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Home My WebLink About10. Auditor's Report on FY 2002 I D. CITY OF SHAKO PEE Memorandum TO: Mayor and Council Mark McNeill, City Administrator FROM: Gregg Voxland, Finance Director SUBJ: Auditor's Report DATE: June 16, 2003 Introduction & Background Attached is item number 10 for the 6/17/2003 agenda. This is the Comprehensive annual Financial Report for 2002 and the auditor's report. Steve Wischmann from KDV will present the report. I I I I CITY OF SHAKOPEE I Shakopee, Minnesota I MEMORANDUM ON FINANCIAL ANALYSIS INFORMATION, ACCOUNTING I POLICIES AND PROCEDURES AND INTERNAL CONTROL I December 31,2002 I I I I I 1\ I I I I ~ I 1\ ~DV I KERN. DEWENTER'VIERE I April 25, 2003 I I Honorable Mayor and City Council City of Shakopee Shakopee, Minnesota I The accompanying memorandum includes suggestions for improvement of accounting I procedures and internal accounting control measures that came to our attention as a result of our audit of the financial statements of the City of Shakopee, Minnesota, for the year ended December 31,2002. The matters discussed herein were considered by us during our audit and I they do not modify the opinion expressed in our independent auditors' report dated April 25, 2003, on such statements. I In planning and performing our audit of the financial statements of the City of Shakopee, Minnesota, for the year ended December 31, 2002, we considered its internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing I our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving internal control and its operation that we consider to be a reportable condition under standards established by the I American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the City's ability to record, process, I summarize and report on financial data consistent with the assertions of management in the financial statements. The following pages distinguish between reportable conditions, fmancial analysis, and management suggestions. I A material weakness is a reportable condition in which the design or operation of one or more of the internal control components do not reduce to relatively low level the risk that errors or I irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing L,eir assigned functions. I Our consideration of internal controls would not necessarily disclose all matters in internal controls that might be reportable conditions and, accordingly, would not necessarily disclose all I reportable conditions that are considered to be material weaknesses as defined above. However, we do not believe the reportable condition described is a material weakness. I I 1 I I Honorable Mayor and City Council I City of Shakopee Page 2 I This report is intended solely for the information and use of the City Council, management and others within the City and is not intended to be, and should not be used by anyone other than I these specified parties. We would like to express our appreciation for cooperation extended to us by the employees of the City during our audit. I ~,lk W.w.~. V~, ~_ I Kern, DeWenter, Vi ere, Ltd. St. Cloud, Minnesota I I I I I I I I I I I I 2 ---~._-_..._-- ~~------- I I FINANCIAL ANALYSIS I General Fund I The City of Shakopee has consistently experienced increased revenues over the last five years. General Fund revenues increased in 2002 by 20.1% from $ 9,198,300 to $ 11,046,479. The following graphs illustrate the allocation of the revenues for 2002 and 2001. Increases in revenue I for 2002 were a result of tax levies, charges for services and intergovernmental revenue. Licenses and permits decreased from $ 2,740,253 in 2001 to $ 2,313,544 in 2002. I 2002 General Fund Revenues I Miscellaneous Charges for Services 3% 11% Fines and Forfeits I 2% I Licenses and Permits Taxes 21% 53% I Intergovernmental 10% I I 2001 General Fund Revenues I Miscellaneous Charges for Services 3% 12% I Fines and Forfeits Taxes 3% 41% I Licenses and Permits I 30% Intergovernmental 11% I I I 3 -- I I FINANCIAL ANALYSIS (Continued) I Total General Fund expenditures also increased in 2001 from $ 8,425,214 to $ 9,622,006, or 14.2%. This is the third year of increased expenditures, due to growth in the city. The following I is an illustrated expenditure breakdown for 2002 and 2001. Significant expenditure increases during 2002 were concentrated in the general government, public safety and public works areas. Miscellaneous expenditures increased slightly, from $ 103,681 in 2001 to $ 109,455 in 2002. I 2002 General Fund Expenditures I Miscellaneous Recreation 1% 6% General Government I 27% I I Public Safely 47% I I 2001 General Fund Expenditures I Miscellaneous Recreation 1% 8% General Government I 28% Public Works 19% I I Public Safely 44% I I 'I i I 4 I. I I FINANCIAL ANALYSIS (Continued) I The general fund operations showed net income of $ 1,424,473 prior to transfers out, compared to net income of $ 773,086 in 2001. The Fund Balance increased $ 389,520 or 12.4% in 2002 I after net transfers out totaling $ 1,044,597. Transfer out for 2002 were used to fund various City projects, including the building internal service fund. Fund balance totaled $ 3,534,080 at December 3 l, 2002 and is undesignated. The bar chart below highlights the General Fund total I revenues, expenditures and fund balance the last five years. I General Fund $12,000,000 - I $10,000,000 I $8,000,000 - $6,000,000 I $4,000,000 - -j $2,000,000 II $0 1998 1999 2000 2001 2002 I ~----.- -. I-Revenues I $7,461,603 $8,450,929 $9,102,927 $9,198,300 $11,046,479 . . ~x;e-nditures_L$~,355,~j~~~,~41 I $1,750,573 S;,425,~_~~~,006 -Fund Balance l $4,019,747 I $4,700,3;s-r$4,873,116 $3,144,560 $3,~4,o..80.-.I I I Governmental Funds I' ,I Governmental Fund revenues increased in 2002 after a decrease in 2001. Taxes and special assessments account for the majority of the revenues, 40.9% in 2002 compared to 53.0% in I 2001. The decline in Taxes and Special Assessments percentage for 2002 is a result of increased Intergovernmental revenues in the Capital Projects funds. Expenditures in the governmental funds increased significantly in 2002, increasing 33.5%, due to increased Capital Projects. I Capital Outlay for capital projects continues to be the greatest expenditure annually, totaling . 38.7% in 2002 and 24.8% in 2001. Other financing sources for 2002 include $ 4,938,612 of bond proceeds. The following charts represent total governmental funds revenues, expenditures, I I financing sources and financing uses and fund balances for the last five years. I I 5 -- I I FINANCIAL ANALYSIS (Continued) I I Governmental Funds I $30,000,000 _ ~ , $25,000,000 - i -- I $20,000,000 $15,000,000 I $10,000,000 -I -, "~~~~ ! Ii -7 ~- / I 1998 1999 I 2000 2001 I 2002 .~BeY..\'ill'.!'s/Qther Financing Sources 1_$27',JlZ,()60__$J1J40,125.J...g1,705,77U$17,679,163 T $27,690,0~ I ~E"p.,-"-diture,,LOJher Fin_aJlcil1g9se.'5 I $20,~~$18,Ot4.,4}2~$20,9l.9,9..3.3_L$2J,9_69,~$26, 120,898 I I Fund Balance - Governmental Funds I. ------- (E_U_I!.c1_E:!<!_I_<!_I1_~~__<!J__I:)_~~~_'I1_I:l~_r._3J_L______________---------------------1 $12,000,000 - I i Ii I $10,000,000 i I ".'00,'00 '__J I $6,000,000 - J. $4,000,000 - - I I I I I I 1'.00',00' --t:Ill:I- J $0 ' I General Special Revenue Debt Service Capital Projects o 1998 I!! 1999 02000 0 2001 1Il2002~ I I I 6 --------- I I I I FINANCIAL ANALYSIS (Continued) I I I Debt Service I I r I The following charts illustrate debt service requirements through 2030, and bonded debt for the last five years. The next two years will require considerable resources to be committed for I repayment of various general obligation, tax increment and revenue bonds, including both principal and interest payments. I I Debt Service Schedule (Including Principal and Interest) I $18,000,000 - = --- - - - $16,000,000 -- - I $14,000,000 - 1- $12,000,000 I --- I- $10,000,000 - 1- $8,000,000 - I - $6,000,000 :::::::::: : ill~~~~~Q~OI1[l[1[]jl[1[Ja- I- I I- i? I $0 --- -,- -,-- --,--,------ 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 . . General Obligation Bonds OTax Increment Bonds o Revenue Bon_c!?.-J I * Includes maturities for years 2020 through 2030. I I I I I 7 ----------- I I FINANCIAL ANALYSIS (Continued) I I I Bonded G.O. Debt I $20,000,000 - --- - -~ ~-~-- - I $15,000,000 - I I I $10,000,000 - I $5,000,000 - I $0 1998 1999 2000 2001 2002 I o Gross Bonded Debt · Net Bonded Debt ["I Debt Service Fund Balance j I I I Enterprise Funds I The City has five enterprise funds, four of which showed positive net earnings for 2002. The Electric, Water, Sewer and Storm Drainage Funds continue to report the highest operating Income. The Recreation Fund continues to struggle in generating operating income, requiring I transfers from other funds to subsidize operations. The Storm Drainage Fund experienced an increase in net income as a result of significant trunk charges. The following charts compare the segment information and retained earnings of all the enterprise funds for the last five years. I I I I I I 8 ___ __ - _________n____ ___ -------------- ___n__________________ _ I I FINANCIAL ANALYSIS (Continued) I I Electric Fund $20,000,000 I $18,000,000 $16,000,000 i I i $14,000,000 i I $12,000,000 - -I i I $10,000,000 I I I $8,000,000 ! $6,000,000 I $4,000,000 - $2,000,000 - $0 I 1998 1999 2000 2001 2002 lDoperatino Rev~~u;s . Operating Expenses ~ Operating Income o Income Before Operating Transfers . Net Income I I Water Fund $2,500,000 - /1---------------------------- ---------------------------------------------------------------------- ----------------------------- -----------------1 I $2,000,000 - ~ I $1,500,000 - I I I I I $1,000,000 i I $500,000 - $0 I 1998 1999 2000 2001 2002 o Operating Revenues . Operating Expenses 00 Operating Income o Income Before Operating Transfers . Net Income I I I 9 ,- _.~- ~..._----- I I FINANCIAL ANALYSIS (Continued) I Sewer Fund I I .._ _n_u.._..____~_ $3,000,000 i -- - I $2,500,000 $2,000,000 I $1,500,000 ~ I $1,000,000 i $500,000 - 1 i I I I $0 7' 1998 1999 2000 2001 2002 I --- I I o Operating Revenues . Operating Ex penses III Operating Income o Net Income - I I I I Storm Drainage Fund ________________________________________________________m____ _________________m_____ -----------l $1,800,000 I I $1,600,000 - I I -. $1,400,000 - ~ _.~" I $1,200,000 - l I i $1,000,000 I ~ $800,000 - I $600,000 -1 $400,000 - I -1 $200,000 - i I /1 7 $0 - / 1998 1999 2000 2001 2002 I ~ I o Service Charges · Operating Ex penses III Operating Income o Net Income I I I I I 10 I i ------~----- I I FINANCIAL ANALYSIS (Continued) I Recreation Fund I ~~-~~~----- ~~-~-~~~-----~-------- --------------- ----- --------- u____ --------- $1,500,000 I $1,000,000 --~ ~ I $500,000 ! I $0 I ($500,000)- I i I . I I! I )----------------------------------------------------- ______________m______u___________________________________--------------------------7-! ($1,000,000) ~- -~ --~- ,------ - - 1998 1999 2000 2001 2002 I I o Operating Revenues -Operating Expenses 10 Operating (Loss) D(Loss) Before Operating Transfers -Net Income (Loss) ~ I Retained Earnings - Enterprise Funds I I-m----------------------------------------------------------- _____________________________________m_____________m_________ ----~---i $18,000,000 I i I ! I $16,000,000 - $14,000,000 j I $12,000,000 - - j $10,000,000 - I i $8,000,000 ! I $6,000,000 - I $4,000,000 - I i $2,000,000 - I I ~- ,; $0 i ~-~------- - I ($2,000,000) /------------- m_________~__;----------m-----------m--------------m----------------m---m----------------m7 I Electric Water Sewer Storm Drainage Recreation 01998 131999 -2000 ~ ~20.Q1_ 02OQ2__ I I I II ---"-- ---- ---- -- ----------------------------- ---- ---- -_.---- ---- -- - ---- -- - - -- -- - -- - -- ------ - - -- - -- - I I I I I I I I FINANCIAL ANALYSIS (Continued) I I I I , I Internal Service Funds I I I I The Equipment Fund was started in 1995 to fund City equipment purchases. The fund has I I shown increasing growth and income each year as illustrated by the following chart. I I I I Equipment Fund I I I I I $600,000 I I I I $500,000 I $400,000 I I I $300,000 - I $200,000 I I - - I I I I I "--.- _n I - -- --- I 1998 1999 2000 2001 2002 I L 0 Rental Charges ONe! IncomeJ I . Operating Expenses/Depreciation If1 Operating Income I I I I I I I The Building Fund was established in 1999 to fund City building improvements. The following I 1 I I chart illustrates fund activity for 1999 through 2002, the fund's first four years of operation. In I I 2002 and 2001, transfers in totaling $ 1,000,000 and $ 3,250,000 were made from the general fund respectively. I I Building Fund I I I I I I 4,000,000 I I I I I I I 3,500,000 I I j 3,000,0001-- I , I I I I 2,500,000: I i I I I 2,000,000 i ~ i I I I 1,500,0001 I I I , I 1,000,000 I 500,000 I .. - a. I -500,000 I 1999 2000 2001 2002 I I I I I I ~ Equipm ent .!Rental Gh_arges .!I.Operating Expe~sesfDepreciation Q Operatingl,,-coj1l..! Netln~om~j I i I I I I I 12 I I I I I ~---- - I I FINANCIAL ANALYSIS (Continued) I Tax Capacity and Certified Levy I $30,000,000 - __ __J j I I $25,000,000 ' $20,000,000 I $15,000,000 I $10,000,000 I ------< i $5,000,000 - Ii i I ,$0 I '''" "" _ L "''' I "'" _I _ ",,,-;7 III TaxCaflacity, $16,548,256 $17,337,384 $20,388,264, $25,923,552 $21,902,755 I I I ~Ce~ifj~d~~v;L~3,263,5_~3 '$i853,3~6 I - $3,853,3-;--i~~477,969--T$~6~S:D3~ I I Tax Capacity Rate 40 .000% ---------------------------.------------------------------------------- ----------------------------------1 I 35000% ~~j I I 'I ~~ ~ 25_000% 23.358% ~ 21.127% - " I I - 20.132% i 20.000% - 18.199%__ -; ~ ! !, 15.000% - --- -j I 10000% I--- -- -1 i I 5000% - -- -- I I ~OO~ I 1998 1999 2000 2001 2002 I I I I I I I I 13 I ~_. ___ ___ __u_ __._ __. __ I I FINANCIAL ANALYSIS (Continued) I I General Fund Revenues/Expenditures Per Household I I $1,320 $1,400 - $1,246 $1,200 / -$1,166---$1;158-- - I 1,061 I $1 000 ~/ I i ' I - I $800 .~ ; I I ~ $600 V I /~ I $400 V I ~ I $200 V I i I I $0 ~, I 1999 2000 2001 2002 I 0 Revenues ~ ! I!!I Expenditures I * Denoted the number of households serviced for the year. i I I I Productivity Measures 1999 2000 2001 2002 I Population 17,200 20,568 21,500 22,400 Number of Households 6,400 7,805 7,940 8,863 Number of Full Time Employees I (Excluding Enterprise Funds) 79 89 87 93 I Population per Employee 218 231 256 237 Households per Employee 81 88 9] 85 I I I I I I I 14 I I FINANCIAL ANALYSIS (Continued) I I National Bond Ratings i I 25% 20% I 20% I 150/0 10% I 5% I 0% I Aaa Aal Aal Aa3 AI' A2 A3 Baal Baal Baa3 Below , - Denotes City of Shakopee's Rating I REPORT ABLE CONDITIONS I During our audit we noted a condition which is considered to be "reportable condition" as defined by standards established by the American Institute of Certified Public Accountants. I Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the City's ability to record, process, summarize and report financial data I consistent with the assertions of the Council in the financial statements. The reportable condition follows. I Lack of Sef:ref:ation of Accountinf: Duties I During the year ended December 31, 2002, the City had a lack of segregation of accounting duties due to a limited number of office employees. Although this meets the definition of a "reportable condition," it may not be practical to correct since the costs of obtaining desirable I segregation of accounting duties may exceed benefits that could be derived. I I 15 I I MANAGEMENT RECOMMENDATIONS I Preoare for Imolementation of GASB Statement No. 34 I In the last three years, the audit and consulting professionals at Kern, DeWenter, Viere (KDY) presented your City with three installments of a guide to implement the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34 - Basic Financial I Statements and Management's Discussion and Analysis for State and Local Governments. This year KDV continues its commitment to provide the City with information it needs to make the conversion to the new reporting model. I Keeping in mind that the City of Shakopee will be required to implement GASB Statement No. 34 for the fiscal year ending December 31, 2003, we recommend the City review our I recommendations in each implementation stage from the previous years and develop an implementation plan to assist the City in reaching these goals. I We will continue to provide specific explanation of various issues related to your City to successfully implement GASB Statement No. 34. I SUMMARY I Comments and recommendations contained in this letter are not directives, but instead are intended to provide a basis for discussion and further thought. We thank you for your support and providing us with the privilege to work with you. I I I I I I I I I 16 I I I I CITY OF SHAKOPEE, MINNESOTA I Scott County I COMPREHENSIVE ANNUAL FINANCIAL REPORT I For the Fiscal Year Ended December 31, 2002 I DEPARTMENT OF FINANCE I GREGG M. VOXLAND, Director of Finance I I I MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA I 129 HOLMES STREET SOUTH SEUU(OPEE,~ 55379 I I I I I I I CITY OF SHAKOPEE, MINNESOTA I TABLE OF CONTENTS I SECTION I INTRODUCTORY SECTION I REFERENCE PAGE Organizational Chart. . . . . . . . . . . . . . . . . . . . . . . .. .... . . . . . . . . . . . . . . . . . I Elected and Appointed Officials. . . . . . . . . . . . . . .. .... . . . . . . . . . . . . . . . . . II I Finance Director's Letter ................. . . . . . . . . . . . . . . . .. . . . . . . . . III I Certificate of Achievement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI SECTION 1\ FINANCIAL SECTION I Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII SECTION IIA I GENERAL PURPOSE FINANCIAL STATEMENTS Combined Balance Sheet - All Fund Types And Account Groups. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . Exhibit 1 1 I Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types ................................................. Exhibit 2 4 I Combined Statement of Revenues, Expenditures and and Changes in Fund Balance - Budget and Actual General and Special Revenue Fund Types. . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 3 5 I Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types. . . . . . . . . . . . . . . . . . . . . . . . . . . .. ..................... Exhibit 4 7 Combined Statement of Cash Flows - All Proprietary I Fund Types. . . . . . . . . . . . . . . . . . . . . . . . . . . ., ..................... Exhibit 5 8 Notes to Financial Statements. . . . . . . . . . . . . . . .. ........ . . . . . . . . . . . . . 9 I SECTION liB COMBINING AND INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS AND SCHEDULES I General Fund: Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . Exhibit A 28 Statement of Revenues, Expenditures and Changes in I Fund Balance. . . . . . . . . . . . . . . . . . . . . . .. ..................... Exhibit A-1 29 Schedule of Revenues - Budget And Actual . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit A-2 30 Schedule of Expenditures - Budget And Actual . . . . . . . . . . . . . . . . . . . . . . . Exhibit A-3 32 I Special Revenue Funds: Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit B 37 Combining Statement of Revenues, Expenditures and I Changes in FUnd Balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit B-1 38 Combining Schedule of Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit B-2 40 Combining Schedule of Revenues, Expenditures and I Changes in Fund Balances - Budget and Actual. . . . . . . . . . . . . . . . . . . Exhibit B-3 41 I I Debt Service Funds: Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit C 44 I Combining Statement of Revenues, Expenditures and Changes in Fund Balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit C-1 46 Capital Projects Funds: I Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit D 49 Combining Statement of Revenues, Expenditures and Changes in Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit D-1 51 I Enterprise Funds: Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit E 54 I Combining Statement of Revenues, Expenses and Changes in Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit E-1 55 Combining Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit E-2 57 Electric Fund: I Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit F 59 Statement of Revenues, Expenses I and Changes in Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit F-1 60 Statement of Cash Flows. . . . . . . . . . . . . . . . .. .. . . . . . . . . . . . . . . . . . . . Exhibit F-2 61 Schedule of Property, Equipment and Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit F-3 62 I Water Fund: Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . Exhibit G 63 I Statement of Revenues, Expenses and Changes in Retained Earnings. . . . . . . . .. . . . . . . . . . . . . . . . . . . . Exhibit G-1 64 Statement of Cash Flows . . . . . . . . . . . . . . . . . . ........... . . . . . . . . . . Exhibit G-2 65 Schedule of Property, Equipment and Accumulated I Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit G-3 66 Sewer Fund: I Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit H 67 Statement of Revenues, Expenses and Changes in Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit H-1 68 Statement of Cash Flows. . . . . . . . . . . . . . . ........................................ .. Exhibit H-2 69 I Schedule of Property, Equipment and Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit H-3 70 Storm Drainage Fund: I Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 71 Statement of Revenues, Expenses and Changes in Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1-1 72 I Statement of Cash Flows. . . . . . . . . . . . . . . . . . ....... . . . . . . . . . . . . . . Exhibit 1-2 73 Schedule of Property, Equipment and Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1-3 74 I Refuse Fund: Statement of Revenues, Expenses and Changes in Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit J 75 I Statement of Cash Flows. . . . . . . . . . . . . . . . .. ........... . . . . . . . . . . Exhibit J-1 76 I I I I I Recreation Fund: Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit K 77 Statement of Revenues, Expenses and Changes in Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit K-1 78 I Statement of Cash Flows. . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . Exhibit K-2 79 Schedule of Property, Equipment and Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit K-3 80 I Internal Service Funds: Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit L 82 I Combining Statement of Revenues, Expenses and Changes in Retained Earnings . . . . . . . .. . . . . . . . . . . . . . . . . . . . . Exhibit L-1 83 Combining Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit L-2 84 I Equipment Fund: Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit M 86 Statement of Revenues, Expenses and Changes in Retained Earnings-. .. .. . . .. . . . . . . . . . . . . . . . .. . . . Exhibit M-1 87 I Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit M-2 88 Schedule of Property, Equipment and Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Exhibit M-3 89 I Building Fund: Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit N 90 Statement of Revenues, Expenses I and Changes in Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit N-1 91 Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . .. .................. Exhibit N-2 92 Schedule of Property, Equipment and Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit N-3 93 I Agency Funds: Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 0 95 I Statement of Changes in Assets and Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . Exhibit 0-1 96 General Fixed Asset Account Group: I Schedule of General Fixed Assets. . . . . . . . . . . . . . . . . . . . . . . .'. . . . . . . . . Exhibit P 98 Schedule of General Fixed Assets by Function and Activity. . . . . . . . . . . . . . . . . . . . . . . . .. ..................... Exhibit P-1 99 I Schedule of Changes in General Fixed Assets by Function and Activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit P-2 100 General Long-Term Debt Account Group: I Schedule of General Long-Term Debt. . . . . . .. ..................... Exhibit Q 102 Supplementary Financial Information: Combined Schedule of Bonded Indebtedness. . . . . . . . . . . . . . . . . . . . . . . Exhibit R 104 I Schedule of Debt Service Requirements to Maturity. . Exhibit S 105 Schedule of Deferred Tax Levies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit T 106 I I I I I SECTION III I STATISTICAL SECTION General Fund Expenditures by Function..... . . . . . . . . . . . . . . . . . . . . . . . . . Table 1 108 General Fund Revenues by Source. .. . .. . . . . . . . .. . . . . .. . . . .. . . .. . . . . . Table 2 109 I Property Tax Levies and Collections... .. . . .. . ... . . . . . . .. .. .. . ... . . . . . Table 3 111 Assessed and Estimated Market Value of All Taxable Property. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . Table 4 112 I Tax Rates and Tax Levies Direct and Overlapping Governments. . . . . . . . . . . Table 5 114 Special Assessment Billings and Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . Table 6 115 Ratio of Net Bonded Debt to Assessed Value and I Net Bonded Debt Per Capita.. . . . . . . . . . . . . .. . . .. . . .. . . .. . . .. . . . . . Table 7 116 Computation of Direct and Overlapping Debt. .. .. .. . . . . . .. . . . . . .. . . . . . . Table 8 117 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Fund Expenditures. . . .. . . .. . . . . . ... . . .. :' Table 9 118 I Schedule of Revenue Bond Coverage. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . Table 10 119 Computation of Legal Debt Margin.. .. . .. . . . . . . .. . . . . . .. . . . . . . .. . . . . . Table 11 120 Demographic Statistics. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 12 121 I Property Value and Construction .................................... \ Table 13 122 Ten Principal Taxpayers in City of Shakopee. . . ... ..................... Table 14 123 Insurance Coverage....................... ....................... Table 15 124 I Principal Officials and Surety Bonds. .. . . . . . .. . . .. . . . . . .. . . . . . .. . . . . . . Table 16 125 Miscellaneous Statistical Data. . . . . . . . . . . . . . . .. ..................... Table 17 126 SECTION IV I OTHER DATA Schedule of Expenditures of Federal Awards 127 I Note to the Schedule of Expenditures of Federal Awards 128 Independent Auditors' Report on Compliance and on Internal Control Over I Financial Reporting Based on an Audit of Financial Statements Performed ' in Accordance with Government Auditing Standards 129 I Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 131 I Schedule of Findings and Questioned Costs in Accordance with OMB Circular A-133 133 I Independent Auditors' Report on Compliance with Minnesota Statutes 135 Findings and Corrective Action Plans on Compliance with Minnesota Statutes I and Internal Controls 136 I I I I ~ ~~tr~:i~~~:~~J'/f~4 ~i~~1;~~l1i:}+rl~:~~ ~4Ai~ t~~'~:;~:{:ltt~i(~~} ~;}~~ :<<~~1tJf!~~Eri~~~M ~~~ (~?~~~s~f~;';~;~:: ~ ~f~~~h1~t ~ ik\~ ~~~; 1~ : 1!~~1 ~~,~ ~~~% ~ ~;/~~:~ ~14f~~~~ : ~~~ ;~~ ~:q~}v.G: \ tf\~: ~^L;;}:O;f ~r~ ~ &~ ~~~: ~~ ~$)~:$ ~~t ~;~ ~ :>j~~ ~ ~f;~~].;J~ ~~~fftb~~:; 'f&&f~~~$4kI~~r."4K i't./:,,'?,~ ~~~"l ~>y 7{.,( ;/' ;f.ij:'j,jtk.'h'>#.!~;J"'" x:-;;: /~"" ,,'"'~it~~ ..."4", "~i1:O:~~~ 'P,:- Sf; r.i:~;~~" ~<,>."'/;~,f'i-~ :Jt;f~ t't.! ~~'" f}if "",",~~y-;~~!~~ ~~ r~~'Jt itr;~);")>eJS)"~yY$!~ 4~C(.r~ 1:rJ?~~ ~ ;:"~h,p \t' ~~l~~--:"~~ ~ J~y\~w.1f, ~.. -lfi'iiJ!i ,~ !L>"-'-t?~ ->.f!">-;.:rf'~., ~'- '{t.r.'i.~(j-<i ~;;;. ___~ tt:1:t+- ~ ~'7;,.IJi;",.~ "i~ 1-~ ~i'~ ~.;f~~ .Jt ~~~ ~""'''~&.i2 "'1f;t<;.~r::~"'" '1:t $; ~';;:lf :':ft~k""'r;"" 'i' ~ ~";: ':t"~t:l~N''l)~'''''- t '\~~ {~"",v:{:i ""f, I.Z",.,. 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" ,.. ~ " 1"- 1 i. ; , , I "E:; c .,,! 1 I" , , , 11.. .. m!, g 1'---' -... = ">.- gEE '-_ '.. ! 'e' .... E ~ !:n , l.lll .. 0 - E . ~ , .! _, l(;;! ... U ~ 8 1"- 1 I ! 11l1HIJI' ... · 0: . , .., ."-' .. ... ... ; ! i ! !". I 8 ~ ~ '" '---- :..., '"I' ",I ::: :l Ii 3 . ! I~l lbj c - 0 0 . . .c. .m. ~ il m ,. I j I-IlI '---' I -ll.l! it. I I I:!!j -l! .. '. ! ~ . ~ "- ,- , <5 ,ii: I m ! ; I 1 I i "- ~~ I ! 