, as of December 3 1,
2010, and the respective changes in financial position and where applicable, cash flows, thereof, and the
respective budgetary comparison for the General Fund for the year then ended in conformity with U.S.
generally accepted accounting principles.
The City has implemented Governmental Accounting Standards Board (GASB) tatement No. 51,
Accounting and Financial Reportan or Intangible Assets.
In accordance with Government Auditing Standards, we have also issued our report dated April 19,
011 # on our consideration of the City's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing and not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
2
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U.S. generally accepted accounting principles require that the Management's Discussion and Analysis,
which follows this report letter, be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the GASB, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic or historical context. we have applied certain limited procedures to
the required supplementary information in accordance with L.S. generally accepted auditing standards,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic
financial statements and other knowledge we obtained during our audit of the bash financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's financial statements as a whole. The accompanying supplementary
information identified in the Table of Contents is presented for purposes of additional analysis and is not
a required part of the financial statements. The supplementary information is the responsibility of
management and was derived from and relate directly to, the underlying accounting and other records
used to prepare the financial statements. The information has been subjected to the auditing procedures
applied in the audit of the financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to prepare
the financial statements or to the financial statements themselves, and other additional procedures in
accordance with U.S. generally accepted auditing standards. In our opinion, the information is fairly
stated, in all material respects in relation to the financial statements as a whole.
Y", DW-a, W
KERN, DEWENTE , MERE, LTD.
St. Cloud, Minnesota
April 19, 2011
(THIS PAGE LEFT BLANK INTENTIONALLY)
CITY of ST. JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
As management of the City (the "City"), we offer readers of the City's financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2010.
FINANCIAL HIGHLIGHTS
Ivey financial highlights for 2010 include the following:
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by
32,852,072. Of this amount, $ 9,283,205 may be used to meet government's ongoing obligations
to citizens and creditors (unrestricted net assets).
The government's total net assets decreased by $ 918,494 from 2009 to 2010. The decrease is due to
reductions of Focal Government Aid, decrease in investment rate of return, decrease in development
and increases in emergency repair costs to the City of St. Cloud for the wastewater distribution
system,
As of the close of the current fiscal year, the City's governmental funds reported combined ending
fund balances of 83965,062, a decrease of $ 5411787. Of this amount, $ 8, 944,123 is available or
designated for spending at the government's discretion (unreserved fund balance). The remaining
balance of $ 20,3 3 9 is reserved for prepaid expenditures.
At the end of the current fiscal year, unreserved fund balance for the General Fund was $ 1964425363
or 68%. of total General Fund expenditures ($ 1,072,269, or 47 %, excluding the fire and FE
Access funds).
The City's total long -term debt increased by $ 118,709 during the current fiscal year. The increase
was due to debt issues to the City of St. Cloud for wastewater treatment.
OVERVIEW of THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements are comprised of three components: 1 government -
wide Financial statements, fund financial statements and Notes to the Financial Statements. This
report also contains other supplementary information in addition to the basic financial statements
themselves.
Government -wide Financial Statements. The government -wide financial statements are designed to
provide readers with a broader overview of the City's finances, in a manner similar to a private - sector
business.
The Statement of Net Assets presents information on all of the City a s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may
serve as a useful indicator of whether the financial position of the City's is improving or deteriorating.
The Statement of Activities presents information showing how the government's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in future fiscal
periods e.g., uncollected taxes and earned but unused vacation leave).
CITY of ST. JOSEPH
MANAGEMENT'S EMENT' DISCUSSION AND ANALYSIS
December 31, 2010
Both of the government, wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that
are intended to recover all or a significant portion of their costs through user fees and charges business -
type activities). The governmental activities of the City include general government, public safety,
public works, economic development, culture and recreation, and interest on long- terra debt. The
business -type activities of the City include water, sanitary sewer, refuse and storm water services.
The government -wide financial statements include not only the City itself (known as the primary
government), but also a legally separate Economic Development Authority. Financial information for
b.
this component unit is blended in the financial information.
The government -wide financial statements can be found on pages 24-25 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City, like other state
and local goverrnnents, uses fund accounting to ensure and demonstrate compliance with finance- related
legal requirements. All of the funds of the City can be divided into two categories: governmental funds
and proprietary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government -wide financial statements, governmental fund financial statements focus on near -term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government's near -term
financing requirements.
Because the focus of governmental Bands is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long -terns impact of the government's near -term financing
decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of
Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this
comparison between governmental funds and government -wide governmental activities.
The City maintains 31 individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the general fund and improvement debt service funds, all of which are
considered to be major funds. Data from the other governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these nonrna_jor governmental funds is
provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its general Fund. A budgetary comparison statement
has been provided for the general fund (page 33 and 80) to demonstrate compliance With this budget.
The basic govemmental frond financial statements can be found on pages 26-33 of this report
31
CITY of ST, JOSEPH
MANAGEMENT'S EMENT' DISCUSSION AND ANALYSIS
December 31, 2010
Proprietary Funds. The pity maintains proprietary funds that are used to report the same functions
presented as business -type activities in the government -vide financial statements. The City uses
proprietary funds to account for its water, sanitary sever, refuse and storm water activities.
Proprietary funds provide the sane type of information as the government -wide financial statements,
only in more detail. The proprietary fund financial statements provide separate information for the
water,, sanitary sewer, refuse and storm water, all of which are considered to be major funds of the City.
The basic proprietary fund financial statements can be found on pages 4 -3 8 of this report.
Notes to the Financial Statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government -wide and fund financial statements. The Notes to
the Financial Statements can be found on pages 39-63 of this report.
Other Information* The combining statements referred to earlier in connection With nonmaaor
governmental funds can be found on pages 68 -79 of this report.
Comparative Data. While comparative data 'is not illustrated in this report, comments throughout this
narrative and overview will discuss significant changes from the prior year.
OVE NT -WAIF FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City, assets exceeded liabilities by 32,852,072 at the close of the most
recent fiscal year.
By far the largest portion of the City's net assets reflects its investment in capital assets e.g., land.,
buildings, machinery and equipment) net accumulated depreciation, less any related debt used to acquire
those assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets arc not available for future spending. Although the City's investment in its i
capital assets s reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
VI
CITY OF ST. JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
NET ASSETS
An additional portion of the City's net assets (8.5%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets, 9,283,205,
may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of
net assets for the government as a whole, as well as for its separate governmental and business -type
activities.
The governmental activities total net asset balance decreased by 2.5% due to the City's building permit
activity decreasing in 2010., losses in state aids and a one -time transfer of interest income into the
business -type activities.
There was a 2.8% decrease in the total net assets for the business -type activities. The decrease is due to
the City paying the City of St. Cloud for emergency repair costs of the wastewater interceptor system
and paying down the water filtration plant debt with fewer connection fees that anticipated for the debt
payments.
Governmental Activities. Governmental activities reduced the City's total net assets by $ 301,176.
The most significant change in governmental net assets is due to building permit activity and related
charges decreasing in 2010 as is common in the United States and surrounding area. In addition, the
City Council chose to move interest income from the Sales Tax Fund to the water Fund to cover debt
payments, reducing the governmental activities net assets. The City increased capital spending after
removing the capital spending for two years even though state aids were reduced in 2010. Capital
expenses were delayed to offset the reduction of state aids in 2008 and 2009.
8
Governmental
Business -Type
Activities
Activities
Total
2010
2009
2010
2009
2010
2009
ASSETS:
Current and Other Assets
$ 1250081262 $
12,014,S59
$ 2,802x508 $
314122777
$ 14,8105770 $
15,427_ }336
Capital Assets, Net
11,1379839
11974 %072
27,048,341
26 }541,591
381186,180
38x290,663
Total Assets
23 5146,101
239763,131
2958 %849
29,9545368
5259965950
53j173999
LIABILITIES:
Current Liabilities
1,793x565
23547,123
607,232
5605187
24002797
37107,310
Long -Term Liabilities
9,622,086
951845882
8 }1215995
7a655�241
V 744x081
16,840,123
Total Liabilities
1134155651
11 j32,005
8,729,227
8,215,428
2031442878
1 %947 433
NET ASSETS:
Invested in Capital Assets,
Net Related Debt
75082j94
6,2271836
183548,272
18,551 }243
20}' 66,792
1957865766
Restricted
2,802,075
2j9083308
-
-
2 }802,075
2,9087308
Unrestricted
118463181
238955482
255735350
3j87,697
9,283,205
11,0751492
Total Net Assets
$ 1137303450 $
1250312626
$ 219121,122 $
21 }7381940 38,940
$ 32,852,0' 2 $
33x770 }566
An additional portion of the City's net assets (8.5%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets, 9,283,205,
may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of
net assets for the government as a whole, as well as for its separate governmental and business -type
activities.
The governmental activities total net asset balance decreased by 2.5% due to the City's building permit
activity decreasing in 2010., losses in state aids and a one -time transfer of interest income into the
business -type activities.
There was a 2.8% decrease in the total net assets for the business -type activities. The decrease is due to
the City paying the City of St. Cloud for emergency repair costs of the wastewater interceptor system
and paying down the water filtration plant debt with fewer connection fees that anticipated for the debt
payments.
Governmental Activities. Governmental activities reduced the City's total net assets by $ 301,176.
The most significant change in governmental net assets is due to building permit activity and related
charges decreasing in 2010 as is common in the United States and surrounding area. In addition, the
City Council chose to move interest income from the Sales Tax Fund to the water Fund to cover debt
payments, reducing the governmental activities net assets. The City increased capital spending after
removing the capital spending for two years even though state aids were reduced in 2010. Capital
expenses were delayed to offset the reduction of state aids in 2008 and 2009.
8
CITY of ST. JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
Business -Type Activities. Business -type activities decreased ffie City's net assets by 617,318,
accounting for the 2.8% decrease in the City's total net assets. "le all the proprietary funds
contributed to the decrease in net assets, the lamest part of the decrease is attributable to the water and
Sanitary Sewer Funds.
The water utility (including the water Access Charge [WAC1 Fund) decreased by 454,197. The City
issued debt to construct a water filtration plant in 2005 with the main revenue source new connections or
WAC fees. The City collected more connection fees than was required for the debt payments in 2004-
2006. The carryover balance of the earlier connection fees are covering the slower building years in
007 -2010. The building activity increased significantly in 2009, but not to the same levels as
anticipated in 2005 when the water filtration plant debt was approved. The 2010 building activity
decreased from 2009. The City Council approved rate increases and a transfer of interest income from
the Sales Tax Fund to compensate for low building activity to pay for the water debts.
The sanitary sewer utility decreased (including the Sewer Access Charge [SAC] Fund) decreased by
17J27. The City's sanitary sewer utility consists of two operational elements. The City operates and
maintains a collection system with approximately 25 miles of gravity sewer pipe, 5 pump stations and 6
miles of force main pipe. The City pumps its wastewater to the City of St. Cloud for treatment and
disposal and; thus, leases capacity in the City of St. Cloud's interceptor system and wastewater
treatment facility, known as the St. Cloud wastewater Treatment System WT ). The City is
considered a contract user and pays a monthly fee for the services provided by the SCWTS.
In 2008., the SCWTS experienced' an interceptor collapse near Beaver Trail in t. Cloud. The collapse
resulted in an examination of the interceptor system used by the St. Cloud Area Cities. Several
interceptors were deemed unsafe, close to collapsing or already collapsing and required immediate
emergency repairs. The City is responsible for various portions of the emergency repair costs depending
on the location of the repairs and the allocation of use by the City as indicated in the Sewer Use
Agreement with the City of St. Cloud. In 2010, the City paid 144,648 for emergency interceptor
repairs. The City also increased the usage of chemicals to reduce the strength of the hydrogen sulfide in
the wastewater sent to the City of St. Cloud for treatment. Deducing the hydrogen sulfide strength
reduces the wastewater odors and prevents rapid deterioration of the interceptors. In addition to the
emergency repairs to the City of St. Cloud interceptor system, several interceptors required maintenance
to prolong their life. The City of St. Cloud contracted to have the degraded interceptors lined, The City
of St. Cloud issued sewer revenue bonds to pay for the lining projects, and in turn, issued notes to each
city using the system. The City incurred two notes for lining projects totaling 1,015,000. The 2010
payments on the notes totaled $ 96,960 principal and interest to the City of St. Cloud.
The following graphs and charts summarize and graphically depict the changes in net assets for the
governmental and business -type activities.
CITY OF ST. JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
CHANGE IN NET ASSETS
III]
Governmental Activities
Business-Type
Activities
Total
2010
2009
2010
2009
2010
2009
REVENUES:
Program Revenues:
Charges for Services
4862720
$ 5917174
$ 1,5517549
1,780,938
$ 2,O38,269 $
2 }372,112
Operating Grants and
Contributions
119,180
127,935
29,901
27005
149,081
129,940
Capital Grants and
Contributions
541P485
3832679
(422)
68,771
541,063
452,450
General Revenues:
Property Taxes
15716,943
136817454
-
1,7163943
156819454
Tax Increments
1002133
72,592
-
1009133
72,592
Saks Tax
2703346
2429422
-
-
27%346
242,422
Franchise Fees
1129155
1072120
-
-
1125155
1072120
State Aids
646,692
907,456
-
646,692
907,456
Unrestricted Investment Earnings
159,899
348,416
513262
1329248
211,161
480,664
Gain on Sale of Capital Assets
552820
69626
95
-
55,915
65626
Total Revenues
4A9,373
4,468,8''4
1,632,385
I,983,962
5,841,758
6 }452,836
EXPENSES
General Govermnent
6281457
5752236
-
628,457
575,236
Public Safety
12372 }229
12412314
-
1,372,229
IR4122314
Public Works
0077012
1748%739
-
1,507,012
1,480,739
Culture and Recreation
309,160
2915046
-
-
309, 160
2915046
Economic Development
14 %625
148x726
-
-
140,625
148,726
Interest on Deng -Tenn Debt
460,663
61%212
-
4603663
610,212
Water
-
1,031,791
1,0809122
1,031,791
x,08042
Sanitary Sewer
-
8432166
733,179
843,166
7335179
Storm Water
-
1622833
1693185
162,833
169PI85
Refuse
-
304,316
293,981
3045316
293,981
Total Expenses
41418,146
4,518,273
2,342,106
222762467
6,760,252
6,794,140
Decrease in Net Assets before
Tranfers
(208, 7'73)
(499399)
(709,721)
(2929505)
(918,494)
(341,904)
Transfers
(92,41I3
201,290
92,403
(2012290)
-
Change in Net Assets
(301,176)
151,891
(617,318)
(4932795)
(918,494 )
(3411%904)
NET ASSETS:
Beginning
12,0317626
1x,879,735
212738,940
22,2322735
332770,566
345112,4711
Ending
$ 11,7302450
$ 12,0315626
S 21a12I2622
21,73859411
32,852pO72 $
33,77 %566
III]
CITY OF ST, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
EXPENSES AND PROGRAM REVENUES ^ GOVERNMENTAL ACTIVITIES
$1,600,000 - -_ - $13400)000
$1 }200 }000
$1,00,000 —
$80 %0 00
$60,000
$4005.000 - n $200,000
$ L -�
—r-
General Public Safety
venunent
Public Works
- ��7_79
Culture and Eco nomi e
Recreation Development
REVENUES BY SOURCE — GOVERNMENTAL ACTIVITIES
General Government
2%
Public Safety
11%
❑ revenue
El Expenses
Interest on Long -
terrn Debt
Public Works
13%
Culture and
Recreation, Economic
General Revenues Development
73% 1%
11
CITY OF ST, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
EXPENSES AND PROGRAM REVENUES — BUSINESS-TYPE A TI"TIE
$13200 5000 -j .
$12000 po
$800,000
$6007000
$4005.000
$2009000
I
Water
Sanitary Sewer Defuse Storm water
REVENUES BY SOURCE — BUSINESS -TYPE ACTIVI'T'IES
nest
Revenues
Storm Water
6%
_,,Water
Refuse.,-- 32%
18%
Sanitary Sewer
41%
1
CITY of ST. JOSEPH
MANAGEMENT'S ENT' DISCUSSION AND ANALYSIS
December 31, 2010
FINANCIAL ANALYSIS of THE CITY'S FUNDS AT THE FUND LEVEL
The financial performance of the City as a whole is reflected in its governmental funds as well. As the
City completed the year, its governmental funds reported a combined fwd balance of 8,965906.
Revenues for the City's governmental funds were $ 4,582,241, while total expenditures were
$ 6,263,199. The excess of expenditures over revenues is due to the State Legislature's unilateral cuts in
general state aids, deelme in interest earnings and decrease in special assessment revenue. The City
Council decided to postpone replacing a full -tine police officer since 2009 and cut capital spending
until 2010 to adjust for state aid reductions. Special assessment revenue decreased as a result of a
developer paying their assessment in full in 2009. The assessment covered the final bond payment in
2010.
