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2011 CAFRCITY OF NEW HOPE HENNEPIN COUNTY, NHNNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2011 KIRK MCDONALD - CITY MANAGER PREPARED BY: DEPARTMENT OF FINANCE Member GFOA of U.S. and Canada Published May 21, 2012 -I- THIS PAGE IS LEFT BLANK INTENTIONALLY -2- CITY OF NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2011 INTRODUCTORY SECTION Page No. Letter of Transmittal from City Manager 7 Certificate of Achievement for Excellence in Financial Reporting 13 Organizational Chart 14 Elected Officials and Staff 15 FINANCIAL SECTION Independent Auditor's Report 19 Management's Discussion and Analysis 21 Basic Financial Statements Government -wide Financial Statements Statement of Net Assets 33 Statement of Activities 34 Fund Financial Statements Governmental Funds 108 Balance Sheet 38 Reconciliation of the Balance Sheet to the Statement of Net Assets 41 Statement of Revenues, Expenditures and Changes in Fund Balances 42 Reconciliation of the Statement of Revenues, Expenditures and 113 Changes in Fund Balances to the Statement of Activities 45 General Fund 115 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 46 Economic Development Authority Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 47 Proprietary Funds Statements of Net Assets 48 Statements of Revenues, Expenses and Changes in Fund Net Assets 56 Statements of Cash Flows 60 Fiduciary Funds Statement of Fiduciary Net Assets 68 Notes to the Financial Statements 69 Required Supplementary Information Schedule of Funding Progress for the Postemployment Benefit Plan 102 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 104 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 105 Nonmajor Special Revenue Funds Subcombining Balance Sheet 108 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 110 Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual Community Development Fund 112 Safety Camp Fund 113 Storm Sewer Fund 114 Solid Waste Management Fund 115 -3- CITY OF NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2011 Page No. Combining and Individual Fund Financial Statements and Schedules - Continued 144 Nonmajor Debt Service Funds 146 Subcombining Balance Sheet 118 Subcombining Statement of Revenues, Expenditures and changes in Fund Balances 119 Nonmajor Capital Projects Funds 154 Subcombining Balance Sheet 122 Subcombining Statement of Revenues, Expenditures and changes in Fund Balances 123 General Fund 158 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 124 Internal Service Funds 162 Combining Statements of Net Assets (Liabilities) 132 Combining Statements of Revenues, Expenses and Changes in Fund Net Assets (Liabilities) 134 Combining Statements of Cash Flows 136 Agency Fund 169 Statement of Changes in Assets and Liabilities 138 Supplementary Information (Unaudited) Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 140 STATISTICAL SECTION (UNAUDITED) Financial Trends Net Assets by Component 144 Changes in Net Assets 146 Governmental Activities Tax Revenues by Source 151 Fund Balances of Governmental Funds 152 Changes in Fund Balances of Governmental Funds 154 Revenue Capacity General Government Tax Revenues by Source 157 Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 158 Property Tax Capacity Rates - Direct and Overlapping Governments 160 Principal Property Taxpayers 162 Property Tax Levies and Collections 165 Debt Capacity Ratios of Outstanding Debt by Type 166 Ratios of General Bonded Debt Outstanding 168 Computation of Direct and Overlapping Debt 169 Legal Debt Margin Information 170 Pledged Revenue Coverage 172 Demographic and Economic Information Demographic and Economic Statistics 173 Principal Employers 174 Operating Information Full -Time Equivalent City Government Employees by Function 176 Operating Indicators by Function 179 Capital Asset Statistics by Function 180 -4- INTRODUCTORY SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -5- THIS PAGE IS LEFT BLANK INTENTIONALLY V0q May 21, 2012 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, 2011, 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. 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" 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 55428 -4898 - www.ci.new- hope.rrm.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 -7- 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 government'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: improvements, street maintenance, sanitary and storm sewer collection, services, and general administrative services. police and fire protection, culture and recreation, public water distribution, planning, zoning and building inspection 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 Independent School District No. 281 Education 2,200 Minnesota Masonic Home/North Ridge Care Center Skilled nursing care facility 789 St. Therese Home of New Hope Skilled nursing care facility 650 Perrigo Company Pharmaceutical and medicine manufacturing 413 Navarre Corporation Computers Peripherals, and software 280 Coborn's Delivers Direct selling establishments 240 Liberty Diversified Internantional Stationery supplies 200 Dakota Growers Pasta Company Macaroni and spaghetti 200 Waymouth Farms, Inc. Salted and roasted nuts and seeds 137 Parker — Hannifin Oildyne Division Fluid power cylinders and actuators 135 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. 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: I retaining existing businesses, 21 assisting with expansions, 31 attracting new businesses to vacant available buildings, 41 attracting new construction to a limited number of available vacant sites, and 51 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 2011. In 2011, $42,896,364 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 2011. PLANNING AND DEVELOPMENT The following planning and development activities occurred in 2011: New Hope Transit Oriented Development Study (TOD) — The 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/Industrial Commercial/ Industrial redevelopment consisted of $5.8 million in total development including; Lutonix - $1,100,000, CVS - $900,000, 5121 Winnetka - $713,000 and Can Do Canines - $700,000. Additionally, the 5121 Winnetka project received a $443,150 TBRA grant for cleanup of lead contamination. Educational IDS 287 developed their new North Education Center at a value of $25,674,703 for the three story school. Housing The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs. Approximately $2.82 million was reinvested in the City's housing stock in 2011 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 2011 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 2011($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, Robbinsdale and Osseo. -9- 2. Housing maintenance programs: a. Code compliance inspections - 252 inspections completed in 2011. 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 459 single family and two multi - family rental units were registered with the City. iii. A total of 3,582 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 Minnesota 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. Long -term financial planning - Management provided a long -term plan to City Council in 2012 that will highlight the tax effect of major capital and operating decisions. This will also be an important document when preparing future budgets. -10- AWARDS AND ACKNOWLEDGMENTS 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, 2010. 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, Abdo, Eick and Meyers, LLP (the City's contracted finance director) 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 -11- THIS PAGE IS LEFT BLANK INTENTIONALLY -12- Certificate of Achievement for Excellence in Financial Reporting Presented to City of New Hope Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2010 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 iinancial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President R/. Executive Director -13- ' Residents C. ,;y of Nev-. Hope ------------ - - - - -- City Council Planning Commission i Policy I `----------------- ' I EDA Board HRA Board I------------- - - - - -- ' � I Citizen Advisory ~ i Commission `---- -------- - - - - -- I City Manager I 7 i —� Human Rights Commission i I I Chief Administrator Government Relations I i i I Communications/Media I `------------ - - - - -' I Budget Human Services Council Relations i I— —i Personnel Board i I I Emergency Management g ement Fire Board EDA Executive Director HRA Executive Director I I ---- •----------- - - - - -, I Wesi Metro Fire - Rescue District, I I � ' I Fire Suppression i i Fire Prevention i I Emergency Mgt. Coord. i I Rescue i I I i Explorers i I I L --------------- - - - - -- City of New Hope ------------ - - - - -, -+ City Attorney r 111 - - - - - - - - - - -. I - - - -, L —� City Engineer ------------- - - - -'� I I r Fiscal Advisor t - - - - - - - - - - - - - - - , City Planner r City Manager Comm. Development Finance Human Resources Ciiy Clerk Ciiy Hall Council Relations Elections Safety Licensing Info Technology Communications Inspections Permits Housing Econ. Development Planning /Zoning Finance /Accounting Payroll Treasury .audit Risk Mgmt /Insurance Parks & Recreation Recreation Parks Recreation Facilities Forestry Police Police Investigation Community Services Animal Control Reserves Explorers Crime Prevention School Liaison Public Works Utilities Utility Billing Central Garage Streets Parks Maintenance CITY OF NEW HOPE ELECTED AND APPOINTED OFFICIALS FOR THE YEAR ENDED DECEMBER 31, 2011 ELECTED Name Title Kathi Hemken Mayor John Elder Council Member Andrew Hoffe Council Member Eric Lammle Council Member Daniel Stauner Council Member APPOINTED Name Title Kirk McDonald City Manager Guy Johnson Director of Public Works Curtis Jacobsen Director of Community Development Susan Rader Director of Parks and Recreation Tim Fournier Director of Police Rich Johnson Human Resources Manager Valerie Leone City Clerk -15- Term Expires 01/02/13 01/02/15 01/02/13 01/02/13 01/02/15 THIS PAGE IS LEFT BLANK INTENTIONALLY -1�- FINANCIAL SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -17- THIS PAGE IS LEFT BLANK INTENTIONALLY -18- MMKR CERTIFIE[ PUBLIC ACCOIIN'I'ANTS INDEPENDENT AUDITOR'S REPORT To the City Council City of New Hope, Minnesota PRINCIPALS Thomas M. Nlonraguv, CPA "1"Inomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichren, 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, 2011, 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. The prior year partial comparative information presented has been derived from the City's 2010 financial statements, and in our report dated May 12, 2011, we expressed unqualified opinions on the respective financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information. 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 the 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, 2011, 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 fund for the year then ended, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 of the notes to basic financial statements, the City has implemented Governmental Accounting Standards Board (GASB) Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions" during the year ended December 31, 2011. The financial statements include prior year partial comparative information, which does not include all of the information required in a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the City's financial statements for the year ended December 31, 2010, from which it was derived. (continued) -19- Malloy, Montague, Karnowski, Radosevich, & Co., P.A. 5353 Wayzata Boulcuard • Suitc 410 , Minncapolis, MN 55416 • Tcicphonc: 952- 545.0424 • Tcicfax: 952. 545 -0569 • www.mmkr.com In accordance with Government Auditing Standards, we have also issued a report dated May 21, 2012 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. 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 Postemployment 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 GASB, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for 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 required parts of the basic financial statements. The combining and individual fund 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. W ny ', (Cu t,wo w J �o-dlo a �u.c'cC„_ � Co. I P. A . May 21, 2012 -20- Management Discussion & Analysis As management of the City of New Hope, Minnesota, (the City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2011. 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 7 of this report. Financial Highlights • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $63,811,795 (net assets). Of this amount, $26,050,252 (unrestricted net assets) may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net assets increased by $3,535,440. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $24,573,244, a decrease of $1,962,687 in comparison with the prior year. • At the end of the current fiscal year, unassigned fund balance for the General fund was $4,920,846 (49.9 percent) of total General fund 2011 expenditures and transfers out. • The City's total noncurrent liabilities increased by $1,950,497 (19.2 percent) during the current fiscal year. The key factor in this increase was the issuance of new bonds during 2011. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City'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. -21- 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 --------------- - - - - -, X44age "ceet d Basic Required D &cuJe&q Financial Supplementary 44d Statements Information rfcxa?.y.¢id -- - - - - - - - - - - - - - - - - - - Government -Wide Fund ated Financial Financial tq Statements Statements fe�utycta8 $tater�ce�te Summary Detail Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances in a manner similar to a private - sector business. The statement of net assets presents information on all of the City'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 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 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 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 include sewer utility, water utility, golf course, ice arena, storm water, and street lighting. The government -wide financial statements start on page 33 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, 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 can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. -22- 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 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, HRA Construction, Street Infrastructure, Temporary Financing, and Energy Conservation Project 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 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 38 of this report. Proprietary fund The City 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 uses enterprise funds to account for its sewer utility, water utility, golf course, ice arena, storm water, and street lighting operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City 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. 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 sewer utility, water utility, golf course, ice arena, storm water, and street lighting funds, all of which are considered to be major funds of the City. 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 48 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 68 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 69 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's progress in funding its obligation to provide other postemployment benefits to its employees. Required supplementary information starts on page 102 of this report. 