1 i . I 1 I i i i ~q I , : I c:: I : i .l! '1 : 8 : ; . ' .- >---1 ~ : - . . . i ~ i f ~ i I ! ! 10 i i I LJ L---.. I . I I I I CITY OF SHAKOPEE, MINNESOTA I CITY OFFICIALS I Year Ended December 31, 2002 I ELECTED OFFICIALS: Term Expires I Mayor William Mars December 31, 2003 Councilmember Matthew Lehman December 31, 2003 I Councilmember Joseph Helkamp December 31, 2003 Councilmember Cletus J. Link December 31, 2003 Councilmember Terry Joos December 31, 2005 I APPOINTED OFFICIALS: I City Administrator Mark H. McNeill Director of Finance Gregg M. Voxland I I I I I I I I I I II I I I I SHAKOPEE I May 9, 2003 I Mr. Mark McNeill I Mayor William Mars Councilmembers City of Shakopee, MN. 55379 I Dear Mr. McNeill, Mayor Mars and Councilmembers: The Comprehensive Annual Financial Report of the City of Shakopee, Minnesota (the City) for the I year ended December 31, 2002, is submitted herewith. This report was prepared by the City's Finance Department. The City is responsible for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures. The Finance Department I believes that these statements are accurate in all material aspects and present fairly the financial position and the results of operations of the funds and account groups of the City. I The organization, form and contents of this report were prepared in accordance with the standards prescribed by the Government Finance Officer's' Association of the United States and Canada (GFOA), the American Institute of Certified Public Accountants and the State Auditor's I Office, State of Minnesota. The format conforms to the audit guide for Audits of State and Local Government Units and Governmental Accountinq. Auditinq and Financial Reportinq Principles. The financial reporting for the various funds of the City is on the modified accrual or accrual basis I as appropriate. The Comprehensive Annual Financial Report is composed of four sections. First, the introductory I section contains the title page, table of contents, list of City officials, organization chart, Certificate of Achievement for Excellence in Financial Reporting and this letter of transmittal. Second, the financial section has the independent. auditors' report, the General Purpose Financial Statements or overview financial statements and the combining and individual fund and account group I statements and schedules. Third is the statistical section including various tables reflecting financial, economic and social trends of the City of Shakopee. The fourth section contains the auditors' compliance report. I The notes to the financial statements are considered an integral and essential part of adequate disclosure and fair presentation of this report. They give insight and aid in understanding the I financial statements and the information presented. I I COMMUNITY PRIDE SINCE 1857 I 129 Holmes Street South' Shakopee, Minnesota' 55379-1351' 952-233-3800' FAX 952-233-3801' www.ci.shakopee.mn.us III I THE REPORTING ENTITY I The funds and entities related to the City of Shakopee included in the comprehensive annual I financial report are those for which the City Council is financially accountable. The City implemented the requirements of Governmental Accounting Standards Board (GASB) Statement I No. 14, "The Reporting Entity", to determine the component units to be included with the City as part of its reporting entity. Based on the requirements of GASB Statement No. 14, all funds and accounts groups of the City and the Shakopee Economic Development Authority (EDA) are I included in this report. Shakopee is organized under Plan A, which includes a City Administrator, but the City Council retains most decision making authority. The City Council has four members who serve staggered I terms of four years plus the Mayor who serves a term of two years. All council positions are non- partisan, part-time and members are elected at large. The City provides the normal municipal services such as public safety, public works, parks, I recreation, planning and zoning. Also provided are electrical distribution, water and sewer utilities, storm drainage, and some transit services. I ECONOMIC CONDITION AND OUTLOOK The City of Shako pee is located about 20 miles southwest of Minneapolis. Shakopee is in the I northern part of Scott County and is the county seat. The City is a free standing growth center and is a part of the developing Twin Cities Metropolitan Area. The growth pattern for Shakopee I has changed since the opening of the Highway 169 south bypass and is currently one of the fastest growing cities in the Minneapolis/St. Paul metro area. Shakopee has a strong and diverse commercial and industrial base beside the advantages of I being in a metropolitan setting for economic stability. The top ten employers have about 3,600 employees with the largest having about 500 full time employees. The top ten principal taxpayers account for 29% of the tax capacity value. The largest accounts for 6.8% of the tax capacity I value. This is compared to the previous year at 26% and 5.2% respectively. Commercial/industrial property comprises 32% of the total estimated market value of the City, up from 29% last year. I Taxable tax capacity for payable 2002 property taxes decreased about 14.6% from 2001. This is due to the state legislature changing the tax capacity formula. Market value for Shakopee grew I 27% from $1,369,102,400 to $1,743,136,300 from 2001 to 2002. For 2003, the state legislature continued levy limits. The limit was indexed for inflation and household growth and excluded debt service levies. Levy limits did not have a significant impact on Shakopee for 2002 or 2003. For I 2004, the state legislature has imposed a strict levy limit with no adjustment for growth or inflation. MAJOR INITIATIVES The City's growth continues at a fast pace. There are about 1,168 new lots/units are expected to I be available for building in 2003. The respective number for last year was 512. A new comprehensive plan for the City was finalized in 1996. This planning document guides the I growth and development for the next 20 years. Areas covered in the plan include zoning, future utility facilities, transportation issues, and parks and trails. In March of 2002, an update of the I IV I I I comprehensive plan was approved by the Metropolitan Council and city staff is currently working I on a new revision. A new library and police station with a total value of $8 million dollars are under construction. I Funding is from the Building Intemal Service Fund. The old library was demolished and the existing police station will have minor remodeling for Public Works usage. Shakopee Area Catholic Schools has a new building under construction valued at 7.4 million I dollars. Walmart and Sam's Club stores recently opened while a Kmart store closed. A new Home Depot store is expected to commence construction this summer. Also this summer, Scott County will begin construction of a new jail facility valued at 34 million dollars. Shakopee Public I Utilities Commission will start construction this summer of a new 11 million dollar service center. Annexation of 138 acres from Jackson Township has been completed with another 48 acres in the process of annexation. I FINANCIAL INFORMA liON I Internal accounting controls are to provide reasonable, but not absolute assurance regarding the physical safeguarding of assets against loss or misuse and maintaining accountability for assets. Reasonable assurance balances the cost of internal control against the benefits likely to be I achieved and such balancing is a function of management's judgment. The City believes its internal controls are adequate within this framework. Budgeting control is provided by an annual budget resolution passed by City Council (or EDA as I appropriate). Formal control is at the division level and Council action is necessary to change budgeted amounts between divisions and/or funds. I Revenues for the General Fund totaled $11,046,479 for 2002, approximately a 20% increase from 2001. Most of the change in revenue results from tax revenue increasing 66% partly due to changes in state aids. Total revenue was $595,519 or 6% over the budgeted amount. The I amount of revenue derived from various sources and their importance is shown in the table (in thousands) and the graph below: 2003 2002 2001 I Budoet Actual Actual Revenue Source Amount Percent Amount Percent Amount Percent I Taxes $ 7,418 68.7% $ 5,874 53.1 % $ 3,864 42.0 % Licenses & Permits 1,878 17.4 2,314 20.9 2,000 21.7 Intergovernmental 132 1.2 1,065 9.6 982 10.7 I Charges for Service 876 8.1 1,243 11.3 1,806 19.6 Fines & Forfeits 240 2.2 253 2.3 230 2.5 Miscellaneous 241 2.2 297 2.8 316 3.5 $ 10,785 100.0% $ 11,046 100.0 % $ 9,198 100.0 % I I I I v I I $8,000 $7,000 I $6,000 i $5,000 I c II $4,000 ::J ~ $3,000 I::. I $2,000 $1,000 $0 Taxes Perrrits Intergovn't Charges Fines Msc I REVENUES I 82001 Actual 82002 Actual l!I2003 Budget I ,I Not included above are the interfund transfers. The transfer from the Shakopee Public Utilities I Commission to the General Fund was $1,057,147 in 2002. The transfer in 2001 was $1,238,295. Expenditures in total were $9,622,006 or 10% under the budget. Significant expenditures under I , budget in this report are in the Planning Department in the amount of $177,667, Government Buildings at $145,934, Fire Department at $137,090, Engineering at $219,063 and the I Unallocated Division at $254,175. Minor over expenditures occurred in the Street division at $43,160 and Shop at $6,351. Expenditures compared to original budget were $1,045,434 or 9.8% below budget. Much of the savings was due to the anticipation of state aid cuts. Shown I below is a comparison table and graph for General Fund expenditures (in thousands). 2003 2002 2001 Budoet Actual Actual I Exoenditure Function Amount Percent Amount Percent Amount Percent General Govemment $ 2,934 26.8 % $ 2,622 27.3 %$ 2,325 27.6 % I Public Safety 4,914 44.9 4,421 45.9 3,707 44.0 Public Works 2,042 18.6 1,848 19.2 1,625 19.3 Recreation 745 6.8 622 6.5 664 7.9 Miscellaneous 320 2.9 109 1.1 104 1.2 I $ 10,955 100.0 % $ 9,622 100.0 %$ 8,425 100.0 % I I I I VI I I I $6,000 I $5,000 I $4,000 ~ " .., " ~ $3,000 0 ... I t:. $2,000 $1,000 I So General GoverMlenl Public Safely Plbllc Works Recreation Miscellaneous EXPENDITURES I I .2001 Actual .2002 Actual 1lI2003 Budget I I A ten year history of general fund revenues and expenditures (excluding transfers) and General I Fund tax levy is: $12,000 I $10,000 l/) $8,000 "Cl C I IG $6,000 h__u_u_n___h_nn _non l/) ::l 0 .c $4,000 ... I $2,000 nn_n___n____h__h_nh_n__n_U_n__n_ -__ n__h_ __C_____nn__h_n_n_ __n_nn_U_nn__h_nn__ $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 I GENERAL FUND I -+- Expenditures _ Revenues -.It- City Tax Levies I I I The City needs a substantial fund balance in the General Fund in order to provide for cash flow needs and to have a reserve in the event revenues fall short of projections. Several of the major revenue sources are not available to the City until after approximately six months of the year have I passed. City Council has set a target fund balance of 25% to 35% of budgeted expenditures and operating transfers out for the following year. As of December 31, 2002, unreserved and undesignated fund balance was at 30 percent of budgeted 2003 expenditures and operating I transfers. - The State Legislature enacted a "Fiscal Disparity Law" in 1971, which was implemented for taxes I payable 1975. The law provides for the "pooling" of 40. percent of all new commercial and I VII I I industrial property valuations in the seven-county metropolitan area. In turn, valuations from this "pool" are redistributed to taxing jurisdictions according to specific criteria. The City of Shakopee I continues to experience a net loss of valuation under the law. Data for 2002 and 2001 is shown below. 2001/02 2000/01 I Tax Capacity $21.902.755 $25,662.726 Contribution to Pool (3,046,771) (3,806,211 ) Distribution from Pool 1.503.318 1 ,809.131 I Net Loss of Value (1 ,543.453) (1.997,080) Net Tax Capacity $20.359.302 $23.665.646 The enterprise funds showed varying changes in net income from 2001. The Electric Fund's riet I income decreased 26.8% or $731,466, the Water Fund's net income decreased 28.9% or I $243,207. The Sewer Fund's net income increased 23% or $333,734, the Storm Drainage Fund's net income increased 50% or $627,901. The Recreation Fund had an increase of $347,180. The above figures are before changes for fixed assets. City employees belong to a mandatory state wide pension system. There are two basic plans that I apply to employees. The two are the basic and coordinated plan, and the police and fire plan. The police and fire plan currently has a surplus of assets over liabilities while the coordinated and I basic plan has about 85% of liabilities available in assets. Shakopee has "volunteer" (part time) fire fighters who belong to their own local relief association. The ratio of net bonded debt (including G.O. Tax Increment Bonds but excluding revenue bonds) I to tax capacity and amount of debt per capita are indicators of the City's. debt position and are useful for purposes of comparison to other cities. The City continues to be in a favorable position I as represented by the below data for 2002 and 2001. 2002 2001 Ratio of direct net debt to tax capacity .43 .25 I Debt per capita $418 $306 The total (direct and overlapping) debt per capita is in the high range of over $2,500 per capita. I For 2002, the number was $3,240. Below is shown the changes in bonded debt (excluding revenue bonds) for the City of Shakopee. I 2002 2001 Gross bonded debt outstanding January 1 $15,090,000 $18,355,000 I Bonds retired (3,015,000) (3,265,000) Bonds issued 4.935.000 Gross bonded debt outstanding December 31 17,010,000 15,090,000 I Less Sinking Fund Assets December 31 7,653.349 8.502,950 Net bonded debt December 31 $ 9.356.651 $ 6.587.050 The City has $16,620,000 of general obligation property tax and special assessment supported I debt and $390,000 of general obligation backed tax increment debt outstanding. There is $7,653,349 in Debt Service Funds in support of these bonds. There is the legal debt margin or I authority under state law to issue an additional $29,774,377 in general obligation debt. VIII I I I I Several of the improvement bond issues are partially supported by tax levies. These levies are recognized as revenue annually as they are re-certified on the property taxes. The amount of deferred tax levies in support of improvement bonds is $2,073,839. There is another $316,172 in deferred tax levies for the G.O. Revenue Bonds if revenues are insufficient for debt service needs. I For the G.O. Building Bonds there is $3,450,050 in deferred tax levies. The investment portfolio of the City held investments whose total market value was above the I carrying value at December 31, 2002. The approximate difference between cost and market for the investment portfolio was $1,680,428. The portfolio has been adjusted to reflect market values in accordance with GASB Statement No. 31 Accountinq and Financial Reoortinq for Certain I Investments and for External Investment Pools. As a result of the investment events in Orange County, California, rating agencies and the I securities market are more concerned about the types and maturities of investments public bodies are holding. The City does not invest in derivatives and has a comparatively short maturity schedule as follows: I o to 3 months 3% 3 to 12 months 12% 1 to 2 years .24% I 2 to 5 years 21% 6 to 10 years 40% I OTHER INFORMATION I The City of Shakopee insures for significant risk and the only retention is the deductible under the insurance policies. A schedule of insurance coverage is included in the statistical section. I Shakopee has had a long standing policy of having an independent audit of City records as provided for by State law. The audit is conducted by a Certified Public Accountant. The accountants' opinion has been included in this report. I The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial reporting to the City of Shakopee for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2001. The I Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. I In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting I principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Shakopee has I received a Certificate of Achievement for the last eighteen consecutive years (fiscal years 1984 - 2001 ). We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. A copy of the Certificate of I Achievement received for fiscal year 2001 appears in this report. I IX I The preparation of this report on a timely basis could not be accomplished without the efficient I and dedicated services of the Finance Department and the entire city staff. This transmittal letter highlights some of the areas of the financial statements. The basic I statements, along with notes and supplementary data, present in detail the financial position of the City of Shakopee. I Respectfully submitted, ~V#l 'I regg . 0 and" I Finance Dire tor I I I I I I I I I ,I I I x I I I I Certificate of Achievement I for Excellence I in Financial Reporting I Presented to I City of Shakopee, I Minnesota I For its Comprehensive Annual Financial Report for the Fiscal Year Ended I December 31, 2001 A Certificate of Achievement for Excellence in Financial I Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement I systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting I and financial reporting. 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"'" ~'Jt " ii>t~ftt\!. ~~l:~~ ~~4{~~i:~~,:i~~)f::: ~~~~1~i~t~~~~~~:~~:>)',~,~(t!Wfk~1t~::~~~Z:l1J ~~f!~~ilt'i ~~~\',*2)~t~tt~~;~~"1~~:~t~~~~:t:jf.~t~~~~~<ft~ ~ :t~lW'i ~~A;l~~~~~:i^,:;'~:':::<>\"~I,"/::1.t<<.:"~Yf~~ t>>f ttct~"I;~~~;!"~*M~~~<J~~;S;;~ ~ I ~DV I I KERN. D EWENTER.YI ERE I INDEPENDENT AUDITOR'S REPORT I April 25, 2003 I I Honorable Mayor and Members of the City Council City of Shakopee Shakopee, Minnesota I We have audited the accompanying general purpose financial statements of the City of Shakopee, Minnesota, as of and for the year ended December 31, 2002, as listed in the table of I contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial . statements based on our audit. We did not audit the electric fund and water fund financial I statements of the Shakopee Public Utilities Commission which represent 52 percent and 83 percent of the assets and revenues of the enterprise funds, respectively. These statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for the Shakopee Public Utilities I Commission, is based solely upon the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United I States of America and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material I misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating I the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, based on our audit and the report of other auditors, the general purpose financial I statements referred to above present fairly, in all material respects, the financial position of the City of Shako pee, Minnesota, as of December 31,2002, and the results of its operations and the cash flows of its proprieta..-y fund types for the year then ended in conformity with accounting I principles generally accepted in the United States of America In accordance with Government Auditing Standards, we have also issued a report dated April 25, I 2003 on our--consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts, and grants. This report is an integral part of a Government Auditing Standards audit, and in considering the results of the I audit, this report should be read along with the auditor' sreport on the financial statements. XII I I I Our audit was performed for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial I statements and schedules, including the Schedule of Expenditures ofPederal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations listed in the table of contents are presented for purposes of I additional analysis and are not a required part of the general purpose financial statements of the City of Shakopee, Minnesota. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly I presented in all material respects in relation to the general purpose financial statements taken as a whole. The information in Tables 1 through 17, listed under the statistical section in the table of I contents, is not necessary for a fair presentation of the financial statements, but is presented as additional analytical data. This information has not been subjected to any audit procedures and, accordingly, we express no opinion. I fu, De.W.tJ.,..4t ( VA.W., 'tI-J.. I Kern, DeWenter, Yiere, Ltd. I St. Cloud, Minnesota I I I I I I I I I XIII I I I I I I- I I- I THIS PAGE LEFT BLANK INTENTIONAlLY I I I I I I I I - -- . I I I Exhibit 1 I CITY OF SHAKOPEE, MINNESOTA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS December 31, 2002 I Govemmental Fund Types Special Debt Capital I ASSETS AND OTHER DEBITS General Revenue Service Projects Assets Cash And Cash Equivalents $ 600 $ $ $ I Investments (Note IC, III A) 3,613,343 1,566,702 7,606,878 7,263,417 Restricted Investments (Note IC, iliA) Accrued Interest Receivable 19,586 9,235 49,071 48,140 Accounts Receivable 252,652 48,685 365,167 I Prepaid Items Taxes Receivable - Delinquent 71,269 2,515 2,624 Special Assessments Receivable 20,154 6.944,405 499,618 I Due From Other Funds (Note III D) 768,544 Due From Other Govemments 237,681 Inventory Other Assets 11,348 Property And Equipment (Note III C) I Accumulated Depreciation Amount Available In Debt Service Funds Amount To Be Provided I Total Assets And Other Debits $ 4,995,177 $ 1,627,137 $ 14,602,978 $ 8,176,342 LIABILITIES. FUND EQUITY AND OTHER CREDITS Uabilities I Accounts, VVages,And Benefits Payable $ 1,369,674 $ 149,385 $ 2,600 $ 713,3n Contracts Payable 279,095 Due To Other Funds (Note III D) 642,000 I Due To Other Govemments 19,000 Customer Advances Deferred Revenue 91,423 2,515- 6,947,029 499,618 Deposits Payable I Accrued Interest 1,546 Long Tenn Debt (Note III F) Special Assessment Bonds VVith Govemment Commitment (Note III F) Tax Increment Bonds (Note III F) I Total Uabilities 1,461,097 170,900 6,949,629 2,135,636 Fund Equity Investment In General I FIXed Assets Coniributed Capital (Note III G) Retained Earnings (Note III H) Reserved - EmergenCies I Reserved. Construction. . Reserved. Bond Requirements Unreserved Fund Balance (Note III H) Reserved. Special Purpose . 1,456,237 I Reserved - Debt Service 7,653,349 Reserved. Capital Projects 6,818,306 Unreserved - Des. for Future Year Appr. Unreserved, Undeslgnated 3,534,080 (777,600) I Total Fund Equity And Other'Credits 3,534,080 1,456,237 7,653,349 6,040,706 Total Uabilities, Fund Equity And Other Credits $ 4,995,1n $ 1,627,137 $ 14,602,978 $ 8,176,342 The accompanying notes are an integral part of these financial statements. I I 1 I Exhibit 1 CllY OF SHAKOPEE, MINNESOTA I COMBINED BALANCE SHEET ALL FUND lYPES AND ACCOUNT GROUPS December 31,2002 I Proprietary Fiduciary Fund Types Fund Types Account Groups General General Total Internal Fixed Long Term (Memorandum Only) I Enterprise Service Agency Assets Debt 2002 2001 $ 14,693,631 $ $ $ $ $ 14,694,231 $ 14,973,706 I 9,841,314 9,415,269 1,779,089 41,086,012 37,710,134 19,484,071 19,484,071 19,866,337 312,861 72,842 511,735 628,326 3,222,730 790,000 4,679,234 3,709,407 I 5,251 76,408 61,661 7,464,177 4,607,978 33,157 801,701 268.512 I 237,681 69,732 508,708 508,708 719,071 781,417 792,765 849,185 98,527,433 22,443,100 99,005,258 219,975,791 112,805,222 I (17,076,600) (5,182,748) (22,259,348) (19,793,419) 7,653,349 7,653,349 8,502,950 9,356,651 9,356,651 6.587,050 I $ 130,328,722 $ 27,538,463 $ 1,779,089 $ 99,005,258 $ 17,010,000 $ 305,063.166 $ 191,571,103 I $ 2,272,164 $ 38,007 $ 20,567 $ $ $ 4,565,774 $ 4,550,824 619,535 898,630 114,724 159,701 801,701 268,512 I 19,000 19,000 186,264 186,264 137,729 36,265 7,576,850 4,691,695 218,494 1,758,522 1,977,016 1,343,338 I 566,327 567,873 673,906 25,660,000 25,660,000 26,000,000 16,620,000 16,620,000 14,335,000 390,000 390.000 755,000 I 29,099,215 657,542 1,779,089 17,010,000 59,263,108 52,889,728 I 99,005,258 99,005,258 9,816,136 34,698,582 15,422,752 50,121,334 50,214,595 100,000 100,000 88,524 2,040,697 2,040,697 2,858,579 I 1,750,645 1,750,645 1,809,816 62,639,583 11,458,169 74,097,752 56,778,523 1,456,237 945.041 I 7.653,349 8,502,950 6,818,306 4,547,275 200,000 2,756,480 2,919,936 I 101.229,507 26,880,921 99,005,258 245,800,058 138,681,375 $ 130,328,722 $ 27,538,463 $ 1,779,089 $ 99,005,258 $ 17,010,000 $ 305,063,166 $ 191.571,103 I I 2 I I I I I I I I I I This page left intentionally blank. I I I , I I "I - I I 3 I \ " I I Exhibit 2 CITY OF SHAKOPEE, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCES I ALL GOVERNMENTAL FUND TYPES FOR THE YEAR ENDED DECEMBER 31, 2002 I Govemmental Fund Types Total I Special Debt Capital (Memorandum Only) General Revenue Service Projects 2002 2001 Revenues Taxes $ 5,873,826 $ 77,346 $ 282,718 $ " 894,708 $ 7,128,598 $ 6,069,719 I Special AssE1ssments 1,108,716 357,716 1,466,432 2,380,186 Ucenses And Permits 2,313,544 1,501,102 3,814,646 3,159,222 Intergovemmental 1,065,291 658,060 3,507,256 5,230,607 1,627,879 Charges For Services 1,243,535 245,981 1,489,516 1,093,146 I" Fines And Forfeits 253,348 253,348 230,085 Miscellaneous 296,935 488,021 400,526 471,346 1,656,828 1,386,351 . Total Revenues 11,046,479 1,469,408 1,791,960 6,732,128 21,039,975 15,946,588 I Expenditures Current General Government 2,621,616 564,456 3,186,072 2,770,732 Public Safety 4,421,028 38,575 4,459,603 3,710,865 I Public Works 1,847,808 411,095 2,258,903 2,019,943 Recreation 622,099 622,099 664,340 Mlscenaneous 109,455 109,455 103,681 Capital Outlay 9,249,946 9,249,946 4,396,346 I Debt Service Principal 3,015,000 3,015,000 3,265,000 Interest And Other Charges 729,300 729,300 770,152 I Total Expenditures 9,622,006 1,014,126 3,744,300 9,249,946 23,630,378 17,701,059 Excess (Deficiency) Of Revenues Over Expenditures 1,424,473 455,282 (1,952,340) (2,517,818) (2,590,403) (1,754,471) I Other Financing Sources (Uses) Operating Transfers In 1,057,147 55,914 588,776 1,701,837 1,718,995 I Operating Transfers OUt (2,101,744) (388,776) (2,490,520) (4,268,740) Proceeds Of Borrowing 47,337 4,891,275 4,938,612 Sale Of Property 9,644 9,644 13,680 I Total Other Financing Sources (Uses) (1,034,953) 55,914 636,113 4,502,499 4,159,573 (2,536,065) Excess Of Revenues & Other Financing Sources Over Expenditures I & Other Financing Uses 389,520 511,196 (1,316,227) 1,984,681 1,569,170 (4,290,536) Fund Balance Janual}' 1 3,144,560 945,041 8,502,950 4,522,651 17,115,202 21,321,415 Residual Equity Transfer 466,626 (466,626) 84,323 I Fund Balance December 31 $ 3,534,080 $ 1,456,237 $ 7,653,349 $ 6,040,706 $ 18,684,372 $ 17.115,202 - I I The accompanying notes are an integral part of these financial statements. 4 I I Exhibit 3 I CITY OF SHAKOPEE, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES I AND CHANGES IN FUND BAlANCES BUDGET AND ACTUAL GENERAL AND BUDGETED SPECIAL REVENUE FUND TYPES I FOR THE YEAR ENDED DECEMBER 31,2002 General Fund I Over (Under) Budget Actual Budget I Revenues Taxes $ 6,333,250 . $ 5,873,826 $ (459,424) Ucenses And Permits 2,220,350 2,313,544 93,194 I Intergovernmental 367,660 1,065,291 697,631 Charges For Services 968,700 1,243,535 274,835 Fines And Forfeits 220,000 253,348 33,348 Miscellaneous 341,000 296,935 (44,065) I Total Revenues 10,450,960 11,046,479 595,519 Expenditures I Current General Govemment 3,208,050 2,621,616 (586,434) Public Safety 4,592,810 4,421,028 (171,782) Public Works 1,811,350 1,847,808 36,458 Recreation 691,600 622,099 (69,501) I Miscellaneous 363,630 109,455 (254,175) Total Expenditures 10,667,440 9,622,006 (1,045,434) Excess (Deficiency) Of Revenues I Over Expenditures (216,480) 1,424,473 1,640,953 Other Financing Sources (Uses) I Operating Transfers In 1,033,000 1,057,147 24,147 Operating Transfers Out (845,830) (2,101,744) (1,255,914) Sale of Property 9,644 9,644 I Total Other Financing Sources (Uses) 187,170 (1,034,953) (1,222,123) Excess (Deficiency) Of Revenues And I Other Financing Sources Over Expenditures And Other Financing Uses (29,310) 389,520 418,830 Fund Balance January 1 3,144,560 $ 3,144,560 I Fund Balance December 31 It 3,115,250 $ 3,534,080 $ 418,830 ... I -. I The accompanying notes are an Integral part of these financial statements. I 5 I I I Exhibit 3 CITY OF SHAKOPEE, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES I AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL I GENERAL AND BUDGETED SPECIAL REVENUE FUND TYPES FOR THE YEAR ENDED DECEMBER 31, 2002 I Budgeted Special Revenue Funds Total (Memorandum Only) Over (Under) Over (Under) I Budget Actual Budget Budget Actual Budget $ $ (3,834) $ 6,414,430 $ $ (463,258) $ 81,180 77,346 5,951,172 2,220,350 2,313,544 93,194 I 407,000 466,450 59,450 774,660 1,531.741 . 