In addition, building permit and related development revenue fell in 2010. The development activity in
2009 was higher than normal in comparison to the surrounding area and the United States. Development
activity in 2010 was consistent with the current economic conditions.
A summary of financial highlights for each major governmental fund follows.
General Fund
The General Fund is the chief operating fund of the City. At the end of the current fiscal year,
unreserved fund balance of the General Fund was S 1,664, 875, are increase of $ 5,3 10. As a measure of
the General Fund's liquidity, it may be useful to compare both unreserved fund balance to total fund
expenditures. Unreserved fund balance represents 68% of total General Fund expenditures, 47% (5.6
months working capital) after removing the Fire Fund and PEG Access Fund. The City Council has a
goal of 4 -6 months of working capital for the General Fund. Although the General Fund experienced
reductions in state aids, building pern-tits and investment income, the Fund remained stable as a result of
the prudent financial policies of the City.
General Fund expenditures were lover than budgeted by 148,726. To compensate the City for a loss
of state aid, the City Council decided to not replace a full -time police officer and exempt staff agreed to
a 0% cost-of-living increase; non - exempt a I% cost -of- living increase. Further, the fire department had
fever calls than expected resulting in lower operating costs. The fire department also held off on
significant capital purchases. The City Council allowed for some capital spending in 2010 after two
years of freezing capital expenditures to prevent significant deterioration of city equipment and
infrastructure.
The schedule on the following page presents a smeary of General fund revenues and expenditures.
1
CITY of ST,, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
General Fund Budgetary Highlights
Over the course of the year, the City amended the annual operating budget to move budgeted capital
expenditures to the general Capital Outlay Fund. This amendment is typically an annual revision to the
General Fund budget; however, the City Council decided to forego the 2008 and 2009 amendments to
compensate for the loss of state aid. Capital outlays were frozen for the two years. Historically, the City
has m imal budget amendments during the budget year.
Actual revenues were 55,550 less than expected due to decreases in development fee revenue
and cuts to state aids. Proper.} taxes were reduced by the Market Value Homestead Credit
(M'VHC) provided by the state. The MVHC is 57,052 less than the loss of property tax due to
the state aid outs.
Actual expenditures were 1 48 ,726 less than budget as a result imposing a hirin g freeze and the
fire department's decline in fire calls and capital spending.
G. O. Crossover Refunding Bonds of 2009A Debt Service Fund
This Debt Service Fund is used to pay the debt associated with the 2002 bond issue 2002 Street
Improvements). The 2009A bond was issued 1n April 2009 to refund the 2002 G. g. Improvement
Bonds for an interest savings of $ 102,600 over the bond life. The revenue expected to be received for
the 2009A Crossover refunding Bonds includes special assessments, property tax levies and utility
rates.
14
December 31,
December 31,
Increase
Percent
2010
2009
(Decrease)
Change
REVENUES:
Taxes
$ 133013$45
$ 1,2113735
$ 9%l 10
7%
Special Assessment
2%349
42735
15,114
330%
Licenses and Permits
7%330
186,058
106,728)
-57%
Intergovernmental
7952232
9822565
(187,333)
-19%
Chargcs for services
2385787
234 }991
3,796
2%
Fines and Forfeitures
74,210
683.059
65151
9%
Miscellaneous
97,372
1073753
{1�,3$1�
-10%
Total general Fund Revenue
$ 21,6072125
$ 2,795,896
$ (188J71)
-7%
December 31,
December 31,
Increase
Percent
2010
209
(Decrease)
harYge
EXPENDITURES:
General government
$ 5259.070
$ 498,113
$ 269957
5%
Public Safety
1,273,740
1,2723755
985
0%
Public Worms
4329481
4305.964
19.517
0%
Culture and recreation
197,938
195fiO
24336
1%
Total general Fund Expcnditures
$ 27429,229
$ 2,3979434
$ 31,795
1%
General Fund Budgetary Highlights
Over the course of the year, the City amended the annual operating budget to move budgeted capital
expenditures to the general Capital Outlay Fund. This amendment is typically an annual revision to the
General Fund budget; however, the City Council decided to forego the 2008 and 2009 amendments to
compensate for the loss of state aid. Capital outlays were frozen for the two years. Historically, the City
has m imal budget amendments during the budget year.
Actual revenues were 55,550 less than expected due to decreases in development fee revenue
and cuts to state aids. Proper.} taxes were reduced by the Market Value Homestead Credit
(M'VHC) provided by the state. The MVHC is 57,052 less than the loss of property tax due to
the state aid outs.
Actual expenditures were 1 48 ,726 less than budget as a result imposing a hirin g freeze and the
fire department's decline in fire calls and capital spending.
G. O. Crossover Refunding Bonds of 2009A Debt Service Fund
This Debt Service Fund is used to pay the debt associated with the 2002 bond issue 2002 Street
Improvements). The 2009A bond was issued 1n April 2009 to refund the 2002 G. g. Improvement
Bonds for an interest savings of $ 102,600 over the bond life. The revenue expected to be received for
the 2009A Crossover refunding Bonds includes special assessments, property tax levies and utility
rates.
14
CITY of ST, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
G.O. Improvement Bonds of 2005E Debt Service Fund
This Debt Service Fund is used to pay the debt payments from the 2005B bond issue (2005 street
improvements for Hill Street and Cloverdale). In 20105 City issued an advanced crossover refunding
bond to refund the 2005B bonds once callable on December 1, 2012. The refunding was undertaken to
reduce total future debt service payments. The refunding resulted in a net present value savings of
$ 15035,000. 8,365, an economic gain of 40,472. The Fund includes bond issue i'oceeds for 2010 of
This Debt Service Fund is funded by property tax levies andspecial assessments. Several
special assessments were prepaid in earlier years reducing the special assessment collections in future
years. The 2010 refunding bonds have eight years remaining after the refund .
tug
date.
G.O. Improvement Bonds of 2005C Debt Service Fund.
This debt service fund is used to pay the debt relating to the 2005C bond issue (Northland Heights and
transportation studies). The bonds were paid in full in December 2010.
G. O. Improvement Bonds of 2007A Debt Service Fund
This Debt Service Fund is used to Fay the debt payments from the 2007A bond issue 007 street
improvements for Jade Road, 8 th Avenue and the East Side overlays, and transportation studies). In
2010, the fund balance of this Fund decreased 111,789. This Debt Service Fund is partly funded b
developer special assessments. � � y
• ents.. Several special assessments were prepaid in earlier years reducing the
special assessment collections in future years. The 2007A bonds have seven years of payments
remaining.
Proprietary Funds. The City" s proprietary fund statements provide the same type of information found
in the government -wide financial statements, but in more detail. The unrestricted assets of the
Proprietary funds decreased 1 87,43 7 overall. The following paragraphs p rovide a brief financial
overview of each major proprietary fund.
Water Enterprise Fund
The water Fund is used to account for the operations of the ity�s water utifity. In 2010. the water
Funds net assets decreased 60,946 due to paying down debt relating to the construction of the water
filtration plant and old water tower. Included in the water bonds are two long-term debts issued to fund
the additional treatment capacity. The revenue stream for the debts is a combination of water use fees,
connection fees and trunk fees. The slowdown in development in recent years has required the use of
reserved connection an its d try fees from when development was at its height, and transferring
investment revenue from the Sales Tax Fund. The 2002 water debt was refunded in 2009 to reduce the
interest expense over the remaining life of -the bonds. The City will save 20,692 in interest expense. aid for with wat
The refunded bond is
p water use fees.
15
CITY OF ST, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
Sanitary Sewer Enterprise Fund
The Sanitary Sewer Fund is used to account for the operations of the City's sanitar y sewer utility. In
20105 the Sanitary Sewer Funds net assets decreased 18 1,097 due to payments made to the City of
St. Cloud for emergency interceptor repairs and additional operational casts. In addition the i issued
two sewer revenue notes to the City of St. Cloud for interceptor projects to upgrade the Tri-City lift
station and line several sewer mains. The City leases space in the interceptor system as well as the
wastewater treatment plant from the City of St. Cloud. These costs were paid for with current sewer
user fees.
Defuse Enterprise Fund
The Refuse Fund is used to account for the contract services to provide residential refuse service and to
operate a compost area. In 2010, the Defuse Fund's net assets decreased 7,973 . The charges for
services in the Refuse Fund increased 5,374 while operational expenses increased 10,33 5.
Operational expenses increased as a result of reimbursing the General Fund for rnaintenancc p ersonnel
and equipment time to operate the compost site. Compost fees were established to cover all operational
costs of the compost site.
Storm water Enterprise Fund
The Storm water Fund is used to account for the operations of ` the City's storm water utility. In 201 0
the Storm water Fund's net assets increased 62,579- The Storm water Fund had an operating loss of
63,539, or 30,,619 expense. p �.
surplus after removing depreciation The deficit is due to reducing
storm water fees to align with costs and covering % of depreciation. The City Council chose to
reduce of the fees while still covering some depreciation. The decision was based on the Storm water
Fund having a healthy net asset balance. The Storm water Fund has not collected an y development anent fees
for the past two years.
CAPITAL ASSETS AND DEBT ADMINISTRATION
TRATION
Capital Assets. The City's investment in capital assets for its governmental and business-type activities
as of December 31, 0 1 o amounted to 38,186,180 (net of accumulated depreciation). The investment
in capital assets includes land, intangible assets, buildings, improvements, machinery and equipment,
furniture and office euiprnent, infrastructure and construction 'in progress. Tnvestment in capital assets
net related debt increased $ 980,026 to $ 20,7663792- The increase is attributable to cap*tal asset
increases in infrastructure a and construction in progress for street reconstruction projectsand residential
development areas as well as capitalizing the sewer rights for the City of St. Cloud sewer improvement
projects. The City began the 1 Avenue street improvement project in 201 o to reconstruct the street
and add storm sewer infrastructure. The 16th Avenue improvement project will finish M' 2011. The City
increased the overall debt relating to the capital assets by S 118,709
The table on the next page is a summary of the City's capital assets
1
CAFI "I'AL ASSETS
CITY of ST, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
Governmental Activities Business -Type Activities
2010 2009 2010 2009
Total
2010 2009
Land
$ 346x258
3463258
$ 377,882
$ 377,182
$ 724,140
$ 724,140
Easements
5x820
-
-
57820
M
Construction in Progress
391 }235
183045
211,174
3 %032
609 }409
57,077
Improvements
6045362
6053275
-
-
6049362
605,275
Infrastructure
1V555428
15,755 }421
-
1 5,7550421
1 5,755,428
Buildings
21-466,309
254661.309
8212%415
8,120}415
10,586,724
109586724
Plant and Lines
y
205966,294
2257953547
20,966,294
22,795�547
Sewer Rights
-
-
2,844,253
-
258447253
Machinery and Equipment
2;7069735
2,5743856
606,8lO
6232784
3,3132625
3 }198,640
Less. Accumulated
Depreciations
(11,138,3011)
(111, 175099)
(65015,567)
(554153069)
(1 7,223,875)
(15)432 }168
Total
$ 115137,839
$ 11, 749,072
2750489341
$ 2655413591
$ 38 -� 1863180
$ 38 >290,663
Additional information on the 1ty's capital assets can be found in note 5 on pages 0-51 of this report.
Total depreciation expense for 201 0 was 1 ,9 1 3,534.
Long-Term Debt. At the end of the current fiscal year, the City had total net bonded debt outstanding
Of 1 9 3 239. Of this amount �
, 1 oa4�,o� 1 comprised debt backed �� e 1 faith and credit of the
government. The remainder of the City's debt represents bonds and motes secured by specified revenue
sources i.e. utility and lease revenue bonds). Other long -term debt includes compensated absences
payable and other post employment benefits.
An illustration of the City's longterm debt is included in the table on the following pageb
17
CITY of ST. JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
OUTSTANDING LONG-TERM DEBT
Governmental Activities:
G.O. Bonds
G.O. Special Revenue Bonds
G-0. Revenue Bonds
Compensated Absences Payable
Total Governmental Activities
Business -Type Activities:
General obligation Revenue Bonds
Loans Payable
Dotes Payable
Compensated Absences Payable
Total Business -Type Activities
$ 1121593803 11;525,689 -3%
$ 735453,665
$ 7952X987
Percent
2010
2009
Change
959,503
$ 1,267}931
$ 15343p654
-6%
9,155,133
93393,889
-3%
4251000
50000
-15%
311,732
2889146
8%
$ 1121593803 11;525,689 -3%
$ 735453,665
$ 7952X987
-5%
.
44,000
- 100%
959,503
100%
112,385
1 07,573
4%
$ 836179553
$ 11,104 }560
6%
The City refunded an improvement bond in 2010 to tale advantage of lover interest costs. The total
savings from refunding the debt will be 40,472 over the life of the bonds. Duting 2010, the City
issued the following debt:
1501000 G. 0. Equipment Certificates of Indebtedness, Series 201 OA to purchase general capital
equipment for administration, public works and the police department.
1,825,000 G. o. Improvement Bonds, Series 201of to rcfund the 2005 improvement bonds and to
provide funding for the 2010 16'h Avenue street improvements. Interest savings will be 40,472
over the remaining eight years of payments of the 2005 bonds.
8351P00 G.O. Sever Revenue Dotes, Series 2009 to provide funding for the City of St. Cloud
interceptor lining projects in phases 1 and 2 and to upgrade the Tri -City lift station. The notes
represent the City's allocation of the project expenses.
1 o,00O G.O. Sewer Revenue Notes, Scries 201 OA to provide funding for the it Y of t. Cloud
interceptor lining projects in phase 3. The notes represent the City's allocation of the project
expenses.
The City paid down the net bonded debt and notes by$ 2,888,233 to end the year. In 2010, two dents
were paid in fall.
The City improved a bond rating to an "A+" rating from Standard & Poor's P) for G.O. debt in
2010. According to the S&P municipal credit analysis, the City's solid bond rating reflects the City's
increase in reserves as well as managements improved financial practices. St. Josephs financial
position is considered to be very strong.
18
CITY of ST, JOSEPH
MANAGEMENT'S ENT' DISCUSSION AND ANALYSIS
December 31, 2010
Minnesota Statutes limit the amount of net G.O. debt a governmental entity may issue to 3% of its
taxable market value. Net G.O. debt is debt solely paid for, with limited exceptions, b ad valorem
taxes. �e current ■ r City r r F � � ■
debt limitation for the City is 9,629,094 which significantly exceeds the City's
outstanding pure G.O. debt.
y
Additional information on the City's long -term debt can be found in note 6 on pages 5 -56.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City experienced a stable financial position at the end of 201 o despite reductions in state aids and
building activity �
t vity and the increase in t. Cloud sewer charges as evidenced by the tax rate, reduction of
bonded debt and General Fund reserves.
While the housing market for newly constructed hones has significantly declined the City anticipates
continued growth in both residential and commercial. The construction of a new community school
(K-8) will spur development adjacent to the school site as it is open space and a dcvelo er has already
preliminary lotted tract �- �
ary p act for oo homes. The new school opened for the 009 -2010 school year. In
2010, a developer began platting phase 2 of the Rivers Bend Development to build 1 patio homes. The
i issued eight build F .. �
City g■ mg permits far new homes in 010. In addition, Graceview departments opened
1n Jul 201 o with 60 units available.
July
The City also anticipates commercial /industrial development with the expansion of the Industrial Park
and 1 �
planning initiatives for downtown revitalization. The first downtown project began construction in
ooh with completion in 2009. The project consists of a commercial and residential mixed -use facility
and is known as the Millstream Shops and Lofts. The residential and commercial units are fully
occupied with exception of the restaurant. The restaurant is currently occupied b an art gallery.
� g Y
In 2009, the oborn's PUD was approved which contained three commercial development sites. The
PUD is located on AH p
• 75 and R 13 , one of the major commerce corridors in the City. entra are
Medical Clinic, oborn's Superstore and Central MN Credit Union currently occupy the development
site. A recent market study of the City area indicated that the trade area of the City would increase by
150% if a. grocery store was added to the landscape of the City. The City has received concrete leads for
firther commercial construction near this site including a fast food restaurant.
In addition to new construction, the City experienced four commercial openings, filling vacant
g g
properties in 2010 some of which include: Silvers Equestrian Outfitters, American Burger Ear, Katie's
Kennels and Millstream Motors, LL C.
The City Council has also identified an area near Interstate 94 for future commercial development and
focused on planning the infrastructure expansion and land use during 2008-2009. Development ment aloe
� g
with corridor is contingent upon Stearns County completing the realignment of County Road 2. It is
anticipated that construction of the street improvement will occur in 2011 or 2012. The commerce
potential at the intersection of I -4 and CR 2 is an opportunity for the City to diversify the tax base.
