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2010 CAFRCITY OF NEW HOPE NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010 CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010 KIRK MCDONALD - CITY MANAGER PREPARED BY: DEPARTMENT OF FINANCE Member GFOA of U.S. and Canada Published May 12, 2011 -1- THIS PAGE IS LEFT BLANK INTENTIONALLY -2- CITY OF NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS INTRODUCTORY SECTION Page No. Letter of Transmittal from City Manager 9 Certificate of Achievement for Excellence in Financial Reporting 15 Organizational Chart 16 Elected Officials and Staff 17 FINANCIAL SECTION Independent Auditor's Report 21 Management's Discussion and Analysis 23 Basic Financial Statements Government -wide Financial Statements Statement of Net Assets 35 Statement of Activities 36 Fund Financial Statements Governmental Funds Balance Sheet 40 Reconciliation of the Balance Sheet to the Statement of Net Assets 43 Statement of Revenues, Expenditures and Changes in Fund Balances 44 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 47 General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 48 Economic Development Authority Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 49 Proprietary Funds Statements of Net Assets 50 Statements of Revenues, Expenses and Changes in Fund Net Assets 54 Statements of Cash Flows 56 Fiduciary Funds Statement of Fiduciary Net Assets 60 Notes to the Financial Statements 61 Required Supplementary Information Schedule of Funding Progress for the Postemployment Benefit Plan 95 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 100 Nonmajor Special Revenue Governmental Funds Combining Balance Sheet 104 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 106 -3- CITY OF NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS - CONTINUED Page No. Combining and Individual Fund Financial Statements and Schedules - Continued Nonmajor Debt Service Governmental Funds Combining Balance Sheet 110 Combining Statement of Revenues, Expenditures and changes in Fund Balances 112 Nonmajor Capital Projects Governmental Funds Combining Balance Sheet 116 Combining Statement of Revenues, Expenditures and changes in Fund Balances 117 General Fund Balance Sheet 120 Schedule of Revenues, Expenditures and Changes in Fund Balances Compared to Budget 121 Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual Community Development Fund 126 Safety Camp Fund 127 Storm Sewer Fund 128 Solid Waste Management Fund 129 Internal Service Funds Combining Statement of Net Assets (Liabilities) 132 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets (Liabilities) 134 Combining Statement of Cash Flows 136 Agency Funds Combining Schedule of Changes in Assets and Liabilities 138 Supplementary Information (Unaudited) Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 141 -4- CITY OF NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OFCONTENTS - CONTINUED STATISTICAL SECTION (UNAUDITED) Financial Trends Net Assets by Component Changes in Net Assets Governmental Activities Tax Revenues by Source Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Revenue Capacity General Government Tax Revenues by Source Tax Capacity, Market Value and Estimated Actual Value of Taxable Property Property Tax Capacity Rates - Direct and Overlapping Governments Principal Property Taxpayers Property Tax Levies and Collections Debt Capacity Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Computation of Direct and Overlapping Debt Legal Debt Margin Information Pledged Revenue Coverage Demographic and Economic Information Demographic and Economic Statistics Principal Employers Operating Information Full -Time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function Table Page No. 1 146 2 148 3 153 4 154 5 156 6 159 7 160 8 162 9 164 10 167 11 168 12 170 13 171 14 172 15 174 16 175 17 176 18 178 19 180 20 182 -5- THIS PAGE IS LEFT BLANK INTENTIONALLY INTRODUCTORY SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -7- THIS PAGE IS LEFT BLANK INTENTIONALLY May 12, 2011 Honorable Mayor and City Council City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 -4898 The comprehensive annual financial report (CAFR) of the City of New Hope, Minnesota (the City), for the fiscal year ended December 31, 2010, is submitted herewith. As required by state law, this report is published annually, prior to June 30, and submitted to the Office of the State Auditor. The form and contents of this report and the accompanying financial statements and statistical tables are designed to meet the needs of a broad spectrum of financial statement readers, and were prepared in conformance with standards set forth by: 1. The Governmental Accounting Standards Board (GASB) 2. The American Institute of Certified Public Accountants 3. The United States Office of Management and Budget 4. The State Auditor, State of Minnesota 5. The Government Finance Officers' Association (GFOA) of the United States and Canada The financial data presented in this report was prepared by the City's finance department staff, with technical and formatting assistance provided by the independent audit firm, Malloy, Montague, Karnowski, Radosevich & Co., PA (MMKR). The responsibility for the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data as presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial activity of the various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. Accounting principles generally accepted in the United States of America require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of the Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE GOVERNMENT The City is a residential suburb of the City of Minneapolis with a population of 20,339. The City is 5.6 square miles in area and is substantially developed with the exception of just under 12 acres of property which consists primarily of residential zoned property. The City was incorporated in 1953 and enjoys a diverse commercial and residential tax base. The City operates under the „ Optional Plan B n government structure as defined in Minnesota Statutes. Optional Plan B is known as the council- manager plan. Under this plan, as specified in the statutes, The City Council shall exercise the legislative power of the City and determine all matters of policy. The city manager shall be the head of the administrative branch of the city government and shall be responsible to the City Council for the proper administration of all affairs relating to the City.” The City Council is composed of five members, including the mayor. The city manager is appointed by the City Council. CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 554284898 • xvwxv. ci.new- hope.mn.us City Hall: 763 - 531 -5100 • Police (non - emergency): 763 - 531 -5170 • Public Works: 763 - 592 -6777 • TDD: 763- 531 -5109 City Hall Fax: 763 - 531 -5136 • Police Fax: 763 - 531 -5174 • Public Works Fax: 763 - 592 -6776 -9- The City's accounting system is organized and operated on a "fund basis." Each fund is a distinct self - balancing accounting entity. The City's accounting records for governmental fund types are maintained on the modified accrual basis and the accrual basis is utilized by proprietary and fiduciary funds, as defined in the notes to basic financial statements. The City maintains a system of internal control that provides a reasonable assurance of accounting data reliability, and the safeguarding of assets against loss from unauthorized use or disposition. The concept of reasonable assurance recognizes the cost of control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. Budgets are maintained for the General Fund and certain special revenue funds (as noted in the notes to basic financial statements). The city manager is directed to submit an annual budget to the City Council. Upon adoption of the annual budget resolution by the City Council, it becomes the formal budget for city operations. Any changes to the original budget have to be authorized by City Council action, but must maintain a balanced budget by either recognizing additional receipts, or utilizing fund balances. Budget controls are maintained through a system of purchase orders and monthly financial statements which compare actual performance with the budget. The City has reviewed its reporting entity definition in light of GASB's pronouncements. The entities included in the City's report are those for which the City has financial accountability. Blended component units, although legally separate entities, are, in substance, part of the primary govemment's operations and are included as part of the primary government. Accordingly, the Economic Development Authority (EDA) is reported as special revenue fund of the primary government. The City provides a full range of municipal services, including: police and fire protection, culture and recreation, public improvements, street maintenance, sanitary and storm sewer collection, water distribution, planning, zoning and building inspection services, and general administrative services. ECONOMIC OUTLOOK The City is a nearly fully developed community with little vacant land available for development. The City has a good mix of single /multi- family residential housing stock, parks and open space, and a strong commercial /industrial tax base. There are approximately 440 commercial /industrial /service businesses in the City, and the major employers are listed as follows: Major Employers Products /Services Employees Minnesota Masonic Home /North Ride Skilled nursing care facility 900 St. Therese Care Center Skilled nursing care facility 539 Navarre Corporation Computers peripherals, and software 500 Paddock Laboratories Pharmaceutical and medicine manufacturing 277 Liberty Diversified Industries Stationery supplies 244 Dakota Growers Pasta Company Macaroni and spaghetti 184 Oild ne Division Fluid power cylinders and actuators 173 Wa mouth Farms, Inc. Salted and roasted nuts and seeds 170 Coborns Deliver Direct selling establishments 165 The City has four major industrial park areas including Science Industry Park, 49th and Quebec Avenues, Winnetka Avenue area between 32nd and 36th Avenues, and north of Medicine Lake Road on Nevada Avenue. The major shopping centers /areas in the City include: Midland Shopping Center, Winnetka Commons Shopping Center, New Hope Mall, Winnetka Center, Post Haste Square, and the 42nd Avenue Redevelopment District. -10- Local commercial /industrial businesses are extremely important to the City. The City Council has undertaken programs and initiatives to address both commercial and industrial properties. These programs focus on: 1) retaining existing businesses, 21 assisting with expansions, 3) attracting new businesses to vacant available buildings, 4) attracting new construction to a limited number of available vacant sites, and 5) improving communication with businesses and responding more effectively to business concerns and inquiries. The City Council has continued the Outstanding Business Award Program initiated in 2006, to recognize the City's businesses' contributions to the local community. In 2009, a monthly business forum was established to share information and improve communications between businesses and the City and the forum continued through 2010. In 2010, $14,611,948 of reinvestment was approved in the City in construction permits. The City will work to increase the momentum to continually expand the tax base while continuing to provide the high level of services delivered to the residents, businesses, and property owners of the City. The following is a brief summary of the major projects that contributed to the success of 2010. PLANNING AND DEVELOPMENT The following planning and development activities occurred in 2010: New Hope Transit Oriented Development Study (TOD) — T he city has partnered with Hennepin County to conduct a major Transit Oriented Development Study in the City Center (Winnetka and 42 Avenues North) area of the city. The goal is to create a framework for future redevelopment in the City Center Area. Commercial Commercial redevelopment consisted of one large project and several smaller projects, initiated in 2010 with a total construction value of approximately $5.0 million. Good Samaritan Society — Ambassador Health Care was the largest individual project at $4.6 million. Industrial Several small industrial remodeling projects were completed or initiated in 2010 with a construction value of over $1.7 million. Paddock Laboratories, 3940 Quebec Avenue North - During 2010 Paddock undertook 22 smaller projects with a value of $1,331,285 of interior remodeling to their facility, Housing The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs. Approximately $2.17 million was reinvested in the City's housing stock in 2010 for private home additions and/or remodeling projects. 1. Housing rehabilitation programs: a. Community Development Block Grant (CDBG) Housing Rehabilitation Program - administered by Hennepin County: i. CDBG funded activity in 2010 continued the expenditure of previously allocated CDBG funds. ii. The city reauthorized its scattered site housing program with an allocation of $99,000 in CDBG funds. b. Greater Metropolitan Housing Corporation (GMHC) in 2010 ($5,000). c. Northwest Suburban Remodeling Fair - annual remodeling fair sponsored by the City and the cities of Brooklyn Center, Brooklyn Park, Crystal, Maple Grove, Plymouth, and Robbinsdale. -11- 2. Housing maintenance programs: a. Code compliance inspections -258 inspections completed in 2010. b. Rental housing program and inspections: i. A rental registration permit program, which requires the registration and inspection of all rental units in the City, was implemented in 2006 for single family and 2007 for multi - family units. ii. A total of 284 single family and two multi - family rental units were registered with the City. iii. A total of 3,477 multi - family rental units were registered with the City. c. Multifamily Property Manager's Association - quarterly meetings. 3. Metropolitan Council Livable Communities Act - annually renewed by the City. PARKS AND RECREATION The City provides the residents with a vast array of park amenities and recreation opportunities at an affordable cost. The City's swimming pool continues to maintain strong attendance numbers, as well as providing a convenient training facility for team swimming practices. The ice arena has year -round use of ice time for youth, adult recreational, and league hockey. The facility also rents ice time to the Olympic Development Program, a local training group. PROPERTY TAX PROCESS AND COST CONTAINMENT Preliminary tax levies have to be sent to the county auditor by September 15th. This levy can be lowered at a later date, but cannot be increased. The county sends out notices to all property owners informing them of proposed property taxes and the dates of public hearings by the various taxing districts. The final budget is adopted by the City in December at a City Council meeting after the public hearing. The City has established several cost saving programs over the years. The central garage rents out equipment to departments as needed and, therefore, eliminates the duplication of ownership of equipment between departments. The information technology fund accounts for government -wide computer applications, equipment maintenance and replacement, and professional and technical support services to all city departments. The City and the City of Crystal merged and consolidated their fire departments in 1998. The first full calendar year of operations was completed in 1999. Known as the West Metro Fire - Rescue District, the fire department serves both cities from three fire stations, providing cost effective and professional fire prevention and suppression services. To maximize resources and reduce costs, the City participates in several additional agreements with other cities, the local independent school district, and Hennepin County, sharing service delivery such as: police dispatching, animal control, gymnasium facilities, and purchasing activities. The City participates with the cities of Brooklyn Center and Crystal in a cooperative recycling program. During 1993, the City entered into a program with the City of Crystal in which a season swimming pool ticket purchased at either city can be used at both pools. These are not joint ventures, but contractual operations between other governmental units. OTHER PERTINENT INFORMATION Independent Audit - As required by state statute, city policy requires an annual audit of all city accounts to be made by independent certified public accountants selected by the City Council. This requirement has been complied with and the opinion of MMKR is included with this report. Claims and Litigation - The City had the usual and customary types of miscellaneous claims pending at year -end, mostly of a minor nature and entirely covered by insurance carried for that purpose. -12- AWARDS AND ACKNOWLEDGEMENTS The Certificate of Achievement for Excellence in Financial Reporting - The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2009. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire staff of the Department of Finance, other city departments, and the staff of MMKR. We wish to express our appreciation to all the contributors for their efforts to complete this report. Respectfully submitted, Kirk McDonald City Manager -13- THIS PAGE IS LEFT BLANK INTENTIONALLY -14- Presented to City of New Mope lu r•� For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2009 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. Of r ' President Executive Director -15- V'Ra City of New Hope Residents ---- ----------- --- City Council Planning Commission I i — — — — Policy I `----------- - - - - -- I EDA Board I I HRA Board Citizen Advisory ~ i Commission ' I j City Manager I -------------------- I I I � I ' West Metro Fire - Rescue District: I I i I Fire Suppression ' I —� Fire Prevention ----- - - - - -I I Emergency Mgt. Coord. I Rescue Explorers i I - ------- --------- - - - - -' I I I ------------------------- - - - - -- I I Chief Administrator —, Human Rights Commission I Government Relations I I Communications/Media I ` ----------------- ( Budget I I Human Services I '------------ - - - - -- I Council Relations Personnel Board ' I Emergency Management I Fire Board EDA Executive Director I HRA Executive Director City Manager I I Comm Development I I Finance Human Resources Inspections Utility Billing City Clerk Permits Finance /Accounting Council Relations Housing Payroll Elections Econ. Development Treasury Safety Planning/Zoning Audit Licensing Risk Mgmt/Insurance Info Technology Communications City of New Hope April 2010 ------------------ ---- °------- - - City Attorney i I � � I------------- - - - --' I I i L —� City Engineer I I —i Fiscal Advisor i i ------- ------ - - - --' I I I , � L — City Planner - ------------ - - - --' Parks & Recreation Recreation Parks Recreation Facilities City Hall Forestry Police Police Investigation Community Services Animal Control Reserves Explorers Crime Prevention School Liaison Public Works Utilities Central Garage Streets Parks Maintenance CITY OF NEW HOPE ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 2010 1011101000111 Name Title Kathi Hemken John Elder Andrew Hoffe Eric Lammle Daniel Stauner Mayor Councilmember Councilmember Councilmember Councilmember F. IC Name Kirk McDonald Rich Johnson Curtis Jacobsen Sharon French Guy Johnson Valerie Leone Gary Link Title City Manager Human Resources Manager Director of Community Development Director of Parks and Recreation Director of Public Works City Clerk Director of Police -17- Term Expires 01/02/12 01/02/14 01/02/12 01/02/12 01/02/14 THIS PAGE IS LEFT BLANK INTENTIONALLY -18- FINANCIAL SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -19- THIS PAGE IS LEFT BLANK INTENTIONALLY -20- MMKR CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT City Council and Residents City of New Hope, Minnesota PRINCIPALS Thomas M. Montague, CPA Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of New Hope, Minnesota (the City) as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2010, and the respective changes in financial position and cash flows, where applicable thereof, and the respective budgetary comparisons for the General Fund and major special revenue funds for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated May 12, 2011 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. (continued) -21- Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Telephone: 952- 545 -0424 m Telefax: 952- 545 -0569 • www.mmkr.com Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Funding Progress for the Post - Employment Benefit Plan, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, supplementary information, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, supplementary information, and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. May 12, 2011 -22- Management Discussion & Analysis As management of the City of New Hope, we offer readers of the City of New Hope's financial statements this narrative overview and analysis of the financial activities of the City of New Hope for the fiscal year ended December 31, 2010. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which starts on page 9 of this report. Financial Highlights • The assets of the City of New Hope exceeded its liabilities at the close of the most recent fiscal year by $60,276,355 (net assets). Of this amount, $29,219,174 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The government's total net assets increased by $4,212,635. • As of the close of the current fiscal year, the City of New Hope's governmental funds reported combined ending fund balances of $26,535,931, an increase of $2,447,662 in comparison with the prior year. • At the end of the current fiscal year, unreserved fund balance for the General fund was $4,527,847 (45.5 percent) of total General fund expenditures and transfers out. • The City of New Hope's total bonded debt increased by $1,434,816 (17.6 percent) during the current fiscal year_ The key factor in this increase was the issuance of new bonds during 2010. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of New Hope's basic financial statements_ The City of New Hope's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. -23- Figure A -1 shows how the various parts of this annual report are arranged and related to one another. Figure A -1 Annual Report Format ------------------- 7ff4aa9evoaear'd Basic Required D&Cajj&a Financial Supplementary aaad Statements Information Jgr2Ct�i�4[Q -------------------- Government -Wide Fund Financial Financial to. Statements Statements �[r2RK000iQ ,SZCLTea2teaat2 Summary Detail Government -wide financial statements — The government -wide financial statements are designed to provide readers with a broad overview of the City of New Hope's finances in a manner similar to a private- sector business. The statement of net assets presents information on all of the City of New Hope's assets and liabilities, with the difference between the two reported as net assets. Over time increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of New Hope is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of New Hope that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of New Hope include general government, public safety, public works, culture and recreation, economic development, and interest on long -term debt. The business -type activities of the City of New Hope include water utility, sewer utility, golf course, ice arena, storm water, and street lighting. The government -wide financial statements start on page 35 of this report. -24- Fund financial statements — A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of New Hope, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. All of the funds of the City of New Hope can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of New Hope maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Economic Development Authority, Improvement Bond Redemption, HRA Construction, and Street Infrastructure funds, all of which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of New Hope adopts annual appropriated budgets for its General fund and several special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with the adopted budgets. The basic governmental fund financial statements start on page 40 of this report. Proprietary funds — The City of New Hope maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of New Hope uses enterprise funds to account for its water utility, sewer utility, golf course, ice arena, storm water, and street lighting operations. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water utility, sewer utility, golf course, ice arena, storm water, and street lighting funds, all of which are considered to be major funds of the City of New Hope. Internal service funds — These funds are an accounting device used to accumulate and allocate costs internally among the City of New Hope's various functions. The City of New Hope uses internal service funds to account for distribution of vehicle and equipment costs, government -wide costs of insurance coverage and employee leave, and information technology cost allocation. Because all of these services predominately benefit governmental rather than business -type functions, they have been included within governmental activities in the governmental -wide financial statements. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements start on page 50 of this report Fiduciary funds — These funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements start on page 60 of this report. Notes to the financial statements — The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements start on page 61 of this report. -25- Other information — The combining statements referred to earlier, in connection with nonmajor governmental funds and internal service funds, are presented immediately following the required supplementary information. Combining and individual fund statements and schedules start on page 95 of this report. Other reports — Additional information related to the General fund start on page 120 of this report. Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of New Hope, assets exceeded liabilities by $60,276,355 at the close of the most recent fiscal year. A portion of the City of New Hope's net assets (43.9 percent) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City of New Hope uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of New Hope's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of New Hope's Net Assets The balance of unrestricted net assets ($29,219,174) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report a positive balance in all three categories of net assets, as well as for its separate governmental and business -type activities. Governmental activities - Governmental activities increased the City of New Hope's net assets by $2,727,732. Business -Type activities - The net assets of business -type activities increased by $1,484,903. -26- Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) Assets Current and other assets $ 37,306,228 $ 34,909,537 $ 2,396,691 $ 3,534,787 $ 2,000,315 $ 1,534,472 Capital assets 18,531,181 17,476,454 1,054,727 12,347,186 11,666,444 680,742 Total assets 55,837,409 52,385,991 3,451,418 15,881,973 13,666,759 2,215,214 Liabilities Other liabilities 901,018 905,229 (4,211) 391,501 344,430 47,071 Noncurrent liabilities 7,190,597 6,462,700 727,897 2,959,911 2,276,671 683,240 Total liabilities 8,091,615 7,367,929 723,686 3,351,412 2,621,101 730,311 Net assets Invested in capital assets, net of related debt 16,495,175 16,411,454 83,721 9,989,405 9,395,068 594,337 Restricted 4,572,601 6,730,905 (2,158,304) - - - Unrestricted 26,678,018 21,875,703 4,802,315 2,541,156 1,650,590 890,566 Total net assets $ 47,745,794 $ 45,018,062 $ 2,727,732 $ 12,530,561 $ 11,045,658 $ 1,484,903 The balance of unrestricted net assets ($29,219,174) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report a positive balance in all three categories of net assets, as well as for its separate governmental and business -type activities. Governmental activities - Governmental activities increased the City of New Hope's net assets by $2,727,732. Business -Type activities - The net assets of business -type activities increased by $1,484,903. -26- The following table indicates the changes in net assets for the City's governmental and business -type activities: City of New Hope's Changes in Net Assets Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) Revenues Program revenues Charges for services $ 1,870,683 $ 1,710,308 $ 160,375 $ 7,495,808 $ 7,293,823 $ 201,985 Operating grants and contributions 1,356,292 586,508 769,784 470,183 66,609 403,574 Capital grants and contributions 787,047 117,544 669,503 30,739 75,209 (44,470) General revenues Property taxes 8,730,979 8,760,482 (29,503) - - Tax increments 1,408,256 1,262,598 145,658 - Franchise taxes 430,494 438,744 (8,250) General aids and grants 79,529 755,762 (676,233) - - N iscellaneous 360,242 870,245 (510,003) 17,400 27,234 (9,834) Total revenues 15,023,522 14,502,191 521,331 8,014,130 7,462,875 551,255 Expenses General government 2,552,425 2,244,977 307,448 - - - Public safety 5,864,775 6,218,996 (354,221) Public works 1,625,959 1,291,983 333,976 Culture and recreation 1,899,105 2,053,788 (154,683) Economic development 192,431 - 192,431 Interest on long -term debt 252,224 275,532 (23,308) - Water and sewer utility - - - 5,265,147 (5,265,147) Water utility 2,915,757 - 2,915,757 Sewer utility 1,928,845 - 1,928,845 Golf course - 346,345 369,579 (23,234) Ice arena 712,153 694,039 18,114 Storm water 430,899 393,118 37,781 Street lighting - - - 104,099 126,983 (22,884) Total expenses 12,386,919 12,085,276 301,643 6,438,098 6,848,866 (410,768) Increase (decrease) in net assets before transfers 2,636,603 2,416,915 219,688 1,576,032 614,009 962,023 Transfers 91,129 - 91,129 (91,129) - (91,129) Change in net assets 2,727,732 2,416,915 310,817 1,484,903 614,009 870,894 Net assets, January 1 45,018,062 42,601,147 2,416,915 11,045,658 10,431,649 614,009 Net assets, December 31 $ 47,745,794 $ 45,018,062 $ 2,727,732 $ 12,530,561 $ 11,045,658 $ 1,484,903 During 2010 the City split up the operation of the water utility and sewer utility funds. The revenues and expenses from water and sewer operations will be reported separately in 2010 resulting in reporting classification differences between 2010 and 2009. -27- Governmental Activities Revenues - The following chart illustrates the City's revenue by source for its governmental activities: Revenues by Source - Governmental Activities Property taxes 58.1% Capital grants and contributions 5.2% Operating grants and contributions 9.0% Iise taxes 2.9% General aids and grants - unrestricted 0.5% Unrestricted investment earnings 2.2% Chargesfor serv i ces \,-Gain on sale of capital 12.5% assets 0.2% Expenses - The following chart illustrates the City's expenses and program revenues for its governmental activities: Expenses and Program Revenues - Governmental Activities $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 ■Expenses ■Program eve — Tax increments /,Zz 9.4% -28- a� o -o > U y -C > by O a a cC U O U U O N W C ■Expenses ■Program eve — Tax increments /,Zz 9.4% -28- Business -type activities - Business -type activities net assets increased in 2010. Below are the graphs showing the business -type activities revenue and expense comparisons. Revenue Sources - Business -type Activities Unrestricted investment earnings 0.2 % Charges for services 93.5% $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Capital grants and contributions 0.4% Expense and Program Revenues - Business -type Activities Waterutility Sewer utility Golf course Ice arena Storm water Street lighting ■Fxpenses ■ Program revenues — 29 — Operating grants and contributions 5.9% Financial Analysis of the Government's Funds As noted earlier, the City of New Hope uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds - The focus of the City of New Hope's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of New Hope's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year the City of New Hope's governmental funds had combined ending fund balances of $26,535,931, an increase of $2,447,662 in comparison with the prior year. Approximately 65.7 percent of this total amount, $17,428,841, constitutes unreserved fund balance, which is available for spending at the City's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed for other purposes. General Fund the General fund is the chief operating fund of the City of New Hope. At the end of the current fiscal year, unreserved fund balance of the General fund was $4,527,847, while total fund balance reached $4,591,600. As a measure of the General fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 45.5 percent of total General fund expenditures and transfers out, while total fund balance represents 46.1 percent of that same amount. The City's General fund balance increased $237,249 during the current fiscal year. This increase is primarily due to transfers in from other funds of $483,823. Expenditures were under budget by $201,435. Charges for services exceeded budget by $160,134, while interest on investments, property taxes, and fines and forfeits fell short of budgeted expectations by $93,453, $62,750, and $62,239 respectively. Economic Development Authority — the increase of $7,956 in fund balance is due to revenues in excess of expenditures in the amount of $63,083 and a transfer to other funds of $55,127. Improvement Bond Redemption — the increase of $118,860 in fund balance is due to special assessment revenue and interest income exceeding debt service expenditures. HRA Construction —the increase of $1,760,415 is mainly due to tax increment revenue of $1,078,910 and transfers from other funds of $856,153. Street Infrastructure - The increase in fund balance of $917,307 is due to property tax and intergovernmental revenue exceeding capital outlay. Proprietary funds - The City of New Hope's proprietary funds provide the same type of information found in the government wide financial statements, but in more detail. At the end of the year, unrestricted net assets of the Water Utility, Sewer Utility, Golf Course, Ice Arena, Storm Water, and Street Lighting funds amounted to $2,933,937. Total net assets increased by $1,666,768. General Fund Budgetary Highlights Budget amendments were made during the year to reduce both the anticipated property tax revenue and current expenditures across all functions as well as capital outlay. Both the original and final budgets called for no increase or decrease to fund balance. Actual revenues were over budget by $36,563, and expenditures were under budget by $201,435. • The largest positive revenue variances were charges for services and intergovernmental revenues which were over budget by $160,134 and $99,718 respectively. • The largest negative revenue variances were in interest income, property taxes, and fines and forfeits which were under budget by $93,453, $62,750, and $62,239 respectively. • The largest positive expenditure variances were current public safety and current culture and recreation expenditures which were under budget by $148,737 and $69,526 respectively. • The largest negative expenditure variance was current public works which was over budget by $84,768 but this was offset by the Department of Agriculture's emerald ash borer grant. -30- Capital Asset and Debt Administration Capital assets The City of New Hope's investment in capital assets for its governmental and business type activities as of December 31, 2010, was $30,878,367 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements, machinery and equipment, park facilities, roads, highways, and bridges. The total increase in the City of New Hope's investment in capital assets for the current fiscal year was 6.0 percent. Major capital asset events during the current fiscal year consisted of projects in process for Winnetka Avenue infrastructure, Bass Lake Road water main improvement, 45 Avenue pond, 2009 lighted field improvement project, 2011 infrastructure project, and the 2009 retaining wall project. Additionally the City added several public works vehicles and pieces of equipment. City of New Hope's Capital Assets (net of accumulated depreciation) Governmental Activities Land Buildings and structures Vehicles and equipment Improvements other than buildings Construction Increase 2010 2009 (Decrease) $ 994,268 $ 994,268 $ - Business -type Activities Increase 2010 2009 (Decrease) $ 485,043 $ 485,043 $ - 4,614,974 4,794,884 (179,910) 3,532,432 2,101,082 1,718,680 382,402 889,125 9,206,129 8,114,641 1,091,488 6,446,689 3,660,499 (128,067) 993,997 (104,872) 5,481,573 965,116 in progress 1,614,728 1,853,981 (239,253) 993,897 1,045,332 (51,435) Total $ 18,531,181 $ 17,476,454 $ 1,054,727 $ 12,347,186 $ 11,666,444 $ 680,742 Additional information on the City of New Hope's capital assets can be found in Note 3C starting on page 74 of this report. -31- Debt administration At the end of the current fiscal year, the City of New Hope had total bonded debt outstanding of $9,609,031. Of this amount $1,296,006 will be paid from general property taxes and $4,605,000 from redevelopment district tax increments. Special assessment bonds outstanding at year end totaled $775,000. The remaining $2,933,025 of outstanding bonds at year end were revenue bonds, for which the City has pledged revenue streams from the water utility, sewer utility, and storm water utility for all principal and interest payments due on these bonds. The debt service funds have total fund balance of $4,288,603, all of which is reserved for the payment of debt service. The City has intentionally shifted the philosophy for financing major street improvements away from debt financing to the pay -as- you -go philosophy. The City established the Street and Park Infrastructure Capital Projects Funds in 2001 with dedicated portions of the property tax levy, thereby eliminating this type of debt issuance. City of New Hope's Outstanding Debt Special Assessment Bonds, Tax Increment Bonds, General Obligation Bonds, Revenue Bonds, and other Debt Special assessment bonds Tax increment bonds General obligation bonds and certificates Revenue bonds Capital leases Compensated absences Other postemployment benefits Total Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) $ 775,000 $ 910,000 $ (135,000) $ 4,605,000 4,795,000 (190,000) 1,296,006 225,000 1,071,006 2,933,025 2,244,215 688,810 19,756 27,161 (7,405) 475,772 505,621 (29,849) - - - 38,819 27,079 11,740 7,130 5,295 1,835 $ 7,190,597 $ 6,462,700 $ 727,897 $ 2,959,911 $ 2,276,671 $ 683,240 The City issued General Obligation Utility Revenue Bonds, General Obligation Certificates of Indebtedness, and Refunding Bonds during 2010. The City of New Hope maintains an "Al" rating from Moody's Investors Service. Additional information on the City of New Hope's long term debt can be found in Note 3E starting on page 78 of this report. Economic Factors and Next Year's Budgets and Rates • User charges have been increased to account for various utility improvements scheduled for 2011 and beyond. • The overall tax levy for 2011 was increased 1.5 percent. • The City is presenting a long -term plan to City Council in 2011 that will highlight the tax effect of major capital and operating decisions. All of these factors were considered in preparing the City of New Hope's budget for the 2011 fiscal year. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the finance department, City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428. -32- GOVERNMENT -WIDE FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -33- THIS PAGE IS LEFT BLANK INTENTIONALLY -34- CITY OF NEW HOPE, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2010 ASSETS Cash and temporary investments Temporarily restricted cash Receivables Accrued interest Delinquent taxes Unremitted tax collections Accounts Special assessments Internal balances Due from other governments Inventory Prepaid items Land held for resale Deferred charges Investment in joint ventures Capital assets Land and construction in progress Depreciable assets (net of accumulated deprecation) TOTAL ASSETS LIABILITIES Accounts and contracts payable Accrued salaries payable Accrued interest payable Deposits payable Due to other governments Noncurrent liabilities: Due within one year Compensated absences payable Lease payable Bonds payable Due in more than one year Other postemployment benefits payable Lease payable Bonds payable, net of unamortized discounts TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Restricted for Debt service Unrestricted Governmental Business -type Activities Activities Total $ 31,071,320 $ 1,806,658 $ 32,877,978 - 595,000 595,000 141,250 - 141,250 157,969 - 157,969 18,727 - 18,727 697,171 1,015,944 1,713,115 489,208 206,402 695,610 772,342 (772,342) - 341,660 401,891 743,551 49,894 44,186 94,080 63,753 - 63,753 2,433,162 - 2,433,162 82,070 68,539 150,609 987,702 168,509 1,156,211 2,608,996 1,478,940 4,087,936 15,922,185 10,868,246 26,790,431 55,837,409 15,881,973 71,719,382 463,930 153,963 617,893 255,338 27,885 283,223 99,977 40,473 140,450 10,483 40,850 51,333 71,290 128,330 199,620 475,772 - 475,772 - 7,843 7,843 365,000 955,000 1,320,000 38,819 7,130 45,949 - 11,913 11,913 6,311,006 1,978,025 8,289,031 8,091,615 3,351,412 11,443,027 16,495,175 9,989,405 26,484,580 4,572,601 - 4,572,601 26,678,018 2,541,156 29,219,174 TOTAL NET ASSETS $ 47,745,794 $ 12,530,561 $ 60,276,355 The notes to the financial statements are an integral part of this statement. -35- CITY OF NEW HOPE, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2010 Business -type activities Water utility 2,915,757 3,082,771 Program Revenues Sewer utility 1,928,845 2,292,300 - - Operating Capital Grants 313,941 - - Charges for Grants and and Functions /Programs Expenses Services Contributions Contributions Governmental activities 104,099 121,647 - - Total business -type activities General government $ 2,552,425 $ 984,855 $ 279,576 $ - Public safety 5,864,775 218,732 245,219 - Public works 1,625,959 - 741,910 787,047 Culture and recreation 1,899,105 562,383 54,418 - Economic development 192,431 104,713 35,169 - Interest on long -term debt 252,224 - - - Total governmental activities 12,386,919 1,870,683 1,356,292 787,047 Business -type activities Water utility 2,915,757 3,082,771 271,441 - Sewer utility 1,928,845 2,292,300 - - Golf course 346,345 313,941 - - Ice arena 712,153 741,266 - - Storm water 430,899 943,883 198,742 30,739 Street lighting 104,099 121,647 - - Total business -type activities 6,438,098 7,495,808 470,183 30,739 Total $ 18,825,017 $ 9,366,491 $ 1,826,475 $ 817,786 General revenues Taxes Property taxes Tax increments Franchise taxes General aids and grants - unrestricted Unrestricted investment earnings Gain on disposal of assets Transfers Total general revenues Change in net assets Net Assets, January 1 Net Assets, December 31 The notes to the financial statements are an integral part of this statement. -36- Net Revenues (Expenses) and Changes in Net Assets Governmental Business -type Activities Activities Total $ (1,287,994) $ - $ (1,287,994) (5,400,824) - (5,400,824) (97,002) - (97,002) (1,282,304) - (1,282,304) (52,549) - (52,549) (252,224) - (252,224) (8,372,897) - (8,372,897) - 438,455 438,455 - 363,455 363,455 - (32,404) (32,404) - 29,113 29,113 - 742,465 742,465 - 17,548 17,548 - 1,558,632 1,558,632 (8,372,897) 1,558,632 (6,814,265) 8,730,979 - 8,730,979 1,408,256 - 1,408,256 430,494 - 430,494 79,529 - 79,529 337,312 17,400 354,712 22,930 - 22,930 91,129 (91,129) - 11,100,629 (73,729) 11,026,900 2,727,732 1,484,903 4,212,635 45,018,062 11,045,658 56,063,720 $ 47,745,794 $ 12,530,561 $ 60,276,355 -37- THIS PAGE IS LEFT BLANK INTENTIONALLY -38- FUND FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -39- CITY OF NEW HOPE, MINNESOTA BALANCE SHEET GOVERNMENTALFUNDS DECEMBER 31, 2010 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable 9001 9015/9501 9143/9146 9211 -9219 Accrued salaries payable 174,527 Economic Improvement - Advances from other funds - Development Bond HRA Due to other governments General Authority Redemption Construction ASSETS 419 6,950 - 2,586 Cash and temporary investments $ 4,355,041 $ 1,905,624 $ 3,913,374 $ 4,385,210 Receivables 472,862 462,270 383,975 2,269,060 Unremitted tax collections 16,421 - - 1,153 Delinquent taxes 157,969 - - - Accounts 185,508 472,021 - - Accrued interest 141,250 - - - Special assessments - 55,098 - - Delinquent 145 - 4,108 - Deferred 6,714 40,498 380,606 - Due from other funds - - - - Advances to other funds - 2,266,474 - - Due from other governments 137,661 - - - Land held for resale - - - 2,433,162 Prepaid items 63,753 - - - TOTAL ASSETS $ 5,064,462 $ 4,684,617 $ 4,298,088 $ 6,819,525 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable $ 121,410 $ - $ - $ - Accrued salaries payable 174,527 1,949 - - Advances from other funds - - - 2,266,474 Due to other governments 11,691 - - - Deposits payable 419 6,950 - 2,586 Deferred revenue 164,815 453,371 383,975 - TOTAL LIABILITIES 472,862 462,270 383,975 2,269,060 FUND BALANCES Reserved for Prepaid items 63,753 - - - Debt service - - 3,914,113 - Loans receivable - 55,098 - - Advances to other funds - 2,266,474 - - Land held for resale - - - 2,433,162 Unreserved Designated reported in: General fund 4,339,325 - - - Special revenue funds - - - - Capital projects funds - - - 2,117,303 Undesignated reported in: General fund 188,522 - - - Special revenue funds - 1,900,775 - - TOTAL FUND BALANCES 4,591,600 4,222,347 3,914,113 4,550,465 TOTAL LIABILITIES AND FUND BALANCES $ 5,064,462 $ 4,684,617 $ 4,298,088 $ 6,819,525 The notes to the financial statements are an integral part of this statement. -40- 9203 Other Total Street Governmental Governmental Infrastructure Funds Funds $ 3,621,609 $ 5,220,589 $ 23,401,447 - 1,153 18,727 - - 157,969 - 39,642 697,171 - - 141,250 - 1,925 6,178 - 55,212 483,030 - 379,561 379,561 - - 2,266,474 155,054 48,945 341,660 - - 2,433,162 - - 63,753 $ 3,776,663 $ 5,747,027 $ 30,390,382 $ 146,567 $ 59,056 $ 327,033 96 - 176,572 - - 2,266,474 10,983 - 22,674 - 528 10,483 - 49,054 1,051,215 157,646 108,638 3,854,451 63,753 - 374,490 4,288,603 - - 55,098 - 2,266,474 - 2,433,162 - - 4,339,325 - 230,690 230,690 3,619,017 4,035,612 9,771,932 - 188,522 - 997,597 2,898,372 3,619,017 5,638,389 26,535,931 $ 3,776,663 $ 5,747,027 $ 30,390,382 -41- THIS PAGE IS LEFT BLANK INTENTIONALLY -42- CITY OF NEW HOPE, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS DECEMBER 31, 2010 Total fund balances - governmental Amounts reported for the governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets Less: accumulated depreciation Long -term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds- Long-term liabilities at year -end consist of: Bond principal payable Less deferred charges net of accumulated amortization Unamortized premium on bonds Internal service funds are used by management to charge certain costs to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Assets Internal service fund net assets included in governmental activities Internal balances for internal services used by business -type activities Some receivables are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds Special assessments Delinquent taxes Accounts Governmental funds do not report a liability for accrued interest until due and payable The City's investment in a joint venture is not a financial resource and, therefore, is not reported as an asset in the governmental funds, but is included in the Statement of Net Assets Total net assets - governmental activities The notes to the financial statements are an integral part of this statement. $ 26,535,931 23,186,940 (8,020,448) (6,660,000) 82,070 (16,006) 10,305,586 392,781 480,373 157,969 412,873 (99,977) 987,702 $ 47,745,794 -43- CITY OF NEW HOPE, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 9001 9015/9501 9143/9146 9211 -9219 Economic Improvement 483,823 - - 856,153 Development Bond HRA - - General Authority Redemption Construction REVENUES - - - - Transfers out Property taxes $ 7,044,686 $ 85,000 $ - $ - Tax increments - - - 1,078,910 Franchise taxes 430,494 - - - Licenses and permits 236,378 - - - Intergovernmental 562,450 - - 197 Charges for services 1,127,194 - - - Fines and forfeits 238,961 - - - Special assessments 1,835 4,907 237,713 - Investment income 43,369 130,438 55,128 57,320 Miscellaneous 16,626 35,169 - - TOTAL REVENUES 9,701,993 255,514 292,841 1,136,427 EXPENDITURES Current General government 1,581,180 - - - Public safety 5,783,154 - - - Public works 989,734 - - - Culture and recreation 1,594,155 - - - Economic development - 192,431 - - Capital outlay General government 519 - - 232,165 Public safety - - - - Public works - - - - Culture and recreation 1,779 - - - Debt service Principal - - 135,000 - Interest - - 38,981 - TOTAL EXPENDITURES 9,950,521 192,431 173,981 232,165 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (248,528) 63,083 118,860 904,262 OTHER FINANCING SOURCES (USES) Transfers in 483,823 - - 856,153 Proceeds from sale of capital assets 1,954 - - - Bonds issued - - - - Premium on bonds issued - - - - Transfers out - (55,127) - - TOTAL OTHER FINANCING SOURCES (USES) 485,777 (55,127) - 856,153 NET CHANGE IN FUND BALANCES 237,249 7,956 118,860 1,760,415 FUND BALANCES, JANUARY 1 4,354,351 4,214,391 3,795,253 2,790,050 FUND BALANCES, DECEMBER 31 $ 4,591,600 $ 4,222,347 $ 3,914,113 $ 4,550,465 The notes to the financial statements are an integral part of this statement. -44- 9203 380,000 515,000 - Other Total Street Governmental Governmental Infrastructure Funds Funds $ 1,182,500 $ 382,059 $ 8,694,245 - 329,346 1,408,256 - - 430,494 - - 236,378 1,121,790 80,783 1,765,220 - 242,710 1,369,904 - - 238,961 - 13,937 258,392 37,679 69,979 393,913 - 35,812 87,607 2,341,969 1,154,626 14,883,370 - 302,549 1,883,729 - 8,357 5,791,511 - - 989,734 - 5,226 1,599,381 - - 192,431 - - 232,684 - 631,410 631,410 1,424,662 - 1,424,662 - 315,189 316,968 - 380,000 515,000 - 234,073 273,054 1,424,662 1,876, 804 13,850,564 917,307 (722,178) 1,032,806 - 1,256,345 2,596,321 - - 1,954 - 1,245,000 1,245,000 - 16,173 16,173 - (2,389,465) (2,444,592) - 128,053 1,414,856 917,307 (594,125) 2,447,662 2,701,710 6,232,514 24,088,269 $ 3,619,017 $ 5,638,389 $ 26,535,931 -45- THIS PAGE IS LEFT BLANK INTENTIONALLY -46- CITY OF NEW HOPE, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 Total net change in fund balances $ 2,447,662 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Depreciation expense (861,051) Capital outlays 1,501,714 The issuance of long -term debt provides current financial resources to governmental funds, while the repayment of principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Bonds issued (1,245,000) Less bond issuance costs 31,758 Add premium on bonds issued (16,173) Principal repayments on bonds 515,000 Amortization of deferred charges (3,263) Interest on long -term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due_ (7,665) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Special assessments 3,029 Property taxes 36,734 Accounts (15,166) The City's investment in a joint venture is not a financial resource and, therefore, is not reported as an asset in the governmental funds, but is included in the Statement of Net Assets Contributions to joint venture 613,144 Internal service funds are used by management to charge the costs for equipment, information system, equipment replacement, employee benefits and major losses incurred by individual funds Internal service fund activity included in governmental activities (454,856) Internal balances for internal service activity for business -type activities 181,865 Change in net assets - governmental activities $ 2,727,732 The notes to the financial statements are an integral part of this statement. -47- CITY OF NEW HOPE, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Property taxes Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Special assessments Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay General government Culture and recreation 111011 F.11NO 9 a 01011t9lRIR EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Transfers in Proceeds from sale of capital assets TOTAL OTHER FINANCING SOURCES NET CHANGE IN FUND BALANCE FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Original Final Variance with Final Budget $ 7,445,652 $ 7,107,436 $ 7,044,686 $ (62,750) 458,000 458,000 430,494 (27,506) 210,480 210,480 236,378 25,898 462,732 462,732 562,450 99,718 967,060 967,060 1,127,194 160,134 301,200 301,200 238,961 (62,239) - - 1,835 1 136,822 136,822 43,369 (93,453) 1,700 21,700 16,626 (5,074) 9,983,646 9,665,430 9,701,993 36,563 1,636,838 1,611,868 1,581,180 30,688 6,044,335 5,931,891 5,783,154 148,737 929,364 904,966 989,734 (84,768) 1,698,464 1,663,681 1,594,155 69,526 43,000 36,050 519 35,531 3,500 3,500 1,779 1,721 10,355,501 10,151,956 9,950,521 201,435 (371,855) (486,526) (248,528) 237,998 371,855 486,526 483,823 (2,703) 1,954 1,954 371,855 486,526 485,777 (749) - - 237,249 237,249 4,354,351 4,354,351 4,354,351 - $ 4,354,351 $ 4,354,351 $ 4,591,600 $ 237,249 Actual Amounts The notes to the financial statements are an integral part of this statement. -48- CITY OF NEW HOPE, MINNESOTA ECONOMIC DEVELOPMENT AUTHORITY FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Property taxes Intergovernmental Other Special assessments Investment income Miscellaneous IC011 r:Ul.iDlda 0 to] ILI EXPENDITURES Economic development Current Personal services Supplies Other services and charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES Transfers out NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Original Final $ 85,000 $ 85,000 50,000 50,000 32,000 32,000 $ 85,000 Variance with Final Budget - (50,000) 4,907 4,907 130,438 98,438 35,169 35,169 167,000 167,000 255,514 88,514 100,311 100,311 113,408 (13,097) 850 850 138 712 157,265 157,265 78,885 78,380 258,426 258,426 192,431 65,995 (91,426) (91,426) (91,426) 63,083 154,509 - (55,127) (55,127) (91,426) 7,956 99,382 4,214,391 4,214,391 4,214,391 $ 4,122,965 $ 4,122,965 $ 4,222,347 $ 99,382 Actual Amounts The notes to the financial statements are an integral part of this statement. -49- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS DECEMBER 31, 2010 ASSETS CURRENT ASSETS Cash and temporary investments Restricted cash Receivables Accounts Special assessments Delinquent Deferred Due from other funds Due from other governments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Deferred charges Investment in joint venture Capital assets, at cost Land Buildings and structures Improvements other than buildings Vehicles and equipment Construction in progress Total capital assets, at cost Less accumulated depreciation Net capital assets TOTAL NONCURRENT ASSETS TOTAL ASSETS Business -type Activities - Enterprise Funds 9301 9300 9302 Water Utility Sewer Utility Golf Course 600,708 $ 199,922 $ 253,438 50,375 100 5,043 3,090 - 101,285 60,480 - 247,576 - - 33,840 - 10,346 988,452 516,930 60,821 28,171 8,276 - 168,509 - - - - 250,625 - - 973,145 3,389,036 3,076,266 106,694 1,392,767 293,139 149,758 701,807 72,309 - 5,483,610 3,441,714 1,480,222 (1,851,675) (1,838,292) (758,855) 3,631,935 1,603,422 721,367 3,828,615 1,611,698 721,367 4,817,067 2,128,628 782,188 The notes to the financial statements are an integral part of this statement. -50- -51- Governmental Business -type Activities - Enterprise Funds - Continued Activities - 9303 9304 9305 Internal Ice Arena Storm Water Street Lighting Total Service Funds $ 417,649 $ 977,607 $ 161,105 $ 1,806,658 $ 7,669,873 - 595,000 - 595,000 - 54,558 97,232 9,908 1,015,944 - - 4,371 680 13,184 - - 29,244 2 193,218 - - 501,341 - 501,341 - 39,059 115,256 - 401,891 - - - - 44,186 49,894 511,266 2,320,051 173,902 4,571,422 7,719,767 - 32,092 - 68,539 - - - - 168,509 - - 234,417 - 485,042 85,647 5,617,003 - - 6,590,148 3,032,156 - 3,249,119 - 9,821,115 - 196,363 - - 2,032,027 6,557,518 - 219,782 - 993,898 - 5,813,366 3,703,318 - 19,922,230 9,675,321 (2,718,809) (407,413) - (7,575,044) (6,310,632) 3,094,557 3,295,905 - 12,347,186 3,364,689 3,094,557 3,327,997 - 12,584,234 3,364,689 3,605,823 5,648,048 173,902 17,155,656 11,084,456 -51- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2010 LIABILITIES CURRENT LIABILITIES Accounts and contracts payable Accrued salaries payable Accrued interest payable Due to other funds Due to other governments Deposits payable Lease payable, current Bonds payable, current TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES Other postemployment benefits payable Lease payable Bonds payable, net TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Unrestricted TOTAL NET ASSETS Business -type Activities - Enterprise Funds - Continued 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 70,177 $ 15,127 $ 1,992 9,247 4,502 1,036 16,961 3,838 - 501,341 - 379,561 116,757 - - 76,515 76,515 - 790,998 99,982 382,589 2,387 1,577 970 993,512 218,164 - 995,899 219,741 970 1,786,897 319,723 383,559 2,561,908 1,308,743 721,367 468,262 500,162 (322,738) $ 3,030,170 $ 1,808,905 $ 398,629 The notes to the financial statements are an integral part of this statement. -52- Business -type Activities - Enterprise Funds - Continued 9303 9304 9305 Ice Arena Storm Water Street Lighting Total $ 36,377 $ 20,327 $ 9,963 $ 153,963 $ 136,897 9,105 3,995 - 27,885 554,538 - 19,674 - 40,473 - - - - 880,902 - 11,573 - - 128,330 48,616 40,850 - - 40,850 - 7,843 - - 7,843 - - 801,970 - 955,000 - 105,748 845,966 9,963 2,235,246 740,051 1,680 11,913 516 - 7,130 - - 11,913 766,349 - 1,978,025 38,819 13,593 766,865 - 1,997,068 38,819 119,341 1,612,831 9,963 4,232,314 778,870 3,074,801 2,322,586 - 9,989,405 3,364,689 411,681 1,712,631 163,939 2,933,937 6,940,897 $ 3,486,482 $ 4,035,217 $ 163,939 $ 12,923,342 $ 10,305,586 Total net assets - enterprise funds $ 12,923,342 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds Net assets - business -type activities Governmental Activities - Internal Service Funds (392,781) $ 12,530,561 -53- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 OPERATING REVENUES Charges for services Billings to departments Other TOTAL OPERATING REVENUES OPERATING EXPENSES Cost of goods sold Personal services Supplies Other services and charges Utilities Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) Investment income Intergovernmental Miscellaneous revenues Gain on disposal of assets Interest expense TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE TRANSFERS AND CONTRIBUTIONS TRANSFERSIN CAPITAL CONTRIBUTIONS TRANSFERS OUT TOTAL TRANSFERS AND CONTRIBUTIONS CHANGE IN NET ASSETS NET ASSETS, JANUARY 1 NET ASSETS, DECEMBER 31 Business -type Activities - Enterprise Fund 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 3,047,304 $ 2,292,300 $ 305,558 3,047,304 2,292,300 305,558 (37,535) (1,451,112) 1,807,588 1,298,199 26,164 326,248 210,476 163,680 238,150 8,297 33,939 317,326 277,240 34,716 1,154 - 18,064 116,731 67,795 41,826 2,807,197 1,862,007 318,389 240,107 430,293 (12,831) (2,023) - 387 241,162 - - 51,971 - 8 (32,561) (11,214) (24,048) 258,549 (11,214) (15,278) 498,656 419,079 (28,109) - 1,427,361 - 13,775 - - (1,464,887) (37,535) (1,451,112) 1,389,826 - (952,456) 1,808,905 (28,109) 3,982,626 - 426,738 $ 3,030,170 $ 1,808,905 $ 398,629 The notes to the financial statements are an integral part of this statement. -54- Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (181,865) Change in net assets - business -type activities $ 1,484,903 -55- Governmental Business -type Activities - Enterprise Fund - Continued Activities - 9303 9304 9305 Internal Ice Arena Storm Water Street Lighting Totals Service Funds $ 741,266 $ 943,883 $ 121,647 $ 7,451,958 $ - - - - - 1,859,795 - - - - 44,513 741,266 943,883 121,647 7,451,958 1,904,308 - - - 3,131,951 - 267,562 48,706 - 1,016,672 978,400 21,478 7,222 - 309,086 359,185 64,234 228,775 2,609 924,900 528,983 242,434 757 101,490 363,899 - 101,613 61,692 - 389,657 501,084 697,321 347,152 104,099 6,136,165 2,367,652 43,945 596,731 17,548 1,315,793 (463,344) 4,235 12,709 2,092 17,400 48,112 - 167,790 - 408,952 - - 61,691 - 122,045 - - - - 20,976 (1,413) (50,832) - (120,068) - 2,822 191,358 2,092 428,329 69,088 46,767 788,089 19,640 1,744,122 (394,256) - - - 1,427,361 - - - - 13,775 - - (16,068) - (1,518,490) (60,600) - (16,068) - (77,354) (60,600) 46,767 772,021 19,640 1,666,768 (454,856) 3,439,715 3,263,196 144,299 11,256,574 10,760,442 $ 3,486,482 $ 4,035,217 $ 163,939 $ 12,923,342 $ 10,305,586 Change in net assets - enterprise funds $ 1,666,768 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (181,865) Change in net assets - business -type activities $ 1,484,903 -55- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts from interfund services provided Other operating cash receipts Payments to suppliers Payments to employees NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund debt transfers Borrowing (payments) on interfund balances Intergovernmental receipts NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Intergovernmental receipts Acquisition and construction of capital assets Proceeds from sale of assets Proceeds from bonds issued (net) Principal paid on bonds and leases Interest paid on bonds and leases NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received from investments NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 RECONCILIATION TO THE PROPRIETARY FUNDS STATEMENT OF NET ASSETS: Cash and temporary investments Restricted cash TOTAL CASH AND CASH EQUIVALENTS Business -type Activities - Enterprise Funds 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 3,049,579 $ 1,975,292 $ 305,758 51,971 - 8,383 (2,360,691) (1,579,422) (110,858) (330,755) (204,397) (163,526) 410,104 191,473 39,757 - 2,644 - (40,170) (37,535) - (358,098) 358,098 - (384,097) - 379,561 241,162 - - (541,203) 323,207 379,561 (537,076) (235,687) - 1,078,395 291,815 - (355,250) (355,250) (400,000) (52,947) (15,636) (27,129) 133,122 (314,758) (427,129) (2,023) - 387 - 199,922 (7,424) - 57,799 $ $ 199,922 $ 50,375 - 199,922 50,375 - $ 199,922 $ 50,375 The notes to the financial statements are an integral part of this statement. -56- 30,739 ( 216 , 388 ) - 832,672 (7,405) (409,500) (1,412) (72,524) - 30,739 - - (989,151) (828,240) - - 20,977 - 2,202,882 - - (1,527,405) - - (169,648) - (8,817) 164,999 - (452,583) (807,263) 4,235 12,709 2,092 17,400 48,112 141,308 1,245,320 15,287 1,594,413 (849,583) 276,341 327,287 145,818 807,245 8,519,456 $ 417,649 $ 1,572,607 $ 161,105 $ 2,401,658 $ 7,669,873 417,649 977,607 161,105 1,806,658 7,669,873 - 595,000 - 595,000 - $ 417,649 $ 1,572,607 $ 161,105 $ 2,401,658 $ 7,669,873 -57- Governmental Business -type Activities - Enterprise Funds - Continued Activities - 9303 9304 9305 Internal Ice Arena Storm Water Street Lighting Totals Service Funds $ 751,240 $ 826,391 $ 118,800 $ 7,027,060 $ - - - - - 1,957,141 - 61,691 - 122,045 (340,329) (280,936) (105,605) (4,777,841) (954,156) (265,021) (44,614) - (1,008,313) (1,032,817) 145,890 562,532 13,195 1,362,951 (29,832) - - - 2,644 - - (16,068) - (93,773) (60,600) - 384,097 - 379,561 - - 137,051 - 378,213 - - 505,080 - 666,645 (60,600) 30,739 ( 216 , 388 ) - 832,672 (7,405) (409,500) (1,412) (72,524) - 30,739 - - (989,151) (828,240) - - 20,977 - 2,202,882 - - (1,527,405) - - (169,648) - (8,817) 164,999 - (452,583) (807,263) 4,235 12,709 2,092 17,400 48,112 141,308 1,245,320 15,287 1,594,413 (849,583) 276,341 327,287 145,818 807,245 8,519,456 $ 417,649 $ 1,572,607 $ 161,105 $ 2,401,658 $ 7,669,873 417,649 977,607 161,105 1,806,658 7,669,873 - 595,000 - 595,000 - $ 417,649 $ 1,572,607 $ 161,105 $ 2,401,658 $ 7,669,873 -57- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Other income Decrease (increase) in assets Receivables Accounts Special assessments Due from other governments Inventory Prepaid items Increase (decrease) in liabilities Accounts and contracts payable Accrued salaries payable Due to other governments Deposits payable Other postemployment benefits payable NET CASH PROVIDED BY OPERATING ACTIVITIES SUPPLEMENTAL SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Amortization of bond discount Amortization of bond premium Purchase of capital assets on account Transfer of capital assets from other funds Transfer of capital assets to other funds Transfer of bonds payable from other funds Transfer of bonds payable to other funds Capital contributions Business -type Activities - Enterprise Funds - Continued 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 240,107 $ 430,293 $ (12,831) 116,731 67,795 41,826 51,971 - 8,383 179,941 (253,438) 200 64,699 (63,570) - (242,365) - - 11,085 - 1,719 (45,787) 4,314 306 (4,021) 4,502 (57) 38,229 - - (486) 1,577 211 $ 410,104 $ 191,473 $ 39,757 $ 673 $ 673 $ $ 678 $ 657 $ - $ 40,959 $ 10,813 $ $ - $ 1,424,717 $ - $ 1,424,717 $ $ $ - $ 358,098 $ - $ 358,098 $ $ $ 13,775 $ - $ - The notes to the financial statements are an integral part of this statement. -58- -59- Governmental Business -type Activities - Enterprise Funds - Continued Activities - 9303 9304 9305 Internal Ice Arena Storm Water Street Lighting Totals Service Funds $ 43,945 $ 596,731 $ 17,548 $ 1,315,793 $ (463,344) 101,613 61,692 - 389,657 501,084 - 61,691 - 122,045 - (29,922) (4,057) (2,524) (109,800) 50,161 - 1,821 (323) 2,627 (954) (115,256) - (358,575) 2,672 - - - 12,804 - 75 - - 75 811 (12,088) (43,912) (1,466) (98,633) (182,156) 2,105 3,995 - 6,524 584 (170) (270) (40) 37,749 48,616 40,850 - - 40,850 - 436 97 - 1,835 11,740 $ 145,890 $ 562,532 $ 13,195 $ 1,362,951 $ (29,832) $ $ 1,883 $ $ 3,229 $ $ - $ 543 $ - $ 1,878 $ - $ $ 15,701 $ $ 67,473 $ 86,908 $ - $ - $ - $ 1,424,717 $ - $ $ $ $ 1,424,717 $ $ - $ - $ - $ 358,098 $ - $ $ - $ - $ - $ 13,775 $ - -59- CITY OF NEW HOPE, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS AGENCYFUND DECEMBER 31, 2010 Cash and temporary investments LIABILITIES Deposits payable The notes to the financial statements are an integral part of this statement. 9503 Pass - Through Grant Fund $ 51,385 $ 51,385 -60- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 IP[iiMEl<i"01 Iu /: C1'(I7Ify ["131 y [GYRIN II:TKKll"13 Y I0[ei 0111 [y 19y A. Financial reporting entity The City of New Hope (the City) operates under "Optional Plan B" as defined in Minnesota Statutes_ Optional Plan B is known as the Council- Manager Plan_ Under this plan, as specified in the statutes, "The City Council shall exercise the legislative power of the City and determine all matters of policy. The city manager shall be the head of the administrative branch of the city government and shall be responsible to the City Council for proper administration of all affairs relating to the City_" The City Council is composed of five members including the mayor. The City Council appoints the city manager. The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the primary government. Blended component units are, in substance, part of the government's operations and so are reported as if they were part of the primary government. The City has identified the following component units using the above criteria. The New Hope Economic Development Authority (EDA) and Housing and Redevelopment Authority (HRA) are fiscally dependent upon the City, and were developed to control and operate the housing and redevelopment and tax increment districts within the City. Since the City Council makes up the New Hope EDA and HRA boards, and funding for New Hope EDA and HRA activities are provided by the City, both entities are considered to be blended component units of the City, and are reported as special revenue funds. The City participates in various joint ventures and jointly controlled organizations which are described later in these notes. B. Government -wide and fund financial statements The government -wide financial statements (i.e_, the statement of net assets and the statement of activities) report information on all of the non - fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, service, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among programs revenue are reported instead as general revenues. Separate fund financial statements are provided for governmental, proprietary, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Aggregated information for the remaining nonmajor funds are reported in single columns in the respective fund financial statements. -61- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 IP[iiMEl<i"01lu /: 03101 [ GYR INII:TKKll"13YI0[ei01a[yIW.W6010 0 1IN"04 11 Aggregated information for the internal service funds is presented in a single column in the proprietary fund financial statements. Because the principal users of the internal services are the City's governmental activities, the financial statements of the internal service funds are consolidated into the governmental activities column when presented in the government -wide financial statements. The cost of these services is reported in the appropriate functional activity. C. Measurement focus, basis of accounting, and financial statement presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenue to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, tax increments, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non - exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non - exchange transactions must also be available before it can be recognized. Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as deferred revenue. On the modified accrual basis, receivables that will not be collected within the available period have also been reported as deferred revenue in the fund financial statements. -62- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major governmental funds: The General fund - The government's primary operating fund. It accounts for all financial resources except those required to be accounted for in another fund. Economic Development Authority Special Revenue fund — The Economic Development Authority Special Revenue Fund accounts for the activities of the authority which controls and operates the housing and redevelopment projects and tax increment districts in the City. Improvement Bond Redemption Debt Service fund — The Improvement Bond Redemption Debt Service Fund is used to account for the payment of principal and interest on special assessment bonds issued to finance improvement projects. HRA Construction Capital Projects fund — The HRA Construction Capital Projects Fund is used to account for redevelopment costs for tax increment districts, which are primarily funded by tax increment bonds and tax increments. Street Infrastructure Capital Projects fund — The Street Infrastructure Capital Projects Fund is used to account for street improvement projects. The City reports the following major enterprise funds: Water Utility fund - The Water Utility fund is used to account for the provisions of water services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection. Sewer Utility fund — The Sewer Utility fund is used to account for the provisions of sewer services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection. Golf Course fund — The Golf Course fund is used to account for the operations of the City's public golf course. Ice Arena fund — The Ice Arena fund is used to account for the operation of the City's indoor ice arena. Storm Water fund — The Storm Water fund is used to account for the general operation and maintenance of the City's storm water system. Street Lighting fund — The Street Lighting fund is used to account for the operation of the City's streetlight system. -63- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 IP[ iiME1<i"0 1lu/: 1 1C 1 IIIfy[" 13 1y[ GYR INII:TKKll"13YI0[ei01a[yIW.W6010 0 1IN"04 11 Additionally, the government reports the following fund types: Internal Service funds — These funds are used to account for the City's vehicle and equipment rental operation, employee leave benefits, insurance, and information technology operations. Internal service funds operate in a manner similar to enterprise funds; however, they provide services primarily to other departments within the City. Agency fund — An agency fund was established to account for pass- through grant funds held by the City as the agent for others- Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private- sector guidance. As a general rule the effect of interfund activity has been eliminated from government -wide financial statements. Exceptions to this general rule are charges between the government's enterprise fund functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contribution, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds and of the government's internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. -64- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED D. Assets, liabilities, and net assets or equity Deposits and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from date of acquisition. Cash and investments include balances from all funds that are combined and invested to the extent available in savings accounts, certificates of deposit, U.S. government obligations, and other securities authorized by state statutes. Earnings from investments are allocated to the respective funds on the basis of applicable participation by each fund. The City records all investments at fair value based on quoted market prices. The City may also invest idle funds as authorized by Minnesota statutes, as follows: L 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 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated "A" or better; revenue obligations rated "AA" or better. 4. General obligations of the Minnesota Housing Finance Agency rated "A" or better. 5. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 6. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. 7. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a "depository" by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker - dealers. 8. Guaranteed investment contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency_ Investments are stated at their estimated fair value at the end of the year. Restricted cash The City received bond proceeds of $595,000 during 2010 that will be used to refund Storm Water Bonds on February 1, 2011. The cash received from the issuance of the refunding bonds will be restricted in the Storm Water fund for the debt service payment. -65- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Receivables and payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to /from other funds" (i.e_, the current portion of interfund loans) or "advances to /from other funds" (i_e_, the non - current portion of interfund loans). All other outstanding balances between funds are reported as "due to /from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Property taxes The Council annually adopts a tax levy in December and certifies it to the County for collection in the following year_ The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, July, and December each year. Taxes payable on homestead property, as defined by Minnesota statutes, were reduced by a market value credit aid The credit is paid to the City by the State of Minnesota (the State) in lieu of taxes levied against the homestead property. The State remits this credit in two equal installments in October and December each year. Delinquent taxes receivable included the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred revenue liability for taxes not received within 60 days after year end in the fund financial statements. Accounts receivable Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also included for services provided in. The City annually certifies delinquent water, sewer, storm water, and street lighting accounts to the County for collection in the following year. Special assessments Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with Minnesota Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. In governmental fund financial statements, revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funds are completely offset by deferred revenues. In government -wide financial statements, special assessments are recognized as revenues in the year for which they are levied. -66- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 IP[ iiMElfi"0 1luV. 1 1"M& OIfy[ "► 11y[ GYR INII:TKKlIIAYYI0[ei01a[yIW.W6010 0 1IN"04 P7 Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Pursuant to Minnesota Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. Inventories and prepaid items Inventory is valued at cost using the first - in/first -out (FIFO) method. Inventory consists mainly of expendable supplies held for consumption. Inventories of the governmental funds are recorded as expenditures when consumed rather than when purchased. Certain cash payment to vendors reflects costs applicable to future accounting periods are recorded as prepaid items in both government -wide and fund financial statements. Investment in joint ventures Included in the assets of the government -wide statements and proprietary funds are amounts representing the City's investment in two joint ventures described later in these notes. Use of estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. Capital assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, an similar items), are reported in the applicable governmental or business -type activities columns in the government - wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life of two years or more. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets would be recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. -67- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 IP[iiMEl< i"01 lu /: C1'(I7 Ify ["131 y [GYRIN II:TKKll"13 Y I0[ei 01 a [y I W. 6601 Y Y 1►U104 11 Property, plant, and equipment of the City are depreciated using the straight line method over the following estimated useful lives: Assets Years Land improvements 15-50 Buildings and structures 15-50 Improvements other than buildings 15-50 Vehicles and equipment 3-20 Compensated absences A liability is recognized for unpaid vacation, sick leave, wellness days, and personal leave earned by employees at the balance sheet date if it is probable the benefit will be paid as time off or at separation of service. The City implemented a personal leave plan in 1994 in which all new employees, other than police officers, participate. Employees who have had five or more years of service at the time of implementation were allowed to choose between the personal leave plan or the vacation/sick leave plan. Under the vacation /sick leave plan, employees are entitled to compensation for unpaid vacation time up to 160 hours and one -third of their accumulated sick leave to a maximum of 320 hours_ Under personal leave, employees are entitled to 200 hours of accumulated leave time. Other postemployment benefits Under Minnesota statute 471.6 1, subdivision 2b., public employers must allow retirees and their dependents to continue coverage indefinitely in an employer- sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent coverage immediately before retirement. All premiums are funded on a pay -as- you -go basis. The liability was actuarially determined, in accordance with GASB Statement 45, at December 31, 2008. Long -term obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business- type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt using the straight line method. In the fund financial statements, governmental fund types recognized bond premium and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. •: CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Interfund transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund are accounted for as expenditures /expenses in the fund that is reimbursed. Fund equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use of a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Comparative data reclassifications Comparative total data for the prior year have been presented only for individual enterprise funds in the fund financial statements in order to provide an understanding of the changes in the financial position and operations of these funds. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. In the current year the operations of the Water and Sewer Utility funds were separated and reported in separate Water and Sewer Utility funds. In previous years the City reported water and sewer operations in the same fund. Net assets Net assets represent the difference between assets and liabilities. Net assets are displayed in three components a. Invested in capital assets, net of related debt - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net assets - Consist of net assets restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. C. Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt ". -69- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information Budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America_ Annual appropriated budgets are legally adopted for the General and certain special revenue funds_ Budgeted amounts are reported as originally adopted, or as amended by the City Council. Individual amendments were not material in relation to the original appropriations that were adjusted. Budgeted expenditure appropriations lapse the year end_ The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. When adopted through passage of a resolution, the budget becomes the formal appropriation budget. 4. The legal level of budget control is at the fund level. Total fund expenditures may not legally exceed budgeted fund appropriations. Budget appropriations lapse at year -end. 5. The City Manager may make transfers of appropriations within funds, or departments within funds, but cannot adjust the total budget of a fund. 6. Adjustments to budgets at the fund level must be authorized by the City Council. 7. Monitoring of budgets is maintained at the expenditure category level (personnel services, supplies, other services and charges, or capital outlay) within each activity and fund. 8. Legally adopted budgets are adopted for the following funds: a. General Fund b. Special revenue funds i. Community Development ii_ Safety Camp iii. Storm Sewer iv. Solid Waste Management v_ Economic Development Authority 9_ Formal budgetary integration is employed as a management control device during the year for the General Fund and special revenue funds_ Budgets are not prepared for the Firemen's Relief, Lions Club, Liquor Reserve, and Ice Arena Endowment Special Revenue Funds. -70- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED B. Excess of expenditures over appropriations For the year ended December 31, 2010, expenditures exceeded appropriations in the following fund: Fund Nonmaj or Community Development C. Deficit fund equity Fund Internal service Employee Leave Excess of Expenditures Final Over Budget Actual Appropriations 1,720 S 1,726 Amount $ 33,350 The City can eliminate this deficit by increasing billings to other departments for employee leave charges. Note 3: DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits and investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: • United States government Treasury bills, Treasury notes, Treasury bonds; • Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; • General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; • General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; • Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and • Time deposits that are fully insured by any federal agency. -71- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QMMIN 110Y F. 1 11 01 111011110 SM111 = a a 11"Oki Mwcflev 6 IOU" 0111 Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the government entity_ At year -end, the carrying amount of the City's deposits was $974,118 and the bank balance was $1,277,341_ At December 31, 2010, all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City's agent in the City's name. A reconciliation of cash and investments as reported on the statement of net assets follows: Carrying amount of deposits $ 974,118 Investments 32,547,295 Petty cash 2,950 Total $ 33,524,363 Cash and investments Statement of Net Assets Cash and temporary investments $ 32,877,978 Restricted cash 595,000 Statement of Fiduciary Net Assets 51,385 Total $ 33,524,363 Investments As of December 31, 2010, the City had the following investments that are insured or registered, or securities held by the City's agent in the City's name: 1. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. 2. Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or available. -72- Fair Value Credit Segmented and Quality/ Time Carrying Types of Investments Ratings (1) Distribution (2) Amount Pooled investments Broker Money Market Funds N/A Less than 6 months $ 7,666,930 Non - pooled investments Negotiable Certificates of Deposit N/A Less than 6 months 965,797 Negotiable Certificates of Deposit N/A 6 months to 1 year 243,636 Negotiable Certificates of Deposit N/A 1 to 3 years 1,259,241 U.S. Government Agency Securities AAA More than 3 years 15,329,592 State and Local Government Securities A+ 1 to 3 years 4,017,560 State and Local Government Securities AA- 1 to 3 years 1,470,260 State and Local Government Securities AAA More than 3 years 1,594,279 Total investments $ 32,547,295 1. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. 2. Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or available. -72- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QGi1'1 IN 11 1Y V. 1 11 11 111011110 SM111= a a 11"Oki Mwcllev 6 IOU" 1111 The investments of the City are subject to the following risks: • Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes limit the City's investments to the list on page 65 of the notes. The City's investment policy does not address this risk any further. Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party_ The City's investment policy does not address custodial credit risk but the City typically limits its exposure by purchasing insured or registered investments_ • Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer_ The City's investment policy does not limit the concentration of investments. As of December 31, 2010, the City had invested 5 percent or more of its total investment portfolio in securities issued by the following federal agencies: Federal Home Loan Bank — 15.7 percent, Federal Home Loan Mortgage Corporation — 13.9 percent, and Federal National Mortgage Association — 17.2 percent, Illinois State Tax Bond — 6.2 percent. • Interest rate risk. This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer period for which an interest rate is fixed, the greater the risk). The City's investment policy does not limit the duration of investments_ B. Deferred revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Total governmental funds $ 1,051,215 -73- Unavailable Delinquent property taxes receivable General $ 157,969 Special assessments General 6,846 Economic development authority 40,498 Improvement bond redemption 383,975 Nonmajor funds 49,054 Revenue not yet earned Economic development authority Accounts receivable 412,873 Total governmental funds $ 1,051,215 -73- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QUMI N 110Y 11: 1 11 01 111011110 W.K111= a a 11"Oki Mwcflev 6 IOU" 0111 C. Capital assets Capital asset activity for the year ended December 31, 2010 was as follows: Governmental activities Capital assets not being depreciated Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated Buildings and structures Vehicles and equipment Improvements other than buildings Total capital assets being depreciated Less accumulated depreciation for Buildings and structures Vehicles and equipment Improvements other than buildings Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net Beginning Ending Balance Increases Decreases Balance $ 994,268 $ - $ - $ 994,268 1,853,981 1,441,660 (1,680,913) 1,614,728 2,848,249 1,441,660 (1,680,913) 2,608,996 9,153,714 88,001 - 9,241,715 6,936,762 850,817 (198,662) 7,588,917 11,705,336 1,717,297 - 13,422,633 27,795,812 2,656,115 (198,662) 30,253,265 (4,358,830) (267,911) - (4,626,741) (5,218,082) (468,415) 198,662 (5,487,835) (3,590,695) (625,809) - (4,216,504) (13,167,607) (1,362,135) 198,662 (14,331,080) 14,628,205 1,293,980 15,922,185 $ 17,476,454 $ 2,735,640 $ (1,680,913) $ 18,531,181 -74- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Beginning Balance Increases Business -type Activities Capital assets not being depreciated Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated= Buildings and structures Vehicles and equipment Improvements other than buildings Total capital assets being depreciated Less accumulated depreciation for Buildings and structures Vehicles and equipment Improvements other than buildings Total accumulated depreciation Total capital assets being depreciated, net Business -type activities capital assets, net Ending Decreases Balance $ 485,042 $ - $ - $ 485,042 1,045,333 973,055 (1,024,490) 993,898 1,530,375 973,055 (1,024,490) 1,478,940 6,590,148 - 2,032,027 - 8,699,280 1,121,834 6,590,148 2,032,027 9,821,114 17,321,455 1,121,834 (2,929,649) (128,067) (1,038,030) (104,872) (3,217,707) (156,718) (7,185,386) (389,657) 10,136,069 732,177 18,443,289 (3,057,716) (1,142, 902) (3,374,425) (7,575,043) 10,868,246 $ 11,666,444 $ 1,705,232 $ (1,024,490) $ 12,347,186 -75- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QGiMIN 110V V. 1 11 01 111011110 SM 170/:\ a a 11103 Mwcflev 6 IOU" 0111 Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government $ 110,020 Public safety 73,263 Public works 426,784 Culture and recreation 250,984 Internal service 501,084 Total depreciation expense - governmental activities $ 1,362,135 Business -type activities Water Utility $ 116,731 Sewer Utility 67,795 Golf course 41,826 Ice arena 101,613 Storm Water Utility 61,692 Total depreciation expense - business -type activities $ 389,657 D. Interfund Receivables, Payables, and Transfers Individual fund receivable and payable balances at December 31, 2010 are as follows: Receivable Fund Payable Fund Amount Economic Development Authority HRA Construction $ 2,266,474 Nonmajor governmental Golf Course 379,561 Storm Water Water Utility 501,341 Total $ 3,147,376 The $2,266,474 balance relates to financing $2,433,162 in 2008 for the purchase of land at Bass Lake Road. The $379,561 balance was a loan to the Golf Course fund from the Temporary Financing fund to allow the Golf Course to pay off a bond early. The $501,341 balance was to eliminate a temporary cash deficit in the Water Utility Fund at year end. -76- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QMMIN 110V V. 1 11 01111011110 SM111 = a a 11"Oki Mwcflev 6 IOU" 0111 Interfund transfers at December 31, 2010 are as follows: • A transfer of $97,296 was made from the Firemen's Relief fund to the General fund to close the Firemen's Relief fund. • A transfer of $856,153 was