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 104 of this report. -23- 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, assets exceeded liabilities by $63,811,795 at the close of the most recent fiscal year. A portion of the City's net assets (49.7 percent) reflects its investment in capital assets (e.g., land, buildings, vehicles and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City'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 An additional portion of the City's net assets, $6,018,734 represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($26,050,252) 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. -24- Governmental Activities Business -type Activities Increase Increase 2011 2010 (Decrease) 2011 2010 (Decrease) Assets Current and other assets $ 36,590,321 $ 37,306,228 $ (715,907) $ 3,891,574 $ 3,534,787 $ 356,787 Capital assets, net of depreciation 23,719,133 18,531,181 5,187,952 13,716,150 12,347,186 1,368,964 Total assets 60,309,454 55,837,409 4,472,045 17,607,724 15,881,973 1,725,751 Liabilities Other liabilities 1,630,902 901,018 729,884 373,476 391,501 (18,025) Noncurrent liabilities 9,715,281 7,190,597 2,524,684 2,385,724 2,959,911 (574,187) Total liabilities 11,346,183 8,091,615 3,254,568 2,759,200 3,351,412 (592,212) Net assets Invested in capital assets, net of related debt 20,399,936 16,495,175 3,904,761 11,342,873 9,989,405 1,353,468 Restricted 6,018,734 9,279,142 (3,260,408) - - - Unrestricted 22,544,601 21,971,477 573,124 3,505,651 2,541,156 964,495 Total net assets $ 48,963,271 $ 47,745,794 $ 1,217,477 $ 14,848,524 $ 12,530,561 $ 2,317,963 An additional portion of the City's net assets, $6,018,734 represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($26,050,252) 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. -24- Governmental activities. Governmental activities increased the City's net assets by $1,217,477. Business -type activities. The net assets of business -type activities increased by $2,317,963. 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 2011 2010 (Decrease) 2011 2010 (Decrease) Revenues Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Taxes Property taxes Tax increments Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Total revenues Expenses General government Public safety Public works Culture and recreation Economic development Interest on long -term debt Sewer utility Water utility Golf course Ice arena Storm water Street lighting Total expenses $ 2,052,357 $ 1,870,683 $ 181,674 $ 7,623,726 $ 7,495,808 $ 127,918 783,382 1,356,292 (572,910) 24,031 470,183 (446,152) 1,110,762 787,047 323,715 111,106 30,739 80,367 8,784,948 8,730,979 53,969 - - - 1,400,163 1,408,256 (8,093) - - - 439,795 430,494 9,301 - - - 87,206 79,529 7,677 - - - 745,484 337,312 408,172 71,089 17,400 53,689 13,568 22,930 (9,362) - - - 15,417,665 15,023,522 394,143 7,829,952 8,014,130 (184,178) 1,841,145 2,552,425 (711,280) - - - 6,129,860 5,864,775 265,085 - - - 1,795,189 1,625,959 169,230 - - - 1,882,279 1,899,105 (16,826) - - - 536,433 192,431 344,002 - - - 248,174 252,224 (4,050) - - - - - - 2,070,951 1,928,845 142,106 - - - 3,535,160 2,915,757 619,403 - - 322,679 346,345 (23,666) - - - 746,218 712,153 34,065 - - - 490,336 430,899 59,437 - - - 113,753 104,099 9,654 12,433,080 12,386,919 46,161 7,279,097 6,438,098 840,999 Changes in net assets before transfers 2,984,585 2,636,603 347,982 550,855 1,576,032 (1,025,177) Transfers (1,767,108) 91,129 (1,858,237) 1,767,108 (91,129) 1,858,237 Change in net assets 1,217,477 2,727,732 (1,510,255) 2,317,963 1,484,903 833,060 Net assets, January 1 47,745,794 45,018,062 2,727,732 12,530,561 11,045,658 1,484,903 Net assets, December 31 $ 48,963,271 $ 47,745,794 $ 1,217,477 $ 14,848,524 $ 12,530,561 $ 2,317,963 -25- Governmental activities. Expenses - The following chart illustrates the City's expenses and program revenues for its governmental activities: Expenses and Program Revenues - Governmental Activities $6,500,000 $6,000,000 $5,500,000 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- General Public safety Public works Culture and Economic Interest on long - government recreation development term debt ■ Expenses ■ Program revenues Revenues - The following chart illustrates the City's revenue by source for its governmental activities: Revenues by Source - Governmental Activities Property taxes Tax increments 57.0% 9.1% Franchise taxes 2.9% Grants and contribution, unrestricted 0.6% Unrestricted investment Capital grants and earnmgs 4 8% contributions 7.2% Operating grants and Crain on sale of capital contributions assets Charges for services 0.1% 13.2% -26- Business -type activities. Below are the graphs showing the business -type activities revenue and expense comparisons. Expense and Program Revenues - Business -type Activities $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 IN Sewer utility Water utility Golf course Ice arena Storm water Street lighting ■ Expenses ■ Program revenues Revenue Sources - Business -type Activities Unrestricted investment earnings n ooi Charges for services 97.4% Capital grants and contributions 1.4% -27- Operating grants and contributions 0.3% Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. Governmental funds. The focus of the City'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's financing requirements. In particular, unassigned 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's governmental funds had combined ending fund balances of $24,573,244, a decrease of $1,962,687 in comparison with the prior year. Approximately 20.0 percent of this total amount, $4,920,846, constitutes unassigned fund balance, which is available for spending at the City's discretion. The remainder of fund balance is not available for new spending because it is either 1) nonspendable ($14,366), 2) restricted ($7,559,164), 3) committed ($4,666,447), or 4) assigned ($7,412,421). Fund Balance December 31, Increase Funds 2011 2010 (Decrease) General $ 4,935,212 $ 4,591,600 $ 343,612 The General fund is the chief operating fund of the City. As a measure of the General fund's liquidity, it may be useful to compare fund balance to total fund expenditures and transfers out. Unassigned fund balance represents 49.9 percent of total 2011 expenditures and transfers out. Economic Development Authority $ 4,479,550 $ 4,222,347 $ 257,203 The increase in fund balance is partly due to net transfers of $168,600 into the fund. HRA Construction $ 5,554,293 $ 4,550,465 $ 1,003,828 This fund accounts for the activity within the City's Tax Increment Financing (TIF) Districts, less resources accumulated elsewhere for TIF related long -term obligations. The increase in fund balance is a result of unspent TIF revenues identified for future projects. Street Infrastructure $ 1,986,543 $ 3,619,017 $ (1,632,474) This fund accounts for street improvements throughout the City. The decrease in fund balance is a result of roughly $3.8 million in project costs. Temporary Financing $ 3,007,417 $ 2,518,850 $ 488,567 The increase in fund balance is due to net transfers of $972,696 into the fund. Energy Conservation Project $ 2,147,900 $ - $ 2,147,900 At year -end, this fund has $2,052,073 cash with fiscal agent, representing unspent bonds proceeds for the project. Proprietary funds. The City'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 enterprise funds amounted to $4,164,502. Other factors concerning the finances of these funds have already been addressed in the discussion of the City's business -type activities. General Fund Budgetary Highlights Budget amendments were made during the year to reduce the anticipated intergovernmental revenue and current expenditures across all functions as well as capital outlay. In addition, budget amendments were made to increase anticipated revenues within licenses and pem7its, charges for services, fines and forfeitures, and miscellaneous revenues. Both the original and final budgets called for no change to fund balance. Actual revenues were over budget by $109,083, and expenditures were under budget by $239,109. -28- Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business type activities as of December 31, 2011, was $37,435,283 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements, vehicles and equipment, park facilities, roads, highways, and bridges. The total increase in the City's investment in capital assets for the current fiscal year was 21.2 percent. Major capital asset events during the current fiscal year consisted of completion of the Winnetka Avenue infrastructure, Bass Lake Road water main improvement, 45 Avenue pond, and 2009 lighted field improvement projects. Additional projects included the renovation of the Lions Park improvements, Northwood parking lots, Virginia Avenue infrastructure and the Energy savings project. City of New Hope's Capital Assets (net of depreciation) Additional information on the City's capital assets can be found in Note 3C starting on page 83 of this report. Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $11,536,286. Of this amount $1,259,247 will be paid from general property taxes and $4,410,000 from redevelopment district tax increments. Lease revenue bonds were issued in 2011 and had an outstanding balance at year -end of $3,505,000. The remaining $2,362,039 of outstanding bonds at year end were revenue bonds, for which the City has pledged revenue streams from the sewer utility, water utility, and storm water for all principal and interest payments due on these bonds. The Debt Service funds have total fund balance of $465,243, all of which is restricted 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 Governmental Activities Business -type Activities Increase Increase 2011 2010 (Decrease) 2011 2010 (Decrease) G.O. special assessment bonds Governmental Activities $ 775,000 Business -type Activities G.O. bonds and certificates 1,259,247 1,296,006 (36,759) - - - Increase 4,410,000 4,605,000 Increase Lease revenue bonds 2011 2010 (Decrease) 2011 2010 (Decrease) Land $ 994,268 $ 994,268 $ - $ 485,042 $ 485,042 $ - Buildings and structures 4,364,197 4,614,974 (250,777) 3,409,609 3,532,432 (122,823) Vehicles and equipment 2,172,922 2,101,082 71,840 784,692 889,125 (104,433) Improvements other than buildings 9,932,550 9,206,129 726,421 7,105,905 6,446,689 659,216 Construction in progress 6,255,196 1,614,728 4,640,468 1,930,902 993,898 937,004 Total $ 23.719.133 $ 18.531.181 $ 5.187.952 $ 13.716.150 $ 12.347.186 $ 1.368.964 Additional information on the City's capital assets can be found in Note 3C starting on page 83 of this report. Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $11,536,286. Of this amount $1,259,247 will be paid from general property taxes and $4,410,000 from redevelopment district tax increments. Lease revenue bonds were issued in 2011 and had an outstanding balance at year -end of $3,505,000. The remaining $2,362,039 of outstanding bonds at year end were revenue bonds, for which the City has pledged revenue streams from the sewer utility, water utility, and storm water for all principal and interest payments due on these bonds. The Debt Service funds have total fund balance of $465,243, all of which is restricted 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 Governmental Activities Business -type Activities Increase Increase 2011 2010 (Decrease) 2011 2010 (Decrease) G.O. special assessment bonds $ - $ 775,000 $ (775,000) $ - $ - $ - G.O. bonds and certificates 1,259,247 1,296,006 (36,759) - - - G.O. tax increment bonds 4,410,000 4,605,000 (195,000) - - - Lease revenue bonds 3,505,000 - 3,505,000 - - - G.O. revenue bonds - - - 2,362,039 2,933,025 (570,986) Capital leases payable - - - 11,238 19,756 (8,518) Compensated absences 470,152 475,772 (5,620) - - - Other postemployment benefits 70,882 38,819 32,063 12,447 7,130 5,317 Total $ 9,715,281 $ 7,190,597 $ 2,524,684 $ 2,385,724 $ 2,959,911 $ (574,187) The City achieved an "AA" rating from Standard and Poor's. Additional information on the City's long -tern debt can be found in Note 3E starting on page 87 of this report. -29- Economic Factors and Next Year's Budgets and Rates • User charges have been increased to account for various utility improvements scheduled for 2012 and beyond. • The overall tax levy had no increase in 2012. • Management provided a long -term plan to City Council in 2012 that will highlight the tax effect of major capital and operating decisions. This will also be an important document when preparing future budgets. All of these factors were considered in preparing the City's budget for the 2012 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. -30- GOVERNMENT -WIDE FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -31- THIS PAGE IS LEFT BLANK INTENTIONALLY -32- CITY OF NEW HOPE, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2011 The notes to the financial statements are an integral part of this statement. -33- Governmental Business -type Activities Activities Total ASSETS Cash and temporary investments $ 27,390,369 $ 3,322,944 $ 30,713,313 Cash with fiscal agent 2,052,073 - 2,052,073 Receivables Unremitted tax collections 19,414 - 19,414 Delinquent taxes 174,958 - 174,958 Accrued interest 152,642 - 152,642 Accounts 150,279 990,935 1,141,214 Loans 450,922 - 450,922 Special assessments 494,618 191,764 686,382 Internal balances 1,003,851 (1,003,851) - Due from other governments 454,570 124,673 579,243 Inventory 28,918 39,762 68,680 Prepaid items 14,366 - 14,366 Land held for resale 2,433,162 - 2,433,162 Unamortized deferred charges 169,333 56,838 226,171 Investment in joint ventures 1,600,846 168,509 1,769,355 Capital assets Land and construction in progress 7,249,464 2,415,944 9,665,408 Depreciable assets (net of accumulated deprecation) 16,469,669 11,300,206 27,769,875 TOTAL ASSETS 60,309,454 17,607,724 77,917,178 LIABILITIES Accrued salaries payable 264,138 33,800 297,938 Accounts and contracts payable 1,218,457 205,706 1,424,163 Due to other governments 50,144 112,146 162,290 Accrued interest payable 95,380 21,824 117,204 Deposits payable 2,783 - 2,783 Noncurrent liabilities Due within one year Compensated absences payable 470,152 - 470,152 Lease payable - 8,307 8,307 Bonds payable 330,000 334,000 664,000 Due in more than one year Other postemployment benefits payable 70,882 12,447 83,329 Lease payable - 2,931 2,931 Bonds payable, net of unamortized discounts 8,844,247 2,028,039 10,872,286 TOTAL LIABILITIES 11,346,183 2,759,200 14,105,383 NET ASSETS Invested in capital assets, net of related debt 20,399,936 11,342,873 31,742,809 Restricted for Economic development 5,554,293 - 5,554,293 Debt service 369,863 - 369,863 Public safety police expenditures 85,753 - 85,753 Ice arena 8,825 - 8,825 Unrestricted 22,544,601 3,505,651 26,050,252 TOTAL NET ASSETS $ 48,963,271 $ 14,848,524 $ 63,811,795 The notes to the financial statements are an integral part of this statement. -33- CITY OF NEW HOPE, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2011 Functions /Programs Governmental activities General government Public safety Public works Culture and recreation Economic development Interest on long -term debt Total governmental activities Business -type activities Sewer utility Water utility Golf course Ice arena Storm water Street lighting Total business -type activities Total Expenses Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions $ 1,841,145 $ 220,629 $ 222,928 $ - 6,129,860 877,159 247,537 - 1,795,189 219,353 162,707 1,110,762 1,882,279 637,077 12,204 - 536,433 98,139 138,006 - 248,174 - - - 12,433,080 2,052,357 783,382 1,110,762 2,070,951 2,352,635 - - 3,535,160 3,169,859 21,031 13,454 322,679 278,788 - - 746,218 752,671 - - 490,336 947,031 3,000 97,652 113,753 122,742 - - 7,279,097 7,623,726 24,031 111,106 $ 19,712.177 $ 9,676,083 $ 807,413 $ 1,221,868 General revenues Taxes Property taxes Tax increments Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Transfers Total general revenues and transfers 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. -34- Net (Expenses) Revenues and Changes in Net Assets Governmental Business -type Activities Activities Total $ (1,397,588) $ - $ (1,397,588) (5,005,164) - (5,005,164) (302,367) - (302,367) (1,232,998) - (1,232,998) (300,288) - (300,288) (248,174) - (248,174) (8,486,579) - (8,486,579) - 281,684 281,684 - (330,816) (330,816) - (43,891) (43,891) - 6,453 6,453 - 557,347 557,347 - 8,989 8,989 - 479,766 479,766 (8,486,579) 479,766 (8,006,813) 