The St. Joseph Economic Development Authority (IAA) is an active grow promoting business interests
r
}
within the it p
The EDA continues to work with property owners to develop industrial and commercial
sites. The EDA is also working with the St. Cloud Area Economic Partnershi p an e Comprehensive
th p
Economic Development Strategy EIS ) to attract businesses from around the court to the area and
r �
to provide opportunity for possible federal grant funding.
19
CITY of ST, JOSEPH
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2010
Property tax reforms and budget deficits at the state level have significantly impacted govermnent aid
payments made to the City. Further, the taxable market value on residential properties has decreased
slightly. The Council continues to budget conservatively to maintain a steady tax rate. As the Nation's
recession continues, the City is monitoring the federal and state legislation with the impacts on the local
government.
The City annually reviews the fee structures for all licenses and permits and services to recover
appropriate costs in lieu of raising property taxes.
The City's rate structure for the utilities is established to help cover not only the operating costs but the
depreciation as well. water and sanitary sewer is charged from the first gallon used with a separate line
charge to recover current and future capital replacements. This structure began in 2006 to promote
water conservation. residential sewer rates are capped at the water used for the November/December
billing. The City monitors the rates annually and will eventually cover depreciation fully.
As stated above, the City is part of the St. Cloud wastewater System. The wastewater system is
managed in part by the St. Cloud Area wastewater Advisory Committee (SCAWAQ of which each city
has representation. SCAWAC has identified the need to expand the treatment portion of the wastewater
system and has been working on the expansion needs for the past couple years. The improvements
consist of three phases — design, construction and rehabilitation. The design phase was completed in
009 with each city paying cash for their portion of the design, respectively the City paid 296,972 in
2008.
Late in 2009, the area cities agreed to move forward to bid the project and in January 2010, the project
was awarded to the lowest responsible bidder. As expected, the bid results were less than the engineer's
estimate with a bid of 43.6 million. To reduce the overhead costs, the area cities applied to the
Minnesota Public Finance Authority (PFA) to fund the construction and rehabilitation costs. The PFA
agreed to finance the prowj ect with a 20 year loan with an interest rate of 1.771 %. The City's payments
began in 2010 with a payment of $ 6,080 to the City of St. Cloud. The City's apportionment of the
construction and rehabilitation phase is 4,551,830. The payment structure for the first years will be
va fable as the payments will be based on the actual capital outlay. Once the project is completed the
annual payments will be stable. The phase two and three costs include a 5% contingency Oust under
$ 2 million). if the contingency is not needed, the additional draws will not be used for the PFA
funding; therefore, the area cities will have a reduced debt payment for the PFA loan.
As part of the Wastewater Treatment System User Agreement with the City of St. Cloud, each city is
responsible for operation, repair and. replacement costs for their portion of the City of St. Cloud Sewer
Interceptor System SIS). The SIS includes lift stations and sewer mains. The City of St. Cloud
conducted a study of the SIS in 2008 to determine the condition of the system. Several interceptors
were found to be failing or collapsing. The City of St. Cloud initiated needed emergency repairs for the
three interceptors used by the City. In 20 10, the City paid the City of St. Cloud 144,648 to repair the
Lower Pan, Halliday Road and Waite Park Avenue interceptors. The repair costs were paid monthly
through August 2010.
20
CITY of ST, JOSEPH
MANAGEMENT'S EMENT' DISCUSSION AND ANALYSIS
December 31, 201 0
Further, the City St. Cloud began the design phase to upgrade the Tri-City Lift Station since 2008. The
City and the City of Waite Park have been involved in the planning process since both Cities utilize the
lift station. Construction for the lift station upgrade finished at the end of oo■ The it of fit. ■ F Y Cloud
also identified scheduled I ning repairs on various interceptors for 2009 and 2010 ■ The repairs were
placed on a schedule for construction with STS phase 1 and 2 beginning in 2009 and SIB phase 3 in
The City of S � are P t. Claud issued debt in 2009 and 010 to cover the lining airs and upgrade the
p
Tri- ity Lift Station. Each area city was assigned a revenue note to a the it of t. Cloud for their
eon of the pay
p costs on a monthly basis. The City is responsible for 81,41 o principal and interest
costs for SIS phase 1 and 2 and the Tri -City lift station through .August 2019 acid 0 1 a 6 principal
rind al
and interest costs for I phase through August 2020.
All the factors were considered in preparing the City's budget and fee schedule for the 2011 and future
reporting years.
REQUESTS FOR INFORMATION
The financial, report is designed to provide a general ove m
*ew of the City's finances for all those with
are
interest in the City's finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Finance Director PO Box 668
5 College Avenue North, St. Joseph, Minnesota 56374. '
1
(THIS PAGE LEFT BLANK IlVTENTIONALLY)
BASIC FINANCIAL STATEMENTS
3
CITY OF ST. JOSEPH
STATEMENT OF NET ASSETS
December 31, 2010
Governmental
Business -Type
Activities
Activities
Total
ASSETS
Cash and Investments
(Including Cash Equivalents)
$ 7 }231 3218
S 2,f759 183
$ 9,30624I11
Cash with Fiscal Agent
130235692
13023:692
Property Tax Receivable
49,050
4%050
Accounts Receivable
59,037
479,990
539,027
Interest Receivable
202855
7190
28,045
Due from Other Governments
1039208
1035208
Date's Receivable
259 715
-
259715
Special Assessments Receivable:
Delinquent
582876
689538
1275414
Deferred
39229,670
135266
392429936
Prepaid Expenses
201339
203339
Deferred Issuance Costs
1865602
1589341
3443943
Capital Assam:
Land
3469258
3775882
7245140
Easements
55820
-
55820
Construction in Progress
3915235
2185174
609,409
Buildings
25466x309
85120 }415
10,5869724
Infrastructure
1 59755 5428
15,7559428
Itnprovements
6045362
-
604,362
Plant and Lines
209966,294
2039665294
Machinery and Equipment
29706 }735
6069890
393135625
Sewer lights
-
298445253
298449253
Less Accumulated Depreciation
(11 j383308)
(6085,567)
(1752233875)
Capital Assets (Net of Accumulated Depreciation)
11 }1379839
272{}489341
38,186,180
Taal Assets
$23,146101
$ 29,850,849
$ 52,996,950
LIABILITIES AND NET ASSETS
Liabilities
Accounts Payable
805404
$ 29,633
110,037
Contracts Payable
295370
-
299370
Due to Other Governments
2213
242272
269485
Salaries and Benefits Payable
29,137
6,787
359924
Interest Payable
393304
295763
69,067
Bond Principal Payable (Net):
Payable Within One Year
1,5809000
41 x,000
15990,000
Payable After One Year
912689071
7,1355664
1 69403 5735
Notes Payable:
Payable Within One Year
_
959000
950000
Payable After One Year
864,504
864,504
Compensated Absences Payable:
Payable Within One Year
33x137
115777
449914
Payable After One Year
278,595
1003608
3795203
Net Other Post Employment Benefits (OPEB) Obligation
753420
219219
96,139
Total Liabilities
1154159651
V293227
_
20,144 878
Net Assets
Invested in Capital Assets, Net of Related Debt
790825194
18,548,272
2097665792
Restricted for:
Debt Service
155889375
-
19588,375
Other purposes
1 x213 5700
-
17213j700
Unrestricted
1,846181
2,573,350_
952839205
Total Net Assets
1197305450
219121,622
32,8525072
Total Liabilities and Net Assets
23,146 101
$ 29,850,849
$ 52,996,950
The Notes to the Financial Statements are an integral part of this statement.
24
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00 00 i 1 C4
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4i > 0 C
PLI ca 00 48 0
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tb
w
25
CITY OF ST. JOSEPH
BALANCE SHEET - GOVERNMENTAL FUND
December 31, 2010
ASSETS
Cash and Irwcstments
Cash with a Fiscal Agent
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Accounts Receivable
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
Prepaid Expenses
Total Assets
LIABILITIES AND FUND BALANCE
Liabilities
Accounts Parable
Contracts Parable
Due to Other Funds
Due to Other Govemments
Salaries and Benefits Payable
Deferred Revenue
Total Liabilities
Fund Balances
Deserved for:
Prepaid Expense
Unreserved, Deported in:
General Fund - Designated
General Fund Undesignated
Special Revenue - Designated
Special Revenue - Undesignated
Debt Service - Designated
Capital Projects - Designated
Total Fund Balances
Total Liabilities and
Debt Service
$ 60,505 $ 129 $ 129
23,213 -
295137 -
5 89005 7893849 5953,642
14%860 789,978 595x771
20,339 _
15,483: 1 50
161,386
542,243 1;5525413
1,664 875 542,243 1,552,413
Fund Balances 1,8143735 $ L3325221 1 $ 211483184
The Notes to the Financial Statements are an integral part of this statement. 26
G.D.
Crossover
G.O.
General Fund
Refunding
Improvement
(1013 105
bonds of
Bonds of
108)
2009A (318)
2005E (333)
$ 1,150,811
$ 535,730
$ 522x709
-
13023,192
35x151
13,815
443
13,714
23929
40,073
53640
785,105
5559126
59}037
-
41084
19,570
1,509
225459
59072
4x13 2
32000
-
-
0x33
-
_
1,814,735
15332,221
$ 231148x184
$ 60,505 $ 129 $ 129
23,213 -
295137 -
5 89005 7893849 5953,642
14%860 789,978 595x771
20,339 _
15,483: 1 50
161,386
542,243 1;5525413
1,664 875 542,243 1,552,413
Fund Balances 1,8143735 $ L3325221 1 $ 211483184
The Notes to the Financial Statements are an integral part of this statement. 26
Debt Service
G.0.
Enprovement
Other
Total
Bonds of
Governmental
Governmental
2007A (341)
Funds
Funds
$ 3805514
$ 4,84,884
$ 758745648
~
-
L0239692
939
107202
499050
403
19757
58;876
8841,172
9993627
332292,670
-
-
59,037
2A69
14,191
23,823
-
4%000
4%000
13262
69,83
103,208
223715
253715
$ 1,269,759 51952;1159 $ 1295172058
$ 1 29 199512 S 803,404
299370 29370
4%000 49,000
- 29213
29,13'
8849205 1,132} 182 37551 ,996
20 }339
1,4832150
- 161,386
- 1,1739137 1P173,137
88,5 79 88,579
3859554 11,764,991 4,245,201
385,554 - 41.819,977 899659062
172693759 $ 5,9 2,159 $ 12, 17,058
27
(THIS PAGE LEFT BLANK INTENTIONALLY)
8
CITY of ST. JOSEPH
RECONCILIATION of THE BALANCE SHEET To
THE STATEMENT of NET ASSETS - GOVERNMENTAL FUND
December 3I, 2010
Total Fund Balances - Govenunental Funds
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported as assets in governmental funds.
Cost of Capital Assets
Less Accumulated Depreciation
Long -term liabilities, including bonds payable, are not due and payable in
the current period and, therefore, are net reported as liabilities in the funds.
Long -term liabilities at year -end consist of:
Bond Principal Payable, Net of Premiums and Discounts
Deferred Issuance Costs
Compensated Absences Payable
Net OPEB Obligation
Delinquent receivables will be collected in subsequent years, but are not
available soon enough to pay for the current periods expenditures and,
therefore, are deferred in the funds.
Property Taxes
Special Assessments
Other long -term assets are not available to pay for current expenditures and
therefore, are deferred 'in the funds.
Deferred Special Assessments
Notes Receivable
The water Access Capital Project Fund is proprietary in nature and, therefore
R. in the business -type activities in the Statement of Net Assets.
The Sewer Access Capital Project Fund is propriety in nature and, therefore
included in the business -type activities in the Statement of Net Assets.
Governmental funds do not report a liability for accrued interest
due and payable.
Total Net Assets - Govemmmtal Activities
The Notes to the Financial Statements are an integral part of this statement.
819655062
22y2761147
(11,138,308)
(1 p,848,071)
186,602
(311,732)
('75,420)
493,050
8X6
3,228,231
259715
(15,768)
(b44,630)
_39,304)
11,730,450
9
CI'T'Y OF ST. JOSEPH
STATEMENT OF REVENUES} EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31# 2010
The Notes to the Financial Statements are an integral part of this statement. 30
Debt Service
G.O. Crossover
G.G.
G.O.
General Fund
Refunding
Improvement
Improvement
(101, 105,
bonds of
Bonds o f
Bonds of
1 8}
2009A (318)
2005B (333 )
20050 (335)
RE�REVENUES
Property Taxes
$ 1111892453
$ 645015
$ 14,825
$ 15414
Tax Increments
Sales Tares
237
-
_
Special Assessments
20,349
1482407
91 fi%
Franchise Fees
112,155
Licenses and Permits
7%330
_
Intergovernmental
795 }232
1,656
384
(1,078)
Charges for Services
2383787
-
_
Fines and Forfeitures
745210
-
Miseellaneous:
Investment Income
382652
1 01923
11 J93
18,045
Contributions and Donations
212897
-
_
Revolving Loan Repayments
_
Other
362823
-
-
-
Total Revenues
2073125
22510001
118�698
18,381
EXPENDITURES
Current
General Government
5253070
_
Public Safety
111262,682
-
Public Works
3932920
-
Culture and Recreation
197,938
Economic Development
_
_
-
Debt Service
Principal
-
295P000
952000
8102000
Interest and Other Charges
62,375
79,076
285471
Capital Outlay
General Government
_
_
Public Safety
11,058
-
-
Public Works
38,561
Culture and Recreation
Total Expenditures
21429,229
357;375
74,07
174,076-
8383471
Excess of Revenues Over
(Under) Expenditures
1775896
(132,374)
(55,3 78)
(820,090)
OTHER FINANCING SOURCES (USES)
Sale of Property
_
_
Bonds Issued
Refunding Bonds Issued
-
-
11035,000
Bond Premium
-
-
15,958
Transfers In
253741
9031000
-
Transfers Out
(198,327)
-
-
1422969
Total Other Financing Scones (Uses
172,586)
K000
1 x05010958
(142,969)
Net Change in Fund Balances
5,310
(42,374)
9953580
(963,059)
FUND BALANCES
Beginning of Year
1 }65,565
5842617
556,833
963,059
End of Year
$ t,664,875
$ 5423243
$ 15552,413
$ -
The Notes to the Financial Statements are an integral part of this statement. 30
G.0.
180,373
- -
Improvement
Other
Tom
Bonds of
Govem mentaii
Govemmentarl
2007A (34 1)
funds
Funds
35,101
$ 3842839
$ 1,689,647
1003133
1005133
-
270,109
2703346
38521876
237,275
883,603
-
-
112,155
-
-
79p330
912
103524
80763
813779
3203566
743210
17,366 83,594
180,373
- -
213897
33960
35960
1,568
382391
43931255 1,1 73,781
425823241
525,0'70
1,262,682
- 393,920
- 1 X569 199,507
- 14 %305 140,305
5 10;000 640x000
25350,000
75,119 224x96 1
470,002
74591
743591
13,715
243773
694089
732,650
- 8 %699
89,699
5853119 1,87810929
6,263,1 99
(1452864) (705148) (1,680,958)
41
3x260
363260
940,000
9403000
-
-
1,03 5,000
82369
24,327
34,075
4059043
554,859
---(622,
(9643275)
34,075
766,693
13626,171
(I 11 } 789)
61X545
(54 }78'
497 }343
4x758,432
9101%849
5 385554
$ 4,81 9,9'77
S 83965x062
41
CITY OF ST, JOSEPH
RECONCILIATION of THE STATEMENT of RE" ENUESa EXPENDITURES
AND CHANGES IN FUND BALANCES To THE STATEMENT
OF ACTIVITIES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 201 0
Total Net Change in Fund Balances - Governmental Funds
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the
Statement of Activities, the cast of those assets is allocated over the estimated useful lives
as depreciation expense.
Capital Outlays
Depreciation Expense
Gain on Disposal
Transferred to Proprietary Funds
Principal payments on long -terra debt are recd
gmz
ed as expenditures in the governmental
funds but as an increase in net assets in the Statement of Activities.
Some expenses reported in the Statement of Activities do not require the use of current
financial resources arid, therefore, are not reported as expenditures in governmental funds.
Accrued interest payable
Amortization of bond discounts, premiums and issuance charges
Proceeds from long -term debt are recognized as an other financing source in the governmental
funds but as a decrease in net assets in the Statement of Activities,
The governmental finds report the effect of issuance costs, premiums, discounts and
similar items when debt is first issued, whereas these amounts are deferred and a mortized
in the Statement of Activities.
Compensated absences and other post employment benefit payments are recognized as paid in the
governmental funds but recognized as the expense is incurred in the Statement of Activities.
Delinquent receivables will be collected M subsequent years, but are not available soon enough
to pay for the current period's expenditures and, therefore, are not revenues in the funds.
