HomeMy WebLinkAbout2014 Audit Report
CITY OF ST. JOSEPH
Stearns County, Minnesota
AUDITED FINANCIAL STATEMENTS
For the Year Ended December 31, 2014
CITY OF ST. JOSEPH
TABLE OF CONTENTS
ELECTED OFFICIALS AND ADMINISTRATION
................................................................... 1
INDEPENDENT AUDITORS REPORT
..................................................................................... 2
MANAGEMENTS DISCUSSION AND ANALYSIS
................................................................. 5
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position ...................................................................................................... 24
Statement of Activities ........................................................................................................... 25
Fund Financial Statements:
Balance Sheet Governmental Funds ................................................................................... 26
Reconciliation of the Balance Sheet to the Statement of Net Position
Governmental Funds ............................................................................................................ 27
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds ............................................................................................................ 28
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances to the Statement of Activities Governmental Funds .......................................... 29
Statement of Revenues, Expenditures and Changes in Fund Balances Budget
and Actual General Fund .................................................................................................. 30
Statement of Net Position Proprietary Funds ...................................................................... 31
Reconciliation of the Statement of Net Position Business-Type Activities ........................ 32
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary
Funds .................................................................................................................................... 33
Reconciliation of the Statement of Revenues, Expenses and Changes in Net
Position Business-Type Activities .................................................................................... 34
Statement of Cash Flows Proprietary Funds ....................................................................... 35
Notes to the Financial Statements ................................................................................................ 37
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress Other Post Employment Benefits ............................................. 68
SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget
and Actual General Fund ....................................................................................................... 70
Combining Balance Sheet Nonmajor Governmental Funds.................................................... 72
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds ............................................................................................... 78
CITY OF ST. JOSEPH
TABLE OF CONTENTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
............................................................................... 84
REPORT ON LEGAL COMPLIANCE
........................................................................................ 86
SCHEDULE OF FINDING AND RESPONSE ON INTERNAL
CONTROL
.....................................................................................................................................87
CITY OF ST. JOSEPH
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 2014
Elected OfficialsPositionTerm Expires
Rick SchultzMayor January 2015
Robert LosoCouncil MemberJanuary 2017
Renee SymanietzCouncil MemberJanuary 2017
Steve FrankCouncil MemberJanuary 2015
Dale WickCouncil MemberJanuary 2015
Administration
Judy WeyrensCity AdministratorAppointed
Lori BartlettFinance DirectorAppointed
1
INDEPENDENT AUDITORS REPORT
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of St. Joseph,
Minnesota, as of and for the year ended December 31, 2014, and the related Notes to the Financial
S
Contents.
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the fi
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the City
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the City.An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City of St. Joseph, Minnesota, as of December 31,
2014, and the respective changes in financial position and, where applicable, cash flows thereof and the
budgetary comparison for the General Fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the M
Discussion and Analysis, which follows this report letter, and the Schedule of Funding Progress - Other
Post Employment Benefits on page 68 be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board (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
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
coniries, the basic financial statements and other
knowledge we obtained during our audit of the basic 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of St. JosephThe combining and individual
nonmajor fund financial statements are presented for purposes of additional analysis and are not a
required part of the basic financial statements.
The combining and individual nonmajor fund financial statements are the responsibility of management
and were derived from and relate directly to the underlying accounting and other records used to prepare
the basic financial statements. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
3
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated April 10, 2015
on our consideration of the City of St. Josephs internal control over financial reporting and on 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
internal control over financial reporting or on compliance.That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City of St.
internal control over financial reporting and compliance.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
April 10, 2015
4
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
statements this narrative overview and analysis of the financial activities of the City of St. Joseph for the
fiscal year ended December 31, 2014.
FINANCIAL HIGHLIGHTS
Key financial highlights for 2014 include the following:
The assets of the City of St. Joseph exceeded its liabilities at the close of the most recent fiscal year
by $ 30,413,410. Of this amount, $ 2,783,993 may be used to meet gove
obligations to citizens and creditors (unrestricted net position).
net position decreased by $ 12,559 from 2013 to 2014. The decrease is due
to long-term debt payments and depreciation expense much higher than capital asset additions.
combined ending fund balances of $ 6,320,214, a decrease of $ 53,616. Of this amount $ 1,090,232
is unassigned discretion. The remaining balance of $ 5,229,982 is
set aside for specific future expenditures.
At the end of the current fiscal year, unassigned fund balance for the general fund was $ 1,090,634
or 41.1% of total general fund expenditures ($ 1,109,817 or 47.3% excluding the fire and PEG
Access funds).
long-term debt decreased by $ 4,097,315 during the current fiscal year.
The decrease was due to a debt paid off early and an advanced refunding bond paid that were less
than debt issued in 2014. The debt payments exceeded new debt issued.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of
are comprised of three
components: 1) government-wide financial statements, 2) fund financial statements and 3) Notes to the
Financial Statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.
Government-Wide Financial Statements.
The government-wide financial statements are designed to
provide readers with a broader overview of the C
private-sector business.
The Statement of Net Position
liabilities, with the difference between the two reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the City of
The Statement of Anet position changed
during the most recent fiscal year. All changes in net position 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).
5
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
Both of the government-wide financial statements distinguish functions of the City of St. Joseph 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 of St. Joseph include general
government, public safety, public works, economic development, culture and recreation, and interest on
long-term debt. The business-type activities of the City of St. Joseph include water, sanitary sewer,
refuse, storm water and street light utility services.
The government-wide financial statements include not only the City of St. Joseph itself (known as the
primary government), but also a legally separate Economic Development Authority. Financial
information for this component unit is blended in the financial information.
The government-wide financial statements can be found on pages 24-25 of this report.
Fund Financial Statements.
A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City of St. Joseph,
like other state and local governments, uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. All of the funds of the City of St. Joseph 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
-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long--term 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 of St. Joseph maintains thirty-one 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 Park Terrace
improvement fund 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 non-major
governmental funds is provided in the form of combining statements elsewhere in this report.
The City of St. Joseph adopts an annual appropriated budget for its General Fund. A budgetary
comparison statement has been provided for the General Fund (page 30) to demonstrate compliance with
this budget.
The basic governmental fund financial statements can be found on pages 26-29 of this report.
6
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
Proprietary Funds.
The City of St. Joseph maintains proprietary funds that are used to report the same
functions presented as business-type activities in the government-wide financial statements. The City of
St. Joseph uses proprietary funds to account for its water, sanitary sewer, refuse, storm water and street
light utility activities.
Proprietary funds provide the same type of information as the government-wide financial statements,
only in more detail. The proprietary fund financial statements provide separate information for the
water, sanitary sewer, refuse, storm water and street light utility, all of which are considered to be major
funds of the City of St. Joseph.
The basic proprietary fund financial statements can be found on pages 31-35 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 37-65 of this report.
Other Information.
The combining statements referred to earlier in connection with non-major
governmental funds can be found on pages 72-83 of this report.
Comparative Data.
While comparative data is not illustrated in this report, comments throughout this
narrative and overview will discuss significant changes from the prior year.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a
position. In the case of the City of St. Joseph, assets exceeded liabilities by $ 30,413,410 at the close of
the most recent fiscal year.
net position 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 of St. Joseph uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending. Although
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.
7
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
NET POSITION
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
201420132014201320142013
ASSETS:
Current and Other Assets$ 8,086,164$ 8,177,188$ 1,431,529$ 7,936,890$ 9,517,693$ 16,114,078
Capital Assets, Net 10,015,177 10,032,856 33,208,533 30,616,440 43,223,710 40,649,296
Total Assets 18,101,341 18,210,044 34,640,062 38,553,330 52,741,403 56,763,374
LIABILITIES:
Current Liabilities 1,329,513 1,624,073 1,457,613 5,682,524 2,787,126 7,306,597
Long-Term Liabilities 6,620,623 5,748,374 12,920,244 13,282,434 19,540,867 19,030,808
Total Liabilities 7,950,136 7,372,447 14,377,857 18,964,958 22,327,993 26,337,405
NET POSITION:
Invested in Capital Assets,
Net Related Debt 6,370,844 6,289,255 19,429,295 16,865,194 23,072,465 20,868,221
Restricted 4,556,952 5,019,375 - - 4,556,952 5,019,375
Unrestricted (776,591) (471,033) 832,910 2,723,178 2,783,993 4,538,373
Total Net Position$ 10,151,205$ 10,837,597$ 20,262,205$ 19,588,372$ 30,413,410$ 30,425,969
net position (15%) represents resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net position,
$ 56,319,
At the end of the current fiscal year, the City of St. Joseph is able to report positive balances in all three
categories of net position for the government as a whole, as well as for its separate business-type
activities. The governmental activities had positive balances in all, but the unrestricted net position.
The governmental activities total net position balance decreased by 6.3% due to a stabilizing the tax levy
while increasing expenditures, capital spending out of reserved funds, early debt payoff, and increases in
compensated absence liability due to an increase in longevity of full-time employees.
There was a 3.4% increase in the total net position for the business-type activities. The increase is due
to the payoff of a bond advanced refunded in the Water Fund, along with paying down other debts. The
City issued a bond in the Water Fund to pay for necessary improvements of the water tower. In 2013,
the City of St. Joseph issued sewer revenue bonds to pay for upgrades at the Main lift station. The
project is substantially completed. The assets are reported as construction in progress with no
depreciation recorded yet.
8
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
Governmental Activities.
Governmental activities reduced total net position by
$ 686,392. The most significant change in governmental net position is due to the increases in
accumulated depreciation exceeding capital asset additions. The City increased capital spending for
equipment purchased from reserved funds, and capital projects with bond issues postponed in 2013 to
2014 to offset tax levy reductions and limited state aids. In addition, the Council approved hiring two
full-time staff in positions in 2013 previously left vacant or at reduced hours; 2014 recording the first
full year of their wages. The City experienced little employee turn-over resulting in accruals at higher
amounts for long-term employees. In doing so, the compensated absence liability increased 11.1%.
Business-Type Activities.
Business-type activities innet position by
$ 673,833. The largest contributors were in the water, sewer and storm water funds. These three funds
received large capital contributions from the Park Terrace improvement fund for reconstruction
improvements in the Park Terrace neighborhood. The water fund defeased the original 2005D bonds
with funds received from the 2012A advanced crossover bonds. The sewer fund received transfers to
pay debts and cover construction costs at the Main lift station. In addition, interest income improved in
2014.
The water utility (including the Water Access Charge \[WAC\] fund) net position increased by $ 377,706.
The City issued debt to construct three new wells in 2005 and a new water filtration plant in 2006 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 carry-over balance of the earlier connection
fees covered the slower building years beginning in 2007. The building activity increased the past
couple years, but not to the same levels as anticipated in 2005 and 2006 when the debts were approved.
The 2014 building activity was slower with 13 new WAC connections; bond estimates anticipated 65
connections. To help compensate unrealized revenue, the city council approved increasing the water
rates as well as allocated reserves from the debt service relief fund to the water fund.
The sewer utility (including the Sewer Access Charge \[SAC\] fund) net position increased by $ 217,499.
The increase is attributable to capitalizing Park Terrace sewer improvements. The sewer fund is paying
down debts, a good portion of the debts owed to the City of St. Cloud for sewer conveyance and
treatment. The City of St. Joseph set aside connection fees (SAC fees) and a portion of the sewer usage
revenue in anticipation of the current significant sewer note payments to St. Cloud. The SAC fee
reserves will cover the debts through 2015. New connection fees will add to the reserves and ability to
pay future debt payments. The City of St. Joseph increased usage fees to help cover costs.
The change in net position in the storm water fund also increased significantly by $ 99,835. The storm
water fund received capital contributions for the Park Terrace storm sewer improvements. Without the
capital contributions, the change in net position decreased $ 102,984. The Council opted to reduce
storm water usage rates to offset larger increases for water and sewer usage rates. Without depreciation
and capital contributions, the change in net position decreased $ 5,326. The city council plans to cover
100% of depreciation when the economic conditions improve for overall rate increases.
9
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
The graphs and charts below and on the following pages summarize and graphically depict the changes
in net position for the governmental and business-type activities.
CHANGE IN NET POSITION
Governmental ActivitiesBusiness-Type ActivitiesTotal
201420132014201320142013
REVENUES:
Program Revenues:
Charges for Services$ 478,561$ 477,662$ 1,959,537$ 2,059,014$ 2,438,098$ 2,536,676
Operating Grants and
Contributions 407,978 185,693 408 8,604 408,386 194,297
Capital Grants and
Contributions 876,982 407,359 306,381 37,492 1,183,363 444,851
General Revenues:
Property Taxes 1,674,468 1,720,770 - - 1,674,468 1,720,770
Tax Increments 41,094 38,636 - - 41,094 38,636
Sales Tax 380,113 360,902 - - 380,113 360,902
Franchise Fees 124,940 117,894 - - 124,940 117,894
State Aids 875,663 647,620 - - 875,663 647,620
Unrestricted Investment Earnings 88,145 23,861 88,986 21,918 177,131 45,779
Total Revenues 4,947,944 3,980,397 2,355,312 2,127,028 7,303,256 6,107,425
EXPENSES:
General Government 604,527 547,927 - - 604,527 547,927
Public Safety 1,616,153 1,549,009 - - 1,616,153 1,549,009
Public Works 1,413,380 1,221,092 - - 1,413,380 1,221,092
Economic Development 432,250 152,833 - - 432,250 152,833
Culture and Recreation 334,232 431,908 - - 334,232 431,908
Interest on Long-Term Debt 230,831 249,823 - - 230,831 249,823
Water - - 1,102,600 1,090,286 1,102,600 1,090,286
Sanitary Sewer - - 1,027,840 1,003,244 1,027,840 1,003,244
Storm Water - - 322,397 316,087 322,397 316,087
Refuse - - 181,074 170,289 181,074 170,289
Street Light Utility - - 50,531 47,638 50,531 47,638
Total Expenses 4,631,373 4,152,592 2,684,442 2,627,544 7,315,815 6,780,136
Decrease in Net Position before
Tranfers 316,571 (172,195) (329,130) (500,516) (12,559) (672,711)
Transfers (1,002,963) (169,249) 1,002,963 169,249 - -
Change in Net Position (686,392) (341,444) 673,833 (331,267) (12,559) (672,711)
NET POSITION:
Net Position - Beginning 10,837,597 11,334,625 19,588,372 20,113,354 30,425,969 31,447,979
Change in Accounting Principle - (155,584) - (193,715) - (349,299)
Net Position - Beginning Restated 10,837,597 11,179,041 19,588,372 19,919,639 30,425,969 31,098,680
Net Position - Ending$ 10,151,205$ 10,837,597$ 20,262,205$ 19,588,372$ 30,413,410$ 30,425,969
10
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
EXPENSES AND PROGRAM REVENUES GOVERNMENTAL ACTIVITIES
EXPENSES AND PROGRAM REVENUES - GOVERNMENTAL ACTIVITIES
1,800,000
1,600,000
Revenue
Expenditures
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
GeneralPublic SafetyPublic WorksCulture andEconomicInterest on Long-
GovernmentRecreationDevelopmentterm Debt
REVENUES BY SOURCE - GOVERNMENTAL ACTIVITIES
REVENUES BY SOURCE GOVERNMENTAL ACTIVITIES
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11
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
BUSINESS-TYPE ACTIVITIES
EXPENSES AND PROGRAM REVENUES
1,200,000
Revenue
Expenditures
1,000,000
800,000
600,000
400,000
200,000
-
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SewerUtility
REVENUES BY SOURCE BUSINESS-TYPE ACTIVITIES
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12
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
FINANCIAL ANALYSIS OF THE CITY AT THE FUND LEVEL
The financial performance of the City of St. Joseph as a whole is reflected in its governmental funds as
well. As the City completed the year, its governmental funds reported a combined fund balance of
$ 6,320,214, a decrease of $ 53,616 from 2013
$ 4,882,031, while total expenditures were $ 6,458,425. The excess of expenditures over revenues is
mainly attributed to Park Terrace improvement expenditures. The capital outlay is reported in the
expenditure category. Bond proceeds are considered other financing sources and not represented under
the revenues. With bond proceeds, revenues would show surplus over expenditures of $ 433,606. The
City of St. Joseph spent down capital reserves in 2014. One of the more significant capital expenditures
went to designing a government center using half cent sales tax accumulated reserves. The project was
postponed to gather public input and priorities.