8,784,948 - 8,784,948 1,400,163 - 1,400,163 439,795 - 439,795 87,206 - 87,206 745,484 71,089 816,573 13,568 - 13,568 (1,767,108) 1,767,108 - 9,704,056 1,838,197 11,542,253 1,217,477 2,317,963 3,535,440 47,745,794 12,530,561 60,276,355 48,963,271 $ 14,848,524 $ 63,811,795 -35- THIS PAGE IS LEFT BLANK INTENTIONALLY -36- FUND FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -37- CITY OF NEW HOPE, NIINNESOTA BALANCESHEET GOVERNMENTAL FUNDS DECEMBER 31, 2011 FUND BALANCES Nonspendable 14,366 - - - Restricted - - 5,554,293 - Committed - 4,479,550 - Assigned - - - 1,986,543 Unassigned 4,920, 846 - - - TOTAL FUND BALANCES 4,935,212 4,479,550 5,554,293 1,986,543 TOTAL LIABILITIES AND FUND BALANCES $ 5,434,149 $ 4,932,275 $ 7,740,196 $ 2,436,141 The notes to the financial statements are an integral part of this statement. -38- 9001 9015/9501 9213 -9220 9203 Economic Development HRA Street General Authority Construction Infrastructure ASSETS Cash and temporary investments $ 4,823,007 $ 2,261,409 $ 5,301,264 $ 2,000,484 Cash with fiscal agent - - - - Receivables Unremitted tax collections 11,416 - 5,770 - Delinquent taxes 174,958 - - - Accrued interest 152,642 - - - Accounts 116,986 3,712 - - Loans - 450,922 - - Special assessments Delinquent 788 - - - Deferred 6,897 38,135 - 114,176 Due from other governments 133,089 - - 321,481 Prepaid items 14,366 - - - Due from other funds - 91,913 - - Advances to other funds - 2,086,184 - - Land held for resale - - 2,433,162 - TOTAL ASSETS $ 5,434,149 $ 4,932,275 $ 7,740,196 $ 2,436,141 LIABILITIES AND FUND BALANCES LIABILITIES Accrued salaries payable $ 208,072 $ 4,534 $ - $ - Accounts and contracts payable 86,748 11,396 1,390 335,422 Due to other governments 20,045 - 5,916 - Deposits payable 1,490 793 500 - Due to other funds - - 91,913 - Advances from other funds - - 2,086,184 - Deferred revenue 182,582 436,002 - 114,176 TOTAL LIABILITIES 498,937 452,725 2,185,903 449,598 FUND BALANCES Nonspendable 14,366 - - - Restricted - - 5,554,293 - Committed - 4,479,550 - Assigned - - - 1,986,543 Unassigned 4,920, 846 - - - TOTAL FUND BALANCES 4,935,212 4,479,550 5,554,293 1,986,543 TOTAL LIABILITIES AND FUND BALANCES $ 5,434,149 $ 4,932,275 $ 7,740,196 $ 2,436,141 The notes to the financial statements are an integral part of this statement. -38- 9242 9245 Energy Temporary Conservation Financing Project $ 2,660,198 $ 699,130 - 2,052,073 Other Total Governmental Governmental Funds Funds $ 2,482,727 $ 20,228,219 - 2,052,073 2,228 19,414 - 174,958 - - 152,642 3,720 25,861 150,279 - - 450,922 10,652 - 1,655 13,095 316,103 - 6,212 481,523 - - - 454,570 - - - 14,366 30,000 - - 121,913 315,000 - - 2,401,184 - - - 2,433,162 $ 3,331,953 $ 2,754,923 $ 2,518,683 $ 29,148,320 $ 212,606 607,023 51,354 1,093,333 - 5,000 30,961 - 2,783 - - 91,913 - 2,086,184 324,536 - - 1,057,296 324,536 607,023 56,354 4,575,076 - - 14,366 1,445,050 559,821 7,559,164 - - 186,897 4,666,447 3,007,417 702,850 1,715,611 7,412,421 - - - 4,920,846 3,007,417 2,147,900 2,462,329 24,573,244 $ 3,331,953 $ 2,754,923 $ 2,518,683 $ 29,148,320 -39- THIS PAGE IS LEFT BLANK INTENTIONALLY -40- CITY OF NEW HOPE, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS DECEMBER 31, 2011 Total fund balances - governmental funds 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 Noncurrent liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Noncurrent liabilities at year -end consist of Bond principal payable Less: deferred charges, net of accumulated amortization Plus: unamortized bond premium Internal service funds are used by management to charge certain costs of services to individual funds. The assets and liabilities are included 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 receivable Delinquent taxes receivable Loans receivable 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 current 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. $ 24,573,244 29,312,020 (8,927,630) (9,160,000) 169,333 (14,247) 9,788,938 658,851 484,471 174,958 397,867 (95,3 80) 1,600, 846 $ 48,963,271 -41- CITY OF NEW HOPE, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2011 9001 9015/9501 9213 -9220 9203 Economic Development HRA Street General Authority Construction Infrastructure REVENUES Taxes Property taxes Tax increments Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Economic development Capital outlay Public safety Public works Culture and recreation Economic development Debt service Principal Interest Bond issuance costs $ 6,960,834 $ 85,000 $ - $ 1,182,500 - - 1,106,326 - 439,795 - - - 359,530 - - - 539,846 123,000 142 897,504 1,204,602 98,139 - - 241,504 - - - 6,705 4,907 - - 88,821 52,201 143,441 77,667 30,885 15,006 - 55,325 9,872,522 378,253 1,249,909 2,212,996 1,558,853 - - - 5,930,605 - - - 812,036 - - - 1,556,248 - - - - 289,650 - - 12,392 - - - - - - 3,845,470 - - 246,081 - TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Bonds issued Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 9,870,134 289,650 246,081 3,845,470 2,388 88,603 1,003,828 (1,632,474) 341,224 231,919 - - - (63,319) - - 341,224 168,600 - - 343,612 257,203 1,003,828 (1,632,474) 4,591,600 4,222,347 4,550,465 3,619,017 $ 4,935,212 $ 4,479,550 $ 5,554,293 $ 1,986,543 The notes to the financial statements are an integral part of this statement. -42- 9242 9245 Energy Temporary Conservation Financing Project Other Total Governmental Governmental Funds Funds $ 539,625 $ 8,767,959 - - 293,837 1,400,163 - - - 439,795 - - - 359,530 - - 38,761 1,599,253 - - 241,628 1,544,369 - - 13,825 255,329 66,587 - 75,636 153,835 62,428 631 123,359 548,548 - - 13,967 115,183 129,015 631 1,340,638 15,183,964 - - 1,658 1,560,511 - - 2,596 5,933,201 - - 267,848 1,079,884 - - 4,238 1,560,486 - - - 289,650 613,144 - - 625,536 - - - 3,845,470 - 1,969,444 499,247 2,468,691 - - - 246,081 - - 1,005,000 1,005,000 - - 247,973 247,973 - 93,820 - 93,820 613,144 2,063,264 2,028,560 18,956,303 (484,129) (2,062,633) (687,922) (3,772,339) 1,228,229 705,533 366,963 2,873,868 - 3,505,000 - 3,505,000 (255,533) - (4,250,364) (4,569,216) 972,696 4,210,533 (3,883,401) 1,809,652 488,567 2,147,900 (4,571,323) (1,962,687) 2,518,850 - 7,033,652 26,535,931 $ 3,007,417 $ 2,147,900 $ 2,462,329 $ 24,573,244 -43- THIS PAGE IS LEFT BLANK INTENTIONALLY -44- 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, 2011 Total net change in fund balances - governmental funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays Depreciation expense The City's investment in a joint venture is not a current 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 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. The amounts below are the effects of these differences in the treatment of long -term debt and related items. Bonds issued Less: bond issuance costs Principal repayments Amortization of deferred charges and bond premium 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. 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 Property taxes Loan principal repayments 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. The activities of internal service funds is reported in the government -wide financial statements. Change in net assets of the internal service funds Plus: the change in internal balances for internal services used by business -type activities Change in net assets - governmental activities The notes to the financial statements are an integral part of this statement. $ (1,962,687) 6,125,080 (907,182) 613,144 (3,505,000) 93,820 1,005,000 (4,798) 4,597 4,098 16,989 (15,006) (516,648) 266,070 $ 1,217,477 -45- 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, 2011 REVENUES Taxes Property taxes Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay General government Public safety Culture and recreation TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Transfers in NET CHANGE IN FUND BALANCE FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Original Final Variance with Final Budget $ 7,077,171 $ 7,077,171 $ 6,960,834 $ (116,337) 458,000 458,000 439,795 (18,205) 365,080 367,660 359,530 (8,130) 762,620 469,210 539,846 70,636 957,605 1,034,905 1,204,602 169,697 276,200 278,950 241,504 (37,446) - - 6,705 6,705 48,900 48,900 88,821 39,921 20,500 28,643 30,885 2,242 9,966,076 9,763,439 9,872,522 109,083 1,603,357 1,534,513 1,558,853 (24,340) 6,103,430 6,074,846 5,930,605 144,241 863,740 863,467 812,036 51,431 1,644,077 1,596,294 1,556,248 40,046 34,123 29,123 - 29,123 79,500 7,500 12,392 (4,892) 3,500 3,500 - 3,500 10,331,727 10,109,243 9,870,134 239,109 (365,651) (345,804) 2,388 348,192 365,651 345,804 341,224 (4,580) 343,612 343,612 4,591,600 4,591,600 4,591,600 - $ 4,591,600 $ 4,591.600 $ 4,935,212 $ 343,612 The notes to the financial statements are an integral part of this statement. Actual Amounts -46- 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, 2011 REVENUES Property taxes Intergovernmental Charges for services Special assessments Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Economic development Current Personnel services Supplies Other services and charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Original Final Variance with Final Budget $ 85,000 $ 85,000 $ 85,000 $ - - - 123,000 123,000 98,139 98,139 - - 4,907 4,907 43,800 43,800 52,201 8,401 - - 15,006 15,006 128,800 128,800 378,253 249,453 113,865 114,901 106,914 7,987 350 350 6 344 129,278 128,242 182,730 (54,488) 243,493 243,493 289,650 (46,157) (114,693) (114,693) 88,603 203,296 231,919 231,919 (27,199) (27,199) (63,319) (36,120) (27,199) (27,199) 168,600 195,799 (141,892) (141,892) 257,203 399,095 4,222,347 4,222,347 4,222,347 - $ 4,080,455 $ 4,080,455 $ 4,479,550 $ 399,095 The notes to the financial statements are an integral part of this statement. Actual Amounts -47- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS DECEMBER 31, 2011 AND 2010 ASSETS CURRENT ASSETS Cash and temporary investments Restricted cash and temporary investments Receivables Accounts Special assessments Delinquent Deferred Due from other funds Due from other governments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Unamortized deferred charges Investment in joint ventures Capital assets Land Buildings and structures Improvements other than buildings Vehicles and equipment Construction in progress Less: accumulated depreciation Total capital assets (net of accumulated depreciation) TOTAL NONCURRENT ASSETS TOTAL ASSETS Business -type Activities - Enterprise Funds 9300 9301 Sewer Utility Water Utility 2011 2010 2011 2010 $ 413,985 $ 199,922 $ 706,617 $ - 254,548 253,438 558,616 600,708 1,149 3,090 1,934 5,043 57,838 60,480 97,213 101,285 - - 46,844 247,576 - - 28,309 33,840 727,520 516,930 1,439,533 988,452 5,607 8,276 23,532 28,171 - - 168,509 168,509 3,134,254 3,076,266 3,789,011 3,389,036 293,139 293,139 1,392,767 1,392,767 132,933 72,309 1,512,548 701,807 (1,908,043) (1,838,292) (1,971,745) (1,851,675) 1,652,283 1,603,422 4,722,581 3,631,935 1,657,890 1,611,698 4,914,622 3,828,615 2,385,410 2,128,628 6,354,155 4,817,067 The notes to the financial statements are an integral part of this statement. -48- -49- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water 2011 2010 2011 2010 2011 2010 $ 11,153 $ 50,375 $ 347,901 $ 417,649 $ 1,668,076 $ 977,607 - - - - - 595,000 - 100 73,979 54,558 94,701 97,232 - - - - 3,563 4,371 - - - - 27,141 29,244 - - - - - 501,341 - - 24,921 39,059 52,908 115,256 11,453 10,346 - - - - 22,606 60,821 446,801 511,266 1,846,389 2,320,051 - - - - 27,699 32,092 250,625 250,625 - - 234,417 234,417 973,145 973,145 5,617,003 5,617,003 - - 106,694 106,694 - - 3,612,056 3,249,119 149,758 149,758 196,363 196,363 - - - - - - 285,421 219,782 (791,379) (758,855) (2,820,422) (2,718,809) (472,395) (407,413) 688,843 721,367 2,992,944 3,094,557 3,659,499 3,295,905 688,843 721,367 2,992,944 3,094,557 3,687,198 3,327,997 711,449 782,188 3,439,745 3,605,823 5,533,587 5,648,048 -49- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2011 AND 2010 ASSETS CURRENT ASSETS Cash and temporary investments Restricted cash and temporary investments Receivables Accounts Special assessments Delinquent Deferred Due from other funds Due from other governments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Unamortized deferred charges Investment in joint ventures Capital assets Land Buildings and structures Improvements other than buildings Vehicles and equipment Construction in progress Less: accumulated depreciation Total capital assets (net of accumulated depreciation) TOTAL NONCURRENT ASSETS TOTAL ASSETS Business -type Activities - Enterprise Funds 9305 Street Lighting Totals 2011 2010 2011 2010 $ 175,212 $ 161,105 $ 3,322,944 $ 1,806,658 - - - 595,000 9,091 9,908 990,935 1,015,944 588 680 7,234 13,184 2,338 2,209 184,530 193,218 - - - 501,341 - - 124,673 401,891 - - 39,762 44,186 187,229 173,902 4,670,078 4,571,422 - - 56,838 68,539 - - 168,509 168,509 - - 485,042 485,042 - - 6,590,148 6,590,148 - - 10,642,015 9,821,115 - - 2,032,027 2,032,027 - - 1,930,902 993,898 - - (7,963,984) (7,575,044) - - 13,716,150 12,347,186 - - 13,941,497 12,584,234 187,229 173,902 18,611,575 17,155,656 The notes to the financial statements are an integral part of this statement. -50- Governmental Activities - Internal Service Funds 2011 2010 $ 7,162,150 $ 7,669,873 28,918 49,894 7,191,068 7,719,767 85,647 85,647 3,032,156 3,032,156 6,836,364 6,557,518 (6,619,424) (6,310,632) 3,334,743 3,364,689 3,334,743 3,364,689 10,525,811 11,084,456 -51- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2011 AND 2010 Business -type Activities - Enterprise Funds LIABILITIES CURRENT LIABILITIES Accrued salaries payable Accounts and contracts payable Due to other governments Accrued interest payable Due to other funds Deposits payable Compensated absences payable, current portion Lease payable, current portion Bonds payable, current portion TOTAL CURRENT LIABILITIES 9300 9301 Sewer Utility Water Utility 2011 2010 2011 2010 $ 10,361 $ 4,502 $ 10,697 $ 9,247 28,325 15,127 54,256 70,177 - - 110,586 116,757 1,635 3,838 13,161 16,961 - - - 501,341 72,872 76,515 161,872 76,515 113,193 99,982 350,572 790,998 NONCURRENT LIABILITIES Advances from other funds - - - - Other postemployment benefits payable 3,121 1,577 3,935 2,387 Lease payable - - - - Bonds payable, net of unamortized discounts 144,851 218,164 1,216,258 993,512 TOTAL NONCURRENT LIABILITIES 147,972 219,741 1,220,193 995,899 TOTAL LIABILITIES 261,165 319,723 1,570,765 1,786,897 NET ASSETS Invested in capital assets, net of related debt 1,434,560 1,308,743 3,344,451 2,561,908 Unrestricted 689,685 500,162 1,438,939 468,262 TOTAL NET ASSETS $ 2,124,245 $ 1,808,905 $ 4,783,390 $ 3,030,170 The notes to the financial statements are an integral part of this statement. -52- -53- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water 2011 2010 2011 2010 2011 2010 $ 860 $ 1,036 $ 11,079 $ 9,105 $ 803 $ 3,995 1,555 1,992 24,101 36,377 87,922 20,327 - - 1,560 11,573 - - - - - - 7,028 19,674 30,000 34,561 - - - - - - - 40,850 - - - - 8,307 7,843 - - - - - - 99,256 801,970 32,415 37,589 45,047 105,748 195,009 845,966 315,000 345,000 - - - - 1,419 970 2,868 1,680 1,104 516 - - 2,931 11,913 - - - - - - 666,930 766,349 316,419 345,970 5,799 13,593 668,034 766,865 348,834 383,559 50,846 119,341 863,043 1,612,831 688,843 721,367 2,981,706 3,074,801 2,893,313 2,322,586 (326,228) (322,738) 407,193 411,681 1,777,231 1,712,631 $ 362,615 $ 398,629 $ 3,388,899 $ 3,486,482 $ 4,670,544 $ 4,035,217 -53- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2011 AND 2010 Business -type Activities - Enterprise Funds LIABILITIES CURRENT LIABILITIES Accrued salaries payable Accounts and contracts payable Due to other governments Accrued interest payable Due to other funds Deposits payable Compensated absences payable, current portion Lease payable, current portion Bonds payable, current portion TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES Advances from other funds Other postemployment benefits payable Lease payable Bonds payable, net of unamortized discounts TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Unrestricted 9305 Street Lighting Totals 2011 2010 