757,081 70,000 43,575 (26,425) 1,038.700 1,287,110 248,410 220,000 253,348 33,348 28,000 58,931 30,931 369,000 355,866 (13,134) I 586,180 646,302 60,122 11,037,140 11,692,781 655,641 I 317,180 216,133 (101,047) 3,525,230 2,837,749 (687,481) 4,592,810 4,421,028 (171,782) 603,870 411,095 (192,775) 2,415,220 2,258,903 (156,317) I 691,600 622,099 (69,501) 363,630 109,455 (254,175) 921,050 627,228 (293,822) 11.588,490 10,249,234 (1,339,256) I (334,870) 19,074 353,944 (551,350) 1,443,547 1,994,897 I 33,000 55,914 1,066,000 1,113,061 47,061 (845,830) (2,101,744) (1,255,914) 9,644 9,644 I 33,000 55,914 220,170 (979,039) (1,208,853) I (301,870) 74,988 353,944 (331,180) 464,508 772,774 I 891,712 891,712 4,036,2n 4,036,2n $ 589,842 $ 966,700 $ 376,858 $ 3,705,092 $ 4,500,780 $ 795,688 I I -. I I 6 I Exhibit 4 I CITY OF SHAKOPEE, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS I AlL PROPRIETARY FUND TYPES FOR THE YEAR ENDED DECEMBER 31, 2002 I Total (Memorandum Only) Internal I Enterprise Service 2002 2001 Operating Revenues Sales $ 24,256,158 $ 997,800 $ 25,253,958 $ 25,314,370 Cost Of Sales 12,487,784 12,487,784 12,984,805 I Gross Profit 11,768,374 997,800 12,766,174 12,329,565 Operating Expenses I Operations And Maintenance 5,617,219 5,617,219 4,717,066 Treatment Charges 1,202,817 1,202,817 1,200,768 Depreciation And Amortization 2,015,879 873,863 2,889,742 2,500,205 Total Operating Expenses 8,835,915 873,863 9,709,n8 8,418,039 I Operating Income 2,932,459 123,937 3,056,396 3,911,526 I Add: NOIH)peratlng Income Investment Income 2,075,520 698,704 2,n4,224 2,873,930 Other Income 1,843,021 895 1,843,916 824,632 Less: Non-Operating Expense I Interest Expense (1,202,462) (1,202,462) (999,172) Loss On Disposal of Assets (2oo,129) (200,129) Income Before Operating Transfers 5,648,538 623,407 6,271,945 6,610,916 I Operating Transfers From Other Funds 1,134,795 1,009,559 2,144,354 3,788,040 Operating Transfers To Other Funds (1,355,671) (1,355,671) (1,238,295) Net Income 5,427,662 1,632,966 7,060,628 9,160,661 I Capital Contributions 9,387,294 5,730 9,393,024 5,925,983 Add: Depreciation On Contnbuted Assets 923,945 I Increase In Retained earnings 14,814,956 1,638,696 16,453,652 16,010,589 I Retained earnings January 1 51,715,969 9,819,473 61,535,442 45,609,176 Residual Equity Transfer Out (84,323) Retained earnings December 31 $ 66,530,925 $ 11,458,169 $ n,989,094 $ 61,535,442 I I . I The accompanying notes are an integral part of these financial statements. I 7 I I I ExhIbit 5 CITY OF SHAKOPEE, MINNESOTA COMBINED STATEMENT OF CASH FLOWS I ALl PROPRIETARY FUND TYPES FOR THE YEAR ENDED DECEMBER 31, 2002 Total (Memorandum Only) Internal I Enterprise Service 2002 2001 Cash Row From Operating ActIvItIes Operating Income $ 2,932,459 $ 123,937 $ 3,056,396 $ 3,911,528 Adjusbnents To Reconcile Operating Income To I Net Cash ProvkIed By OperatIng AttivIlIes Depreciation And Amortization 2,015,879 873,863 2,889,742 2,500,205 Loss on Sale of Equipment 200,129 200,129 (Increase) Decrease In Accounts Receivable (500,198) (500,198) 683,552 (Increase) Decrease In Prepaid Expenses 5,143 5,143 (5,143) I (Increase) Decrease In Due From Other Funds (12,638) (12,638) 7,043 (Increase).Decrease In Inventory 210,363 210,363 (163,603) (Increase) Decrease In Other Assets 20,161 20,161 (363,050) Increase (Decrease) In Accounts Payable (495,381) (154,449) (649.830) 1,098,300 Increase (Decrease) In Contracts Payable 619,535 619,535 Increase (Decrease) In Due To Other Funds (83.861) (83.861 ) (61,838) I Increase (Decrease) In CUstomer Advances 48,535 48.535 137.729 . Increase (Decrease) In Deferred Revenue 14,209 14,209 21,058 Increase (Decrease) In CUstomer Deposits 31,073 31,073 31,748 Rents And Miscellaneous Income 239,992 239.992 63.299 I Net Cash Provided By Operating ActIvItIes 4.425.736 1,663,015 6,088,751 7.840,824 Cash Rows From Noncapital FInancing ActIvItIes Grants From Other Governments 31,569 TransfelS From Other Funds 1,134,795 1,009.559 2,144,354 3,788,040 I TransfelS To Other Funds (1,355,671) (1,355,671) (1,311,621) Net Cash Provided (Used) For Noncapltal Rnancing Aclivitles (220,876) 1,009,559 788,683 . 2,507,988 Cash Rows From Capital And Related Financing Activities I Acquisition of Fixed Assets (5,695,341) (4,967,071) (10,662,412) (4,449,006) Proceeds From Sale Of FIxed Assets 5,701 895 6,596 73,833 PrIncipal Payments On Long Tenn Debt (340,000) (340,000) (235,000) Interest PaId (1,472,748) (1,472,748) (760,562) Trunk Charges 1,603,029 1,603,029 669,478 I Bond Proceeds 12,000,000 Bond Issuance Expense (265,458) Net Cash Provided (Used) For Capital And Related Financlng ActIvItIes (5,899,359) (4,966,176) (10,865.535) 7,033,285 I Cash Rows From Investing ActIvItIes Payments Received from Notes Receivable 40.000 40,000 35,000 Investment Income 2,165,756 694,348 2,860,102 2,603,369 Change In Investments (750,832) 1.559,256 808,424 (24,332,04n I Net Cash Provided By (Used For) Investing AclIvltIes 1,414,924 2,293,602 3,708,528 (21.693,678) Net Increase (Decrease) In Cash and Cash Equivalents (279,575) (279,575) (4,311,581) I Cash and Cash Equivalents. Jaooary 1 14,973,208 $ 14,973,208 19.284,787 Cash and Cash Equivalents. December 31 $ 14,593.631 $ $ 14,693.631 $ 14,973,206 Non Cash Investing, Capital, Investing and Rnanclng ActIvItIes I ContrIbutions From Other Funds $ 44,502 $ $ 44,502 $ 89,634 DevelopelS 8,397,m 8,397,672 8,579,773 Change In Fair Value of Investments 852,291 400,282 1,252,573 378,881 h;qulsltlorflransfer Of FIxed Assets (8,570,057) (8,570,057) (8,669,4On I The accompanying notes @Fe an Integral part of these financial statements. I I I 8 I I CITY OF SHAKOPEE. MINNESOTA I Notes to Financial Statements I December 31, 2002 I I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES I The accompanying summary of the City of Shakopee's more significant accounting policies is presented to assist the reader in interpreting the financial statements and other data in this report. The policies contained herein sho~1d be viewed as an integral part of the accompanying financial statements. I A Reporting Entity These financial statements cover the City and its component units. They cover the activity of all funds, I account groups, departments, agencies, boards, commissions and other organizations which are not legally separate from the City. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the general purpose financial statements of the City because of the significance of their operational or financial relationships with the I City. The City is considered financially accountable to a component unit if it appoints a voting majority of the I organization's governing body, and it is able to impose its will on the organization by significantly influencing the programs, projects, activities, or level of services 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. I As a result of applying the component unit definition criteria above, certain organizations have been defined in accordance with GASB Statement No. 14 and are presented in this report as follows: I Blended component units - reported as if they were part of the City, Discretely presented components units - entails reporting the component unit financial data in a I column separate from the financial data of the City, Related organizations - the relationship of the City with the entity is disclosed. I For each of the categories above, the specific entities are identified as follows: Blended components units: I Shakopee Economic Development Authority (EDA) was organized to promote development, improve housing and redoce blighted areas in the City. It is included by reason of the City Council having . final approval for EDA actions and the EDA board being comprised entirely of City Council members. I City staff handles EDA activity including EDA funds and the CitY approves EDA tax levies and bonding activity. Therefore, the City has financial oversight for EDA activities. - I I 9 I I I Separate financial statements for the Shakopee Economic Development Authority are not prepared. For any information desired beyond what is presented in this report, contact the Finance Director for I the City of Shakopee at 129 Holmes Street South, Shakopee, Minnesota, 55379-1351. Discretely presented component units: I None. Related Organizations: I None. I Other Organizations: Shakopee Fire Relief Association is organized as a nonprofit organization by its members t6 provide pensions and other benefits to its members in accordance with Minnesota statutes. It is not a I component unit of the City because the board of directors is appointed by the membership. The financial oversight of the City is limited to approval authority for amending the association bylaws when the change results in an increase in the pension benefit level requiring an increased City contribution. The Relief Association has the authority to levy its own taxes for pensions and deficits I and would continue to exist for its members if the City was dissolved. B. Measurement Focus, Basis of Accounting and Basis of Presentation I The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and I accounted for in individual funds based upon the purpose for which they are spent and the means by which spending activities are controlled. The various funds are grouped in the financial statements in this report into seven generic fund types and three broad fund categories as follows: I Governmental Fund Types Governmental Funds are those through which most governmental functions of the City are financed. The measurement focus is on current financial resources and is based upon determination of I financial position and changes in financial position (sources, uses, and balances of financial resources rather than upon net income determination). These funds are maintained on the modified accrual basis of accounting (explained below). The following are the City's Governmental Fund I Types: General Fund - The General Fund is the main operating fund of the City. It is used to account for all financial resources not accounted for in other funds. Principal revenues are property taxes, permits, I state aids and charges for services. Primary expenditures are for police and fire protection, public works, park maintenance and general administration. I Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted to expenditures for specific purposes. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources I for and the payment of general long-term debt principal (as recorded in Generallong.Term Debt Account Group),. interest, and related costs. The principal sources of revenue are property taxes and special assessments. - I I , I 10 I I Capital Projects Funds - Capital Projects Funds are used to account for the financial resources used for the acquisition or construction of major capital facilities other than those financed by I proprietary funds. Principal revenue sources are bond proceeds and state aids. Proprietary Fund Types Enterprise Funds - Enterprise Funds account for the operation and maintenance of City facilities I and services which are predominately self supporting through service charges to customers. The measurement focus is on economic resources and is based upon determination of net income which is similar to private business. The City has five funds that fall under this fund type: Electric Fund, I Water Fund, Sewer Fund, Storm Drainage Fund, and Recreation Fund. Internal Service Funds - Internal Service Funds are used to account for the financing of goods or service-s provided by one department to other departments of the City on a cost-reimbursement I basis. Fiduciary Fund Types I Agency Funds - Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, other govemment units and other funds. The City's Agency Funds are custodial in nature and do not involve measurement of results of operations. Govemmental and agency funds are accounted for using the modified accrual basis of accounting. Their I revenues are recognized when they become measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. I Major revenues that are susceptible to accrual indude property taxes, special assessments, intergovemmental revenues, charges for services, and interest on investments. Major revenues that are not susceptible to accrual indude licenses and permits, fees and miscellaneous revenues; such revenues are recorded only as received because they are not measurable until collected. Expenditures I are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred and will be liquidated with expendable financial resources, except for principal and interest on general long-term debt which is recognized when due. I Proprietary Funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Revenues are recognized when they are eamed, and expenses are recognized when they are incurred. . The City applies. all applicable Financial Accounting Standards I Board (FASB) pronouncements issued prior to November 30, 1989, in accounting and reporting for its proprietary operations. C. Assets, Liabilities and Equity I 1. Cash, Cash Equivalents and Investments Cash balances from all funds induding the EDA funds but excluding the spue funds (Electric and Water I Funds) are pooled and invested to the extent available in certificates of deposit, U.S. Government obligations and other authorized investments. Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation. Some specific investments are I segregated for arbitrage considerations. The SPUC funds are similarly treated. All investments are stated at fair value in accordance with GASB 31 using quoted market prices at year I end. The value of investment pools, which are SEe registered, are equal to the value of the pool shares. - I I 11 .1 I I For purposes of the statement of cash flows, the proprietary funds consider all highly liquid investments I with an original maturity of three months or less to be cash equivalents. Highly liquid investments allocated to the proprietary fund types have original maturities of 90 days or less, and therefore qualify as cash equivalents. I 2. Short Term Interfund Receivables and Pay abies During the course of its operations, the City has various transactions between funds to finance operations, provide services and construct assets. Certain transactions have not been paid or received as of December 31, 2002 and the interfund balances thereof have been recorded. See Note'" D. I 3. Inventories and Other Assets The inventories carried in the Enterprise Funds are valued at average cost. The General and Special I Revenue Funds accumulate insignificant inventories, and are therefore not recorded at year-end on the balance sheets of these funds. Other assets include payments made to vendors for services that benefit 2002 or beyond and include I unamortized debt issuance costs for the Bectric and Water Enterprise Funds. Also included is the unamortized cost of buying capacity in a sewer interceptor owned by Metropolitan Council - Environmental Services. I 4. Restricted Assets _0" _ Certain cash and investments in the Enterprise Funds are classified as restricted. The Electric Fund has monies restricted for customer deposits, emergency system repairs, construction projects and debt I service. The Water Fund has monies restricted for water production and trunk distribution facility acquisition, based on trunk and connection fees collected from users, construction projects and debt service. I 5. Rxed Assets The accounting and reporting treatment applied to the fixed assets associated with a fund are determined by its measurement focus. General fixed assets are long-lived assets of the City as a whole. I When purchased, they are recorded and accounted for in the General Fixed Assets Account Group. General Fixed Assets are recorded at cost if acquired after 1977 otherwise the valuation basis is estimated historical cost. Donated assets are valued at estimated market value as of the date received. I No depreciation is recorded on these assets. Public domain ("infrastructure") general fixed assets such as streets, sidewalks and bridges were added in 2002 and are included in general fixed assets as of December 31, 2002. They are not depreciated. I Fixed Assets in the proprietary funds are capitalized in the fund in which they are utilized. Depreciation is recorded on these assets on a straight line basis over estimated useful lives which range from 5-10 years I for equipment and 10-50 years for buildings and improvements. Assets of the Electric and Water Funds are recorded at historical cost for acquisitions after 1951 and at estimated historical cost assigned to contributions from municipalities and developers. Assets acquired I prior to 1951 are carried at estimated historical cost. Sewer Fund assets are recorded at cost for acquisitions subsequent to 1967 and at estimated historical cost for developer contributions. Storm drainage lines older than 1986 are recorded as contributed assets as of December 31,1985. Values are assigned based on estimated historical cost at the time of construction. Storm Drainage lines are I recorded at cost for acquisitions subsequent to 1986 and at current estimated cost for developer contnbutions. Recreation Fund assets are recorded at cost for acquisitions starting in 1995. The Recreation Fund received assets older than 1995 which were transferred from General Fixed Assets and I recorded at net book value as contributed assets. Values for contributed assets are assigned based on estimated historical cost at the time of construction. Assets of the Intemal Service Equipment Fund are . recorded at cost for acquisitions after I I 12 I I 1994 and at historical cost for assets transferred from General Fixed Assets on January 1, 1995. Assets I of the Building Fund are recorded at cost for acquisitions after 1998 and at historical cost for assets transferred from General Fixed Assets on January 1,1999. 6. Compensated Absences I Compensated absences for governmental fund employees are reported in the General Fund. Vested leave is expected to be liquidated with expendable available financial resources and is reported as a current liability and expenditure of the General Fund. In the event there would be vested leave not I expected to be liquidated with expendable available financial resources, it would be reported in the General Long Term Debt Account Group and no expenditure would be reported for such amounts. No liability is recorded for non-vesting accumulating rights to receive sick leave benefits. The City compensates employees upon termination for unused vacation. The accumulated liability for I unpaid vacation at December 31, 2002 was approximately $343,823 for the City and is recorded in the financial statements. City employees are compensated for 33%-45% of unused sick leave benefits upon termination up to a I maximum of 960 hours. The accumulated liability for unpaid sick leave benefits at December 31, 2002, was approxiniately $389,014 and is reflected in the financial statements. Accumulated liability for I nonvested sick leave for City and for SPUC employees is not reflected in the financial statements. SPUC employees are compensated for severance pay upon termination of employment The accumulated liability for severance at December 31, 2002 is reflected in the financial statements. I The City makes use of compensatory time off in lieu of paying overtime. The accumulated liability for unused compensatory time off at December 31, 2002, was approximately $104,923 for the City and is I reflected in the financial statements. The City also pays a retirement benefit to certain qualified employees. The liability at December 31, 2002 was $28,274 and is reflected in the financial statements. I 7. Long-term Obligations Long term liabilities that will be financed from govemmental funds are accounted for in the General Long- I Term Debt Account Group. Long-term liabilities of the proprietary funds are accounted for in the respective funds. Both bond discounts and issuance costs are recognized in the current period for governmental fund I types. Bond discount and issuance costs for the bond issue in the Electric and Water proprietary funds are being amortized over 25 years. 8. Fund EquHy I Proprietary funds that have received capital grants or contributions from developers, customers or other funds or govemments have such amounts recorded as contributed capital. Reserves are those portions of fund equity not available for appropriation or expenditure or that have a specific future use and I therefore are legally segregated. 9. Memorandum Only-Total Columns I Included on the combined financial statements are total columns captioned "Memorandum Only" to indicate that they are presented only for informational purposes. Adjustments to eliminate interfund transactions have not been made in arriving at such amounts and the memorandum totals do not present the consolidated financial position, results of operations, or cash flows in conformity with I accounting principles generally accepted in the United States of America. I 13 I I I 10. Comparative Data Some financial statements have comparative data for the prior year included to aid in understanding the I City's changes in operations and financial position. Other statements do not have comparative data since its inclusion would make the statements unduly complex and difficult to read. I 11. Interfund iransactions During the course of normal operations, the City has numerous transactions between funds. Those transactions that are quasi-extemal are accounted for as revenues, expenses or expenditures as appropriate. I All other interfund transactions are recorded as transfers. If the transfer is a permanent transfer of equity and is non-routine or nonrecurring, it is recorded as a residual equity transfer. Any other transfer is I shown as an operating transfer. 12. New Funds/Closed Funds The City has established two new Special Revenue Funds, a new Debt Service Fund, and two new I Capital Projects Funds for 2002 projects. The refuse enterprise fund was closed in 2001. 13. Accounting Changes I The Govemmental Accounting Standards Board has issued Govemmental Accounting Standard No. 31, which has been implemented by the city. The effect is to record investments at fair value which resulted in an increase of approximately $1 ,673,788 in investment income for 2002. I II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY I A Budgetary Information The City follows these procedures in establishing the budgetary data reflected in the financial statements. 1. The City Administrator submits to the City Council a proposed budget for the upcoming fiscal year. I The budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. I 3. The budget is legally enacted through passage of a resolution with specific appropriations from the General and Special Revenue Funds. I 4. The City Council may authorize transfer of budgeted amounts between divisions within a fund by amending the budget resolution. I 5. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. - 6. Budgets are formally controlled for the General and certain Special Revenue Funds. Budgets for I Debt Service and Capital Projects Funds are used for management with control exercised through project controls and bond indentures. I -. I I 14 I I 7; Budgetary control is at the fund level for Special Revenue Funds and at the division level (i.e., City I Clerk) for the General Fund. Budgeted amounts are as originally adopted, or as amended. City Council may amend the budget at the division level or fund level. Staff may amend budgets at the I line item level within divisions without City Council approval. The amendments to the budget were not material in relation to the original budget with the exceptions of increasing transfers out of the General Fund to Building fund in the amount of $2,500,000. Appropriations lapse at year end. 8. Within the Special Revenue Fund Type, the Forfeiture Fund and the Block Grant Fund did not I have a budget for 2002 and therefore are not included in the statements for budget comparison. The Forfeiture Fund is not required to have a budget adopted. All activity in. this fund is at the I discretion of the Chief of Police. B. BudgetlGAAP Reconciliation A reconciliation of the annual budget to actual revenues and expenditures included in the accompanying I financial statements for governmental funds - Special Revenue fund type follows: Total Other I Fund Balance Financing Fund Balance December 31, Total Total Sources December 31, 2001 Revenues Expenditures (Uses ) 2002 I Special Revenue Funds: Budgeted Funds $ 891,712 $ 646,302 $ 627,228 $ 55,914 $ 966,700 Unbudgeted Funds 53,329 823,106 386,898 53,329 . 489,537 I Total Special Revenue Funds $ 945,041 $1,469,408 $ 1,014,126 $109,243 $ 1,456,237 I C. Excess of Expenditures Over Appropriations In the General Fund, there were expenditures in excess of appropriations in the Street Division in the I amount of $43,160, and in the Shop Division in the amount of $6,351. D. Deficit Fund Equity I Expenditures and other financing uses exceeded revenues and other financing sources or a net loss occurred in certain individual funds for the year ended December 31,2002 as follows: Special Revenue Funds I EDA $ 45,466 Block Grant 1,249 Debt Service Funds I 1990A Improvement 191,081 1991A Improvement 115,958 1992A Improvement 150,555 1993-A Refunding Tax Increment 392,157 I 1995A Improvement 261,124 1996A Improvement 368,723 1997 Fire Bond 106,n2 I 1997B Improvement 201,984 1998-B Improvement 378,444 1999-2000 Improvement 46,822 Capital Projects Funds I I 15 I I I Capital Improvements 89,587 1998-B Improvements 12,137 I DNR Trail 2,321 1999 Improvements 5,087 2001/2002 Improvements 940,898 I CR161CR83 Project 2,904,929 2003 Project 11,866 Enterprise Funds Recreation 201,953 I Material Debt Service Funds deficiencies are planned reductions or uses of.fund balances. The City has in excess of $6.9 million in deferred revenue principally from special assessments to support activity in the Debt Service Funds. Capital Projects deficiencies are draw downs on fund balances for projects that I are in final stages or for current and future projects which had insufficient current revenue to offset expenditures. The Recreation Fund experienced unfavorable operating revenues and expenses. I Fund balance deficits existed in the following funds at year end;" Capital Projects Funds TIF#10 $ 3,215 I DNR Trail 454 2001/2002 Improvements 762,065 2003 Project 11,866 I Capital Projects Funds fund balance deficits shown above are intended to be eliminated by future revenues from tax increments, bond proceeds and transfers from other funds. I III. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS I A Deposits and Investments In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council and the Utility Commission, all of which are members of the Federal Reserve System. I Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. I Authorized collateral "includes the legal investments described below and certain other state and local government obligations. Minnesota statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. I The City's deposits are categorized below to give an indication of the level of risk assumed at year-end. Category 1 includes deposits that are insured or collateralized by securities held by the City or its agent in the City's name. Category 2 includes deposits which are collateralized with securities held by the I pledging institution's designated trustee in the City's name. Category 3 includes deposits that are not collateralized or collateralized with securities held by the pledging institution, but not in the City's name. ".. I -0 I I 16 I I Cash and deposit balances at December 31, 2002: I Credit Risk Category Bank Carrying I 1 2 3 Balance Amount Bank Cash $ 2,049,426 $ 0 $ 0 $ 2,049,426 $ 1,989,913 I I Categories 2 and 3 are not authorized by Minnesota statutes; however, due to the effects of cash flows, the City's deposits may temporarily fall into these categories. I The City also invests idle funds as authorized by Minnesota Statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of I 1940 and whose only investments are in securities described in 1 above. 