A summary of financial highlights for each major governmental fund follows.
General Fund
The general fund is the chief operating fund of the City of St. Joseph. At the end of the current fiscal
year, unassigned fund balance of the general fund was $ 1,090,634
liquidity, it may be useful to compare both unassigned fund balance to total fund expenditures.
Unassigned fund balance represents 41.1% of total general fund expenditures, 47.3% (5.7 months
working capital) after removing the Fire and PEG Access fund. The City Council has a goal to maintain
the General Fund working capital fund balance equal to 4-6 months of expenditures. Although the
General fund experienced reductions in contributions and property tax revenues, the intergovernmental
revenues increased $ 134,562 to help maintain a healthy fund balance. Interest earnings and building
permit revenue also increased in 2014.
General fund expenditures were higher than budgeted by $ 18,869 and over 2013 expenditures by
$ 52,860. The City of St. Joseph sets funds aside for the street maintenance plan. The street
maintenance expenditures fluctuate each year, increasing in 2014. Spring 2014 was one of the snowiest
periods on record for Central Minnesota. The ice and snow removal budget was overspent by $ 20,394
as a result. Engineering and other general government expenditures were over budget. The city council
approved studies to consider power pole relocations, splash pad options, park planning and downtown
alley improvements. In addition, the City of St. Joseph has been in discussions with Stearns County to
consider options for the CR 2/Minnesota Street intersection and timing to turn-back Minnesota Street to
the City. Finally, legal fees increased for union negotiations, sign litigation and reviewing the orderly
annexation agreement with St. Joseph Township.
As a result of the prudent financial policies of the City, the General Fund remained stable.
The schedule on the next page presents a summary of General Fund revenues and expenditures.
Park Terrace Improvements Fund
The Park Terrace Improvement Fund represents the reconstruction costs for streets, parks, water, sewer
and storm sewer infrastructure in the Park Terrace neighborhood. Construction is expected to finish in
2015.
13
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
December 31,December 31,IncreasePercent
20142013(Decrease)Change
REVENUES:
Taxes$ 1,249,534 $ 1,270,427 $ (20,893)-2%
Special Assessment 7,302 2,080 5,222251%
Licenses and Permits 105,929 97,192 8,7379%
Intergovernmental 1,018,932 884,370 134,56215%
Charges for Services 243,067 244,699 (1,632)-1%
Fines and Forfeitures 38,330 45,439 (7,109)-16%
Miscellaneous 82,048 82,248 (200)0%
Total General Fund Revenue$ 2,745,142 $ 2,626,455 $ 118,6875%
December 31,December 31,IncreasePercent
20142013(Decrease)Change
EXPENDITURES:
General Government$ 552,709 $ 503,562 $ 49,14710%
Public Safety 1,455,771 1,527,118 (71,347)-5%
Public Works 448,752 376,199 72,55319%
Culture and Recreation 199,011 196,504 2,5071%
Total General Fund Expenditures$ 2,656,243 $ 2,603,383 $ 52,8602%
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 and the park dedication fund. This amendment is
typically an annual revision to the General fund budget. Historically, the City has minimal budget
amendments during the budget year.
Actual revenues were $ 35,092 more than expected mainly due to increases in property taxes and
intergovernmental revenues. City council approved moving a portion of the EDA property taxes
into the general fund to keep level operational funding in EDA. Intergovernmental revenues had
a large variance over budget due to police and fire aid.
Actual expenditures were $ 18,223 more than budget. The main overage came from the public
works department. Engineering, snow and ice removal and capital outlay show the largest
variances. City council requested various studies for the engineer to review. The 2013-2014
winter was one of the snowiest and coldest in Minnesota history. Many Minnesota cities
overspent in snow and ice removal as a result. City council puts money aside each year for street
maintenance. The amount of required maintenance varies each year. The City spent down some
of the capital reserves for crack filling in 2014.
Proprietary Funds.
The City o provide the same type of
information found in the government-wide financial statements, but in more detail. The unrestricted net
position of the Proprietary Funds decreased $ 1,584,416 overall. The paragraphs on the following pages
provide a brief financial overview of each major proprietary fund.
14
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
Water Enterprise Fund
The Water F2014, the Water
net position increased $ 372,598. Before transfers and capital contributions, the net position
would show a decrease of $ 293,926. The net position includes depreciation of $ 379,414. The water
revenues are covering 22% of the depreciation along with the other operating costs and debt payments.
Water rates have been and are projected to be incremental increased to continue covering operational
costs along with the debts. Water access charges collected will also help cover debt payments.
Sanitary Sewer Enterprise Fund
The Sanitary Sewer F
2014, the Sanitary Sewer Fnet position increased $ 528,459, a decrease before capital
contributions and transfers of $ 344,480. As a contract user of the St. Cloud Wastewater Treatment
Facility, St. Joseph is obligated to pay a portion of the costs to maintain the St. Cloud treatment facility
and conveyance system. St. Joseph issued four notes with St. Cloud for various conveyance and
treatment facility projects. In addition, St. Joseph issued a bond in 2013 to rehabilitate the Sauk River
manhole feed from the St. Joseph force main into St. Cloud to reduce toxins discharged into the
wastewater treatment system. In 2013 the City issued a $ 1.875M bond to cover costs to rehabilitate the
Main lift station and sewer mains under CSAH 75. The large debt costs are partially paid for with
reserved sewer connection and trunk fees along with sewer usage rates. The reserves are estimated to be
used up in 2015; however, new development will extend the estimate. Utility rates have been increased
also to offset lower development activity in the past few years. Operational revenues are covering 52%
of depreciation.
Refuse Enterprise Fund
The refuse fund is used to account for the contract services to provide residential refuse, recycling and
compost services. In 2014net position decreased $ 33,841. The operating revenues
decreased and expenses increased from 2013. The refuse fund has a net position balance that built up
from earlier years of operations. Council opted to reduce refuse rates to allow for larger increases in
other utility funds. In addition, city council approved paying for an aquatics and facilities studies out of
the reserved balance. These decisions were known to cause a decrease in the net position. The
composting services are also operated out of the refuse fund. The City of St. Joseph approved
contracting for compost services in 2012. The compost contract runs year to year. It is anticipated the
City will continue to contract for composting.
Storm Water Enterprise Fund
The Storm Water F2014,
the Storm Water Fnet position increased $ 99,835. The Storm Water Fund had an operating loss
of $ 71,374 or, $ 26,284 surplus after removing depreciation expense. The deficit is consistent with
previous years and expected with the decision to reduce storm water rates. The City Council chose to
maintain the fees while still covering some depreciation to allow for larger increases in other funds. The
decision was based on the fund having a healthy net position balance. The Storm Water Fund has not
collected any development fees for the previous five years.
15
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
Street Light Utility Enterprise Fund
The Street Light Utility F2013,
the City Council voted to create a street light utility fee to pay for operations of the street lights,
removing the expenditure from the general fund levy. The average household pays $ 3 more per year
while an average business pays $ 173 less per year for street lighting. The new user fee allows the City
to capture revenue from tax exempt properties to help pay for the service provided to them. The City of
St. Joseph is somewhat unique in that over 42% of the City property is classified as tax exempt. To be
fair to all users benefiting from street lighting, the City Council determined a user fee was a more
appropriate way to charge for services. The net position change of the Street Light Utility Fund was
positive $ 12,634 at December 31, 2014.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
T for its governmental and business-type activities as
of December 31, 2014, amounts to $ 43,223,710 (net of accumulated depreciation), an increase of
$ 2,574,414. The investment in capital assets includes land, intangible assets, buildings, improvements,
machinery and equipment, furniture and office equipment, infrastructure, and construction in progress.
Net investment in capital assets increased $ 2,204,244. The increase is attributable to capital asset
construction in progress for the Park Terrace, water tower and Main lift station improvements. The
assets disposed were much smaller than the value of the improvements added. In addition, construction
in progress is not depreciated until the asset is fully constructed and operational. The overall debt
related to capital assets decreased $ 4,155,001. The 2012A advanced crossover bonds paid off the
original 2005D water revenue bonds in December. This payoff accounted for the most significant
change in debt related to capital assets. The City of St. Joseph issued two debts in 2014 for the water
tower and Park Terrace improvements. The bond issues were less than what was paid off in 2014.
The table on the next page
16
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
CAPITAL ASSETS
Governmental ActivitiesBusiness-Type ActivitiesTotal
201420132014201320142013
Land$ 457,194$ 457,194$ 377,882$ 377,882$ 835,076$ 835,076
Easements 5,820 5,820 67,915 67,915 73,735 73,735
Construction in Progress 960,861 938,569 3,212,639 84,230 4,173,500 1,022,799
Improvements 1,251,885 741,872 - - 1,251,885 741,872
Infrastructure 16,613,244 16,142,002 - - 16,613,244 16,142,002
Buildings 2,511,263 2,511,263 8,120,415 8,120,415 10,631,678 10,631,678
Plant and Lines - - 21,461,161 21,195,993 21,461,161 21,195,993
Sewer Rights - - 8,569,212 8,531,687 8,569,212 8,531,687
Machinery and Equipment 3,242,495 3,254,963 680,376 670,838 3,922,871 3,925,801
Less: Accumulated - -
Depreciation (15,027,585) (14,018,827) (9,281,067) (8,432,520) (24,308,652) (22,451,347)
Total$ 10,015,177$ 10,032,856$ 33,208,533$ 30,616,440$ 43,223,710$ 40,649,296
Note 5 on page 50 of
this report. Total depreciation expense for 2014 was $ 2,101,977.
Long-Term Liabilities
At the end of the current fiscal year, the City of St. Joseph had total net bonded debt outstanding of
$ 20,803,587. Of this amount, $ 6,934,349 comprises debt backed by the full faith and credit of the
and notes 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.
g-term liabilities is included in the table on the following page.
17
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
OUTSTANDING LONG-TERM LIABILITIES
Percent
20142013Change
Governmental Activities:
General Obligation Bonds$ 1,134,323$ 1,400,758-19%
General Obligation Special Assessment Bonds 5,800,026 4,766,58422%
General Obligation Revenue Bonds 90,000 180,000-50%
Compensated Absences Payable 439,015 395,21811%
Net Other Post Employment Benefits 183,098 159,88115%
Total Governmental Activities$ 7,646,462$ 6,902,44111%
Business-Type Activities:
General Obligation Revenue Bonds$ 8,706,244$ 13,233,396-34%
Notes Payable 5,072,994 5,377,850100%
Compensated Absences Payable 122,421 108,53213%
Net Other Post Employment Benefits 53,620 46,70615%
Total Business-Type Activities$ 13,955,279$ 18,766,484-26%
The City of St. Joseph issued $ 2,670,000 General Obligation Bonds, Series 2014A in June 2014. The
bond issue funds three projects: Park Terrace, water tower and Main lift station improvements.
The City increased the net bonded debt by $ 677,007 on the governmental activities to end the year. In
2014, one debt was paid in full with a second bond defeased early. The business-type activities saw a
decrease in bonded debt of $ 4,832,008. A reduction from the 2005D water revenue bond refunding of
$ 4,595,000 accounted for most of the decrease. The 2014A debt issue was recorded 75% in
governmental activities and 25% business-like activities.
The City of St. Joseph maintained a bond rating to an A+/Stable for the
general obligation debt in 2014. According to municipal credit analysis
solid bond rating l operations characterized by maintaining very strong
budgetary flexibility, very strong liquidity, strong management conditions, adequate economy and
budgetary performance, and weak debt and contingent liability position. Although a large debt liability,
Minnesota state statutes limit the amount of net general obligation debt a governmental entity may issue
to 3% of its taxable market value. Net general obligation debt is debt solely paid for, with limited
exceptions, by ad valorem taxes. The current debt limitation for the City of St. Joseph is $ 8,020,736
which significantly exceeds pure general obligation debt of
$ 1,120,000.
-term liabilities can be found in Note 6 on pages 52-56.
18
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
ECONOMIC FACTORS AND AND RATES
The City of St. Joseph experienced a stable financial position at the end of 2014 despite decreasing
taxable market values, declining development, and increases in St. Cloud sewer charges as evidenced by
the tax rate and General fund reserves.
While the housing market for newly constructed homes has significantly declined, the City of St. Joseph
anticipates growth in both residential and commercial. The construction of a community school (K-8)
will spur development adjacent to the school site as it is open space and a developer has already
preliminary platted a tract for 500+ homes. The new school opened for the 2009-2010 school year.
School enrollment has surpassed planning expectations. ISD 742 began constructing a 10 classroom
addition in 2014 to accommodate the growth. In 2010 a developer began platting phase 2 of the Rivers
Bend development to build 12 patio homes. Another developer added phase 4 to the Graceview
neighborhood. Graceview phase 4 is a phased development with 19 lots in the first phase. As an
incentive for single family construction, city council approved $ 50,000 in WAC/SAC incentives for the
first ten new homes. The incentive will be carried forward until used. The City of St. Joseph issued six
building permits for new homes in 2014, plus two in the first quarter of 2015.
In 2013 the City of St. Joseph was awarded a $ 600,000 Minnesota Small Cities Development Program
(SCDP) housing rehabilitation grant to correct deficiencies of older, low to moderate income homes in
St. Joseph. A qualified homeowner in the targeted area can receive up to a $ 35,000 0% forgivable
-15% of the construction costs. The unused
balance at the end of 2014 was $ 287,304.
The City also anticipates commercial/industrial development with the expansion of the Industrial Park,
development to the west along Interstate 94, and planning initiatives for downtown revitalization. The
first downtown project began construction in 2006 with completion in 2009. The project consists of a
commercial and residential mixed-use facility and is known as the Millstream Shops and Lofts. All
units are occupied. In addition, the downtown commercial spaces were filled with the addition of Retail
Therapy and Sisters & Co. In 2014 city council approved a redevelopment TIF to add a mixed use
facility in downtown. The project is entitled Bayou Blues and Bayou Flats. The Bayou Blues facility
will include residential, office space, restaurant and taproom. The Bayou Flats consists of a four-unit
two-story condominium living space, complete with roof top decks.
In 2009 the Coborns PUD was approved which contained three commercial development sites. The
PUD is located on CSAH 75 and CR133, one of the major commerce corridors in St. Joseph.
CentraCare medical clinic(including grocery and liquor stores) and Central MN
Credit Union currently occupy the development site. A recent market study of the St. Joseph area
indicated that the trade area of St. Joseph would increase by 150% if a grocery store was added to the
landscape of the City. In late 2012, .
19
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
In addition, city council approved TIF financing for the Central Minnesota Credit Union to construct a
$ 4.2M office building for a call center, information technology support/equipment, and other
administrative and support staff. A minimum of 30 employees with work in the facility with room to
expand to 80 employees.
The City is also experiencing new growth in the industrial park. Finken Companies occupied a vacant
building, adding skilled work force with water treatments, heating and cooling services, and plumbing
solutions. Scenic Specialties landscape business plans move and rehabilitate a barn on their site to
create a rustic events center. Weddings, corporate gatherings, family gatherings can rent the facility for
their event. There are few options in the Central Minnesota area for a rustic event center.