Delinquent Special Assessments
Delinquent Property Taxes
Certain revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds.
Deferred Special Assessments
Notes receivable
The water Access Capital Prod ect Fund is proprietary in nature and, therefore, is reported
�vitlx business type activites.
The Sewer Access Capital Project Fund is proprietary in nature and, therefore, is reported
with business -type activities.
Change in Net Assets - Governmental Activities
The Notes to the Financial Statements are an integral part of this statement.
(54,787)
774,714
( 1 ,226,3 65)
193.560
(1791,142)
2 }350 }000
(6,3 99)
(5031 7)
(119755000)
415728
(625635)
275241
(175311)
(3675060)
(5,2 8 4)
3939251
363630
_ (311,176)
32
CITY OF ST. JOSEPH
STATEMENT of REVENUES, EXPENDITURES AND
GRANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2010
Variance with
EXPENDITURES
Current
General Government
Original
Final
Actual
Final Budget -
Public Safety
Budget
Budget
Amounts
Over (Under,
REVENUES
3 63 xo3o
3635030
393,920
3 028 90
Property Takes
$ 13277x635
1,277 }635
191595453
$ (881 82)
Sales Tars
125
125
237
112
Special Assessments
1,500
1 3500
2%349
189849
Franchise Fees
1013500
1012500
11 2,1 55
103655
Licenses and Permits
1519450
1 5 1,450
795330
(72,1 2o)
Intergovernmental
748,140
7482140
7957232
47,092
Charges for Services
237J75
2379175
238,787
19612
Fines and Forfeitures
785500
78x500
741,210
(4x290)
Miscellaneous Revenues:
299530
g4) 720
1779 596
93,176
Investment Income
44,000
441,000
383,652
(5,348)
Contributions and Donations
183100
18j00
21 }897
31797
Other
42550
49550
361.823
323,273
Total revenues
2fi623,675
25,662}675
2,607x125
(55,550)
EXPENDITURES
Current
General Government
531 x700
531,700
525VO70
(61.630)
Public Safety
1,355,1 55
1,385,1 55
122625652
(125,473)
Public Works
3 63 xo3o
3635030
393,920
3 028 90
Culture and Recreation
1533270
1$3,270
1979938
149668
Capital outlay
General Govenunent
6,000
12000
-
(1 9000)
Public Safety
559240
35,800
11,055
(245742)
Public Works
572375
75,000
38,561
(36,439)
Culture and Recreation
1$,375
-
-
-
Total Expenditures
2,633,14
2,5779955
2x4293,229
(148x7
Excess of revenues
Over Expenditures
299530
g4) 720
1779 596
93,176
OTHER FINANCING SOURCES (USES)
Sale of Property
250
250
-
(25 0)
Transfers In
143000
147000
25x741
11,741
Transfers Out
L429010)
L422010)
(198,327)
1569317)
Total Other Financing Sources (Uses)
(27x76D
(273760)
(1722556 )
( 1449826)
Net Change in Fund Balances
$ 12770
$ 56,960
55,310
$ (5 1 x6501
FUND BALANCES
Beginning of Year 13659,565
End of Year $ 11,664)$75
The Notes to the Financial Statements are an intcgral Fart of this statement. 33
CITY OF ST. JOSEPH
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
December 31, 2010
The Notes to the Financial Statements are an integral part of this statement. 34
Sanitary "ewer
Refuse
Storm Water
Water (60 1)
(602)
603)
(651 )
Total
ASSETS
Current Assets
Cash and Investments
$ 4923965
405,237
$ 259 }158
274,393
$ 12431 }753
Special Assessments receivable:
Delinquent
-
-
68,538
G 8 X53 8
Deferred
115354
431
1,288
193
132266
Accounts Receivable
723355
3303780
57,869
183986
479,991
Interest Receivable
1,172
1,490
735
825
45222
Total Current Assets
577,846
737,938
3192050
3625935
1,997J69
Noncurrent Assets
Deferred Issuance Costs
1243.451
33,890
-
-
158,341
Capital Assets:
Land
372,941
4,941
-
377,882
Construction in Progress
48# 01
,675
1 �3,5�8
X18,174
Buildings
7,502,432
6 1 7,983
-
-
831202415
Plants and Lines
83873,800
7,402 }240
400,254
201966,294
Machinery and Equipment
183 997
4213.127
-
1, 766
606,890
Sewer rights
-
2,8441,253
-
-
2 }8445253
Total Capital Assets
161982F071
11 )296,2 1 9
-
4,855,618
33 � 13 3,908
Less Accumulated Depreciation
(2,5305 i}
(2)816,526)
-
C"738,1i65)
(6,f85,567)
Net Capital Assets
14,451,0 5
8,47 ,693
-
4211 72553
2 7,048,341
Total Noncurrent Assets
1425755546
855135583
-
4,117,553
272206,682
Total Assets
$ 15,1533392
S 9,251 521
$ 31%050
$ 4A803,488
$ 2932043451
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts Payable
$ 35752
$ 33922
$ 213017
5 942
$ 295633
Salaries and Benefits Payable
33112
2,298
633
744
6,87
Interest payable
242157
5}i06
-
-
29,763
Due to Other Governments
350
21,114
23808
24,272
Long- Terra Liabilities Due
Within One Year
3809043
135,043
835
856
516,"77'7
Total Current Liabilities
4115414
167,983
25,293
2,542
607,232
Noncurrent Liabilities
Compensated Absences
48,339
483339
81783
62924
112,385
Notes Payable, Net
-
959,504
-
-
959504
Bands Payable, Net
7,1223239
423,425
-
-
+7,545,664
Net OPEB Obligation
1 0,294
8,403
1,261
1,261
21 )219
Less Amounts Due Within One Year
(3803043)
(1353043)
(856)
(5165777)
Total Noncurrent Liabilities
6,8005829
13304,628
9,209
7,329
831215995
Total Liabilities
7a21 21243
1,4'72,111
345502
93871
8)72%227
Net Assets
Investment in Capital Assets, Net
Related Debt
7,333,955
77 0961764
-
43117,553
183548,272
Unrestricted
6077,
682,146
2+� 84,548
3+5�3,064�
1,9+26)952
Total Net Assets
7194
73941 � 149
+'�
f } l ! 8)91 0
2843548
4P4 f 0yi 1 f
+�
200 4 1 5,224
Total Liabilities and Net Assets
15,153 392
$ 9,2511521
S 319,050
.R 4,4801488
$ 291204,451
The Notes to the Financial Statements are an integral part of this statement. 34
CITY OF ST, JOSEPH
RECONCILIATION OF THE STATEMENT
OF NET ASSETS - BUSINESS-TYPE .ACTIVITIES
December 31, 2010
Total Net Assets - Propriety Funds
Amounts reported for business -type activities in the Statement of Net Assets
are different because:
The Water Access Capital Pray eet Funds is proprietary in nature and
relates to water improvements for the applicable funds. Therefore,
it is included as a busines -type activity.
20,475,224
1,768
The Sewer Access Capital Prod eet Funds is proprietary in nature and
relates to sewer improvements for the applicable funds. Therefore,
It is included as a business -type activity, 6449630
Total Net Assets - Business -Type Activities $ 2151213,622
The Notes to the Financial Statements are an integral part of this statement. 35
CITY OF ST. JOSEPH
STATEMENT OF REVENUES, EXPENSES AND CHANGES
III NET ASSE'S'S - PROPRIETARY FUNDS
For the Year Ended December 31, 2010
The Notes to the Financial Statements are an integral part of this statement. 36
Sanitary
Refuse
Storm Water
Water (60 1)
Sewer (602)
(603)
(651)
Total
OPERATING REVENUES
Chatges for Setviees
$ 466,004
$ 624 }308
289,605
$ 992294
$ 194799211
OPERAT NG EXPENSES
Wages and Salaries
1619043
148,704
413169
413150
392A6
Sewer Use Rental
-
305 #071
-
-
305,071
Materials and Supplies
322969
47,906
22064
356
83,295
Repairs and Maintenance
36fiU
403576
6,965
151820
999989
Professional Services
23,912
363961
2,339
83746
715958
Insurance
18,191
6324'
-
-
24,438
Utilities
58,088
155223
743
745054
Depreciation
3863941
2062070
-
94a158
687,169
Contracted Services
-
-
250933'
250 }337
Equipment
556
556
-
1, 112
Miscellaneous
63034
12526
699
2,603
10,862
Total Operating Expenses
7249362
80$2$40
3049316
162,833
290001.351
Operating Loss
(2585358)
(184,532)
(143711)
(63,539)
(521,140)
NONOPERATING REVENUES
(EXPENSES)
Investment Income
89316
11 J04
4,979
61,389
302788
Special Assessments
13784
906
1,509
280
45479
Gain on Disposal of Asset
-
243
-
243
Loss on Disposal of Asset
(74)
(74)
(148)
Operating Grants and Contributions
-
25,000
-
259000
Interest Expense
(293,564)
(33,438)
-
-
(327,002)
Amortization of Bond Premium
61,811
3 }846
-
109657
Amortization of Bond Costs
(209676)
(4J34)
-
(253410)
Other Income
239655
2,633
250
269538
Total Nonoperating revenues
(Expenses)
(273} 48)
5,560
63738
69595
(254,855)
Doss before Capital
Contributions and Transfers
(532,106)
(1783972)
(72973)
(569944)
(7753995)
Capital Contributions
9 }869
5,615
-
1639598
199142
Transfers In
516 }291
4 ?,200
-
-
5635491
Transfers Out
(55 *000)
_ (555000)
-
(44,075)
(1549075)
Change in Net Assets
(60,946)
(1815097)
(72973)
62,579
(187,437)
NET ASSETS
Beginning of Year
8,002,095
19960,00
2922521
41408,038
20,6629661
End of Year
$ 7x941,149
$ 757783910
$ 284548
$ 4,470 1.617
S 20,4 75,224
The Notes to the Financial Statements are an integral part of this statement. 36
CITY OF ST. JOSEPH
RECONCILIATION OF THE STATEMENT OF I EVENUE 5 EXPENSE
AND CHANGES IN NET ASSETS - BUSINESS-TYPE ACTIVITIES
For the Year Ended December 31, 201 0
Total Net Change in Fund Net Assets - Proprietary Funds $ (187,437)
Amounts reported for business -type activities in the Statement of Activities
are different because:
1 ccogn1 ed current year activity from the water Access Capital Project Fund
with the business -type activities. (3933,251
Recognized current year activity from the Sewer Access Capital Prod ect Fund
with the business -type activities. 36963
Capital contributions from governmental activities. (1791,142
Transfers in of capital assets from govmirnental activities, 1 79,14
Change in Net Assets - Business -Type Activities (6179318)
The Notes to the Financial Statements are an integral part of this statement, 37
CITY OF ST. JOSEPH
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended December 31, 2010
Sanitmy
Refuse
Stonrn Water
a#er (60 1)
Sewer- (602)
603
(65 1 )
Total
CASH FLIES y OPERATING ACTIVITIES
Receipts from Customers and Uses
$ 4669612
$ 526,890
$ 29211262
$ 103,129
S 1,388,893
Payments to Suppliers
(182,457)
(460,$ 89)
(263,23 5)
(26,601)
(933,182)
Payments to Employes
(153,206)
(1429287)
(40 }524)
(38,864)
(374}881)
Other Miscellaneous Receipts
25,526
28,632
874
707
559739
Net Cash Flows - Operating Activities
156,475
4 72 654
_ ( 10,623)
38,371
1
CASH FLOWS - NONCAPITAL FINANCING
AC TIVITIE S
Transfer from Other Funds
5163291
47,200
-
-
5631491
Transfer to Other Funds
_ (559000 )
(551000
'
_ (443075)
1 54,07
Net Cash Flows - Noncapital Financing
4619291
.'
800
-
44907
4093,416
Activities
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal Paid on Debt
(409,000)
(11 5,000)
-
-
(524,000)
Interest Paid on Debt
(296,004)
(30,764)
-
(326,768)
Note Payable Proceeds
-
1101 5,000
-
1,01 5x000
Proceeds from Disposal of Capital Assets
-
317
-
J
317
Acquisition of Capital Assets
-
(150155000)
-
(19016,000
Net Cash Flows - Capital and Related
_ (705,004)
(1451,447)
_
_
8501451
Financing Activitis
CASH FLOWS T INVESTING ACTIVITIES
Interest and Dividends Received
119264
139556
631281
6,945
38,046
Net Change in Cash and Cash Equivalents
(75,974)
(187,345)
(49342)
13241
(2665420)
CASH AND CASH EQUIVALENTS
Beginning of Year
568,939
592,582
263,500
2733152
_ 1,698,1 73
End of Year
_ 492,965
$ 405,237
259 158
$ 274,393
$ 1 4313
IIECONCELIATION OF OPERATING
LOSS TO NET CASH FLOWS ..
OPERATING ACTIVITIES
Operating Loss
$ 2589358
(184532)
(141,711)
S (63539)
$ 52 1 ,140
Adjustments to Reconcile Operating Doss
to Net Cash Flows - Operating Activities:
Depreciation Expense
3863941
2061,070
-
949158
687,169
Other Income
253439
285539
1,759
281
561018
Accounts Receivable
608
(97,418)
2,657
3,252
(90,901)
Special Assessments Receivable
87
93
(885)
426
(279)
Due from Other Governments
-
-
583
583
Accounts Payable
(4,686)
(3 91 )
(1 57)
924
(43210)
Due to Outer Governmental Units
(11493)
(6,432)
69
-
(7,856)
Salaries Payable
618
177
190
401
1,386
Compensated Absences Payable
11,889
13889
(198)
1,232
43812
Net OPEB Obligation
51330
4.7351
653
653
10,987
Total Adjustments
.]
414 833
136,88
4,088
101,910
-
6�'� X09
Net Cash Flogs - Operating Activities
$ 156,475
_$ X47,6541
$ 10
38,371
$ 136 569
NON1rCASH CA,.PITAL ACTIVITIES
Capital Contributions
$ 9,869
$ 5 675
$ -
$ 163.598
$ 1' 142
The Notes to the Financial Statements ate an integral part of this statement.
38
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMIENTS
December 31, 2010
NOTE I — SUMMARY of SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of St. Joseph is a statutory city governed by an elected mayor and four council members. The
accompanying financial statements present the government entities for which the government is
considered to be financially accountable.
The financial statements present the City and its component units. The City includes all funds, account
groups, organizations, institutions, agencies, departments and offices that are not legally separate from
such. Component units are legally separate organizations for which the elected officials of the City are
financially accountable and are included within the basic financial statements of the City because of the
significance of their operational or financial relationships with the City.
The City is considered financially accountable for a component unit if it appoints a voting majority of
the organization's governing body and it is able to impose its will on the organization by significantly
influencing the programs, projects, activities or level of services perforned or prodded by the
organization, or there is a potential for the organization to provide specific financial benefits to or
impose specific financial burdens on, the City.
As a result of applying the component unit definition criteria above, certain organizations have been
defined and are presented in-Us report as follows:
Blended Component Unit — Deported as if they were part of the City.
Joint Ventures — The relationship of the City with the entity is disclosed.
For the categories above, the specific entities are identified as follows:
1. Blended Component Unit
The St. Joseph Economic Development Authority (EDA) was organized for the purpose of
preserving and creating jobs, enhancing the tax base and promoting the general welfare of the people
of the City of St. Joseph. The St. Joseph. EDA is governed by a five member board appointed by the
City Council. The St. Joseph EDA is included as a blended component unit of the City because the
St. Joseph EDA is financially accountable to the City and the St. Joseph EDA provides services
almost entirely for the City. The St. Joseph EDA is presented as the Economic Development
Authority Special Revenue Fund and the City Hall General Obligation (G.O.) EDA Refunding Bonds
of 2005A Debt Service Fund. Separate financial statements are not prepared for the St. Joseph EDA.
2. Joint Ventures
Central Minnesota Major Crime Investigation Unit is a group of local law enforcement officers
within the four county surrounding area that will be available to assist any of the participating
entities in the investigation and solution of major Mmes. During 2010, the City contributed 4,061
to the organization. It is reported as a special revenue fund of the City of Sartell. Complete financial
statements can be obtained from: City of Sartell, F.D. Box 140, Sartell, Minnesota 563 7 7 .
9
CITY of ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 1— SUMMARY of SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
2. Joint ventures (Continued)
The City of St. Cloud Human lights Office is a joint venture between the cities of St. Cloud and
St. Joseph, which works to enhance the lives of the citizens of the communities. During 2010, the
City contributed 1 717 to the organization. It is reported as an agency fund of the City of
St. Cloud. Complete financial statements can be obtained from: City of St. Cloud, 400 2nd Street
South, St. Cloud, Minnesota 56301.