3. General obligations of the State of Minnesota or any of its municipalities. 4. Bankers acceptances of United States banks eligible for purchase by the Federal Reserve I System. 5. Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. The City has an investment policy that limits repurchase agreements to a maximum of 18 days and I restricts the amount of funds that may be placed in bankers acceptance, commercial paper or repurchase agreements. I The City's investments are categorized below to give an indication of the level of custodial credit risk assumed at year-end. CategOry 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and I unregistered investments for which the securities are held by the counter part's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counter party, or by its trust department or agent but not in the City's name. I Cash and investment balances at December 31,2002: Credit Risk Category Carrying Fair I 1 2 3 Amount Value U.S. Governments $ 41,401,536 $ 0 $ 0 $ 41,401,536 $ 41,401.536 Commercial Paper 27,429,342 .0 0 27,429,342 27,429,342 I Total Investments $ 69,342,622 $ 0 $ 0 68,830,878 68,830.878 Investment Pools 4.442,018 4.442,018 I Total Deposits 1.989.913 1.989.913 I Cash oil hand 1.505 1,505 I Total Cash and Investments $ 75,264.314 $ 75,264,314 I 17 I I I B. Receivables I Receivables are recorded according to their origin as follows: 1. Property tax levies are set by the City Council in December each year, and are certified to Scott I County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads all levies over taxable property. Such taxes become a lien on January 1 and I are receivables at that date. Revenues are accrued and recognized in the year collectible, net of delinquencies. I Real property taxes may be paid by taxpayers in two equal installments, on May 15 and October 15. Personal property taxes may be paid February 28 and June 30. The County provides tax settlements to cities and other local govemments three times a year, on or before April 15, June 30 and November 30. I Taxes which remain unpaid at December 31 are classified as delinquent taxes receivable, and are fully offset by deferred revenue because they are not known to be available to finance current I expenditures. No allowance for uncollectible taxes has been provided because such amounts are not expected to be material. 2. The principal and interest portion of special assessments is reCognized as revenue in the year I collected. Both the principal and interest on special assessments are payable in installments over a term of years that matches the scheduled payments for the bond issue which financed the project 3. Interest on investments is recorded as revenue in the year when eamed. I 4. State aid for street construction is recorded as revenue when an applicable liability has been incurred and a claim for reimbursement submitted. The City's unexpended, encumbered balance for I Municipal State Aid - Construction as of December 31 2002 was $28,078. 5. Utility service charges are recognized when eamed with the exception of approximately one week's worth of service at year end which is not billed and not recorded until the following year. I 6. The City has assessments that involve green acre properties. Green Acres status means that payment of special assessments is deferred until the propertY is sold or developed. The City carries I the installments certified to the County Auditor (principal and interest) in delinquent special . assessments receivable and future installments (principal) in deferred special assessments receivable. Green acre assessments at December 31, 2002, are carried as follows: I Fund Total Capital Improvement Fund $ 80.231 I 7. The Intemal Service Fund has a long term receivable for bonds issued by the Scott County Housing and Redevelopment Authority in the amount of $790,000. The bonds are in support of the Blocks 3 I & 4 redevelopment project and not considered part of the investment portfolio. The bonds mature February 1, 2003 through 2014 and the interest is 6.75%. I I I 18 I I C. Fixed Assets 1. General Fixed Assets I A summary of changes in the General Fixed Asset Account Group during 2002 is as follows: Balance Disposals Balance I 1/1/02 Additions & Transfers 12/31/02 Land $ 7,268,825 $ 1,710,012 $ (92,125) $ 8,886,712 Infrastructure 87,276,782 87,276,782 I Buildings and Improvements 1,015,003 70,281 (18,696) 1,066,588 Equipment 1,532,308 315,021 (72,153) 1,775,176 Total $ 9.816.136 $ 89.372.096 $ (182.974) $ 99.005.258 I 2. Proprietary Fund Fixed Assets I A summary of Proprietary Fund Type Fixed Assets at December 31. 2002 follows: Enterprise Internal Service I Funds Funds Land $ 379,309 $ 14,102,894 I Buildings and Improvements 1,383,149 4,932,016 Equipment 573,214 3,408,190 Other Improvements 92,403,198 I Intangible Assets 1,368,569 Work In Progress 2,419,994 $ 98.527.433 $ 22.443.100 I D. Interfund Receivables and Payables and Transfers Individual fund interfund receivable and payable balances at December 31,2002 are as follows: I Debit Credit General $ 768,544 I Capital Projects 2001/2002 Improvements 642,000 I Enterprise Electric 24,868 60,262 Water 8,289 66,281 Sewer 22,391 I Storm 10,767 Recreation $ 801.701 $ 801.701 I I I 19 I I I E. Leases I The City has no capital or significant operating leases. F. Long-Term Debt 1. The bonded debt obligations outstanding at year-end are summarized as follows: I Bonds Maturities Interest Rates 12/31101 General Obligation Bonds 2003 - 2017 3.000A. to 6.10% $16,620,000 I General Obligation Tax Increment Bonds 2003 4.75% to 4.90% 390,000 Revenue Bonds 2006 - 2030 4.25% to 6.00% 25.660.000 $42670000 I Changes in general long-term liabilities and revenue bonds during 2002 are summarized as follows: Balance Debt Debt Balance I Bonds 12/31/01 Issued Retired 12/31/02 General Obligation Bonds $ 14,335,000 $ 4,935,000 $ 2,650,000 $ 16,620,000 I General Obligation Tax ; Increment Bonds 755,000 365,000 390,000 Revenue' Bonds 26,000,000 340,000 25,660,000 I Total $ 41,090,000 $ 4,935,000 $ 3,355,000 $ 42,670,000 I General Obligation Bonds shown above are special assessment debt (G.O. Improvement Bonds) with government commitment to make full debt service payments in the event special assessment revenues are insufficient I General Obligation Tax Increment Bonds are supported by incremental property tax revenues on the KMart Distribution Center. The City has a contingent liability against its full faith and credit for the $390,000 in bonds outstanding. I General Obligation Bonds and General Obligation Tax Increment Bonds are reported in the General Long Term Debt Account Group (payable from debt service funds). Revenue Bonds are reported in and payable from the Electric, Water and Storm Enterprise Funds. I In 1997 the City defeased the 1993B G.O. Improvement bond issue by placing funds in an irrevocable trust to provide for all future debt service needs. The trust account assets and liabilities Ii are not included in these financial statements. The bonds were called February 1, 2002. The Shakopee EDA issued a Taxable Limited Revenue Note in 1997 for $1,710,000 in support of costs associated with a contract for private development between the EDA and ADC I Telecommunications Inc. (ADC). ADC is the holder of the note. The non-interest bearing note requires the EDA to make semi- annual payments of $142,500 from August 1, 1999 to February 1, 2005, but only to the extent that City and County property taxes are paid by ADC and remitted to the I EDA Accordingly, the note is not included in these financial statements since the EDA has no obligation beyond taxes actually collected. ". I I 20 I I I The City has pledged its taxing authority to back three series of revenue bonds issued by the Scott County Housing and Redevelopment Authority for the Blocks 3 & 4 redevelopment project in I downtown Shakopee. The issues are; Scott County Housing and Redevelopment Authority Housing Development Revenue Bonds Series 1997 A. The amount is $3,495,000 and payments are scheduled from February 1, I 2002 to 2027 with interest ranging from 4.10% to 5.38%. Scott County Housing and Redevelopment Authority Taxable Tax Increment Development I Revenue Bonds Series 19970. The amount is $945,000 and payments are scheduled from February 1, 2013 to 2020 with interest ranging from 7.10% to 7.45%. Scott County Housing and Redevelopment Authority Taxable Tax Increment Development I Revenue Bonds Series 1997E. The amount is $1,170,000 and payment is scheduled for February 1, 2025 with interest at 5.38%. The City and EDA have entered into a development agreement for costs related to a Seagate I facility moving to Shakopee. The Shakopee EDA issued a Taxable Tax Increment Revenue Note in the amount of $4,572,725 in support of development costs for the Seagate project. Seagate is the holder of the note. The EDA is liable only to the extent of the tax in~rement . I received from the Seagate property. The interest on the note is 7.5%. Payments_are scheduled semi-annually from August 1, 2000 to February 1, 2009. Deferred tax levies are recognized as revenue in the year in which they are collected. The deferred I levies amounting to $5,840,061 are shown below and are not reflected in the financial statements. Deferred property tax levies in support of Debt Service Improvement funds: I IssuelFund Amount 1995A Improvement $ 185,399 1995B Revenue 316,172 I 1996A Improvement 252,095 1997 A BuDding Bonds 3,450,050 1997B Improvement 119,365 I 1998B Improvement 373,195 2000A Improvement 372,260 2oo2A Improvement 771,525 I ,I I I -. I I 21 I I I Bonded debt maturities, including interest of $26,149,699 are as follows: I Tax General Increment Obligation Revenue Bonds Bonds Bonds Total I 2003 399,555 2,682,775 1,928,883 5,011,213 2004 2,589,735 1,951,213 4,540,948 'I 2005 2,217,276 1,921,294 4,138,570 2006 2,608,792 1,950,261 4,559,053 2007 2,477,059 1,775,211 4,252,270 2008-12 6,092,176 8,915,536 15,007,712 I '. 2013-30 1,444,691 29,865,242 31,309,933 $ 399.555 $ 20.112.504 $ 48.307.640 $ 68.819.699 I o-.._:~ I There is $7,653,349 available in the Debt Service Funds. The City is subject to a staMory limitation on net debt by the State of Minnesota. This debt may not I exceed two percent of market value. At December 31, 2002, the legal debt margin (authority to issue} was $29,774,377. I G. Contributed Capital Contributed capital Changed by the follOwing amounts in 2002: Electric Water Sewer Storm Drainal!c Recreation Eauioment Buildinl! Total I Other Funds! Acct. Groups S 0 S 0 S 0 S 0 S 0 S . 0 S 34.621 S 34.621 Less: I Reclassification of Prior Year Deve]oper Contributions 0 0 ].674.868 ].093.628 0 0 0 2.768,496 Transfers Out - Contributed Assets 0 0 0 0 ]27.883 0 0 ]27.883 I Contributed Capital 52.983.092 Januay 1 141.090 7.872.010 13.]49.950 16.273.180 158.731 2.721.440 12.666.691 I Contributed Captial December 31 ~ 141 090 ~ 7&72010 S 11 475 0&2 S 15 179 552 S 10 848 S 2721440 S 12701 112 S 50 121 ]34 I H. Reserved Fund Balances.and Retained Earnings and Restricted Asset Accounts Fund balances in the Special Revenue, Debt Service and Capital Projects fund types are reserved for the specific purpose of the individual fund. The Forfeiture Fund is for Jaw enforcement, Transit is fOr the City transit program I EDA is for development and redevelopment activity. and the Block Grant is for the police Departmenfs DARE. Cops and Auto Theft grants. The Electric and Water Enterprise Funds have reserves for future constrUction, emergencies. and bond requirements of $2.040,697. $100,000 and $1.750,645 respectively at December 31. 2002. I I. I 22 I IV. OTHER INFORMATION I A. Risk management I The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions and natural disasters for which the City carries insurance policies though a risk pool from the League of Minnesota Cities Insurance Trust. The City retains risk for the deductible portions of the insurance ;1 policies. The amount of these deductibles ranges from $2,500 to $5,000. 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. Through the pool the City is subject to reassessment but due to reserves and reinsurance contracts, the likelihood I' is very low. The policy limits through the pool include $1,000,000 aggregate for propertylliability, $1,000,000 for automobile coverage and $50,000 faithful performance employee bonding. B. Segment Information-Enterprise Funds I The City currently operates six enterprise funds which are designated to operate primarily from user fees charged to customers. Stonn I Electric Water Sewer Drainae:e Recreation Total Operatin~ Revenues $5,726,731 $1,983,320 $2,416,845 $950,936 $690,542 $11,768,374 Depreciation 746,315 499,708 358,413 404,233 7,210 2,015.879 I Operatin~ Income (Loss) 2,354,396 408,360 701,139 260,345 (791,781) 2,932,459 Operatin~ Transfer In (Out) (618,866) (438,281) 288,%5 (288,965) 836,271 (220,876) I Net Income Before Depreciation Add Back 1,456,248 159,664 2,071,995 1,670,141 69,614 5,427,662 Cmrent Capital Contribution 533,977 2,925,959 2,360,550 3,566,80& 9,387,294 I Property Additions (Net) 8,252,591 3,978,565 2,392,018 3,825,950 294,693 18,743,817 Net Workin~ Capital 4.871,105 648,979 12,572,489 8,630,415 16,434 26,739,422 I Total Assets 42,549,379 25,081,755 30,133,766 32,437,721 ,126,101 130,328,722 Lon~-Term Debt 22,598,800 2,071,200 410,000 25,080,000 Total Equity 16,772,625 22,514,530 30,014,967 31,872,436 54,949 101,229.507 I C. Related Party Transaction No'related party transactions occurred during 2002 except those reported in note IV G. I D. Subsequent Events The City has awarded no material construction contracts in 2003 as of April 25, 2003. The City issued I 2003A General Obligation Improvement Bonds totaling $2,215,000. E. Contingent Liabilities And Commitments The City has several claims and/or lawsuits against it for street/sidewalk/traffic accidentS. Whatever the I outcome of the individual situation is, it is expected that there will be no material financial impact on the City. There are various uncompleted construction contracts as of year end totaling approximately $6,853,395 I for work yet to be done. Completed work is reflected in the financial statements, work yet to be done is not -0 I I 23 I I I F. Conduit Debt I The City has issued various Industrial Revenue Bonds for the benefit of private development. The bonds are secured by the property financed and are payable only from payments received on the underlying mortgage loans. I The City, state or any subdivision thereof are not obligated in any manner for the debt. Ps of December 31, 2002 there were six issues outstanding for a total of $19,884,233. Bonds were issued between 1980 and 2000. The bonds are not reported as liabilities in the accompanying financial statements. I See note IIIF for information on debt issued by Scott County HRA . I G. . Jointly Governed Organizations The City has agreements with governmental entities which provide reduced costs, better service, and additional benefits to the participants. These programs, in which the City participates, are listed below and amounts recorded within the current year financial statements are disclosed. I lOGIS (local Government Information Systems) is a joint venture of approximately 26 governmental entities that provides computerized data processing and support services to its members. legally I separate, the City does not appoint a voting majority of the Board C}l'!d lOGIS is fiscally independent of the City. During 2002, the City paid $176,539 to lOGIS for services provided which is included in expenditures of the General Fund. Financial statements are available by contacting lOG IS, 5750 Duluth Street, Golden Valley, MN 55422-4036. I Scott Joint Prosecution Association (SJPA) is a joint venture of approximately 5 cities that provides legal prosecution and support services to its members. legally separate, the City does not appoint a voting I majority of the Board and SJPA is fiscally independent of the City. During 2002, the City paid $223,599 to SJPA for services provided which is included in expenditures of the General Fund. Financial statements are available by contacting SJPA, 129 South Holmes St., Shakopee, MN 55379. I H. Employee Retirement Systems and Plans 1. Defined Benefit Pension Plans - Statewide I a. Plan Description All full.time and certain part-time employees of the City of Shakopee are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota I (PERA). PERA administers the Public Employees Retirement Fund (PERF), the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota statutes, I Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members I must participate in the Coordinated Plan. All police officers, fire-fighters and peace officers who qualify for membership by statue are covered by the PEPFF. I -. I I I 24 I I 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 I after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. I 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 I member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan I members and 1.7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all PEPFF members and PERF members hired prior to July 1, 1989 whose annuity is calculated using I Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also I available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single-life I annuity is a lifetime annuity that ceases upon the death of the retir~o 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 I 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 I and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. I PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained on the web at mnpera.com, by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by I calling (651)296-7460 or 1-800-652-9026. b. Funding Policy I Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These Statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state Statutes. PERF Basic I Plan members and Coordinated Plan members are required to contribute 9.10% and 5.10%, respectively, of their annual covered salary. PEPFF members are required to contribute 6.20% of their annual covered salary. The City of Shakopee is required to contribute the following I percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 5.53% for Coordinated Plan PERF members, and 9.30% for PEPFF members. The City's contributions to the Public Employees Retirement Fund for the years ending December 30, 2002, 2001, and 2000 were $264,141, $209,707, and $188,345, respectively. The City's contributions to the I Public Employees Police & Fire Fund for the years ending December 31, 2002, 2001 i and 2000 were $155,213, $129,366, and $113,112; respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. I 25 I I I 2. Defined Benefit Pension Plan - Shakopee Fire Department Relief Association I a. Plan Description The Shakopee Fire Department Relief Association is the administrator of a single employer I defined benefit pension plan established to provide benefits for volunteer members of the Shakopee Fire Department. The Relief Association provides retirement benefits to members and benefits to survivors upon the I death of eligible members. Pension benefits are determined by multiplying the accrued liability, as set forth in Minnesota Statute 69.772, Subdivision 2, by the ratio of the lump sum service pension amount provided in the bylaws of the Association to a service pension of $5,000 per year of I service. The Board of Trustees has the authority to establish and amend benefit provisions. The Shakopee City Council must approve of any amendments to the benefit provisions that result in an increased city contribution. Benefit provisions are also subject to enabling state statutes; therefore, any amendments to benefit provisions are reviewed by the Office of the State Auditor. I The Relief Association issues a publicly available financial report that includes financial statements and required supplementary information for the Relief Association. That report may be obtained by writing to Shakopee Fire Department Relief Association, 129 Holmes St. S., Shakopee, MN I 55379. b. Funding Policy and Annual Pension Cost I Schedules I and It, prepared by the Association and certified to the City Council by August 1 of each year, determine the municipal contribution for the following calendar year. Plan members, the volunteer firefighters, do not contribute to the plan. Schedules I and It follow enabling state statutes for fire relief associations. Municipalities are required by state statutes to contribute the I amount certified on Schedules I and II. The City's annual contribution for the current year and related information follows: I Required Contribution: $99,441 Actual Contribution: 99,441 Date Certified to City Council August 2002 I Statutory Assumptions Asset Valuation Method Market Investment Rate of return 5.0% I Benefit Increase 0 Administrative Expense Increase 3.5% State Aid Increase 0 I Amortization of Deficit/Surplus 13.1% Actuarial Cost Method Entry Age Normal Amortization of Deficit Period 20 Years Amortization Period Closed I I . I I 26 I I I Three-Year Trend Information: I Municipal Contribution State Contribution Year Statutory Actual Percentage State Percentage I Ended Contribution Contribution Contributed Contribution Contributed 12/31/2002 $ 99,441 $ 99,441 100% $ 105,284 100% 12/31/2001 65,211 65,211 100% 84,908 100% I 12/31/2000 65,211 65,211 100% 63,999 100% Reauired Supplementarv Information Unfunded I Statutory (Assets In USAL as a Valuation Value of Accrued Excess of) Funded Covered Percentage Date Assets Liabilitv (SALl SAL (USAL) Ratio Em2!L Covered Pavroll I 12/31/2002 $ 1,625,640 $ 2,753,195 $1,127,555 59% N1A N1A 12/3112001 1,536,625 2,270,721 734,096 68% N/A N/A 12/31/2000 1,640,303 1,957,499 317,196 84% N1A N1A .- I I. Other Post Employment Benefits City employees are eligible to participate in COBRA provisions after severing employment or MN Chapter 488 after retirement, which allows employees to continue coverage on the City's health insurance plan I under certain provisions. Currently, the City has eleven former employees participating under the MN Chapter 488 provision and two disabled at the end of 2002. The participants pay for the premium under the above provisions. J. GASB Statement No. 34 I In June, 1999 the Governmental Accounting Standards Board (GAS B) issued Statement No. 34, Basic Financial Statements - and Managements Discussion and Analysis for State and Local I Governments. The general provisions of GASB Statement No. 34 must be implemented by the City of Shakopee, no later than the fiscal year ending December 31, 2003. I I I I I -. 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'" (:<"':> :. ~ 1,,~, __~,~ 't. ~;,tffflF!1X1r:~f:fti :?;}~:;':,g:f~,:2:J' {'~lii,~!~~,}~~~';;t~l1~;'~~~':~~[;,;~ :~;;~~~.0:~:J~,~i~;;;:/;~~ ~':'{}~:::'\;Jt:ty~~~~;~ :;~~",;f/: It '. ~_~' --' 'C', h'-, ( I I I CllY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31,2002 I I .- I GENERAL FUND I The General Fund is used to account for revenues and expenditures necessary to carry out the basic functions of city government These basic functions include police and fire protection, planning, administration, etc. Appropriations are made from this fund annually. I Revenues are recorded by source, i.e. taxes, intergovernmental, charges for services, etc. Expenditures are recorded by object and are primarily for day-to-day operating expenses and I equipment. Capital expenditures for large scale public improvements are accounted for within the Capital Projects Funds. I I I I I ~ I I I I EXHIBIT A CITY OF SHAKOPEE, MINNESOTA I GENERAL FUND I BALANCE SHEET December 31,2002 I 2002 2001 I Assets Cash And .Cash Equivalents $ 600 $ 300 I Investments 3,613,343 3,765,653 Accrued Interest Receivable 19,586 36,802 I Accounts Receivable 252,652 87,168 Taxes Receivable - Delinquent 71,269 . 56,256 Special Assessments - Deferred 17,599 7,084 I Special Assessments - Delinquent 2,555 2,930 Due From Other Funds 768,544 247,993 Due From Other Governments 237,681 69,732 Other Assets 11,348 47,607 .1 Total Assets $ 4,995,177 $ 4,321,525 I Liabilities And Fund Balance Liabilities I Accounts, Wages, And Benefits Payable $ 1,369,674 $ 1,110,695 Deferred Revenue 91,423 66,270 I Total Liabilities 1,461,097 1,176,965 Fund Balance I Unreserved Designated For Future Appropriations - Debt Service 200,000 Undesignated 3,534,080 2,944,560 I Total Fund Balance 3,534,080 3,144,560 Total Liabilities And Fund Balance $ 4,995,177 $ 4,321,525 I I I I 28 I I I EXHIBIT A-1 CllY OF SHAKOPEE, MINNESOTA I GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 I Over (Under) 2001 Budget Actual Budget Actual I Revenues Taxes $ 6,333,250 $ 5,873,826 $ (459,424) $ 3,863,980 Ucenses And Permits 2.220.350 2,313.544 93.194 2,740,253 I Intergovernmental 367.660' 1,065.291 697.631 981,799 Charges For Services 968,700 1.243,535 274,835 1,065,824 Fines And Forfeits 220,000 253,348 33,348 230,085 Miscellaneous 341,000 296,935 (44,065) 316,359 I Total Revenues 10,450,960 11,046,479 595,519 9,198,300 I Expenditures Current General Government 3,208,050 2,621,616 (586,434) 2,325,091 Public Safety 4,592,810 4,421,028 (171,782) 3,706,838 Public Works 1,811.350 1.847,808 36,458 1,625,264 I Recreation 691.600 622,099 (69,501 ) 664,340 Miscellaneous 363,630 109,455 (254,175) 103,681 I Total Expenditures 10.667,440 9.622,006 (1,045,434) 8,425,214 Excess (Deficiency) Of Revenues Over Expenditures (216.480) 1,424,473 1,640,953 n3,086 I Other Financing Sources (Uses) Operating Transfers In 1.033.000 1,057,147 24,147 1,243,695 Operating Transfers Out (845.830) (2,101,744) (1,255,914) (3,843,340) I Sale Of Property 9,644 9,644 13,680 " Total Other Financing Sources (Uses) 187,170 (1,034,953) (1,222,123) (2,585,965) I Excess (Deficiency) of Revenues And Other Financing Sources Over Expenditures And Other Financing Uses (29,310) 389,520 418,830 (1,812,879) I Fund Balance January 1 3,144,560 3,144,560 4,873,116 Residual Equity Trar:sfer In 84,323 I Fund Balance December 31 $ 3,115,250 $ 3,534,080 $ 418,830 $ 3,144,560 I I I 29 I I EXHIBIT A-2 CITY OF SHAKOPEE, MINNESOTA I GENERAL FUND SCHEDULE OF REVENUES - BUDGET AND ACTUAL I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 I Over I (Under) 2001 Budget Actual Budget Actual Taxes I General Property Tax - Current $ 5,727,850 $ 5,258,335 $ (469,515) $ 3,370,658 Excess Tax Increment 74,402 74,402 I Fiscal Disparities 425,400 366,621 (58,779) 318,725 Lodging Tax 170,000 159,472 (10,528) 163,320 Aggregate Tax 10,000 " 14,996 4,996 11,277 Total Taxes 6,333,250 5,873,826 (459,424) 3,863,980 I Licenses And Permits I Business Licenses And Permits 2,219,100 2,312,390 93,290 2,738,938 Non-Business Licenses And Permits 1,250 1,154 (96) 1,315 Total Licenses And Permits 2,220,350 2,313,544 93,194 2,740,253 I Intergovernmental Revenues Federal Grants 45,000 164,378 119,378 17,158 , State Grants I Local Government Aid 165,660 165,666 6 242,026 HACA 535,418 Market Value Credits 544,969 544,969 I PERA Aid 12,000 15,051 3,051 18,170 Police State Aid 105,000 140,396 35,396 123,197 Other 40,000 34,831 (5,169) 45,830 Total Intergovernmental I Revenues 367.660 1,065,291 697,631 981,799 Charges For Services I General Government 129,200 213,482 84,282 181,611 Public Safety 167,500 185,019 17,519 158,623 Highways/Public Works 672,000 845,034 173,034 725,590 I Total Charges For Services 968,700 1,243,535 274,835 1,065,824 I I 30 I I I EXHIBIT A-2 I CITY OF SHAKOPEE, MINNESOTA GENERAL FUND I SCHEDULE OF REVENUES - BUDGET AND ACTUAL (concluded) FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 I Over (Under) 2001 Budget Actual Budget Actual I Fines And Forfeits $ 220,000 $ 253,348 $ 33,348 $ 230,085 Miscellaneous Revenues Investment Income 250,000 232,614 (17,386) 248,554 I Rents 11 ,000 11 ,926 926 11,076 Contributions 100 Miscellaneous 80,000 52,395 (27,605) 56,629 I Total Miscellaneous Revenues 341,000 296,935 (44,065) 316,359 I Total Revenues 10,450,960 11,046,479 595,519 9,198,300 Other Financing Sources Operating Transfers From: I Debt Service 5,400 Enterprise Funds 1,033,000 1,057,147 24,147 1,238,295 Sale of Assets 9,644 9,644 13,680 I Total Other Financing Sources. 