Other developments include a 24 unit phase one senior development near downtown consisting of
cottage homes, twin homes, and an eight-plex assisted living unit; plumbing and mechanical business
building expansion, 12,000 sq. ft. commercial addition and industrial office build-out.
JLT Partnership, LLC was approved to develop ten patio-bay townhomes in the Graceview development
for construction to begin in 2015. The Central Minnesota Housing Partnership (CMHP) was awarded
federal grant money to rehabilitate the 36 unit Cloverdale Townhomes for low to moderate income
families. Construction will begin in 2015. Finally, the College of St. Benedicts is remodeling and
expanding their nursing school facility. The state of the art training facility will draw students to the
campus.
The St. Joseph Economic Development Authority (EDA) is an active group promoting business interests
within the St. Joseph Community. The EDA continues to work with property owners to develop
industrial and commercial sites. The EDA is also working with the Comprehensive Economic
Development Strategy (CEDS) to attract businesses from around the country to the area and to provide
opportunity for possible federal grant funding. In addition, the EDA is working on a plan to identify and
revitalize the downtown area to attract people to the area.
Property tax reforms and budget deficits at the state level have significantly impacted government aid
payments made to the City. Further, the taxable market value on properties has decreased slightly. The
Council continues to budget conservatively to keep minimal increases in the tax rate. As the
economic instability 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.
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 so that the rates cover operation and depreciation. The City
has a long-term goal of covering depreciation fully through rates.
20
CITY OF ST. JOSEPH
Stearns County, Minnesota
December 31, 2014
and fee schedule for the
2014 and future reporting years. As the City looks forward to 2015, improvement projects are planned
to mill and overlay streets in the Northland and Cloverdale additions, designing an aquatics center,
update the parks and trails system plan, and continue evaluating the government facility needs. A busy
2015 is anticipated.
REQUESTS FOR INFORMATION
those with an interest in the 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, 25 College Avenue North, St. Joseph, MN 56374.
21
(THIS PAGE LEFT BLANK INTENTIONALLY)
22
BASIC FINANCIAL STATEMENTS
23
CITY OF ST. JOSEPH
STATEMENT OF NET POSITION
December 31, 2014
Governmental Business-Type
ActivitiesActivitiesTotal
ASSETS
Cash and Investments
(Including Cash Equivalents)$ 6,154,035$ 1,050,678$ 7,204,713
Property Tax Receivable 49,076 - 49,076
Accounts Receivable 48,548 349,496 398,044
Interest Receivable 7,486 8,143 15,629
Due from Other Governments 90,500 - 90,500
Notes Receivable 21,724 - 21,724
Special Assessments Receivable:
Delinquent 115,246 604 115,850
Deferred 1,577,126 22,358 1,599,484
Prepaid Expenses 22,423 250
22,673
Capital Assets:
Land 457,194 377,882 835,076
Easements 5,820 67,915 73,735
Construction in Progress 960,861 3,212,639 4,173,500
Buildings 2,511,263 8,120,415 10,631,678
Infrastructure 16,613,244 - 16,613,244
Improvements 1,251,885 - 1,251,885
Plant and Lines - 21,461,161 21,461,161
Machinery and Equipment 3,242,495 680,376 3,922,871
Sewer Rights - 8,569,212 8,569,212
Less Accumulated Depreciation (15,027,585) (9,281,067) (24,308,652)
Capital Assets (Net of Accumulated Depreciation) 10,015,177 33,208,533 43,223,710
Total Assets$ 18,101,341$ 34,640,062$ 52,741,403
LIABILITIES AND NET POSITION
Liabilities
Accounts Payable$ 84,449$ 52,508$ 136,957
Contracts Payable 101,112 185,741 286,853
Due to Other Governments 9,189 101,232 110,421
Salaries and Benefits Payable 88,793 9,328 98,121
Interest Payable 20,131 73,769 93,900
Bond Principal Payable (Net):
Payable Within One Year 1,015,000 690,000 1,705,000
Payable After One Year 6,009,349 8,016,244 14,025,593
Notes Payable (Net):
Payable Within One Year - 340,220 340,220
Payable After One Year - 4,732,774 4,732,774
Compensated Absences Payable:
Payable Within One Year 10,839 4,815 15,654
Payable After One Year 428,176 117,606 545,782
Net Other Post Employment Benefits (OPEB) Obligation
183,098 53,620 236,718
Total Liabilities 7,950,136 14,377,857 22,327,993
Net Position
Net Investment in Capital Assets 6,370,844 19,429,295 23,072,465
Restricted for:
Debt Service 2,954,639 - 2,954,639
Other Purposes 1,602,313 - 1,602,313
Unrestricted (776,591) 832,910 2,783,993
Total Net Position 10,151,205 20,262,205 30,413,410
Total Liabilities and Net Position$ 18,101,341$ 34,640,062$ 52,741,403
The Notes to the Financial Statements are an integral part of this statement.24
(528,892)(1,113,554)(537,413)(143,090)(314,072)(230,831)(2,867,852)(126,573)(226,132)(37,169)(40,781)12,539(418,116)(3,285,968)1,674,46841,094380,113124,940875,663177,131-
3,273,409(12,559)30,425,96930,413,410
Total
$
$
and Changes in Net Position
Net (Expense) Revenue
(126,573)(226,132)(37,169)(40,781)(418,116)(418,116)
------------
1,002,9631,091,949673,833
12,53988,98619,588,37220,262,205
$
Business-Type
Activities
$
(528,892)(1,113,554)(537,413)(143,090)(314,072)(230,831)(2,867,852)(2,867,852)(1,002,963)(686,392)
- - - - - -
1,674,468380,113124,940875,6632,181,460
41,09488,14510,837,59710,151,205
Governmental
Activities
$
$
----
5,861847,89716,7526,472876,982155,907107,99442,480306,3811,183,363
$
Capital Grants Contributions
and
$
Program Revenues
For the Year Ended December 31, 2014
--
3,927129,215271,6363,200407,97821153130833408408,386
Operating Grants and Contributions
STATEMENT OF ACTIVITIES
Total General Revenues and Transfers
$
$
CITY OF ST. JOSEPH
Unrestricted Investment Earnings
-
367,523772478,561820,099693,699285,1971,959,5372,438,098
71,70828,07010,48897,50563,037
Charges for
Services
$
Net Position - Beginning
Change in Net Position
$
Net Position - Ending
Tax Increments
Property Taxes
Franchise Fees
General Revenues
Sales Taxes
State Aids
604,5271,616,1531,413,380432,250334,232230,8314,631,3731,102,6001,027,840322,397181,0742,684,4427,315,815
50,531
Expenses
Transfers
The Notes to the Financial Statements are an integral part of this statement.
$
$
Functions/Programs
Total Business-Type Activities
Total Governmental Activities
Business-Type Activities
Total Governmental and
Interest on Long-Term Debt
Economic Development
Culture and Recreation
Governmental ActivitiesBusiness-Type Activities
General Government
Street Light Utility
Sanitary Sewer
Public Works
Public Safety
Storm Water
Refuse
Water
25
CITY OF ST. JOSEPH
BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2014
Capital Projects
General Fund Park Terrace Other Total
(101, 102, Improvements Governmental Governmental
105, 108)(450)FundsFunds
ASSETS
Cash and Investments $ 1,836,162$ 545,624 $ 4,043,881 $ 6,425,667
Taxes Receivable - Delinquent 35,692 - 13,384 49,076
Special Assessments Receivable:
Delinquent 153 - 115,093 115,246
Deferred 7,128 - 1,569,998 1,577,126
Accounts Receivable 42,908 1,040 12,733 56,681
Interest Receivable 2,803 - 5,683 8,486
Due from Other Funds - - 500 500
Due from Other Governments 5,548 - 84,952 90,500
Notes Receivable - - 21,724 21,724
Prepaid Expenses 22,423 - - 22,423
Total Assets$ 1,952,817$ 546,664 $ 5,867,948 $ 8,367,429
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable$ 71,001$ 5,256 $ 8,192 $ 84,449
Contracts Payable - 63,108 38,004 101,112
Due to Other Funds - - 500 500
Due to Other Governments 9,189 - - 9,189
Salaries and Benefits Payable 88,740 - 53 88,793
Total Liabilities 168,930 68,364 46,749 284,043
Deferred Inflows Of Resources
Unavailable Revenue - Property Taxes 35,692 - 13,384 49,076
Unavailable Revenue - Special Assessments 7,281 - 1,685,091 1,692,372
Unavailable Revenue - Notes Receivable - - 21,724 21,724
Total Deferred Inflows of Resources 42,973 - 1,720,199 1,763,172
Fund Balances
Nonspendable 22,423 - - 22,423
Restricted 15,216 - 3,048,110 3,063,326
Committed - - 103,523 103,523
Assigned 612,641 478,300 949,769 2,040,710
Unassigned 1,090,634 - (402) 1,090,232
Total Fund Balances 1,740,914 478,300 4,101,000 6,320,214
Total Liabilities, Deferred Inflows
of Resources and Fund Balances$ 1,952,817$ 546,664 $ 5,867,948 $ 8,367,429
The Notes to the Financial Statements are an integral part of this statement. 26
CITY OF ST. JOSEPH
RECONCILIATION OF THE BALANCE SHEET TO
THE STATEMENT OF NET POSITION - GOVERNMENTAL FUNDS
December 31, 2014
Total Fund Balances - Governmental Funds$ 6,320,214
Amounts reported for governmental activities in the Statement of Net Position
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 25,042,762
Less Accumulated Depreciation (15,027,585)
Long-term liabilities, including bonds payable, are not due and payable in
the current period and, therefore, are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of:
(7,024,349)
Bond Principal Payable, Net of Premiums and Discounts
(439,015)
Compensated Absences Payable
Net OPEB Obligation (183,098)
Delinquent receivables will be collected in subsequent years, but are not
available soon enough to pay for the current period's expenditures and,
therefore, are deferred in the funds.
49,076
Property Taxes
115,246
Special Assessments
Other long-term assets are not available to pay for current expenditures and,
therefore, are deferred in the funds.
1,577,126
Deferred Special Assessments
21,724
Notes Receivable
The Water Access Capital Project Fund is proprietary in nature and, therefore,
(5,671)
included in the business-type activities in the Statement of Net Position.
The Sewer Access Capital Project Fund is proprietary in nature and, therefore,
(275,094)
included in the business-type activities in the Statement of Net Position.
Governmental funds do not report a liability for accrued interest
(20,131)
due and payable.
Total Net Position - Governmental Activities
$ 10,151,205
The Notes to the Financial Statements are an integral part of this statement. 27
CITY OF ST. JOSEPH
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
General Fund Park Terrace Other Total
(101, 102, Improvements Governmental Governmental
105, 108)(450)FundsFunds
REVENUES
Property Taxes$ 1,124,594$ -$ 551,588$ 1,676,182
Tax Increments - - 41,094 41,094
Sales Taxes - - 380,113 380,113
Special Assessments 7,302 - 656,978 664,280
Franchise Fees 124,940 - - 124,940
Licenses and Permits 105,929 - - 105,929
Intergovernmental 1,018,932 - 271,636 1,290,568
Charges for Services 243,067 - 158,697 401,764
Fines and Forfeitures 38,330 - - 38,330
Miscellaneous:
Investment Income 24,842 - 61,873 86,715
Contributions and Donations 9,181 - 6,827 16,008
Revolving Loan Repayments - - 8,083 8,083
Other 48,025 - - 48,025
Total Revenues 2,745,142 - 2,136,889 4,882,031
EXPENDITURES
Current
General Government 552,559 - - 552,559
Public Safety 1,419,890 - - 1,419,890
Public Works 403,435 7,143 - 410,578
Culture and Recreation 199,011 - 6,535 205,546
Economic Development - - 432,015 432,015
Debt Service
Principal - - 1,350,000 1,350,000
Interest and Other Charges - - 250,870 250,870
Capital Outlay
General Government 150 - 133,565 133,715
Public Safety 35,881 - 27,761 63,642
Public Works 45,317 1,423,572 37,384 1,506,273
Culture and Recreation - 54,998 77,166 132,164
Economic Development - - 1,173 1,173
Total Expenditures 2,656,243 1,485,713 2,316,469 6,458,425
Excess of Revenues Over
(Under) Expenditures
88,899 (1,485,713) (179,580) (1,576,394)
OTHER FINANCING SOURCES (USES)
Insurance Recoveries 5,207 - - 5,207
Sale of Property 766 - - 766
Bonds Issued - 1,986,654 23,346 2,010,000
Bond Premium - - 33,635 33,635
Transfers In 12,891 - 529,847 542,738
Transfers Out (88,080) (22,641) (958,847) (1,069,568)
Total Other Financing Sources (Uses) (69,216) 1,964,013 (372,019) 1,522,778
Net Change in Fund Balances 19,683 478,300 (551,599) (53,616)
FUND BALANCES
Beginning of Year1,721,231 - 4,652,599 6,373,830
End of Year$ 1,740,914$ 478,300$ 4,101,000$ 6,320,214
The Notes to the Financial Statements are an integral part of this statement. 28
CITY OF ST. JOSEPH
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES TO THE STATEMENT
OF ACTIVITIES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
Total Net Change in Fund Balances - Governmental Funds$ (53,616)
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over the estimated useful lives
as depreciation expense.
1,758,495
Capital Outlays
344,243
Capital Contributions
(1,225,488)
Depreciation Expense
(9,746)
Loss on Disposal
(885,183)
Transferred to Proprietary Funds
Principal payments on long-term debt are recognized as expenditures in the governmental
1,350,000
funds but as an increase in net position in the Statement of Activities.
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.
3,411
Accrued interest payable
16,628
Amortization of bond discounts, premiums and issuance charges
Proceeds from long-term debt are recognized as an other financing source in the governmental
(2,010,000)
funds but as a decrease in net position in the Statement of Activities.
The governmental funds report the effect of premiums, discounts and
similar items when debt is first issued, whereas these amounts are deferred and amortized
(33,635)
in the Statement of Activities.
Compensated absences and OPEB payments are recognized as paid in the
(67,014)
governmental funds but recognized as the expense is incurred in the Statement of Activities.
Delinquent receivables will be collected in subsequent years, but are not available soon enough
to pay for the current period's expenditures and, therefore, are not revenues in the funds.
(22,308)
Delinquent Special Assessments
(1,714)
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.
(149,006)
Deferred Special Assessments
(7,311)
Notes Receivable
The Water Access Capital Project Fund is proprietary in nature and, therefore, is reported
(5,108)
with business-type activities.
The Sewer Access Capital Project Fund is proprietary in nature and, therefore, is reported
310,960
with business-type activities.