E. Government -wide and Fund uncial Statements
The government -wide financial statements (i.e., the Statement of Net Assets and the Statement of
Activities) report information on all of the nonfiduclary activities of the City. Govemmental activities,
which normally are supported by taxes and intergovernmental revenues, are reported separately from
business -type activities, which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Interest on general long -term debt is considered an indirect expense and
is reported separately to the Statement of Activities. program revenues include 1) charges to customers
or applicants who purchase, -use or directly benefit from goods, spices or privileges provided by a
given function or segment and grants and contributions that are restricted to meeting the operational
or capital requirements of a particular function or segment. Taxes and other inns not properly
included among program revenues are reported instead as general revenues. Internally dedicated
revenues are reported as general revenues rather than program revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual govermnental funds and major individual enterprise funds are reported as separate columns in
the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are levied.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been .net.
40
CITY OF ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 1— SUMMARY of SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. revenues are recognized as soon as they are both
measurable and available. revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
City considers revenues to be available if they are collected within 60 days of the end of the current
fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to compensated
absences and claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal
period. only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
Description of Funds:
Major Governmental Funds;
General Fund — This Fund is the City's primary operating fund. It accounts for all financial resources
of the general City, except those rewired to be accounted for in another fund.
G.O. Crossover Refunding Bonds of 2009A Debt Service Fund — This Fund accounts for the
resources accumulated and payments made for principal and interest on this bored issue.
G.O. Innpro ernent Bonds of 2005B Debt Service Fund — This Fund accounts for the resources
accumulated and payments made for principal and interest on this bond issue.
G.O. improvement Bonds of 2005C Debt Service Fund — This Fund accounts for the resources
accumulated and payments made for principal and interest on this bored issue.
G.O. hnprovement Bonds of 2007A Debt Service Fund — This Fund accounts for the resources
accumulated and payments nude for principal and interest on this bond issue.
Proprietary Funds:
Water Fund — This Fund accounts for the operations of the City's water utility.
Sanitary Sewer Fund — This Fund accounts for the operations of the City's sanitary sewer utility.
Defuse Fund -- This Fund accounts for the operations of the City's refuse utility.
Storm water Fund — This Fund accounts for the operations of the City's storm water utility.
�j11
CITY of ST, JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 1— SUMMARY of SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Private- sector standards of accounting and financial reporting issued prior to December 1, 198911
generally are followed in both the government -wide and proprietary fund financial statements to the
extent that those standards do not conflict with or contradict guidance of the GASB. Governments also
have the option 'of following subsequent private - sector guidance for their business -type activities and
enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private -
sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are charges between the City's water, sanit
■ �
sewer and
storm water functions and various other functions of the City. Elimination of these charges
would distort the direct costs and program revenues reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of
the water Enterprise, Sanitary Sewer Enterprise, Refuse Enterprise and Storm water Enterprise Funds
are charges to customers for sales and services. Operating expenses for enterprise funds include the cost
of sales and services, administrative expenses and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted) and unrestricted resources are available for use, it is the City's polio to use
restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities and Net Assets or Equity
1. Cash and Investments
The City's cash and cash equivalents are considered to be cash on hand, deposits and highly liquid
debt instruments purchased with original maturities of three months or less from the date of
acquisition. Investments are stated at fair value.
Minnesota Statutes require all deposits made by cities with financial institutions are collateralized in
an amount equal to 110% of deposits m' excess of Federal Deposit Insurance Corporation (FDIC)
a
insurance.
Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies and
inshrumentaiities, shares of investment companies whose only investments are in the aforementioned
securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future
contracts, repurchase and reverse repurchase agreements and commercial paper of the highest quality
with a maturity of no longer then 270 days and in the Minnesota Municipal Investment Fool.
4
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 31, 2 0 10
NOTE 1— SUMMARY of SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity
I. Cash and Investments (Continued)
Custodial Credit Risk — Deposits-, In the case of deposits, this is the risk that in the event of a bank
failure, the City's deposits may not be returned to it. The City has an investment policy M' lace to
address c P
custodial credit risk for deposits, stating they will obtain collateral or bond for all uninsured
amounts on deposit. All deposits shall be covered by FDIC, N UA or collateralized at 110 %.
Concentration of Credit Risk: Investments should be diversified to avoid incurring unreasonable
risks inherent: in over investing in specific instruments, individual financial institutions or maturities.
The City's investment policy state's the City will attempt to diversify its investments according to
type, issuer and maturity. The portfolio, as much as possible, will contain both short- term and long -
term investments. The City will attempt to match its investments with anticipated cash flow
requirements. Extended maturities may be utilized to take advantage of higher yields. No more than
0% of the total investments should extend beyond five years and the weighted average maturity of
the portfolio shall never exceed five years.
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not
ff.lfill its obligations. Minnesota Statutes 118A.04 and 118A.05 limit investments that are M' the top
two ratings issued by nationally recognized statistical rating organizations. The City's investment
policy limits the allowable investments in accordance with these Statutes.
Interest Rate isle. The City should try to m ' ize the risk that arises from over investing in
specific instruments, individual financial institutions or maturities. The City's investment polio
status the in securities y
vestment portfolio will be structured so that securities mature to meet cash flow
requirements and avoiding the need to sell securities prior to maturity, investing in short -form
securities, investing in long -term securities if the market rate is favorable.
Custodial Credit Risk — Investments: For an investment, this is the risk that in the event of the
failure of the counterparty, the City will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. The City's investment policy
addresses this risk and states the City will permit investments only to the extent that there is
Securities Investor Protection Corporation (IPA and excess SIPC coverage available.
2. receivables and Payahles
All trade and property tax receivables are shown at a gross amount since both are assessable to the
property taxes and are collectible upon the sale of the property,
43
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 1— SUMMARY of SIGNIFICANT ACCOUNTING POLICIES
II, Assets, Liabilities and Net Assets or Equity (Continued)
2. Receivables and Payables (Continued)
The City levies its property tax for the subsequent year during the month of December. December 28
is the last day the City can certify a tax levy to the County Auditor for collection the following year.
Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. The
property tax is recorded as revenue when it becomes measurable and available. Stearns County is the
collecting agency for the levy and remits the collections to the City four times a year. The tax levy
notice 1s mailed in March with the first half of the payment due on May 15 and the second half due
on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes
receivable,
The County Auditor prepares the tax list for all taxable property in the City, applying the applicable
tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property, The
County Auditor also collects all special assessments, except for certain prepayments paid directly to
the City.
The County Auditor submits the list of taxes and special assessments to be collected on each parcel
of property to the County Treasurer in January of each year.
3' Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government -wide and fund financial statements.
4. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads,,
sidewalks and similar items), are reported in the applicable governmental or business -type activities
columns in the government -ride financial statements. Capital assets are defined by the City as
assets with an initial, individual cost of more than S l ,000 and an estimated useful life in excess of
two years. Such assets arc recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the date of
donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized.
44
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
4. Capital Assets (Continued)
Property, plant and equipment ef'the City are depreciated using the straight -line full year convention
method over the following estimated useful lives:
Assets Years
Land Irnprovernents
-0
Buildings
0_40
Building Improvements
15
Infrastructure
10-50
Sewer Rights
20-50
Furniture and Fixtures
5-10
Vehicles
5 -0
Equipment
3-7
Machinery
5-7
5. Compensated Absences
The City compensates employees who leave City service in good standing for all earned, unused
vacation. Employees can accrue up to 200 hours of ` vacation depending on years of service. The
max imum amount of carryover from year-to-year is 100 hours or the amount of the current vacation
accrual rate. In addition., employees are compensated for unused sick leave up to a maximum of
720 hours) at various rates depending on the employee type and years of service, provided the City's
notice of termination policy has been complied with.
6. Lung -Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund financial
statements, long -term debt and ether long -tin obligations are reported as liabilities in the applicable
governmental activities, business -type activities or proprietary fund type Statement of Net Assets.
In the Bind financial statements, governmental fund types recognize bond premiums and discounts,
as well as bend issuance costs, during the current period. The face amount of debt issued is reported
as other financing sources. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
7. Fund Equity
In the fund financial statements, govemmental funds report reservations of fund balance for amounts
that are net available for appropriation or are legally restricted by outside parties for use for a
specific purpose. Designations of fund balance represent tentative management plans that are subject
to change.
45
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 1— SUMMARY of , I NIFICAN1' ACC TINTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
8, Net Assets
Net assets represent the difference between assets and liabilities in the government -wide financial
statements* Net assets invested in capital assets, net of related debt consists of capital assets, net of
accumulated depreciation, reduced by the outstanding balance of any long -term debt used to build or
acqui
CITY of ST. JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 2 — STEWARD HIPq COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information (Continued)
6. Annual appropriated budgets are adopted during the year for the General and two Special
Revenue Funds. Annual appropriated budgets are not adopted for Debt Service Funds because
effective budgetary control is alternatively achieved through bond indenture provisions.
Budgetary control for Capital Projects Funds is accomplished through the use of project controls
and formal appropriated budgets are not adopted.
7. Budgeted amounts are as originally adopted by the City Council. Budgeted expenditure
appropriations lapse at year -end.
Encumbrances outstanding at year -end expire and outstanding purchase orders are canceled and not
reported in the financial statements.
B. Deficit Fund Balance
The following Fund had a deficit fund balance at December 31 � 2010:
Nonmajor Governmental Fund:
Special Revenue:
City Street Beautification 485441
This deficit will be eliminated with future revenues or transfers from other funds.
NOTE 3 — DEPOSITS AND INVESTMENTS
Cash balances of the City's funds are combined (pooled) and invested to the extent available in various
I
nvestments authorized by Minnesota Statutes. Each fund's portion of this pool (or pools) is displayed
in the financial statements as "cash and cash equivalents" or "investments". For purposes of identifying
risk of investing public funds, the balances and related restrictions are summarized as follows.
A. Deposits
Custodial Credit Risk — Deposits: As of December 31, 2010, the City's bank balance was not exposed to
custodial credit risk because it was fully insured through the FDIC and fully collateralized with securities
hold by the pledging financial institutions trust department or agent and in the City's name. As of
December 31, 2010, the City's deposits had a carrying value as shown below.
Certificates of Deposit
Checking
Savings
Total
450659021
25504649
1#281,459
79851:9129
47
CITY of ST. JOSEPH
NOTES To THE FIN ANC STATEMENTS
December 31, 2010
NOTE 3 — DEPOSITS AND INVESTMENfS
B. Investments
As of December 3 1 !P 20109 the City had the following investments:
Fair
Value
Brokered Certificates of Deposit 810 294
Government Bonds Totes 6379646
Brokered Money Market 79057
State and Local Government Securities 1 1o�
Total
$ 29,478,689
Weighted Standard
Average Poor's
Maturity Years Rating
2.81
/
9.04
AAA
N/A
N/A
N/A
N/A
Credit Risk: As of December 3 1 !P 2010. the City's investments wcre rated as listed in the table above.
Concentration of Credit Risk: As of December 31 20101 the City's investments in FHLB securities
(25.7%) and the investment in state and local government securities (41.3%) exceeded 5% of the City's
total investment portfolio. Money market accounts are not subject to concentration of credit risk.
C. Deposits and Investments
The following is a summary of deposits and investments as of December 3 1, 2010:
Deposits (Note .A.)
Investments (Note 33.)
Petty Cash
Total
$ 785 1 J 2
2 478 0
275
$ 10, 3 0, o3
Deposits and investments are presented in the December 31, 2010 basic financial statements as follows:
Statement of Net Assets:
Cash and Investments 9P3069401
Cash with Fiscal Agents 1 0233692
Total Deposits and Investments $ 1013 3 OsO93
48
CITY OF ST, JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 4 — INTERFUND BALANCES AND TRANSFERS
A. Interfund Balances
The composition of interfand balances as of December 31 � 201 0 is as follows:
Receivable Fund Payable Fund Amount
Other Governmental Funds Other Governmental Funds $ 49,000
The due from /due to other funds balances represent borrowing to cover short fall of pledges for the street
beautification project.
B. Transfers
The composition of interfund transfers as of December 3 1 � 2010 is as follows.
Transfers were made to close funds and provide resources for debt payments and planning projects
M
Transfer in
G.O.
G.O.
Crossover
Impro=- ernent
tattier
Refunding
Bonds of
Govemmental
Sanitary
General
Bonds of 2009A
2007A
Funds
Water Sc,. -er
Total
Transfer Out:
General $ -
$
$
$ 198$27
$ $
$ 198,37
G.O. Improvement Bonds
of 20050
142,969
-
142,969
Other Governmental
Funds 2Sa741
-
33,747
516 291 471200
622,979
Water
45 }000
-
10 }000
-
55x000
Sanitary Sewer -
45,000
1011000
-
555-000
Storm water -
-
34,05
10,000
- -
44,075
Total Transfers $ 25,741
$ 90,000
$ 345075
$ 405 043
$ 516,291 $ 47,200
$ 11118,350
Transfers were made to close funds and provide resources for debt payments and planning projects
M
CITY of ST* JOSEPH
NOTES TO THE FIN N IAL STATEMENTS
December 31, 2010
NOTE 5 — CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2010 was as follows:
Governmental Activities.
Capital Assets not being Depreciated:
Land
Easements
Construction In Progress
Total Capital. Assets
net being Depreciated
Capital Assets being Depreciated:
Buildings
Infrastructure
hrnprovements
Machinery and Equipment
Total Capital Assets
being Depreciated
Less Accumulated Depreciation for:
Buildings
In#rastructure
Improvements
Machinery and Equipment
Total Accumulated
Depreciation
Total Capital Assets being
Depreciated, Net
Governmental Activities Capital
Assets, Net
Beginning
Balance Increases
$ 346,258 $ -
- 5�8 o
1,04 3733190
364,3 37010
Ending
Decreases Balance
$ 346,258
5,820
391,235
- 743X3
2,466,3 09
-
-
25.466, 3 09
1V555428
15J559428
605,275
-
913
604,362
25.574,856
2523822
_ 1209943 _
2.570 735
219401,868
252-5822
1215856
2195329834
6933,219
849673
-
777,892
7,280,419
8 94NO
-
81175,319
2819336
41,8'2
838
322,370
1 7629125
2049920
1045318
13, 62,727
1 OO 17,099
1 26a365
1059156
11 13 8 308
,111384,769_
(9735543)
169700
M394526
$ 11 }' 49,072 1 (5943533) 16i0 $ 11-4137 839
50
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 5 — CAPITAL ASSETS
Total Depreciation Expense - Govenunental Activities _ $ 1,226,365
Business -Type Activities:
Water $ 3869941
Sanitary Sewer 2065070
Stonn Suer 94158
Total Depreciation Expense - Business -Type Activities 687.169
51
Beginning
Balance
Ending
Restated
Increases
Decreases
Balance
Business-Type Activities;
Capital Assets not being Depreciated:
Land
377X2
$ -
$ -
$ 377,82
Construction in Progress
39 032
17 ,14
-
2185174
Total Capital Assets net
being Depreciated
41 629 14
1795142
-
596,05
Capital Assets being Depreciated:
Buildings
8;.1209415
-
821 209415
Plant and Lines
20,966x294
-
2019669294
Machinery and Equipment
623,784
-
169894
606, 890
Sever Rights
_ 1,8293253
15015,0
298443253
Total Capital Assets
being Depreciated
_w 31,539,' 46
1901550
169894
321,5375,852
Less Accumulated Depreciation for:
Buildings
111128,394
1865261
-
173149655
Plant and Lines
394027692
4195759
-
358227451
Machinery and Equipment
2955463
443564
16X671
3239356
Sewer Rights
588 520
369585
625 1 5
Total Accumulated
Depreciation
5,4157069
_ 6879169
165671
612055567
Total Capital Assets bung
Depreciated, Net
_ 26,1249677
3272831
223
2694529285
Business -Type Activities
Capital Assets, Net
X26,541,591
$ 506,973
223
$ 27,048,341
Depreciation expense was charged to functions /programs of the City
as follows:
Governmental Activities:
General Government
$ 535891
Public Safety
87P294
Public works
9755122
Culture and Recreation
1091732
FDA
IM
Total Depreciation Expense - Govenunental Activities _ $ 1,226,365
Business -Type Activities:
Water $ 3869941
Sanitary Sewer 2065070
Stonn Suer 94158
Total Depreciation Expense - Business -Type Activities 687.169
51
CITY OF ST. JOSEPH
/NOTES TO THE FINANCU L STATEMENTS
December 3 I,, 2010
NOTE 6 — LONG- TERM DEBT
A. General Obligation Bonds
The City issues G.O. bonds to provide for financing improvement, development and street improvement
projects. Debt service is covered respectively by contract revenue, special assessments against benefited
properties, federal grants and lease revenue with any shortfalls being paid f om general taxes.