2011 2010 $ - $ - $ 33,800 $ 27,885 9,547 9,963 205,706 153,963 - - 112,146 128,330 21,824 40,473 30,000 535,902 - 40,850 8,307 7,843 334,000 955,000 9,547 9,963 745,783 1,890,246 - - 315,000 345,000 - - 12,447 7,130 - - 2,931 11,913 - - 2,028,039 1,978,025 - - 2,358,417 2,342,068 9,547 9,963 3,104,200 4,232,314 - - 11,342,873 9,989,405 177,682 163,939 4,164,502 2,933,937 TOTAL NET ASSETS $ 177,682 $ 163,939 $ 15,507,375 $ 12,923,342 Total net assets - enterprise funds $ 15,507,375 $ 12,923,342 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (658,851) (392,781) Net assets - business -type activities The notes to the financial statements are an integral part of this statement. $ 14,848,524 $ 12,530,561 -54- Governmental Activities - Internal Service Funds 2011 2010 $ 51,532 $ 90,958 125,124 136,897 19,183 48,616 470,152 463,580 665,991 740,051 70,882 38,819 70,882 38,819 736,873 778,870 3,334,743 3,364,689 6,454,195 6,940,897 $ 9,788,938 $ 10,305,586 -55- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 OPERATING REVENUES Charges for services Billings to departments Other TOTAL OPERATING REVENUES OPERATING EXPENSES Cost of goods sold Personnel services Supplies Utilities Other services and charges Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) Investment earnings Miscellaneous revenues Gain on sale of capital assets Interest expense TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE TRANSFERS AND CONTRIBUTIONS TRANSFERS IN CAPITAL CONTRIBUTIONS TRANSFERS OUT TOTAL TRANSFERS AND CONTRIBUTIONS CHANGE IN NET ASSETS NET ASSETS, JANUARY 1 NET ASSETS, DECEMBER 31 Business -type Activities - Enterprise Funds 9300 9301 Sewer Utility Water Utility 2011 2010 2011 2010 $ 2,352,635 $ 2,292,300 $ 3,130,311 $ 3,047,304 2,352,635 2,292,300 3,130,311 3,047,304 1,356,328 1,298,199 2,281,327 1,807,588 245,089 210,476 321,900 326,248 11,813 8,297 181,267 238,150 10,511 7,288 1,136 1,154 303,811 269,952 469,815 317,326 69,751 67,795 120,070 116,731 1,997,303 1,862,007 3,375,515 2,807,197 355,332 430,293 (245,204) 240,107 10,943 - 3,926 (2,023) - - 60,579 51,971 (6,511) (11,214) (35,087) (32,561) 4,432 (11,214) 29,418 17,387 359,764 419,079 (215,786) 257,494 - 1,427,361 2,000,000 - - - 13,454 254,937 (44,424) (37,535) (44,448) (1,464,887) (44,424) 1,389,826 1,969,006 (1,209,950) 315,340 1,808,905 1,753,220 (952,456) 1,808,905 - 3,030,170 3,982,626 $ 2,124,245 $ 1,808,905 $ 4,783,390 $ 3,030,170 The notes to the financial statements are an integral part of this statement. -56- -57- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water 2011 2010 2011 2010 2011 2010 $ 273,064 $ 305,558 $ 752,671 $ 741,266 $ 947,031 $ 943,883 273,064 305,558 752,671 741,266 947,031 943,883 24,948 26,164 - - - - 163,139 163,680 288,663 267,562 53,692 48,706 34,391 33,939 23,410 21,478 11,678 7,222 22,185 18,064 263,310 242,434 623 757 36,077 34,716 56,886 64,234 278,240 228,775 32,524 41,826 101,613 101,613 64,982 61,692 313,264 318,389 733,882 697,321 409,215 347,152 (40,200) (12,831) 18,789 43,945 537,816 596,731 1,131 387 9,665 4,235 40,670 12,709 5,724 8,383 - - 3,000 61,691 (2,669) (24,048) (1,037) (1,413) (24,791) (50,832) 4,186 (15,278) 8,628 2,822 18,879 23,568 (36,014) (28,109) 27,417 46,767 556,695 620,299 - - - - 97,652 167,790 - - (125,000) - (19,020) (16,068) - - (125,000) - 78,632 151,722 (36,014) (28,109) (97,583) 46,767 635,327 772,021 398,629 426,738 3,486,482 3,439,715 4,035,217 3,263,196 $ 362,615 398,629 $ 3,388,899 $ 3,486,482 $ 4,670,544 4,035,217 -57- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Business -type Activities - Enterprise Funds 9305 Street Lighting Totals 2011 2010 2011 2010 OPERATING REVENUES Charges for services Billings to departments Other $ 122,742 $ 121,647 $ 7,578,454 $ 7,451,958 TOTAL OPERATING REVENUES 122,742 121,647 7,578,454 7,451,958 OPERATING EXPENSES Cost of goods sold - - 3,662,603 3,131,951 Personnel services 180 - 1,072,663 1,016,672 Supplies - - 262,559 309,086 Utilities 112,141 101,490 409,906 371,187 Other services and charges 1,432 2,609 1,146,261 917,612 Depreciation - - 388,940 389,657 TOTAL OPERATING EXPENSES 113,753 104,099 6,942,932 6,136,165 OPERATING INCOME (LOSS) 8,989 17,548 635,522 1,315,793 NONOPERATING REVENUES (EXPENSES) Investment earnings 4,754 2,092 71,089 17,400 Miscellaneous revenues - - 69,303 122,045 Gain on sale of capital assets - - - - Interest expense - - (70,095) (120,068) TOTAL NONOPERATING REVENUES (EXPENSES) 4,754 2,092 70,297 19,377 INCOME (LOSS) BEFORE TRANSFERS AND CONTRIBUTIONS 13,743 19,640 705,819 1,335,170 TRANSFERS IN - - 2,000,000 1,427,361 CAPITAL CONTRIBUTIONS - - 111,106 422,727 TRANSFERS OUT - - (232,892) (1,518,490) TOTAL TRANSFERS AND CONTRIBUTIONS - - 1,878,214 331,598 CHANGE IN NET ASSETS 13,743 19,640 2,584,033 1,666,768 NET ASSETS, JANUARY 1 163,939 144,299 12,923,342 11,256,574 NET ASSETS, DECEMBER 31 $ 177,682 $ 163,939 $ 15,507,375 $ 12,923,342 Change in net assets - enterprise funds $ 2,584,033 $ 1,666,768 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds. (266,070) (181,865) Change in net assets - business -type activities $ 2,317,963 $ 1,484,903 The notes to the financial statements are an integral part of this statement. -58- Governmental Activities - Internal Service Funds 2011 2010 2,107,784 1,859,795 17,116 44,513 2,124,900 1,904,308 960,492 978,400 396,513 359,185 84,583 85,697 815,552 443,286 523,152 501,084 2,780,292 2,367,652 (655,392) (463,344) 196,936 48,112 13,568 20,976 210,504 69,088 (444,888) (394,256) (71,760) (60,600) (71,760) (60,600) (516,648) (454,856) 10,305,586 10, 760,442 $ 9,788,938 $ 10,305,586 -59- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts from interfund services provided Other operating receipts Payments to suppliers Payments to employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Transfers out Borrowing (payments) on interfand balances Deposits received (returned) NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets Proceeds from sale of assets Capital contributions Intergovernmental receipts Proceeds from bonds issued (net) Principal paid on long -term debt Interest paid on long -term debt 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 and temporary investments TOTAL CASH AND CASH EQUIVALENTS Business -type Activities - Enterprise Funds 9300 9301 Sewer Utility Water Utility $ 2,356,108 $ 2,293,584 $ 3,139,154 $ 2,972,449 - - 60,579 51,971 (1,658,452) (1,579,422) (2,909,147) (2,360,691) (237,686) (205,540) (318,902) (329,612) 459,970 508,622 (28,316) 334,117 - - 2,000,000 55,219 (44,424) (92,754) (44,448) (37,526) - - (501,341) (384,097) (44,424) (92,754) 1,454,211 (366,404) (129,425) (137,896) (1,251,675) (648,642) - - 13,454 13,775 - - 241,162 - - 289,420 411,738 1,043,645 (76,515) (355,250) (103,159) (355,250) (6,486) (12,220) (34,724) (19,218) (212,426) (215,946) (723,204) 34,310 10,943 - 3,926 (2,023) 214,063 199,922 706,617 - 199,922 - - - $ 413,985 $ 199,922 $ 706,617 $ 413,985 199,922 706,617 - $ 413,985 $ 199,922 $ 706,617 $ The notes to the financial statements are an integral part of this statement. -60- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water 2011 2010 2011 2010 2011 2010 $ 273,164 $ 305,758 $ 747,388 $ 710,390 $ 952,473 $ 941,647 5,724 8,383 - - 3,000 61,691 (119,145) (110,858) (365,895) (340,329) (272,868) (280,936) (162,866) (163,526) (285,501) (265,021) (56,296) (44,614) (3,123) 39,757 95,992 105,040 626,309 677,788 - - (125,000) - (19,020) (16,068) (34,561) 379,561 - - 501,341 384,097 - - (40,850) 40,850 - - (34,561) 379,561 (165,850) 40,850 482,321 368,029 (378,654) (216,388) - - - - 160,000 52,534 - - - - - 810,350 - (400,000) (8,518) (7,405) (801,969) (409,500) (2,669) (27,129) (1,037) (1,413) (33,208) (50,202) (2,669) (427,129) (9,555) (8,818) (1,053,831) 186,794 1,131 387 9,665 4,236 40,670 12,709 (39,222) (7,424) (69,748) 141,308 95,469 1,245,320 50,375 57,799 417,649 276,341 1,572,607 327,287 $ 11,153 $ 50,375 $ 347,901 $ 417,649 $ 1,668,076 $ 1,572,607 11,153 50,375 347,901 417,649 1,668,076 977,607 - - - - - 595,000 $ 11,153 $ 50,375 $ 347,901 $ 417,649 $ 1,668,076 $ 1,572,607 -61- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Transfers out Borrowing (payments) on interfand balances Deposits received (returned) NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets Proceeds from sale of assets Capital contributions Intergovernmental receipts Proceeds from bonds issued (net) Principal paid on long -term debt Interest paid on long -term debt 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 9,353 13,195 1,160,185 1,678,519 - - 2,000,000 Business -type Activities - Enterprise Funds - - (232,892) (146,348) 9305 379,561 - - (40,850) 40,850 Street Lighting Totals 329,282 2011 2010 2011 2010 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 123,522 $ 118,800 $ 7,591,809 $ 7,342,628 Receipts from interfund services provided - - - - Other operating receipts - - 69,303 122,045 Payments to suppliers (113,989) (105,605) (5,439,496) (4,777,841) Payments to employees (180) - (1,061,431) (1,008,313) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Transfers out Borrowing (payments) on interfand balances Deposits received (returned) NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets Proceeds from sale of assets Capital contributions Intergovernmental receipts Proceeds from bonds issued (net) Principal paid on long -term debt Interest paid on long -term debt 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 9,353 13,195 1,160,185 1,678,519 - - 2,000,000 55,219 - - (232,892) (146,348) - - (34,561) 379,561 - - (40,850) 40,850 - (78,124) - 1,691,697 329,282 (1,759,754) (1,002,926) - - 13,454 13,775 - - 401,162 52,534 - - 411,738 2,143,415 - - (990,161) (1,527,405) - (78,124) (110,182) - - (2,001,685) (430,789) 4,754 2,092 71,089 17,401 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 and temporary investments TOTAL CASH AND CASH EQUIVALENTS 14,107 15,287 921,286 1,594,413 161,105 145,818 2,401,658 807,245 $ 175,212 $ 161,105 $ 3,322,944 $ 2,401,658 $ 175,212 $ 161,105 $ 3,322,944 $ 1,806,658 - - - 595,000 $ 175,212 $ 161,105 $ 3,322,944 $ 2,401,658 The notes to the financial statements are an integral part of this statement. -62- Governmental Activities Internal Service Funds 2011 2010 2,124,900 1,957,141 (1,299,150) (965,896) (961,283) (1,021,077) (135,533) (29,832) (71,760) (60,600) (71,760) (60,600) (510,934) (828,240) 13,568 20,976 (497,366) (807,264) 196,936 48,113 (507,723) (849,583) 7,669,873 8,519,456 $ 7,162,150 $ 7,669,873 $ 7,162,150 $ 7,669,873 $ 7,162,150 $ 7,669,873 -63- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Business -type Activities - Enterprise Funds 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 Other income related to operations (Increase) decrease 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 Compensated absences payable Other postemployment benefits payable NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Amortization of deferred charges and bond bond discount Amortization of bond premium Capital assets purchased on account Transfer of capital assets from other funds Transfer of capital assets to other funds Transfer of other assets from other funds Transfer of other assets to other funds Transfer of bonds payable from other funds Transfer of bonds payable to other funds Transfer of other liabilities from other funds Transfer of other liabilities to other funds 9300 9301 Sewer Utility Water Utility 2011 2010 2011 2010 $ 355,332 $ 430,293 $ (245,204) $ 240,107 69,751 67,795 120,070 116,731 - - 60,579 51,971 The notes to the financial statements are an integral part of this statement. -64- (1,110) 4,559 5,743 (78,056) 4,583 (3,275) 7,181 4,404 - - (4,081) (1,203) - - 5,531 11,085 24,011 4,314 25,038 (45,787) 5,859 4,502 1,450 (4,021) - - (6,171) 38,229 1,544 434 1,548 657 $ 459,970 $ 508,622 $ (28,316) $ 334,117 $ 3,343 $ 2,452 $ 5,312 $ 3,699 $ 1,115 $ 657 $ 1,149 $ 678 $ $ 10,813 $ $ 40.959 $ $ 1,522,508 $ $ $ $ $ $ 1,522,508 $ $ 320,346 $ $ $ $ $ $ 320.346 $ $ 355,250 $ $ $ $ $ $ 355,250 $ $ 5,024 $ $ The notes to the financial statements are an integral part of this statement. -64- -65- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water 2011 2010 2011 2010 2011 2010 $ (40,200) $ (12,831) $ 18,789 $ 43,945 $ 537,816 $ 596,731 32,524 41,826 101,613 101,613 64,982 61,692 5,724 8,383 - - 3,000 61,691 100 200 (19,421) (29,922) 2,531 (4,057) - - - - 2,911 1,821 - - 14,138 (954) - - (1,107) 1,719 - - - - - - - 75 - - (437) 306 (12,276) (12,088) 17,673 (43,912) (176) (57) 1,974 2,105 (3,192) 3,995 - - (10,013) (170) - (270) 449 211 1,188 436 588 97 $ (3,123) $ 39,757 $ 95,992 $ 105,040 $ 626,309 $ 677,788 $ $ 7,471 $ $ $ 5,614 $ 5,035 $ $ $ $ $ 1,385 $ 543 $ $ $ $ $ 65,623 $ 15,701 -65- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 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 Other income related to operations (Increase) decrease 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 Compensated absences payable Other postemployment benefits payable NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Amortization of deferred charges and bond bond discount Amortization of bond premium Capital assets purchased on account Transfer of capital assets from other funds Transfer of capital assets to other funds Transfer of other assets from other funds Transfer of other assets to other funds Transfer of bonds payable from other funds Transfer of bonds payable to other funds Transfer of other liabilities from other funds Transfer of other liabilities to other funds Business -type Activities - Enterprise Funds 9305 Street Lighting Totals 2011 2010 2011 2010 $ 8,989 $ 17,548 $ 635,522 $ 1,315,793 - - 388,940 389,657 - - 69,303 122,045 The notes to the financial statements are an integral part of this statement. •• 817 (2,524) (11,340) (109,800) (37) (323) 14,638 2,627 - - 10,057 (2,157) - - 4,424 12,804 - - - 75 (416) (1,466) 53,593 (98,633) - - 5,915 6,524 - (40) (16,184) 37,749 - - 5,317 1,835 $ 9,353 $ 13,195 $ 1,160,185 $ 1,678,519 $ $ $ 14,269 $ 18,657 $ $ $ 3,649 $ 1,878 $ $ $ 65,623 $ 67,473 $ $ $ $ 1,522,508 $ $ $ $ 1,522,508 $ $ $ $ 320,346 $ $ $ $ 320,346 $ $ $ $ 355,250 $ $ $ $ 355,250 $ $ $ $ 5,024 $ $ $ $ 5,024 The notes to the financial statements are an integral part of this statement. •• Governmental Activities - Internal Service Funds 2011 2010 $ (655,392) $ (463,344) 523,152 501,084 - 50,161 - 2,672 20,976 811 5,955 (154,234) (39,426) 8,954 (29,433) 48,616 6,572 (36,292) 32,063 11,740 $ (135,533) $ (29,832) -67- 86,908 -67- CITY OF NEW HOPE, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUND DECEMBER 31, 2011 ASSETS 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 $ 45,694 $ 45,694 -68- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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: Blended component unit 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. 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, even though the latter are excluded from the government -wide financial statements. 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. 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. -69- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 and fiduciary 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 City considers revenues 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, other postemployment benefits, 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. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -70- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major governmental funds: The General fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another 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. 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 increment revenues. The Street Infrastructure Capital Projects fund is used to account for street improvements throughout the City. The Temporary Financing Capital Projects fund is used to account for various capital projects and capital outlay purchases until permanent fmancing is acquired. The Energy Conservation Project Capital Projects fund accounts for the accumulation of resources for major construction of the energy conservation project. The City reports the following major enterprise funds: The Sewer Utility fund accounts 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. 