Change in Net Position - Governmental Activities$ (686,392)
The Notes to the Financial Statements are an integral part of this statement.29
CITY OF ST. JOSEPH
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2014
Variance with
Original Final Actual Final Budget -
BudgetBudgetAmounts
Over (Under)
REVENUES
Property Taxes$ 1,087,245$ 1,087,245$ 1,124,594 $ 37,349
Special Assessments 1,500 1,500 7,302 5,802
Franchise Fees 117,450 117,450 124,940 7,490
Licenses and Permits 98,970 98,970 105,929 6,959
Intergovernmental 998,380 998,380 1,018,932 20,552
Charges for Services 253,880 253,880 243,067 (10,813)
Fines and Forfeitures 62,500 62,500 38,330 (24,170)
Miscellaneous Revenues:
Investment Income 23,000 23,000 24,842 1,842
Contributions and Donations 18,500 18,500 9,181 (9,319)
Other 48,625 48,625 48,025 (600)
Total Revenues 2,710,050 2,710,050 2,745,142 35,092
EXPENDITURES
Current
General Government 541,250 541,250 552,559 11,309
Public Safety 1,414,685 1,414,685 1,419,890 5,205
Public Works 370,520 370,520 403,435 32,915
Culture and Recreation 218,365 218,365 199,011 (19,354)
Capital Outlay
General Government 16,250 11,500 150 (11,350)
Public Safety 81,525 51,700 35,881 (15,819)
Public Works 52,500 30,000 45,317 15,317
Culture and Recreation 24,315 - - -
Total Expenditures 2,719,410 2,638,020 2,656,243 18,223
Excess of Revenues Over
(Under) Expenditures (9,360) 72,030 88,899 16,869
OTHER FINANCING SOURCES (USES)
Insurance Recoveries - - 5,207 5,207
Sale of Property - - 766 766
Transfers In - - 12,891 12,891
Transfers Out - - (88,080) (88,080)
Total Other Financing Sources (Uses) - - (69,216) (69,216)
Net Change in Fund Balances$ (9,360)$ 72,030 19,683$ (52,347)
FUND BALANCES
Beginning of Year1,721,231
End of Year$ 1,740,914
The Notes to the Financial Statements are an integral part of this statement.30
CITY OF ST. JOSEPH
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
December 31, 2014
Sanitary Sewer Refuse Storm Water Street Light
Water (601)(602)(603)(651)Utility (652)Total
ASSETS
Current Assets
Cash and Investments$ 19,928$ 299,409 $ 225,832$ 225,325$ 8,552$ 779,046
Special Assessments Receivable:
Delinquent 78 285 204 37 - 604
Deferred 10,750 13 29 11,533 33 22,358
Accounts Receivable 120,086 130,735 58,726 19,309 12,507 341,363
Interest Receivable 3,968 2,329 430 406 10 7,143
Prepaid Expenses 125 125 - - - 250
Total Current Assets 154,935 432,896 285,221 256,610 21,102 1,150,764
Noncurrent Assets
Capital Assets:
Land 372,941 4,941 - - - 377,882
Easements - - - 67,915 - 67,915
Construction in Progress 944,357 2,105,854 - 162,428 - 3,212,639
Buildings 7,502,432 617,983 - - - 8,120,415
Plants and Lines 9,046,775 7,540,594 - 4,873,792 - 21,461,161
Machinery and Equipment 199,325 433,431 45,540 2,080 - 680,376
Sewer Rights - 8,569,212 - - - 8,569,212
Total Capital Assets 18,065,830 19,272,015 45,540 5,106,215 - 42,489,600
Less Accumulated Depreciation (4,041,366) (4,115,066) (13,012) (1,111,623) - (9,281,067)
Net Capital Assets 14,024,464 15,156,949 32,528 3,994,592 - 33,208,533
Total Noncurrent Assets 14,024,464 15,156,949 32,528 3,994,592 - 33,208,533
Total Assets$ 14,179,399$ 15,589,845 $ 317,749$ 4,251,202$ 21,102$ 34,359,297
LIABILITIES AND NET POSITION
Current Liabilities
Accounts Payable$ 6,671$ 20,007$ 21,203$ 134$ 4,493$ 52,508
Contracts Payable - 185,741 - - - 185,741
Due to Other Governments 2,473 96,166 2,593 - - 101,232
Salaries and Benefits Payable 4,150 3,772 592 814 - 9,328
Interest Payable 13,265 60,504 - - - 73,769
Long-Term Liabilities Due
Within One Year 526,865 507,085 362 723 - 1,035,035
Total Current Liabilities 553,424 873,275 24,750 1,671 4,493 1,457,613
Noncurrent Liabilities
Compensated Absences 50,199 50,199 7,842 14,181 - 122,421
Notes Payable, Net - 5,072,994 - - - 5,072,994
Bonds Payable, Net 6,479,219 2,227,025 - - - 8,706,244
Net OPEB Obligation 26,014 21,236 3,185 3,185 - 53,620
Less Amounts Due Within One Year (526,865) (507,085) (362) (723) - (1,035,035)
Total Noncurrent Liabilities 6,028,567 6,864,369 10,665 16,643 - 12,920,244
Total Liabilities 6,581,991 7,737,644 35,415 18,314 4,493 14,377,857
Net Position
Net Investment in Capital Assets 7,545,245 7,856,930 32,528 3,994,592 - 19,429,295
Unrestricted 52,163 (4,729) 249,806 238,296 16,609 552,145
Total Net Position 7,597,408 7,852,201 282,334 4,232,888 16,609 19,981,440
Total Liabilities
and Net Position$ 14,179,399$ 15,589,845 $ 317,749$ 4,251,202$ 21,102$ 34,359,297
The Notes to the Financial Statements are an integral part of this statement.31
CITY OF ST. JOSEPH
RECONCILIATION OF THE STATEMENT
OF NET POSITION - BUSINESS-TYPE ACTIVITIES
December 31, 2014
Total Net Position - Proprietary Funds$ 19,981,440
Amounts reported for business-type activities in the Statement of Net Position
are different because:
The Water Access Capital Project Fund is proprietary in nature and
relates to water improvements for the applicable funds. Therefore,
5,671
it is included as a business-type activity.
The Sewer Access Capital Project Fund is proprietary in nature and
relates to sewer improvements for the applicable funds. Therefore,
275,094
it is included as a business-type activity.
Total Net Position - Business-Type Activities
$ 20,262,205
The Notes to the Financial Statements are an integral part of this statement. 32
CITY OF ST. JOSEPH
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION - PROPRIETARY FUNDS
For the Year Ended December 31, 2014
Sanitary Storm Water Street Light
Water (601)Sewer (602)Refuse (603)(651)Utility (652)Total
OPERATING REVENUES
Charges for Services$ 723,850 $ 658,852$ 285,197 $ 97,505 $ 63,037 $ 1,828,441
Misc Operating Revenues - 2,827 - - - 2,827
Total Operating Revenues 723,850 661,679 285,197 97,505 63,037 1,831,268
OPERATING EXPENSES
Wages and Salaries 187,989 152,857 28,372 44,443 - 413,661
Materials and Supplies 45,761 41,094 2,760 311 - 89,926
Repairs and Maintenance 25,762 18,649 2,702 18,807 1,043 66,963
Professional Services 22,137 31,849 17,547 6,053 239 77,825
Insurance 12,653 11,206 - - - 23,859
Utilities 68,678 12,020 754 - 46,762 128,214
Depreciation 379,414 392,911 6,506 97,658 - 876,489
Contracted Services - 180,578 255,255 - - 435,833
Equipment - 6,897 - - - 6,897
Miscellaneous 11,331 2,051 8,501 1,607 2,487 25,977
Total Operating Expenses 753,725 850,112 322,397 168,879 50,531 2,145,644
Operating Income (Loss) (29,875) (188,433) (37,200) (71,374) 12,506 (314,376)
NONOPERATING REVENUES
(EXPENSES)
Investment Income 50,134 21,666 4,003 3,772 95 79,670
Special Assessments 303 15 31 (4,467) 33 (4,085)
Loss on Disposal of Asset (4,183) - - (12,195) - (16,378)
Interest Expense (359,313) (183,676) - - - (542,989)
Amortization of Bond Premium 14,621 5,948 - - - 20,569
Other Income 34,387 - - - 34,387
Total Nonoperating Revenues
(Expenses) (264,051) (156,047) 4,034 (12,890) 128 (428,826)
Loss before Capital
Contributions and Transfers (293,926) (344,480) (33,166) (84,264) 12,634 (743,202)
Capital Contributions 508,702 484,536 - 202,819 - 1,196,057
Transfers In 289,000 435,753 - - - 724,753
Transfers Out (131,178) (47,350) (675) (18,720) - (197,923)
Change in Net Position 372,598 528,459 (33,841) 99,835 12,634 979,685
NET POSITION
Beginning of Year 7,224,810 7,323,742 316,175 4,133,053 3,975 19,001,755
End of Year$ 7,597,408 $ 7,852,201$ 282,334 $ 4,232,888 $ 16,609 $ 19,981,440
The Notes to the Financial Statements are an integral part of this statement. 33
CITY OF ST. JOSEPH
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION - BUSINESS-TYPE ACTIVITIES
For the Year Ended December 31, 2014
Total Net Change in Fund Net Position - Proprietary Funds$ 979,685
Amounts reported for business-type activities in the Statement of Activities
are different because:
Recognized current year activity from the Water Access Capital Project Fund
with the business-type activities. 5,108
Recognized current year activity from the Sewer Access Capital Project Fund
with the business-type activities. (310,960)
Capital contributions from governmental activities (885,183)
Transfers in of capital assets from governmental activities 885,183
Change in Net Position - Business-Type Activities $ 673,833
The Notes to the Financial Statements are an integral part of this statement.34
CITY OF ST. JOSEPH
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended December 31, 2014
Sanitary Refuse Storm Water Street Light
Water (601)Sewer (602)(603)(651)Utility (652)Total
CASH FLOWS - OPERATING ACTIVITIES
Receipts from Customers and Users$ 721,258 $ 658,379$ 285,730$ 97,852$ 61,133 $ 1,824,352
Payments to Suppliers (182,767) (64,816) (289,839) (26,913) (48,711) (613,046)
Payments to Employees (178,092) (142,570) (27,692) (42,829) - (391,183)
Other Miscellaneous Receipts 39,349 3,613 316 525 26 43,829
Net Cash Flows - Operating Activities 399,748 454,606 (31,485) 28,635 12,448 863,952
CASH FLOWS - NONCAPITAL FINANCING
ACTIVITIES
Loan from Other Fund - - - - (4,000) (4,000)
Transfer from Other Funds 289,000 435,753 - - - 724,753
Transfer to Other Funds (131,178) (47,350) (675) (18,720) - (197,923)
Net Cash Flows - Noncapital Financing
Activities 157,822 388,403 (675) (18,720) (4,000) 522,830
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal Paid on Debt (5,015,000) (466,494) - - - (5,481,494)
Interest Paid on Debt 4,318,140 (188,358) - - - 4,129,782
Bond Proceeds 660,000
660,000 - - - -
Proceeds from Disposal of Capital Assets - - - - - -
Acquisition of Capital Assets (551,113) (1,737,792) - 6,177 - (2,282,728)
Net Cash Flows - Capital and Related
Financing Activities (587,973) (2,392,644) - 6,177 - (2,974,440)
CASH FLOWS - INVESTING ACTIVITIES
Interest and Dividends Received 46,741 19,564 3,655 3,434 84 73,478
Net Change in Cash and Cash Equivalents 16,338 (1,530,071) (28,505) 19,526 8,532 (1,514,180)
CASH AND CASH EQUIVALENTS
Beginning of Year 3,590 1,829,480 254,337 205,799 20 2,293,226
End of Year$ 19,928 $ 299,409$ 225,832$ 225,325$ 8,552 $ 779,046
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH FLOWS -
OPERATING ACTIVITIES
Operating Income (Loss)$ (29,875)$ (188,433) $ (37,200) $ (71,374)$ 12,506 $ (314,376)
Adjustments to Reconcile Operating Loss
to Net Cash Flows - Operating Activities:
Depreciation Expense 379,414 392,911 6,506 97,658 - 876,489
Other Income 34,690 15 31 (10,642) 35 24,129
Accounts Receivable (2,592) (3,300) 533 347 (1,904) (6,916)
Special Assessments Receivable 4,659 3,598 285 11,167 (7) 19,702
Prepaid Items (125) (125) - - - (250)
Accounts Payable 1,800 12,934 (2,085) (135) 1,820 14,334
Contracts Payable - 177,533 - - - 177,533
Due to Other Governmental Units 1,880 49,186 (235) - - 50,831
Salaries Payable 351 1,357 (62) 29 - 1,675
Compensated Absences Payable 6,191 6,191 332 1,175 - 13,889
Net OPEB Obligation
3,355 2,739 410 410 - 6,914
Total Adjustments 429,623 643,039 5,715 100,009 (56) 1,178,330
Net Cash Flows - Operating Activities$ 399,748 $ 454,606$ (31,485) $ 28,635$ 12,450 $ 863,954
The Notes to the Financial Statements are an integral part of this statement. 35
(THIS PAGE LEFT BLANK INTENTIONALLY)
36
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of St. Joseph is a statutory city governed by an elected mayor and four council
members. The accompanying financial statements present the government entities for which the
government is considered to be financially accountable.
The financial statements present the City and its component units. The City includes all funds, account
groups, organizations, institutions, agencies, departments and offices that are not legally separate from
such. Component units are legally separate organizations for which the elected officials of the City are
financially accountable and are included within the basic financial statements of the City because of the
significance of their operational or financial relationships with the City.
The City is considered financially accountable for a component unit if it appoints a voting majority of
the organizations governing body and it is able to impose its will on the organization by significantly
influencing the programs, projects, activities or level of services performed or provided by the
organization, or there is a potential for the organization to provide specific financial benefits to or
impose specific financial burdens on, the City.
As a result of applying the component unit definition criteria above, certain organizations have been
defined and are presented in this report as follows:
Blended Component Unit Reported as if they were part of the City.
Joint Ventures The relationship of the City with the entity is disclosed.
For the categories above, the specific entities are identified as follows:
1. Blended Component Unit
The St. Joseph Economic Development Authority (EDA) was organized for the purpose of
preserving and creating jobs, enhancing the tax base and promoting the general welfare of the people
of the City. The St. Joseph EDA is governed by a five member board appointed by the City Council,
two members of which are City Council Members. 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, as the
City Council approves the budget as well as any expenditure over $ 1,000. 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.
37
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
2. Joint Ventures
The Central Minnesota Major Crime Investigation Unit is a group of local law enforcement officers
within the four county surrounding areas that will be available to assist any of the participating
entities in the investigation and solution of major crimes. During 2014, the City contributed $ 6,299
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, P.O. Box 140, Sartell, Minnesota 56377.
The City of St. Cloud Human Rights 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 2014, the
City contributed $ 0 to the organization. It is reported as an agency fund of the City of St. Cloud.
nd
Complete financial statements can be obtained from: City of St. Cloud, 400 2 Street South, St.
Cloud, Minnesota 56301.
B.Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information on all of the nonfiduciary activities of the City. Governmental activities,
which normally are supported by taxes and intergovernmental revenues, are reported separately from
business-type activities, which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Interest on general long-term debt is considered an indirect expense and
is reported separately in the Statement of Activities. Program revenues include 1) charges to customers
or applicants who purchase, use or directly benefit from goods, services or privileges provided by a
given function or segment and 2) grants and contributions that are restricted to meeting the operational
or capital requirements of a particular function or segment. Taxes and other items not properly
included among program revenues are reported instead as general revenues. Internally dedicated
revenues are reported as general revenues rather than program revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are levied.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
38
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
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
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 period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current period.
Only the portion of special assessments receivable due within the current 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 Citys primary operating fund. It accounts for all financial resources
of the general City, except those required to be accounted for in another fund.
Park Terrace Improvements Capital Project Fund This fund accounts for the costs associated with
improvements within the Park Terrace Neighborhood.
Proprietary Funds:
Water Fund This Fund accounts for the operations of the Citys water utility.
Sanitary Sewer Fund This Fund accounts for the operations of the Citys sanitary sewer utility.
Refuse Fund This Fund accounts for the operations of the Citys refuse and compost utility.
Storm Water Fund This Fund accounts for the operations of the Citys storm water utility.
Street Light Utility Fund
39
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
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 Citys water, sanitary
sewer, refuse, storm water and street light utility 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 funds principal ongoing operations. The principal operating revenues of
the Water Enterprise, Sanitary Sewer Enterprise, Refuse Enterprise, Storm Water and Street Light Utility
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.
D. Assets, Liabilities, Deferred Inflows and Net Position or Equity
1. Cash and Investments
The Citys cash and cash equivalents are considered to be cash on hand, deposits and highly liquid
debt instruments purchased with original maturities of three months or less from the date of
acquisition. Investments are stated at fair value.