made from the HRA Bonds fund to the HRA Construction fund for TIF related debt completed in 2009. • A transfer of $1,256,345 was made from the Refunding Bonds fund to the Temporary Financing fund to close the Refunding Bonds fund. • A transfer of $1,427,361 was made from the Water fund to the Sewer fund to separate the Water and Sewer funds. • A transfer of $65,000 was made from the Park Infrastructure fund to the General fund to cover pool operations. • A transfer of $114,671 was made from the Construction Projects fund to the General fund to cover budget shortfalls in the General fund. • Transfers were made out of the Water Utility Fund, Economic Development Authority Fund, Sewer Utility Fund, Storm Water Fund, Central Garage Fund, and Information Technology Fund for $37,526, $55,127, $37,535, $16,068, $20,964, and $39,636 respectively to the General Fund to cover administrative charges paid for by the General Fund. -77- Transfer in: HRA Nonmajor General Construction Governmental Sewer Utility Fund Fund Fund Funds Fund Total Transfer out Economic Development Authority $ 55,127 $ - $ - $ - $ 55,127 Nonmajor Governmental 276,967 856,153 1,256,345 - 2,389,465 Water Utility 37,526 - - 1,427,361 1,464,887 Sewer Utility 37,535 - - - 37,535 Storm Water 16,068 - - - 16,068 Central Garage 20,964 - - - 20,964 Information Technology 39,636 - - - 39,636 Total transfers $ 483,823 $ 856,153 $ 1,256,345 $ 1,427,361 $ 4,023,682 • A transfer of $97,296 was made from the Firemen's Relief fund to the General fund to close the Firemen's Relief fund. • A transfer of $856,153 was made from the HRA Bonds fund to the HRA Construction fund for TIF related debt completed in 2009. • A transfer of $1,256,345 was made from the Refunding Bonds fund to the Temporary Financing fund to close the Refunding Bonds fund. • A transfer of $1,427,361 was made from the Water fund to the Sewer fund to separate the Water and Sewer funds. • A transfer of $65,000 was made from the Park Infrastructure fund to the General fund to cover pool operations. • A transfer of $114,671 was made from the Construction Projects fund to the General fund to cover budget shortfalls in the General fund. • Transfers were made out of the Water Utility Fund, Economic Development Authority Fund, Sewer Utility Fund, Storm Water Fund, Central Garage Fund, and Information Technology Fund for $37,526, $55,127, $37,535, $16,068, $20,964, and $39,636 respectively to the General Fund to cover administrative charges paid for by the General Fund. -77- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QUMI N i] 0V V. 1 1 1 11 01 111011110 0GY071= a a 11"Oki Mwcflev 6 IOU" 0111 E. Long -term debt General obligation bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both general government and proprietary activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues_ In addition, general obligation bonds have been issued to refund both general obligation and revenue bonds_ General obligation bonds are direct obligation and pledge the full faith and credit of the government. General obligation bonds currently outstanding are as follows: General obligation bonds The following bonds will be repaid from future tax levies. Description 1996 G.O. Taxable bonds 2010B G.O. Certificates of indebtedness Authorized Interest Issue Maturity Balance at and Issued Rate Date Date Year End $ 380,000 6.50-6.85 % 03/01/96 02/01/11 $ 35,000 1,245,000 2.00-2.60 11/23/10 02/01/20 1,245,000 Total General Obligation Bonds $ 1,280,000 The annual debt service to maturity for general obligation bonds and equipment certificates are as follows: Year Ending Governmental Activities December 31, Principal Interest Total 2011 $ 35,000 $ 19,521 $ 54,521 2012 125,000 25,348 150,348 2013 130,000 22,798 152,798 2014 135,000 20,148 155,148 2015 135,000 17,448 152,448 2016 -2020 720,000 43,122 763,122 Total $ 1,280,000 $ 148,385 $ 1,428,385 -78- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED General obligation tax increment bonds The following bonds were issued for development projects_ The additional tax increments resulting from increased tax capacity of the redevelopment properties will be used to retire the related debt. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Tax Increment Bonds of 2004 $ 4,080,000 2.75-4.30 % 04/01/04 02/01/25 $ 3,295,000 G.O. Tax Increment Bonds of 2005 1,370,000 4.65-5.65 03/01/05 02/01/31 1,310,000 Total G.O. Tax Increment Bonds $ 4,605,000 The annual debt service to maturity for general obligation tax increment bonds are as follows: Year Ending Governmental Activities December 31, Principal Interest Total 2011 $ 195,000 $ 193,737 $ 388,737 2012 205,000 187,353 392,353 2013 210,000 180,259 390,259 2014 215,000 172,782 387,782 2015 225,000 164,725 389,725 2016-2020 1,275,000 681,856 1,956,856 2021-2025 1,690,000 369,043 2,059,043 2026-2030 490,000 98,593 588,593 2031 100,000 2,820 102,820 Total $ 4,605,000 $ 2,051,168 $ 6,656,168 -79- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED General obligation special assessment improvement bonds The following bonds will be repaid from assessments levied against benefiting properties and future tax levies_ Balance Authorized Interest Issue Maturity at Description and Issued Rate Date Date Year End G_O. Special assessment improvement bonds of 1999 $ 2,205,000 4.00-4.75 % 05/01/99 02/01/19 $ 775,000 The annual service requirements to maturity for the general obligation special assessment improvement bonds are as follows: Year Ending 4-50-5.40 % Governmental Activities 850,000 December 31, Principal Interest Total 2011 $ 135,000 $ 32,425 $ 167,425 2012 135,000 26,418 161,418 2013 135,000 20,309 155,309 2014 135,000 14,133 149,133 2015 135,000 7,889 142,889 2016-2019 100,000 9,500 109,500 Total $ 775,000 $ 110,674 $ 885,674 General obligation revenue bonds The following bonds were issued to finance improvements to the water, sewer and storm water utility system. They will be retired by user charges and are backed by the full faith and credit of the City. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End 1995 Storm water revenue bonds 2002 Storm water revenue bonds 2010A G.O. Utility revenue bonds 2010B Refunding bonds Total G.O. Revenue Bonds $ 1,200,000 4-50-5.40 % 12/01/95 850,000 4-00-5.20 04/01/02 1,580,000 2.00 05/06/10 605,000 2.00-3.00 11/23/10 02/01/11 $ 110,000 02/01/22 635,000 02/01/14 605,000 02/01/22 1,580,000 $ 2,930,000 -80- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QUM= i] 0V V. 1 11 01 111011110 0GY071= a a 11"Oki Mwcflev 6 IOU" 0111 The annual debt service to maturity for all general obligation revenue bonds are as follows: Year Ending Business -type Activities December 31, Principal Interest Total 2011 $ 955,000 $ 70,970 $ 1,025,970 2012 315,000 42,807 357,807 2013 325,000 36,408 361,408 2014 320,000 29,958 349,958 2015 130,000 25,458 155,458 2016-2020 675,000 80,149 755,149 2021-2022 210,000 5,205 215,205 Total $ 2.930.000 $ 290,955 $ 3.220.955 Capital lease On July 1, 2008, the City purchased an energy optimization system through a capital lease agreement. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, it has been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows: Business -type Equipment Less: Accumulated depreciation Total The City has entered into the following capital leases to finance various equipment purchases: Description Ice arena energy optimization system Authorized Interest Issue Maturity andIssued Rate Date Date $ 38,245 $ 38,892 (23,336) $ 15,556 Balance at 3.05 % 07/01/08 07/01/13 $ 19,756 -81- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QUMIN1] 01111: I11 01111011110 SM110W:\111 11103MwKf7eY6 IOU" 0111 The future minimum lease obligations and the net present value of these minimum lease payments as of December 31, 2010, were as follows: Year Ending December 31 2011 2012 2013 Total minimum payments Less amount representing interest Present value of minimum least payments Changes in long -term liabilities Long -term liability activity for the year ended December 31, 2010, was as follows: Governmental activities: Special assessment bonds Tax increment bonds General obligation bonds and certificates Add: Premiums on bonds Total bonds payable Compensated absences payable Other postemployment benefits payable Governmental activity long -term liabilities Business -type activities: Bonds payable Revenue bonds Add: Premiums on bonds Less: Bond discount Total bonds payable Capital leases payable Other postemployment benefits payable Business -type activity Governmental Activities $ 8,819 8,819 3,675 21,313 (1,557) $ 19,756 Beginning Ending Due Within Balance Increases Decreases Balance One Year $ 910,000 $ $ (135,000) $ 775,000 $ 135,000 4,795,000 (190,000) 4,605,000 195,000 225,000 1,245,000 (190,000) 1,280,000 35,000 - 16,173 (167) 16,006 - 5,930,000 1,261 (515,167) 6,676,006 365,000 505,621 497,159 (527,008) 475,772 475,772 27,079 17,961 (6,221) 38,819 - $ 6,462,700 $ 1,776,293 $ (1,048,396) $ 7,190,597 $ 840,772 $ 2,265,000 $ 2,185,000 $ (1,520,000) $ 2,930,000 $ 955,000 - 17,882 (1,877) 16,005 - (20,785) - 7,805 (12,980) - 2,244,215 2,202,882 (1,514,072) 2,933,025 955,000 27,161 - (7,405) 19,756 7,843 5,295 2,808 (973) 7,130 - long -term liabilities $ 2,276,671 $ 2,205,690 $ (1,522,450) $ 2,959,911 $ 962,843 Internal service funds predominantly serve the governmental funds. Accordingly, long -term liabilities for internal service funds are included as part of the above totals for governmental activities- -82- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 QUM=110V V. 1 11 01 111011110 SM111 = a a 11"Oki Mwcflev 6 IOU" 0111 Refunding Issue On May 6, 2010, the City issued $1,580,000 of G.O. Utility Revenue Bonds, Series 2010A_ The bonds bear an average interest rate of 2.60 percent and refunded the Series 1999A G_O_ Improvement Bonds. As a result of the refunding issue, the City saved $28,076 in debt service payments and achieved an economic gain (the present value of the difference between old debt service and new debt service) of $27,086. On November 23, 2010, the City issued $1,850,000 of General Obligation Certificates of Indebtedness and Refunding Bonds, Series 2010B. The bonds bear an average interest rate of 2.32 percent and will refund the $850,000 General Obligation Storm Sewer Revenue Bonds, Series, 2002A. As a result of the refunding issue, the City will save $90,253 in debt service payments and achieved an economic gain (the present value of the difference between old debt service and new debt service) of $77,269. F. Designated Fund Balances Designated fund balances at December 31, 2010 are summarized as follows: -83- Fund Economic Improvement Development Bond HRA Governmental funds General Authority Redemption Construction Designated for: Working capital $ 4,339,325 $ - $ - $ - Special revenue programs - - - - Capital improvements - - - 2,117,303 Total designated fund balance $ 4,339,325 $ - $ - $ 2,117,303 Fund Other Street Governmental Governmental funds Infrastructure Funds Total Designated for: Working capital $ - $ - $ 4,339,325 Special revenue programs - 230,690 230,690 Capital improvements 3,619,017 4,035,612 9,771,932 Total designated fund balance $ 3,619,017 $ 4,266,302 $ 14,341,947 -83- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 4: OTHER INFORMATION A. Defined benefit pension plan - public employees retirement association (PERA) - statewide 1. Plan description All full -time and certain part -time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost sharing, multiple- employer retirement plans. These plans are established and administered in accordance with Minnesota statutes, chapters 353 and 356. GERF 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 must participate in the Coordinated Plan. All police officers, fire- fighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by state statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of the step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 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 members and 1.7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 for each year of service. For all PEPFF members, and for GERF members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and Coordinated 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 available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that ceases upon the death of the retiree — no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives_ Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants_ 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. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to PERA, 60 Empire Street, Suite #200, St. Paul, Minnesota 55103 -1855 or by calling (651) 296 -7460 or 1 -800- 652 -9026. -84- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1►riil- Well 61101.41121011 N►IVA /:11 Y [1AQK1AY Y 1/21/0111 2. Funding policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature_ The City makes annual contributions to the pension plans equal to the amount required by state statutes_ GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.0 percent, respectively, of their annual covered salary in 2010. PEPFF members were required to contribute 9.4 percent of their annual covered salary in 2010. PECF members are required to contribute 5.83 percent of their annual covered salary_ The City is required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan GERF members, 7.0 percent for Coordinated Plan GERF members, and 14.1 percent for PEPFF members. Employer contribution rates for the Coordinated plan will increase to 7.25 percent, effective January 1, 2011. The City's contributions to the General Employees Retirement Fund for the years ending December 31, 2010, 2009 and 2008 were $217,644, $231,739, and $236,699, respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ending December 31, 2010, 2009 and 2008 were $344,624, $307,857, and $277,898, respectively. The City's contributions were equal to the contractually required contributions for each year as set by Minnesota statute_ B. Postemployment benefits other than pensions 1. Plan description The City of New Hope administers a single - employer defined benefit healthcare plan ( "the Retiree Health Plan "). The plan provides healthcare insurance for eligible retirees and their eligible dependents through the City's group health insurance plan, which covers both active and retired members. The benefit levels, employee contributions, and employer contributions are governed by the City and can be amended by the City through the City's collective bargaining agreements with employee groups. The Retiree Health Plan does not issue a publicly available financial report. Post - employment insurance benefits — All retirees of the City have the option under state law to continue their medical insurance coverage through the City from the time of retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to continue coverage for medical insurance. The City is legally required to include any retirees for whom it provides health insurance coverage in the same insurance as its active employees, whether the premiums are paid by the City or the retiree. Consequently, participating retirees are considered to receive a secondary benefit know as an "implicit rate subsidy." This benefit relates to the assumption that the retiree is receiving a more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the City's younger and statistically healthier active employees. 2. Funding policy Contribution requirements are set by the City Council annually on a pay -as- you -go basis. The City contributes none of the cost of current year premiums for eligible retired plan members and their spouses except for the implicit rate subsidy described above. For fiscal year 2010, the City contributed $7,194 to the plan. Plan members receiving benefits contribute 100 percent of their premium costs- -85- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1►riil- Well 61101:41121011 N►IVA /:11 Y [1AQK1AY Y 1/21/0111 3. Annual other postemployment benefit cost and net other postemployment benefit obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the retiree health plan_ Annual required contribution $ 20,748 Interest on net OPEB obligation 1,133 Adjustment to annual required contribution (1,112) Annual OPEB cost (expense) 20,769 Contributions made (7,194) Increase in net OPEB obligation 13,575 Net OPEB obligation- beginning of year 32,374 Net OPEB obligation- end of year $ 45,949 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2010 and the preceding two fiscal years are as follows: Trend Information Percentage Year Annual Annual OPEB Net OPEB Ending OPEB Cost Contributed Obligation 12/31/10 $ 20,769 (121-2)% $ 45,949 12/31/09 20,759 (56.0) 32,374 12/31/08 20,748 21.3 16,336 :• CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1►riil- Well 61101.41121011 N►IVA /:11 Y [1AQK1AY Y 112t" 0111 4. Funded status and funding progress As of December 31, 2008, the actuarial accrued liability for benefits was $187,037, all of which was unfunded_ The covered payroll (annual payroll of active employees covered by the plan) was $6,256,409 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 3.0 percent_ The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future_ Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 5. Methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce the effects of short -term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. The following simplifying assumptions were made: Retirement age for active employees — Based on the historical average retirement age for the covered group, active plan members were assumed to retire at age 60, or at the first subsequent year in which the member would qualify for benefits. Marital status — Marital status of members at the calculation date was assumed to continue throughout retirement. Mortality — Life expectancies were based on mortality tables from the National Center for Health Statistics. The 2004 United States Life Tables for Males and Females were used. Turnover — Non - group - specific age -based turnover date from GASB Statement No_ 45 was used as the basis for assigning active members a probability of remaining employed until the assumed retirement age and for developing an expected future working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid_ Healthcare cost trend rate — The expected rate of increase in healthcare insurance premiums was based on projections of the Office of the Actuary at the Centers for Medicare & Medicaid Services. A rate of 6.8 percent initially, reduced to an ultimate rate of 6.0 percent after six years, was used. Health insurance premiums — 2007 health insurance premiums for retirees were used as the basis for calculation for the present value of total benefits to be paid. Inflation rate — The expected long -term inflation assumption of 3.3 percent was based on projected changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI -W) in the 2006 Annual Report of the Board of Trustees of the Federal Old -Age and Survivor Insurance and Disability Insurance Trust Funds for an intermediate growth scenario. -87- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1\roTm— Well 61101.41121011 N►IVA /:11 Y [1AQK1AY Y 1/21/0111 Payroll growth rate – The expected long -term payroll growth rate was assumed to equal the rate of inflation Based on the historical and expected returns of the City's short -term investment portfolio, a discount rate of 3.5 percent was used. In addition, a simplified version of the entry age actuarial cost method was used. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2010 was 30 years. C. Contingencies Construction commitments The government has active construction projects as of December 31, 2010. The projects include infrastructure improvement projects. At year end the City's commitments with contractors are as follows: Project Northwood Lake West Inlet Cleaning 2009 Retaining Wall Project Winnetka Avenue Infrastructure Bass Lake Road Water Main Improvement 2009 Lighted Field Improvement Project Cold storage building roof 2011 Sanitary Sewer Lining Total Federal and State Funds Spent Remaining to date Commitment $ 40,569 $ 1,801 58,173 3,062 873,506 45,974 646,459 34,024 70,462 3,709 82,563 4,345 65,837 3,465 $ 1,837,569 $ 96,380 The City receives financial assistance from federal and state government agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2010. Tax increment districts The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increment could become a liability of an applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. ma CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1►riil- Well Y 1101.41121011 N►IVA /:11 Y [1AQK0AY Y 112t" 0111 D. Risk management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust ( LMCIT), which is a risk sharing pool with approximately 800 other governmental units_ The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years_ Liabilities are reported when it is probably that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. E. Conduit debt obligations At times, the City has issued industrial revenue bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. The City is not obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2010, there were five series of industrial revenue bonds outstanding. The original issue amounts totaled $12,910,000 and have been reduced through annual payments and partial call prepayments. The outstanding balance as of December 31, 2010 is undetermined. F. Joint ventures and governed organizations Joint ventures Joint Water Commission The City is a party to a joint powers agreement through which the Golden Valley, Crystal, and New Hope Joint Water Commission (JWC) is formed. The agreement provides for the operation and ownership of a water supply, distribution, and support system in and for the cities of Golden Valley, Crystal, and New Hope. The City purchases water used by its residents from the JWC and shares in the JWC's operation, maintenance, repair, and replacement costs based on its water usage. As provided for in the joint powers agreement, in the event of termination, all real and personal property and cash held by the JWC would be divided among the members by unanimous consent_ Such division would be based on refunded monetary contributions made to the JWC by the member cities_ Over the years, the costs of construction have been allocated among the member cities, generally on the basis of water purchased_ These costs were expensed as incurred by the City in the cost of water purchased. The City has no information on the total construction costs it has paid. Based on the above, the City has not recorded an interest in the JWC up to the present time_ The asset recorded in the Water fund as an investment in the JWC represents the accumulated contributions for working capital_ This amount approximates the City's share in the JWC fund balance at December 31, 2010. -89- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1\ Gil' W Well 6I101 .4100117N►IVA/:11Y[1AM6010Y1111 0111 The following financial information is taken from the JWC's audited financial statements for the year ended December 31, 2010: Total assets $2,626,810 Total liabilities $641,189 Total net assets $1,985,621 Total revenue $6,260,720 Total expenses $5,585,195 The City's share of JWC's total revenue for the year ended December 31, 2010 was $1,721,133 or 27 percent. JWC financial statements are available from the City of Golden Valley, attention: Finance Department, 7800 Golden Valley Road, Golden Valley, Minnesota, 55427 -4508. West Metro Fire - Rescue District By a resolution dated August 25, 1997, the City Council approved entering into an agreement by which a joint powers fire department would be established by merging the fire departments of New Hope and Crystal. A joint and cooperative agreement created the joint powers fire department effective January 2, 1998, and operation began in July 1998, under the name West Metro Fire- Rescue District (the District). As required by the agreement, the City transferred fire department equipment to the District while retaining its rights to these assets in the event of the District's dissolution. The equipment had a net book value of $987,702, and this amount is shown as "Investment in Joint Venture" in the government -wide financial statement under governmental activities. The District's financial statements for the period ended December 31, 2010 are available at the District office located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428. According to a formula in the agreement, the City's share of the District's budget is 49 percent. Payments to the District in 2010 totaled $962,679_ Jointly Controlled Organizations 1. Basset Creek Watershed Management Commission (BCWMC) The City is one of nine member cities of the BCWMC, a joint powers organization formed to assist its members' preservation and use of natural water storage and retention systems. The City's 2010 contribution to the BCWMC for its fiscal year ended January 31, 2011 was $22,605, representing 5.0 percent of member's contributions for the year. 2. Shingle Creek Watershed Management Commission (SCWMC) The City is one of nine member cities of the SCWMC, a joint powers organization formed to assist its members' preservation and use of natural water storage and retention systems. The City's contribution to the SCWMC for its fiscal year ended December 31, 2010 was $24,186, representing 7.9 percent of members' contributions for the year. 3. Pets Under Police Security (PUPS) The City has entered into a joint and cooperative agreement with five other cities to create an organization which provides efficient and economical impoundment of animals in a jointly owned and operated facility_ The City incurred charges of $16,027 for these services in 2010_ -90- CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1►riil- Well 61101.41121011 N►IVA /:11 Y [1AQK1AY Y 112t" 0111 4. Hennepin Recycling Group (HRG) The City is party to a joint powers agreement with two other cities to create an organization to collect, recycle, and dispose of solid waste in compliance with the Minnesota Waste Management Act. HRG contracts for collection and recycling activities and the City is billed for services provided to its residents. In 2010, total charges of $209,100 were incurred for these services. 5. Local Governmental Information Systems (LOGIS) The City is one of over 30 local government units in Minnesota making up a consortium that have joined together to provide one another with a full service data processing solution. Fees paid to the consortium are based on the level of service required and the applications utilized_ In 2010, the City incurred charges of $206,907 for application support, systems development, Internet access, and network support services. -91- THIS PAGE IS LEFT BLANK INTENTIONALLY -92- REQUIRED SUPPLEMENTARY INFORMATION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -93- THIS PAGE IS LEFT BLANK INTENTIONALLY -94- CITY OF NEW HOPE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2010 Schedule of Funding Progress for the Postemployment Benefit Plan Required Supple Actuarial Actuarial Actuarial Valuation Value of Accrued Date Assets Liability 12/31/08 $ - $ 187,037 ;mentary Information Unfunded Actuarial Accrued Liability Funded (UAAL) Ratio $ 187,037 - % UAAL as a Percentage Covered of Covered Payroll Payroll $ 6,256,409 3.0 % -95- THIS PAGE IS LEFT BLANK INTENTIONALLY -96- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -97- CITY OF NEW HOPE, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2010 ASSETS Cash and temporary investments Receivables Unremitted tax collections Accounts Special assessments Delinquent Deferred Due from other funds Due from other governments TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable Deposits payable Deferred revenue TOTAL LIABILITIES FUND BALANCES Reserved for Debt service Unreserved Designated for special revenue programs Designated for capital improvements Undesignated TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES Special Debt Capital Revenue Service Projects $ 1,181,090 $ 398,442 $ 3,641,057 - 1,153 - 39,642 - - 1,925 - - 6,158 - 49,054 - - 379,561 - - 48,945 $ 1,228,815 $ 399,595 $ 4,118,617 $ - $ 25,105 $ 33,951 528 - - - - 49,054 528 25,105 83,005 - 374,490 - 230,690 - - - - 4,035,612 997,597 - - 1,228,287 374,490 4,035,612 $ 1,228,815 $ 399,595 $ 4,118,617 -98- Total $ 5,220,589 1,153 39,642 1,925 55,212 379,561 48,945 $ 5,747,027 $ 59,056 528 49,054 108,638 374,490 230,690 4,035,612 997,597 5,638,389 $ 5,747,027 -99- CITY OF NEW HOPE, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Property taxes Tax increments Intergovernmental State County Charges for services Special assessments Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Culture and recreation Capital outlay Public safety Culture and recreation Debt service Principal Interest 111011 F.11 M 0. 1 49OU1]1r91R9..1 Special Debt Capital Revenue Service Projects $ 46,791 $ 39,268 $ 296,000 - 329,346 - - 31,838 - - - 48,945 221,048 - 21,662 - - 13,937 19,882 18,370 31,727 35,512 - 300 323,233 418,822 412,571 302,549 - - 8,357 - - 5,226 - - 631,410 - - 315,189 - 380,000 - - 206,876 27,197 316,132 586,876 973,796 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Bonds issued Premium on bonds issued Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 7,101 (168,054) (561,225) - - 1,256,345 - - 1,245,000 - - 16,173 (97,296) (2,112,498) (179,671) (97,296) (2,112,498) 2,337,847 (90,195) (2,280,552) 1,776,622 1,318,482 2,655,042 2,258,990 $ 1,228,287 $ 374,490 $ 4,035,612 -100- Total 382,059 329,346 31,838 48,945 242,710 13,937 69,979 35,812 1,154,626 302,549 8,357 5,226 631,410 315,189 380,000 234,073 1,876,804 (722,178) 1,256,345 1,245,000 16,173 (2,389,465) 128,053 (594,125) 6,232,514 $ 5,638,389 -101- THIS PAGE IS LEFT BLANK INTENTIONALLY -102- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS Firemen's Relief Fund — This fund accounts for collections of general property taxes and other revenue for pension benefits of the City. Community Development Fund — This fund accounts for revenue received from the Department of Housing and Urban Redevelopment. Expenditures are restricted to approved projects as outlined by the act. Safety Camp Fund — This fund accounts for the activities for a children's three -day safety camp sponsored by the City. Storm Sewer Fund — This fund is used to account for revenue derived from property taxes and other revenue to be used to financing operating costs related to the two storm water districts in the City. Lions Club Fund — This fund accounts for revenue received mainly from the New Hope Lions Club, and is used for special police, fire, and parks /recreation projects. Solid Waste Management Fund — This fund accounts for grants and fees to be used to cover the cost of operations of the City's solid waste management program. Liquor Reserve Fund — This fund accounts for residual funds from the City's discontinued municipal liquor operation and interest earned thereon, to be used to support certain City proprietary fund operations. Ice Arena Endowment Fund — This fund is used to account for contributions and other receipts to be used for future capital needs and budget requirements of the New Hope Ice Arena. -103- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2010 ASSETS Cash and temporary investments Receivables Accounts Special assessments Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Deposits payable FUND BALANCES Unreserved Designated for housing projects Undesignated TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES 9005 9008 9024 Firemen's Community Relief Development Safety Camp $ - $ 230,690 $ 11,171 $ 230,690 $ 11,171 230,690 - - 11,171 230,690 11,171 $ - $ 230,690 $ 11,171 -104- 9013/9014 9021 9016 9010 9017 Solid Waste Liquor Ice Arena Storm Sewer Lions Club Management Reserve Endowment Total $ 17,169 $ 152,926 $ 129,697 $ 635,759 $ 3,678 $ 1,181,090 - - 25,692 13,950 - 39,642 - - 1,925 - - 1,925 - - 6,158 - - 6,158 $ 17,169 $ 152,926 $ 163,472 $ 649,709 $ 3,678 $ 1,228,815 $ - $ 528 $ - $ - $ - $ 528 - - - - - 230,690 17,169 152,398 163,472 649,709 3,678 997,597 17,169 152,398 163,472 649,709 3,678 1,228,287 $ 17,169 $ 152,926 $ 163,472 $ 649,709 $ 3,678 $ 1,228,815 -105- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Property Taxes Charges for services Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Personal services Other services and charges Public safety Supplies Other services and charges Culture and recreation Personal services Supplies TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers out NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 9005 9008 9024 Firemen's Community Relief Development Safety Camp - - 4,317 1,977 3,392 166 1,977 3,392 4,483 - 1,726 - - 1,268 - 3,958 1,726 5,226 1,977 1,666 (743) (97,296) - - (95,319) 1,666 (743) 95,319 229,024 11,914 $ - $ 230,690 $ 11,171 -106- 9013/9014 9021 9016 9010 9017 Solid Waste Liquor Ice Arena Storm Sewer Lions Club Management Reserve Endowment Total $ 46,791 $ - $ - $ - $ - $ 46,791 - - 216,731 - - 221,048 34 2,152 2,009 10,136 16 19,882 - 21,562 - 13,950 - 35,512 46,825 23,714 218,740 24,086 16 323,233 - - 2,953 - - 2,953 46,791 - 209,935 41,144 - 299,596 - 3,660 - - - 3,660 - 4,697 - - - 4,697 - - - - - 1,268 - - - - - 3,958 46,791 8,357 212,888 41,144 - 316,132 34 15,357 5,852 (17,058) 16 7,101 - - - - - (97,296) 34 15,357 5,852 (17,058) 16 (90,195) 17,135 137,041 157,620 666,767 3,662 1,318,482 $ 17,169 $ 152,398 $ 163,472 $ 649,709 $ 3,678 $ 1,228,287 -107- THIS PAGE IS LEFT BLANK INTENTIONALLY -108- CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE FUNDS The debt service funds are used to account for the payment of principal and interest on the City's general obligation bonds. Revenues for this purpose include ad valorem property taxes, special assessments, investment income, and other revenue. General Obligation Taxable Fund — This fund accounts for revenue from property tax, interest income, and transfers to pay for the principal and interest on the General Obligation Taxable Bonds sold by the City in 1996. Refunding Bonds Fund — This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City's refunding Bonds of 1995 and 1998. HRA Bonds Fund — This fund accounts for revenue from property taxes and interest income to pay for the principal and interest on the City's tax increment bond issues. -109- CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2010 ASSETS Cash and temporary investments Receivables Unremitted tax collections TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable FUND BALANCES Reserved for debt service TOTAL LIABILITIES AND FUND BALANCES 9140 9147 General Obligation Refunding 0lf[IE3991 Taxable Bonds HRA Bonds $ 33,122 $ - $ 365,320 - - 1,153 $ 33,122 $ - $ 366,473 $ - $ 33,122 - $ 25,105 - 341,368 $ 33,122 $ - $ 366,473 -110- Total $ 398,442 1,153 $ 399,595 $ 25,105 374,490 $ 399,595 -111- CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2010 -112- 9140 9147 9110 -9119 General Obligation Refunding Taxable Bonds HRA Bonds REVENUES Property taxes $ 39,268 $ - $ - Tax increments - - 329,346 Intergovernmental State - - 31,838 Investment income 3 13,823 4,544 TOTAL REVENUES 39,271 13,823 365,728 EXPENDITURES Debt service Principal 35,000 155,000 190,000 Interest 3,588 3,410 199,878 TOTAL EXPENDITURES 38,588 158,410 389,878 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 683 (144,587) (24,150) OTHER FINANCING SOURCES (USES) Transfers out - (1,256,345) (856,153) NET CHANGE IN FUND BALANCES 683 (1,400,932) (880,303) FUND BALANCES, JANUARY 1 32,439 1,400,932 1,221,671 FUND BALANCES, DECEMBER 31 $ 33,122 $ - $ 341,368 -112- Total $ 39,268 329,346 31,838 18,370 418,822 380,000 206,876 586,876 (168,054) (2,112,498) (2,280,552) 2,655,042 $ 374,490 -113- THIS PAGE IS LEFT BLANK INTENTIONALLY -114- CITY OF NEW HOPE, MINNESOTA NONMAJOR CAPITAL PROJECT FUNDS Capital projects funds account for proceeds from the sale of bonds and other revenue to be used for the purchase or construction of equipment and capital improvement facilities. Temporary Financing Fund — This fund accounts for improvement projects until permanent financing is acquired. Park Infrastructure Capital Projects Fund — The Park Infrastructure Capital Projects Fund is used to account for park improvement projects. -115- CITY OF NEW HOPE, MINNESOTA NONMAJOR CAPITAL PROJECTS GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2010 ASSETS Cash and temporary investments Receivables Special assessments Deferred Due from other funds Due from other governments TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable Deferred revenue TOTAL LIABILITIES FUND BALANCES Unreserved Designated for capital improvements TOTAL LIABILITIES AND FUND BALANCES 9242 Temporary Financing $ 2,139,289 9233 Park Infrastructure Total $ 1,501,768 $ 3,641,057 49,054 - 49,054 379,561 - 379,561 - 48,945 48,945 $ 2,567,904 $ 1,550,713 $ 4,118,617 $ - $ 33,951 $ 33,951 49,054 - 49,054 49,054 33,951 83,005 2,518,850 1,516,762 4,035,612 $ 2,567,904 $ 1,550,713 $ 4,118,617 -116- CITY OF NEW HOPE, MINNESOTA NONMAJOR CAPITAL PROJECTS GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2010 OTHER FINANCING SOURCES (USES) Transfers in 9242 9233 1,256,345 Bonds issued Temporary Park 1,245,000 Premium on bonds issued Financing Infrastructure Total REVENUES (114,671) (65,000) (179,671) Property taxes $ - $ 296,000 $ 296,000 Intergovernmental SOURCES (USES) 2,402,847 County - 48,945 48,945 Charges for services - 21,662 21,662 Special assessments 13,937 - 13,937 Investment income 11,455 20,272 31,727 Miscellaneous - 300 300 TOTAL REVENUES 25,392 387,179 412,571 EXPENDITURES Capital outlay Public safety 631,410 - 631,410 Culture and recreation - 315,189 315,189 Debt service Interest 27,197 - 27,197 TOTAL EXPENDITURES 658,607 315,189 973,796 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (633,215) 71,990 (561,225) OTHER FINANCING SOURCES (USES) Transfers in 1,256,345 - 1,256,345 Bonds issued 1,245,000 - 1,245,000 Premium on bonds issued 16,173 - 16,173 Transfers out (114,671) (65,000) (179,671) TOTAL OTHER FINANCING SOURCES (USES) 2,402,847 (65,000) 2,337,847 NET CHANGE IN FUND BALANCES 1,769,632 6,990 1,776,622 FUND BALANCES, JANUARY 1 749,218 1,509,772 2,258,990 FUND BALANCES, DECEMBER 31 $ 2,518,850 $ 1,516,762 $ 4,035,612 -117- THIS PAGE IS LEFT BLANK INTENTIONALLY -118- OTHER REPORTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 CITY OF NEW HOPE, MINNESOTA GENERAL FUND BALANCE SHEET DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) ASSETS Cash and temporary investments Receivables Unremitted tax collections Delinquent taxes Accounts Accrued interest Special assessments Delinquent Deferred Due from other governments Prepaid items TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable Accrued salaries payable Due to other governments Deposits payable Deferred revenue TOTAL LIABILITIES FUND BALANCES Reserved for Prepaid items Unreserved Designated for working capital Undesignated TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES 2010 2009 $ 4,355,041 $ 3,910,596 16,421 156,974 157,969 121,235 185,508 246,056 141,250 256,323 145 299 6,714 2,535 137,661 53,739 63,753 59,799 $ 5,064,462 $ 4,807,556 $ 121,410 $ 135,670 174,527 171,367 11,691 21,978 419 120 164,815 124,070 472,862 453,205 63,753 59,799 4,339,325 4,294,552 188,522 - 4,591,600 4,354,351 $ 5,064,462 $ 4,807,556 -120- CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED ON THE FOLLOWING PAGES FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) Intergovernmental Market value and other tax credits - 2010 1,021 1,021 2009 Local government aid Budgeted Amounts Actual Variance with Actual 423,735 Original Final Amounts Final Budget Amounts REVENUES Other federal, state, and local grants 75,425 75,425 173,635 98,210 Taxes State insurance premium tax 192,500 192,500 200,205 7,705 Property taxes $ 7,445,652 $ 7,107,436 $ 7,044,686 $ (62,750) $ 6,524,813 Franchise taxes 458,000 458,000 430,494 (27,506) 340,497 Total taxes 7,903,652 7,565,436 7,475,180 (90,256) 6,865,310 Licenses and permits Public safety 282,440 282,440 261,421 (21,019) Business regulatory licenses 40,580 40,580 60,471 19,891 43,675 Non - business licenses and permits 169,900 169,900 175,907 6,007 182,629 Total licenses and permits 210,480 210,480 236,378 25,898 226,304 Intergovernmental Market value and other tax credits - - 1,021 1,021 305,938 Local government aid 44,807 44,807 41,843 (2,964) 423,735 Highway maintenance aid 150,000 150,000 145,746 (4,254) 144,028 Other federal, state, and local grants 75,425 75,425 173,635 98,210 223,520 State insurance premium tax 192,500 192,500 200,205 7,705 201,410 Total intergovernmental 462,732 462,732 562,450 99,718 1,298,631 Charges for services General government 152,860 152,860 219,581 66,721 223,106 Public safety 282,440 282,440 261,421 (21,019) 188,646 Public works 17,950 17,950 92,025 74,075 91,773 Culture and recreation 513,810 513,810 554,167 40,357 496,389 Total charges for services 967,060 967,060 1,127,194 160,134 999,914 Fines and forfeits 301,200 301,200 238,961 (62,239) 236,173 Special assessments - - 1,835 1,835 2,203 Investment income 136,822 136,822 43,369 (93,453) 59,478 Miscellaneous 1,700 21,700 16,626 (5,074) 37,456 TOTAL REVENUES 9,983,646 9,665,430 9,701,993 36,563 9,725,469 -121- Advisory Personal services CITY OF NEW HOPE, MINNESOTA (103) 497 Supplies GENERALFUND - 29 Total SCHEDULE OF REVENUES, EXPENDITURES AND (103) 526 CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED 20,342 19,842 FOR THE YEAR ENDED DECEMBER 31, 2010 Personal services - - 8,125 (With Comparative Actual Amounts For The Year Ended December 31, 2009) Supplies 12,150 12,150 18,197 2010 20,454 2009 279,173 270,403 244,061 Budgeted Amounts Actual Variance with Actual 291,323 282,553 270,383 Original Final Amounts Final Budget Amounts EXPENDITURES 22,909 - Supplies Current Expenditures 1,400 2,429 (1,029) General government Other services and charges 6,400 6,400 Mayor and City Council 936 4,127 Total Personal services $ 45,059 $ 45,059 $ 44,006 $ 1,053 $ 44,065 Supplies 4,500 3,000 1,418 1,582 4,032 Other services and charges 29,673 28,873 27,513 1,360 35,315 Total 79,232 76,932 72,937 3,995 83,412 Advisory Personal services - - 103 (103) 497 Supplies - - - - 29 Total - - 103 (103) 526 City hall 20,342 19,842 21,592 Personal services - - 8,125 (8,125) 12,604 Supplies 12,150 12,150 18,197 (6,047) 20,454 Other services and charges 279,173 270,403 244,061 26,342 (44,918) Total 291,323 282,553 270,383 12,170 (11,860) City manager Personal services 289,390 289,390 293,169 (3,779) 136,918 Supplies 1,000 1,000 1,620 (620) 2,685 Other services and charges 20,342 19,842 21,592 (1,750) 64,263 Total 310,732 310,232 316,381 (6,149) 203,866 Elections Personal services 56,348 56,348 33,439 22,909 - Supplies 1,400 1,400 2,429 (1,029) 220 Other services and charges 6,400 6,400 5,464 936 4,127 Total 64,148 64,148 41,332 22,816 4,347 Administrative services Personal services - - - - 13,427 Supplies - - - - 112 Other services and charges - - - - 223 Total - - - - 13,762 Finance Personal services 79,808 79,808 83,511 (3,703) (24,132) Supplies 2,550 1,000 1,819 (819) 1,463 Other services and charges 133,419 132,419 141,720 (9,301) 213,765 Total 215,777 213,227 227,050 (13,823) 191,096 Auditing Other services and charges 32,150 32,150 28,975 3,175 61,750 -122- CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current Expenditures - continued General government - continued Assessing Other services and charges $ 107,000 $ 107,000 $ 103,449 $ 3,551 $ 106,580 Legal Other services and charges 15,000 15,000 27,722 (12,722) 31,822 Human resources Personal services 181,939 181,939 179,532 2,407 136,844 Supplies 800 800 964 (164) 307 Other services and charges 41,900 41,700 26,387 15,313 29,753 Total 224,639 224,439 206,883 17,556 166,904 Planning and zoning Personal services 101,322 101,322 90,313 11,009 85,492 Supplies 3,500 3,000 153 2,847 978 Other services and charges 59,366 54,066 68,076 (14,010) 52,705 Total 164,188 158,388 158,542 (154) 139,175 Communication Personal services 83,977 83,977 85,474 (1,497) 72,177 Supplies 2,025 1,425 1,607 (182) 150 Other services and charges 46,647 42,397 40,342 2,055 38,427 Total 132,649 127,799 127,423 376 110,754 Other functions Other services and charges - - - - 27,721 Total general government 1,636,838 1,611,868 1,581,180 30,688 1,129,855 Public safety Police Personal services Supplies Other services and charges Total Police reserves Personal services Supplies Other services and charges Total 3,608,305 3,564,605 3,425,621 138,984 3,290,399 81,950 76,950 82,516 (5,566) 60,319 754,856 730,264 726,353 3,911 933,779 4,445,111 4,371,819 4,234,490 137,329 4,284,497 15,845 15,845 5,660 10,185 11,247 12,820 12,820 7,913 4,907 6,231 14,486 12,112 13,849 (1,737) 15,025 43,151 40,777 27,422 13,355 32,503 -123- CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) -124- 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current Expenditures - continued Public safety - continued Fire and safety Personal services $ - $ - $ 1,716 $ (1,716) $ 978 Supplies 500 500 534 (34) 69 Other services and charges 1,025,425 990,126 990,026 100 1,022,723 Total 1,025,925 990,626 992,276 (1,650) 1,023,770 Animal control Personal services 75,749 75,749 79,755 (4,006) 83,599 Supplies 1,870 1,870 832 1,038 1,567 Other services and charges 27,032 26,586 27,018 (432) 31,318 Total 104,651 104,205 107,605 (3,400) 116,484 Protective