1967 WaterSewer Audit
BROEKER HENDRICKSON &3 CO.
e ertified 'Pa6lic Rccountants
NORTHWESTERN BANK BUILDING
MINNEAPOLIS, MINNESOTA 55402
To the Village Council
Village of New Hope
Hennepin County, Minnesota
We have examined the balance sheet of the VILLAGE OF NEW
HOPE WATER AND SEWER FUND as of December 31, 1967, 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 financial statements present
fairly the financial position of the Village of New Hope Water and
Sewer Fund at December 31, 1967, and the results of its operations for
the year then ended, in conformity with generally accepted accounting
principles applied on a basis consistent with that of the preceding year.
Minneapolis, Minnesota ;I~ ~t'
.-
June 13, 1968
VILLAGE OF NEW HOPE
WATER AND SEWER FUND
BALANCE SHEET - DECEMBER 31, 1967
A S S E T S
CURRENT ASSETS:
:::ash $ 1,079.78
Accounts receivable 61,191.61
Due from other funds 192,660.00
Investments--unrestricted 196, 30LL .91
Total current assets $ 451,236.30
RESTRICTED INVESTMENTS (Note 1) 51,100.00
PLANT AND EQUIPMENT, at cost:
Accumulated
Cost Depreciation Net
Water and sewer
plant and dis-
tribution system $ 80,145.55 $702,722.92
(Note 2) $782,868.47
Building and land 83,952.01 10,091.94 73,860.07
Equipment 37,185.47 22,631.68 14,553.79
j904,005.95 $112,869.17 $791,136.78 791,136.78
OTHER ASSETS:
Deferred sewer use charges, in process
of amortization over life of long- $ 60,500.00
term contract
Advance to Joint Water Commission 10,563.91
Due from other municipalities 17,185.65 88,249.56
jl,381,722.64
L I A B I LIT I E S
CURRENT LIABILITIES:
Current maturity of long-term liabilities $ 33,000.00
Accrued interest on Water and Sewer Revenue
Bonds and Long-Term Sewer Usage Contract 4,150.83
Accounts payable 40,338.70
Total current liabilities $ 77,489.53
LONG-TERM LIABILITIES, exclusive of current
maturity included above:
Water and sewer s)stem revenue bonds
payable (Note 3 $405,000.00
Long-term sewer usage contract (Note 4) 32,500.00 437,500.00
RESERVE FOR RESTRICTED ASSETS 51,100.00
RETAINED EARNINGS--per accompanying
statement 815,633.11
jl,381,722.64
The accompanying notes are an integral part of
this balance sheet.
VILLAGE OF NEW HOPE
WA'1'ER AND SEWER FUND
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1967
INCOME
REVENUES: $268,580.52
Water and sewer use charges
Water connection charges 101,893.84
Sewer connection charges 55,845.07
Other 4,368.16
Total revenues $430,687.59
OPERATING EXPENSES:
Cleaning and waste removal- $ 10,303.65
Salaries
Operating expenses 75,961.29 $112,264.94
Contract expense 26,000.00
Water-
Salaries $ 10,526.23
Water purchased 72,764.80
Other 4,060.27 87,351.30
Administrative-
Salaries $ 13,586.50
Other 8,272.99 21,859.49
Depreciation 22,380.60 243,856.33
Net operating income $186,831.26
INTEREST EARNED ON INVESTMENTS 4,831.54
$191,662.80
INTEREST EXPENSE ON BONDS AND
CONTRACT PAYABLE 17,939.16
Income before extraordinary item $173,723.64
EXTRAORDINARY ITEM--Reduction in accounts
payable reserve (Note 5) 25,341.88
Net income for the year _$199,065.52
RETAINED EARNINGS
BALANCE, DECEMBER 31, 1966 $616,367.59
ADD:
Net income for the year ended
December 31, 1967, as above $199,065.52
Decrease in reserve for restricted assets 200.00 199,265.52
BALANCE, DECEMBER 31, 1967 .$815,633.11
The accompanying notes are an integral part of
these statements of income and retained earnings.
VILLAGE OF NEW HOPE
WATER AND SEWER FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1967
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. Through December 31,
1967, the Water and Sewer Fund of the Village has expended 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 Village's commitment under the agree-
ment; such amounts to be expended during 1968 and 1969.
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
1968 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 redemption 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 1968 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.
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VILLAGE OF NEW HOPE
WATER AND SEWER FUND
NOTES TO FINANCIAL STATEMENTS ( CONTINUED )
DECEMBER 31, 1967
4. The long-term sewer usa~e contract bears 2% interest and is due
on December 1st of 19 8 ($28,000) and 1969 ($32,500)0
5. The Village of New Hope had provided, through December 31, 1966,
$41,386.43 as a reserve against billings from the Village of
Golden Valley for sewer usage to December 31, 1965. Certain
of these billings were formally protested by the Village of
New Hope. The Village of Golden Valley filed suit asking for
payment of $65,299.00 plus interest as settlement for the pro-
tested portion. During 1967, the Village of New Hope settled
this claim for a total of $16,044.55 includi81 related costs.
The balance of the unused reserve ($25,341.88 has been in-
cluded as a special credit in current results of operations.