1966 WaterSewer Audit
August 7, 1967
To the Village Council
Village of New Hope
Hennepin County, Minnesota
We have examined the balance sheet of the VILLAGE OF N~J HOPE,
WATER AND SEWER FUND as of December 31, 1966, and the related statements
of income and retained earnings for the year then ended. Our examination
was made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances.
-In our opinion, the accompanying balance sheet and statements
of income and retained earnings present fairly the financial position
of the Village of New Hope, Water and Sewer Fund at December 31, 1966,
and the results of its operations for the year then ended, in conformity
with generally accepted accounting principles applied on a basis consis-
tent with that of the preceding year.
The examination was conducted jointly by the firm of Broeker
Hendrickson & Co., Certified Public Accountants, and Department of Public
Examiner, State of Minnesota, in accordance with the request of the
Village Council.
~II~ ~~
\
BROEKER HENDRICKSON & COo
Certified Public Accountants
/r0-d'~J~
Robert A. Whitaker
Date released: Public Examiner
December 7, 1967
VILLAGE OF NEW HOPE
WATER AND SEWER FUND
BALANCE SHEET - DECEMBER 31, 1966
A S S E T S
CURRENT ASSETS:
Cash $ 3,077.02
Accounts receivable 67,820.97
Due from other funds 167,174.40
Investments--unrestricted 80,403.07
Total current assets $ 318,475.46
RESTRICTED INVESTMENTS (Note 1) 51,300.00
PLANT AND EQUIPMENT, at cost:
Accumulated
Cost Depreciation Net
Water and sewer
plant and dis-
tribution
system (Note 2) $722,398.85 $ 65,092.89 $657,305.96
Building 76,452.01 7,798.38 68,653.63
Equipment 36,474.97 17,597.30 18,877.67
_$835,325.83 _$ 90, 488 .57 ~744,837.26 744,837.26
OTHER ASSETS:
Deferred sewer use charges, in process
of amortization over life of long-
term contract $ 86,500.00
Advance to Joint Water Commission 10,563.91
Due from other municipalities 15,306.45 112,370.36
$1,226,983.08
L I A B I LIT I E S
CURRENT LIABILITIES:
Current maturity of long-term liabilities $ 31,000.00
Accrued interest on Water and Sewer Revenue
Bonds and Long-Term Sewer Usage Contract 4,241.67
Accounts payable 12,187.39
Total current liabilities $ 47,429.06
LONG-TERM LL~BILITIES, exclusive of current
maturity included above:
Water and sewer s)stem revenue bonds
payable (Note 3 $410,000.00
Long-term sewer usage contract (Note 4) 60,500.00 470,500.00
RESERVES:
For expenditures (Note 5) $ 41,386.43
For restricted assets 51,300.00 92,686.43
RETAINED EARNINGS--per accompanying
statement 616,367.59
_$1,226,983.08
The accompanying notes are an integral
part of this balance sheet.
VILLAGE OF NEW HOPE
WA TER AND SEWER FUND
NOTES TO FINANCIAL STATEMENTS
1. Restricted assets consist of investments appropriated for the payment
of bonds and interest as provided in the bond indenture.
2. On November 12, 1963, the Village entered into an agreement under the
authority of Minnesota statutes, Section 471.59, with the City of
Crystal and the Village of Golden Valley for the joint construction
and operation of a water storage and distribution system using
the City of Minneapolis as the source of the water supply. The
agreement created a Joint Water Commission to administer the venture
under the terms of the agreement. Actual operation of the system
began July 1, 1964. The Water and Sewer Fund of the Village has
invested at December 31, 1966, a total of $191,428.77 as its share
of the cost of these joint facilities, with the balance of costs
assessed to benefited property owners. Approximately $375,000 of
Village funds are required to complete the Village1s commitment
under the agreementj such amounts to be expended during 1967 and
1968.
3. The indenture underlying the Water and Sewer System Revenue Bonds
payable provides, in part, the following:
a. Annual bond maturities vary from $5,000 to $25,000 for
each year through 1992. Bonds maturing in the years
1967 through 1972 are payable on their respective
maturity dates without option of prior payment. Bonds
maturing in the years 1989 through 1992 are subject to
redemption on any interest date on or after April 1,
1966, at par plus accrued interest. Bonds maturing
in the years 1973 through 1988 are subject to redemp-
tion on any interest date on or after April 1, 1972,
at par plus accrued interest and a premium of $40 per
$1,000 bond. All prepayments are at the option of
the Village.
b. The annual interest on the bonds is 4.0% on $320,000 of
bonds maturing in the years 1967 through 1988 and 3.8%
on bonds maturing in the years 1989 through 1992.
Interest is payable semi-annually on April 1st and
October 1st.
4. The long-term sewer usage contract bears 2% interest and is due on
December 1st of each year as follows:
1968 $ 28,000.00
1969 32,500.00
$ 60,500.00
VILLAGE OF NEW HOPE
WATER AND SEvlliR FUND
NOTES TO FINANCIAL STATE~lliNTS ( CONTINUED )
50 The Reserve for Expenditures of $41,386.43 represents reserves
against billings for sewer usage to December 31, 1965, a portion
of which remains unpaid and has been formally protested by the
Village of New Hope. The Village of Golden Valley has filed suit
asking payment of $65,299.00 plus interest as settlement for the
contested portiono
60 On August 23, 1966, the Village Council authorized a $100,000
transfer from the Water and Sewer Fund to partially finance the
establishment of a Civic Center Fund. The resolution providing
for the sale and issuance of Water and Sewer Revenue Bonds of
1962, requires that specific council action be taken before
transferring surplus monies from the Water and Sewer Fund. No
such action was taken by the Village Council in 19660
VILLAGE OF NEW HOPE
WATER AND SEWER FUND
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1966
INCOME
REVENUES:
Water and sewer use charges $263,449.33
Water connection charges 83,863.28
Sewer connection charges 43,194.01
Other 2,341.07
Total revenues $392,847.69
OPERATING EXPENSES:
Cleaning and waste removal-
Salaries $ 12,324.70
Operating expenses 16,587.50
Contract expense 24,000.00 $ 52,912.20
Water-
Salaries $ 11,452.02
Water purchased 54,871.17
Other 7,543.03 73,866.22
Administrative-
Salaries $ 12,626.62
Other 6,612.99 19,239.61
Deprecia tion 20,568.44 166,586.47
Net operating income $226,261.22
INTEREST EARNED ON INVESTMENTS 19,985.71
$246,246.93
INTEREST EXPENSE ON BONDS AND
CONTRACT PAYABLE 18,617.50
Net income for the year ~227,629.43
RETAINED EARNINGS
BALANCE, DECEMBER 31, 1965 $379,781.46
ADD:
Net income for the year ended
December 31, 1966, as above $227,629.43
Costs of Minneapolis water connection 108,756.70
improvement recovered during year
Decrease in reserve for restricted assets 200.00 336,586.13
$716,367.59
DEDUCT:
Contribution to Civic Center Fund (Note 6) 100,000000
BALANCE, DECEMBER 31, 1966 $616,367.59