Minnesota Statutes require all deposits made by cities with financial institutions are collateralized in
an amount equal to 110% of deposits in excess of Federal Deposit Insurance Corporation (FDIC)
insurance.
Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies and
instrumentalities, shares of investment companies whose only investments are in the aforementioned
securities, obligations of the State of Minnesota or its municipalities, bankers acceptances, future
contracts, repurchase and reverse repurchase agreements and commercial paper of the highest quality
with a maturity of no longer than 270 days and in the Minnesota Municipal Investment Pool.
40
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities, Deferred Inflows and Net Position or Equity (Continued)
1. Cash and Investments (Continued)
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 Citys investment policy states the City will attempt to diversify its investments according to
type, issuer and maturity. The portfolio, as much as possible, will contain both short-term and long-
term investments. The City will attempt to match its investments with anticipated cash flow
requirements. Extended maturities may be utilized to take advantage of higher yields. No more than
20% of the total investments should extend beyond five years and the weighted average maturity of
the portfolio shall never exceed five years.
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not
fulfill its obligations. Minnesota Statutes 118A.04 and 118A.05 limit investments that are in the top
two ratings issued by nationally recognized statistical rating organizations. The Citys investment
policy limits the allowable investments in accordance with these statutes.
Interest Rate Risk: The City should try to minimize the risk that arises from over investing in
specific instruments, individual financial institutions or maturities. The Citys investment policy
states the investment portfolio will be structured so that securities mature to meet cash flow
requirements and avoiding the need to sell securities prior to maturity, investing in short-term
securities, investing in long-term securities if the market rate is favorable.
Custodial Credit Risk Investments: For an investment, this is the risk that in the event of the
failure of the counterparty, the City will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. The Citys investment policy
addresses this risk and states the City will permit investments only to the extent that there is
Securities Investor Protection Corporation (SIPC) and excess SIPC coverage available.
2. Receivables and Payables
All trade and property tax receivables are shown at a gross amount since both are assessable to the
property taxes and are collectible upon the sale of the property.
The City levies its property tax for the subsequent year during the month of December. December 28
is the last day the City can certify a tax levy to the County Auditor for collection the following year.
Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. The
property tax is recorded as revenue when it becomes measurable and available. Stearns County is the
collecting agency for the levy and remits the collections to the City four times a year. The tax levy
notice is mailed in March with the first half of the payment due on May 15 and the second half due
on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes
receivable.
41
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities, Deferred Inflows and Net Position or Equity (Continued)
2. Receivables and Payables (Continued)
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. Prepaid items are reported
using the consumption method and recorded as expenditures at the time of consumption.
4. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads,
sidewalks and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are defined by the City as
assets with an initial, individual cost of more than $ 1,000 and an estimated useful life in excess of
two years. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the date of
donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized.
Property, plant and equipment of the City are depreciated using the straight-line full year convention
method over the following estimated useful lives:
AssetsYears
Land Improvements5-20
Buildings30-40
Building Improvements15
Infrastructure10-50
Sewer Rights20-50
Furniture and Fixtures5-10
Vehicles5-20
Equipment3-7
Machinery5-7
42
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities, Deferred Inflows and Net Position or Equity (Continued)
5. Deferred Inflows of Resources
In addition to liabilities, the statement of financial position and fund financial statements will
sometimes report a separate section for deferred inflows of resources. This separate financial
statement element represents an acquisition of net position that applies to a future period(s) and so
will not be recognized as an inflow of resources (revenue) until that time. The City presents deferred
inflows of resources on the governmental funds balance sheet as unavailable revenue. The
governmental funds report unavailable revenues from three sources: property taxes, special
assessments and notes receivable. These amounts are deferred and recognized as an inflow of
resources in the period that the amounts become available.
6. Compensated Absences
The City compensates employees who leave City service in good standing for all earned, unused
vacation. Employees can accrue up to 200 hours of vacation depending on years of service. The
maximum amount of carryover from year-to-year is 100 hours or the amount of the current vacation
accrual rate. In addition, employees are compensated for unused sick leave (up to a maximum of
720 hours or 960 hours for LELS and AFSCME employees) at various rates depending on the
employee type and years of service, provided the Citys notice of termination policy has been
complied with.
7. Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the applicable
governmental activities, business-type activities or proprietary fund type Statement of Net Position.
Bond premiums and discounts are deferred and amortized over the life of the bonds using the
effective interest method.
In the fund financial statements, governmental fund types recognize bond premiums and discounts,
as well as bond issuance costs, during the current period. The face amount of debt issued is reported
as other financing sources. Premiums received on debt issuances are reported as other financing
sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
8. Fund Equity
a)Classification
In the fund financial statements, governmental funds report fund classifications that comprise a
hierarchy based primarily on the extent to which the City is bond to honor constraints on the
specific purpose for which amounts in those funds can be spent.
43
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities, Deferred Inflows and Net Position or Equity (Continued)
8. Fund Equity (Continued)
a)Classification (Continued)
Nonspendable Fund Balance These are amounts that cannot be spent because they are
not in spendable form as they are legally or contractually required to be maintained intact
and include amounts set aside for prepaid items.
Restricted Fund Balance These are amounts that are restricted to specific purposes
either by a) constraints placed on the use of resources by creditors, grantors, contributors,
or laws or regulations of other governments or b) imposed by law through enabling
legislation.
Committed Fund Balance These are amounts that can only be used for specific purposes
pursuant to constraints imposed by the City Council (highest level of decision making
authority) through resolution.
Assigned Fund Balance s intent to
be used for specific purposes but are neither restricted nor committed. Assignments are
Unassigned Fund Balance These are residual amounts in the General Fund not reported
in any other classification. The General Fund is the only fund that can report a positive
unassigned fund balance. Other funds would report a negative unassigned fund balance
should the total of nonspendable, restricted, committed and assigned fund balances
exceed the total net resources of that fund.
first use restricted resources, and then use unrestricted resources as they are needed. When
commi
resources in the following order: committed, assigned and unassigned.
b)Minimum Fund Balance
working capital, a portion of the
s budgeted expenditures
of the General Fund, excluding the fire department.
44
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities, Deferred Inflows and Net Position or Equity (Continued)
9. Net Position
Net position represents the difference between assets and liabilities and deferred inflows in the
government-wide financial statements. Net investment in capital assets consists of capital assets, net
of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build
or acquire the capital assets. A reclassification of $ 2,727,674 between the net position and
unrestricted net position on the total column in the Statement of Net Position to recognize the portion
of debt attributable to capital assets donated from governmental activities to business-type activities.
Net position is reported as restricted in the government-wide financial statement when there are
limitations on their use through external restrictions imposed by creditors, grantors or laws or
regulations of other governments. The restricted for other purposes restriction of net position for
governmental activities of $ 1,602,313 includes $ 17,981 for tax incrementing financing, $ 1,486,279
in state collected sales tax restricted by enabling legislation, $ 40,086 in park dedication fees, $ 3,217
restricted by donors for future projects, $ 39,534 in revolving loan funds restricted for EDA projects
and $ 15,216 of restricted PEG access fees.
10.Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenditures/expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
1.In August of each year, City staff submits to the City Council, a proposed operating budget for
the year commencing the following January 1. The operating budget includes proposed
expenditures and the means of financing them for the upcoming year.
2.Public hearings are conducted to obtain taxpayer comments.
3.The budget is legally enacted through passage of a resolution after obtaining taxpayer comments.
4.Budgets for the General Fund and the Economic Development Authority Special Revenue Fund
are adopted on a basis consistent with accounting principles generally accepted in the United
States of America.
45
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information (Continued)
5.Expenditures may not legally exceed budgeted appropriations at the department level. No funds
budget can be increased without City Council approval. The City Council may authorize transfer
of budgeted amounts between departments within any fund. Management may amend budgets
within a department level, so long as the total department budget is not changed.
6.Annual appropriated budgets are adopted during the year for the General Fund and the Economic
Development Authority Special Revenue Fund. 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, 2014.
Nonmajor Governmental Funds:
Special Revenue:
TIF 2-2 St. Joseph Meat Market$ 402
This deficit will be eliminated with future tax increment revenues.
C.Disbursements in Excess of Appropriations
Disbursements exceeded appropriations in the following Fund for the year ended December 31, 2014.
DisbursementsAppropriations
General Fund$ 2,656,243 $ 2,638,020
Economic Development Authority 394,568 130,595
46
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 3 DEPOSITS AND INVESTMENTS
A. Deposits
investments authorized by Minnesota Statutes
investments. For purposes of identifying
risk of investing public funds, the balances and related restrictions are summarized as follows.
Custodial Credit Risk Deposits: As of December 31, 2014
custodial credit risk because it was fully insured through the FDIC or NCUA and fully collateralized
name. As of December 31, 2014, the
Certificates of Deposit$ 3,322,200
Checking 103,593
Savings 1,120,464
Total$ 4,546,257
B.Investments
As of December 31, 2014, the City had the following investments:
Weighted
FairAverageMoody's
ValueMaturity (Years)Rating
Brokered Certificates of Deposit$ 1,870,493 3.2N/A
Brokered Money Market 288N/AN/A
Government Bonds/ Notes
787,4008.09AAA
Total$ 2,658,181
Credit Risk: As of December 31, 2014,
Concentration of Credit Risk: As of December 31 2014
(9.1%), American
Express- Salt Lake City-UT (9.1%), Ally Bank (7.6%), GE Money Bank- UT (7.6%), GE Captial
Financial Inc.- UT (7.6%), Stockman Bank- MT (7.3%) exceeded 5% of the Ci
portfolio. Money market accounts are not subject to concentration of credit risk.
47
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 3 DEPOSITS AND INVESTMENTS
C. Deposits and Investments
The following is a summary of deposits and investments as of December 31, 2014:
Deposits (Note 3.A.)$ 4,546,257
Investments (Note 3.B.) 2,658,181
Petty Cash 275
Total$ 7,204,713
Deposits and investments are presented in the December 31, 2014 basic financial statements as follows:
Statement of Net Position:
Cash and Investments$ 7,204,713
NOTE 4 INTERFUND BALANCES AND TRANSFERS
A. Interfund Balances
The composition of interfund balances as of December 31, 2014 is as follows:
Receivable FundPayable FundAmount
Other Governmental FundsOther Governmental Funds$ 500
The due from/due to other funds balance represents a loan made to cover tax increment financing (TIF)
consulting costs to establish the TIF district.
48
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 4 INTERFUND BALANCES AND TRANSFERS
B.Transfers
The composition of interfund transfers as of December 31, 2014 is as follows:
Transfer InTransfer OutDescription Amount
General FundWaterTransfer retirement reserve funding$ 2,425
General FundSanitary SewerTransfer retirement reserve funding 2,350
General FundRefuseTransfer retirement reserve funding 675
Transfer sign replacement reserve
to seal coating reserve
General FundOther Governmental Funds 6,971
Transfer costs funded with the
Sanitary SewerWaterwater tower project 83,753
Annual transfer for bond payment
Sanitary SewerOther Governmental Funds 352,000
Annual transfer for bond payment
WaterOther Governmental Funds 289,000
Close fund, WAC/SAC fees, move
Other Governmental FundsOther Governmental Fundsexpenditures to project fund
310,876
Other Governmental FundsPark Terrace ImprovementsMove expenditures to project fund 22,641
Other Governmental FundsGeneral FundTransfer unspent capital budget 88,080
GeneralStorm WaterTransfer retirement reserve funding 470
Other Governmental FundsWaterAnnual transfer for bond payment 45,000
Sanitary SewerAnnual transfer for bond payment 45,000
Other Governmental Funds
Other Governmental FundsStorm WaterAnnual transfer for bond payment 18,250
$ 1,267,491
49
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2014 was as follows:
BeginningEnding
BalanceIncreasesDecreasesBalance
Governmental Activities:
Capital Assets not being Depreciated:
Land$ 457,194$ - $ -$ 457,194
Easements 5,820 - - 5,820
Construction in Progress 938,569 744,485 722,193 960,861
Total Capital Assets
not being Depreciated 1,401,583 744,485 722,193 1,423,875
Capital Assets being Depreciated:
Buildings 2,511,263 - - 2,511,263
Infrastructure
16,142,002 615,359 144,117 16,613,244
Improvements 741,872 510,013 - 1,251,885
Machinery and Equipment 3,254,963 69,891 82,359 3,242,495
Total Capital Assets
being Depreciated 22,650,100 1,195,263 226,476 23,618,887
Less Accumulated Depreciation for:
Buildings 965,782 63,373 - 1,029,155
Infrastructure
10,654,843 892,964 144,117 11,403,690
Improvements 407,832 52,915 - 460,747
Machinery and Equipment 1,990,370 216,236 72,613 2,133,993
Total Accumulated
Depreciation 14,018,827 1,225,488 216,730 15,027,585
Total Capital Assets being
Depreciated, Net 8,631,273 (30,225) 9,746 8,591,302
Governmental Activities Capital
$ 10,032,856$ 714,260$ 731,939$ 10,015,177
Assets, Net
50
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 5 CAPITAL ASSETS
BeginningEnding
BalanceIncreasesDecreasesBalance
Business-Type Activities:
Capital Assets not being Depreciated:
Land$ 377,882$ -$ -$ 377,882
Easements 67,915 - - 67,915
Construction in Progress 84,230 3,128,409 - 3,212,639
Total Capital Assets
not being Depreciated 530,027 3,128,409 - 3,658,436
Capital Assets being Depreciated:
Buildings 8,120,415 - - 8,120,415
Plant and Lines
21,195,993 292,885 27,717 21,461,161
Machinery and Equipment 670,838 26,143 16,605 680,376
Sewer Rights 8,531,687 37,525 - 8,569,212
Total Capital Assets
being Depreciated 38,518,933 356,553 44,322 38,831,164
Less Accumulated Depreciation for:
Buildings 1,869,435 184,260 - 2,053,695
Plant and Lines 5,095,378 425,741 15,521 5,505,598
Machinery and Equipment 430,327 37,645 12,421 455,551
Sewer Rights 1,037,380 228,843 - 1,266,223
Total Accumulated
8,432,520 876,489 27,942 9,281,067
Depreciation
Total Capital Assets being
Depreciated, Net 30,086,413 (519,936) 16,380 29,550,097
Business-Type Activities Captial
$ 30,616,440$ 2,608,473$ 16,380$ 33,208,533
Assets, Net
Depreciation expense was charged to functions/programs of the City as follows:
Governmental Activities:
General Government$ 39,537
Public Safety 132,449
Public Works 949,172
Culture and Recreation 104,095
Economic Development 235
Total Depreciation Expense - Governmental Activities$ 1,225,488
Business-Type Activities:
Water$ 379,414
Sanitary Sewer 392,911
Refuse 6,506
Storm Sewer 97,658
Total Depreciation Expense - Business-Type Activities$ 876,489
51
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 6 LONG-TERM DEBT
A.G.O. Bonds
The City issues G.O. bonds to provide for financing improvement, development and street improvement
projects. Debt service is covered respectively by contract revenue, special assessments against benefited
properties, federal grants and lease revenue with any shortfalls being paid from general taxes.