1,033,000 1,066,791 33,791 1,257,375 I Residual Transfer In 84,323 Total Revenues And Other Financing Sources $ 11,483,960 $ 12,113,270 $ 629,310 $ 10,539,998 I I I I -- I I 31 1 I I EXHIBIT A-3 CITY OF SHAKOPEE, MINNESOTA I ,~ GENERAL FUND . SCHEDUlE OF EXPENDITURES - BUDGET AND ACTUAl I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 I j I Over ! (Under) 2001 I Budget Actual Budget Actual ..t General Government Mayor And Council I Personal Servlces $ 38,840 $ .37,818 $ (1,022) $ 38,429 Supplies And Services 51,9S0 38,835 (13,145) 30,239 Total 90,820 76,653 (14,167) 68,668 Administration I Personal Services 390,no 373,922 (16,848) 355,234 Supplies And ServIces 150,380 149,015 (1,365) 110,587 Capital OUtlay 17,000 17,031 31 17,478 I Total 558,150 539,968 (18.182) 483,299 ~ , City Clerk ! Personal Servlces 189.190 191,200 2,010 157,061 I \ Supplies And ServIces 43,810 63,362 19.552 33,175 Capital OuUay 95,00Q (95,000) Total 328,000 254,562 (13,438) 190,236 I Less Expenses Charged To Other Activities (3,000) (3,000) (3,000) . Net 325,000 251,562 (73,438) 187,236 I I I 1 Finance I Personal Services 297,no 243,298 (54.472) 230,333 ! supprles And ServIces 385,700 356,671 (29,029) 361,975 ! , Total 683,470 599.969 (83.501) 592,308 I Less Expenses Charged To Other Activities (8,000) (8,000) (7,000) : I i Net 675,470 591,969 (83,501 ) 585.308 , i I i .1 1 t I . . . I ~ 32 I ! I I I EXHIBIT A-3 I CITY OF SHAKOPEE, MINNESOTA GENERAL FUND I SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (continued) FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 OVer (Under) 2001 I Budget Actual Budget Actual Legal SUpplies And Services $ 424,500 $ 350,955 $ (73,545) $ 385.276 I Planning Personal ServIces 415,830 371,373 (44,457) 262,588 Suppl'res And Servk:es 349,080 215,870 (133,210) 134,031 I Total 764,910 587.243 (1n,667) 396,619 Less Expenses Charged To Other Activities (6,000) (6,000) (6,000) I Net 758,910 581,243 (1n,667) 390,619 Government Buildings Personal ServIces 46.050 31,895 (14,155) 39,319 I Suppl/es And ServIces 329,150 197,371 (131,n9) 185.366 Total 375,200 229.266 (145,934) 224,685 I Total General Government 3.208,050 2,621,616 (586,434) 2,325,091 PubrlC Safety Police Personal Services 2,547.950 2,562,681 14,731 2,026,111 I SUppUes And ServlCes 413,150 395,986 (17,164) 375.767 Capital OuUay 20,000 17,587 (2,413) 16,043 Total 2,981,100 2,976,254 (4,846) 2,417,921 I. I I I I , I I 33 I I EXHIBIT A-3 CITY OF SHAKOPEE, MINNESOTA I GENERAl FUND SCHEDULE OF EXPENDITURES. BUDGET AND ACTUAL (continued) I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 I - Over (Under) 2001 I Budget Actual Budget Actual FIre Personal Services $ 339,100 $ 2n,394 $ (61,706) $ 229,924 I Supplies And Services 662,380 588,156 (74,224) 519,269 Capital OuUay 25,000 23,840 (1,160) 17,868 Total 1,026,480 889,390 (137,090) 767,061 I .- Building Inspection Personal Services 429,470 413,995 (15,475) 362.863 Supplies And Services 155,760 141,389 (14,371) 158,993 Total 585,230 555.384 (29,846) 521,856 I Total Public Safety 4,592,810 4,421,028 (171,782) 3,706,838 Public Works I ! Engineering Personal Services 578,670 572,947 (5,723) 385,026 I Supplies And Services 87,060 79,730 (7,330) 132.509 Total 665,730 652,6n (13.053) 517,535 Less Expenses Charged To I Other Activities (7,000) (7,000) (8,000) Net 658,730 645,6n (13,053) 509,535 Street I Personal Services 391,490 366,503 (24,987) 379,281 SuppUes And Services 572,350 640,497 68,147 566.100 Total 963.840 1,007,000 43,160 945,381 I I I . I I 34 I I I EXHIBIT A-3 I CITY OF SHAKOPEE, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (concluded) I FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 Over (Under) 2001 I Budget Actual Budget Actual Shop Personal ServIces $ 134,080 $ 136,732 $ 2,652 $ 126,085 Suppnes And Services 48,200 51,917 3,717 38,263 I Capital Outlay 6,500 6,482 (18) 6.000 Total 188,780 195,131 6,351 170,348 Total Public Works 1,811,350 1,847,808 36,458 1,625,264 I Recreation Park Maintenance Personal Services 396,590 358,346 (38,244) 345,988 I Supplies And Services 295,010 263,753 (31,257) 318,352 Total Recreation 691,600 622,099 (69,501) 664,340 I MIscellaneous Unallocated Supplies And Services 203,630 100,666 (102,964) 97,985 Contingency 160,000 8,789 (151,211) 5,696 I Total Miscellaneous 363,630 109,455 (254,175) 103,681 I Total Expenditures 10,667,440 9,622,006 (1,045,434) 8,425,214 Operating Transfer To: Special Revenue Fund 55,914 55,914 55,300 I Debt Service Fund 200,000 200,000 Recreation Fund 845,830 845,830 538,040 Internal Service Building 1,000,000 1,000,000 3,250,000 I Total Other Financing Uses 845,830 2,101,744 1,255,914 3,843,340 Total Expenditures And Other Financing Uses $ 11,513,270 $ 11,723,750 $ 210,480 $ 12,268,554 I I -. I I 35 I I I I I , I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I .1 .1 I 36 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31, 2002 I I I SPECIAL REVENUE FUNDS I Special Revenue Funds are used to account for the proceeds of specific revenue sources designated to finance particular activities as required by law or administrative regulation. I The Forfeiture Fund reflects an activity of the Police Department. Established in 1984, the Transit Fund I accounts for the van pool and dial-a-ride services provided by the City after opting out of the Metropolitan Transit Commission's service. Economic Develooment Authoritv Fund accounts for the activities of that body. The Block Grant Fund account includes money for the Police Department from the following grants DARE, COPS OT and Auto Theft Prevention. The Telecommunications Fund I accounts for the activity of various telecommunication programs of City. The SCDP Grant Fund accounts for the Small Cities Development Grant awarded to the City by the State of Minnesota. I I I I I I . I I I I EXHIBIT B CIlY OF SHAKOPEE, MINNESOTA I SPECIAL REVENUE RINDS COMB!NING BAlANCE SHEET December 31. 2002 I Economic Tolal Development Block Forfellunl Transit TeIecomm SCDP Grant AuIhorIly Grant 2002 2001 I ~ Cash And Cash EquIvllIents $ $ $ $ $ $ $ $ 200 Inveslmenls 68,162 660,_ 370,fNl 8.718 459.232 1.568.702 1.054.747 AccruedI_R~ 442 3,749 2,128 2,918 9,235 8,990 Accounls ReceIvable 888 415 43.955 3,429 49.685 32,858 I Pn!paId Items 108 Taxes ReceIvable - DeInquent 1.819 698 2.515 . 808 TolalAssels $ 69,490 S 666.478 $ 418.180 $ 8.718 $ 468.273 $ $ 1.827.137 S 1.095.307 L1abiIitIes And Fund Balance I UabiII1les Accounts ~ $ 753 $ 80,239 $ 3.413 $ $ 62,384 $ S 148.789 $ 128.478 CompensaledAbsenCes ~ 683 1.913 2,598 2,184 Due To Other Governments 19.000 19.000 19.000 I Deferred Revenue 1.819 698 2515 808 Tolal Uabl1ItIes 753 101.058 4,095 64.993 170.900 150,268 Fund Balance Reserved - SpecIal Purpose 68.737 585.420 412.084 8.718 401.280 1.458.237 945.041 Total UabiJitlesAnd Fund Balance $ 69.490 $ 668.478 $ 418.180 $ 8.716 $ 468.273 S S 1.627.137 $ 1.095.307 I I I I I I I I I I 37 I I EXHIBIT B-1 I CITY OF SHAKOPEE, MINNESOTA SPECIAl REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE I FOR THE YEAR ENDED DECEMBER 31, 2002 Econonic Total I Development Block Forfeiture Transit Telecomm SCDP Grant Authority Grant 2002 2001 Revenues I Taxes $ $ 2,969 $ $ $ 74,371 $ $ 71,346 $ 445,681 Intergovernmental 12,100 401,143 179.510 65,307 658.060 496,318 Charges For Services 38,375 202.406 5,200 245,981 'Z1 ,322 Miscellaneous 43,142 33,148 385.674 25,783 74 488,021 84.230 Talal Revenues 55,242 475,635 588,280 179.510 170,667 74 1.469.408 1,053,551 I Expenditures Current General Government 176,196 170,794 216,133 1,333 564,456 445,641 Public Safety 38,575 38,575 4,027 I PubllcWllIks 411,095 411,095 394,679 Talal ~ltures 38,575 411,095 176,196 170.794 216.133 1,333 1.014.126 844.347 Excess Revenues Over Expenditures 16.667 64,540 412,084 8,716 (45,466) (1,259) 455,282 209.204 I Transfers From General Fund 55,914 55,914 55,300 Other Financing Sources (Uses) 55.914 55.914 55.300 Excess (OeIldency) Of Revenues And I Other sources Over Expenditures And Other Uses 16,667 64,540 412,084 8,716 10,448 (1,259) 511,196 264.504 Fund Balance January 1 52.070 500.880 390,832 1,259 945,041 680.537 I Fund Balance December 31 $ 68,737 $ 565,420 $ 412,084 . $ 8,716 $ 401,280 $ $ 1,456,237 $ 945,041 I I I I I I I ~ I I 38 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I -. I I 39 I I EXHIBIT B-2 I CITY OF SHAKOPEE, MINNESOTA SPECIAl REVENUE FUNDS COMBINING SCHEDULE OF REVENUES I FOR THE YEAR ENDED DECEMBER 31, 2002 I Econorric Total Development Block Forfeiture Transit Teleconm seDP Grant AulhOlity Granl 2002 2001 Revenues Taxes I General Property Tax $ $ 1,062 $ $ $ 64,896 $ $ 65,958 $ 407,006 Ascal Disparities 1,907 9,481 11,358 311.675 Total 2,969 74,3n n,346 445,681 I Intergovemmenlal Revenue Federal Grants 179,510 179,510 264,842 Malkel Value CreditS 1,299 1.299 Slate Grants 12,100 401,143 413,243 135,144 S1ateHACA 5,932 County Grant 64.008 64.008 90.400 I Tolal 401.143 179,510 65,307 658,060 496.318 Charges For ServIces 38,375 202,406 5,200 245,981 27,322 I Miscellaneous Investment Income 3,918 33,148 14,975 25,783 74 n,898 61,782 '- Miscellaneous 39,224 370,899 410,123 22.448 Total 43,142 33.148 385,874 25,783 74 488,021 84.230 I Total Revenues $ 55,242 $ 475,635 $ 588,280 $ 179,510 $ 170,667 $ 74 $ 1,469,408 $ 1.053,551 I I I I I I I I I I 40 I "EXHIBIT B-3 I CITY OF SHAKOPEE, MINNESOTA BUDGETED SPECIAl REVENUE FUNDS I COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2002 Transit Economic Development Authority I Over Over (Under) (Under) I Budget Actual Budget Budget Actual Budget Revenues Taxes $ $ 2,969 $ 2,969 $ 81,180 $ 74,3n $ (6,803) I Intergovernmental Federal Grants Market Value Credits 1,299 1,299 I State Grants 217,000 401,143 184,143 124,000 (124;000) County Grant 66,000 64,008 (1,992) Total 217,000 401,143 184,143 190,000 65,307 (124,693) I Charges For Services 70,000 38,375 (31,625) 5,200 5,200 Miscellaneous I Investment Income 15,000 33,148 18,148 13,000 25,783 12,783 Total 15,000 33,148 18,148 13,000 25,783 12,783 Total Revenues 302,000 475,635 173,635 284,180 170,667 (113,513) I Expend'ltures Personal ServIces 16,800 8,069 (8,731) 69,930 65,574 (4,356) I Supplies And Services 587,070 372,402 (214,668) 247,250 150,559 (96,691) Capital OuUay " 30,624 30,624 Total Expenditures 603,870 411,095 (192,n5) 317,180 216,133 (101,04n I Excess Of Revenues Over (Under) Expenditures (301,870) 64,540 366,410 (33,000) (45,466) (12,466) Other Ananclng Uses I Transfers From General Fund 33,000 55,914 22,914. Excess (Deficiency) Of Revenues Over Expenditures And I Other Uses (301,870) 64,540 366.410 10.448 10,448 Fund Balance January 1 500,880 500,880 390,832 390,832 Fund Balance December 31 $ 199,010 $ 565,420 $ 366,410 $ 390,832 $ 401,280 $ 10,448 I I . I I 41 I I ExHIBIT B-3 I CITY OF SHAKOPEE, MINNESOTA BUDGETED SPECIAL REVENUE FUNDS I COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCES - BUDGET AND ACTUAL (conduded) FOR THE YEAR ENDED DECEMBER 31, 2002 I Total over I (Under) Budget Actual Budget Revenues I Taxes $ 81,180 $ 77,346 $ (3.834) Intergovernmental Federal Grants I W Credit 1,299 1,299 Slate Grants 341,000 401,143 60,143 County Grant 66,000 64,008 (1,992) Total 407,000 466,450 59,450 I Charges For Services 70,000 43,575 (26,425) Miscellaneous I Investment Income 28,000 58,931 30,931 Total 28,000 58,931 30,931 I Total Revenues 586,180 646,302 60.122 Expenditures Personal Services 86,730 73,643 (13.087) I suppnes And ServIces 834,320 522,961 (311,359) Capital OuUay 30.624 30,624 Total Expenditures 921,050 627,228 (293,822) I Excess Of Revenues Over (Under) Expenditures (334,870) 19,074 353,944 I. Other Anandng Uses Transfers from General Fund 33.000 55,914 22.914 Excess (DefIciency) of Revenues I Over Expenditures and Other Uses (301,870) 74,988 376,858 Fund Balance January 1 891,712 891,712 I Fund Balance December 31 $ 589,842 $ 966,700 $ 376,858 I I I I 42 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I - I ,I 43 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31,2002 I I I DEBT SERVICE FUNDS I These funds are maintained to account for the accumulation and disbursement of money needed for interest and debt redemption requirements of the general obligation bond issues. Primary revenues I sources are property tax, special assessments and tax increments. Provisions are made within the City's general property tax levy to provide sufficient money to meet these requirements. I I I I I I I I . I I I I EXHIBIT C CITY OF SHAKOPEE, MINNESOTA I DEBT SERVICE FUNDS COMBINING BALANCE SHEET I December 31, 2002 1993-A I Refunding 1991-A 1992-A Tax 1995-A 1996-A I Improvement Improvement Increment Improvement Improvement. Assets Investments $ 97,979 $ 395,692 $ .399,554 $ 633,060 $ 969,774 I Accrued Interest Receivable 2,833 113 3,851 6,850 Taxes Receivable - Delinquent Special Assessments Receivable I Delinquent 765 12,518 443 Deferred 11,712 346,328 125,384 Total Assets $ 98,744 $ 410,237 $ 399,667 $ 995,757 $ 1,102,451 I Liabilities And Fund Balance I Accounts Payable $ $. $ $ 1,300 $ Deferred Revenue 765 11,712 358,846 125,827 Total liabilities 765 11,712 360,146 125,827 I Fund Balance Reserved For Debt Service 97,979 398,525 399,667 635,611 976,624 Total Liabilities And Fund Balance $ 98,744 $ 410,237 $ 399,667 $ 995,757 $ 1,102,451 I I I I I - I I . 44 I I I EXHIBIT C I CITY OF SHAKOPEE, MINNESOTA DEBT SERVICE FUNDS I COMBINING BALANCE SHEET December 31, 2002 I Total 1997 1997-8 1998-A 1998-B 2000-A 2oo2-A 2oo2-B I Fire Bond Improvement Improvement Improvement Improvement Improvement Improvement 2002 2001 I 284,119 $ 357,301 $ 1,881,697 $ 1,498,990 $ 905,830 $ 141,472 $ 41,410 $ 7,606,878 $ 8,446,693 1,671 2,339 11,942 10,544 6,585 2,198 145 49,071 58,157 2,624 2,624 4,799 I 50,243 225,203 508 289,680 229,202 281,965 221,065 423,788 838,528 365,488 4,040,467 6,654,725 3,489,339 i 288.414 $ 691,848 $ 2,339,907 $ 1,933,830 $ 1,750,943 $ 509,158 $ 4,082,022 $ 14,602,978 $ 12,228,190 I $ $ 1,300 $ $ $ $ $ 2,600 $ 1,900 2,624 332;208 446,268 424,296 838,528 365,488 4,040,467 6,947,029 3,723,340 I 2,624 332,208 447,568 424,296 838,528 365,488 4,040,467 6,949,629 3,725,240 285,790 359,640 1,892,339 1,509,534 912,415 143,670 41,555 7,653,349 8,502,950 I 288,414 $ 691,848 $ 2,339,907 $ 1,933,830 $ 1,750,943 $ 509,158 $ 4,082,022 $ 14,602,978 $ 12,228,190 I I I I I I I 45 I I EXHIBIT C-1 CITY OF SI-IAKOPEE, MINNESOTA I DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCE FOR THE YEAR ENDED DECEMBER 31,2002 I 1993-A Refunding I 199O-A 1991-A 1992-A Tax 1995-A 1996-A 1997 Improvement Improvement Improvement Increment Improvement Improvement Are Bond Revenues Taxes - General Property $ $ 36,495 $ $ $ 62,715 $ $ 125,958 I Special Assessments 37,697 5,560 93,751 55,445 Investment Income 4,904 25,045 996 34,045 60,570 14,778 Contributions Total Revenues 4,904 74,192 30,605 996 190,511 116,015 140,736 I Expenditures Debt Service Redemption Of Bonds 190,000 175,000 160,000 365,000 390,000 375,000 110,000 I Interest On Bonds 5,985 14,400 20,410 27,779 58,635 62,631 136,908 Ascal Agent Fees 750 750 374 3,000 47,107 600 Total Expenditures 195,985 190,150 181,160 393,153 451,635 484,738 247,508 Excess (Deficlency) Of Revenues I Over Expenditures (191,081) (115,958) (150,555) (392,157) (261,124) (368,723) (106,772) Other Ananclng Sources (Uses) Transfer In (Out) Capital Projects Funds 200,000 388,776 I Transfer Out General Fund Proceeds Of Borrowing Total Other Ananclng Sources (Uses) 200,000 388,776 Excess (Deficlency) Of Revenues And I Other Ananclng Sources Over Expenditures And Other Ananclng Uses (191,081) 84,042 (150,555) (3,381 ) (261,124) (368,723) (106,772) Fund Balance January 1 269,280 13,937 549,080 403,048 896,735 1,345,347 392,562 I Residual Equity Transfer (78,199) Fund Balance December31 $ $ 97,979 $ 398,525 $ 399,667 $ 635,611 $ 976,624 $ 285,790 I I I I - I I 46 I I I EXHIBIT ~1 CITY OF SHAKOPEE, MINNESOTA I DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE I FOR THE YEAR ENDED DECEMBER 31, 2002 I Total 1997-B 1998-A 1998-8 2OOO-A 2002-A 2OO2-B Improvement Improvement Improvement Improvement Improvement Improvement 2002 2001 I $ $ $ $ 57,550 $ $ $ 282,718 $ 261,363 58,632 431,274 138,283 199,943 85,706 2,425 1,108,716 2,083,011 20,681 105,582 59,867 58,219 14,559 1,280 400,526 491,208 8,869 I 79,313 536,656 198,150 315,712 100,265 3.705 1,791,960 2,844,451 240,000 260,000 500.000 250,000 3,015,000 3,265,000 I 40,697 80,239 76,078 112,047 22,319 658,128 761,218 600 3,059 516 487 13,929 71,172 8,934 281.297 343,298 576,594 362,534 36,248 3,744,300 4,035,152 I (201,984) 193,558 (378,444) (46,822) 64,017 3,705 (1,952.340) (1,190.701) I 588,776 377,802 (5,400) 9,487 37,850 47,337 9.487 37,850 636,113 372,402 I (201,984) 193,558 (378,444) (46,822) 73,504 41,555 (1,316,227) (818,299) I 561,624 1,698,781 . 1,406,457 959,237 .6,862 8,502,950 9,321,002 481,521 63.304 466,626 247 $ 359,640 $ 1,892.339 $ 1.509.534 $ 912,415 $ 143.670 $ 41,555 $ 7.653,349 $ 8,502,950 I I I I I I I 47 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I 'I I I "0 I I 48 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31,2002 I I I CAPITAL PROJECTS FUNDS I Capital Projects Funds are established to account for the construction of major capital facilities. Project resources are a combination of several revenue sources such as bond proceeds, interfund transfers, I intergovernmental revenue, grants, etc. These funds provide the means for administrators to ensure that designated revenues are appropriately utilized. Park Reserve Fund is for the development and improvement of City parks. The Capital Improvement I Fund is for various projects in the City, usually small projects. The various improvement funds are for street and utility improvements for which the costs are at least partially assessed against benefited properties. The TIF Funds are to account for the activity in the tax increment financing districts. The I DNR Trail Fund was established to act as fiscal agent for a number of agencies participating in the construction of a DNR trail through the participating communities. I I I I I I I I I EXHIBIT D CITY OF SHAKOPEE; MINNESOTA I CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET I DECEMBER 31, 2002 Park CapIlaI TlF TlF TlF East Dean's I Reserve Improvements #1 #10 #11 Lake ~ I Investments $ 2,108,974 $ 3,072,556 $ 137,595 $ 17,976 $ 307.520 $ 579,653 Accrued Interest RecelvabIe 10,215 22,858 2,145 'Z1 733 4.154 Accounts RecelvabIe 695 238,675 Special Assessments ReceIvable I DeInquent 80,918 Defened 418,700 Total Assets $ 2,119.884 $ 3.833.707 $ 139.740 $ 18.003 $ 308,253 $ 583,807 UabIIitIes And Fund BaJance I LIabIItIes Accounts Payable $ 34,040 $ 109.807 $ $ 21,218 $ 269,973 $ I Contracts Payable 14,400 Retained percentage 52,443 Due To Other Funds Defened Revenue 499,618 Accrued Interest Payable I Total UabJIties 34.040 676,268 21.218 269.973 Fund BaJance (DelIdt) Reserved for Projects 2,085,844 3,157,439 139,740 38,280 583,807 I Unreserved (3,215) Total Fund BaJance (DelIdt) 2,085,844 3.157,439 139,740 (3.215) 38,280 583.807 Total UabIIiUes And Fund BaJance $ 2,119.884 $ 3.833.707 $ 139,740 $ 18.003 $ 308,253 $ 583.807 I I I I I I -. I I 49 I I . EXHIBIT D I CIlY OF SHAKOPEE, MINNESOTA CAPITAl PROJECTS FUNDS COMBINING BALANCE SHEET I DECEMBER 31, 2002 I Total 19988 ONR 2001/2002 CR161CR83 2003 Improvements Trail Improvements Project Project 2002 2001 I $ 50,500 $ (468) $ 5,332 $ 983,779 $ $ 7.263.417 $ 4.838.603 14 7.994 48.140 54,796 125,797 365,167 31.350 I 80.918 202,631 418.700 676.792 $ 50.500 $ (454) $ 5,332 $ 1.117.570 $ $ 8.176,342 $ 5.804,172 I . $ 50,500 $ $ 6,550 $ 209,423 $ 11,866 $ 713.377 $ 259,410 I 79,017 94,951 188,368 38,284 9O,7'Z1 114,724 642,000 642,000 24,950 499,618 879,423 1,546 1.546 3.014 I 50,500 767,397 304.374 11,866 2,135.636 1,281.521 813,196 6,818,306 4,547,275 I (454) (762,065) (11.866) (777,600) (24,624) (454) (762,065) 813,196 (11,866) 6.040.706 4.522.651 $ 50.500 $ (454) $ 5,332 $ 1,117.570 $ $ 8,176,342 $ 5,804,172 I I I- I I I I -. I I 50 I EXHIBIT 0-1 .1 CITY OF SHAKOPEE, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE I FOR THE YEAR ENDED DECEMBER 31, 2002 I Park Capital TIF TIF Reserve Improvements #1 #10 I Revenues Taxes - General Property $ $ $ 333,545 $ 21,218 I Special Assessments 357,716 Licenses and Permits 1,501,102 Intergovemmental Revenues State Highway Aid 914,063 I Other Grants Miscellaneous Investment Income 90,317 197,191 18,968 242 Miscellaneous 1,139 11,231 I Total Revenues 1,592.558 1,480,201 352,513 21,460 Expenditures I Capital Outlay Street And Highway 1,569,788 Land 5,015 Public Buildings I Recreation 537,243 Economic Development 21,218 Total Expenditures 542,258 1,569,788 21,218 I '1'." Excess (Deficiency) Of Revenues Over Expenditures 1.050,300 (89,587) 352,513 242 I Other Financing Sources (Uses) Operating Transfer In (Out) Debt Service . (388,776) Operating Transfer In (Out) Capital Projects (200,000) I Proceeds Of Borrowing 1,173,150 Total Other Financing Sources (Uses) 973,150 (388,776) Excess (Deficiency) Of Revenues I And Other Financing. Sources Over Expenditures And Other Financing Uses 1,050,300 883,563 (36,263) 242 Fund Balance (Deficit) January 1 1,035,544 2,195,677 176,003 (3,457) I Residual Equity Transfer 78,199 Fund Balance (Deficit) December 31 $ 2,085,844 $ 3.157,439 $ 139,740 $ (3,215) I : I I 51 I I . EXHIBIT D-1 I CITY OF SHAKOPEE, MINNESOTA CAPITAL PROJECTS FUNDS I COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE (Continued) FOR THE YEAR ENDED DECEMBER 31,2002 I TIF East Dean's 1998B DNR 1999 2001/2002 #11 Lake Improvements Trail Improvements Improvements I $ 539,945 $ $ $ $ $ I I 8,928 . 36,733 33,363 (2,321) 4,876 I 548,873 36,733 33,363 (2,321) 4,876 I (363) 45,500 9,963 940,898 I 540,017 I 540,017 (363) 45,500 9,963 940,898 8,856 37,096 (12,137) (2,321) (5,087) (940,898) I 200,000 . I 200,000 I 8,856 37,096 (12,137) (2,321 ) (5,087) (740,898) 29,424 546,711 493,658 1,867 68,391 (21,167) I (481,521) (63,304) $ 38,280 $ 583,807 $ $ (454) $ $ (762,065) I I I I 52 I EXHIBIT 0-1 I CITY OF SHAKOPEE, MINNESOTA CAPITAL PROUECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE (Concluded) I FOR THE YEAR ENDED DECEMBER 31, 2002 Total I CR16/CR83 2003 Project Proje~ 2002 2001 I Revenues Taxes - General Property $ $ $ 894,708 $ 1,498,695 I Special Assessments 357,716 297,175 Licenses and Permits 1,501,102 418,969 Intergovemmental Revenues State Highway Aid 1,365,734 2,279,797 149,762 I Other Grants 1,227,459 1,227,459 Miscellaneous Investment Income 70,679 458,976 468,838 Miscellaneous 12,370 16,847 I Total Revenues. 2,663,872 6,732,128 2,850,286 Expenditures I Capital Outlay Street And Highway 5,568,801 11,866 8,146,453 2,095,157 land 5,015 890,730 I Public Buildings 324,702 Recreation 537,243 190,127 Economic Development 561,235 895,630 Total Expenditures 5,568,801 11,866 9,249,946 4,396,346 I Excess (Deficiency) Of Revenues Over Expenditures (2,904,929) . (11,866) (2,517,818) (1,546,060) I Other Financing Sources (Uses) Operating Transfer In (Out) Debt Service (388,n6) (3n,802) Operating Transfer In (Out) Capital Projects I Proceeds Of Borrowing 3,718,125 4,891,275 Total Other Financing Sources (Uses) 3,718,125 4,502,499 (3n,802) Excess (Deficiency) Of Revenues I And Other Financing Sources Over Expenditures And Other Financing Uses 813,196 (11,866) 1,984,681 (1,923,862) Fund Balance (Deficit) January 1 4,522,651 6,446,760 I Residual Equity Transfer (466,626) (24n Fund Balance (Deficit) December 31 $ 813,196 $ (11,866) $ 6,040,706 $ 4,522,651 I I I 53 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31, 2002 I I I I I ENTERPRISE FUNDS The Enterprise Funds are maintained to account for the operation of the electric, water, sanitary sewer, I storm drainage and recreation programs. Since the operation of these systems is financed by user charges and are generally self-supporting, they are accounted for in a manner similar to private business. I I I I I I I I I I I Exhibit E CITY OF SHAKOPEE, MINNESOTA I ENTERPRISE FUNDS COMBINING BALANCE SHEET 12/3112002 I Stonn Totals 8eclr1c Water Sewer Drainage Recreation Fund Fund Fund Fund Fund 2002 2001 I Assets Current Assets Cash And Cash Equivalents $ 3.334.119 $ 390,701 $ 2.486.780 $ 8.417,943 $ 64.088 $ 14,693,631 $ 14,973,206 Investments 9,841,314 9,841,314 7,552,663 Acaued Interest Receivable 118,371 55,580 82,404 53,841 2,665 312,861 403.097 Accounts ReceIvable 2,254,267 486,670 280.790 178,170 20,833 3.222,730 2,722,532 I PrepaId Expenses 5.143 Due From Other Funds 24,868 8,289 33, 157 20,519 Long Term ReceIvable (current portion) 5.701 Inventory 484,793 23,915 508,708 719.071 Other Assets 712,265 69,152 781,417 801,578 I Total 6,928,683 1,036,307 12,691,288 8,649,954 87,586 29,393,818 27 ,203,510 RestrIcted Assets Investments 14,655,396 4,828,675 19,484,071 19,868.337 Total 14,655.396 4,628,675 19,484,071 19,868,337 I. FIxed Assets 25,853,616 24,051,118 20,429,583 28,107,262 85,834 98,527,433 84,882,200 Less: Accumulated DeprecIation (4.886,316) (4,834,345) (2,987,105) (4.319.515) . (47.319) (17,076,600) (15.380,409) Total 20.965,300 19,216.773 17 ,442,478 23,787.767 38,515 81,450.833 69,501.791 I Total Assets $ 42.549.379 $ 25.081,755 $ 30,133.766 $ 32.437,721 $ 126,101 $ 130.328,722 $ 116,571.638 Liabilities And Eaultv I liabilities Current liabilities (payable from current assets): Accounts Payable $ 1.774,787 $ 321,045 $ 96,406 $ 8,772 $ 71,152 $ 2,272,164 $ 2,767.545 Due To Other Funds 60,262 66,281 22,391 10,767 159,701 243.562 Customer Advances 186.264 186,264 137,729 I Deferred Revenue 36,265 36.265 22,056 Total 2.057,578 367.326 118.799 19.539 71.152 2,654,394 3,170,892 Current liabilities (payable from restricted assets): I DeposIts 218.494 218.494 187.421 Acaued Interest 505.662 49,699 10,746 566,327 670.892 Bonds Payable (current portion) 396,200 58.800 125,000 580.000 340,000 Total 1,120.376 108.699 135,746 1.364.821 1.198,313 Long Term Debt 22.598.800 2,071,200 410,000 25.080,000 25,660,000 I Total liabilities 25,776.754 2,567.225 118,799 565,285 71,152 29,099,215 30,029,205 Fund Equity I Conbibuted Capital 141,090 7,872,010 11.475,082 15.179,552 30.848 34,698,582 37,594.960 Retained Earnings Reserved For EmergencIes 100,000 100,000 88,524 Reserved For ConslrucIloo 2,040,697 2,040,697. 2,858,579 Reserved For Bond Requirements 1.569.558 161,087 1.750.645 1,809.818 Unreserved 14.941.977 12.440.736 18,539,885 16.692.884 24,101 62.639,583 44,190,554 I Total Fund Equity 16,772,625 22,514,530 30,014,967 31.872,438 54,949 101,229.507 86,542,433 Total Liabilities & Equity $ 42,549,379 $ 25,081.755 $ 30,133,766 $ 32.437,721 $ 126,101 S 130,328,722 S 116,571,638 I I , I I 54 I I I ExhibIt E-1 CITY OF SHAKOPEE, MINNESOTA I ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31. 