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. The Golf Course fund is used to account for the operations of the City's public golf course. The Ice Arena fund is used to account for the operation of the City's indoor ice arena. The Storm Water fund accounts for the general operation and maintenance of the City's storm water system. The Street Lighting fund is used to account for the operation of the City's streetlight system. Additionally, the City reports the following fund types: Internal service 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. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent on behalf of others. The Agency fund is custodial in nature and does not present results of operations or have a measurement focus. This fund was established to account for pass - through grant funds held by the City as the agent for others. -71- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 GASB. 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 City 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. -72- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 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 balances from all funds are pooled and invested, to the extent available, in certificates of deposit, U.S. government obligations, and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. The City may also invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 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. -73- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 2011. The City annually certifies delinquent water, sewer, storm water, and street lighting accounts to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established for the delinquent water and sewer accounts. 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. 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. -74- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Interfund 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." Inventory 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. 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. Property, plant, and equipment of the City are depreciated using the straight line method over the following estimated useful lives: Assets Land improvements Buildings and structures Improvements other than buildings Vehicles and equipment Years 15 -50 15 -50 15 -50 3 -20 -75- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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. The Employee Leave internal service fund is typically used to liquidate governmental compensated absences payable. Other Postemployment Benefits (OPEB) 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 a group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees are able to add dependent coverage during open enrollment period or qualifying life event prior to retirement. All premiums are funded on a pay - as- you -go basis. The liability was determined, in accordance with GASB Statement No. 45, at January 1, 2011. The Insurance Reserve Internal service fund is typically used to liquidate governmental other postemployment benefits payable. 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 straight line 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. 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. Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt". -76- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Fund balance In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are defined as follows: Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items. Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council (the Council), which is the City's highest level of decision - making authority. Committed amounts cannot be used for any other purpose unless the Council modifies or rescinds the commitment by resolution. Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established by the Council itself or by an official to which the governing body delegates the authority. The Council has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the Finance Manager or City Manager. Unassigned - The residual classification for the General fund and also negative residual amounts in other funds. The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The City has formally adopted a fund balance policy for the General fund. The City's policy is to maintain a minimum unassigned fund balance of 40 - 50 percent of the next year's budgeted expenditures. 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. Change in accountingprincipal GASB Statement 54 "Fund Balance Reporting and Governmental Fund Type Definitions" enhances the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. The City implemented this standard for fiscal year end December 31, 2011. Changes to governmental fund type fund balance reporting is reflected in the financial statements and schedules and related disclosures are included in Note 1 and Note 3. -77- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 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. B. Excess of expenditures over appropriations For the year ended December 31, 2011, expenditures exceeded appropriations in the Economic Development Authority fund by $46,157. This excess was funded by revenues received more than anticipated. C. Deficit fund equity As of December 31, 2011, the Employee Leave internal service fund had a net liability of $13,359. The City can eliminate this deficit by increasing billings to other departments for employee leave charges. -78- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 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. 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 City. At year -end, the carrying amount of the City's deposits was $3,815,691 and the bank balance was $4,092,744. At December 31, 2011, 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. -79- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Investments As of December 31, 2011, the City had the following investments that are insured or registered, or securities held by the City or its 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. -80- Fair Value Credit Segmented and Quality/ Time Carrying Types of Investments Ratings (1) Distribution (2) Amount Pooled investments Broker Money Market Funds AAA- Less than 6 months $ 3,995,954 Non - pooled investments Negotiable Certificates of Deposit N/A Less than 6 months 242,590 Negotiable Certificates of Deposit N/A 6 months to 1 year 301,021 Negotiable Certificates of Deposit N/A 1 to 3 years 699,516 Negotiable Certificates of Deposit N/A More than 3 years 860,592 U.S. Government Agency Securities AAA 1 to 3 years 26,131 U.S. Government Agency Securities AAA More than 3 years 7,520,643 Municipal Bonds AA+ 1 to 3 years 1,037,040 Municipal Bonds AA 1 to 3 years 1,348,925 State and Local Government Securities A+ 6 months to 1 year 1,247,316 State and Local Government Securities A+ 1 to 3 years 797,464 State and Local Government Securities A+ More than 3 years 1,029,270 State and Local Government Securities AA- 1 to 3 years 2,731,779 State and Local Government Securities AA- More than 3 years 514,135 State and Local Government Securities AA+ 1 to 3 years 200,024 State and Local Government Securities AA+ More than 3 years 476,591 State and Local Government Securities A- 1 to 3 years 2,094,940 State and Local Government Securities AAA More than 3 years 3,868,508 Total investments $ 28.992.439 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. -80- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED 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 73 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, 2011, the City had invested 5 percent or more of its total investment portfolio in the following issuers: Federal Home Loan Mortgage Corporation - 7.1 percent, Federal National Mortgage Association - 19.0 percent, the State of Illinois - 10.6 percent, the State of California - 7.2 percent, the State of Michigan - 5.3 percent, and New York City Transitional Finance Authority - 9.8 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. A reconciliation of cash and temporary investments as reported on the statement of net assets follows: Carrying amount of deposits $ 3,815,691 Investments 28,992,439 Petty cash 2,950 Total $ 32,811,080 Statement of Net Assets Cash and temporary investments $ 30,713,313 Cash with fiscal agent 2,052,073 Statement of Fiduciary Net Assets Cash and temporary investments 45,694 Total $ 32,811,080 -81- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED B. Receivables /deferred revenue Loans receivable The City has made several business subsidy loans to local businesses, some of which were funded with grant proceeds received from Hennepin County. The terms and periods of repayment vary with each loan. Loans receivable in the Economic Development Authority fund at December 31, 2011 totaled $450,922. 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 reported in the governmental funds were as follows: Unavailable Delinquent property taxes receivable General $ 174,958 Special assessments receivable General 7,624 Economic development authority 38,135 Street infrastructure 114,176 Temporary financing 324,536 Loans receivable Economic development authority 397,867 Total governmental funds $ 1,057,296 -82- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED C. Capital assets Capital asset activity for the year ended December 31, 2011 was as follows: Beginning Balance Increases 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 Ending Decreases Balance $ 994,268 $ - $ - $ 994,268 1,614,728 5,503,790 (863,322) 6,255,196 2,608,996 5,503,790 (863,322) 7,249,464 9,241,715 - - 9,241,715 7,588,917 585,310 (214,360) 7,959,867 13,422,633 1,392,508 - 14,815,141 30,253,265 1,977,818 (214,360) 32,016,723 (4,626,741) (250,777) - (4,877,518) (5,487,835) (513,470) 214,360 (5,786,945) (4,216,504) (666,087) - (4,882,591) (14,331,080) (1,430,334) 214,360 (15,547,054) 15,922,185 547,484 - 16,469,669 $ 18,531,181 $ 6,051,274 $ (863,322) $ 23,719,133 -83- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED capital assets, net $ 12,347,186 $ 1,981,848 $ (612,884) $ 13,716,150 Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government $ 109,739 Public safety 73,987 Public works 462,378 Culture and recreation 261,078 Internal service 523,152 Total depreciation expense - governmental activities $ 1,430,334 Business -type activities Sewer utility $ 69,751 Water utility 120,070 Golf course 32,524 Ice arena 101,613 Storm water 64,982 Total depreciation expense - business -type activities $ 388,940 -84- Beginning Ending Balance Increases Decreases Balance Business -type Activities Capital assets not being depreciated Land $ 485,042 $ - $ - $ 485,042 Construction in progress 993,898 1,549,888 (612,884) 1,930,902 Total capital assets not being depreciated 1,478,940 1,549,888 (612,884) 2,415,944 Capital assets being depreciated Buildings and structures 6,590,148 - - 6,590,148 Vehicles and equipment 2,032,027 - - 2,032,027 Improvements other than buildings 9,821,115 820,900 - 10,642,015 Total capital assets being depreciated 18,443,290 820,900 - 19,264,190 Less accumulated depreciation for Buildings and structures (3,057,716) (122,823) - (3,180,539) Vehicles and equipment (1,142,902) (104,433) - (1,247,335) Improvements other than buildings (3,374,426) (161,684) - (3,536,110) Total accumulated depreciation (7,575,044) (388,940) - (7,963,984) Total capital assets being depreciated, net 10,868,246 431,960 - 11,300,206 Business -type activities capital assets, net $ 12,347,186 $ 1,981,848 $ (612,884) $ 13,716,150 Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government $ 109,739 Public safety 73,987 Public works 462,378 Culture and recreation 261,078 Internal service 523,152 Total depreciation expense - governmental activities $ 1,430,334 Business -type activities Sewer utility $ 69,751 Water utility 120,070 Golf course 32,524 Ice arena 101,613 Storm water 64,982 Total depreciation expense - business -type activities $ 388,940 -84- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Construction commitments The City has active construction projects as of December 31, 2011. At year -end, the City's commitments with the contractors are as follows: Project 2011 Infrastructure Improvements Boone Avenue Improvements Winnetka Avenue Infrastructure Lions Park Improvements Bass Lake Road Water Main Improvements 2009 Retaining Wall Total D. Interfund receivables, payables, and transfers The composition of internal balances as of December 31, 2011 is as follows: Receivable Fund Spent Remaining to date Commitment $ 3,220,714 502,330 1,200,374 84,256 1,011,610 61,234 $ 329,592 164,622 50,983 4,997 692 22,931 $ 6,080,518 $ 573,817 Payable Fund Purpose Due from/to other funds Governmental Governmental Economic Development Authority HRA Construction Governmental Business -type Temporary Financing Golf Course Total due from /to other funds Advances to /from other funds Governmental Governmental Economic Development Authority HRA Construction Governmental Business -type Temporary Financing Golf Course Total advances to /from other funds Interfund activity eliminated from government -wide statements Internal service fund activities related to the enterprise funds Total internal balances - government -wide statements Finance capital purchase Cash flow purposes Finance capital purchase Cash flow purposes Amount $ 91,913 30,000 121,913 2,086,184 315,000 2,401,184 (2,178, 097) 658,851 $ 1,003,851 The Economic Development Authority fund loaned $2,433,162 in 2008 for the purchase of land at Bass Lake Road. The interfund loan matures in 2028 and carries an interest rate of four percent. As of December 31, 2011, the balance outstanding was $2,178,097. The Temporary Financing fund loaned $379,561 to the Golf Course fund in 2010 to allow the Golf Course to pay off a bond early. Payments are made as cash is available. As of December 31, 2011, the balance outstanding was $345,000. -85- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Interfund transfers at December 31, 2011 are as follows: Fund General Fund Transfer in Economic Energy Development Temporary Conservation Authority Financing Project Transfer out Economic Development Authority Temporary Financing Nonmajor governmental Sewer Utility enterprise Water Utility enterprise Ice Arena enterprise Storm Water enterprise Internal Service enterprise $ 63,319 - - - - 255,533 98,253 231,919 1,228,229 325,000 44,424 - - - 44,448 - - - - - - 125,000 19,020 - - - 71,760 - - - Total transfers Fund Transfer out Economic Development Authority Temporary Financing Nonmajor governmental Sewer Utility enterprise Water Utility enterprise Ice Arena enterprise Storm Water enterprise Internal Service enterprise Total transfers $ - $ - $ 63,319 255,533 366,963 2,000,000 4,250,364 - - 44,424 - - 44,448 - - 125,000 - - 19,020 - 71,760 $ 366,963 $ 2,000,000 $ 4,873,868 • Transfers of $36,115 and $70,765 were made from the Economic Development Authority fund and Nonmajor governmental funds, respectively, to the General fund to close funds and activity. • Transfers were made out of the Economic Development Authority fund, Nonmajor governmental funds, Sewer Utility enterprise fund, Water Utility enterprise fund, Storm Water enterprise fund, and internal Service fund for $27,204, $27,488, $44,424, $44,448, $19,020, and $71,760, respectively, to the General fund to cover administrative charges paid for by the General fund. • Transfers were made from the Nonmajor governmental funds of $231,919, $1,228,229, and $366,963 to the Economic Development Authority fund, Temporary Financing fund and other Nonmajor governmental funds, respectively, to close funds. • Transfers of $255,533, $325,000, and $125,000 were made out of the Temporary Financing fund, Nonmajor governmental funds, and Ice Arena enterprise fund, respectively, to the Energy Conservation Project fund to finance the project. • The Water Utility enterprise fund received a transfer of $2,000,000 from the Nonmajor governmental funds to cover project costs and the deficit cash balance. $ 341,224 $ 231,919 $ 1,228,229 $ 705,533 Nonmajor Water Governmental Utility Funds Enterprise Total :• CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED E. Long -term debt 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 equipment acquired through capital lease has a cost of $38,892, and a net book value of $7,778 as of December 31, 2011. The future minimum lease obligations and the net present value of these minimum lease payments as of December 31, 2011, are as follows: Year Ending Business -type December 31 Activities 2012 $ 8,819 2013 3,001 Total minimum payments 11,820 Less amount representing interest (582) Present value of minimum least payments $ 11,238 General obligation (G.O.) bonds The City issues G.O. bonds to provide funds for the acquisition and construction of major capital facilities. G.O. bonds have been issued for both governmental and business -type activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, G.O. bonds have been issued to refund G.O. revenue bonds. The following G.O. bonds will be repaid from future tax levies. Description 2010B G.O_ Certificates of Indebtedness Authorized Interest Issue Maturity Balance at and Issued Rate Date Date Year End $ 1,245,000 2.00-2-60% 11/23/10 02/01/20 $ 1,245,000 The annual debt service to maturity for G.O. bonds are as follows: Year Ending December 31, 2012 2013 2014 2015 2016 2017-2020 Total Governmental Activities Principal Interest Total $ 125,000 $ 25,348 $ 150,348 130,000 22,797 152,797 135,000 20,148 155,148 13 5, 000 17,447 152,447 140,000 14,698 154,698 580,000 28,426 608,426 $ 1,245,000 $ 128,864 $ 1,373,864 -87- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED G.O. tax increment bonds The following bonds were issued for development purposes. The additional tax increment resulting from the increased tax capacity of the redeveloped properties has been pledged to retire the related debt. Tax increment revenues are projected to produce over 75 percent of the debt service requirements over the life of the bonds. For the current year, principal and interest paid and total related tax increment revenues were $389,318 and $293,837, respectively. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Tax Increment Bonds of 2004 $ 4,080,000 3.00-4.30 % 04/01/04 02/01/25 $ 3,125,000 G.O. Tax Increment Bonds of 2005 1,370,000 5-60-5.65 03/01/05 02/01/31 1,285,000 Total G.O. tax increment bonds $ 4,410,000 The annual debt service to maturity for G.O. tax increment bonds are as follows: Year Ending Governmental Activities December 31, Principal Interest Total 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 235,000 156,036 391,036 2017-2021 1,335,000 628,843 1,963,843 2021-2026 1,485,000 296,813 1,781,813 2027-2031 500,000 70,621 570,621 Total $ 4,410,000 $ 1,857,432 $ 6,267,432 Lease revenue bonds The following bonds were issued to finance the Energy Conservation project and will be repaid primarily with energy savings. Description 201 IA Taxable Lease Revenue Bonds Authorized Interest Issue Maturity Balance at and Issued Rate Date Date Year End $ 3,505,000 5.00 % 12/01/11 12/01/28 $ 3,505,000 ma CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual debt service to maturity for all lease revenue bonds are as follows: Year Ending Governmental Activities Interest December 31, Principal Interest Total 2012 $ - $ 28,741 $ 28,741 2013 - 28,741 28,741 2014 - 28,741 28,741 2015 - 28,741 28,741 2016 - 28,741 28,741 2017-2021 - 143,705 143,705 2021 -2026 - 143,705 143,705 2027-2028 3,505,000 57,482 3,562,482 Total $ 3,505,000 $ 488,597 $ 3,993,597 G.O. revenue bonds The following bonds were issued to finance capital improvements in the enterprise funds. They will be repaid from future net revenues pledged from the Sewer Utility, Water Utility, and Storm Water funds and are backed by the taxing power of the City. Annual principal and interest payments on the bonds are expected to require less than 18, 57, and 18 percent of net revenues from the Sewer Utility, Water Utility, and Storm Water funds, respectively. Principal and interest paid for the current year and total customer net revenues for the Sewer Utility fund were $83,001 and $459,970, respectively. Principal and interest paid for the current year and total customer net revenues for the Water Utility fund were $137,883 and $12,114, respectively. Principal and interest paid for the current year and total customer net revenues for the Storm Water fund were $835,177 and $626,309, respectively. -89- Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End 2010A G.O. Utility Revenue Bonds $ 1,200,000 2.00 % 05/06/10 02/01/14 $ 1,370,000 2010B G.O. Water Revenue Refunding Bonds 605,000 2.00-3.00 11/23/10 02/01/22 605,000 2011 G.O_ Water Revenue Bonds 411,738 1.70 02/23/11 08/20/29 385,095 Total G.O. revenue bonds $ 2,360,095 -89- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual debt service to maturity for G.O. revenue bonds are as follows: Year Ending December 31, 2012 2013 2014 2015 2016 2017-2021 2021-2026 2027-2029 Business -type Activities Principal Interest Total $ 334,000 $ 49,460 $ 383,460 344,000 42,760 386,760 339,000 35,986 374,986 150,000 31,163 181,163 150,000 28,081 178,081 796,000 83,257 879,257 180,000 13,220 193,220 67,095 2,537 69,632 Total Changes in long -term liabilities $ 2,360,095 $ 286,464 $ 2,646,559 Long -term liability activity for the year ended December 31, 2011, was as follows: 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. -90- Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities Bonds payable G.O. special assessment bonds $ 775,000 $ - $ (775,000) G.O. bonds and certificates 1,280,000 - (35,000) 1,245,000 125,000 G.O. tax increment bonds 4,605,000 - (195,000) 4,410,000 205,000 Lease revenue bonds - 3,505,000 - 3,505,000 - Add: premiums on bonds 16,006 - (1,759) 14,247 - Total bonds payable, net 6,676,006 3,505,000 (1,006,759) 9,174,247 330,000 Compensated absences payable 475,772 496,945 (502,565) 470,152 470,152 Other postemployment benefits payable 38,819 85,464 (53,401) 70,882 - Governmental activity long -term liabilities $ 7,190,597 $ 4,087,409 $ (1,562,725) $ 9,715,281 $ 800,152 Business -type activities Bonds payable G.O. revenue bonds $ 2,930,000 $ 411,738 $ (981,643) $ 2,360,095 $ 334,000 Add: premiums on bonds 16,005 - (3,649) 12,356 - Less: bond discount (12,980) - 2,568 (10,412) - Total bonds payable, net 2,933,025 411,738 (982,724) 2,362,039 334,000 Capital leases payable 19,756 - (8,518) 11,238 8,307 Other postemployment benefits payable 7,130 14,144 (8,827) 12,447 - Business -type activity long -term liabilities $ 2,959,911 $ 425,882 $ (1,000,069) $ 2,385,724 $ 342,307 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. -90- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED F. Components of fund balance At December 31, 2011, portions of the City's fund balance are not available for appropriation due to not being in spendable form ( Nonspendable), legal restrictions (Restricted), City Council action (Committed), policy and/or intent (Assigned). The following is a summary of the components of fund balance: Purpose Nonspendable Prepaid items Restricted for Economic development Capital improvements Debt service Public safety police expenditures Ice arena Economic Development HRA Street General Authority Construction Infrastructure $ 14,366 $ - $ - $ - $ - $ - $ 5,554,293 $ - Total restricted Committed to Operations Economic development Total committed Assigned to Street improvements General improvements Capital equipment Park improvements Total assigned $ - $ - $ 5,554,293 $ - - 4,479,550 - - $ - $ 4,479,550 $ - $ - $ - $ - $ - $ 1,986,543 $ - $ - $ - $ 1,986,543 -91- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Energy Other Temporary Conservation Governmental Purpose Financing Project Funds Total Nonspendable Prepaid items $ - $ - $ - $ 14,366 Restricted for Economic development $ - $ - $ - $ 5,554,293 Capital improvements - 1,445,050 - 1,445,050 Debt service - - 465,243 465,243 Public safety police expenditures - - 85,753 85,753 Ice arena - 8,825 8,825 Total restricted $ - $ 1,445,050 $ 559,821 $ 7,559,164 Committed to Operations $ - $ $ 186,897 $ 186,897 Economic development - - 4,479,550 Total committed $ - $ - $ 186,897 $ 4,666,447 Assigned to Street improvements $ - $ - $ - $ 1,986,543 General improvements 3,007,417 702,850 - 3,710,267 Capital equipment - - 341,991 341,991 Park improvements - - 1,373,620 1,373,620 Total assigned $ 3,007,417 $ 702,850 $ 1,715,611 $ 7,412,421 -92- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 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 (800) 652 -9026. -93- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION - CONTINUED 2. Funding policy Minnesotaa 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 Minnesota statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.25 percent, respectively, of their annual covered salary in 2011. PEPFF members were required to contribute 9.60 percent of their annual covered salary in 2011. The City is required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan GERF members, 7.25 percent for Coordinated Plan GERF members, and 14.40 percent for PEPFF members. The City's contributions to GERF for the years ending December 31, 2011, 2010 and 2009 were $250,873, $217,644, and $231,739, respectively. The City's contributions to PEPFF for the years ending December 31, 2011, 2010 and 2009 were $314,461, $344,624, and $307,857, 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 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. There are 67 active participants and 9 retired participants. The benefit levels, employee contributions, and employer contributions are governed by the City and can be amended by the City. The Retiree Health Plan does not issue a publicly available financial report. 2. Funding policy 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 pool as its active employees. 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. Contribution requirements are set by the City 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 dependents except for the implicit rate subsidy described above. For fiscal year 2011, the City contributed $62,228 to the plan. 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 City has elected to calculate the ARC and related information using the alternative measurement method permitted by GASB Statement No. 45 for employers in plans with fewer than one hundred total plan members. 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. -94- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION - CONTINUED 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: Annual required contribution $ 99,799 Interest on net OPEB obligation 1,608 Adjustment to annual required contribution (1,799) Annual OPEB cost (expense) 99,608 Contributions made (62,228) Increase in net OPEB obligation 37,380 Net OPEB obligation- beginning of year 45,949 Net OPEB obligation- end of year $ 83,329 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2011 and the preceding two fiscal years are as follows: Three Year Trend Information Percentage Year Annual Annual OPEB Net OPEB Ending OPEB Cost Contributed Obligation 12/31/11 $ 99,608 62.5 % $ 83,329 12/31/10 20,769 34.6 45,949 12/31/09 20,759 22.7 32,374 4. Funded status and funding progress As of January 1, 2011, the actuarial accrued liability for benefits was $1,001,568, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $4,266,321, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 23.5 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. -95- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION - CONTINUED 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 age of retirement and expectations of management, the retirement age for active plan members was determined on an individual level. In addition, spouses of retired employees were assumed to discontinue coverage on the plan when the retired employee reaches Medicare age. 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 2007 United States Life Tables for Males and for Females were used. Turnover - Non - group - specific age -based turnover data from GASB Statement No. 45 were 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 actual rate changes for 2011 and 2012 along with projections of the Office of the Actuary at the Centers for Medicare & Medicaid Services. A rate increase of 5.2 percent initially in 2011, followed by a 6.4 percent decrease in 2012, to an ultimate average rate increase of 5.2 percent after six years, was used. Health insurance premiums - 2010, 2011, and 2012 health insurance premiums for retirees were used as the basis for calculation of the present value of total benefits to be paid. Inflation rate - The expected long -term inflation assumption of 2.4 percent was based on average changes over the past ten years in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI -W) in The 2010 Annual Report of the Board of Trustees of the Federal Old -Age and Survivors Insurance and Disability Insurance Trust Funds for an intermediate growth scenario. 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, 2011 was thirty years. -96- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION — CONTINUED C. Contingencies Federal and State funds 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, 2011. 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. Contingent liabilities Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City's counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City. 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, 2011, 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, 2011 is undetermined. -97- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION - CONTINUED E. 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, 2011. The following financial information is taken from the JWC's audited financial statements for the year ended December 31, 2011: Total assets $3,505,492 Total liabilities $ 919,795 Total net assets $2,585,697 Total revenue $7,917,561 Total expenses $7,327,533 The City's share of JWC's total revenue for the year ended December 31, 2011 was $2,103,571 or 29 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). The District is governed by a seven - member board of directors that includes one Council member from each City. 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 $374,558. The City's equity interest and its share of the net income (loss) of the District are added to the value of the "Investment in Joint Venture" in the government -wide financial statement under governmental activities. As of December 31, 2011, the amount reported as investment in joint venture was $1,600,846. According to a formula in the agreement, the City's share of the District's budget is 49 percent. Payments to the District in 2011 totaled $970,970. The District's financial statements for the period ended December 31, 2011 are available at the District office located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428. -98- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION - CONTINUED 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 2011 contribution to the BCWMC for its fiscal year ended December 31, 2011 was $23,840, 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, 2011 was $28,080, 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 $16,945 for these services in 2011. 