G.O. bonds are direct obligations and pledge the Full faith and credit of the City. These bonds generally
are issued as 5 to 15 year serial bonds with equal debt service payments each year.
Revenue bonds are issued by the City where the City pledges income derived from the acquired or
constructed assets to pay debt service including access and trunk charges and utility user fees.
B. Components of Long -Term Liabilities
Governmental Activities:
G.O. Bonds} Including Refiinding Bonds:
0.0. Refunding Bonds of 2003B
G.O. Certificates of Indebtedness
of 2008A
G.O. Capital Improvement Plan
Refunding Bonds 2009E
G .0. Certificates of Indebtedness
of2010A
Total G.O. Bonds
G.O. Special Assessment Bonds:
G.O. Improvement Crossover
Refunding Bonds of 20030
G.0, Improvement Bonds of 2005E
G.O. Improvement Bands of 2006C
G.O. Improvement Bonds of 2007A
0.0. Improvement Refunding
Bonds of 200713
G-0. lmprove nt Refunding
Bonds of 2009A
G.O. Improvement Bonds of 2010E
Total G.0, Special
Assessment Bonds
Public Project revenue Bonds:
EDA ]revenue Refunding Bonds of 2005A
Uaamortized Premiums,Discounts
Compensated Absences
Total Long -Tenn Liabilities,
Governmental Activities
Issue
Interest
original
Final
Principal
Due Within
Date
bate
Issue
Maturit y
Outstandin
One Year
07.128,103
1.50% 4.40%
$ 8 15,000
12/01/17
S 490,000
$ 602000
04/031-8
3.10 % - 3.50%
29021000
12 /0IA 3
18051000
602000
09.'03109
1.10 % - 3.75%
495,000
12101.'18
4461000
50,000
04.22110
2.75%
150,000
12, "01115
1500000
30,000
1 �265aO00
200,000
07/25Y'03
1.25 % -3.15%
750,000
12/01.+11
65 1-000
65,000
03.24,'05
2.50 % -4.40%
1,655,000
12.`01120
1,190,000
1001000
06/13/06
4.001%4.255/0
2,375,000
1101.21
12865,000
1351000
07,25,'07
4.00 % -4.13%
2,875,000
12.101.47
113551000
510,000
1114,'07
3.60 % - 3.90%
9809000
12/01/14
570,000
145,000
03119.'09
1.25 % - 2.90%
2,555,000
12101'17
222602000
300POO
M28/10
2.00 -3.25%
1,825,000
12101,26
178251000
45,000
911301000
1,300,000
03.'15/05
2.75 % -4.15%
6452000
12/0VI5
4251Y000
80,000
2g }0'71
-
311,'132
33,137
$ 11,159,803
„ $ 1,613,137
5
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENT
December 31, 2010
NOTE 6 -- LONG -TERM DEBT
B. Components of Long -Term Liabilities (Continued)
Long -term bonded indebtedness listed on the previous page and above were issued to finance acquisition
and construction of capital assets or to refinance (refund) previous bond issues.
The City issued the $ 1,82 5,000 of G. 0. hprovement Bonds 2 01OB for an advanced refunding of
$ 1,035,000 of the G.O. Improvement Bonds 2005B. The issue will be called on December 1, 2012.
The refunding was undertaken to reduce total future debt service payments. The refunding resulted in a
net present value cash flow savings of $ 3 8,368. The economic gain from the transaction was $ 40,472.
3
Issue
Interest
original
Final
Principal
Due Within
Date
Rate
Issue
Ilriaturi
Outstanding
one Year
Business -Type Activities:
G.O. Revenue Bonds:
G.O. Water Revenue Bonds of 2005D
X2,'15105
4.00 % - 4.25%
$ 4,595,000
12.'0112$
$ 4,595,000
$
G.O. Water Revenue Bonds of 2006A
0132106
3.50 % - 4.00%
3,575,000
11'01j'16
2,1250000
320,000
G.O. Sewer revenue Refunding
Bonds of 2009A
0311 9.'09
1.25 % -3.85%
45510000
X2,'01. 1
4203000
35,000
G.O. Water Revenue Refunding
Bends of 20090
10,20,'09
1.0 % -2.6%
425,000
12,'01116
370,000
55 000
,Total G.O. Revenue Bonds
79510,000
410,000
Motes Payable:
City of St. CIoud 2009E Bonds
1042609
2.0 %-4.0%
835,000
0$101119
755 }000
752000
City of St. Cloud 2010 Bonds
10.28/10
2.0 % -2.5%
180,000
08.'01120
180,000
20 000
Total ]dotes Parable
935P000
95,000
Unamortized Premium
603168
-
Compensated Absences
112,385
11,777
Total Business-T,,
pe Activities
8,617,553
516!1777
Total all Long -Term Liabilities
$ 19,777,356
$ 2.129,914
Long -term bonded indebtedness listed on the previous page and above were issued to finance acquisition
and construction of capital assets or to refinance (refund) previous bond issues.
The City issued the $ 1,82 5,000 of G. 0. hprovement Bonds 2 01OB for an advanced refunding of
$ 1,035,000 of the G.O. Improvement Bonds 2005B. The issue will be called on December 1, 2012.
The refunding was undertaken to reduce total future debt service payments. The refunding resulted in a
net present value cash flow savings of $ 3 8,368. The economic gain from the transaction was $ 40,472.
3
CITY OF ST, JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 6 — LONG-TERM DEIST
C. Changes in Long -Term Liabilities
Long -term 1tability activity for the year ended December 31, 2010 was as follows:
The General Fund typically liquidates the liability related to compensated absences
54
Beginning
Ending
Due Within
Balance
Additions
Reductions
Balance
One Year
Governmental Activities:
Bonds Payable.
General Obligation
$ 11340,000
$ 1 509000
$ 225,000
$ 1 y265,000
$ 200,000
G.O. Special Assessment Bonds
913553000
13$252000
2,0509000
951305000
13,3003000
Public Project Revenue Bonds
5009000
-
75,000
4255000
80-1000
Total Bonds Payable
11,1 95,000
1,975,000
2,35 0,000
10202000
1,5 80,000
Ltnamortized Prern ium s/Di s counts
422543
(10,896)
3o576
287071
Compensated Absences
288 14
181,
158 }176
311,732!-
3321
Total Goy =ernrnental
_
Aeti�, ities
11,525,189
2P 1451866
295 113752
11,1 59,803
1 }613 � 137
Business -Type Activities:
Bends Payable:
G.O. Utility Revenue Bonds
7,910,000
-
400,000
'7510,000
4109000
Notes Payable:
Water Filtration Plant Land
441000
_
44,000
-
City of St. Cloud Bands
-
11015P000
80,000
9353000
955000
Unamortized Premiums.giscounts
422987
273.838
10,657
6008
-
Compensated Absences
107 x'73
5'7,3 ��
527577
112,385
11777
Total Business -Type
�
Activities
104 560
11.100,227
5879234
8,617,553.
516,777
Total Long -Term Liabilities
$ 19,630,249
$ 3,246,093
_ $ 3,09SsG
$ 19,777,356
$ 2 }129,914
The General Fund typically liquidates the liability related to compensated absences
54
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL IAL TATEMENT
December 31, 2010
NOTE 6 — LONG-TERM DEBT
D. Minimum Debt Payments
Minimum annual principal and interest payments required to retire long -tern liabilities:
5
avenunental Activities
Year Ended
G.O. Government Activities
G.O. Special Assessment Bonds
June 3 0,
Principal
Interest
principal
Interest
2011
2001000
41410
130011000
3149203
2012
21ONO
35Y920
22401000
261 X468
2013
2101000
293753
860NO
178A48
2014
1553000
231420
820,000
15 1 fi25
2015
160,000
18J45
7305000
1251490
2016 -2020
330,000
219515
2fflO,000
3103716
2021-2025
-
&
50031000
379080
Total
$ 1.,265,000
17 163
9,130,000
19379,030
Governmental Activities
Year Ended
Public Project revenue Bonds
June 3 �,
prinel
Interest
Total
2011
805000
16443
12952056
2012
853000
139643
2,846ffll
2013
809000
105455
131368x656
014
9000
7X5
19 477 S0
2015
909000
35735
1,1 2751370
2016-2020
-
-
3x3421231
2021-2025
-
5373,080
Total
4 000
514611
1224209804
5
CITY OF ST, JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOT E 6 — LONG-TERM DEBT
D. Minimum Debt Payments (Continued)
Year Ended
June 30,
Business-Type Activities
Utility Revenue Bonds Notes Payable
Principal Interest Princi al Interest Total
2011
4109000
2923,954
95,000
55205
823 a 1 5 9
2012
4 0NO
2799861
901M0
24,150
82411011
013
440) 000
26506
K000
2273 5 0
8182046
2014
45511000
2491944
953000
20,550
820,494
015
475M00
232,994
1005000
17 850
8252844
016 -2020
2X55000
895.04
465po
41,000
35756,084
2021-2025
25555,000
405261
-
-
,9% 15
2026 - O 8
390 o
34 O
-
-
4249000
Total
7,510 ,9000
2q6564148
935.4000
151,105
$ 114252,253
E. Conduit Debt
Conduit debt obligations are certain limited obligation revenue bends or similar debt instruments issued
for the express purpose of providing capital financing for a specie third party. The City has issued
various revenue bends to provide funding to private sector entities for projects deemed to be in the
Public interest. Although these bends bear the name of the City, the City has no obligation for such debt.
Accordingly, the bends are net reported as liabilities in the financial statements of the City.
As of December 3 1, 2010, the City's conduit debt consisted of the following*
Commercial Development Revenue nue Note
(Independence Center), Series 2001 419} 191
Industrial Revenue Bonds (St. Joseph
Development, LL C), Series 2002 123953000
Total 1,8144191
i
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 1� 2010
NOTE 7 — RE SERVED FUND BALANCE ET ASSETS
Reserved/Designated Fund Equity
Find equity balances are classified on the following page to reflect the limitations and restrictions of the
respective funds.
A. Reserved. Fund Balance
Reserved For:
General Fund
Prepaid Expenses 205339
E. Ilesignated /Un.designated Fund. Balance
NOTE 8 — RISK ANA EMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance
Trust (LMCIT) with other cities in the state, which is a public entity risk pool currently operating as a
common risk management and insurance program. The City pays an annual premium to the LIM IT for
its insurance coverage. The LM IT is self - sustaining through commercial companies for excess claims.
The City is covered through the pool for any claims incurred but unreported, however, retains risk for the
deductible portion of its insurance policies. The amount of these deductibles is considered immaterial to
the financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three fiscal years.
The City's workers' compensation insurance policy is retrospectively rated. With this type of policy,
final premiums are determined after loss experience is known. The mount of premium adjustment for
01 o is estimated to be immaterial based on workers' compensation rates and salaries for the year.
At December 31, 2010. there were no other claims liabilities reported in the fiord based on the
requirements of GASB Statement. To. 10, which requires a liability for claims be reported if information
prior to the issuance of the financial statements indicates it is probable a liability has been inured at the
date of the financial statements and the amount of the loss can be reasonably estimated.
57
Desisted
Capital
Debt
Marking
State Collected
Revolving
Projects
Service
Capital
EDA Sales Tax
Loan
Undesignated Total
General Fund
$ 402,006
$ 1 50,000
$ 931,144
$ ti
$
$ 161,396 $ 1,644 .,536
G.O. Crossover Refunding Bonds
of 2009A
542x243
-
- 542,243
G.O. Improvcmcnt Bonds 2005E
-
1,5521P413
-
1,552,413
G.O. Iinprovetnent Bonds 2007A
-
385x554
-
385,554
Other Govermnental Funds
1,793,270
'
1,764,991
-
5,162 1,133,319
34,656
88,579 41P819,977
Total
2,195.276
$ 4,395,201
_ $ 931,144_
=L=J5 162 $ 1,133,319
34 656
$ 249,965 8s944,723
NOTE 8 — RISK ANA EMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance
Trust (LMCIT) with other cities in the state, which is a public entity risk pool currently operating as a
common risk management and insurance program. The City pays an annual premium to the LIM IT for
its insurance coverage. The LM IT is self - sustaining through commercial companies for excess claims.
The City is covered through the pool for any claims incurred but unreported, however, retains risk for the
deductible portion of its insurance policies. The amount of these deductibles is considered immaterial to
the financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three fiscal years.
The City's workers' compensation insurance policy is retrospectively rated. With this type of policy,
final premiums are determined after loss experience is known. The mount of premium adjustment for
01 o is estimated to be immaterial based on workers' compensation rates and salaries for the year.
At December 31, 2010. there were no other claims liabilities reported in the fiord based on the
requirements of GASB Statement. To. 10, which requires a liability for claims be reported if information
prior to the issuance of the financial statements indicates it is probable a liability has been inured at the
date of the financial statements and the amount of the loss can be reasonably estimated.
57
CITY of ST, JOSEPH
`VOTES To THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association
A. Plan Deser* tion
All Full -time and certain part -time employees of the City are covered by defined benefit plans
administered by the Public Employees' Retirement Association of Minnesota (PERA). PERA
administers the General Employees' Retirement Fund (GERF) and the Public Employees' Police and
Fire Fund (PEPFF), which are cost - sharing, multiple - employer retirement plans. These Plans are
established and administered in accordance with Minnesota Statutes Chapters 3 53 and 3 56.
GERF members belong to either the Coordinated or Basic Plan. Coordinated Plan members are covered
by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership are
covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by state statute and vest after three years of
credited service. The defined retirement benefits are based on a member's highest average salary for any
five successive years of allowable service, age and years of credit at termination of service.
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The
retiring member receives the higher of a step -rate benefit accrual formula (Method 1 ) or a level accrual
formula (Method ). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of
average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity
accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and
1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for
Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF
members, the annuity accrual rate is 3.0% for each year of service. For all GERF and PEPFF members
hired prior to July 1, 1989, whose annuity is calculated using Method 1, a full annuity is available when
age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic
and Coordinated Plan members hired prior to July 1, 1989. Normal retirement age is the age for
unreduced Social Security benefits capped at 66 for Coordinated Flan members hired on or after July 1,
1989. A reduced retirement annuity is also available to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. A single -life annuity is a
lifetime annuity that ceases upon the death of the retiree — no survivor annuity is payable. There are also
various types ofa oint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the Fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this scct-ion are current provisions and apply
to active Plan participants. Nested, terminated employees who are entitled to benefits but are not yet
receiving them are bound by the provisions in effect at the time they last terminated their public service.
58
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December I, 2010
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
PErA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF and PEPFF. That report may be obtained on the Internet at
www.mnpera.org, by writing to PErA at 60 Empire Drive, #200, St. Paul, Minnesota 55103-2088 or by
calling (651) 296 -7460 or (800) 652-9026.
B. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These Statutes
are established and amended by the State Legislature. The City makes annual contributions to the
pension plans equal to the amount required by state statutes. GERF Basic Flan members and
Coordinated Plan members were required to contribute 9. 1 % and 6.0 %, respectively, of their annual
covered salary in 2010. PEPFF members were required to contribute 9.4% of their annual covered salary
in 2010. In 201 O, the City was required to contribute the following percentages of annual covered
payroll: 11.78% for Basic Plan members, 7.0% for Coordinated Plan members and 14.1% for PEPFF
members. The City's contributions to the Public Employees' retirement Fund for the years ending
December 31, 2010, 2009 and 2008 were $ 509562, 46,555 and$ 47,466, respectively. The City's
contributions to the PEPFF for the years ending December 31, 2010, 2009 and 2008 were 60A61
$ 62,604 and 59,981, respectively. The City's contributions were equal to the contractually required
contributions for each year as set by state statute.
C. Refined Contribution Plan
The City provides pension benefits for its elected local government officials through a defined
contribution plan administered by the PErA. The public Employees' Defined Contribution Plan
(PEDCP) is a multi- employer tax qualified plan under Section 401(a) of the Internal revenue Code and
all contributions by or on behalf of employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less
administrative expenses. Minnesota Statutes Chapter 353D.03, specifies plan provisions, including the
employee and employer contribution rates for those qualified personnel who elect to participate. An
eligible elected official who decides to participate contributes % of salary which is matched by the
elected official's employer. For ambulance service personnel, employer contributions are determined by
the employer and for salaried employees must be a fixed percentage of salary. Employer contributions
for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are
paid for their services may elect to make member contributions in an amount not to exceed the employer
share. Employer and employee contributions are combined and used to purchase shares in one or more
of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan,
PE1 A receives % of employer contributions and twenty -five hundredths of I% of the assets in each
member's account annually.