2002 I Stann Tobls EIecIric Water Sewer Drainage Recreation Fund Fund Fund Fund Fund 2002 2001 I OperatIng Revenues Sales $18,214,515 $ 1,983,320 $ 2,416,845 $ 950,936 $ 690.542 $ 24,256,158 S 24,49&,771 Cost Of Sales 12,487,784 12,487,784 12,984.805 I Gross Profit 5,728,731 1.983.320 2,416,845 950,936 690,542 11,766,374 11,511,966 Operating Expenses Operations And Maintenance 2,628,020 1,075,252 154,476 286,358 1.475.113 5,617,219 4.717.066 Treatment Charges 1,202,817 1.202.817 1.200.768 I Depreciatlon And AmortIzatIon 746.315 499,708 358.413 404,233 7,210 2,015,879 1.863,686 Total Operating Expenses 3,372,335 1.574,960 1.715.706 690,591 1.482.323 8.835.915 7.781.520 I Operating Income (Loss) 2,354.396 406.360 701.139 260,345 (791.781) 2,932,459 3.730.448 Non-Operating Income (Expense) Investment Income 604.960 242,402 728,567 476.027 23,564 2,075,520 2,175,612 Other Income 170,000 68,432 353,324 1,249,705 1,560 1,843.021 764,346 Interest Expense (1,054,242) (121,249) (28.971) (1.202.462) (999.172) I Loss On Asset DIsposal Net NOIl-OpeIaling Income (Expense) (279.282) 189.585 1.081,891 1.698.761 25,124 2,716.079 1,940,786 Income (Loss) Before Operating Transfers 2,075.114 597,945 1,783,030 1,959,106 (766,657) 5,648,538 5.671,232 I Operating Transfers In 288.965 845.830 1,134.795 538,040 Operating Transfers (Out) (618,866) (438.281 ) (286.965) (9.559) (1,355,671) (1,238.295) Net Income 1.456,248 159,664 2,071,995 1,670,141 69,614 5,427,662 4.970,977 I CapItal Contn'bulions 533,977 2,925.959 2,360,550 3,566,806 9,387,294 5,812,006 Add: DeprecIatIon On Con\IibutedAssets 550.969 I Increase (Decrease) In Retained earnings 1,990,225 3.085.623 4.432.545 5,236,949 69.614 14,814,956 11,333,962 Retained earnings January 1 14,641.310 11.558,897 14,107,340 11,455,935 (45.513) 51,715.969 40,466,340 Residual Equity Transfer' Out (84,323) I Retained earnings December 31 $ 16,631,535 $ 14,642,520 $ 18,539.885 $ 16,692.884 $ 24,101 $ 56,530,925 $ 51,715,969 I I I I I I 55 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I . I I 56 I I I Exhibit E-2 CITY OF SHAKOPEE, MiNNESOTA I ENTERPRiSE FUNDS COMBINING STATEMENT OF CASH flOWS FOR THE YEAR ENDED DECEMBER 31, 2002 I Storm Totals 8ectrlc Water Sewer Drainage Recreation Fund Fund Fund Fund Fund 2002 2001 Cash Fk7N From Operating AcIivilles I Operating Income (loss) $ 2,354.396 $ 408,360 $ 701.139 $ 260.345 $ (791,781) $ 2,932.459 $ 3,730.448 Adjustments To Reconcile Operating Income (lOSS) To Net Cash Provided By (Used For) Operating AcIivilles Depreciation And AmortIzation 746.315 499,708 358,413 404,233 7,210 2,015,879 1.863.688 Loss on Sale or Equipment I Change In Assets And Llabililles (Inaease) Decrease In Accounts Receivable (887,773) 91,832 40,763 47,210 7.770 (500,196) 863,552 (Inaease) Dectease In PrepaId Expenses 424 1,089 3.630 5,143 (5,143) (Inaease) Decrease In Due From Other Funds (10,768) (1,872) (12,638) 7.043 (Inaease) Decrease In Due From Other Govemments (Increase) Decrease In Inventory 210,340 23 210,363 (163,603) I (Increase) Decrease In Other Assets 17,957 2,204 20.181 (383,050) lnaease (Decrease) In Accounts Payable (377,259) (36,692) (74,010) (1.028) (6,392) (495,381) 907.140 lnaease (Decrease) In Due To Other Funds 42,679 (117,666) (2,366) 7,721 (14,229) (83,8&1) (61,838) lnaease (Decrease) In Customer Advances 48,535 48.535 137,729 lnaease (Decrease) In Deferred Revenue 36,265 (22,056) 14,209 21,058 I Inaease (Decrease) In Customer Deposits 31.073 31,073 31.748 Rents And M"lSCelIaneous Income 170,000 88.432 1,560 239.992 63.299 Net Cash ProvIded By (Used For) Operating Aclivilies 2.581.762 692,273 1,024,363 719,570 (792,232) 4,425,738 6.832.065 Cash Flows From Noncapital FInancing AcIivilles I Grants From Other Governments 31.569 Transfers From Other Funds 266,965 845.830 1,134,795 538,040 Transfers To Other Funds (618.866) (438,281) (288,965) (9,559) (1,355.671) (1,311,621) Net Cash ProvIded By (Used For) Noncapltal FmancIng Aclivilies (618,866) (438,281) 266.965 (288,965) 836,271 1220.876) (742,012) I Cash Flows From Capital And Related FlIlanclng Aclivilies Acquisition Of FIxed Assets (3,402,997) (1,997,726) (31,486) (259,142) (4,008) (5,695,341) (3,155.255) Proceeds From Sale Of FIXed Assets 5,701 5,701 13,547 F'rinclpaI Payments On Long Tenn Debt (167.000) (58,000) (115,000) (340,000) (235.000) I Interest Paid (1.321,164) (122,457) (29,127) (1.472,748) (760,562) Trunk Charges 353,324 1,249.705 1.603.028 669.478 Bond Proceeds 12,000,000 Bond Issuance Expense (265.458) Net Cash Used For Capital And Related I FInancing AcIIvilies (4,885,460) (2.178, 183) 321,856 846.438 (4,(08) (5.899,3S9) 8,268,750 Cash Flows From Investing AcIIvilies Investment Income 679,114 262,085 729,455 471,876 23,228 2, 165,758 1,942.441 Change In Investments 224,525 1,313.293 (2,288,650) (750.832) (20,610,825) I Net Cash Provided By (Used For) Investing AcIIvilies 903,639 1.575,378 (1.559,195) 471.878 23.226 1,414,924 (18,666,384) Net Increase (Decrease) In Cash and Cash Equivalents (2,018,925) (148,813) 75.989 1,748,917 63,257 (279.575) (4,311,581) Cash and Cash Equivalents - January 1 5.353.044 539,514 2.410,791 6,689,028 831 14.973.208 19,284,787 I Cash and Cash Equivalents - December 31 $ 3.334,119 $ 390.701 $ 2,486,780 $ 8.417.943 $ 64.088 $ 14,693.831 $ 14,973,206 Non Cash Investing, Capital And FInancIng AcIivilles ContrlbutIons From I Other Funds $ $ $ $ 44,502 $ $ 44,502 S 89,634 Developers 533,977 1,980.839 2,360.550 3,522,308 8.397,672 6,579.773 Change in Fair Value or Investments 66,397 92,831 411,139 268,627 13,297 852,291 251,557 AcquIsitIon Of Fixed Assets (533,Sm (1,980.839) (2,360,550) (3,566.808) (127,883) 18.570,057) (8.689.407) I I - - I I 57 I I I I _h. . I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I . I I 58 I I - Exhibit F I CITY OF SHAKOPEE, MINNESOTA ELECTRIC FUND BALANCE SHEET I December 31, 2002 2002 2001 Assets I Current Assets Cash And Cash Equivalents $ 3,334,119 $ 5,353,044 Accrued Interest Receivable 118,371 192,525 I Accounts Receivable 2,254,267 1,566,494 Due From Other Funds 24,868 14,102 Long Term Receivable (current portion) 5,701 Inventory 484,793 695,133 I Other Assets 712,265 730,222 Total 6,928,683 8,557,221 I Restricted Assets Cash And Cash Equivalents Investments 14,655,396 14,685,445 Total 14,655,396 14,685,445 I Fixed Assets 25,853,616 22,073,068 Less: Accumulated Depreciation (4,888,316) (4,269,672) I Total 20,965,300 17,803,396 Total Assets $ 42,549,379 $ 41,046,062 I Liabilities And Eauity Liabilities Current Liabilities (payable from current assets) I Accounts Payable $ 1,774,787 $ 2,152,046 Due To Other Funds 60,262 17,583 Deferred Revenue 36,265 I Customer Advances 186,264 1-37,729 Total 2,057,578 2,307,358 Current Liabilities (payable from restricted assets) I Deposits 218,494 187,421 Accrued Interest 505,682 606,883 Bonds Payable (current portion) 396,200 167,000 I Total 1,120,376 961,304 Long Term Debt 22,598,800 22,995,000 Total Liabilities 25,776,754 26,263,662 I Contributions 141,090 141,090 Retained Earnings I Reserved For Emergencies 100,000 88,524 Reserved For Bond Requirements 1,589,558 1,649,465 Unreserved 14,941,977 12,903,321 Tqtal Equity 16,772,625 14,782,400 I Total Liabilities & Equity $ 42,549,379 $ 41,046,062 I I 59 I I Exhibit F-1 CITY OF SHAKOPEE, MINNESOTA I ELECTRIC FUND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS I FOR THE YEAR ENDED DECEMBER 31,2002 I 2002 2001 Operating Revenues I Sales $ 18,214,515 $ 18,504,239 Operating Expenses I Cost Of Sales 12,487,784 12,984,805 Operations And Maintenance 2,626,020 1,904,973 I Depreciation And Amortization 746,315 690,240 Total Operating Expenses 15,860,119 15,580,018 I Operating Income 2,354,396 2,924,221 Add: Non-Operating Income I Investment Income 604,960 620,118 Other Income 170,000 28,116 I Less: Non-Operating Expense Interest Expense (1,054,242) (842,608) Net Non-Operating Income (Expense) (279,282) (194,374) I Income Before Operating Transfers 2,075,114 2,729,847 Operating Transfer To General Fund (618,866) (791,592) I Net Income 1,456,248 1,938,255 I Capital Contributions 533,977 562,799 Increase in Retained Earnings 1,990,225 2,501,054 I Retained Earnings - January 1 14,641,310 12,140,256 I Retained Earnings - December 31 $ 16,631,535 $ 14,641,310 - I I 60 I I I Exhibit F-2 I CITY OF SHAKOPEE, MINNESOTA ELECTRIC FUND STATEMENT OF CASH FLOWS I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 2001 I Cash Flow From Operating Activities Operating Income $ 2.354,396 $ 2,924,221 I Adjustments To Reconcile Operating Income To Net Cash Provided By Operating Activities Depreciation And Amortization 746,315 690,240 Change In Assets And Uabilities I (Increase) Decrease In Accounts Receivable (687.773) 482.568 (Increase) Decrease In Due From Other Funds (10,766) 6,534 (Increase) Decrease In Inventory 210,340 (162,294) (Increase) Decrease In Other Assets 17,957 (384,912) I Increase (Decrease) In Accounts Payable (377,259) 725,418 Increase (Decrease) In Due To Other Funds 42,679 (77,328) Increase (Decrease) In Deferred Revenue 36,265 Increase (Decrease) In Customer Advances 48,535 137,729 I Increase (Decrease) In Customer Deposits 31,073 31,748 Rents And Miscellaneous Income 170,000 28,116 Net Cash Provided By Operating Activities 2,581,762 4,402,040 I Cash Flows From Noncapital Financing Activities Operating Transfers To Other Funds (618,866) (781,455) Cash Flows From Capital And Related Financing Activities I Acquisition Of Fixed Assets (3,402,997) (2,238,780) Proceeds From Sale of Fixed Assets 5,701 13,547 Principal Payments On Long Term Debt (167,000) (75,000) Interest Paid (1,321,164) (600,971 ) I Bond Proceeds 12,000,000 Bond issuance Expense . (265,458) Net Cash Used For Capital And Related Financing Activities (4,885,460) 8,833,338 I Cash Flows From Investing Activities Investment Income 679,114 470,272 Change In Investments 224,525 (14,089,165) I Net Cash (Used For) Provided By Investing Activities 903,639 (13,618,893) Net Increase (Decrease) In Cash and Cash Equivalents (2,018,925) (1,164,970) I Cash and Cash Equivalents - January 1 5,353,044 6,518,014 Cash and Cash Equivalents - December 31 $ 3,334,119 $ 5,353,044 I Non Cash Investing, Capital and Financing Activities Contnbutions From Developers $ 533,977 $ 853,990 I Change in FaitValue of Investments 66,397 Acquisition Of FIXed Assets (533,9m (853,990) I I 61 I 8mibf F~ I CITY OF SHAKOPEE, MINNESOTA I ELECTRIC FUND SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION I FOR THE YEAR ENDED DECEMBER 31, 2002 I Property and Equipment Balance Balance I 1/1/2002 Additions Deletions 12/31/02 Distribution $ 12,051,819 $ 7;471,106 $ $ 19,522,925 I General 2,213,347 414,679 93,423 2,534,603 I Unclassified 4,378,621 4,378,621 Work in Progress 1,990,184 429,810 2,419,994 I Electric Plant Acquisitions 1,439,097 63,003 1,376,094 I $ 22,073,068 $ 8,315,595 $ 4,535,047 $ 25,853,616 I AccUmulated Depreciation I Balance Balance 1/1/2002 Additions Deletions 12/31/02 I Distribution $ 666,900 $ 2,719,969 $ $ 3,386,869 I General 689,465 120,157 64,668 744,954 Unclassified 2,215,461 388,083 2,603,544 I Electric Plant Acquisitions 697,846 121,650 63,003 756,493 $ 4,269,672 $ 3,349,859 $ 2,731,215 . $ 4,888,316 I .. I I 62 I I - Exhibit G I CITY OF SHAKOPEE, MINNESOTA WATER FUND BALANCE SHEET I December 31, 2002 2002 2001 I Assets Current Assets Cash And Cash Equivalents $ 390,701 $ 539,514 Accrued Interest Receivable 55,580 75,263 I Accounts Receivable 488,670 580,502 Due From Other Funds 8,289 6,417 Inventory 23,915 23,938 I Other Assets 69,152 71,356 Total 1,036,307 1,296,990 I Restricted Assets Cash And Cash Equivalents Investments 4,828,675 5,180,892 Total 4,828,675 5,180,892 I Fixed Assets 24,051,118 20,136,842 Less: Accumulated Depreciation (4,834,345) (4,382,970) I Total 19,216,773 15,753,872 Total Assets $ 25,081,755 $ 22,231,754 I Liabilities And Equity Liabilities I Current Liabilities (payable from current assets) Accounts Payable $ 321,045 $ 357,737 Due To Other Funds 66,281 183,947 Deferred Revenue 22,056 I Total 387,326 563,740 Current Liabilities (payable from restricted assets) I Accrued Interest 49,899 51,107 Bonds Payable (current portion) 58,800 58,000 Total 108,699 109,107 I Long Term Debt 2,071,200 2,130,000 Total Liabilities 2,567,225 2,802,847 I Contributed Capital 7,872,010 7,872,010 Retained Earnings Reserved For Construction 2,040,697 2,858,579 I Reserved For Bond Requirements 161,087 160,351 Unreserved 12,440,736 8,537,967 Total Equity 22,514,530 19,428,907 I Total Liabilities & Equity $ 25,081,755 $ 22,231,754 I I 63 I I Exhibit G-1 CITY OF SHAKOPEE, MINNESOTA I . WATER FUND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS I FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 2001 Operating Revenues I Sales $ 1,983,320 $ 2,024,965 Other Total Operating Revenues 1,983,320 2,024,965 I' Operating Expenses I Operations And Maintenance 1,075,252 1,034,280 Depreciation And Amortization 499,708 398,439 I Total Operating Expenses 1,574,960 1,432,719 Operating Income 408,360 592,246 I Add: Non-Operating Income I Investment Income 242,402 342,139 Other Income 68,432 30,838 Less: Non-Operating Expense I Interest Expense (121,249) (124,071) Net Non-Operating Income 189,585 248,906 Income Before Operating Transfers 597,945 841,152 I Operating Transfer To General Fund (438,281 ) (446,703) I Net Income 159,664 394,449 Capital Contributions 2,925,959 2,480,711 I Increase In Retained Earnings 3,085,623 2,875,160 I Retained Earnings - January 1 11,556,897 8,681,737 Retained Earnings - December 31 $ 14,642,520 $ 11,556,897 I I 64 I I I Exhibit G-2 I CITY OF SHAKOPEE, MINNESOTA WATER FUND I STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 2001 Cash Flow From Operating Activities Operating Income $ 408,360 $ 592,246 I Adjustments To Reconcile Operating Income To Net Cash Provided By Operating Activities Depreciation And Amortization 499,708 398,439 I Change In Assets And Liabilities (Increase) Decrease In Accounts Receivable 91,832 147,758 (Increase) Decrease In Due From other Funds (1,872) 509 (Increase) Decrease In Inventory 23 (1,309) I (Increase) Decrease In Other Assets 2,204 1,862 Increase (Decrease) In Accounts Payable (36,692) 129,586 Increase (Decrease) In Due To other Funds (117,666) 972 Increase (Decrease) In Deferred Revenue (22,056) 22,056 I Rentals And Miscellaneous Income 68,432 30,838 Net Cash Provided By Operating Activities 892,273 1,322,957 I Cash Flows From Noncapital Financing Activities Operating Transfers To Other Funds (438,281) (446,703) I Net Cash Provided By (Used For) Noncapital (438,281) (446,703) Financing Activities Cash Flows From Capital And Related Financing Activities I AcqulsitionOfF~edAssets (1,997,726) (777,564) Principle Payment On Long Term Debt (58,000) (50,000) Interest Paid (122,457) (125,081) I Net Cash Used For Capital And Related Financing Activities (2,178,183) (952,645) I Cash Flows From Investing Activities Investment Income 262,085 268,472 Change In Investments 1,313,293 (5,180,892) I Net Cash (Used For) Provided By Investing Activities 1,575,378 (4,912,420) Net (Decrease) In Cash and Cash Equivalents (148,813) (4,988,811 ) I Cash and Cash Equivalents - January 1 539,514 5,528,325 Cash and Cash Equivalents - December 31 $ $ 390,701 539,514 I -- Non Cash Investing, Capital and Financing Activities Contributions From Developers $ 1,980,839 $ 2,584,894 I Change in Fair Value of Investments 92,831 Acquisition Of Fixed Assets (1,980,839) (2,584,894) I 65 I I Exhibit G-3 CITY OF SHAKOPEE, MINNESOTA I WATER FUND SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION I FOR THE YEAR ENDED DECEMBER 31, 2002 I Property and Equipment I Balance Balance 1/1/2002 Additions Deletions 12/31/02 I Equipment $ 484,261 $ 59,937 $ 64,289 $ 479,909 Other Improvements 19,652,581 3,918,628 23,571,209 I $ 20,136,842 $ 3,978,565 $ 64,289 $ 24,051,118 I Accumulated Depreciation I Balance Balance I 1/1/2002 Additions Deletions 12/31/02 Equipment $ 131,319 $ 13,131 $ $ 144,450 I Other Improvements 4,251,651 486,577 48,333 4,689,895 I $ 4,382,970 $ 499,708 $ 48,333 $ 4,834,345 -, I I I . I I 66 I I EXhibit H I CITY OF SHAKOPEE, MINNESOTA SEWER FUND I BALANCE SHEET December 31,2002 I 2002 2001 I Assets Current Assets I Cash And Cash Equivalents $ 2,486,780 $ 2,410,791 Investments 9,841,314 7,552,663 Accrued Interest Receivable 82,404 83,292 Accounts Receivable 280,790 321,553 I Prepaid Expenses 424 Total 12,691,288 10,368,723 I Fixed Assets 20,429,583 18,037,565 Less: Accumulated Depreciation (2,987,105) (2,628,692) Total 17,442,478 15,408,873 I Total Assets $ 30,133,766 $ 25,777,596 I Liabilities And Eauitv Liabilities Current Liabilities (payable from current assets) I Accounts Payable $ 96,408 $ 170,418 Due To Other Funds 22,391 24,757 I Total Liabilities 118,799 195,175 Contributed Capital I From Other Govemments 50,384 50,384 From Other Funds 5,928,643 5,928,642 From Developers 5,496,055 5,496,055 Total 11,475,082 11,475,081 I Retained Eamings - Unreserved 18,539,885 14,107,340 Total Equity 30,014,967 25,582,421 I Total Liabilities & Equity $ 30,133,766 $ 25,777,596 I . I I 67 I I I Exhibit H-1 CITY OF SHAKOPEE, MINNESOTA I SEWER FUND . STATEMENT OF REVENUES, EXPENSES AND CHA.NGES IN RETAINED EARNINGS I FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 2001 I Operating Revenues Sewer Service Charges $ 2,020,425 $ 1,839,396 Other 396,420 409,764 I Total Operating Revenues 2,416,845 2,249,160 Operating Expenses I Personal Services 36,432 26,594 Supplies And Services 118,044 212,859 I Treatment Charges 1,202,817 1,200,768 Depreciation 358,413 366,088 Total Operating Expenses 1,715,706 1,806,309 I Operating Income 701,139 442,851 I Add: Non-Operating Income Investment Income 728,567 739,471 I Trunk Charges 353,324 266,974 Total Non-Operating Income 1,081,891 1,006,445 I Income Before Operating Transfer 1,783,030 1,449,296 Operating Transfer In 288,965 "I Net Income 2,071,995 1,449,296 Add: Capital Contributions 2,360,550 1,674,868 I Add: Depreciation On Contributed Assets That Reduces Contributed Capital 253,906 I Increase In Retained Earnings 4,432,545 3,378,070 Retained Earnings - January 1 . 14,107,340 10,729,270 I Retained Earnings - December 31 $ 18,539,885 $ 14,107,340 I 68 I I I Exhibit H-2 I CITY OF SHAKOPEE, MINNESOTA SEWER FUND I STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31,2002 I 2002 2001 Cash Flow From Operating Activities Operating Income $ 701,139 $ 442,851 Adjustments To Reconcile Operating Income To I Net Cash Provided By Operating Activities DepreCiation 358,413 366,088 Change In Assets And Uabilitles (Increase) Decrease In Accounts Receivable 40,763 (30.688) I (Increase) Decrease In Prepaid I;xpenses 424 (424) Increase (Deciease) In Accounts Payable (74,010) 61,099 Increase (Decrease) In Due To Other Funds (2,366) 4,947 I Net Cash Provided By Operating Activities 1,024,363 843,873 Cash Flows From Noncapital Financing Activities Operating Transfers From Other Funds 288,965 I Net Cash Provided By (Used For) Noncapital Financing Activities 288,965 I Cash Flows From Capital And Related Financing Activities Acquisition Of Fixed Assets (31,468) (79,605) I Trunk Charges 353,324 266,974 Net Cash Provided By (Used For) Capital And Related Financi~ Activities 321,856 187,369 I Cash Flows From Investing Activities Investment Income 729,455 737-,496 Change In Investments (2,288,650) (1,340,768) I Net Cash (Used For) Investing Activities (1,559,195) (603,272) Net Increase In Cash and Cash Equivalents 75,989 427,970 I Cash and Cash Equivalents - January 1 2,410,791 1,982,821 Cash and Cash Equivalents - December 31 $ 2,486,780 $ 2,410,791 I Non Cash Investing. Capital and Financing Activities Contributions From I Other Funds $ $ 89,634 Developers 2,360.550' 1,674,868 Change in Fair Value of Investments 411,139 154,852 Acquisition Of FIXed Assets (2,360,550) (1,764,502) I ~ I I 69 I I Exhibit H-3 CITY OF SHAKOPEE, MINNESOTA I SEWER FUND SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION I FOR THE YEAR ENDED DECEMBER 31, 2002 I Property and Equipment I Balance Balance 1/1/02 Additions Deletions 12/31/02 $ $ $ $ I Equipment 14,526 14,526 Other Improvements A" .~. 16,654,470 2,392,018 19,046,488 I Intangible Assets 1,368,569 1,368,569 . I $ "18,037,565 $ 2,392,018 $ $ 20,429,583 I Accumulated Depreciation I Balance Balance 111/02 Additions Deletions 12/31/02 -I Equipment $ 6,796 $ 1,309 $ $ 8,105 Other Improvements 2,462,896 334,961 2,797,857 I Intangible Assets 159,000 22,143 181,143 I $ 2,628,692 $ 358,413 $ $ 2,987,105 I I ~ I I 70 I I EXhibit I I CITY OF SHAKOPEE, MINNESOTA STORM DRAINAGE FUND BALANCE SHEET I December 31, 2002 2002 2001 I Assets Current Assets Cash And Casn Equivalents $ 8.417,943 $ 6,669,026 I Accrued Interest Receivable 53,841 49,690 Accounts Receivable 178,170 225,380 Prepaid Expenses 1,089 I Total 8,649,954 6,945,185 Fixed Assets 28,107,282 24,281,332 Less: Accumulated Depreciation (4,319,515) (3,915,282) I Total 23,787,767 20,366,050 Total Assets $ 32,437,721 $ 27,311,235 I Liabilities And EQuity Liabilities I Current Liabilities (payable from current assets) Accounts Payable $ 8,772 $ 9,800 I Due To Other Funds 10,767 3,046 Total 19,539 12,846 Current Liabilities (payable from I restricted assets) Accrued Interest 10,746 12,902 Bonds Payable (current portion) 125,000 115,000 I Total 135,746 127,902 Long Term Debt 410,000 535,000 I Total Liabilities 565,285 675,748 I Contributed Capital From Other Governments 90,212 90,212 From Other Funds 9,266,270 9,266,270 From Developers 5,823,070 5,823,070 I Total 15,179,552 15,179,552 Retained Earnings.- Unreserved 16,692,884 11,455,935 I Total Equity 31,872,436 26,635,487 Total Liabilities & Equity $ 32,437,721 $ 27,311,235 , I I I 71 I I Exhibit 1-1 CITY OF SHAKOPEE, MINNESOTA I STORM DRAINAGE FUND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS I FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 2001 Operating Revenue I Service Charges $ 950,936 $ 1,057,985 Other Charges 80,642 I Total Operating Revenue 950,936 1,138,627 Operating Expenses I Personal Services 124,548 92,923 Supplies And Services 161,810 136,432 I Depreciation 404,233 394,853 Total Operating Expenses 690,591 624,208 I Operating Income 260,345 514,419 Add: Non-Operating Income I Investment Income 476,027 446,775 Trunk Charges 1,249,705 402,504 I Less: Non-Operating Expense Interest Expense (26,971 ) (32,493) Income Before Operating Transfer 1,959,106 1,331,205 I Operating Transfer Out (288,965) Net Income 1,670,141 1,331,205 I Add: Capital Contributions 3,566,808 1,093,628 I Add: Depreciation On Contributed Assets That Reduces Contributed Capital 283,268 I Increase In Retained Earnings 5,236,949 2,708,101 Retained Earnings - January 1 11,455,935 8,747,834 I Retained Earnings - December 31 $ 16,692,884 $ 11,455,935" I 72 I I I Exhibit 1-2 I CITY OF SHAKOPEE, MINNESOTA STORM DRAINAGE FUND I STATEMENT OF CASH FLOWS FOR THE YEAR t;;NDt;;D Dt;;Ct;;M~t;;R 91, 2002 I 2002 2001 I Cash Flow From Operating Activities Operating Income $ 260,345 $ 514,419 Adjustments To Reconcile Operating Income To Net Cash Provided By Operating Activities I Depreciation 404,233 394,853 Change In Assets And Liabilities .. (Increase) Decrease In Accounts Receivable 47,210 112,367 (Increase) Decrease In Prepaid Expenses 1,089 (1,089) I Increase (Decrease) In Accounts Payable (1,028) (9,223) Increase (Decrease) In Due To Other Funds 7,721 (4,658) I Net Cash Provided By Operating Activities 719,570 1,006,669 Cash Flows From Noncapital Financing Activities Operating Transfers To Other Funds (288,965) I Net Cash Provided By (Used For) Noncapital Financing Activities (288,965) I Cash Flows From Capital And Related Financing Activities Acquisition Of Fixed Assets (259,142) (49,000) Principal Paid on Long Term Debt (115,000) (110,000) I Interest Paid (29,127) (34,510) Trunk Charges 1,249,705 402,504 Net Cash Provided By Capital And Related Financing Activities 846,436 208,994 I Cash Flows From Investing Activities Investment Income 471,876 439,516 I Net Increase In Cash and Cash Equivalents 1,748,917 1,655,179 Cash and Cash Equivalents - January 1 6,669,026 5,013,847 I Cash and Cash Equivalents - December 31 $ 8,417,943 $ 6,669,026 I Non Cash Investing, Capital and Financing Activities Contributions From Other Funds $ 44,502 $ I Developers : 3,522,306 1,347,399 Change in Fair Value of Investments 268,627 92,380 Acquisition Of Fixed Assets - (3,566,808) (1,347,399) I I 73 I I Exhibit 1-3 CITY OF SHAKOPEE, MINNESOTA I STORM DRAINAGE FUND SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION I FOR THE YEAR ENDED DECEMBER 31, 2002 I Property and Equipment I Balance Balance 1/1/02 Additions Deletions 12/31/02 $ I Land $ 324,777 54,532 $ $ 379,309 Other Improvements 23,956,555 3,771,418 27,727,973 I $ 24,281,332 $ 3,825,950 $ $ 28,107,282 I Accumulated Depreciation I Balance Balance I 1/1/02 Additions Deletions 12/31/02 Other Improvements $ 3,915,282 $ 404,233 $ $ 4,319,515 I I I I 'I . I I 74 I I I Exhibit J I CITY OF SHAKOPEE, MINNESOTA REFUSE COLLECTION FUND I STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 2001 I Operating Revenue Service Charges $ $ 9,315 I Operating Expenses Personal Services 4,509 Supplies And Services 48,814 I - Total Operating Expenses 53,323 I Operating (Loss) (44,008) I Add: Non-Operating Income Investment Income 6,113 Grants From Other Governments 31,569 I Net Income (6,326) Retained Earnings - January 1 90,649 I Residual Equity Transfer Out (84,323) I Retained Earnings - December 31 $ $ I I I I 0 I I 75 I I Exhibit J-1 CITY OF SHAKOPEE, MINNESOTA I REFUSE COLLECTION FUND STATEMENT OF CASH FLOWS I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 2001 I Cash Flow From Operating Activities I Operating (Loss ) $ $ (44,008) Adjustments To Reconcile Operating (Loss) To Net Cash Provided By (Used For) Operating Activities I (Increase) Decrease In Accounts Receivable Increase (Decrease) In Accounts Payable (2,933) Net Cash Provided By Operating Activities (46,941) I Cash Flows From Noncapital Financing Activities Transfer Out (83,463) I Grants From Other Governments 31,569 Net Cash Provided By (Used For) Noncapital Financing Activities (51,894) Cash Flows From Investing Activities I Investment Income 6,113 Net Increase In Cash and Cash Equivalents (92,722) I Cash and Cash Equivalents - January 1 92,722 Cash and Cash Equivalents - December 31 $ $ I I I I I . I I 76 I I Exhibit K I CITY OF SHAKOPEE, MINNESOTA RECREATION FUND I BALANCE SHEET December 31, 2002 I 2002 2001 I" Assets Current Assets I Cash And Cash Equivalents $ 64,088 $ 831 Accrued Interest Receivable 2,665 2,327 Accounts Receivable 20,833 28,603 I Prepaid Expenses 3,630 Total 87,586 35,391 I Fixed Assets 85,834 353,393 Less: Accumulated Depreciation (47,319) (183,793) Total 38,515 169,600 I Total Assets $ 126,101 $ 204,991 I Liabilities And Equity Liabilities Current Liabilities (payable from I current assets) Accounts Payable $ 30,390 $ 44,594 Compensated Absences 40,762 32,950 Due To Other Funds 14,229 I Total Liabilities 71,152 91,773 1 Contributed Capital From Other Funds 30,848 158,731 I Retained Earnings - Unreserved 24,101 (45,513) Total Equity 54,949- 113,218 I Total Liabilities & Equity $ 126,101 $ 204,991 I I . I I 77 I 1 Exhibit K-1 CITY OF SHAKOPEE, MINNESOTA I RECREATION FUND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS I FOR THE YEAR ENDED DECEMBER 31, 2002 .. 