inspection Personal services 347,251 347,251 340,570 6,681 335,907 Supplies 3,600 3,600 1,537 2,063 2,547 Other services and charges 74,646 73,613 79,254 (5,641) 116,267 Total 425,497 424,464 421,361 3,103 454,721 Total public safety 6,044,335 5,931,891 5,783,154 148,737 5,911,975 Public works Street maintenance Personal services 470,673 470,673 456,499 14,174 303,796 Supplies 85,360 75,160 89,732 (14,572) 59,310 Other services and charges 358,331 344,133 428,981 (84,848) 360,963 Total 914,364 889,966 975,212 (85,246) 724,069 Engineering Other services and charges 15,000 15,000 14,522 478 15,945 Total public works 929,364 904,966 989,734 (84,768) 740,014 Culture and recreation Recreation Personal services 517,039 512,039 523,049 (11,010) 572,482 Supplies 50,456 50,456 61,261 (10,805) 54,056 Other services and charges 151,368 147,165 149,616 (2,451) 174,146 Total 718,863 709,660 733,926 (24,266) 800,684 Parks Personal services 499,350 499,350 427,408 71,942 356,559 Supplies 36,360 35,360 26,517 8,843 27,370 Other services and charges 251,639 232,459 240,321 (7,862) 318,374 Total 787,349 767,169 694,246 72,923 702,303 -124- CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) Capital outlay General government Public safety Culture and recreation Total capital outlay TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Transfers in Proceeds from sale of capital assets TOTAL OTHER FINANCING SOURCES NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 43,000 36,050 2010 35,531 53,739 2009 - Budgeted Amounts Actual Variance with Actual 3,500 Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED 37,252 64,218 10,355,501 10,151,956 9,950,521 Current Expenditures - continued 9,539,105 (371,855) (486,526) Culture and recreation - continued 237,998 186,364 Swimming pool Personal services $ 103,930 $ 103,930 $ 95,589 $ 8,341 $ 106,409 Supplies 34,030 34,030 35,882 (1,852) 37,598 Other services and charges 54,292 48,892 34,512 14,380 46,049 Total 192,252 186,852 165,983 20,869 190,056 Total culture and recreation 1,698,464 1,663,681 1,594,155 69,526 1,693,043 Total current expenditures 10,309,001 10,112,406 9,948,223 164,183 9,474,887 Capital outlay General government Public safety Culture and recreation Total capital outlay TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Transfers in Proceeds from sale of capital assets TOTAL OTHER FINANCING SOURCES NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 43,000 36,050 519 35,531 53,739 - - - - 10,479 3,500 3,500 1,779 1,721 - 46,500 39,550 2,298 37,252 64,218 10,355,501 10,151,956 9,950,521 201,435 9,539,105 (371,855) (486,526) (248,528) 237,998 186,364 371,855 486,526 483,823 (2,703) 215,510 1,954 1,954 - 371,855 486,526 485,777 (749) 215,510 - - 237,249 237,249 401,874 4,354,351 4,354,351 4,354,351 - 3,952,477 $ 4,354,351 $ 4,354,351 $ 4,591,600 $ 237,249 $ 4,354,351 -125- CITY OF NEW HOPE, MINNESOTA COMMUNITY DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 -126- Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts REVENUES Investment income $ 8,800 $ 8,800 $ 3,392 $ (5,408) $ 5,292 EXPENDITURES General government Current Other services and charges 1,720 1,720 1,726 (6) 5,254 NET CHANGE IN FUND BALANCES 7,080 7,080 1,666 (5,414) 38 FUND BALANCES, JANUARY 1 229,024 229,024 229,024 - 228,986 FUND BALANCES, DECEMBER 31 $ 236,104 $ 236,104 $ 230,690 $ (5,414) $ 229,024 -126- CITY OF NEW HOPE, MINNESOTA SAFETY CAMP FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 REVENUES Charges for services Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Culture and recreation Current Personal services Supplies Other services and charges Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts $ 3,240 $ 3,240 $ 4,317 $ 1,077 $ 10,060 - - 166 166 134 4,000 4,000 - (4,000) 3,363 7,240 7,240 4,483 (2,757) 13,557 1,457 1,457 1,268 189 1,291 5,500 5,500 3,958 1,542 3,758 250 250 - 250 715 TOTAL EXPENDITURES 7,207 7,207 5,226 1,981 5,764 NET CHANGE IN FUND BALANCES 33 33 (743) (776) 7,793 FUND BALANCES, JANUARY 1 11,914 11,914 11,914 - 4,121 FUND BALANCES, DECEMBER 31 $ 11,947 $ 11,947 $ 11,171 $ (776) $ 11,914 -127- CITY OF NEW HOPE, MINNESOTA STORM SEWER FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 -128- Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts REVENUES Property taxes $ 46,791 $ 46,791 $ 46,791 $ - $ 48,567 Investment income - - 34 34 - TOTAL REVENUES 46,791 46,791 46,825 34 48,567 EXPENDITURES General government Current Other services and charges 46,791 46,791 46,791 - 48,567 NET CHANGE IN FUND BALANCES - - 34 34 - FUND BALANCES, JANUARY 1 17,135 17,135 17,135 - 17,135 FUND BALANCES, DECEMBER 31 $ 17,135 $ 17,135 $ 17,169 $ 34 $ 17,135 -128- CITY OF NEW HOPE, MINNESOTA SOLID WASTE MANAGEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 REVENUES Intergovernmental Other Charges for services Investment income TOTAL REVENUES EXPENDITURES General government Current Personal services Supplies Other services and charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES Transfers out NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Original Final Variance with Actual Final Budget Amounts $ - $ - $ - $ - $ 3,304 241,000 241,000 216,731 (24,269) 218,228 4,400 4,400 2,009 (2,391) 2,780 245,400 245,400 218,740 (26,660) 224,312 - - 2,953 (2,953) 3,145 - - - - 20 241,700 241,700 209,935 31,765 202,286 241,700 241,700 212,888 28,812 205,451 3,700 3,700 5,852 2,152 18,861 (3,145) (3,145) - 3,145 - 555 555 5,852 5,297 18,861 157,620 157,620 157,620 - 138,759 $ 158,175 $ 158,175 $ 163,472 $ 5,297 $ 157,620 Actual Amounts -129- THIS PAGE IS LEFT BLANK INTENTIONALLY -130- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS Internal service funds are used to account for activities and services performed for other organizational units within the City. Charges to other city agencies are made to support these activities. Central Garage Fund — This fund is used to account for the rental of motor vehicles and other equipment to other departments Employee Leave Fund — This fund accounts for the cost of providing leave time benefits to employees, which includes vacation, holiday, sick time, and personal leave. Funding is based on chargebacks to department based on a percentage of wages. Insurance Reserve Fund — This fund accounts for all insurance costs for the City. Funding is provided by chargebacks to departments by percentage of wages for health, dental, life, and disability insurance. Funding for general liability and property insurance is provided by chargebacks to departments based on activities and the use of property. Information Technology Fund — This fund accounts for the City's investment in, and operations of, computer networks, application and system software, Internet access, data storage, and related activities- -131- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS (LIABILITIES) DECEMBER 31, 2010 ASSETS CURRENT ASSETS Cash and temporary investments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Capital assets, at cost Land Buildings and structures Vehicles and equipment Total capital assets, at cost Less accumulated depreciation NET NONCURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Accounts and contracts payable Accrued salaries payable Due to other governments TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES Other postemployment benefits payable TOTAL LIABILITIES NET ASSETS (LIABILITIES) Invested in capital assets Unrestricted TOTAL NET ASSETS (LIABILITIES) 9402 9408 9407 Insurance Central Garage Employee Leave Reserve $ 6,498,261 $ 507,077 $ 451,219 49,894 - - 6,548,155 507,077 451,219 85,647 - - 3,032,156 - - 6,339,374 - - 9,457,177 - - (6,198,244) - - 3,258,933 - - 9,807,088 507,077 451,219 131,467 - 2,542 11,155 540,427 - 142,622 540,427 2,542 - - 38,819 142,622 540,427 41,361 3,258,933 - - 6,405,533 (33,350) 409,858 $ 9,664,466 $ (33,350) $ 409,858 -132- 9410 Information Technology Total $ 213,316 $ 7,669,873 - 49,894 213,316 7,719,767 - 85,647 - 3,032,156 218,144 6,557,518 218,144 9,675,321 (112,388) (6,310,632) 105,756 3,364,689 319,072 11,084,456 2,888 136,897 2,956 554,538 48,616 48,616 54,460 740,051 - 38,819 54,460 778,870 105,756 3,364,689 158,856 6,940,897 $ 264,612 $ 10,305,586 -133- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS (LIABILITIES) FOR THE YEAR ENDED DECEMBER 31, 2010 9402 9408 OPERATING REVENUES Billings to departments Other TOTAL OPERATING REVENUES OPERATING EXPENSES Personal services Supplies Other services and charges Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) Investment income Gain on disposal of assets TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE TRANSFERS TRANSFERS OUT CHANGE IN NET ASSETS NET ASSETS (LIABILITIES), JANUARY 1 NET ASSETS (LIABILITIES), DECEMBER 31 Central Garage Employee Leave 9407 Insurance Reserve $ 1,074,455 $ 505,198 $ 41,096 - - 44,513 1,074,455 505,198 85,609 365,704 491,539 11,740 322,663 - - 305,101 - 98,803 478,670 - - 1,472,138 491,539 110,543 (397,683) 13,659 (24,934) 30,978 7,361 6,407 20,976 - - 51,954 7,361 6,407 (345,729) 21,020 (18,527) (20,964) - - (366,693) 21,020 (18,527) 10,031,159 (54,370) 428,385 $ 9,664,466 $ (33,350) $ 409,858 -134- 9410 Information Technology Totals $ 239,046 $ 1,859,795 - 44,513 239,046 1,904,308 109,417 978,400 36,522 359,185 125,079 528,983 22,414 501,084 293,432 2,367,652 (54,386) (463,344) 3,366 48,112 - 20,976 3,366 69,088 (51,020) (394,256) (39,636) (60,600) (90,656) (454,856) 355,268 10,760,442 $ 264,612 $ 10,305,586 -135- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2010 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from interfund services provided Payments to suppliers Payments to employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers out CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from sale of assets NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received from investments NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation Decrease (increase) in assets Accounts receivable Due from other governments Inventory Increase (decrease) in liabilities Accounts and contracts payable Accrued salaries payable Due to other governments Other postemployment benefits payable NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES SUPPLEMENTAL SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of capital assets on account 9402 Central Garage $ 1,074,765 (622,508) (365,214) 9408 9407 Insurance Employee Leave Reserve $ 505,198 $ 116,302 - (130,115) (546,540) (11,740) 87,043 (41,342) (25,553) (20,964) - - (828,240) - - 20,977 - - (807,263) - - 30,978 7,361 6,407 (710,206) (33,981) (19,146) 7,208,467 541,058 470,365 $ 6,498,261 $ 507,077 $ 451,219 $ (397,683) $ 13,659 $ (24,934) 478,670 - - 310 - 30,693 811 - - 4,445 - (70,131) 490 (27,922) - - (27,079) 38,819 $ 87,043 $ (41,342) $ (25,553) $ 86,908 $ - $ - -136- 9410 Information Technology Totals $ 260,876 $ 1,957,141 (201,533) (954,156) (109,323) (1,032,817) (49,980) (29,832) (39,636) (60,600) - (828,240) - 20,977 - (807,263) 3,366 48,112 (86,250) (849,583) 299,566 8,519,456 $ 213,316 $ 7,669,873 (54,386) $ (463,344) 22,414 501,084 19,158 50,161 2,672 2,672 - 811 (88,548) (182,156) 94 584 48,616 48,616 - 11,740 $ (49,980) $ (29,832) $ - $ 86,908 -137- CITY OF NEW HOPE, MINNESOTA AGENCYFUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2010 -138- Balance Balance January 1 Additions Deductions December 31 ASSETS Cash and temporary investments $ 35,240 $ 71,266 $ (55,121) $ 51,385 LIABILITIES Deposits payable $ 35,240 $ 71,266 $ (55,121) $ 51,385 -138- SUPPLEMENTARY INFORMATION (UNAUDITED) CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -139- THIS PAGE IS LEFT BLANK INTENTIONALLY -140- CITY OF NEW HOPE, MINNESOTA SUPPLEMENTARY INFORMATION SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTAL FUNDS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 REVENUES Property taxes Tax increments Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest income Other TOTAL REVENUES Per capita EXPENDITURES Current General government Public safety Public works Culture and recreation Economic development Capital outlay Debt service Principal Interest TOTAL EXPENDITURES Per capita Total Long -term indebtedness Per capita Total 2010 2009 $ 8,694,245 1,408,256 430,494 236,378 1,765,220 1,369,904 238,961 258,392 393,913 87,607 $ 9,898,968 438,744 226,303 1,401,010 1,166,302 236,173 157,581 791,039 Percent Increase (Decrease) (12.17) % n/a (1.88) 4.45 26.00 17.46 1.18 63.97 n/a (88.93) $ 14,883,370 $ 14,316,120 3.96 % $ 732 $ 691 $ 1,883,729 $ 1,726,566 9.10 % 5,791,511 5,933,364 (2.39) 989,734 740,014 33.75 1,599,381 1,698,807 (5.85) 192,431 - n/a 2,605,724 1,137,776 129.02 515,000 885,000 (41.81) 273,054 273,100 (0.02) $ 13,850,564 $ 12,394,627 11.75 % $ 681 $ 598 13.83 % $ 6,676,006 $ 5,930,000 12.58 % 328 286 14.68 General Fund Balance - December 31 $ 4,591,600 $ 4,354,351 5.45 % Per capita 226 210 7.41 The purpose of this report is to provide a summary of financial information concerning the City of New Hope to interested citizens_ The complete financial statements may be examined at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota 55428. Questions about this report should be directed to Kirk McDonald, City Manager at (763) 531 -5112. -141- THIS PAGE IS LEFT BLANK INTENTIONALLY -142- STATISTICAL SECTION (UNAUDITED) CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -143- THIS PAGE IS LEFT BLANK INTENTIONALLY -144- STATISTICAL SECTION (Unaudited) This part of the City of New Hope's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and well -being have changed over time. Revenue Capacity These schedules contain information to help the reader assessthe government's most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assessthe affordability of the government's current levels of out- standing debt and the government's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. -145- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET ASSETS BY COMPONENT LAST EIGHT FISCAL YEARS (accrual basis of accounting) Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets Business -type activities Invested in capital assets, net of related debt Unrestricted Total business -type activities net assets Total primary government Fiscal Year 2003 2004 2005 2006 $ 14,997,083 $ 10,248,795 $ 11,770,767 $ 13,366,539 18,186,452 6,824,715 Unrestricted 15,756,949 5,672,066 18,186,452 7,429,026 17,056,531 $ 41,776,737 12,169,857 $ 43,616,250 4,106,700 4,677,467 6,049,538 $ 33,991,655 $ 30,112,444 $ 34,634,686 $ 36,472,608 $ 5,782,234 $ 6,935,624 $ 7,277,094 $ 7,817,568 2,002,848 1,565,366 1,704,470 1,379,488 $ 7,785,082 $ 8,500,990 $ 8,981,564 $ 9,197,056 Invested in capital assets, net of related debt $ 20,779,317 $ 17,184,419 $ 19,047,861 $ 21,184,107 Restricted 6,824,715 15,756,949 18,186,452 17,056,531 Unrestricted 14,172,705 5,672,066 6,381,937 7,429,026 Total primary government $ 41,776,737 $ 38,613,434 $ 43,616,250 $ 45,669,664 Note: The City implemented GASB Statement No. 34 in fiscal 2003. Net asset information is not available for previous fiscal years -146- Table 1 Fiscal Year 2007 2008 2009 2010 $ 14,572,777 $ 16,099,860 $ 16,411,454 $ 16,495,175 18,030,936 17,857,296 19,454,696 4,572,601 7,399,637 8,643,991 9,151,912 26,678,018 $ 40,003,350 $ 42,601,147 $ 45,018,062 $ 47,745,794 $ 8,018,286 $ 9,008,538 $ 9,395,068 $ 9,989,405 1,625,562 1,423,111 1,650,590 2,541,156 $ 9,643,848 $ 10,431,649 $ 11,045,658 $ 12,530,561 $ 22,591,063 $ 25,108,398 $ 25,806,522 $ 26,484,580 18,030,936 17,857,296 19,454,696 4,572,601 9,025,199 10,067,102 10,802,502 29,219,174 $ 49,647,198 $ 53,032,796 $ 56,063,720 $ 60,276,355 -147- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET ASSETS - CONTINUED ON THE FOLLOWING PAGES LAST EIGHT FISCAL YEARS (accrual basis of accounting) Expenses Governmental activities General government Public safety Public works Culture and recreation Economic development Interest on long -term debt Fiscal Year 2003 2004 2005 2006 $ 3,493,849 $ 9,987,297 $ 3,253,971 $ 3,683,505 4,723,393 4,697,791 4,650,531 4,739,744 713,980 1,065,869 1,346,334 1,514,119 1,220,059 1,603,052 1,701,120 1,897,571 388,686 296,934 582,402 395,308 Total governmental activities expenses Business -type activities Water Sewer Golf course Ice arena Storm water Street lighting Total business -type activities expenses Total expenses Program revenues Governmental activities Charges for services General government Public safety Public works Culture and recreation Economic development Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type activities Charges for services Water Sewer Golf course Ice arena Storm water Street lighting Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total program revenues 10,539,967 17,650,943 11,534,358 12,230,247 262,245 163,419 124,235 142,197 4,860,434 4,253,600 4,083,803 4,680,584 407,835 428,575 457,175 420,223 705,705 757,160 677,911 724,020 346,103 395,156 689,622 607,298 94,121 98,786 109,960 106,052 6,414,198 5,933,277 6,018,471 6,538,177 $ 16,954,165 $ 23,584,220 $ 17,552,829 $ 18,768,424 $ 1,364,091 $ 1,484,651 $ 1,183,365 $ 1,084,659 262,245 163,419 124,235 142,197 - - - 4,843 427,069 423,831 476,484 452,889 810,372 289,368 331,591 263,548 744,160 486,182 497,096 151,934 3,607,937 2,847,451 2,612,771 2,100,070 4,753,974 4,473,274 4,284,906 4,491,025 357,861 341,707 337,730 345,828 596,642 658,786 591,555 622,428 594,985 823,123 856,761 881,682 110,535 111,237 111,551 115,162 20,600 273 16,968 108,371 - 173,176 55,391 138,886 6,434,597 6,581,576 6,254,862 6,703,382 $ 10,042,534 $ 9,429,027 $ 8,867,633 $ 8,803,452 -148- Table 2 Fiscal Year 2007 2008 2009 2010 $ 3,547,855 $ 2,492,386 $ 2,244,977 $ 2,552,425 5,291,323 5,988,010 6,218,996 5,864,775 650,686 1,381,386 1,291,983 1,625,959 1,868,403 1,967,129 2,053,788 1,899,105 - - - 192,431 369,508 340,081 275,532 252,224 11,727,775 12,168,992 12,085,276 12,386,919 4,955,642 4,915,929 5,265,147 2,915,757 - - - 1,928,845 440,666 383,521 369,579 346,345 723,264 780,816 694,039 712,153 387,889 361,542 393,118 430,899 126,966 121,912 126,983 104,099 6,634,427 6,563,720 6,848,866 6,438,098 $ 18,362,202 $ 18,732,712 $ 18,934,142 $ 18,825,017 $ 1,314,007 $ 1,164,394 $ 1,048,549 $ 984,855 251,622 151,180 134,680 218,732 503,648 579,694 527,079 562,383 - - - 104,713 270,403 388,166 586,508 1,356,292 392,468 63,947 117,544 787,047 2,732,148 2,347,381 2,414,360 4,014,022 4,870,737 5,175,878 5,141,131 3,082,771 - - - 2,292,300 337,712 330,782 345,550 313,941 610,145 659,377 723,975 741,266 922,850 951,699 933,828 943,883 116,940 133,634 149,339 121,647 152,038 16,250 66,609 470,183 21,381 16,353 75,209 30,739 7,031,803 7,283,973 7,435,641 7,996,730 $ 9,763,951 $ 9,631,354 $ 9,850,001 $ 12,010,752 -149- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET ASSETS - CONTINUED LAST EIGHT FISCAL YEARS (accrual basis of accounting) Net revenues (expenses) Governmental activities Business -type activities Total primary government revenues (expenses) General Revenues and Other Changes in Net Assets General Revenues Governmental activities Taxes Property taxes Tax increments Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Miscellaneous Transfers Total governmental activities general revenues Business -type activities Grants and contributions not restricted to specific programs Unrestricted investment earnings Transfers Total business -type activities general revenues Total primary government Change in Net Assets Governmental activities Business -type activities Total primary government 2003 2004 2005 2006 $ (6,932,030) $ (14,803,492) $ (8,921,587) $ (10,130,177) 20,399 648,299 236,391 165,205 $ (6,911,631) $ (14,155,193) $ (8,685,196) $ (9,964,972) $ 8,200,286 $ 8,443,705 $ 8,038,954 $ 8,293,621 - 428,266 435,875 433,806 1,071,453 1,178,413 2,098,594 1,497,688 341,173 521,643 607,253 1,155,967 354,756 380,254 886,549 599,337 - (28,000) (23,396) (12,320) 9,967,668 10, 924, 281 12, 043, 829 11, 968, 099 - - 197,458 5,089 45,560 39,609 23,329 32,878 - 28,000 23,396 12,320 45,560 67,609 244,183 50,287 $ 10,013,228 $ 10,991,890 $ 12,288,012 $ 12,018,386 $ 3,035,638 $ (3,879,211) $ 3,122,242 $ 1,837,922 65,959 715,908 480,574 215,492 $ 3,101,597 $ (3,163,303) $ 3,602,816 $ 2,053,414 Note: The City implemented GASB Statement No. 34 in fiscal 2003. Changes in net asset information is not available for previous fiscal years. Fiscal Year -150- Table 2 Fiscal Year 2007 2008 2009 2010 $ (8,995,627) $ (9,821,611) $ (9,670,916) $ (8,372,897) 397,376 720,253 586,775 1,558,632 $ (8,598,251) $ (9,101,358) $ (9,084,141) $ (6,814,265) $ 9,429,937 $ 10,252,215 $ 10,023,080 $ 8,730,979 - - - 1,408,256 444,898 441,133 438,744 430,494 600,221 666,543 755,762 79,529 1,698,749 992,673 723,565 337,312 - - - 22,930 352,564 96,911 146,680 - - (30,067) - 91,129 12, 526,369 12,419,408 12,087,831 11,100,629 49,416 37,481 27,234 17,400 - 30,067 - (91,129) 49,416 67,548 27,234 (73,729) $ 12,575,785 $ 12,486,956 $ 12,115,065 $ 11,026,900 $ 3,530,742 $ 2,597,797 $ 2,416,915 $ 2,727,732 446,792 787,801 614,009 1,484,903 $ 3,977,534 $ 3,385,598 $ 3,030,924 $ 4,212,635 -151- THIS PAGE IS LEFT BLANK INTENTIONALLY -152- CITY OF NEW HOPE, MINNESOTA Table 3 STATISTICAL SECTION (UNAUDITED) GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Property Tax Franchise Year tax increments tax Total 2003 $ 7,029,236 $ 1,171,050 $ - $ 8,200,286 2004 7,312,104 1,131,601 428,266 8,871,971 2005 7,047,478 991,476 435,875 8,474,829 2006 7,097,895 1,195,726 433,806 8,727,427 2007 7,756,543 1,673,394 444,898 9,874,835 2008 8,416,466 1,835,749 441,133 10,693,348 2009 8,760,482 1,262,598 438,744 10,461,824 2010 8,730,979 1,408,256 430,494 10,569,729 Note: The City implemented GASB Statement No_ 34 in fiscal 2003. Tax revenue source information is not available for previous fiscal years. -153- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2001 2002 2003 2004 General fund Reserved $ - $ - $ - $ - Unreserved 3,748,235 3,694,404 3,617,468 3,939,420 Total general fund $ 3,748,235 $ 3,694,404 $ 3,617,468 $ 3,939,420 All other governmental funds Reserved $ 9,292,070 $ 9,438,987 $ - $ - Unreserved, reported in: Special revenue funds 1,087,720 1,145,287 1,398,320 2,247,767 Debt service funds - - 8,437,888 7,886,432 Capital project funds 3,945,205 3,123,980 4,440,084 4,040,937 Total all other governmental funds $ 14,324,995 $ 13,708,254 $ 14,276,292 $ 14,175,136 Total all governmental funds $ 18,073,230 $ 17,402,658 $ 17,893,760 $ 18,114,556 -154- Table 4 Fiscal Year 2005 2006 2007 2008 2009 2010 $ - $ - $ - $ - $ - $ 63,753 3,975,418 4,227,954 4,249,604 3,952,477 4,354,351 4,527,847 $ 3,975,418 $ 4,227,954 $ 4,249,604 $ 3,952,477 $ 4,354,351 $ 4,591,600 $ - $ - $ - $ 2,433,162 $ 4,699,636 $ 9,043,337 3,844,116 4,385,348 4,748,023 2,993,986 3,266,399 3,129,062 6,383,506 6,294,149 5,992,108 6,571,884 6,450,295 - 