G.O. bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally
are issued as 5 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
IssueInterestOriginalFinalPrincipalDue Within
DateRateIssueMaturityOutstandingOne Year
Governmental Activities:
G.O. Bonds, Including Refunding Bonds:
G.O. Capital Improvement Plan
Refunding Bonds 2009B09/03/091.10%-3.75%$ 495,000 12/01/18$ 230,000$ 55,000
G.O. Certificates of Indebtedness
of 2010A04/22/102.75% 150,000 12/01/15 30,000 30,000
G.O. Refunding Bonds of 2011A11/10/112.00% 430,000 10/01/17 220,000 70,000
G.O. Certificates of Indebtedness
of 2011A11/10/112.00%-2.40% 390,000 10/01/21 285,000 40,000
G.O. Capital Improvement Plan
Bonds of 2011A11/10/112.00%-2.40% 195,000 10/01/21 140,000 20,000
G.O. Certificates of Indebtedness of 2013A09/01/132.00% 265,000 12/01/18 215,000 50,000
Total G.O. Bonds 1,120,000 265,000
G.O. Special Assessment Bonds:
G.O. Improvement Crossover Refunding
Bonds of 2009A03/19/091.25%-2.90% 2,555,00012/01/17 1,020,000 330,000
G.O. Improvement Refunding Bonds of 2010B09/28/102.00%-3.25% 1,035,00012/01/20 790,000 125,000
G.O. Improvement Refunding Bonds of 2010B09/28/102.00%-3.25% 790,000 12/01/25 605,000 50,000
G.O. Improvement Crossover
Refunding Bonds of 2011A11/10/112.00%-2.40% 1,040,00010/01/21 920,000 125,000
G.O. Improvement Bonds of 2013A09/01/132.00%-3.00% 405,000 12/01/24 405,000 30,000
G.O. Improvement Bonds of 2014A06/15/142.00%-3.40% 2,010,00012/01/30 2,010,000 -
Total G.O. Special
Assessment Bonds 5,750,000 660,000
Public Project Revenue Bonds:
EDA Revenue Refunding Bonds of 2005A03/15/052.75%-4.15% 645,000 12/01/15 90,000 90,000
Unamortized Premiums/Discounts 64,349 -
Compensated Absences 439,015 10,839
Total Long-Term Liabilities,
Governmental Activities$ 7,463,364$ 1,025,839
52
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 6 LONG-TERM DEBT
B.Components of Long-Term Liabilities (Continued)
IssueInterestOriginalFinalPrincipalDue Within
DateRateIssueMaturityOutstandingOne Year
Business-Type Activities:
G.O. Revenue Bonds:
G.O. Water Revenue Bonds of 2006A01/12/063.50%-4.00% 3,575,000 12/01/16$ 765,000$ 375,000
G.O. Sewer Revenue Crossover Refunding
Bonds of 2009A03/19/091.25%-3.85% 455,00012/01/21 280,000 35,000
G.O. Water Revenue Refunding
Bonds of 2009C10/20/091.00%-2.60% 425,00012/01/16 135,000 65,000
G.O. Sewer Revenue Bonds of 2011A11/10/112.00-2.40% 225,00010/01/21 165,000 20,000
G.O. Water Revenue Crossover Refunding
Bonds of 2012A04/19/121.00-2.85% 4,860,000 12/01/28 4,860,000 55,000
G.O. Sewer Revenue Bonds of 2013A09/01/132.00-3.70% 1,875,000 12/01/28 1,765,000 110,000
G.O. Improvement Bonds of 2014A06/15/142.00%-3.40% 1,875,000 12/01/32 660,000 30,000
Total G.O. Revenue Bonds 8,630,000 690,000
Utility Revenue Notes Payable:
City of St. Cloud SIS
Phases 1 and 2 (2009B Bonds)10/26/092.00%-4.0% 835,00008/01/19 450,000 85,000
City of St. Cloud SIS
Phase 3 (2010 Bonds)10/28/102.00%-2.5% 180,00008/01/20 115,000 15,000
City of St. Cloud SIS
Phase 4 (2013B Bonds)11/01/133.00%-4.00% 650,00002/01/29 650,000 30,000
City of St. Cloud PFA Loan08/01/101.77% 4,527,703 08/20/30 3,848,536 210,220
Total Notes Payable 5,063,536 340,220
Unamortized Premium 85,702 -
Compensated Absences 122,421 4,815
Total Business-Type Activities 13,901,659 1,035,035
Total all Long-Term Liabilities$ 21,365,023$ 2,060,874
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 $ 4,860,000 of the G.O. Improvement Bonds 2012A for a crossover refunding of the
G.O. Improvement Bonds 2005D. The issue will be called on December 1, 2014. The refunding was
undertaken to reduce total future debt service payments. The refunding resulted in a net present value
benefit of $ 298,853. The economic gain from the transaction was $ 366,766.
53
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 6 LONG-TERM DEBT
C. Changes in Long-Term Liabilities
Long-term liability activity for the year December 31, 2014 was as follows:
ended
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental Activities:
Bonds Payable:
General Obligation$ 1,380,000 $ - $ 260,000 $ 1,120,000
G.O. Special Assessment Bonds 4,740,000 2,010,000 1,000,000 5,750,000
Public Project Revenue Bonds 180,000 - 90,000 90,000
Total Bonds Payable 6,300,000 2,010,000 1,350,000 6,960,000
Unamortized Premiums/Discounts 47,342 33,635 16,628 64,349
Compensated Absences 395,218 149,128 105,331 439,015
Total Governmental
Activities 6,742,560 2,192,763 1,471,959 7,463,364
Business-Type Activities:
Bonds Payable:
G.O. Utility Revenue Bonds 13,150,000 660,000 5,180,000 8,630,000
Notes Payable:
City of St. Cloud Notes 5,365,030 - 301,494 5,063,536
Unamortized Premiums
96,216 10,055 20,569 85,702
Compensated Absences 108,532 39,647 25,758 122,421
Total Business-Type
Activities 18,719,778 709,702 5,527,821 13,901,659
Total Long-Term Liabilities$ 25,462,338$ 2,902,465$ 6,999,780$ 21,365,023
For Governmental Activities, the General Fund typically liquidates the liability related to compensated
absences. For Business-Type Activities, the Water, Sanitary Sewer, Refuse and Storm Water Funds
typically liquidates the liability related to the compensated absences.
54
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 6 LONG-TERM DEBT
D. Minimum Debt Payments
Minimum annual principal and interest payments required to retire long-term liabilities:
Governmental Activities
G.O. Government ActivitiesG.O. Special Assessment Bonds
Year Ended
December 31,PrincipalInterestPrincipalInterest
2015$ 265,000$ 25,905$ 660,000$ 145,588
2016 240,000 19,830 785,000 129,088
2017 250,000 14,480 805,000 109,988
2018 180,000 8,730 465,000 90,738
2019 60,000 4,080 480,000 81,253
2020-2024 125,000 4,440 1,575,000 266,125
2025-2029 - - 815,000 101,383
2030 - - 165,000 5,610
Total$ 1,120,000$ 77,465 $ 5,750,000$ 929,773
Governmental Activities
Public Project Revenue Bonds
Year Ended
December 31,PrincipalInterestTotal
2015$ 90,000$ 3,735$ 1,190,228
2016 - - 1,173,918
2017 - - 1,179,468
2018 - - 744,468
2019 - - 625,333
2020-2024 - - 1,970,565
2025-2029 - - 916,383
2030 - - 170,610
Total$ 90,000$ 3,735 $ 7,970,973
55
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 6 LONG-TERM DEBT
D. Minimum Debt Payments (Continued)
Business-Type Activities
Utility Revenue BondsNotes Payable
Year Ended
December 31,PrincipalInterestPrincipalInterestTotal
2015$ 690,000$ 221,285$ 340,220$ 109,358$ 1,360,863
2016 710,000 199,860 358,946 101,485 1,370,291
2017 670,000 177,640 362,671 93,196 1,303,507
84,841
2018 685,000 163,880 366,510 1,300,231
75,418
2019 700,000 149,440 380,461 1,305,319
2020-2024 3,420,000 518,303 1,423,611 267,582 5,629,496
2025-2029 1,625,000 134,725 1,557,673 117,390 3,434,788
130,000 9,010 273,444 4,843 417,297
2030-2032
Total$ 8,630,000 $ 1,574,143$ 5,063,536 $ 854,113 $ 16,121,792
E.Conduit Debt
Conduit debt obligations are certain limited obligation revenue bonds or similar debt instruments issued
for the express purpose of providing capital financing for a specific third party. The City has issued
various revenue bonds to provide funding to private sector entities for projects deemed to be in the
public interest. Although these bonds bear the name of the City, the City has no obligation for such debt.
Accordingly, the bonds are not reported as liabilities in the financial statements of the City.
As of December 31, 2014, the Citys conduit debt consisted of the following:
Industrial Revenue Bonds (St. Joseph
Development, LLC), Series 2002$ 405,000
56
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 7 FUND BALANCE
Fund equity balances are classified as follows to reflect the limitations and restrictions of the respective
funds.
ParkNonmajor
TerraceGovernmental
GeneralImprovementsFundTotal
Nonspendable:
Prepaid Expenses$ 22,423 $ -$ -$ 22,423
Restricted:
PEG Access Fees 15,216 - - 15,216
Debt Service - - 1,461,013 1,461,013
Tax Increments - - 17,981 17,981
State Collected Sales Tax Projects - - 1,486,279 1,486,279
Park Dedication Fees - - 40,086 40,086
Chartitable Gambling - - 3,217 3,217
Revolving Loan - - 39,534 39,534
Total Restricted 15,216 - 3,048,110 3,063,326
Committed:
Economic Development - - 103,523 103,523
Assigned:
Elections 24,116 - - 24,116
Street Seal Coating /Crack Filling 28,534 - - 28,534
Street Maintenance Plan 5,000 - - 5,000
Schneider Field 2,062 - - 2,062
Loader Tires 764 - - 764
Fire Operations 20,000 - - 20,000
Fire Debt Service 180,000 - - 180,000
Fire Capital 300,085 - - 300,085
Police Forfeiture 5,850 - - 5,850
Severance Pay 46,230 - - 46,230
Capital Outlay Reserves - 478,300 695,841 1,174,141
Debt Service Relief - - 253,928 253,928
Total Assigned 612,641 478,300 949,769 2,040,710
Unassigned 1,090,634 - (402) 1,090,232
Total$ 1,740,914$ 478,300 $ 4,101,000$ 6,320,214
57
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 8 RISK MANAGEMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance
Trust (LMCIT) with other cities in the state, which is a public entity risk pool currently operating as a
common risk management and insurance program. The City pays an annual premium to the LMCIT for
its insurance coverage. The LMCIT is self-sustaining through commercial companies for excess claims.
The City is covered through the pool for any claims incurred but unreported, 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 years.
The Citys workers compensation insurance policy is retrospectively rated. With this type of policy,
final premiums are determined after loss experience is known. The amount of premium adjustment for
2014 is estimated to be immaterial based on workers compensation rates and salaries for the year.
At December 31, 2014, there were no other claims liabilities reported in the fund based on the
requirements of GASB Statement No. 10, which requires a liability for claims be reported if information
prior to the issuance of the financial statements indicates it is probable a liability has been incurred at the
date of the financial statements and the amount of the loss can be reasonably estimated.
NOTE 9 PENSION PLANS
A. Plan Description
All full-time and certain part-time employees of the City are covered by defined benefit plans
admini
administers the General G
Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans. These Plans are
established and administered in accordance with Minnesota Statutes Chapters 353 and 356.
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 by
statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by state statute and vest after five years of
credited service. The defined retirement benefits are based on a members highest average salary for any
five successive years of allowable service, age and years of credit at termination of service.
58
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 9 PENSION PLANS
A. Plan Description (Continued)
Basic Plan members. The
retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual
formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of
average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity
accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and
1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for
Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF
members, the annuity accrual rate is 3.0% for each year of service. For all 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 Plan members hired on or after July 1,
1989. A reduced retirement annuity is also available to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. A single-life annuity is a
lifetime annuity that ceases upon the death of the retiree no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the Fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply
to active Plan participants.
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.
59
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 9 PENSION PLANS
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 Plan members and
Coordinated Plan members were required to contribute 9.1% and 6.25%, respectively, of their annual
covered salary in 2014. PEPFF members were required to contribute 10.2% of their annual covered
salary in 2014. In 2014, the City was required to contribute the following percentages of annual covered
payroll: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members and 15.3% for PEPFF
members. The Citys contributions to the for the years ending
December 31, 2014, 2013 and 2012 were $ 57,872, $ 53,773 and $ 51,941, respectively. The Citys
contributions to the PEPFF for the years ending December 31, 2014, 2013 and 2012 were $ 78,176,
$ 72,518 and $ 66,427, respectively. The Citys contributions were equal to the contractually required
contributions for each year as set by state statute. Contribution rates will increase on January 1, 2015 in
the Coordinated Plan (6.5% for members and 7.5% for employers) and the PEPFF (10.8% for members
and 16.2% for employers).
Defined Contribution Plan
Council Members of the City are covered by the
is a multiple-employer deferred compensation plan administered by PERA. The PEDCP is a tax
qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of
employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less
administrative expenses. Minnesota Statutes Chapter 353D.03, specifies plan provisions, including the
employee and employer contribution rates for those qualified personnel who elect to participate. An
eligible elected official who decides to participate contributes 5% of salary which is matched by the
the employer and for salaried employees must be a fixed percentage of salary. Employer contributions
for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are
paid for their services may elect to make member contributions in an amount not to exceed the employer
share. Employer and employee contributions are combined and used to purchase shares in one or more
of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan,
PERA receives 2% of employer contributions and twenty-five hundredths of 1% of the assets in each
account annually.
There is no vesting period required to receive benefits in the PEDCP. Both the City and the elected local
government officials made the required 5% contribution, amounting to $ 1,635 from each source, or
$ 3,269 in total. As of December 31, 2014 and for the year then ended, PERA held no securities issued
by the City or other related parties.
60
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 9 PENSION PLANS
Defined Benefit Pension Plan Volunteer Firefighters Relief Association
A. Plan Description
The City contributes to the St. Joseph Fire Department -
employer, defined benefit pension plan. The plan provides retirement, disability and death benefits to
volunteer firefighters of the City. Pension benefits are determined by multiplying the accrued liability,
as set forth in Minnesota Statutes 424A.092, Subd. 2, by the ratio of the lump sum service pension
amount provided in the bylaws of the Association to a service pension of $ 1,800 per year of service.
Benefit provisions are also subject to enabling state statutes; therefore, any amendments to benefit
provisions are reviewed by the Office of the State Auditor.
The Association issues a publicly available audit report. The report may be obtained by writing to
St. Joseph Fire Department Relief Association at P.O. Box 4, St. Joseph, Minnesota 56374 or calling
(320) 363-7201.
B.Funding Policy
Minnesota Statutes Chapter 69.772 specifies minimum support rates required on an annual basis. The
minimum support rates from the municipality and from State aid are determined as the amount required
to meet the normal cost plus amortizing any existing prior service costs over a ten year period. The
City shall be used to amortize the unfunded liability of the relief association. The Association is
comprised of volunteers; therefore, there are no payroll expenditures (i.e., there are no covered payroll
percentage calculations). During the year, the City recognized as revenue and as an expenditure an on-
behalf payment of $ 50,192
annual contribution for the current year and related information follows:
Date Certified to City Council:June 10, 2013
Statutory Assumptions:
Investment Rate of Return5.0%
Administrative Expenses Increase3.5%
State Aid Contribution100.0%
Amortization of Surplus (Deficit)10.0%
C. Three Year Trend Information
YearStatutoryActualPercentageStatePercentage
EndedContributionContributionContributedContributionContributed
12/31/14$ 15,736$ 15,736100%$ 50,192100%
12/31/13 18,830 18,830100% 51,538100%
12/31/12 13,679 13,679100% 37,285100%
61
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 9 PENSION PLANS
D. Required Supplementary Information: Schedule of Funding Progress
Excess as a
StatutoryExcess ofPercentage of
Value ofAccruedAssets OverFundedCoveredCovered
ValuationAssetsLiabilityLiabilitiesRatioPayroll*Payroll*
Date(a)(b)(a-b)(a/b)(c)((a-b)/c)
12/31/14$ 742,098$ 628,103$ (113,995)118.15%N/AN/A
12/31/13 695,743 673,236 (22,507)103.34%N/AN/A
12/31/12 598,851 662,688 63,83790.37%N/AN/A
* The Association is comprised of volunteers; therefor, there are no payroll expenditures (i.e., there are
no covered payroll percentage calculations.