59
CITY of ST. JOSEPH
NOTES To THE FINANCIAL TATEMENT
December 31, 2010
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association (Continued)
C. Defined Contribution Elan (Continued)
There is no vesting prod required to receive benefits in the PEDCP. Both the City and the elected local
government officials made the required 5% contribution, amounting to 1,321 from each source, or
2,642 in total. As of December 31 , 0 1 0 and for the fiscal year then ended, PERA held no securities
issued by the City or other related parties.
NOTE 10 — POST EI PLO YI NT HEALTH CARE PLAN
A. Plan Deseription
The City provides a single- employer defined benefit health care plan to eligible retirees. The Plan offers
medical overage. Medical coverage is administered. by Blue ros s E luc Meld. It is the City's policy to
periodically review its medical coverage, and to obtain requests for proposals in order to provide the
most favorable benefits and premiums for City employees and retirees.
F. Funding Policy
Retirees contribute to the health care plan at the same rate as City employees. This results in the retirees
receiving an implicit rate subsidy. Contribution requirements are established by the City, based on the
contract terms with Blue Cross Blue Shield. The required contributions are based on projected pay -as-
you -go financing requirements. For fiscal year 2010, the City contributed 6,291 to the plan. As of
December 31, 2 010, there were two retirees receiving health benefits from the City's health plan.
C. Annual oPEB Cost and Net OFEB obligation
The City's annual OPEE cost (expense) is calculated based on the annual required contribution (ARC)
of the City, an amount actuarially determined in accordance with the parameters of GASB Statement
No. 45. The City prospectively implemented this Statement during the 2009 fiscal year. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year
and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.
The table on the following page shows the components of the City's annual OPEB cost of the year, the
amount actually contributed to the plan, and changes in the City's net OPEE obligation to the plan.
rovii
CITY of ST, JOSEPH
NOTES To THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 10 — POST EMPLOYMENT HEALTH CARE PLAN
C. Annual OPEB Cost and Net OPEB Obligation (Continued)
ARC
57,158
Interest on Net OPEB Obligation
19864
Adjustment to AR
(2a695)
Annual OPEB Cost
56,327
Contributions Made
61291
Increase in Net OPEB Obligation
505036
Net OPEB Obligation - Beginning of Year
465603
Net OPEB Obligation - End of Year
96P639
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net
OPEB obligation for 2009 and 2010 was as follows:
Fiscal Year
Ended
12/31/09 $
12/31/10
Annual OPEB Employer
Cost Contribution
571158 $ 109555
56,37 69291
D. Funded Status and Funding Progress
Percentage of
Annual OPEB Cost
Contributed
18%
11%
Net OPEB
obigation
46,603
96,639
As of January 1, 2009, the most recent actuarial valuation date, the City had no assets deposited to fund
the Plan. The actuarial armed liability for benefits was 345,319 and the actuarial value of assets was
Q, resulting in an unfunded actuarial accrued liability UAAL) of 345,319. The covered payroll
(annual payroll of active employees covered by the plan) was 1,070,515, and the ratio of the 1_TAL to
the covered payroll was 32.3%.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality and the health care cost trend. Amounts determined regarding the funded status
of the plan and the ARC of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
The Schedule of Funding Progress — Other Post Employment Benefits, presented as required
supplementary information following the Notes to the Financial tatements, presents multi -year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative
to the actuarial accrued liabilities for benefits.
61
NOTES To THE FINANCIAL STATEMENTS
December 31, 20 1 0
NOTE 10 — POST EMPLOYMENT HEALTH CARE PLAIT
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short -term volatility in actuarial accrued liabilities, consistent with the
long -term perspective of the calculations.
At the January 1, 2009 actuarial valuation date, the projected unit credit with 30 year amortization of the
unfunded liability method was used. The actuarial assumptions included a 4.0% discount rate. The City
currently does not plan to prefLmd for this benefit., At the actuarial valuation date, the annual health care
cost trend rate was calculated to be 10% initially, reduced incrementally to an ultimate rate of 5% after
10 years. The UA L is being amortized as a level percentage of projected payroll on an open basis.
The remaining amortization period at December 31, 201 o was 28 years.
NOTE 11— COMMITMENTS
The City has entered into contracts for construction as follows:
Proj ect
North Corridor and C. AH 2 Realignment
Field Street Corridor Study
Southwest Beltway Study
16th Avenue Improvements
Total
Expended
Contract
through
Amount
12/31/10
Commitment
$ 3839172
3 3 6,o7o
47,102
3314189
2979183
34,006
54,375
10,890
4331485
550,417
442,550
107,867
2321460
On April 19, 2008, the City of St. Joseph entered into an agreement with the Cities of St. Cloud,
St. Augusta, Sartell, Sauk Rapids and Waite Park, As a part of this agreement, each party became
responsible for the repayment of its proportionate share of certain projects' funding secured by the City
of St. Cloud. The share includes bond issuance casts, finance fees and expenses and net interest costs.
Debt service payments to the City of St. Cloud shall be made in installments over a 20 year period,,
On February 26, 2010, the City of St. Cloud issued Public Facilities Authority (PFA) debt for
433 5 9, goo with payments commencing August 1, 2010. The project began construction in 2010 and
is expected to be completed in 2012. The City's portion of the debt including interest is 5,517,309.
The interest rate on the note is 1.771 %. The City is obligated to the City of St. Cloud for the City of St.
Joseph's share including the debt issuance costs, financing Fees and expenses and net interest costs.
During 2010, the City made payments of 6,080 to the City of St. Cloud.
RJ
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2010
NOTE 12 — RELATED PARTY TRANSACTION
The St. Joseph EDA has issued Public Project revenue Bonds of 2005A. These Bonds are to finance
the City Hall and maintenance facility projects. Dental payments are due from the City to the St. Joseph
EDA. The City will own the projects upon completion of the rental payments. Since the St. Joseph
EDA is reported as a blended component unit of the City the lease transactions are not reported. The
debt and projects are recorded as though part of the City.
63
(THIS PAGE LEFT BLANK INTENTIONALLY)
DIM 11
REQUIRED SUPPLEMENTARY INFORMATIQN
Twi
CITY OF ST. JOSEPH
SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS
December 31, 2010
This Schedule was implemented in 2009. The City has had one actuarial study complete to date;
therefore, the Schedule contains only one year of data. See Note 10 in the Notes to the Financial
Statements for more details on this Schedule,
66
Actuarial
IJAAL as a
Actuarial
Accrued Liability
Unfunded
Percentage of
Actuarial Value of
(AAL) -
AAL
Funded
Covered
Covered
Valuation Assets
Entry Age
(UAAL)
Ratio
Payroll
Payroll
Date a
(b-a)
(a/b)
(c )
((b-a /c
12/31/09 $
$ 3453319
$ 345,319
0.0%
$ 1 fflOO 515
32.3%
This Schedule was implemented in 2009. The City has had one actuarial study complete to date;
therefore, the Schedule contains only one year of data. See Note 10 in the Notes to the Financial
Statements for more details on this Schedule,
66
SUPPLEMENTARY INFORMATION
7
CITY OF ST. JOSEPH
COMBINING BALANCE SHEET -
NONMMIIR GOVERNAMENTAL FUND
December 31, 2010
Special Revenue
68
Economic
TIF 1 -4 St.
TIF 2 -1
Development
Joseph
Millstream
State Collected
Authority
Development
Shops and
Sales Tax
15
156)
_Lofts (157)
(200)
ASSETS
Cash and Investments
U41
$ 41,593
43.021
$ 1 }073,154
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
-
-
Interest Receivable
31
106
5
2x815
Due from Other Funds
-
_
_
-
Due from Other Governments
_
_
571.450
Dotes Receivable
-
_
_
_
Total Assets
$ 8x872
$ 413699
4 026
$ 15133,319
LIABILITIES AND FUND BALANCES
Liabillties
Accounts Payable
$ 35.710
Contracts payable
-
Due to Other Funds
Deferred Revenue
-
Total Liabilities,
3,710
-
_
- ■
Fund Balances
Unreserved, Reported in:
Special Revenue - Designated
5y162
1P1331319
Special Revenue - Undesignated
-
419699
4,026
Debt Service - Designated
Capital Projects - Designated
Taal Fund Balances
53162
410
4x026
13,1335319
Total Liabilities and
Fund Balances
8,872
$ 413699
47026
131333,319
68
Special Revenue
Park
Charitable
City Street
Dedication
Recreation
Gambling
Beautification
Revolving
(205)
Center (21 91
.._ (215)
(232)
Loan (
Total
$ 345861
$ 515261
$ 47989
$ 559
$ 343,566
1,253 }745
107
141
14
-
90
32309
-
-
-
-
-
57,4511
-
-
2 -P
203715
225715
$ 349968
$ 51,4 2
$ 57003
$ 25,559
$ 55 371
$ 193375219
$ 78
$ -
-
$ -
$
$ 35788
"
495.000
-
495000
"
2;000
20,715
22;715
78
-
-
51,001
2 %715
752503
- - - 34656 151733137
51402
34,890 , 5)003 (48,441) - 882579
34;890 511.402 53003 (48,441) 345656 1,261,716
$ 349968 $ 513402 $ 57003 $ 23,559 $ 553,371 $ 1,3372 19
r�
CITY OF ST, JOSEPH
COMBINING ]BALANCE SHEET -
NONI AAIOR GOVERNMENTAL FUNDS
December 31, 20I 0
ASSETS
Cash and Investments
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable
Contracts Payable
Due to Other Funds
Deferred Revenue
Taal Liabilities
Fund Balances
Unreserved, Reported in:
Special Revenue - Designated
Special Revenue - Undesign.ated
Debt Service - Designated
Capital Projects - Designated
Total Fund Balances
Taal Liabilities and
Fund Balances
Debt Service
34%472
85789
1323246
G.O.
G.O.
City Hall
132 246
Improverneni
h provement
G.O. EDA
Fire Hall G.O.
Crossover
Refunding
Refding
Refunding
Refunding
Bonds of
Bonds of
Bonds of
Bonds of 20030
2007E (3202
2005A (322 )
2003E (331
(332)
$ 3395418
85361
131781
671,858
276
23,908
945
374
228
Y
2
201;551
-
125688
130$4
19
424
285
99
538
170
57
5429656
$ 11,926
$ 1339320
8 1,264
129
129
129
129
_ 2023055
-
27908
945
13,064
2029184
3,037
13074
131193
34%472
85789
1323246
689071
3403472
83789
132 246
68ffl 1
5423666
113526
$ 133,320
81P264
70
Debt Service
G.O.
Certificates
G.O.
95000
G.O. Capital
of
G.O.
L764,991
1
7651023
Improvement
G.O. Certificates
improvement
Indebtedness
Improvement
Debt Service
19+764799 1
Bonds of 20060
of Indebtedness
Plan Bonds of
of 2010A
Bonds of
Relief Fund
23067 $ 31.098
_- (3 3 8) --
of 2008 (3�
2009B (343
(344)
2010E (34
(3 90)
Total
$ 752 *267
$ 87782
$ 13
35038
$ 977327
$ 288 aol 9
$ 1,i96r904
13610
12606
13 721
-
-
762
10)202
1,52+7
-
-
-
-
1 }757
4893982
-
-
-
2754579
1%827
999,627
23.161
33
17
60
462
37369
71.914
-
-
-
-
49,000
4,000
1% 723
314
316
-
116
125333
$ 1,2583,270
$ 1%735
$ 23067
$ 3,098
$ 3731368
$ 3 7 133
$ ,77+75. 3+7
$ 129
$ 129
$ 129
$ 129
$ 129
$ -
$ 13161
4939118
19606
_ 11721
2751.579
209589
589
1 011 585
9
493,247
1,735
1,850
1 29
275,7080
20589
_
1 01 2746
7653023
95000
217 2N9
9 660
34 544
L764,991
1
7651023
95000
217-
1 7 23969
973.660
3405544
19+764799 1
$ 1,258, 70 $
1%735 $
23067 $ 31.098
$ 3737368
$ 361 }133
$ 2577+7,73+7
71
CITY of ST. JOSEPH
COMBINING BALANCE SHEET -
NoNMAJOR GOVERNMENTAL FUNDS
December 31, 2010
Ca ital Projects
72
Nortbland
Jade Road
2010A
16th Avenue
Heights/
Street
Equipment
Street
Transportation
InTrovements
Certificates
Improvements
..�_ Studies {435 �
(441
444)
., (445)
_
ASSETS
Cash and Investments
$ 2872130
$ 4119831
$ 22067
2253166
Taxes Receivable - Delinquent
-
-
_
Special Assessments Receivable:
Delinquent
Deferred
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
Total Assets
287,130
$ 411, 831
$ 23067
2253166
LIABILI'T'IES AND FUND BALANCES
Liabilities
Accounts Payable
$ 196
$ _
2,067
$ 809
Contracts Payable
2,298
-
27,072
Due to Other Funds
_
Deferred Revenue
_
_
_
Total Liabilities
25494
2,067
271881
Fund Balances
Unreserved, Reported in:
Special Revenue - Designated
Special Revenue - Undeslgnated
-
-
Debt Service - Designated
-
_
-
Capital Projects - Designated
2849636
411,831
-
197,285
Total Fund Balances
284,636
4115831
-
1973.285
Total Liabilities and
Fund Balances
$ 2875130
411,831
$ 2 }067
$ 225x166
72
Capital Projects
General
'Total
Capital Outlay
Water Acccss
Sewer Access
Govemmental
(490)
Fund 501)
Fund (50)
Total
Funds
$ 264ai11
$ 714
$ 6422. 16
$ 13,834,235
$ 437843884
-
-
-
1 %202
-
-
-
13757
-
-
-
.
999,627
1,054
1,9 14
2,96$
145191
-
.
-
-
4,000
-
-
-
695783
-
-
-
223715
$ 2643611
$ 19768
$ 6443630
$ 1,8373.203
$ 5,9523.159
$ 117491
$ -
$ -
$ 142563
$ 191512
-
-
2 %370
295370
-
-
-
493000
-
1 }034}300
1131491
-
-
435.933
1x1322.182
-
-
1 .)173x137
-
-
-
$$,579
-
-
-
L764,991
1
253,120
1, 768
6449630
L793,270
1,79392" 0
2533120
1,68
644_630
157930270-
,+793,2'7
49819197
$ 2649611
$ 1,768
$ 6443630
$ 13,8375203
$ 5.P9523159
73
CITY OF ST. JOSEPH
COMBINING STATEMENT OF RE ENUES� EXPENDITURES AND GRANGES IN FUND BALANCES -
NONMA,IOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2010
Special Revenge
Economic
TIF 1 -4
TIF 2 -1
State
Development
St. Joseph
Millstream
Collected
Authority
Development
Shops and
Sales Tax
REVENUES
150)
(156)
Lofts (157)
(200)
Property Taxes
$
$ _
$ _
-
Tax Increments
68,380
31 }753
-
Sales Taxes
-
-
2105109
Special Assessments
_
Intergovernmental
-
611
_
Charges for Services
_
-
Miscellaneous:
Investment Income
116
726
40
2052$7
Revolving Goan repayments
-
_
_
Other
-
Total Revenues
116
693106
i 322404
y
2901.396
EXFENDITURES
Current
Culture and Recreation
Economic Development
49719
61,736
28 850
-
Debt Service
Principal
Interest and Other Charges
_
_
_
Capital Outlay
-
General Government
-
Public Safety
-
Public Works
-
Culture and Recreation
_
~
+Yy� /}y ]8
33,x$4
Total Expenditures
4 %719
61,736
25, 50
33,284
Excess of Revenues Over
(Under) Expenditures
(493603)
71370
35554
257,112
OTHER FINANCING SOURCES (USES)
Sale of Property
_
_
_
Bonds Issued
Bond Premium
_
_
Transfers In
51 � 13 7
_-
Transfers Out
-
_
165436
Total Other Financing Sources (Uses)
515137
_
-
(86�
Net Change in Fund Balances
19534
79370
3,554
170,676
FUND BALANCES
Beginning of Year
35628
34,329
472
9621643
End of Year
5,162
41,699
$ 43026
$ 1:11333319
74
Park
Dedication Recreation
(205) Center (2 1 0)
642 968
1,641 - 968
Special Revenue
Charitable City Street
Gambling Beautification Rcvolving Loan
1 (250) Total
100,133
270,1 09
' - 611
108 _ 537 23,424
3 960 1 OAA
108 - 4,497 3993236
1,569 - - - 1 X569
- 140,305
12003 459287
13 5572 - 187,161
(113,931) 968 108 - 4549
- 51}137
86,43
(353299)
( 11,931) 968 108 - 4)497 176,776
465821 5 %434 4 }89 48,441) _ 3% 159 150842940
345.890 511402 51003 (48,441) 34,656 1}261,1 6
75
CITY OF ST. JOSEPH
COMBINING STATEMENT OF REVENUESy EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2010
Debt Service
Excess of Revenues Over
(Under) Expenditures
(95686)
G.O.
G.O.
City Hall G.O.