1 2002 2001 Operating Revenue I Recreation Fees $ 428,027 $ 327,834 Ice Rental Fees 195,054 205,652 Other Operating Fees 67,461 36,979 I Total Operating Revenues 690,542 570,465 Operating Expenses I Personal Services 790,252 663,568 Supplies And Services 684,861 592,114 I Depreciation 7,21'0 14,066 Total Operating Expenses 1,482,323 1,269,748 Operating Loss I (791,781) (699,283) Add: Non-Operating Income I Investment Income 23,564 20,996 Other Income 1,560 4,345 Total Non-Operating Income 25,124 25,341 I Loss Before Operating Transfers (766,657) (673,942) I Operating Transfers From General Fund 845,830 538,040 Operating Transfers Out (9,559) Net Income (Loss) 69,614 (135,902) I Add: Depreciation On Contributed Assets 13,795 I Increase (Decrease) in Retained Earnings 69,614 (122,107) . Retained Earnings - January 1 (45,513) 76,594 I Retained Earnings - December 31 $ 24,101 $ (45,513) I I 78 I I I Exhibit K-2 I CITY OF SHAKOPEE, MINNESOTA RECREATION FUND I STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31,2002 I 2002 2001 Cash Flow From Operating Activities I Operating, Loss $ (791,781) $ (699,283) Adjustments To Reconcile Operating Loss To Net Cash Used By Operating Activities I Depreciation 7,210 14,066 Change In Assets and- Uabilities (Increase) Decrease In Accounts Receivable 7,nO (28,453) (Increase) Decrease In Prepaid Expenses 3,630 (3,630) I Increase (Decrease) In Accounts Payable (14,204) (8,464) Increase (Decrease) In Compensated Absences Payable 7,812 11,657 Increase (Decrease) In Due To Other Funds (14,229) 14,229 I Increase (Decrease) In Deferred Revenue (1,000) Other Income 1,560 4,345 Net Cash Used For Operating Activities (792,232) (696,533) I Cash Flows From Capital And Related Financing Activities AcqUisition Of Fixed Assets (4,008) (10,306) I Cash Flows From Noncapital Financing Activities Operating Transfers Out (9,559) Operating Transfers From General Fund 845,830 538,040 I Net Cash From Noncapital And Related Financing Activities 836,271 538,040 I Cash Flows From Investing Activities Investment Income 23,226 20,572 I Net Increase (Decrease) In Cash and Cash Equivalents 63,257 (148,227) Cash and Cash Equivalents - January 1 831 149,058 I Cash and Cash Equivalents - December 31 $ 64,088 $ 831 Non Cash Investing, Capital and Financing Activities I Contributions From Other Funds $ $ 118,622 Change in Fair Value of Investments 13,297 4,325 Transfer Of fixed Assets (127,883) (118,622) I I I 79 I , I Exhibit K-3 . CITY OF SHAKOPEE, MINNESOTA I RECREATION FUND SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DE.DRECIATION I FOR THE YEAR ENDED DECEMBER 31,2002 I Property and Equipment I Balance Balance 1/1/02 Additions Deletions 12/31/02 $ $ $ I Buildings 7,055 $ 7,055 Equipment 346;338 13,567 281,126 78,IT9 I ... -, $ 353,393 $ 13,567 $ 281,126 $ 85,834 I Accumulated Depreciation . I Balance Balance 1/1/02 Additions Deletions 12/31/02. I Buildings $ 1,551 $ $ $ 1,551 I . -, Equipment 182,242 7,210 143,6.84 45,768 $ 183.793 $ 7,210 $ 143.684 $ 47,319 I 'I I - I - I I 80 I I I I I I I - . I I I THIS PAGE LEFT BLANK INTENTIONALLY I- I o. I I I I I I -. I . I 81 I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31, 2002 I I I INTERNAL SERVICE FUNDS I The EQuipment Fund is maintained to account for the acquisition of larger pieces of equipment User charges are billed monthly to various City departments on a cost reimbursement basis. Revenues and I expenses are recognized on the accrual basis. Revenues are recognized in the accounting period in which they are earned and become objectively measurable; expenses are recognized in the period incurred. I The Buildina Fund is maintained for accumulating funds for construction of publiC buildings. In the near term that may include a library, fire station, police station, public works facility, and city hall. I I I I I I I , I I I Exhibit L CITY OF SHAKOPEE, MINNESOTA I INTERNAL SERVICE FUNDS COMBINING BAlANCE SHEET I December 31, 2002 Totals I Equipment BuDdings 2002 2001 Assets Current Assets I Cash And Cash Equivalents $ $ $ $ Investments 2,158.582 7,256,687 9,415,269 10,807,700 Accrued Interest Receivable 14,945 57,897 72,842 68,484 Long Term Receivable (current portion) 40,000 40,000 40,000 I Total 2,213,527 7,314,584 9.528,111 10,916,184 Long Term Receivable 750,000 750,000 790,000 I Fixed Assets 5,676,934 16,766,166 22,443,100 18,106,886 Less: Accumulated Depreciation (2,312,019) (2,870,729) (5,182,748) (4,413,010) I Total 3,364,915 13,895,437 17,260,352 13,693,876 Total Assets $ 6,328,442 $ 21,210,021 $ 27,538.463 $ 25,400,060 Liabilities And Eauitv I Liabilities Current LiabDities (payable from I current assets): Accounts Payable $ $ 38,007 $ 38,007 $ 192,456 Contracts Payable 619,535 619,535 Total Liabilities 657,542 657,542 192,456 I Fund Equity Contributed Capital 2,721,440 12,701,312 15,422,752 15,388,131 I Retained Earnings - Unreserved 3,607,002 7,851,167 11.458,169 9,819,473 Total Fund Equity 6,328,442 20.552,479 26,880,921 25,207,604 Total Liabilities & Equity $ 6,328,442 $ 21,210,021 $ 27,538.463 $ 25,400,060 I I I I -. I I 82 I I I Exhibit L-1 CITY OF SHAKOPEE, MINNESOTA I INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS I FOR THE YEAR ENDED DECEMBER 31, 2002 Totals I Equipment Buildings 2002 2001 Operating Revenues I Rental Charges $ 578,568 $ 419,232 $ 997,800 $ 817,599 Operating Expenses I Depreciation And Amortization 548.394 325.489 873.883 838.519 Total Operating Expenses 548,394 325.469 873.863 636,519 I Operating Income (Loss) 30,174 93,763 123,937 181,080 Add: Non-0perating Income Investment Income 186,812 511,892 698,704 698,318 I Sale of Property 895 895 60,286 Less: Non-Operatlng Income Loss on Disposals of Assets (12,998) (187,131) (200,129) I Net Non-Operating Income 174,709 324,761 499,470 758,604 Income Before Operating Transfers 204,883 418,524 623,407 939,684 I Operating Transfers from Recreation Fund 9,559 9,559 Operating Transfers from General Fund 1,000,000 1,000,000 3,250,000 Net Income 204,883 1,428,083 1,632,966 4,189,684 I Add: Contributed Assets Transferred 113,9n Add: Capital Contributions 5,730 5,730 Add: Depreciation On Contributed Assets I That Reduces Conbibuted Capital 372,976 Increase In Retained Earnings 210,613 1,428,083 1,638,696 4,676,637 I Retained Earnings January 1 3,396,389 6,423,084 9,819.473 5,142,836 Retained Earnings December 31 $ 3,607,002 $ 7,851,167 $ 11,458,169 $ 9,819,473 I I I , I I 83 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I ~ I I 84 I I I Exhibit L-2 CITY OF SHAKOPEE, MINNESOTA I INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS I FOR THE YEAR ENDED DECEMBER 31. 2002 Totals Equipment Buildings 2002 2001 I Cash Row From Operating Activities Operating Income (Loss) $ 30,174 $ 93.763 $ 123,937 $ 181.080 Adjustments To Reconcile Operating Income (Loss) To Net Cash Provided By (Used For) Operating ActivitIes I Depreciation And AmortIzation 548,394 325,469 873.863 636,519 Loss on disposal of Assets 12.998 187,131 200,129 Change In Assets And liabilities Increase (Decrease) In Accounts Payable (20,298) (134,151) (154.449) 191,160 Increase (Decrease) In Contracts Payable 619.535 619.535 I Net Cash Provided By (Used For) Operating Activitles 571,268 1,091,747 1,663,015 1,008,759 Cash Rows From Noncapital Financing Activities Operating Transfers From Other Funds 1,009,559 1,009.559 3,250.000 I Net Cash Provided By (Used For) Noncapital Financing AclIvities 1.009,559 1,009,559 3.250,000 I Cash Rows From Capital And Related Financing Activities Acquisition Of FIXed Assets (673,558) (4,293,513) (4,967,071) (1,293,751) Sale of Property 895 895 60,286 Net Cash Used For Capital And Related I Financing Activities (672,663) (4,293,513) (4.966,176) (1,233,465) Cash Rows From Investing AclIvities Payments Received for Notes Receivable 40,000 40,000 35.000 Interest Received 180,423 513,923 694,346 660,928 I Change In Investments (119,028) 1,678,284 1,559,256 (3,721,222) Net Cash Provided By (Used For) Investing Activities 101.395 2,192,207 2,293,602 . (3,025.294) Net Increase (Decrease) In Cash and Cash Equivalents I Cash and Cash Equivalents - January 1 Cash and Cash Equivalents - December 31 $ $ $ $ I Non Cash Investing. Capital And Financing AclIvities Conbibutions From Other Funds $ $ 127.863 $ $ Change in Fair Value of Investments 288,866 111,416 400,282 127.324 I Acquisition Of FIXed Assets I I . I I I 85 I I Exhibit M CITY OF SHAKOPEE, MINNESOTA I EQUIPMENT FUND BALANCE SHEET I December 31, 2002 I 2002 2001 Assets I Current Assets Cash And Cash Equivalents $ $ I Investments 2,158,582 1,872,729 Accrued Interest Receivable 14,945 8,556 Total 2,173,527 1,881,285 I Notes Receivable 790,000 830,000 Fixed Assets 5,676,934 5,403,047 I Less: Accumulated Depreciation (2,312,019) ( 1,976,205) Total 3,364,915 3,426,842 I , , Total Assets $ 6,328,442 $ 6,138,127 I Liabilities and Equity Liabilities Current Liabilities (payable from I current assets) Accounts Payabl~ $ $ 20,298 Contributed Capital I From Other Funds 2,617,745 2,617,745 From Private Sources 32,864 32,864 I From Fire Relief 19,766 19,766 From Revenue Sharing 51,065 51,065 Total 2,721,440 2,721,440 I Retained Earnings - Unreserved 3,607,002 3,396,389 Total Equity 6,328,442 6,117,829 Total Liabilities & Equity $ 6,328,442 $ 6,138,127 I . I I 86 I I I Exhibit M-1 CITY OF SHAKOPEE, MINNESOTA I EQUIPMENT FUND I STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31,2002 I 2002 2001 I Operating Revenue Rental Charges $ 578,568 $ 541,764 I Operating Expenses Depreciation 548,394 338,183 I Operating Income 30,174 203,581 Add: Non-Operating Income I Investment Income 186,812 126,406 Sale of Property 895 60,286 Less: Non-Operating Expense I Loss on Disposal of Assets (12,998) Total Non-Operating Income 174,709 186,692 I Net Income 204,883 390,273 Add: Contributed Assets Transferred 113,977 I Add: Capital Contributions 5,730 Add: Depreciation On Contributed Assets That Reduces Contributed Capital 110,168 I Increase In Retained Earnings 210,613 614,418 Retained Earnings - January 1 3,396,389 2,781,971 I Retained Earnings - December 31 . $ 3,607,002 $ 3,396,389 I I I r I I 87 I I Exhibit M-2 CITY OF SHAKOPEE, MINNESOTA I EQUIPMENT FUND STATEMENT OF CASH FLOWS I FOR THE YEAR ENDED DECEMBER 31,2002 2002 2001 I Cash Flow From Operating Activities I Operating Income $ 30,174 $ 203,581 Adjustments To Reconcile Operating Income To Net Cash Provided By Operating Acitvities I Depreciation 548,394 338,183 Loss on Disposal of Assets 12,998 Change In Assets And Liabilities I Increase {Decrease>. In Accounts Payable (20,298) 20,298 Net Cash Provided By Operating Activities 571,268 562,062 Cash Flows From Capital And Related Financing Activities I Acquisition Of Fixed Assets (673,558) (568,540) Sale Of Property 895 60,286 I Net Cash Used For Capital And Related Financing Activities (672,663) (508,254) Cash Flows From Investing Activities I Payments Received for Notes Receivable 40,000 35,000 Interest Received 180,423 133,513 Change In Investments (119,028) (222,321 ) I Net Cash Provided By {Used' For) Investing Activities 101,395 (53,808) I Net Increase (Decrease) In Cash and Cash Equivalents Cash and Cash Equivalents - January 1 I Cash and Cash Equivalents - December 31 $ $ I Non Cash Investing, Capital And Financing Activities Contributions From Other Funds $ $ I Change in Fair Value of Investments 288,866 15,908 Acquisition Of Fixed Assets .- I I 88 I I I Exhibit M-3 I CITY OF SHAKOPEE, MINNESOTA EQUIPMENT FUND I SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 2002 I Property and Equipment I Balance Balance 1/1/02 Additions Deletions 12/31/02 I Equipment $ 5,403,047 $ 673,558 $ 399,671 $ 5,676,934 I I Accumulated Depreciation I Balance Balance 1/1/02 Additions . Deletions 12/31/02 I Equipment $ 1,976,205 $ 548,394 $ 212,580 $ 2,312,019 I I I I I . I I I 89 I I Exhibit N CITY OF SHAKOPEE, MINNESOTA I BUILDING FUND BALANCE SHEET I December 31, 2002 I 2002 2001 Assets I Current Assets Investments $ 7,256,687 $ 8,934,971 I . Accrued Interest Receivable 57,897 59,928 Total 7,314,584 8,994,899 Fixed Assets 16,766,166 12,703,839 I Less: Accumulated Depreciation (2,870,729) (2,436,805) Total 13,895,437 10,267,034 I Total Assets $ 21,210,021 $ 19,261,933 I Liabilities and EQuity Liabilities I Current Liabilities (payable from current assets) Accounts Payable $ 38,007 $ 172,158 Contracts Payable 619,535 I Total 657,542 172,158 Contributed Capital I From Other Funds 12,701,312 12,666,691 Retained Earnings - Unreserved 7,851,167 6,423,084 I Total Equity 20,552,479 19,089,775. Total Liabilities & Equity $ 21,210,021 $ 19,261,933 I I -- I I 90 I I I Exhibit N-1 CITY OF SHAKOPEE, MINNESOTA I BUILDING FUND I STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2002 I 2002 2001 I Operating Revenue Rental Charges $ 419,232 $ 275,835 I ' Operating Expenses Depreciation 325,469 298,336 I Operating Income .'- 93,763 (22,501 ) Add: Non-Operating Income I Investment Income 511,892 571,912 Less: Non-Operating Expenses Loss on Disposals of Assets (187,131) I Total Non-Operating Income 324,761 571,912 Income Before Operating Transfers 418,524 549,411 I Operating Transfers from General Fund 1,009,559 3,250,000 I Net Income 1,428,083 3,799,411 Add: Depreciation On Contributed Assets I That Reduces Contributed Capital 262,808 Increase In Retained Earnings 1,428,083 4,062,219 I Retained Earnings - January 1 6,423,084 2,360,865 Retained Earnings - December 31 $ 7,851,167 $ 6,423,084 I I ~ I I I 91 I I Exhibit N-2 CITY OF SHAKOPEE, MINNESOTA I BUILDING FUND STATEMENT OF CASH FLOWS I FOR THE YEAR ENDED DECEMBER 31, 2002 2002 2001 I Cash Flow From Operating Activities I Operating Income $ 93,763 $ (22,501) , Adjustments To Reconcile Operating Income To Net Cash Provided By Operating Acitvities I Depreciation 325,469 298,336 Loss on Disposals of Assets 187,131 Change In Assets And Liabilities I Increase (Decrease) In Accounts Payable (134,151) 170,862 Increase (Decrease) In Contracts Payable 619,535 Net Cash Provided By Operating Activities 1,091,747 446,697 I Cash Flows From Noncapital Financing Activities Operating Transfers From General Fund 1,009,559 3,250,000 I Cash Flows From Capital And Related Financing Activities Acquisition Of Fixed Assets (4,293,513) (725,211 ) I Net Cash Used For Capital And Related Financing Activities (4,293,513) (725,211 ) Cash Flows From Investing Activities I Interest Received 513,923 527,415 Change In Investments 1,678,284 (3,498,901) Net Cash Provided By (Used For) Investing Activities 2,192,207 (2,971,486) I Net Increase (Decrease) In Cash and Cash Equivalents I Cash and Cash Equivalents - January 1 I Cash and Cash Equivalents - December 31 $ $ Non Cash Investing, Capital And Financing Activities I Contributions From Other Funds $ $ Change in Fair Value of Investments 111,416 I Acquisition Of Fixed Assets 127,883 I 92 I I I Exhibit N-3 CITY OF SHAKOPEE, MINNESOTA I BUILDING FUND I SCHEDULE OF PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 2002 I Property and Equipment I Balance Balance 1/1/02 Additions Deletions 12/31/02 I Buildings $ 12,703,839 $ 4,293,513 $ 231,186 $ 16,766,166 I Work In Progress Total $ 12,703,839 $ 4,293,513 $ 231,186 $ 16,766,166 I I Accumulated Depreciation Balance , Balance I 1/1/02 Additions Deletions 12/31/02 I Buildings $ 2,436,805 $ 453,352 $ 19,428 $ 2,870,729 I I I I , I I I 93 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I : I I 94 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31, 2002 I I I AGENCY FUND I The Escrow Fund is used to account for monies held for specific purposes. I I I I I I I I I - I I I Exhibit 0 CITY OF SHAKOPEE, MINNESOTA I AGENCY - ESCROW FUND BALANCE SHEET I December 31, 2002 I Escrow Fund I 2002 2001 Assets - I Investments $ 1,779,089 $ 1,244,075 Liabilities I Accounts Payable $ 20,567 $ 88,158 Deposits Payable 1,758,522 1,155,917 I Total Liabilities $ 1,779,089 $ 1,244,075 I I I I I I I I - I I 95 I I , Exhibit 0-1 I CITY OF SHAKOPEE, MINNESOTA AGENCY FUNDS I STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the Year Ended December 31,2002 I I Escrow Fund Balance Balance 1/1/02 Additions Deductions 12/31/02 I Assets Investments $ 1,244,075 $ 1,284,103 749,089 $ 1,779,089 I liabilities Accounts Payable $ 88,158 $ 67,591 $ 20,567 Deposits Payable 1,155,917 602,605 1,758,522 Total Liabilities $ 1,244,075 $ 602,605 $ 67,591 $ 1,779,089 I I I < I I I I I I I . I I 96 I I I I I I I I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I -- I I 97 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31, 2002 I I I GENERAL FIXED ASSET I ACCOUNT GROUP The General Fixed Asset Account Group is used to record and control the City's investment in tangible I assets of significant value which have a service life of longer than one year. No depreciation is taken on these assets. Fixed assets of the Enterprise and Internal Service Funds are shown in the statements of those funds. I I I I I I I I .- I I I Exhibit p I CITY OF SHAKOPEE, MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS I FOR THE YEAR ENDED DECEMBER 31, 2002 I Balance Balance I 1/1/02 Additions Deductions 12/31/02 General Fixed Assets I Land $ 7,268,825 $ 1,710,012 $ 92,125 $ 8,886,712 Infrastructure 87,276,782 87,276,782 Buildings And Improvements 1,015,003 70,281 18,696 1,066,588 I Equipment 1,532,308 315,021 72,153 1,775,176 Total $ 9,816,136 $ 89,372,096 $ 182,974 $ 99,005,258 I Investment In General Fixed Assets I General Revenues $ 5,329,501 $ 89,372,094 $ 182,972 $ 94,518,623 I Revenue Sharing 37,512 37,512 Tax Increments 1,777,029 1,777,029 Contributions 2,672,094 2,672,094 $ 9,816,136. $ 89,372,094 $ 182,972 $ 99,005,258 I I I 1 I I r I I 98 I I I Ehxibit P-1 CITY OF SHAKOPEE, MINNESOTA I SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY DECEMBER 31, 2002 I, Buildings & land Improvements Equipment Infrastructure Total I Function And Activity General Govemment Council & Administration $ $ $ 34,328 $ $ 34,328 Clerk & Finance & legal 17,646 17,646 I Planning & Economic 'Authority 1,570,688 175,463 1,746.151 Govemment Buildings 252,313 80,883 333.196 Total 1,823.001 308,320 2.131.321 I Public Safety Police 221,556 221,556 I Fire 86,319 109,268 195,587 Total 86,319 330,824 417.143 I Public Works Engineering 6,363 6,363 Street 696,875 42,737 87,276,782 88,016.394 I Shop 152,110 152,110 Total 696,875 201,210 87,276,782 88,174,867 I Recreation Park Maintenance 6,280,517 1,066,588 934,822 8,281,927 I Total 6.280,517 1,066,588 934,822 8,281,927 Total Functions/Activity $ 8,886,712 $ 1,066,588 $ 1,775.176 $ 87:276,782 $ 99,005,258 I I I I , I I I 99 I Exhibit P-2 I CITY OF SHAKOPEE, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS I BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED DECEMBER 31,2002 ,I Balance Transfers Balance I 1/1/02 Additions Deletions & Adjust 12/31/02 Function And Activity I General Government Council & Administration $ 29,913 $ 17,030 $ 12,615 $ $ 34,328 Clerk & Finance & Legal 17,646 17,646 Planning & I Economic Authority 1,761,151 (15,000) 1,746,151 Government Buildings 386,401 31,204 (22,001) 333,196 Total 2,195,111 17,030 43,819 (37,001) 2,131,321 I Public Safety I Police 221,969 17,587 18,000 221,556 Fire 193,907 13,700 12,020 195,587 Total 415,876 31,287 30,020 417,143 I Public Works I Engineering 6,363 6,363 Street 732,287 87,319,966 35,859 88,016,394 Shop 145,628 6,482 152,110 Total ' 884,278 87,326,448 35,859 88,174,867 I Recreation I Park Maintenance 6,320,871 1,878,707 28,773 111,122 8,281,927 Total 6,320,871 1,878,707 28,773 111,122 8,281,927 I Total Functions/Activity $ 9,816,136 $ 89,253,472 $ 138,471 $ 74,121 $ 99,005,258 I I . I I 100 I I I CITY OF SHAKOPEE, MINNESOTA I ANNUAL FINANCIAL REPORT I FOR THE YEAR ENDED DECEMBER 31, 2002 I I I GENERAL LONG-TERM DEBT ACCOUNT GROUP I General Obligation Bonds, long-term loans from other sources (governments) and other long-term debt of the City are recorded herein. The Debt Service Funds account for the servicing of the bonds and are shown in the statements of those funds. I I I I I I I I -. I- I I I I I I I I I - , I THIS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I : I I 101 I I I Exhibit Q CITY OF SHAKOPEE, MINNESOTA I SCHEDULE OF GENERAL LONG TERM DEBT I December 31,2002 Amount Available And To Be Provided For The I Payment Of General Long Term Debt I . Amount Available In Debt Service Funds $- 7,653,349 Amount To Be Provided By Future Tax Levies I and Tax Increment . '9,350,051 Total Available And To Be Provided $ 17,010,000 I I General Long Term Debt Payable General Obligation Bonds Payable (Exhibit R) I G.O. Bonds $ 16,620,000 G.O. Tax Increment Bonds Payable 390,000 I Total General Long Term Debt Payable $ 17,010,000 I I I I I = I I I 102 I I I I I -I I I . I I This page left intentionally blank. I I I I I I . -I I 103 I I I I I I I I SUPPLEMENTARY FINANCIAL INFORMATION I' I I I I I I I I . I I I I ExhibitR CITY OF SHAKOPEE, MINNESOTA I Combined Schedule of Bonded Indebtedness December 31, 2002 Aulhorlzed I Issue Maturlly and Balance Debt Debt Balance Current Cullellt Date Dale Interest Rate Issued 12/3112001 Issued Rellred 12/3112002 Prlncloal Interest General Obllaation Bonds General Obligation BuDding 6/1/97 2/1/17 4.75,4.85.4.90 $ 3,140,000 $ 2,675,000 $ $ 110,000 $ 2,565,000 $ 120,000 $ 131,500 I Bonds 1997-A 5.00,5.10,5.20 5.25, 5.375, 5.50 General ObItgation Improve- 12/1190 2/1102 6.30 1,930,000 190,000 190,000 ment Bonds 1991l-A General ObItgation Improve- 1011/91 2/1103 6.10 1,725,000 325.000 175,000 150,000 150,000 4,575 I mentBonds 1991-A General Obligation Improve- 12/1/92 2/1104 5.60,5.70 1,665,000 445,000 160,000 285,000 155,000 11,750 ment Bonds 1992-A General Obllga1lon Improve- 11/1/1995 2/112007 4.60,4.75,4.90 3,180,000 1,415,000 390,000 1,025.000 210,000 45,030 I ment Bonds 1995A 5.00.5.10 General OblIgation Improve. 12/1/1996 2/112008 4.50, 4.60, 4.85 2,555,000 1,550,000 375,000 1,175,000 325,000 46,975 ment Bonds 199M 4.70,4.80 General 0bIIga1l0n Improve- 11/5/1997 2/112009 4.30, 4.40, 4.50 '1,805,000 1,030,000 240,000 790,000 195,000 31,405 I ment Bonds 19978 4.55,4.60,4.70 4.75 General ObItgation Improve- 7/1/1998 2/1/2009 4.10,4.125, 4.15 4,495,000 2,065,000 500,000 1,565,000 235,000 61,135 ment Bonds 199!lA 4.20, 4.25, 4.30 I 4.40 General OblIgation Improve- 12/1/1998 2/112010 4.10,4.125,4.20 2,375,000 2,080,000 260,000 1,620,000 260,000 69,839 ment Bonds 19968 4.30, 4.40 General Obligation Improvement- 911912000 21112011 4.35,4.45, 4.50 2,560,000 2,560,000 250,000 2,310,000 325,000 99,666 I Bonds 2000A 4.55,4.60,4.70 4.75,4.90,4.95 General Obligation Improvement- 2/112002 2/112012 3.00, 3.25, 4.00 1,185,000 1,185,000 1,185,000 25,000 44,262 Bonds 2OO2A 4.10,4.20,4.30 General Obligation Improvement. 711/2002 2/1/2013 3.00, 3.25, 3.40 3,750,000 3,750,000 3,750,000 136,638 I Bonds 2OO2B 3.60,3.75,4.00 4.10 To131 General Obllga1lon Bonds 30.365.000 14.335.000 4.935.000 2.650.000 16.620.000 2.000.000 682.775 Tax Increment Bonds I General ObJlgallon Tax Increment 7/1/93 2/1103 4.75,,4.90 2,675,000 755,000 365,000 390,000 390,000 9,555 Refunding Bonds 1993A ToIal General Obligation I Tax Increment Bonds 2.675.000 755.000 365.000 390.000 390.000 9.555 Revenue Bonds UtilIly Revenue Bonds 1993 8/24/93 811/18 5.10,5.25, 5.35 4,250,000 3,500,000 125,000 3.375,000 125,000 187,476 I 5.60 G.O. UtilIly Revenue Bonds 19958 11/1/1995 2/1l2OO6 4.60,4.75, 4.90 1,150,000 650,000 115,000 535,000 125,000 22,915 5.00 UtilIly Revenue Bonds 1999 12/6/1999 2/1/28 5.00, 5.10, 5.15 9,850,000 9,850,000 100,000 9,750,000 110,000 556,836 I 5.20, 5.30, 5.40 5.50, 5.60, 5.625 5.75,5.90,6.00 UtilIly Revenue Bonds 2001 6/112001 2/1/1930 4.25, 4.30, 4.40 12,000,000 12,000,000 12,000,000 220,000 581,656 4.50, 4.85, 4.75 I 4.85, 5.00, 5.12 Tolal Revenue Bonds 27.250.000 26.000.000 340.000 25.560.000 560.000 1,346.883 ToIal Long Tenn Bonded Debt $ 60.290.000 $ 41 ,090,000 $ 4.935.000 $ 3,355.000 $ 42,670,000 $ 2.970.000 $ 2,041.213 I . I I 104 I I exhibit S CITY OF SHAKOPEE, MINNESOTA I Schedule of Debt Service Requirements To Maturity DECEMBER 31. 2002 I Total General Obligallon Bonds G. O. Tax Increment Bonds Revenue Bonds ~ Total Principal Interest Principal Interest Principal Interest Principal Interest I 2003 $ 5,011.213 $ 2,970,000 $ 2,041,213 $ 2.000,000 $ 682,775 $ 390,000 $ 9,555 $ 580,000 $ 1.348,883 2OC4 4,540,948 2,635,000 1,905,948 2,005.000 584,7".>5 630.000 1,321,213 2005 4.138,570 2,340,000 1,798,570 1,710,000 507.278 830,000 1,291,294 2006 4,559,053 2,870,000 1,689,053 2.180,000 428,792 690,000 1,260,261 I 2007 4,252,270 2,680,000 1,5n,270 2,135.000 342,059 545,000 1,230,211 2008 3,927,860 2,465,000 1,462,860 1,895,000 259.424 570,000 1,203,236 2009 3,199,066 1,830,000 1,369,066 1,210,000 193,980 620,000 1.175,066 2010 2,660,968 1,570,000 1,290,968 940.000 146,266 630,000 1.144,682 2011 2,616,242 1,395,000 1.221,242 735.000 108,175 860,000 1,113,067 I 2012 2,403,776 1,245,000 1,158,776 525,000 79,311 720.000 1,079,465 2013 2.221,126- 1,120,000 1.101,126 390,000 58,207 730.000 1.042,919 2014 2.048,061 1.000,000 1,048,061 205,000 43,459 795,000 1.004,602 2015 2,024,879 1,030.000 994,879 220,000 31,900 810,000 962,979 2018 2,048.687 1,110.000 938,687 230.000 19,525 880.000 919,162 I 2017 2,048,352 1,170,000 878.352 240,000 6,600 930,000 871,752 2018 1,776,546 955,000 821,546 955.000 821.546 2019 1,474,211 705,000 769,211 705,000 769,211 2020 1,m.297 1,050,000 722.297 1,050,000 722.297 2021 1,778,125 1.115,000 663,125 1,115,000 663,125 1 2022 1,774,728 1,175,000 599,728 1,175,000 599,728 2023 1,782,259 1,250,000 532,259 1,250,000 532,259 2024 1,785,598 1,325,000 460,598 1,325,000 460,598 2025 1,784,344 1,400.000 384,344 1,400,000 384.344 2026 1.788.174 1,485,000 303.174 1,485.000 303,174 I 2027 1,792,040 1,575,000 217,040 1,575,000 217,040 2028 1,795,684 1,670,000 125,684 1,670,000 125,684 2029 804,578 745,000 59,578 745,000 59,578" 2030 810,244 790,000 20,244 790,000 20,244 I $ 68,819,699 $ 42,670,000 $ 26,149,699 $ 16,620,000 $ 3,492,504 $ 390,000 $ 9.555 $ 25,660,000 $ 22,647,640 I I I I I I : I I I 105 I Exhibit T CITY OF SHAKOPEE, MINNESOTA I Schedule Of Deferred Tax levies December 31, 2002 I I Year 1995A 1995B 1996A 1997A 1997B 1998B 2000A 2002A Of Improve- Revenue Improve- Building Improve- Improve- Improve- Improve- I ~ mentBonds Bonds ment Bonds Bonds ment Bonds ment Bonds ment Bonds ment Bonds 2003 $ 62,274 $ 156,309 $ 64,173 $ 265,217 $ 30,151 $ 61,866 $ 55,032 $ 93,332 I 2004 61,556 159,863 63,495 263,779 29,980 62,306 47,342 97,479 2005 61,569 62,726 "" 261,941 29,757 62,519 55,298 95,891 I 2006 61,701 259,841 29,477 62,567 55,858 98,569 2007 262,577 62,236 56,167 95,786 I ., , 2008 264,614 61,699 56,349 98,254 2009 266,018 . 46,214 95,120 I 2010 266,871 97,094 2011 267,173 I 2012 266,668 2013 270,848 I 2014 268,643 2015 265,860 I $185,399 $316,172 $ 252,095 $3,450,050 $119,365 $373,195 $372,260 $771,525 I I I I , I I 106 I \,::::':'.:'~;~::' r, ,y 1 ~;~7'; ,;; ',' '<';1~'i~!ti>~-5';;l:~.:Ij'.W:;;"ii"\jJ-i~}'P/~'~';~~~~~~~, :~ ~'~~~'~;. ,';'"'~' i i', ":-'" / ^ ~ " '; ,'; ;r.\,":.'>"< ',\'.,' , ~~i1~ ~g~;:~~~f:~~ '" ~ "'" ~ <;: ), "n 2'~"h.!7 I.i e-'" J. ~ > "..",. ~'f'j "E "~'.;\~.. <' \ '" ^' <<,,< ~ ... . ~:3:~~:;_$:':.k;~5i>~~~')..)~t"""';~'Y~.;-t'li"'<'''1-,^';;'-,;'''"",,'<,:'>:f'~7'J:.('\ v->~ r,.,::,;r,-lj<~;-,f-.j,.-:,,!:, t ' 7 "',," ~ ~ ~,,~ <'r--"-J;/<2~:l;: , ~ " ~t;'{:?II\~:;;:~"< ~~ >-~~~tl/':"'" (':,({rj",~j~~"'-" ~ ~;;:;" ~ S< )r".::<:j",:-?~X,>-';},{ ~ t C-~ " P .,. 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Ii: ' ,\ I I i IIII1 I 'I! \ : II II I! i !II I, I . I I i ilii !! \ : I I 'I Ii: I II I ; I I I i I I I 1'1' , 'I I I' I I, I: : il Ii' I 'I I I Iii, IIII 1'1 I i II' I: ,i III!I:I . , , ! I ii, ,'I' : ill , I I I I I I I I , I I I This page left intentionally blank. I I I I I I . I I . ~O7 I Table 1 I CITY OF SHAKOPEE, MINNESOTA General Fund Expenditures by Function Years 1993 Through 2002 I Fiscal General Public Public Miscel- I Period Government Safety . Works Recreation laneous Total I 1993 $ 1,199,244 $ 1,751,566 $ 1,541,671 $ 635,077 $ 40,040 $ 5,167,598 1994 1,291,772 2,389,753 1,017,678 641,707 29,150 5,370,060 I 1995 1,451,119 2,050,871 1,123,556 610,584 . 33,780 5,269,910 I 1996 1,401,633 2,207,346 1,198,715 282,599 20,209 5,110,502 1997 1,502,375 2,394,648 1,222,062 315,551 90,936 5,525,572 I 1998 1,605,783 2,396,551 1,549,421 390,557 413,064 6,355,376 I 1999 2,039,286 2,884,155 1,436,401 458,417 109,182 6,927,441 2000 2,218,058 3,318,628 1,505,776 621,306 86,805 7,750,573 I 2001 2,325,091 3,706,838 1,625,264 664,340 103,681 8,425,214 2002 2,621,616 4,421,028 1,847,808 622,099 109,455 9,622,006 1 Note: Refuse collection removed from General Fund in 1994. I Recreation activities and Pool removed from General Fund in 1996. I I I I - I I . 108. I I I Table 2 CITY OF SHAKOPEE, MINNESOTA I General Fund Revenues by Source Years 1993 Through 2002 I Licenses Inter- Charges Fines Miscel- Fiscal And Governmental For and laneous Total I Period Taxes Permits Revenues Services Forfeits Revenue Revenues I 1993 $ 2,690,777 $481,992 $ 781,224 $ 1,277,803 $63,773 $238,984 $ 5,534,553 1994 2,951,832 410,992 831,073 781,002 64,914 199,290 5,239,103 I 1995 2,950,583 589,104 779,276 935,196 80,083 323,187 5,657,429 1996 2,873,265 711,190 876;219 1,075,570 95;865 318,052 5,950,161 I 1997 3,093,665 746,705 955,070 1,045,053 84,708 438,044 6,363,245 I 1998 3,102,353 1,182,851 1,368,529 1,294,739 99,140 413,991 7,461,603 1999 3,318,114 1,875,506 859,684 1,913,702 148,835 335,088 8,450,929 I 2000 3,399,045 2,023,037 872,607 1,957,569 172,017 678,652 9,102,927 2001 3,863,980 2,000,133 981,799 1,805,944 230,085 316,359 9,198,300 I 2002 5,873,826 2,313,544 1,065,291 1,243,535 253,348 296,935 11,046,479 I Note: Refuse collection removed from General Fund in 1994. Recreation activities and Pool removed from General Fund in 1996. I I I I . I I I 109 I I I I I '1 1 -. I , I I This page left intentionally blank. I I 1 I 1 I . 