E. Contributions Required and Contributions Made
Financial requirements of the Association are determined in accordance with Minnesota Statutes as
follows:
Normal Cost for Next Year (Increase in Pension Benefit Obligation)
Plus Estimated Expenses for Next Year and 10% of Any Deficits
Less Anticipated Income Next Year and 10% of Any Surplus
Contributions totaling $ 15,736 were made by the City and $ 50,192 by the State of Minnesota, in
accordance with state statute requirements for the year ended December 31, 2014.
NOTE 10 POST EMPLOYMENT HEALTH CARE PLAN
A. Plan Description
The City provides a single-employer defined benefit health care plan to eligible retirees. The plan offers
medical coverage.
periodically review its medical coverage, and to obtain requests for proposals in order to provide the
most favorable benefits and premiums for City employees and retirees.
B.Funding Policy
Retirees contribute to the health care plan at the same rate as City employees. This results in the retirees
receiving an implicit rate subsidy. Contribution requirements are established by the City, based on the
contract terms with BlueCross BlueShield. The required contributions are based on projected pay-as-
you-go financing requirements. For 2014, the City contributed $ 4,913 to the plan. As of December 31,
2014, there was one retiree
62
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 10 POST EMPLOYMENT HEALTH CARE PLAN
C. Annual Other Post Employment Benefits Cost and Net Other Post Employment
Benefits Obligation
other post employment benefits (OPEB) cost (expense) is calculated based on the
annual required contribution (ARC) of the City, an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The City prospectively implemented this Statement during the
2009 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
obligation to the plan.
ARC$ 38,729
Interest on Net OPEB Obligation 8,263
Adjustment to ARC (11,948)
Annual OPEB Cost 35,044
Contributions Made 4,913
Increase in Net OPEB Obligation 30,131
Net OPEB Obligation - Beginning of Year 206,587
Net OPEB Obligation - End of Year$ 236,718
EB cost contributed to the plan and the net
OPEB obligation for 2014, 2013 and 2012 was as follows:
Percentage of
Annual OPEB Employer Annual OPEB Cost Net OPEB
Year EndedCostContributionContributedObigation
12/31/12$ 32,788$ 8653%$ 177,108
12/31/13 33,966 4,48713% 206,587
12/31/14 35,044 4,91314% 236,718
D. Funded Status and Funding Progress
As of January 1, 2012, the most recent actuarial valuation date, the City had no assets deposited to fund
the plan. The actuarial accrued liability for benefits was $ 239,852 and the actuarial value of assets was
$ 0, resulting in an unfunded actuarial accrued liability (UAAL) of $ 239,852. The covered payroll
(annual payroll of active employees covered by the plan) was $ 1,386,050, and the ratio of the UAAL to
the covered payroll was 17.3%.
63
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
NOTE 10 POST EMPLOYMENT HEALTH CARE PLAN
D. Funded Status and Funding Progress (Continued)
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality and the health care cost trend. Amounts determined regarding the funded status
of the plan and the ARC of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
The Schedule of Funding Progress Other Post Employment Benefits, presented as required
supplementary information following the Notes to the Financial Statements, presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative
to the actuarial accrued liabilities for benefits.
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, 2012 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 prefund 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
10years. The UAAL is being amortized as a level percentage of projected payroll on an open basis.
The remaining amortization period at December 31, 2014 was 24 years.
NOTE 11 COMMITMENTS
The City has entered into contracts for construction as follows:
Expended
Contractthrough
ProjectAmount12/31/14Commitment
2014 Park Terrace Improvements$ 1,521,703$ 1,262,169$ 259,534
2013 Sewer Improvements 1,642,531 1,460,903 181,628
2014 Water Tower Rehab 487,150 481,750 5,400
Total$ 446,562
64
CITY OF ST. JOSEPH
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2014
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. Rental payments are due from the City to the St. Joseph
EDA. The City will own the projects upon completion of the rental payments. Since the St. Joseph
EDA is reported as a blended component unit of the City the lease transactions are not reported. The
debt and projects are recorded as though part of the City.
NOTE 13 GASB STATEMENTS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 68 replaces the requirements of Statement No. 27, Accounting for Pensions by
State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to
governments that provide pensions through pension plans administered as trusts or similar arrangements
that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions to
recognize their long-term obligation for pension benefits as a liability for the first time, and to more
comprehensively and comparably measure the annual costs of pension benefits.
GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement
Date, an amendment of GASB Statement No. 68, requires that, at transition, a government recognize a
beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the
measurement date of the beginning new pension liability. The provisions of this Statement should be
applied simultaneously with the provisions of Statement 68 which is effective for periods beginning after
June 15, 2014.
65
(THIS PAGE LEFT BLANK INTENTIONALLY)
66
REQUIRED SUPPLEMENTARY INFORMATION
67
CITY OF ST. JOSEPH
SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS
December 31, 2014
ActuarialUAAL as a
ActuarialAccrued LiabilityUnfundedPercentage of
ActuarialValue of (AAL) -AALFunded CoveredCovered
ValuationAssetsEntry Age(UAAL)RatioPayrollPayroll
Date(a)(b)(b-a)(a/b)(c)((b-a)/c)
12/31/09$ -$ 345,319$ 345,3190.0%$ 1,070,51532.3%
12/31/12 - 239,852 239,8520.0% 1,386,05017.3%
* This Schedule was implemented in 2009. The City has had two actuarial studies complete to date;
therefore, the Schedule contains only two years of data.
68
SUPPLEMENTARY INFORMATION
69
CITY OF ST. JOSEPH
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2014
Variance with
Final Budget -
Original Final Actual
BudgetBudgetAmounts
Over (Under)
REVENUES
Property Taxes$ 1,087,245$ 1,087,245$ 1,124,594$ 37,349
Special Assessments 1,500 1,500 7,302 5,802
Franchise Fees 117,450 117,450 124,940 7,490
Licenses and Permits 98,970 98,970 105,929 6,959
Intergovernmental Revenue:
Local Government Aid 873,160 873,160 873,172 12
PERA Aid 1,540 1,540 1,541 1
Fire Aid 39,000 39,000 51,782 12,782
Police Aid 51,500 51,500 57,519 6,019
Federal Grants 8,000 8,000 7,903 (97)
State Grants 6,180 6,180 8,495 2,315
Other Grants and Aids 19,000 19,000 18,520 (480)
Total Intergovernmental Revenue 998,380 998,380 1,018,932 20,552
Charges for Services:
General Government 25,650 25,650 16,029 (9,621)
Public Safety 215,480 215,480 216,871 1,391
Public Works 3,550 3,550 3,672 122
Culture and Recreation 9,200 9,200 6,495 (2,705)
Total Charges for Services 253,880 253,880 243,067 (10,813)
Fines and Forfeitures 62,500 62,500 38,330 (24,170)
Miscellaneous Revenues:
Investment Income 23,000 23,000 24,842 1,842
Contributions and Donations 18,500 18,500 9,181 (9,319)
Other 48,625 48,625 48,025 (600)
Total Miscellaneous Revenues 90,125 90,125 82,048 (8,077)
Total Revenues 2,710,050 2,710,050 2,745,142 35,092
EXPENDITURES
General Government
Mayor and Council 67,915 67,915 70,406 2,491
Administrative and Finance 366,345 366,345 356,465 (9,880)
Other General Government 106,990 106,990 125,688 18,698
Capital Outlay 16,250 11,500 150 (11,350)
Total General Government 557,500 552,750 552,709 (41)
70
CITY OF ST. JOSEPH
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2014
Variance with
Final Budget -
Original Final Actual
BudgetBudgetAmounts
Over (Under)
EXPENDITURES
Public Safety
Police:
Current$ 978,275$ 978,275$ 946,539$ (31,736)
Capital Outlay 27,825 - 4,010 4,010
Total Police 1,006,100 978,275 950,549 (27,726)
Fire:
Current 342,180 342,180 376,636 34,456
Capital Outlay 51,700 51,700 31,871 (19,829)
Total Fire 393,880 393,880 408,507 14,627
Other:
Current 94,230 94,230 96,715 2,485
Capital Outlay 2,000 - - -
Total Other 96,230 94,230 96,715 2,485
Total Public Safety 1,496,210 1,466,385 1,455,771 (10,614)
Public Works
Streets and Highways:
Street Maintenance and Storm Sewers 242,950 242,950 240,316 (2,634)
Snow and Ice Removal 97,570 97,570 117,964 20,394
Street Engineering 30,000 30,000 45,155 15,155
Capital Outlay 52,500 30,000 45,317 15,317
Total Public Works 423,020 400,520 448,752 48,232
Culture and Recreation
Current 218,365 218,365 199,011 (19,354)
Capital Outlay 24,315 - - -
Total Culture and Recreation 242,680 218,365 199,011 (19,354)
Total Expenditures 2,719,410 2,638,020 2,656,243 18,223
Excess of Revenues Over
(Under) Expenditures (9,360) 72,030 88,899 16,869
OTHER FINANCING SOURCES (USES)
Insurance Recoveries - - 5,207 5,207
Sale of Property - - 766 766
Transfers In - - 12,891 12,891
Transfers Out - - (88,080) (88,080)
Total Other Financing Sources (Uses) - - (69,216) (69,216)
Net Change in Fund Balances$ (9,360) $ 72,030 19,683$ (52,347)
FUND BALANCES
Beginning of Year1,721,231
End of Year$ 1,740,914
71
CITY OF ST. JOSEPH
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2014
Special Revenue
TIF 2-1 TIF 2-2 St.
Economic Millstream Joseph Meat
Development Shops and Market State Collected
Authority (150)Lofts (157)(158)Sales Tax (200)
ASSETS
Cash and Investments $ 109,444$ 17,952 $ 116$ 1,426,026
Taxes Receivable - Delinquent 1,316 - - -
Special Assessments Receivable:
Delinquent - - - -
Deferred - - - -
Accounts Receivable - - - -
Interest Receivable 216 29 - -
Due from Other Funds 500 - - -
Due from Other Governments - - - 80,968
Notes Receivable - - - -
Total Assets$ 111,476$ 17,981 $ 116$ 1,506,994
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable$ 6,602$ -$ -$ 293
Contracts Payable - - - 20,422
Due to Other Funds - - 500 -
Salaries and Benefits Payable 35 - 18 -
Total Liabilities 6,637 - 518 20,715
Deferred Inflows Of Resources
Unavailable Revenue - Property Taxes 1,316 - - -
Unavailable Revenue - Special Assessments - - - -
Unavailable Revenue - Notes Receivable - - - -
Total Deferred Inflows of Resources 1,316 - - -
Fund Balances
Restricted - 17,981 - 1,486,279
Committed 103,523 - - -
Assigned - - - -
Unassigned - - (402) -
Total Fund Balances 103,523 17,981 (402) 1,486,279
Total Liabilities, Deferred Inflows
of Resources and Fund Balances$ 111,476$ 17,981 $ 116$ 1,506,994
72
Special RevenueDebt Service
G.O. Crossover City Hall G.O.
Park Charitable Refunding EDA Refunding Fire Hall G.O.
Dedication Gambling Revolving Bonds of Bonds of Refunding Bonds
(205)(215)Loan (250)Total2009A (318)2005A (322)of 2003B (331)
$ 40,029$ 3,211 $ 39,470$ 1,636,248$ 345,915$ 582$ 73,377
- - - 1,316 2,066 2,734 808
- - - - - - -
- - - - 337,191 - -
31 - - 31 - - -
86 6 64 401 762 29 162
- - - 500 - - -
- - - 80,968 268 340 88
- - 21,724 21,724 - - -
$ 40,146$ 3,217 $ 61,258$ 1,741,188$ 686,202$ 3,685$ 74,435
$ 60$ -$ - $ 6,955$ 72$ 71$ 70
- - - 20,422 - - -
- - - 500 - - -
- - - 53 - - -
60 - - 27,930 72 71 70
- - - 1,316 2,066 2,734 808
- - - - 337,191 - -
- - 21,724 21,724 - - -
- - 21,724 23,040 339,257 2,734 808
40,086 3,217 39,534 1,587,097 346,873 880 73,557
- - - 103,523 - - -
- - - - - - -
- - - (402) - - -
40,086 3,217 39,534 1,690,218 346,873 880 73,557
$ 40,146$ 3,217 $ 61,258$ 1,741,188$ 686,202$ 3,685$ 74,435
73
CITY OF ST. JOSEPH
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2014
Debt Service
G.O. G.O.
Improvement G.O. G.O. Improvement
Bonds of Improvement Certificates of Bonds of
2005B/2010B Bonds of Indebtedness of 2011A/2006C
(333)2013A (348)2013A (349)(338)
ASSETS
Cash and Investments $ 254,235 $ 191,194$ 2,616$ 148,501
Taxes Receivable - Delinquent 379 - 458 1,470
Special Assessments Receivable:
Delinquent 103,111 - - 3,168
Deferred 318,051 66,236 - 289,955
Accounts Receivable 231 - - -
Interest Receivable 544 340 96 244
Due from Other Funds - - - -
Due from Other Governments 45 - 244 1,268
Notes Receivable - - - -
Total Assets$ 676,596 $ 257,770$ 3,414$ 444,606
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable$ 71 $ 70$ 70$ 70
Contracts Payable - 17,582 - -
Due to Other Funds - - - -
Salaries and Benefits Payable - - - -
Total Liabilities 71 17,652 70 70
Deferred Inflows Of Resources
Unavailable Revenue - Property Taxes 379 - 458 1,470
Unavailable Revenue - Special Assessments 421,162 66,236 - 293,123
Unavailable Revenue - Notes Receivable - - - -
Total Deferred Inflows of Resources 421,541 66,236 458 294,593
Fund Balances
Restricted 254,984 173,882 2,886 149,943
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total Fund Balances 254,984 173,882 2,886 149,943
Total Liabilities, Deferred Inflows
of Resources and Fund Balances$ 676,596 $ 257,770$ 3,414$ 444,606
74
Debt Service
G.O. Capital G.O. G.O. G.O. G.O. Capital G.O.