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 2011, total charges of $233,194 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 2011, the City incurred charges of $398,705 for application support, systems development, Internet access, and network support services. F. Subsequent events 2012 bonds issued On January 11, 2012, the City issued $2,695,000 of G.O. Tax Increment Refunding Bonds, Series 2012A. The proceeds of the bonds will be used for the advanced refunding of the G.O. Tax Increment Bonds of 2004. The Series 2012A bonds bear an average interest rate of 2.1 percent and mature in 2025. On January 11, 2012, the City issued $1,330,000 of G.O. Taxable Tax Increment Refunding Bonds, Series 2012B. The proceeds of the bonds will be used for the advanced refunding of the G.O. Taxable Tax Increment Bonds of 2005. The Series 2012B bonds bear an average interest rate of 3.8 percent and mature in 2031. Kmart purchase agreement Effective March 15, 2012, the Economic Development Authority entered into a purchase agreement with Gator New Hope, LLC to acquire property with a purchase price of $4.5 million. It is anticipated that existing funds will be used to acquire the property. The closing date is contemplated to be held on July 2, 2012. -99- THIS PAGE IS LEFT BLANK INTENTIONALLY -100- REQUIRED SUPPLEMENTARY INFORMATION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -lol- CITY OF NEW HOPE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2011 Schedule of funding progress for the postemployment benefit plan Funded Ratio UAAL as a Unfunded Percentage Covered Actuarial Actuarial Actuarial Actuarial Accrued Valuation Value of Accrued Liability Date Assets Liability (UAAL) O1 /01 /11 $ - $ 1,001,568 $ 1,001,568 12/31/08 - 187,037 187,037 Funded Ratio -102- UAAL as a Percentage Covered of Covered Payroll Payroll $ 4,266,321 23.5 % 6,256,409 3.0 -102- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -103- CITY OF NEW HOPE, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2011 ASSETS Cash and temporary investments Receivables Unremitted tax collections Accounts Special assessments Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable Due to other governments TOTAL LIABILITIES FUND BALANCES Restricted for Debt service Public safety police expenditures Ice arena Committed to operations Assigned to Capital equipment Park improvements TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES Total Nonmaj or Special Debt Capital Governmental Revenue Service Projects Funds $ 247,877 $ 463,015 $ 1,771,835 $ 2,482,727 - 2,228 - 2,228 25,861 - - 25,861 1,655 - - 1,655 6,212 - - 6,212 $ 281,605 $ 465,243 $ 1,771,835 $ 2,518,683 $ 130 $ 130 $ 51,224 $ 51,354 5,000 5,000 56,224 56,354 - 465,243 - 465,243 85,753 - - 85,753 8,825 - - 8,825 186,897 - - 186,897 - - 341,991 341,991 - - 1,373,620 1,373,620 281,475 465,243 1,715,611 2,462,329 $ 281,605 $ 465,243 $ 1,771,835 $ 2,518,683 -104- CITY OF NEW HOPE, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2011 -105- Total Nonmaj or Special Debt Capital Governmental Revenue Service Projects Funds REVENUES Taxes Property taxes $ 51,520 $ 192,105 $ 296,000 $ 539,625 Tax increments - 293,837 - 293,837 Intergovernmental - 38,761 - 38,761 Charges for services 218,883 - 22,745 241,628 Fines and forfeitures 13,825 - - 13,825 Special assessments - 75,636 - 75,636 Investment earnings 27,879 57,503 37,977 123,359 Miscellaneous 12,067 - 1,900 13,967 TOTAL REVENUES 324,174 657,842 358,622 1,340,638 EXPENDITURES Current General government 1,658 - - 1,658 Public safety 2,596 - - 2,596 Public works 267,848 - - 267,848 Culture and recreation 4,238 - - 4,238 Capital outlay Culture and recreation - - 499,247 499,247 Debt service Principal - 1,005,000 - 1,005,000 Interest - 247,973 - 247,973 TOTAL EXPENDITURES 276,340 1,252,973 499,247 2,028,560 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 47,834 (595,131) (140,625) (687,922) OTHER FINANCING SOURCES (USES) Transfers in - - 366,963 366,963 Transfers out (994,646) (3,228,229) (27,489) (4,250,364) TOTAL OTHER FINANCING SOURCES (USES) (994,646) (3,228,229) 339,474 (3,883,401) NET CHANGE IN FUND BALANCES (946,812) (3,823,360) 198,849 (4,571,323) FUND BALANCES, JANUARY 1 1,228,287 4,288,603 1,516,762 7,033,652 FUND BALANCES, DECEMBER 31 $ 281,475 $ 465,243 $ 1,715,611 $ 2,462,329 -105- THIS PAGE IS LEFT BLANK INTENTIONALLY -106- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS 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. Police Forfeitures Fund - This fund accounts for revenue received mainly from police fines and forfeitures, 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. -107- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS SUBCOMBINING BALANCE SHEET DECEMBER 31, 2011 ASSETS Cash and temporary investments Receivables Accounts Special assessments Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable FUND BALANCES Restricted for Public safety police expenditures Ice arena Committed to operations TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES 9008 9024 9013/9014 Community Development Safety Camp Storm Sewer $ - $ - $ 16,862 16,862 - 16,862 16,862 $ - $ - $ 16,862 -108- 9021 9016 9010 9017 Police Solid Waste Liquor Ice Arena Forfeitures Management Reserve Endowment Total $ 85,883 $ 136,307 $ - $ 8,825 $ 247,877 - 25,861 - - 25,861 - 1,655 - - 1,655 - 6,212 - - 6,212 $ 85,883 $ 170,035 $ - $ 8,825 $ 281,605 $ 130 $ - $ - $ - $ 130 85,753 - - 170,035 85,753 170,035 - 85,753 8,825 8,825 - 186,897 8,825 281,475 $ 85,883 $ 170,035 $ - $ 8,825 1 $ 281,605 -109- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2011 9008 9024 9013/9014 Community Development Safety Camp Storm Sewer REVENUES Taxes Property taxes Charges for services Fines and forfeitures Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Other services and charges Public safety Supplies Public works Other services and charges Culture and recreation Personnel services Supplies Other services and charges 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 $ - $ - $ 51,520 2,887 142 93 - 341 - 2,887 483 51,613 1,658 - - - 51,920 997 - 2,591 - 1,658 4,238 51,920 1,229 (3,755) (307) (231,919) (7,416) - (230,690) (11,171) (307) 230,690 11,171 17,169 $ - $ - $ 16,862 -110- 9021 9016 9010 9017 Police Solid Waste Liquor Ice Arena Forfeitures Management Reserve Endowment Total $ - $ - $ - $ - $ 51,520 - 218,883 - - 218,883 13,825 - - - 13,825 3,720 3,608 17,282 147 27,879 6,726 - - 5,000 12,067 24,271 222,491 17,282 5,147 324,174 1,658 2,596 - - - 2,596 - 215,928 - - 267,848 - 997 - - - 2,591 - - - - 650 2,596 215,928 - - 276,340 21,675 6,563 17,282 5,147 47,834 (88,320) - (666,991) - (994,646) (66,645) 6,563 (649,709) 5,147 (946,812) 152,398 163,472 649,709 3,678 1,228,287 $ 85,753 $ 170,035 $ - $ 8,825 $ 281,475 -111- CITY OF NEW HOPE, MINNESOTA SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2011 REVENUES Investment earnings EXPENDITURES Current General government Other services and charges EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES Transfers out Z. (2,745) (231,919) (231,919) NET CHANGE IN FUND BALANCES 3,974 3,974 (230,690) (234,664) FUND BALANCES, JANUARY 1 230,690 230,690 230,690 - FUND BALANCES, DECEMBER 31 $ 234,664 $ 234,664 $ - $ (234,664) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget $ 5,700 $ 5,700 $ 2,887 $ (2,813) 1,726 1,726 1,658 3,974 3,974 1,229 -112- CITY OF NEW HOPE, MINNESOTA SPECIAL REVENUE FUND - SAFETY CAMP FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2011 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 315 315 (3,755) (4,070) OTHER FINANCING USES Transfers out - - (7,416) (7,416) NET CHANGE IN FUND BALANCES 315 315 (11,171) (11,486) FUND BALANCES, JANUARY 1 11,171 11,171 11,171 - FUND BALANCES, DECEMBER 31 $ 11,486 $ 11,486 $ - $ (11,486) -113- Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Charges for services $ 3,240 $ 3,240 $ - $ (3,240) Investment earnings 300 300 142 (158) Miscellaneous 4,000 4,000 341 (3,659) TOTAL REVENUES 7,540 7,540 483 (7,057) EXPENDITURES Current Culture and recreation Personnel services 1,460 1,475 997 478 Supplies 5,500 5,500 2,591 2,909 Other services and charges 265 250 650 (400) TOTAL EXPENDITURES 7,225 7,225 4,238 2,987 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 315 315 (3,755) (4,070) OTHER FINANCING USES Transfers out - - (7,416) (7,416) NET CHANGE IN FUND BALANCES 315 315 (11,171) (11,486) FUND BALANCES, JANUARY 1 11,171 11,171 11,171 - FUND BALANCES, DECEMBER 31 $ 11,486 $ 11,486 $ - $ (11,486) -113- -114- CITY OF NEW HOPE, MINNESOTA SPECIAL REVENUE FUND - STORM SEWER FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2011 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Taxes Property taxes $ 51,520 $ 51,520 $ 51,520 $ - Investment earnings 400 400 93 (307) TOTAL REVENUES 51,920 51,920 51,613 (307) EXPENDITURES Current Public works Other services and charges 51,920 51,920 51,920 - NET CHANGE IN FUND BALANCES - - (307) (307) FUND BALANCES, JANUARY 1 17,169 17,169 17,169 - FUND BALANCES, DECEMBER 31 $ 17,169 $ 17,169 $ 16,862 $ (307) -114- CITY OF NEW HOPE, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE MANAGEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2011 EXPENDITURES Current Public works Other services and charges 253,734 253,734 215,928 37,806 NET CHANGE IN FUND BALANCES 3,766 3,766 6,563 2,797 FUND BALANCES, JANUARY 1 Budgeted Amounts Actual Variance with FUND BALANCES, DECEMBER 31 Original Final Amounts Final Budget REVENUES Charges for services $ 253,300 $ 253,300 $ 218,883 $ (34,417) Investment earnings 4,200 4,200 3,608 (592) TOTAL REVENUES 257,500 257,500 222,491 (35,009) EXPENDITURES Current Public works Other services and charges 253,734 253,734 215,928 37,806 NET CHANGE IN FUND BALANCES 3,766 3,766 6,563 2,797 FUND BALANCES, JANUARY 1 163,472 163,472 163,472 - FUND BALANCES, DECEMBER 31 $ 167,238 $ 167,238 $ 170,035 $ 2,797 -115- THIS PAGE IS LEFT BLANK INTENTIONALLY -116- 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. 2010B G.O. Equipment 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 2010B G.O. Equipment Bonds. 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. Improvement Bond Redemption Fund - This fund is used to account for the payment of principal and interest on special assessment bonds issued to finance improvement projects -117- ASSETS Cash and temporary investments Unremitted tax collections receivable TOTAL ASSETS FUND BALANCES Restricted for debt service CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE FUNDS SUBCOMBINING BALANCE SHEET DECEMBER 31, 2011 9140 9145 9117 -9119 General 2010B Obligation G.O. Equipment Taxable Bonds HRA Bonds 9143/9146 Improvement Bond Redemption Total $ 35,252 $ 137,070 $ 290,693 $ - $ 463,015 - - 2,228 - 2,228 $ 35,252 $ 137,070 $ 292,921 $ - $ 465,243 $ 35,252 $ 137,070 $ 292,921 $ - $ 465,243 -118- CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE FUNDS SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2011 9140 9145 9117 -9119 9143/9146 REVENUES Taxes Property taxes Tax increments Intergovernmental Special assessments Investment earnings TOTAL REVENUES EXPENDITURES Debt service Principal Interest 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 General 2010B Improvement Obligation G.O. Equipment Bond Taxable Bonds HRA Bonds Redemption Total $ 38,005 $ 154,100 $ - $ - $ 192,105 - - 293,837 293,837 - - 38,761 - 38,761 - - - 75,636 75,636 324 1,293 8,273 47,613 57,503 38,329 155,393 340,871 123,249 657,842 35,000 - 195,000 775,000 1,005,000 1,199 18,323 194,318 34,133 247,973 36,199 18,323 389,318 809,133 1,252,973 2,130 137,070 (48,447) (685,884) (595,131) - - - (3,228,229) (3,228,229) 2,130 137,070 (48,447) (3,914,113) (3,823,360) 33,122 - 341,368 3,914,113 4,288,603 $ 35,252 $ 137,070 $ 292,921 $ $ 465,243 -119- THIS PAGE IS LEFT BLANK INTENTIONALLY -120- 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. Fire Capital Projects Fund - This fund accounts for the purchases of fire capital. Park Infrastructure Fund - The Park Infrastructure fund is used to account for park improvement projects. -121- CITY OF NEW HOPE, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS SUBCOMBINING BALANCE SHEET DECEMBER 31, 2011 9010 9233 Fire Park Capital Projects Infrastructure Total ASSETS Cash and temporary investments $ 341.991 $ 1,429,844 $ 1,771,835 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable $ - $ 51,224 $ 51,224 Due to other governments - 5,000 5,000 TOTAL LIABILITIES - 56,224 56,224 FUND BALANCES Assigned to Capital equipment 341,991 - 341,991 Park improvements - 1,373,620 1,373,620 TOTAL FUND BALANCES 341,991 1,373,620 1,715,611 TOTAL LIABILITIES AND FUND BALANCES $ 341,991 $ 1,429,844 $ 1,771,835 -122- CITY OF NEW HOPE, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2011 9010 9233 Fire Park Capital Projects Infrastructure Total REVENUES Taxes Property taxes Charges for services Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Capital outlay Culture and recreation EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 $ - $ 296,000 $ 296,000 22,745 22,745 37,977 37,977 1,900 1,900 358,622 358,622 - 499,247 499,247 - (140,625) (140,625) 341,991 24,972 366,963 - (27,489) (27,489) 341,991 (2,517) 339,474 341,991 (143,142) 198,849 - 1,516,762 1,516,762 $ 341,991 $ 1,373,620 $ 1,715,611 -123- CITY OF NEW HOPE, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED ON THE FOLLOWING PAGES FOR THE YEAR ENDED DECEMBER 31, 2011 (With Comparative Actual Amounts For The Year Ended December 31, 2010) Charges for services General government 210,115 2011 298,415 88,300 2010 Public safety Budgeted Amounts Actual Variance with Actual 261,421 Original Final Amounts Final Budget Amounts REVENUES Culture and recreation 512,710 512,710 618,942 106,232 Taxes Total charges for services 957,605 1,034,905 1,204,602 169,697 Property taxes $ 7,077,171 $ 7,077,171 $ 6,960,834 $ (116,337) $ 7,044,686 Franchise taxes 458,000 458,000 439,795 (18,205) 430,494 Total taxes 7,535,171 7,535,171 7,400,629 (134,542) 7,475,180 Licenses and permits Miscellaneous 20,500 28,643 30,885 2,242 Business regulatory licenses 49,980 52,560 55,752 3,192 60,471 Non - business licenses and permits 315,100 315,100 303,778 (11,322) 175,907 Total licenses and permits 365,080 367,660 359,530 (8,130) 236,378 Intergovernmental Market value credits 344,434 9,182 1,280 (7,902) 1,021 Local government aid - 41,842 41,843 1 41,843 Highway maintenance aid 145,000 145,000 162,707 17,707 145,746 Other federal, state, and local grants 80,686 80,686 131,126 50,440 173,635 State insurance premium tax 192,500 192,500 202,890 10,390 200,205 Total intergovernmental 762,620 469,210 539,846 70,636 562,450 Charges for services General government 210,115 210,115 298,415 88,300 219,581 Public safety 216,580 217,280 180,903 (36,377) 261,421 Public works 18,200 94,800 106,342 11,542 92,025 Culture and recreation 512,710 512,710 618,942 106,232 554,167 Total charges for services 957,605 1,034,905 1,204,602 169,697 1,127,194 Fines and forfeitures 276,200 278,950 241,504 (37,446) 238,961 Special assessments - - 6,705 6,705 1,835 Investment earnings 48,900 48,900 88,821 39,921 43,369 Miscellaneous 20,500 28,643 30,885 2,242 16,626 TOTAL REVENUES 9,966,076 9,763,439 9,872,522 109,083 9,701,993 -124- CITY OF NEW HOPE, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2011 (With Comparative Actual Amounts For The Year Ended December 31, 2010) City hall Personnel services - - - - 8,125 Supplies 20,500 20,500 15,666 4,834 18,197 Other services and charges 261,005 248,511 253,574 (5,063) 244,061 Total 281,505 269,011 269,240 (229) 270,383 City manager Personnel services 291,510 2011 288,304 5,831 2010 Supplies Budgeted Amounts 1,000 Actual Variance with Actual Other services and charges Original Final Amounts Final Budget Amounts EXPENDITURES Total 314,806 316,691 311,119 5,572 Current Elections General government Personnel services - - - - Mayor and City Council Supplies - - - - Personnel services $ 45,066 $ 45,516 $ 45,248 $ 268 $ 44,006 Supplies 2,250 1,750 2,106 (356) 1,418 Other services and charges 30,046 30,046 29,088 958 27,513 Total 77,362 77,312 76,442 870 72,937 Advisory Supplies 500 500 1,243 (743) Personnel services - - - - 103 City hall Personnel services - - - - 8,125 Supplies 20,500 20,500 15,666 4,834 18,197 Other services and charges 261,005 248,511 253,574 (5,063) 244,061 Total 281,505 269,011 269,240 (229) 270,383 City manager Personnel services 291,510 294,135 288,304 5,831 293,169 Supplies 1,000 1,000 1,811 (811) 1,620 Other services and charges 22,296 21,556 