6,877,231 5,458,640 6,569,745 5,962,599 5,317,588 9,771,932 $ 17,104,853 $ 16,138,137 $ 17,309,876 $ 17,961,631 $ 19,733,918 $ 21,944,331 $ 21,080,271 $ 20,366,091 $ 21,559,480 $ 21,914,108 $ 24,088,269 $ 26,535,931 -155- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Other financing sources (uses) Transfers in 3,937,667 4,264,787 1,029,098 1,322,034 Sales of capital assets 45,718 181,651 504,650 822,219 Bonds issued - 785,000 - 4,080,000 Premium on bonds issued - - - - Refunding bonds issued - - - - Bonds refunded - - - - Transfers out (2,948,313) (3,283,307) (1,155,673) (1,350,034) Total other financing sources (uses) 1,035,072 1,948,131 378,075 4,874,219 Net change in fund balances $ 1,956,852 $ (670,572) $ 457,932 $ 220,796 Debt service as a percentage of Noncapital expenditures 22.6% 21.4% 23.4% 11.1% -156- Fiscal Year 2001 2002 2003 2004 Revenues Property taxes $ 7,364,787 $ 8,219,656 $ 8,165,829 $ 8,429,780 Tax increments - - - - Franchise taxes - - - 428,265 Licenses and permits 345,831 311,494 366,327 500,141 Intergovernmental 3,086,534 3,755,153 2,036,314 1,605,507 Charges for services 1,083,336 1,414,779 1,179,690 1,224,439 Fines and forfeitures 283,588 293,391 297,428 268,358 Special assessments 587,607 487,991 587,753 497,664 Interest on investments - - - - Miscellaneous 1,119,763 1,081,984 624,467 836,520 Total revenues 13,871,446 15,564,448 13,257,808 13,790,674 Expenditures General government 1,902,633 2,015,233 2,358,512 2,102,852 Public safety 4,136,188 4,604,030 4,499,649 4,403,147 Public works 827,746 950,728 737,355 834,167 Culture and recreation 1,436,783 1,410,356 1,350,500 1,388,814 Economic development - - - - Miscellaneous 66,446 42,021 - - Capital Outlay 1,885,695 5,627,892 1,342,454 7,898,496 Debt service Principal 1,925,000 2,905,000 2,435,000 1,385,000 Interest 769,175 627,891 454,481 431,621 Total expenditures 12,949,666 18,183,151 13,177,951 18,444,097 Excess (deficiency) of revenues over (under) expenditures 921,780 (2,618,703) 79,857 (4,653,423) Other financing sources (uses) Transfers in 3,937,667 4,264,787 1,029,098 1,322,034 Sales of capital assets 45,718 181,651 504,650 822,219 Bonds issued - 785,000 - 4,080,000 Premium on bonds issued - - - - Refunding bonds issued - - - - Bonds refunded - - - - Transfers out (2,948,313) (3,283,307) (1,155,673) (1,350,034) Total other financing sources (uses) 1,035,072 1,948,131 378,075 4,874,219 Net change in fund balances $ 1,956,852 $ (670,572) $ 457,932 $ 220,796 Debt service as a percentage of Noncapital expenditures 22.6% 21.4% 23.4% 11.1% -156- Table 5 - - - 653,787 1,236,793 2,596,321 85,757 510,000 2,000 - - 1,954 1,370,000 - - - - 1,245,000 - - - - - 16,173 1,455,000 - - - - - (1,425,000) - - - - - (23,396) (12,320) - (653,787) (984,125) (2,444,592) 1,462,361 497,680 2,000 - 252,668 1,414,856 $ 1,886,185 $ (714,180) $ 1,193,389 $ 354,628 $ 2,174,161 $ 2,447,662 17.1% 11.2% 15.1% 9.7% 9.8% 6.4% -157- Fiscal Year 2005 2006 2007 2008 2009 2010 $ 8,069,691 $ 8,330,410 $ 9,386,469 $ 9,910,002 $ 9,898,968 $ 8,694,245 - - - - - 1,408,256 435,875 433,806 444,898 441,133 438,744 430,494 398,843 289,534 332,351 415,012 226,303 236,378 2,415,857 1,731,191 970,543 1,038,461 1,401,010 1,765,220 1,008,883 1,036,710 1,149,810 1,125,819 1,166,302 1,369,904 240,273 266,750 247,794 285,255 236,173 238,961 417,697 310,708 326,909 203,199 157,581 258,392 - - - - - 393,913 837,789 1,031,207 1,747,196 906,365 791,039 87,607 13,824,908 13,430,316 14,605,970 14,325,246 14,316,120 14,883,370 1,857,955 1,771,012 1,959,594 1,949,002 1,726,566 1,883,729 4,594,910 4,739,323 5,281,122 5,880,729 5,933,364 5,791,511 960,101 825,199 883,268 830,900 740,014 989,734 1,515,255 1,607,849 1,638,354 1,687,171 1,698,807 1,599,381 - - - - - 192,431 2,342,117 4,326,095 1,769,589 2,444,825 1,137,776 2,605,724 1,650,000 940,000 1,525,000 820,000 885,000 515,000 480,746 432,698 357,654 357,991 273,100 273,054 13,401,084 14,642,176 13,414,581 13,970,618 12,394,627 13,850,564 423,824 (1,211,860) 1,191,389 354,628 1,921,493 1,032,806 - - - 653,787 1,236,793 2,596,321 85,757 510,000 2,000 - - 1,954 1,370,000 - - - - 1,245,000 - - - - - 16,173 1,455,000 - - - - - (1,425,000) - - - - - (23,396) (12,320) - (653,787) (984,125) (2,444,592) 1,462,361 497,680 2,000 - 252,668 1,414,856 $ 1,886,185 $ (714,180) $ 1,193,389 $ 354,628 $ 2,174,161 $ 2,447,662 17.1% 11.2% 15.1% 9.7% 9.8% 6.4% -157- THIS PAGE IS LEFT BLANK INTENTIONALLY -158- Table 6 Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) GENERAL GOVERNMENT TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (modified accrual basis of accounting) Property Tax Franchise tax increments tax $ 6,047,750 $ 1,317,037 $ 6,966,400 1,253,256 6,994,779 1,171,050 7,298,179 1,131,601 7,078,215 991,476 7,134, 684 1,195, 721 7,713,075 1,673,394 8,074,253 1,835,749 8,636,370 1,262,598 8,694,245 1,408,256 428,265 435,875 433,806 444,898 441,133 438,744 430,494 Total $ 7,364,787 8,219,656 8,165, 829 8,858,045 8,505,566 8,764,211 9,831,367 10,351,135 10,337,712 10,532,995 -159- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) TAX CAPACITY, MARKET VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (Shown by year of tax collectability) Taxable market value Real property Personal property Total taxable market value Estimated actual value of taxable property Taxable market value as a percentage of estimated actual value Tax capacity Real property Personal property Subtotal Less: tax increment Less: contribution to fiscal disparities Add: distribution from fiscal disparities Net tax capacity Tax levies Revenue Bonds and interest Total Tax capacity rate Revenue Bonds and interest Sewer district Total direct tax rate 2001 2002 2003 2004 $ 1,021,231,000 $ 1,086,880,900 $ 1,190,848,500 $ 1,307,693,600 $ 18,632,849 217,982 18,850,831 (1,041,691) (2,708,748) 3,122,841 $ 18,223,233 $ 14,189,611 128,062 14,317,673 (899,178) (1,691,988) 2,014,124 $ 13,740,631 $ 15,270,524 133,023 15,403,547 (883,555) (1,785,912) 2,173,844 $ 14,907,924 $ 16,113,831 138,157 16,251,988 (836,351) (1,950,724) 2,419,948 $ 15,884,861 34.500 % 53.790 % 49.590 % 46.280 % Source: Hennepin County Auditor /Treasurer Department Note: Property in the county is reassessed annually. Note: The City changed the format of this table for 2010, and will be updating on a go- forward basis. -160- Table 7 2005 2006 2007 2008 2009 2010 $ 1,618,178,200 7,624,400 $ 1,625,802,600 $ 1,423,083,200 $ 1,571,305,700 $ 1,692,471,900 $ 1,750,807,800 $ 1,732,235,700 $ 1,629,433,100 99.78 % $ 17,385,942 $ 18,838,116 $ 20,386,553 $ 21,248,319 $ 21,095,335 $ 19,864,103 144,681 163,526 172,470 151,679 146,456 148,346 17,530,623 19,001,642 20,559,023 21,399,998 21,241,791 20,012,449 (773,458) (1,024,773) (1,471,827) (1,646,615) (1,365,233) (1,181,390) (1,937,115) (1,898,610) (2,035,088) (2,292,166) (2,518,620) (2,596,468) 2,506,494 2,647,714 2,806,702 3,398,192 3,821,605 3,946,315 $ 17,326,544 $ 18,725,973 $ 19,858,810 $ 20,859,409 $ 21,179,543 $ 20,180,906 $ 9,053,443 39,268 $ 9,092,711 45.542 % 0.199 46.276 % 42.375 % 42.346 % 41.995 % 41.342 % 46.014 % -161- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PROPERTY TAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Year Taxes Payable Direct Rate - City of New Hope General Debt Sewer District Levy Levy Levy Total 2001 N/A % N/A % N/A % 34.500 % 2002 N/A N/A N/A 53.790 2003 N/A N/A N/A 49.590 2004 N/A N/A N/A 46.280 2005 39.425 6.661 0.190 46.276 2006 37.497 4.601 0.277 42375 2007 39.782 2.319 0.245 42346 2008 39.308 2.386 0.301 41.995 2009 39.131 1.931 0.280 41342 2010 45.542 0.199 0.273 46.014 Source: Hennepin County Auditor /Treasurer Department Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all City property owners (e.g. the rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district). -162- Table 8 Overlapping Rates School District County No. 281 Other Total 37.620 % 46.680 % 8.130 % 126.930 % 50.410 30.210 7.390 141.800 50.610 29.180 7.760 137.140 44.170 29.990 7.820 128.260 44.170 29.990 7.520 127.956 41.020 28.490 7.220 119.105 39.110 28.750 7360 117.566 38.570 27240 7.820 115.625 40.410 27.210 7.400 116.362 42.640 28.621 9.098 126.373 -163- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Totals $ 1,491,813 7.39 % Source: Hennepin County Auditor /Treasurer Department -164- 2010 Percent Tax of Total Taxpayer Capacity Rank Tax Capacity Geneva Management Service, LLC $ 187,250 1 0.93 % Paddock Property Ltd. Partnership 156,750 2 0.78 St. Therese Home, Inc. 154,438 3 0.77 Minn Masonic Home North Ridge 152,275 4 0.75 New Hope / US Swim Partnership 151,250 5 0.75 Cobalt Industrial Reit 143,850 6 0.71 Winnetka Mall, LLC 139,250 7 0.69 New Hope Distribution Center, LLC 139,250 8 0.69 Long Ridge Industrial Portfolio 135,250 9 0.67 FLS Properties 132,250 10 0.66 Lang Nelson Association - - Hoyt / Winnetka LLC - - Oregon Estates Investment Company - - Northridge Property of New Hope - - Individual - - AMB Property LP - - Totals $ 1,491,813 7.39 % Source: Hennepin County Auditor /Treasurer Department -164- Table 9 2001 Percent Tax of Total Capacity Rank Tax Capacity 179,694 1 0.99 130,270 5 0.71 143,470 3 0.79 128,830 6 0.71 174,906 2 0.96 133,130 4 0.73 128,394 7 0.70 125,046 8 0.69 123,410 9 0.68 121,110 10 0.66 $ 1,388,260 7.62 % -165- THIS PAGE IS LEFT BLANK INTENTIONALLY -166- CITY OF NEW HOPE, MINNESOTA Table 10 STATISTICAL SECTION (UNAUDITED) PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Source: Hennepin County Auditor /Treasurer Department (1) Includes state paid property tax credits. -167- (1) Percent Collection Percentage Collection of Total Fiscal Total of Current of Levy in subsequent Total Collections Year Levy Year's Levy Collected years Collections to Levy 2001 $ 6,042,695 $ 6,026,976 99.74 % $ 15,719 $ 6,042,695 100.00 % 2002 7,016,970 6,959,812 99.19 57,158 7,016,970 100.00 2003 7,015,141 6,950,015 99.07 65,126 7,015,141 100.00 2004 7,430,161 7,329,071 98.64 101,090 7,430,161 100.00 2005 7,660,102 7,582,360 98.99 73,061 7,655,421 99.94 2006 7,706,733 7,623,003 98.91 78,680 7,701,683 99.93 2007 8,093,813 7,984,889 98.65 102,868 8,087,757 99.93 2008 8,452,126 8,343,629 98.72 97,565 8,441,194 99.87 2009 8,457,346 8,382,201 99.11 53,058 8,435,259 99.74 2010 9,092,711 8,983,224 98.80 - 8,983,224 98.80 Source: Hennepin County Auditor /Treasurer Department (1) Includes state paid property tax credits. -167- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Demographic and Economic Statistics on page 175 for personal income and population data- -168- Business -type Governmental Activities Activities General Special Tax Total Fiscal Obligation Assessment Increment Revenue Primary Year Bonds Bonds Bonds Bonds Government 2001 $ 2,790,000 $ 7,180,000 $ 2,920,000 $ 4,015,000 $ 16,905,000 2002 2,905,000 5,380,000 2,485,000 4,575,000 15,345,000 2003 2,835,000 4,035,000 1,965,000 4,255,000 13,090,000 2004 2,135,000 3,540,000 5,755,000 3,935,000 15,365,000 2005 2,160,000 2,290,000 6,905,000 3,620,000 14,975,000 2006 1,515,000 2,020,000 6,395,000 3,300,000 13,230,000 2007 1,065,000 1,180,000 5,875,000 2,965,000 11,085,000 2008 605,000 1,045,000 5,360,000 2,620,000 9,630,000 2009 225,000 910,000 4,795,000 2,265,000 8,195,000 2010 1,280,000 775,000 4,605,000 2,930,000 9,590,000 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Demographic and Economic Statistics on page 175 for personal income and population data- -168- Table 11 Percentage of Personal Income 1.86 % 1.68 1.39 1.54 1.45 1.20 1.01 0.87 0.79 0.83 Per Capita 811 736 628 737 718 633 532 462 396 472 -169- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Table 12 Percentage Less Actual Value Amounts Per Property General Available in Net Fiscal Obligation Debt Service Bonded Year Bonds Funds Debt 2001 $ 12,890,000 $ 9,292,070 $ 3,597,930 2002 10,770,000 9,438,987 1,331,013 2003 8,835,000 8,437,888 397,112 2004 11,430,000 7,886,432 3,543,568 2005 11,355,000 6,383,506 4,971,494 2006 9,930,000 6,294,149 3,635,851 2007 8,120,000 5,992,108 2,127,892 2008 7,010,000 6,571,884 438,116 2009 5,930,000 6,450,295 (520,295) 2010 6,660,000 4,288,603 2,371,397 Table 12 Percentage of Estimated Actual Value of Taxable Per Property Capita 0.352 % 173 0.122 64 0.033 19 0.271 170 0.349 239 0231 174 0.126 102 0.025 21 (0.030) (25) 0.146 117 Note= Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Tax Capacity, Market Value and Estimated Actual Value of Taxable Property on page 160 for property value data. See Demographic and Economic Statistics on page 175 for population data. -170- CITY OF NEW HOPE, MINNESOTA Table 13 STATISTICAL SECTION (UNAUDITED) COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 2010 Total Overlapping Debt Total Direct and Overlapping Debt $ 1,169,085,000 3.86 % $ 45,128,078 $ 1,175,745,000 4.40 % $ 51,788,078 * The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the county's total taxable market value. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognized that, when considering the government's ability to issue and repay long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided by Hennepin County. -171- Gross Amount Bonded of Debt Used Percentage Net Debt For Net Debt Applicable to Applicable Calculation District to District Direct Debt City of New Hope $ 6,660,000 100.00 % $ 6,660,000 Overlapping Debt Hennepin County $ 755,035,000 1.26 % $ 9,513,441 Independent School District #281, Robbinsdale 172,465,000 19.35 33,371,978 Metropolitan Council 167,600,000 0.57 955,320 Three Rivers Park District 73,985,000 1.74 1,287,339 Total Overlapping Debt Total Direct and Overlapping Debt $ 1,169,085,000 3.86 % $ 45,128,078 $ 1,175,745,000 4.40 % $ 51,788,078 * The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the county's total taxable market value. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognized that, when considering the government's ability to issue and repay long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided by Hennepin County. -171- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (1) The debt limit for years 2001 -2007 is 2 percent and for the years 2008 -2010 is 3 percent. Note: Under state law, the City's outstanding general obligation debt should not exceed 3 percent of the market value of taxable property. Prior to 2008, state law provided that general obligation debt should not exceed 2 percent. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment of those obligations. -172- Fiscal Year 2001 2002 2003 2004 Debt limit (1) $ 20,424,620 $ 21,737,618 $ 23,816,970 $ 26,153,872 Total net debt applicable to limit 1,448,934 1,472,376 1,353,643 588,019 Legal debt margin $ 18,975,686 $ 20,265,242 $ 22,463,327 $ 25,565,853 Total net debt applicable to the limit as a percentage of debt limit 7.09% 6.77% 5.68% 2.25% (1) The debt limit for years 2001 -2007 is 2 percent and for the years 2008 -2010 is 3 percent. Note: Under state law, the City's outstanding general obligation debt should not exceed 3 percent of the market value of taxable property. Prior to 2008, state law provided that general obligation debt should not exceed 2 percent. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment of those obligations. -172- Table 14 Fiscal Year 2005 2006 2007 2008 2009 2010 $ 28,461,664 $ 31,426,114 $ 33,849,438 $ 52,524,234 $ 51,967,071 $ 48,774,078 892,849 191,516 108,094 72,562 37,561 1,246,878 $ 27,568,815 $ 31,234,598 $ 33,741,344 $ 52,451,672 $ 51,929,510 $ 47,527,200 3.14% 0.61% 0.32% 0.14% 0.07% 2.56% Legal Debt Margin Calculation for Fiscal Year 2010 Taxable market value $ 1,625,802,600 Debt limit (3% of market value) $ 48,774,078 Debt applicable to limit General obligation bonds 1,280,000 Less: amount available in debt service funds (33 122) Total net debt applicable to limit Legal debt margin 1,246,878 $ 47,527,200 -173- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Revenue Bonds Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Table 15 (1) (2) Gross Operating Revenue Expenses $ 4,835,949 $ 3,878,333 4,938,117 4,174,288 5,755,673 5,205,356 6,335,891 5,517,433 5,723,843 4,803,961 5,848,087 5,306,582 6,317,849 4,867,502 6,520,685 5,153,960 6,524,839 5,535,015 7,131,115 5,046,701 Net Revenue Debt Service Available Principal $ 957,616 $ 295,000 $ 763,829 290,000 550,317 320,000 818,458 320,000 919,882 315,000 541,505 320,000 1,450,347 335,000 1,366,725 345,000 989,824 355,000 2,084,414 1,520,000 Interest Coverage 191,317 196.9118908 % 179,895 162.5531236 205,002 104.8218864 194,823 158.9785227 181,163 185.3991531 163,874 111.910332 151,830 297.9165212 139,000 282.3811983 121,865 207.5690185 168,236 123.4669797 (1) Gross revenues include interest and other nonoperating revenues. (2) Operating expenses exclude depreciation. (3) Revenues and expenses include the Storm Water Fund, Water Utility Fund, Sewer Utility Fund, and Golf Course Fund. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. -174- CITY OF NEW HOPE, MINNESOTA Table 16 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (1) Population was estimated by the City Planning and Development Department for fiscal 2001 -2005. Other fiscal years provided by Metropolitan Council. (2) Provided by the Bureau of Economic Analysis; US Department of Commerce. This figure is for all of Hennepin County. (3) Calculated by multiplying the estimated population by the per capita personal income figure. (4) US Census Bureau (5) Provided by Independent School District #281, Robbinsdale, MN. (6) Provided by the Bureau of Labor Statistics; US Department of Labor. This figure is for all of Hennepin County. -175- Per Capita Total Fiscal Personal Personal Median School Unemployment Year Population (1) Income (2) Income (3) Age (4) Enrollment (5) Rate (6) 2001 20,853 $ 43,533 $ 907,793,649 38.3 13,505 4.2 % 2002 20,843 43,881 914,611,683 38.3 13,543 4.0 2003 20,843 45,333 944,875,719 38.3 13,561 4.2 2004 20,843 48,021 1,000,901,703 38.3 13,186 3.7 2005 20,843 49,566 1,033,104,138 38.3 13,020 3.4 2006 20,904 52,905 1,105,926,120 38.3 13,201 3.5 2007 20,824 52,905 1,101,693,720 38.3 12,901 5.5 2008 20,860 52,905 1,103,598,300 383 12,600 6.9 2009 20,718 49,789 1,031,528,502 38.3 12,000 72 2010 20,339 56,564 1,150,455,196 38.0 11,839 7.0 (1) Population was estimated by the City Planning and Development Department for fiscal 2001 -2005. Other fiscal years provided by Metropolitan Council. (2) Provided by the Bureau of Economic Analysis; US Department of Commerce. This figure is for all of Hennepin County. (3) Calculated by multiplying the estimated population by the per capita personal income figure. (4) US Census Bureau (5) Provided by Independent School District #281, Robbinsdale, MN. (6) Provided by the Bureau of Labor Statistics; US Department of Labor. This figure is for all of Hennepin County. -175- CITY OF NEW HOPE, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (1) Total 10,620 * 49.35 % Source: Minnesota Department of Employment and Economic Development. * This is for Quarter 3 of 2010, as the annual information was not compiled yet. (1) Information for nine years ago was not available. This table will be updated on a go- forward basis. -176- 2010 Percentage of Total City Employer Employees Rank Employment Independent School District No. 281 2,000 1 18.83 % North Ridge Care Center 808 2 7.61 Saint Therese Home of New Hope 602 3 5.67 Paddock Laboratories, Inc. 557 4 5.24 Navarre Corporation 372 5 3.50 Cobom's Delivers 240 6 2.26 Parker - Hannifin Oildyne Division 190 7 1.79 Liberty Diversified International 182 8 1.71 Dakota Growers Pasta 150 9 1.41 Waymouth Farms, Inc. 140 10 1.32 Total 10,620 * 49.35 % Source: Minnesota Department of Employment and Economic Development. * This is for Quarter 3 of 2010, as the annual information was not compiled yet. (1) Information for nine years ago was not available. This table will be updated on a go- forward basis. -176- Table 17 2006 Percentage of Total City Employees Rank Employment 1,930 1 17.37 % 900 2 8.10 539 3 4.85 277 5 2.49 500 4 4.50 250 6 2.25 173 9 1.56 244 7 2.20 184 8 1.66 170 10 1.53 11,112 46.50 % -177- CITY OF NEW HOPE, MINNESOTA FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST NINE FISCAL YEARS Function 2002 2003 2004 General government 21 20 19 Public safety Police Officers 27 27 28 Civilians 7 5 5 Public works 22 22 23 Culture and recreation 10 9 9 Total 87 83 84 Source: Various City departments. Note: Information not available prior to 2002. This table will be updated on a go- forward basis. -178- 2005 2006 2007 Table 18 28 27 30 31 31 30 6 6 7 7 7 7 21 21 23 23 21 22 9 9 9 8 8 8 82 82 90 87 85 82 -179- CITY OF NEW HOPE, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Function 2001 2002 2003 2004 Function Public Safety Police stations Fire stations Public Works City streets (miles) State and County streets (miles) Sidewalks (miles) Street lights Railroad bridges Pedestrian bridges Culture and recreation Parks Swimming pools Olympic Recreational Outdoor theatre Tennis courts Water Water main (miles) Fire hydrants Maximum daily capacity (thousands of gallons) Sewer Sanitary sewer main (miles) Storm sewer lines (miles) Ice Arenas Golf courses 1 1 1 1 3 3 3 3 64.0 64.0 64.0 64.0 8.5 8.5 8.5 8.5 26.4 26.4 26.4 26.4 580.0 580.0 580.0 580.0 2.0 2.0 2.0 2.0 4.0 4.0 4.0 4.0 23 23 23 23 1 1 1 1 1 1 1 1 1 1 1 1 17 17 17 17 63 63 63 63 690 690 690 690 21,000,000 21,000,000 21,000,000 21,000,000 74 74 74 74 56 56 56 56 1 1 1 1 1 1 1 1 Source: Various City departments. Note: No capital asset indicators are available for the general government function. -180- Table 19 2005 2006 2007 2008 2009 2010 1 1 1 1 1 1 3 3 3 3 3 3 64.0 64.0 64.0 64.0 64.0 64.0 8.5 8.5 8.5 8.5 8.5 8.5 26.4 26.4 26.4 26.4 26.4 26.4 580.0 580.0 580.0 580.0 580.0 580.0 2.0 2.0 2.0 2.0 2.0 2.0 4.0 4.0 4.0 4.0 4.0 4.0 23 23 23 23 23 23 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 17 17 17 17 17 17 63 63 63 63 63 63 690 690 690 690 690 690 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 74 74 74 74 74 74 56 56 56 56 56 56 1 1 1 1 1 1 1 1 1 1 1 1 -181- CITY OF NEW HOPE, MINNESOTA Table 20 OPERATING INDICATORS BY FUNCTION LAST THREE FISCAL YEARS Function 2008 2009 2010 Function Public works Street resurfacing (miles) 2 2 2 Potholes repaired 150 450 552 Culture and recreation Program registration - adults 3,874 3,313 3,796 Program registration - youth 5,747 6,360 5,287 Attendance at sponsored events 140,600 139,318 137,199 Golf Course Rounds of golf at the Municipal course 22,900 23,917 21,686 Ice Arena Hours of ice time rental 3,905 4,027 3,980 Water Water main breaks 33 37 19 Average daily consumption (thousands of gallons) 2,003 1,921 1,746 Sewer Average daily treatment (thousands of gallons) 2,360 1,740 1,895 Sources: Various City departments. Note: Indicators are not available for the general government function. Note: Information not available prior to 2008. This table will be updated on a go- forward basis. -182-