Improvement Certificates of Improvement Certificates of Improvement Debt Service Improvement
Plan Bonds of Indebtedness of Bonds of Indebtedness of Plan Bonds of Relief Fund Bonds of
2009B (343)2010A (344)2010B (345)2011A (346)2011A (347)(390)2014A (350)
$ 7,575 $ 5,521$ 224,865$ 2,947$ 13,703$ 253,092$ 196,802
1,880 805 177 387 437 467 -
- - 775 - - 8,039 -
- - 163,834 - - 174,896 219,835
- - - - - - 4,338
24 16 390 20 333 - 1,322
- - - - - - -
242 121 55 79 80 1,154 -
- - - - - - -
$ 9,721 $ 6,463$ 390,096$ 3,433$ 14,553$ 437,648$ 422,297
$ 70 $ 72$ 71$ 69$ 71$ 318$ 72
- - - - - - -
- - - - - - -
- - - - - - -
70 72 71 69 71 318 72
1,880 805 177 387 437 467 -
- - 164,609 - - 182,935 219,835
- - - - - - -
1,880 805 164,786 387 437 183,402 219,835
7,771 5,586 225,239 2,977 14,045 - 202,390
- - - - - - -
- - - - - 253,928 -
- - - - - - -
7,771 5,586 225,239 2,977 14,045 253,928 202,390
$ 9,721 $ 6,463$ 390,096$ 3,433$ 14,553$ 437,648$ 422,297
75
CITY OF ST. JOSEPH
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2014
Capital Projects
Debt Service
City Hall/Police
Garage Capital General
Improvements Capital Outlay Water Access
Total(447)(490)Fund (501)
ASSETS
Cash and Investments $ 1,720,925$ 174,042$ 241,034$ 263
Taxes Receivable - Delinquent 12,068 - - -
Special Assessments Receivable:
Delinquent 115,093 - - -
Deferred 1,569,998 - - -
Accounts Receivable 4,569 - - 5,382
Interest Receivable 4,282 - - 26
Due from Other Funds - - - -
Due from Other Governments 3,984 - - -
Notes Receivable - - - -
Total Assets$ 3,430,919$ 174,042$ 241,034$ 5,671
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable$ 1,237$ -$ -$ -
Contracts Payable 17,582 - - -
Due to Other Funds - - - -
Salaries and Benefits Payable - - - -
Total Liabilities 18,819 - - -
Deferred Inflows Of Resources
Unavailable Revenue - Property Taxes 12,068 - - -
Unavailable Revenue - Special Assessments 1,685,091 - - -
Unavailable Revenue - Notes Receivable - - - -
Total Deferred Inflows of Resources 1,697,159 - - -
Fund Balances
Restricted 1,461,013 - - -
Committed - - - -
Assigned 253,928 174,042 241,034 5,671
Unassigned - - - -
Total Fund Balances 1,714,941 174,042 241,034 5,671
Total Liabilities, Deferred Inflows
of Resources and Fund Balances$ 3,430,919$ 174,042$ 241,034$ 5,671
76
Capital Projects
Total
Sewer Access Governmental
Fund (502)TotalFunds
$ 271,369$ 686,708$ 4,043,881
- - 13,384
- - 115,093
- - 1,569,998
2,751 8,133 12,733
974 1,000 5,683
- - 500
- - 84,952
- - 21,724
$ 275,094$ 695,841$ 5,867,948
$ -$ -$ 8,192
- - 38,004
- - 500
- - 53
- - 46,749
- - 13,384
- - 1,685,091
- - 21,724
- - 1,720,199
- - 3,048,110
- - 103,523
275,094 695,841 949,769
- - (402)
275,094 695,841 4,101,000
$ 275,094$ 695,841$ 5,867,948
77
CITY OF ST. JOSEPH
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
Special Revenue
Economic TIF 2-1 TIF 2-2 St.
Development Millstream Joseph Meat State Collected Park
Authority Shops and Market Sales Tax Dedication
(150)Lofts (157)(158)(200)(205)
REVENUES
Property Taxes$ 95,213$ -$ -$ -$ -
Tax Increments - 37,067 4,027 - -
Sales Taxes - - - 380,113 -
Special Assessments - - - - -
Intergovernmental 271,636 - - - -
Charges for Services 16,752 - - - 164
Miscellaneous:
Investment Income 2,004 276 2 - 801
Contributions and Donations - - - - 3,627
Revolving Loan Repayments - - - - -
Total Revenues 385,605 37,343 4,029 380,113 4,592
EXPENDITURES
Current
Culture and Recreation - - - - 2,540
Economic Development 394,568 33,482 3,965 - -
Debt Service
Principal - - - - -
Interest and Other Charges - - - - -
Capital Outlay
General Government - - - 112,566 -
Public Safety - - - - -
Public Works - - - - -
Culture and Recreation - - - 54,035 20,627
Economic Development - - - - -
Total Expenditures 394,568 33,482 3,965 166,601 23,167
Excess of Revenues Over
(Under) Expenditures
(8,963) 3,861 64 213,512 (18,575)
OTHER FINANCING SOURCES (USES)
Bonds Issued - - - - -
Bond Premium - - - - -
Transfers In - - - - 4,000
Transfers Out - - - - -
Total Other Financing Sources (Uses) - - - - 4,000
Net Change in Fund Balances (8,963) 3,861 64 213,512 (14,575)
FUND BALANCES
Beginning of Year 112,486 14,120 (466) 1,272,767 54,661
End of Year$ 103,523$ 17,981$ (402)$ 1,486,279$ 40,086
78
Special RevenueDebt Service
G.O.
G.O. Crossover Improvement City Hall G.O.
Charitable Refunding Refunding EDA Refunding
Gambling Revolving Loan Bonds of Bonds of 2007B Bonds of 2005A
(215)(250)Total2009A (318)(320)(322)
$ -$ -$ 95,213$ 74,041$ 2 $ 94,062
- - 41,094 - - -
- - 380,113 - - -
- - - 139,840 40,366 -
- - 271,636 - - -
- - 16,916 - - -
63 589 3,735 7,091 1,372 268
3,200 - 6,827 - - -
- 8,083 8,083 - - -
3,263 8,672 823,617 220,972 41,740 94,330
3,995 - 6,535 - - -
- - 432,015 - - -
- - - 315,000 115,000 90,000
- - - 39,771 4,980 7,653
- - 112,566 - - -
- - - - - -
- - - - - -
- - 74,662 - - -
- - - - - -
3,995 - 625,778 354,771 119,980 97,653
(732) 8,672 197,839 (133,799) (78,240) (3,323)
- - - - - -
- - - - - -
- - 4,000 80,000 3,050 -
- - - - (15,806) -
- - 4,000 80,000 (12,756) -
(732) 8,672 201,839 (53,799) (90,996) (3,323)
3,949 30,862 1,488,379 400,672 90,996 4,203
$ 3,217$ 39,534$ 1,690,218$ 346,873$ -$ 880
79
CITY OF ST. JOSEPH
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
Debt Service
G.O.
Improvement G.O. G.O.
Fire Hall G.O. Bonds of Improvement Certificates of
Refunding Bonds 2005B/2010B Bonds of Indebtedness of
of 2003B (331)(333)2013A (348)2013A (349)
REVENUES
Property Taxes$ 24,780$ 12,009$ -$ 53,542
Tax Increments - - - -
Sales Taxes - - - -
Special Assessments - 98,007 12,251 -
Intergovernmental - - - -
Charges for Services 26,405 - - -
Miscellaneous:
Investment Income 1,505 5,055 3,166 893
Contributions and Donations - - - -
Revolving Loan Repayments - - - -
Total Revenues 52,690 115,071 15,417 54,435
EXPENDITURES
Current
Culture and Recreation - - - -
Economic Development - - - -
Debt Service
Principal 70,000 120,000 - 50,000
Interest and Other Charges 6,118 19,666 12,159 6,696
Capital Outlay
General Government - - - -
Public Safety - - - -
Public Works - - 6,127 -
Culture and Recreation - - - -
Economic Development - - - -
Total Expenditures 76,118 139,666 18,286 56,696
Excess of Revenues Over
(Under) Expenditures
(23,428) (24,595) (2,869) (2,261)
OTHER FINANCING SOURCES (USES)
Bonds Issued - - - -
Bond Premium - - - -
Transfers In - - 91,501 -
Transfers Out - - - -
Total Other Financing Sources (Uses) - - 91,501 -
Net Change in Fund Balances (23,428) (24,595) 88,632 (2,261)
FUND BALANCES
Beginning of Year 96,985 279,579 85,250 5,147
End of Year$ 73,557$ 254,984$ 173,882$ 2,886
80
Debt Service
G.O.
Improvement G.O. G.O. Capital G.O. G.O.
Bonds of Improvement Improvement G.O. Certificates Improvement Certificates of
2011A/2006C Bonds of Plan Bonds of of Indebtedness of Bonds of 2010B Indebtedness of
(338)2007A (341)2009B (343)2010A (344)(345)2011A (346)
$ 48,030$ -$ 66,832$ 33,465 $ 5,998$ 21,442
- - - - - -
- - - - - -
74,982 19,716 - - 53,912 -
- - - - - -
- - - - - 21,494
2,274 5,973 228 146 3,632 184
- - - - - -
- - - - - -
125,286 25,689 67,060 33,611 63,542 43,120
- - - - - -
- - - - - -
120,000 280,000 55,000 30,000 50,000 35,000
21,948 11,718 9,716 1,721 16,726 6,731
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
141,948 291,718 64,716 31,721 66,726 41,731
(16,662) (266,029) 2,344 1,890 (3,184) 1,389
- - - - - -
- - - - - -
15,000 - - - 13,250 -
- (185,519) - - - -
15,000 (185,519) - - 13,250 -
(1,662) (451,548) 2,344 1,890 10,066 1,389
151,605 451,548 5,427 3,696 215,173 1,588
$ 149,943$ -$ 7,771$ 5,586 $ 225,239$ 2,977
81
CITY OF ST. JOSEPH
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
Debt Service
G.O. Capital G.O.
Improvement Debt Service Improvement
Plan Bonds of Relief Fund Bonds of
2011A (347)(390)2014A (350)Total
REVENUES
Property Taxes$ 21,958$ 214$ -$ 456,375
Tax Increments - - - -
Sales Taxes - - - -
Special Assessments - 4,561 213,343 656,978
Intergovernmental - - - -
Charges for Services - - - 47,899
Miscellaneous:
Investment Income 3,093 - 13,942 48,822
Contributions and Donations - - - -
Revolving Loan Repayments - - - -
Total Revenues 25,051 4,775 227,285 1,210,074
EXPENDITURES
Current
Culture and Recreation - - - -
Economic Development - - - -
Debt Service
Principal 20,000 - - 1,350,000
Interest and Other Charges 3,391 - 81,876 250,870
Capital Outlay
General Government - - - -
Public Safety - - - -
Public Works - 1,897 - 8,024
Culture and Recreation - - - -
Economic Development - - - -
Total Expenditures 23,391 1,897 81,876 1,608,894
Excess of Revenues Over
(Under) Expenditures
1,660 2,878 145,409 (398,820)
OTHER FINANCING SOURCES (USES)
Bonds Issued - - 23,346 23,346
Bond Premium - - 33,635 33,635
Transfers In - 223,966 - 426,767
Transfers Out - (235,000) - (436,325)
Total Other Financing Sources (Uses) - (11,034) 56,981 47,423
Net Change in Fund Balances 1,660 (8,156) 202,390 (351,397)
FUND BALANCES
Beginning of Year 12,385 262,084 - 2,066,338
End of Year$ 14,045$ 253,928 $ 202,390 $ 1,714,941
82
Capital Projects
2013 City Hall/Police
2013 Street Equipment Garage Capital General Total Other
Improvements Certificates Improvements Capital Water Access Sewer Access Governmental
(448)(449)(447)Outlay (490)Fund (501)Fund (502)TotalFunds
$ - $ -$ -$ -$ -$ - $ -$ 551,588
- - - - - - - 41,094
- - - - - - - 380,113
- - - - - - - 656,978
- - - - - - - 271,636
- - - - 61,862 32,020 93,882 158,697
- - - - 246 9,070 9,316 61,873
- - - - - - - 6,827
- - - - - - - 8,083
- - - - 62,108 41,090 103,198 2,136,889
- - - - - - - 6,535
- - - - - - - 432,015
- - - - - - - 1,350,000
- - - - - - - 250,870
- 20,730 - 269 - - 20,999 133,565
- 12,918 - 14,843 - - 27,761 27,761
1,795 12,850 - 14,715 - - 29,360 37,384
- 2,504 - - - - 2,504 77,166
- 1,173 - - - - 1,173 1,173
1,795 50,175 - 29,827 - - 81,797 2,316,469
(1,795) (50,175) - (29,827) 62,108 41,090 21,401 (179,580)
- - - - - - - 23,346
- - - - - - - 33,635
- - - 84,080 12,000 3,000 99,080 529,847
(91,501) - - (6,971) (69,000) (355,050) (522,522) (958,847)
(91,501) - - 77,109 (57,000) (352,050) (423,442) (372,019)
(93,296) (50,175) - 47,282 5,108 (310,960) (402,041) (551,599)
93,296 50,175 174,042 193,752 563 586,054 1,097,882 4,652,599
$ - $ -$ 174,042$ 241,034$ 5,671$ 275,094$ 695,841$ 4,101,000
83
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
S REPORT
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, 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, 2014 and the related Notes
to the Financial Statements, which collectively comprise the
issued our report thereon dated April 10, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the internal control. Accordingly, we
do not express an opinion on the effectiveness of the internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, as described in the accompanying Schedule of Finding and Response on
Internal Control, we identified a certain deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
timely basis. We consider the deficiencies described in the accompanying Schedule of Finding and
Response on Internal Control to be a material weakness, listed as Audit Finding 06-01.
.
84
Compliance and Other Matters
As part of obtaining reasonable assurance about whether financial statements are free from
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 or other matters that are required to be
reported under Government Auditing Standards.
Response to Findings
identified in our audit is described in the accompanying Schedule of
Finding and Response on Internal Control. response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City
compliance. Accordingly, this communication is not suitable for any other purpose.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
April 10, 2015
85
REPORT ON LEGAL COMPLIANCE
S REPORT
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, 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, 2014, and the related Notes
to the Financial Statements, and have issued our report thereon dated April 10, 2015.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State
Auditor pursuant to Minnesota Statutes § 6.65, contains 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 audit considered all of the
listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the City of
St. Joseph failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for
Political Subdivisions. However, our audit was not directed primarily toward obtaining knowledge of
such noncompliance. Accordingly, had we performed additional procedures, other matters may have
of
This report is intended solely for the information and use those charged with governance and management
of the City and the State Auditor and is not intended to be and should not be used by anyone other than these
specified parties.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
April 10, 2015
86
CITY OF ST. JOSEPH
SCHEDULE OF FINDING AND RESPONSE ON
INTERNAL CONTROL
December 31, 2014
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Material Weakness:
Audit Finding 06-01 Improve Segregation of Accounting Duties
Adequate segregation of accounting duties is in place when the four areas of a transaction have been
separated: authorization, custody, recording and reconciliation.
tation of its internal control over
significant areas including: cash receipts, cash disbursements, capital assets, payroll and utility
billing.
ability to initiate, record, process and report financial data consistent with the assertions of
management in the financial statements. 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 or City Administrator enters cash and checks into the point of sale system,
reconciles the entries and prepares the deposit. The Police Records Specialist records police
receipts, receives payments and reconciles the collections. The Finance Director or police take
deposits to the bank.
Cash Disbursements
The Finance Director approves some invoices for payment, enters invoices into the system,
generates checks and a check register. The Finance Director is also an authorized signer and has
access to the Maelectronic signature. The Administrator reviews and approves checks for
payment. 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. The department heads review their listing for accuracy.
Payroll
The Finance Director enters employees time, processes and posts payroll, generates a payroll
report, distributes paystubs to employees, and posts the journal entries related to payroll. In
addition, this same employee reconciles payroll accruals and time off balances. The City
Administrator does review payroll reports, time off balances and calculated compensated
absences balances for the audit.
87
CITY OF ST. JOSEPH
SCHEDULE OF FINDING AND RESPONSE ON
INTERNAL CONTROL
December 31, 2014
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Material Weakness: (Continued)
Audit Finding 06-01 Improve Segregation of Accounting Duties (Continued)
Utility Billing
The Utility Billing Clerk enters new accounts into the utility billing system and uploads meter
readings via interfacing with electronic readers. The Utility Billing Clerk enters any rate changes
to the system and can enter manual adjustments. The Utility Billing Clerk calculates and enters
final bills, prints and mails utility bills, reconciles receipts to billed amounts and enters receipts
batches.
Cash Reconciliation and Access
The Finance Director performs the above noted responsibilities, while also reconciling cash and
generating manual journal entries.
The City Council and City staff are aware of the limited personnel handling
matters. The processes and internal controls are reviewed frequently to look for ways to improve
internal controls. The department heads, City Administrator and City Council each have active roles
in monitoring the financial matters of the City to provided additional oversight. It is unlikely
complete segregation of accountings duties will be achieved due to the cost of hiring several
additional staff.
88