Bends Issued
Improvement
Bond Premium
Improvement
EDA
1%100
Crossover
_
Refunding
Refunding
Fire Hall G.O.
Refunding
Bonds of
Bonds of
Refunding Bonds
Bonds of 20030
007B (320)
2005A (322)-
of 2003B (331)
(332)
REVENUES
Property Taxes
71999
97a 14
3141
$,
Tax Increments
_
_
Sales Taxes
_
_
Special Assessments
615363
-
-
142823
Intergovernmental
204
23520
781
240
Charges for Services
-
353979
Miscellaneous-
Investment Income
71570
235
2,970
1,920
Devolving Loan Repayments
-
-
Other
Total Revenues
772136
1005569
703146
269473
EXPENDITURES
Current
Culture and Recreation
_
_
Economic Development
-
-
_
Debt Service
Principal
145,000
75 }000
55,000
60 000
Interest and Other Charges
27,822
19,555
213107
41197
Capital Outlay
General government
_
Public Safety
_
Public Words
_-
Culture and Recreation
_
Total Expenditures
172 822
945555
7 � 107
64 187
Excess of Revenues Over
(Under) Expenditures
(95686)
OTHER FINANCING SOURCES (USES)
Sale of Property
_
Bends Issued
_
Bond Premium
_
Transfcrs In
1%100
Transfers Out
_
Total Other Financing Sources (Uses)
19,100
Net Change in Fund Balances
(76,586)
FUND BALANCES
-n 9 0
63014 (53961) (373714)
T
62014 (5,961) (37714)
eg ening of I CA 4175u5 2J75 138,207 105,7$5
End of Year 340,472 $ $1789 S 132246 682071
76
Debt Service
fix. o.
G.O.
G.O.
Certificates of
G.O. Capital
G.O.
G.O.
Certificates of
Improvement
Indebtedness
Itnprovement
Certificates of
Improvement
Debt Service
Indebtcdness of
Bends of
of 2008A
Flan Bonds of
Indebtedness of
Bonds of 2010B
Relief Fund
2006E (337)
20060 (338)
(342)
2009B (343)
2010A (344)
63,+764
-
$ 56,647
�
$ 6 %914
z
$ 56x931
$
$ -
$ 864
-
76,636
-
-
81,105
3,348
1 }666
13,464
15684
15464
-
-
-
263
14,906
169
312
932
45049
6,370
663683
14,653
6 *667
585707
932-
3
86x154
1% 582
a
66,000
1355000
55 *000
50,000
-
-
-
2A62
82 ,1818
81254
169187
2 }879
321246
257
67,462
21+7 }818
633264
665187
2,879
32,246
257
0 779)
(68,165)
(5 87)
(75480)
( 19947)
52X8
10,325
4,916
36 *383
_
-
-
8,369
-
-
3 %000
-
-
-
142,969
71629)
-
-
-
-
-
( 7,629)
3000
-
_
45916
44,762
142596T
(91405)
(38,165)
(587)
(7,480)
2,969
97}66
1531294
93408
8035188
x,587
7,697
-
-
187,250
$ -
$ 765,023
$ 95000
$ 217
$ 23969
$ 97,660
3403544
77
CITY OF ST. JOSEPH
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
ONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2010
Debt Service Capital Projects
Northland
Jade Road
2010A
Heights/
Street
Equipment
Transportation
Improvements
Certificates
Total Studies (435)
(441)
(444)
REVENUES
Property Taxes $ 3841,839
Tax Increments _
Sales Taxes _ -
_
Special Assessments 2379275
Intergovernmental %913
Charges for Services 35,979
Miscellaneous:
Investrnent Income 39,696 _
Revolving Loan Repayments -
�tlYer
Total Revenues
707,702
EXPENDITURES
Current
Culture and Recreation
_
Economic Development
Debt Service
Principal
64%000
Interest and Other Charges
2173,774
Capital Outlay
General Government
_
Public Safety
_
Public works
_
Culture and Recreation
Total Expenditures
8579774
Excess of Revenues Over
(Undcr) Expenditures
(1503072)
OTHER FINANCING SOURCES (USES)
Sale of Property
Bonds Issued
41 x299
Bond Premium
83369
Transfers In
1922069
Transfers Out
(7 }629)
Total Other Financing Sources (Uses)
2343108
Net Change in Fund Balances
84,036
FUND BALANCES
- 7 ;187
- - 72,531
- 2,200
26,368 1,159 315267
(26368) (1,159) (163,597)
33, 1 60
145,084
- (14,647)
1633597
(265368) (1;159)
Beginning of Year 15680,955 311,004 412 }990 -
End of Year 1 X7645991 $ 2845636 A 411,831 S ..
78
Capital Projects
16th Avenue
- 741.591
74,591
111%515 -
- 13,715
Street
90,506
6949089
694,f89
Total Other
Improvements
General Capital Water Access
Sewer Access
- 833,994
Governmental
(445)
Outlay (490 ) -Fund(501)
Fund (502)
Total
Funds
$ -
- $ -
$ -
$ -
$ 3843839
`
-
-
(528 3914)
100,133
..
_
..
-
270,1 09
7669693
-
-
-
237,275
(365630)
-
-
-
10,524
-
- 293550
163250
45;800
81,779
253,120
_ 7,054
133420
20,474
833594
-
-
-
3,960
569
- -
-
569
1x568
569
365604
29,670
66,843
131732781
538,789
538, ?89
(538,220)
11569
14,305
6402000
7,187 224,961
22060
- 741.591
74,591
111%515 -
- 13,715
139715
90,506
6949089
694,f89
- -
^_ 44,1412
893699
104,081
- 833,994
1,8783929
-
(1 049081) 36,604
29,670 076'7,151 }
(705,148)
-
3} 100
-
36,260
36,260
7533617
-
-
898,701
9403000
-
-
-
-
8,369
-
1615837
-
161,837
405,43
(18,11)
(429,855)
66,300
(528 3914)
(62 ,919
735,505
164593+7
(429,855)
(665300 )
5671.884
7669693
1971.285
X0,856
(393,251)
(365630)
(1995267)
61,545
1921264
395,019
681,260
13992,537
4,+758,432
19+75285
253,120
$ 1,768
644,630
$ 1, 793,270
$ 49819,977
VV
CITY OF ST, JOSEPH
SCHEDULE OF REVENUES, EXPENDffURES AND
GRANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2010
REVENUES
Property Taxes
Sales Taxes
Special Assessments
Franchise Fees
Licenses and Perrnits
Intergcvennental Revenue:
Local Oovermn.ent Aid
Market Value Credit
PERA Aid
Fire Aid
Police Aid
Federal Grants
State Grants
Other Grants and Aids
Total Intergovernmental revenue
Charges for Services:
General Oovennnent
Public Safety
Public Works
Culture and Recreation
Total Charges for Services
Fines and Forfeitures
Miscellaneous revenues:
Investment Income
Contributions and Donations
Other
Total Miscellaneous Revenues
Total revenues
EXPENDITURE
General Government
Mayor and Council
A `strative and Finance
Other General Govermnent
Capital Outlay
Total General Covemment
80
Variance with
Original
Actual
Final Budget -
Bud et
Final dud et
Amounts
Over Linder
1,2771,635
11.2773.635
$ 1,189,453
$ ($8,182)
125
125
237
112
1,500
1,500
20,349
185849
1013500
101,500
112,155
10,655
154450
1511,450
793330
(725120)
645,150
6455150
645;.151
1
-
315130
313.130
1,540
11.540
11541
1
393000
39)000,
37,814
( 1,186)
435500
435500
54,160
10,660
33800
3,800
11,511
73711
6,200
63,200
63180
20)
8,950
8,950
79745
11205
7483140
7483140
795,232
472092
293,550
291.550
30,336
786
1995350
19 %350
19%250
(100)
2,775
29775
3,279
504
59500
5,500
59922
422
2372175
237,175
238,787
1;612
78,500
+785500
74,210
(41290)
44;000
44,000
38,652
(53348)
185100
183100
21,897
3,797
49550
49550
363823
32,273
66,65
66 }650
97,372
30).722
2,662, 675
22.662 }675
23607J25
(55,550)
73 }605
732605
67,852
(5)753)
3463060
346,060
3335132
( 1 2,928)
1125035
1129035
1243,086
12X1
65000
15000
-
I p
5371,700
532700
525,07F
(7,630)
80
CITY OF ST, JOSEPH
SCHEDULE OF RE ENUE 9 EXPENDITURES AND
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2010
EXPENDITURES
Public Safety
Police:
Current
Capital Outlay
Total Police
Fire:
Current
Capital Outlay
Total Fire
Other:
current
Capital Outlay
Total Other
Total Public Safety
Public Work
Streets and Highays:
Street Maintenance and Storm Sewers
Snow and lee Removal
Street Engineering
Street Lighting
Capital Outlay
Total Streets and Highways
Culture and Recreation
Current
Capital Outlay
Total Culture and recreation
Total Expenditures
Excess of Revenues Over Expenditures
OTHER FINANCING BOUNCES (USES)
Sale of Property
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund. Balances
FUND BALANCES
Beginning of Year
End of Year
Variance with
Actual Final Budget -
Original Budget Final Budget Amounts Over Under
929,740 9293740 8503 738
183.440 - -
948,180 9291.740 8503738
3515590 3513590
353.800 359800
3 873.3 90 387,390
106,825
^ ^n
i V ■ } Leif V
1,443,395
305,557
1 1 ^ .ff n
(79,002)
(79,002)
(463033)
(24, 742)
(70,775)
1063825 106,387 (438)
10,825 1067387 438
1,4231955 1,273,740 (I 502 15)
2111.870
2 113870
2097988
( 1,882)
71,660
71,660
86,886
15,226
373000
37,000
513,892
145892
42,500
42x500
45,154
25654
873375
75,000
383561
36343
4503405
438,030
4325481
(53549)
183,270
183,1270
197,938
149668
183375
-
-
2013.645
183P270
197,93F_
97,93
14,668
236333145
295773,955
23429122
148}726)
295530
84J20
1773896
935176
250 250 - (250)
143000 143000 25,741 11,"741
(423010) (425010) (1985 15 6,31 7
(275,760) 275760 172,58 144382
1,+770 _ 565960 53.310 513 650)
$ 11.664,875
81
(THIS PAGE LEFT BLANK INTENTIQNALLY)
8
I�DV
_Erhert advice. When you need it.'
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS EASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the financial statements of the governmental activities, the business -type activities,
each major fund and the aggregate remaining fund information of the City of t. Joseph, Minnesota as
of and for the year ended December 31, 2010. and have issued our report thereon dated April 19, 011.
We con F U.S. , , p
ducted our audit m accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
�� tats.
General of the Unit p
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the City's internal control over financial reportffig
as a basis for designing our auditing procedures for the purpose of expressing an opinion on the financial
statements but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
City's internal control over financial reporting.
Our consideration of the internal control over financial reporting was for the limited purpose described
in the preceding paragraph and was not dcsigned to identify all deficiencies in internal control over
financial reporting that might be significant deficiencies or material weaknesses and, therefore, there can
be no assurance that all deficiencies, significant deficiencies or material weaknesses have been
identified. However, as described in the accompanying Schedule of Findings and Responses on Legal
Compliance and Internal Control, we identified a certain deficiency in intcrnal control over financial
reporting that we consider to be a material weakness,,
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect misstatements on a timely basis. A material weakness is a deficiency, or combination of
deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of
the financial statements will not be prevented or detected and corrected on a timely basis. we consider
the deficiency described in the accompanying Schedule of Findings and Responses on Legal Compliance
and Internal Control to be a material weakness, Audit Finding 06-01.
83
Ys��DV
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance that are required to be reported under
Government Auditing Standards.
We noted certain additional natters that we reported to management of the City in a separate letter dated
April 19, 2011.
The City's response to the findings identified in our audit is described in the accompanying Schedule of
Findings and Responses on Legal Compliance and Internal Control. We did not audit the City's
response and., accordingly, we express no opinion on it.
This report is intended solely for the information and use of the City Council, management, federal and
state oversight awarding agencies and pass - through entities and is not intended to be and should not be
used by anyone other than these specified parties
;604,0"b., De U)AMAOL, V-,�, (Xq6
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
April 19, 2011
84
kj:)v
�et-t advice. When you need itt.
REPORT ON LEGAL COMPLIANCE
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the financial statements of the governmental activities, the business -type activities,
each major fund and the aggregate remaining fund information of the City of St. Joseph, Minnesota, as
of and for the year ended December 31, 20 10, and have issued our report thereon dated April 19, 2011.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
provisions of the Minnesota Legal Compliance Audit Guide or Political Subdivisions, promulgated by
the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included such tests of
the accounting records and such other auditing procedures as we considered necessary in the
circumstances.
The Minnesota Legal Compliance Audit Guidefor Political Subdivisions covers seven categories of
compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public
indebtedness, claims and disbursements, miscellaneous provisions and Tax Increment Financing. Our
study included all of the listed categories.
The results of our tests indicate that for the items tested, the City complied with the material terms and
conditions of applicable legal provisions.
This report is intended solely for the information and use of the City Council, City administration and
the Off'ico of the State Auditor, and is not intended to be and should not be used by anyone other than
these specified parties.
b, U.)" # , , 491.0
K,ERN, DEWE TEI , VIERE, LTD.
St. Cloud, Minnesota.
April 19, 2011
16 J
CITY OF ST, JOSEPH
SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
December 31, 2010
CURRENT AND Pilaf YEAR INTERNAL CONTROL FINDING:
Material Weakness:
Audit Finding 06 -01— Improve Segregation of Accounting Duties
Adequate segregation of accounting duties is in place when the four areas of a trans acti on have been
separated: authorization, custody, recording and reconcillatiom
As part of this year's audit, we reviewed the City's documentation of its internal control over
significant areas including: cash receipts, cash disbursements, capital assets, payroll and utility
billing. Some of the areas in which we noticed a lack of segregation or an overlap in duties are as
follows:
Cash Receipts
The office Specialist enters cash and checks into the paint of sale system, reconciles the entries
and prepares the deposit. It was also noted the Utility Billing Clerk creates invoices for
miscellaneous billings but does not retain the information used to create invoices. The Finance
Director takes deposits to the bank.
Cash Disbursements
The Finance Director enters invoices into the system, generates checks and a check register. The
Finance Director is an authorized signer and approves some invoices for payment. The City
Admm' istrator also has access to generate checks and is an authorized signer. At year -end, the
Finance Director reconciles and records accounts and contracts payable.
Capital Assets
The Finance Director records, processes, reconciles and posts journal entries related to capital
assets.
Payroll
The Finance Director enters employee's time, processes and posts payroll, generates a payroll
report, distributes pay stubs to employees and posts the j ournal entries related to payroll. The
City Administrator reviews payroll prior to payment being made. The City Administrator
reconciles salaries payable and compensated absences at year -end.
w
�*
CITY of ST. JOSEPH
SCHEDULE of FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
December 3L 2010
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING.
Material Weakness: (Continued)
Audit Finding 06-01 — Improve Segregation of Accounting Duties (Continual)
Utility B
The Utility Billing Clerk enters new accounts into the utility billing system and uploads meter
readings via interfacing with electronic readers* The Utility Billing Clerk enters any rate changes
to the system} The Utility Billing Clerk can enter manual adjustments,, calculates and enters final
bills, prints and nails utility bills, reconciles receipts to billed amounts and enters receipts
batches.
Cash Reconciliation and Access
T'he Finance Director performs the above noted responsibilities, while also reconciling cash and
generating manual journal entries. The Finance Director also has the ability to wire money either
for payments or for investment transactions,,
City's Response:
The City Council and City staff are aware of the limited personnel handling the City's financial
matters. The processes and internal controls are reviewed frequently to look for ways to improve
internal controls. The department heads, City Administrator and City Council each have active roles
in monitor'ng the financial matters of the City to provided additional oversight. it is unlikely
complete segregation of accountings duties will be achieved due to the cost of hiring several
additional staff.
87
CITY of ST, JOSEPH
SCHEDULE of FINDINGS AND SPONSES ON
L E GAL COMPLIANCE AND INTERNAL CONTROL
December 3 1, 20 1 0
PRIOR YEAR LEGAL COMPLIANCE FINDING:
Audit Finding 07 -0 — Update Collateral Assignment Agreement
Minnesota Statutes 118A. o3, suhd* 4 requires that the Witten assignment shall recite that, upon default
the financial institution shall release to the government entity on demand, free of exchange or other
charges, the collateral pledged.
During our 2009 audit, it was noted the City's collateral assignment agreement with First State Bank did
not require the release of collateral on demand upon default.
Corrective Action Taken:
We noted the City updated its collateral assignment agreement with First State Bank in 2010, requiring
the release of collateral on demand upon default.
* i
F* *i