1 I nO I I Table 3 I CITY OF SHAKOPEE, MINNESOTA Property Tax Levies and Collections I Years 1993 Through 2002 Ratio of I Accumulated Percentage Delinquent Collections Percentage Collections of Total Accumulated Taxes to Year Tax of Current of Levy of Prior Total Collections Delinquent Current Collected Levy Years Taxes Collected Years Taxes Collections To Tax Levy Taxes Years Taxes I 1993 $ 3,146,881 $ 3,005,166 95% $ (3.000) $ 3.002,166 95% $ 144.985 4.61% I 1994 2,832,541 2.753.570 97% 28.107 2,781,6n 98% 65,080 2.30% 1995 2.907.635 2,889,244 99% 21,328 2,910,572 100% 62,188 2.14% 1996 2,887,736 2,863.6n 99% 14.215 2.8n,892 100% 88,834 3.08% I 1997 3,578.560 3.598,147 101% 46,416 3,644.563 102% 71,033 1.98% 1998 3,263,583 3,230,184 99% 22,665 3.252,849 100% 78,834 2.42% I 1999 3,819,736 3,757,750 98% 25.186 3,782,936 99% 65,389 1.71% 2000 3,853,808 3,738,963 97% 24,342 3,763,305 98% 88,656 2.30% I 2001 4,4n,969 4,335,602 97% 62,905 4,398,507 98% 61,661 1.38% 2002 6,645.713 6,484,920 98% 41,342 6,526,262 98% 70,622 1.06% I Source: Scott County Auditor The above data does not include tax increment districts but does include EDA and City. I Negative collections of prior years taxes in 1993 is the result of abatement of prior years taxes. I I I I I I : I I 111 I Table 4 CITY OF SHAKOPEE, MINNESOTA I Tax Capacity and Estimated Market Value of All Taxable Property I December 31,2002 1991/92 1992/93 1993/94 1994/95 1995/96 I Population 12,166 12,732 13,041 13,752 14,952 Real Property I Tax Capacity $ 14.634,316 $ 14,669,065 $ 13,356,769 $ 14,785,689 $ 15,829,452 Area Wide Alloca- tion (Net) (1,529,169) (1,656,489) (990,150) (1,697,226) (1,900,202) I 13,105,147 13,012,576 12,366,619 13,088,463 13,929,250 Personal Property Tax Capacity 235,601 212,852 212,270 238,130 260,873 I Total Real and Personal Property Tax Capacity $ 14,869,917 $ 14,881,917 $ 13,569,039 $ 15,023,819 $ 16,090,325 I Estimated Market Value $ 523,200,700 $ 544,789,600 $ 536,255,100 $ 592,857,300 $ 642,522,700 I Ratio of Total Tax Capacity Value to Total Market I Value 2.84% 2.73% 2.53% 2.53% 2.50% Per Capita Valuations Tax Capacity $ 1,222 $ 1,169 $ 1,040 $ 1,092 $ 1,076 I Market Value 43,005 42,789 41,121 43,111 42,972 Tax Increment Captured Tax Capacity 3,432,651 3,070,427 1,919,057 1,730,527 1,511,139 I 1. Property values include net amount allocated pursuant to the "fiscal disparities" laws 1971, Extra Session, Chapter 24, from area wide "pool." I 2. Population figures per Metropolitan Council estimates except for 2000 which is the official census figure, 1996 and 1997 are City estimates. 3. Tax capacity values include captured tax capacity values under tax increment districts per Scott County Auditor. I I I , I I 112 I I Table 4 I CITY OF SHAKOPEE, MINNESOTA Tax Capacity and Estimated Market Value of All Taxable Property I December 31, 2002 1 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 15,200 16,400 17,200 20,568 21,500 22,040 I $ 16,600,952 $ 16,304,620 $ 17,081,507 $ 20,132,479 $ 25,662,726 $ 21,902,755 (1,969,054) (1,668,299) (1,452,992) (1,718,112) (1,997,080) (1,543,453) I 14,631,898 14,636,321 15,628,515 18,414,367 23,665,646 20,359,302 270,618 243.636 255.877 255,785 260.826 169.164 I $ 16,871,570 $ 16,548,256 $ 17,337,384 "$ 20,388,264 $ 25,923,552 $ 22,071,919 I $ 695,306,365 $ 776,534,400 $ 897,901,119 $ 1,087,145,000 $ 1,369,102,400 $ 1,743,136,300 I I 2.43% 2.13% 1.93% 1.88% 1.89% 1.27% $ 1,110 $ 1,009 $ 1,008 $ 991 $ 1,206 $ 1,001 I 45,744 47,350 52,204 52,856 63,679 79,090 1,514,980 1,332,062 1,231,584 1 ;211 ,989 1,801,828 975,773 I I I I I . 1 1 I 113 I , Table 5 1 'CITY OF SHAKOPEE, MINNESOTA Tax Rates and Tax Levies 1 Direct and Overlapping Governments I Years 1992 Through 2002 I TAX RATES Tax School District Special I Year City 720 191 County Districts 1992/93 0.28162 0.61499 0.70021 0.45564 0.04782 I 1993/94 0.27104 0.65540 0.74468 0.48475 0.05327 I 1994/95 0.25245 0.71179 0.80708 0.50217 0.06101 1995/96 0.22458 0.67174 0.75177 0.46060 0.06380 1996/97 0.23098 0.64174 0.73684 0.41683 0.04680 1997/98 0.21127 0.73306 0.65803 0.40679 0.06329 I 1998/99 0.23358 0.58686 0.66096 0.39282 0.03192 1999/00 0.20132 0.50203 0.53546 0.36182 0,04324 2000/01 0.18199 0.42982 0.45095 0.31729 0.03034 I 2001/02 0.33976 0.26080 0.24120 0.39517 0.04976 I TAX LEVIES 1992/93 $ 3,114,951 $ 4,890,845 $ 445,979 $ 3,921,005 $ 422,014 I 1993/94 2,805,925 5,716,094 451,526 4,521,685 515,738 1994/95 2,805,925 6,830,750 436,181 5,090,536 618,281 I 1995/96 2,785,342 6,903,571 452,440 5,175,459 716,879 1996/97 3,598,560 7,359,641 441,888 5,030,291 548,003 1997/98 2,911,313 8,589,216 371,315 4,980,071 773,707 I 1998/99 3,819,736 8,527,570 357,605 5,344,391 537,711 1999/00 3,853,808 7,508,229 309,605 5,679,041 648,422 2000/01 4,430,959 6,484,070 273,306 6,448,609 758,010 I 2001/02 6,625,413 4,878,510. 182,384 6,432,203 816,530 Source: Scott County Auditor & The Minnesota Homestead Property Tax review I Shakopee EDA tax levy and tax rate included in special districts. Tax rate is per $1,000 of tax capacity. . I I 114 I I Table 6 1 CITY OF SHAKOPEE, MINNESOTA Special Assessment Billings and Collections I Years 1993 Through 2002 I Ratio Total Current Percentage ofTotal Outstanding 1 Special Current of Current Delinquent Collections .' Current and Year Assessments Assessments Assessments Assessments Total To Current Delinquent Collected Billings Collected Collected Collected Collected Amount Due Assessments I 1993 $ 534,589 $ 466,274 87% $ 21,446 $ 487,720 91% $ 786,120 1994 545,044 470,839 86% 58,486 529,325 97% 665,390 1 1995 506,287 480,418 95% 93,336 573,754 113% 574,660 I 1996 332,942 304,232 91% 11,438 315,670 95% 582,511 1997 576,973 552,826 96% 10,762 563,588 98% 649,839 I 1998 833,997 766,187 92% 8,449 774,636 93% 350,225 1999 1,132,179 1,013,835 90% 21,825 1,035,660 91% 331,482 I 2000 1,123,379 1,007,580 90% 11,367 1,018,947 91% 443,190 2001 982,955 906,429 92Dk 83,662 990,091 101% 434,763 I 2002 578,223 553,481 96% 61,580 615,061 106% 373,154 I Source: Scott County Auditor I I I I .- I I I 115 I Table 7 CITY OF SHAKOPEE, MINNESOTA I Ratio of Net General Bonded Debt to Assessed Value I And Net Bonded Debt Per Capita Years 1993 Through 2002 I Less Amount Ratio of I Gross In Funds Net Net General Net Bonded I Fiscal Tax Capacity Bonded For Debt Bonded Bonded Debt To Debt Per Year Population (1) Value (2) Debt (3) Service Debt Tax Capacity Capita 1993 12,732 $ 14,881,917 $ 20,185,000 $9,504,410 $10,680,590 71.8% $ 839 I 1994 13,041 13,569,039 17,325,000 9,204,653 8,120,347 59.8% 623 I 1995 13,752 15,023,819 14,540.000 4,921,309 9.618,691 64.0% 699 1996 14.952 16.090.325 15,380.000 5.269,819 10.110,181 62.8% 676 I 1997 15,200 17.142.188 17,380,000 5.611,176 11.768,824 68.7% 774 1998 16,400 16.548,256 22,000.000 8,608,467 13,391,533 80.9% 817 I 1999 17,200 17.337.384 19.990,000 10.082,459 9.907.541 57.1% 576 I 2000 20.568 20.388,264 18,355.000 9,321,002 9,033.998 44.3% 439 2001 21.500 25.923.552 15.090.000 8.502.950 6.587.050 25.4% 306 I 17,010.000 7,653,349 9,356,651 418 2002 22,400 21.902,755 42.7% Sources: I (1) Metropolitan Council estimates except for 2000 which is the official census figure. 1996 and 1997 are the City's estimate, I (2) Scott County Auditor (3) Note: Includes G. O. Tax I.ncrement Bonds. exclu~es Revenue Bonds. I I - I I 116 I 1 . Table 8 I CITY OF SHAKOPEE, MINNESOTA I Computation of Direct and Overlapping Debt December 31,2002 1 I Percentage Amount Applicable Applicable G.O. To City of To City of I Debt Shakopee Shakopee City of Shakopee $ 17,010,000 100.0% $ 17,010,000 I School District #720 55,710,000 85.5% 47,652,370 School District #191 48,725,000 1.5% 730,875 Scott County 23,330,000 27.6% 6,439,080 I Metropolitan Council 30,815,000 1.0% 308,150 Scott COl!nty HRA 1,625,000 27,6% 448,500 Sub-Total Other Jusidictions 160,205,000 55,578,975 I Total Direct and Overlapping Debt $ 177,215,000 $ 72,588,975 1 Note: City of Shakopee debt does not include GO revenue or revenue bonds, Sources: Scott County Auditor I Dakota County Auditor State Department of Revenue I I I I I ~ I I I 117 I : Table 9 I CITY OF SHAKOPEE, MINNESOTA Ratio of Annual Debt Service Expenditures For I General Bonded Debt to Total General Fund Expenditures December 31, 2002 I Ratio of 1 Debt Service Total General To Total Fiscal Debt Fund General Fund I Period Principal Interest Service Expenditures Expenditures 1993 $ 1,365,000 $ 857,689 $ 2,222,689 $ 5,167,598 43.01 % 1 1994 2,860,000 1,020,288 3,880,288 5,370,060 72.26% I 1995 5,965,000 747,638 6,712,638 5,269,910 127.38% 1996 1,715,000 625,182 2,340,182 5,110,502 45.79% I 1997 1,835,000 658,005 2,493,005 5,525,572 45.12% 1998 2,250,000 800,853 3,050,853 6,355,376 48.00% I 1999 2,010,000 953,290 2,963,290 6,927,441 42.78% I 2000 4,195,000 832,209 5,027,209 7,750,573 64.86% 2001 3,265,000 761,218 4,026,218 8,425,214 47.79% I 2002 3,015,000 658,128 3,673,128 9,622,006 38.17% I Only General Obligation Bonded Debt is reflected above. I I I . I I 118 I I Table 10 I CITY OF SHAKOPEE, MINNESOTA I Schedule of Revenue Bond Coverage Years 1993 Through 2002 I I Net Revenue Debt Service Requirements Fiscal Gross Available For Period Revenue Expenses Debt Service Principal Interest Total Coverage I 1993 $ 2,571,011 $1,309,526 $ 1,261,485 I 1994 3,042,057 1,290,269 1,751,788 $ 211,713 $211,713 8.27 1995 3,278,875 1,302,037 1,976,838 $100,000 226,163 326,163 6.06 I 1996 3,943,476 1,616,121 2,327,355 100,000 261,388 361,388 6.44 I 1997 4,107,281 1,805,153 2,302,128 180,000 268,903 448,903 5.13 1998 4,923,585 1,880,555 3,043,030 200,000 261,217 461,217 6,60 I 1999 5,875,182 2,250,162 3,625,020 200,000 261,217 461,217 7.86 8,122,871 4,321,762 3,801,109 230,000 620,116 850,116 4.47 2000 I 2001 8,683,026 4,652,140 4,030,886 235,000 999;172 1,234,172 3.27 2002 8,660,987 5,637,887 3,023,100 340,000 1,202,462 1,542,462 1.96 I The information for 1993 -1995 is for Electric and Water Funds. I The information for 1996 on is for Electric, Water and Storm Drainage Funds. 1 I I . 1 I I 119 I Table 11 CITY OF SHAKOPEE, MINNESOTA I Computation of Legal Debt Margin I December 31,2002 Market Value (taxable) $ 1,743,136,300 I Debt Limit Two Percent of Market Value (Note III F) 34,862,726 I Amount of Debt Applicable to Debt Limit: Total Bonded Debt $ 42,670,000 I Less (Note III F): G.O. Tax Increment Bonds 390,000 G.O. Special Assessment Bonds 14,055,000 I Revenue Bonds 25,660,000 Available in Debt Service Funds 7,653,349 Total Debt Applicable to Debt Limit (5,088,349) (5,088,349) 1 Legal Debt Margin $ 29,774,377 NOTE (A): I M.SA. Section 475.53 (Limit on Net Debt) Subdivision 1. Generally, except of otherwise provided in Sections 475.51 to 475.75, no municipality, I except a school district or a city of the first class, shall incur or be subject to a net debt in excess of two percent of the market value of taxable property in the municipality." NOTE (B): I M.S.A. Section 475.51 Definitions: S.ubdivision 4. 'Net Debt' means the amount remaining aft~r deduction from its gross debt the I aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which I are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. I (3) Obligations payable wholly from the income of revenue-producing conveniences. I (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligation issued for the acquistion, and betterment of public waterworks systems. and public I lighting, heating or power systems and on any combination thereof or for any other public convenience from which a revenue is or may be derived. : I (6) Amount of all money and the face value of all securities held as a sinking fund for the extinguishment of obligations other than those deductible under this subdivision M.SA Section 469.178, subdivision 1. (tax increment bonds) ".n The bonds are not. I included for purposes of computing the net'debt of any municipality." 120 I I Table 1'2 I CITY OF SHAKOPEE, MINNESOTA I Demographic Statistics Years 1993 Through 2002 I Fiscal Popu- District School Unemployment Year lation ( 1 ) Enrollment (2) Rate (3) I 1993 12,732 2,850 4,1% I 1994 13,041 2,992 3.4% 1995 13,752 3,060 2.3% I 1996 14,952 3,352 3.1% 1997 15,200 3,296 2.5% I 'a" 1998 16,400 3,528 2.0% I 1999 17;200 3,723 1.8% 2000 20,568 3,900 2.6% I 2001 21,500 3,892 4.0% 2002 22,400 4,487 4.0% I Sources: I (1) 2000 population is census data, 1996 and 1997 is staff estimate, other years are Metropolitan Council estimates I (2) School District #720 (3) State Department of Jobs and Training, Scott County year end rate I I I . I I I 121 I Table 13 I CITY OF SHAKOPEE, MINNESOTA Property Value and Construction I Commercial Residential I Construction ( 1 ) Construction (1) Property Value (2) Fiscal Number Value Number Value Commercial Residential I Year Of Permits (000) Of Permits (000) (000) (000) 1993 228 $ 44,415 347 $ 20,276 $ 191,657 . $ 297,045 I 1994 239 14,661 389 23,056 175,925 313,365 . -.'. I 1995 195 29,184 412 26,006 194,511 380,514 1996 161 20,626 533 41,512 209,944 406,689 I 1997 100 52,299 548 39,121 225,815 453,855 1998 142 58,084 677 57,814 240,926 520,973 I 1999 141 94,884 916 121,255 288,809 599,408 2000 147 702,624 1,322 115,628 360,183 719,271 I 2001 146 35,707 1,191 123,252 436,256 925,024 I 2002 215 58,531 1095 90,942 549,534 1,185,015 Sources: I (1) City Bunding Inspector I (2) Scott County Assessor Bank Deposits are Unavailable I I I - I I 122 I I Table 14 I CITY OF SHAKOPEE, MINNESOTA I Ten Principal Taxpayers in the City of Shakopee December 31, 2002 I Percentage 2001/02 Of Total I Tax Cap. Tax Cap. Taxpayer Type of Business Value Value I Seagate Manufacturing/Research $ 1,498,500 6.84% ADC Telecommunications Electronics 890,024 4~06% I Rahr Malting Grain Processing 600,390 2.74% OIRE Property Management 861,828 3.93% I KMart Warehouse Warehouse/Distribution Center 649,000 2.96% I Excell Energy Electrical Generation 593,160 2.71% Valley Fair Amusement Park 254,450 1.16% I Principal Mutual Mortgage Financial 557,756 2.55% Continential 95 Retail 193,256 0.88% I Anchor Glass Manufacturing 327,172 1.49% I $ 6,425,536 29.32% I Source: Scott County Assessor I I I I - I I 123 I Table 15 I CITY OF SHAKOPEE, MINNESOTA Insurance Coverage I December 31,2002 I Real and Persohal Property $26,456,657 I Comprehensive General Liability and 1,000,000 Public Officials and Employees Liability (per occurance) . Comprehensive Automobile Coverage 1,000,000 I Bodily Injury and Property Damage (combined single limit) Boiler and Machinery (per occurance) 5,000,000 I Employee Faithful Performance Blanket Bond 50,000 I Workmen's Compensation Statutory I I I I I I I I : I I. 124 I I Table 16 I CITY OF SHAKOPEE, MINNESOTA I Principal Officials and Surety Bonds December 31,2002 I Name Position I Mayor and Council I William P. Mars Mayor Joseph Helkamp Councilmember Matthew Lehman Councilmember Cletus J. Link Councilmember I Terry Joos Councilmember I Administration I Mark H. McNeill City Administrator/EDA Director R. Michael Leek Community Development Director Gregg M. Voxland Finance Directorrrreasurer Bruce A. Loney Public Works Director I Judith S. Cox City Clerk Daniel T. Hughes Chief of Police Terry Stang Fire Chief I Louis J. Van Hout Utilities Manager I The City of Shakopee has a $50,000 Surety Bond on all City employees. There is a $100,000 Surety Bond on the Treasurer and the Clerk. I I I I .- I I I 125 I Table 17 I CITY OF SHAKOPEE, MINNESOTA Miscellaneous Statistical Data I December 31, 2002 I Date of Incorporation 1870 Form of Government Council/Mayor I Fiscal Year Begins January 1 st. Area of City 33 Square Miles Miles of Streets. and Alleys: I Trunk Highways 8 County Roads 36 I Other 131 Fire Protection: Number of Stations 2 I Number of Employees 46 Police Protection: I Number of Stations 1 Number of Employees 33 Recreation: I Park Area 437 Number of Parks & I Playgrounds 25 Municipal Swimming Pool 1 Ice Arena 1 Employees as of year end: I Full time 93 Part time! Temporary 64 I Elections: Registered Voters -last general election 12,806 I Number of Votes Cast 9,929 Percentage of Registered Voters voting 77.5% I , . I , I I 126 I I .' QTY OF SHAKOPEE,MINNESOTA I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended December 31, 2002 I Federal Federal State or Local Domestic I Funding Administering Assistance Source Deoarbnent Number Grant Name 2002 Exnenditures I US Deparbnent MN Deparbnent of Housing and of Trade and Small Cities and Urban Economic Deveopment I Development Development 14.228 Program $ 170,794 US Deparbnent Cops and I of Justice N/A 16.710 Schools 138.363 Total $ 309 157 I I I I I I I I I I : I The note to the schedule of expenditures of federal awards is an integral part of this statement. I 127 I I CITY OF SBAKOPEE, MINNESOTA NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL A W AlmS I Year Ended December 31, 2002 . I NOTE 1 - BASIS OF PRESENTATION I The accompanying s~hedule of expenditures of federal awards includes the federal grant activity I of the City of Shakopee, Minnesota and is presented on the modified accmal basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-i33, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, I some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the general purpose financial statements. I I I I I I I I I .- I I 128 I I I , CITY OF SHAKOPEE, MINNESOTA I INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON 1 AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I April 25, 2003 I Honorable Mayor and Members I of the City Council City of Shakopee Shakopee, Minnesota I ~.... We have audited the general purpose financial statements of the City of Shakopee, Minnesota as of and for the year ended December 31, 2002, and have issued our report thereon dated April 25, I 2003. 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. I Compliance As part of obtaining reasonable assurance about whether the City's financial statements are free I of material misstatement, we performed tests ofits compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on I compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. I Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Shakopee's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing I our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable I conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the City's ability to record, process, Summarize and report financial data consistent with the assertions of management in the financial statements. The reportable I' condition is described on the following page: I ~ I I 129 I I 1. The City does not have adequate segregation of accounting duties due to a limited number of I office employees. Management is aware of this condition and has taken certain steps to. compensate for the lack of segregation, but due to the small accounting staff needed to I perform all accounting duties, the cost of obtaining desirable segregation of duties exceeds the benefits which could be derived. Due to this reason, management has determined a complete segregation of duties is impractical to correct. Management must remain aware of I this situation and should continually monitor the accounting system, including changes that occur, A material weakness is a condition in which the design or operation of one or more of the I internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their I assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to I be material weaknesses. However, we do not believe the reportable condition described is a material weakness. This report is intended for the information and use of management, the City Council, and State I and Federal regulatory agencies and pass-through. entities and is not intended to be, and should not be used by anyone other than those specified parties. I ~ A1JJ~, V..uu, ;fJJ, I Kern, beWenter, Viere, Ltd. St. Cloud, Minnesota I I I I I -- I I 130 I I I CITY OF SHAKOPEE, MINNESOTA I lNDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH, . REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE I IN ACCORDANCE WITH OMB CIRCULAR A-133 I April 25, 2003 I Honorable Mayor and Members I of the City Council City of Shakopee Shakopee, Minnesota I Compliance We have audited the compliance of the City of Shakopee, Minnesota with the types of compliance requirements described in the U.S. Office of Management and Budget OMB Circular I A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31,2002. The City's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned I Costs in Accordance with OMB Circular A-133. Compliance with the requirements oflaws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the I City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicaQle to financial audits contained in 1 Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits o/States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain I reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance I with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City's compliance with those requirements. I In our opinion, the City of Shakopee, Minnesota complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2002. I I ~ I I 131 I Internal Control over Compliance I The management of the City of Shakopee, Minnesota is responsible for establishing and I maintaining effective internal control over compliance with the requirements oflaws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could I have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-i33. We noted a certain matter involving the internal control over compliance and its operation that I we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over I compliance that, in our judgment, could adversely affect the City's ability to administer a major federal program in accordance with the applicable requirements oflaws, regulations, contracts, and grants. The reportable condition is described in the accompanying Schedule of Findings and I Questioned Costs in accordance with OMB Circular A-i33 as item 02-1 and the Schedule of Findings and Corrective Action Plans on Compliance with Minnesota Statutes and Internal Controls. A material weakness is a condition in which the design or operation of one or more of the I internal control components does not reduce to a relatively low level the risk that noncompliance with the applicable requirements oflaws, regulations, contracts, and grants that would be I material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all I matters in the internal control that might be reportable conditions and, accordingly, would not . necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we do not believe the reportable condition descn1>ed is a material weakness. I This report is intended for the information and use of management, the City Council, and State and Federal regulatory agencies and pass-through entities and is not intended to be, and should I not be used by anyone other than those specified parties. ~, f)eWw.~, V"d.U, ';J4J. I Kern, DeW enter, Viere, Ltd. S1. Cloud, Minnesota I I I . 1 I 132 I I I CITY OF SHAKOPEE, MINNESOTA I SCHEDULE OF FINDINGS AND QUESTIONED COSTS IN ACCORDANCE WITH OMB CIRCULARA-133 Year Ended December 31, 2002 , I Section I - Summary of Auditors' Results I Financial Statements Type of auditors' report issued: Unqualified I Internal control over financial reporting: . Material weakness(es) identified? No I . Reportable condition(s) identified that are not considered to be material weakness( es)? Yes, Audit Finding 02-1 I Noncompliance material to financial statements noted? No I Federal Awards Internal control over major programs: I . Material weakness( es) identified? No . Reportable condition(s) identified that are not considered to be material weakness(es)? Yes, I Audit Finding 02-1 Typ~ of auditors' report issued on compliance for Unqualified I major programs: Any audit findings disclosed that are required to be I reported in accordance with section 510(a) of Circular A-133? Yes I Identification of Major Programs CFDA# 14.228 Name of Federal Program or Cluster CDBG-Small Cities I Development Program Dollar Threshold used to Distinguish I between type A and type B programs: $ 300,000 Auditee qualified as low risk auditee? No .- I I I 133 I CITY OF SHAKOPEE, MINNESOTA I SCHEDULE OF FINDINGS AND QUESTIONED COSTS I IN ACCORDANCE WITH OMB CIRCULAR A-133 For the Year December 31,2002 (Continued) I Section TI - Financial Statement Findings 1 Audit Finding 02-1 I Criteria or Specific Requirement: Internal control that supports the City's ability to record, process, summarize, and report I financial data consistent with the assertions of management hi the financial statements requires adequate segregation of accounting duties. Condition: I The City does not have adequate segregation of accounting duties. Questioned Costs: I None Context: I This finding impacts the internal control for all significant accounting functions. Effect: The lack of adequate segregation of accounting duties could adversely affect the City's ability to I record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Cause: - I There is a limited number of office employees. Recommendation: I Continue to review the accounting system, including changes that may occur. Implement segregation whenever practical. I Management's Response: Management agrees with our recommendation. Section ill - Federal Award Findings and Questioned Costs I See Audit Findings 02-1 in Section TI. I There were no questioned costs. I I 134 I I I CITY OF SHAKOPEE, MINNESOTA I INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH MINNESOTA STATUTES I I April 25, 2003 I Honorable Mayor and Members I of the City Council City of Shako pee Shakopee,~esota I We have audited the general purpose financial statements of the City of Shakopee, ~esota, as of and for the year ended December 31, 2002, and have issued our report thereon dated April 25, I 2003. We conducted our audit in accordance with auditing standards generally accepted in the United . I States of America and the provisions of the Minnesota Legal Compliance Audit Guide for Local. Government promulgated by the Legal Compliance Task Force pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included such tests of the accounting records and such other I auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of compliance to be tested: contracting and bidding, deposits and investments, I conflicts of interest, public indebtedness, and claims and disbursements. Our study included all of the listed categories. 1 The results of our tests indicate that for the items tested, the City complied with the material terms and conditions of applicable legal provisions. I This report is intended for the information and use of management, the City Council, and State and Federal regulatory agencies and pass-through entities and is not intend~ to be, and should not be used by anyone other than those specified parties. I I ~/1}.~, V~, 'Ii'. Kern, DeWenter, Viere, Ltd. S1. Cloud, ~innesota I I 135 I I CITY OF SHAKOPEE, MINNESOTA I FINDINGS AND CORRECTIVE ACTION PLANS ON COMPLIANCE I WITH MINNESOTA STATUTES AND INTERNAL CONTROLS Year Ended December 31, 2002 I CUURENT AND PRIOR YEAR INTERNAL CONTROL FINDING: The City does not have adequate segregation of duties due to a limited number of office I employees, I CORRECTIVE ACTION PLAN (CAP): 1. Explanation of Disagreement with Audit Finding I There is no disagreement with the audit finding. 2. Actions Planned in Response to Finding I Administration will review current segregation of duties to determine if further segregation is possible. I 3. Official Responsible for Ensuring CAP The City Council is responsible for ensuring corrective action of the deficiency. I 4. Planned Completion Date for CAP The planned completion date for the CAP is December 31, 2003, I 5. Plan to Monitor Completion of CAP The Shakopee City Council will be monitoring 'this corrective action plan. I I . I I I : I I 136 I I I CITY OF SHAKOPEE, MINNESOTA I FINDINGS AND CORRECTNE ACTION PLANS ON COMPLIANCE WITH MINNESOTA STATUTES AND INTERNAL CONTROLS Year Ended December 31, 2002 I (Continued) I CURRENT YEAR STATE STATUTE FINDING: None I PRIOR YEAR STATE STATUTE FINDING: I Minnesota Statute Section 574.26 requires that contractors performing public work pledge a performance bond in an amount not less than the contracted price if the contract is greater than $ 10,000. During 2001, the City failed to obtain a performance bond on the Holmes Park Shelter I project. CORRECTNE ACTION TAKEN: I During 2002, the City obtained performance bonds for all projects when required. I I I I I. I ~. I - I I 137 I