21,004 552 21,592 Total 314,806 316,691 311,119 5,572 316,381 Elections Personnel services - - - - 33,439 Supplies - - - - 2 Other services and charges 4,450 4,450 4,203 247 5,464 Total 4,450 4,450 4,203 247 41,332 Finance Personnel services 90,151 90,948 84,142 6,806 83,511 Supplies 500 500 1,243 (743) 1,819 Other services and charges 135,804 135,804 150,506 (14,702) 141,720 Total 226,455 227,252 235,891 (8,639) 227,050 Auditing Other services and charges 30,000 30,000 28,360 1,640 28,975 -125- CITY OF NEW HOPE, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2011 (With Comparative Actual Amounts For The Year Ended December 31, 2010) 2011 2010 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued General government - continued Assessing Other services and charges $ 106,000 $ 106,000 $ 102,523 $ 3,477 $ 103,449 Legal 96,043 96,873 92,031 4,842 90,313 Other services and charges 20,000 20,000 29,872 (9,872) 27,722 Human resources 45,980 43,980 56,779 (12,799) 68,076 Personnel services 186,505 188,177 192,022 (3,845) 179,532 Supplies 1,300 1,300 738 562 964 Other services and charges 21,998 21,998 35,116 (13,118) 26,387 Total 209,803 211,475 227,876 (16,401) 206,883 Planning and zoning Personnel services 96,043 96,873 92,031 4,842 90,313 Supplies 500 500 250 250 153 Other services and charges 45,980 43,980 56,779 (12,799) 68,076 Total 142,523 141,353 149,060 (7,707) 158,542 Communication Personnel services 84,451 85,199 81,655 3,544 85,474 Supplies 2,775 2,775 2,799 (24) 1,607 Other services and charges 45,995 42,995 39,813 3,182 40,342 Total 133,221 130,969 124,267 6,702 127,423 Other functions Other services and charges 57,232 - - - - Total general government 1,603,357 1,534,513 1,558,853 (24,340) 1,581,180 Public safety Police Personnel services 3,679,313 3,602,157 3,468,203 133,954 3,425,621 Supplies 89,400 87,700 79,805 7,895 82,516 Other services and charges 757,013 757,013 770,346 (13,333) 726,353 Total 4,525,726 4,446,870 4,318,354 128,516 4,234,490 Police reserves Personnel services 16,528 16,678 8,936 7,742 5,660 Supplies 4,575 4,575 2,679 1,896 7,913 Other services and charges 15,964 15,964 14,198 1,766 13,849 Total 37,067 37,217 25,813 11,404 27,422 -126- CITY OF NEW HOPE, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2011 (With Comparative Actual Amounts For The Year Ended December 31, 2010) 2011 2010 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued Public safety - continued Fire and safety Personnel services $ - $ - $ - $ - $ 1,716 Supplies 1,000 1,000 626 374 534 Other services and charges 998,267 1,046,650 1,045,157 1,493 990,026 Total 999,267 1,047,650 1,045,783 1,867 992,276 Animal control Personnel services 85,923 86,684 84,165 2,519 79,755 Supplies 1,020 1,020 - 1,020 832 Other services and charges 27,109 27,109 29,956 (2,847) 27,018 Total 114,052 114,813 114,121 692 107,605 Protective inspection Personnel services 339,938 342,916 341,513 1,403 340,570 Supplies 1,650 1,650 1,735 (85) 1,537 Other services and charges 85,730 83,730 83,286 444 79,254 Total 427,318 428,296 426,534 1,762 421,361 Total public safety 6,103,430 6,074,846 5,930,605 144,241 5,783,154 Public works Street maintenance Personnel services 475,943 480,139 430,457 49,682 456,499 Supplies 76,363 76,363 86,694 (10,331) 89,732 Other services and charges 296,434 291,965 283,175 8,790 428,981 Total 848,740 848,467 800,326 48,141 975,212 Engineering Other services and charges 15,000 15,000 11,710 3,290 14,522 Total public works 863,740 863,467 812,036 51,431 989,734 Culture and recreation Recreation Personnel services 500,820 481,759 481,429 330 523,049 Supplies 57,730 57,730 81,650 (23,920) 61,261 Other services and charges 163,397 163,397 178,756 (15,359) 149,616 Total 721,947 702,886 741,835 (38,949) 733,926 Parks Personnel services 504,465 477,187 431,787 45,400 427,408 Supplies 37,805 37,805 27,353 10,452 26,517 Other services and charges 200,983 200,583 195,984 4,599 240,321 Total 743,253 715,575 655,124 60,451 694,246 -127- THIS PAGE IS LEFT BLANK INTENTIONALLY -128- CITY OF NEW HOPE, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2011 (With Comparative Actual Amounts For The Year Ended December 31, 2010) EXPENDITURES - CONTINUED Current - continued Culture and recreation - continued Swimming pool Personnel services Supplies Other services and charges Total Total culture and recreation Total current expenditures 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 Sale of capital assets TOTAL OTHER FINANCING SOURCES NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 2011 2010 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts $ 100,873 $ 99,829 $ 86,431 $ 13,398 $ 95,589 38,030 38,030 35,552 2,478 35,882 39,974 39,974 37,306 2,668 34,512 178,877 177,833 159,289 18,544 165,983 1,644,077 1,596,294 1,556,248 40,046 1,594,155 10,214,604 10,069,120 9,857,742 211,378 9,948,223 34,123 29,123 - 29,123 519 79,500 7,500 12,392 (4,892) - 3,500 3,500 - 3,500 1,779 117,123 40,123 12,392 27,731 2,298 10,331,727 10,109,243 9,870,134 239,109 9,950,521 (365,651) (345,804) 2,388 348,192 (248,528) 365,651 345,804 341,224 (4,580) 483,823 - 1,954 365,651 345,804 341,224 (4,580) 485,777 - - 343,612 343,612 237,249 4,591,600 4,591,600 4,591,600 - 4,354,351 $ 4,591,600 $ 4,591,600 $ 4,935,212 $ 343,612 $ 4,591,600 -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 STATEMENTS OF NET ASSETS (LIABILITIES) DECEMBER 31, 2011 AND 2010 ASSETS CURRENT ASSETS Cash and temporary investments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Capital assets Land Buildings and structures Vehicles and equipment Less: accumulated depreciation Total capital assets (net of accumulated depreciation) TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Accrued salaries payable Accounts and contracts payable Due to other governments Compensated absences payable, current portion 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 Central Garage Employee Leave $ 6,033,520 $ 6,498,261 $ 491,713 $ 507,077 28,918 49,894 - - 6,062,438 6,548,155 491,713 507,077 85,647 3,032,156 6,618,220 (6,485,819) 3,250,204 9,312,642 85,647 - - 3,032,156 - - 6,339,374 - - (6,198,244) - - 3,258,933 - - 9,807,088 491,713 507,077 13,362 11,155 34,920 76,847 113,605 131,467 - - - - 470,152 463,580 126,967 142,622 505,072 540,427 126,967 142,622 505,072 540,427 3,250,204 3,258,933 - - 5,935,471 6,405,533 (13,359) (33,350) $ 9,185,675 $ 9,664,466 $ (13,359) $ (33,350) -132- 9407 Insurance Reserve 2011 2010 9410 Information Technology 2011 2010 Totals 2011 2010 $ 461,352 $ 451,219 $ 175,565 $ 213,316 $ 7,162,150 $ 7,669,873 - - - - 28,918 49,894 461,352 451,219 175,565 213,316 7,191,068 7,719,767 - - - - 85,647 85,647 - - - - 3,032,156 3,032,156 - - 218,144 218,144 6,836,364 6,557,518 - - (133,605) (112,388) (6,619,424) (6,310,632) 19,183 - - 84,539 105,756 3,334,743 3,364,689 461,352 451,219 260,104 319,072 10,525,811 11,084,456 - - 3,250 2,956 51,532 90,958 221 2,542 11,298 2,888 125,124 136,897 - - 19,183 48,616 19,183 48,616 - - - - 470,152 463,580 221 2,542 33,731 54,460 665,991 740,051 70,882 38,819 - - 70,882 38,819 71,103 41,361 33,731 54,460 736,873 778,870 - - 84,539 105,756 3,334,743 3,364,689 390,249 409,858 141,834 158,856 6,454,195 6,940,897 $ 390,249 $ 409,858 $ 226,373 $ 264,612 $ 9,788,938 $ 10,305,586 -133- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS (LIABILITIES) FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 OPERATING REVENUES Billings to departments Other TOTAL OPERATING REVENUES OPERATING EXPENSES Personnel services Supplies Utilities Other services and charges Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) Investment earnings Gain on sale of capital assets TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE TRANSFERS TRANSFERS OUT MORAL NNONW.1=4UN NET ASSETS (LIABILITIES), JANUARY 1 NET ASSETS (LIABILITIES), DECEMBER 31 9402 9408 Central Garage Employee Leave 2011 2010 2011 2010 $ 1,017,060 $ 1,074,455 $ 466,263 $ 505,198 1,017,060 1,074,455 466,263 505,198 361,667 365,704 458,909 491,539 358,798 322,663 - - 49,694 44,401 - - 380,253 260,700 - - 501,935 478,670 - - 1,652,347 1,472,138 458,909 491,539 (635,287) (397,683) 7,354 13,659 167,756 30,978 12,637 7,361 13,568 20,976 - - 181,324 51,954 12,637 7,361 (453,963) (345,729) 19,991 21,020 (24,828) (20,964) - - (478,791) (366,693) 19,991 21,020 9,664,466 10,031,159 (33,350) (54,370) $ 9,185,675 $ 9,664,466 $ (13,359) $ (33,350) -134- 9407 Insurance Reserve 2011 2010 9410 Information Technology 2011 2010 Totals 2011 2010 $ 49,745 $ 41,096 $ 574,716 $ 239,046 $ 2,107,784 $ 1,859,795 17,116 44,513 - - 17,116 44,513 66,861 85,609 574,716 239,046 2,124,900 1,904,308 32,063 11,740 107,853 109,417 960,492 978,400 - - 37,715 36,522 396,513 359,185 - - 34,889 41,296 84,583 85,697 66,827 98,803 368,472 83,783 815,552 443,286 - - 21,217 22,414 523,152 501,084 98,890 110,543 570,146 293,432 2,780,292 2,367,652 (32,029) (24,934) 4,570 (54,386) (655,392) (463,344) 12,420 6,407 4,123 3,366 196,936 48,112 - - - - 13,568 20,976 12,420 6,407 4,123 3,366 210,504 69,088 (19,609) (18,527) 8,693 (51,020) (444,888) (394,256) - - (46,932) (39,636) (71,760) (60,600) (19,609) (18,527) (38,239) (90,656) (516,648) (454,856) 409,858 428,385 264,612 355,268 10,305,586 10,760,442 $ 390,249 $ 409,858 $ 226,373 $ 264,612 $ 9,788,938 $ 10,305,586 -135- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 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 (Increase) decrease in assets Accounts receivable Due from other governments Inventory Increase (decrease) in liabilities Accounts and contracts payable Accrued salaries payable Due to other governments Compensated absences payable Other postemployment benefits payable NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased on account 9402 9408 Central Garage Employee Leave $ 1,017,060 $ 1,074,765 $ 466,263 $ 505,198 (767,903) (622,508) - - (359,460) (365,214) (494,264) (546,540) (110,303) 87,043 (28,001) (41,342) (24,828) (20,964) - (510,934) (828,240) - - 13,568 20,976 - - (497,366) (807,264) - - 167,756 30,979 12,637 7,361 (464,741) (710,206) (15,364) (33,981) 6,498,261 7,208,467 507,077 541,058 $ 6,033,520 $ 6,498,261 $ 491,713 $ 507,077 $ (635,287) $ (397,683) $ 7,354 $ 13,659 501,935 478,670 - - - 310 - - 20,976 811 - - (134) 4,445 - - 2,207 490 (41,927) 8,370 - - 6,572 (36,292) - - - (27,079) $ (110,303) $ 87,043 $ (28,001) $ (41,342) $ 69,180 $ 86,908 $ $ -136- 9407 Insurance Reserve 2011 2010 9410 Information Technology 2011 2010 Totals 2011 2010 $ 66,861 $ 116,302 $ 574,716 $ 260,876 $ 2,124,900 $ 1,957,141 (69,148) (141,855) (462,099) (201,533) (1,299,150) (965,896) - - (107,559) (109,323) (961,283) (1,021,077) (2,287) (25,553) 5,058 (49,980) (135,533) (29,832) - (46,932) (39,636) (71,760) (60,600) - - - (510,934) (828,240) - - - 13,568 20,976 - - - (497,366) (807,264) 12,420 6,407 4,123 3,366 196,936 48,113 10,133 (19,146) (37,751) (86,250) (507,723) (849,583) 451,219 470,365 213,316 299,566 7,669,873 8,519,456 $ 461,352 $ 451,219 $ 175,565 $ 213,316 $ 7,162,150 $ 7,669,873 $ (32,029) $ (24,934) $ 4,570 $ (54,386) $ (655,392) $ (463,344) - - 21,217 22,414 523,152 501,084 - 30,693 - 19,158 - 50,161 - - - 2,672 - 2,672 - - - - 20,976 811 (2,321) (70,131) 8,410 (88,548) 5,955 (154,234) - - 294 94 (39,426) 8,954 - - (29,433) 48,616 (29,433) 48,616 - - - - 6,572 (36,292) 32,063 38,819 - - 32,063 11,740 $ (2,287) $ (25,553) $ 5,058 $ (49,980) $ (135,533) $ (29,832) $ $ $ $ $ 69,180 $ 86,908 -137- CITY OF NEW HOPE, MINNESOTA AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2011 Balance January 1 Additions PASS - THROUGH GRANT FUND ASSETS Cash and temporary investments LIABILITIES Deposits payable Balance Deductions December 31 $ 51,385 $ 228,902 $ (234,593) $ 45,694 $ 51,385 $ 228,902 $ (234,593) $ 45,694 -138- SUPPLEMENTARY INFORMATION (UNAUDITED) CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -139- CITY OF NEW HOPE, MINNESOTA SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTAL FUNDS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 REVENUES Taxes Property taxes Tax increments Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Investment earnings Miscellaneous TOTAL REVENUES Per capita EXPENDITURES Current General government Public safety Public works Culture and recreation Economic development Capital outlay Debt service Principal Interest Bond issuance costs TOTAL EXPENDITURES Per capita Total Long -term indebtedness Per capita General Fund Balance - December 31 Per capita $ 1,560,511 Percent Total (17.16) % Increase 2011 2010 (Decrease) 2.45 $ 8,767,959 $ 8,694,245 0.85 % 1,400,163 1,408,256 (0.57) 439,795 430,494 2.16 359,530 236,378 52.10 1,599,253 1,765,220 (9.40) 1,544,369 1,369,904 12.74 255,329 238,961 6.85 153,835 258,392 (40.46) 548,548 393,913 39.26 115,183 87,607 31.48 $ 15,183,964 $ 14,883,370 2.02 % $ 747 $ 732 18,956,303 $ 1,560,511 $ 1,883,729 (17.16) % 5,933,201 5,791,511 2.45 1,079,884 989,734 9.11 1,560,486 1,599,381 (2.43) 289,650 192,431 50.52 7,185,778 2,605,724 175.77 1,005,000 515,000 95.15 247,973 273,054 (9.19) 93,820 - 100.00 $ 18,956,303 $ 13,850,564 36.86 % $ 932 $ 681 36.86 % $ 9,160,000 $ 6,660,000 37.54 % 450 327 37.54 $ 4,935,212 $ 4,591,600 7.48 % 243 226 7.48 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. -140- STATISTICAL SECTION (UNAUDITED) CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2011 -141- THIS PAGE IS LEFT BLANK INTENTIONALLY -142- 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 City s financial performance and well -being have changed over time. Revenue Capacity These schedules contain information to help the reader assessthe City's most significant local revenue source; property taxes. Debt Capacity These schedules present information to help the reader assess the 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 City's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City'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. -143- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET ASSETS BY COMPONENT LAST NINE FISCAL YEARS (accrual basis of accounting) Fiscal Year 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 Invested in capital assets, net of related debt Restricted Unrestricted Total primary government 2003 2004 2005 2006 $ 14,997,083 $ 10,248,795 $ 11,770,767 $ 13,366,539 6,824,715 15,756,949 18,186,452 17,056,531 12,169,857 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 $ 20,779,317 $ 17,184,419 $ 19,047,861 $ 21,184,107 6,824,715 15,756,949 18,186,452 17,056,531 14,172,705 5,672,066 6,381,937 7,429,026 $ 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. -144- Fiscal Year 2007 2008 2009 2010 2011 $ 14,572,777 $ 16,099,860 $ 16,411,454 $ 16,495,175 $ 20,399,936 18,030,936 17,857,296 19,454,696 9,279,142 6,018,734 7,399,637 8,643,991 9,151,912 21,971,477 22,544,601 $ 40,003,350 $ 42,601,147 $ 45,018,062 $ 47,745,794 $ 48,963,271 $ 8,018,286 $ 9,008,538 $ 9,395,068 $ 9,989,405 $ 11,342,873 1,625,562 1,423,111 1,650,590 2,541,156 3,505,651 $ 9,643,848 $ 10,431,649 $ 11,045,658 $ 12,530,561 $ 14,848,524 $ 22,591,063 $ 25,108,398 $ 25,806,522 $ 26,484,580 $ 31,742,809 18,030,936 17,857,296 19,454,696 9,279,142 6,018,734 9,025,199 10,067,102 10,802,502 24,512,633 26,050,252 $ 49,647,198 $ 53,032,796 $ 56,063,720 $ 60,276,355 $ 63,811,795 -145- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET ASSETS - CONTINUED ON THE FOLLOWING PAGES LAST NINE 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 Total governmental activities expenses Business -type activities Sewer Water 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 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 10, 53 9,967 17,650,943 11,534,358 12,230,247 3,607,937 2,847,451 2,612,771 2,100,070 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 Total business -type activities program revenues 6,434,597 6,581,576 6,254,862 6,703,382 Total program revenues $ 10,042,534 $ 9,429,027 $ 8,867,633 $ 8,803,452 -146- Fiscal Year 2007 2008 2009 2010 2011 $ 3,547,855 $ 2,492,386 $ 2,244,977 $ 2,552,425 $ 1,841,145 5,291,323 5,988,010 6,218,996 5,864,775 6,129,860 650,686 1,381,386 1,291,983 1,625,959 1,795,189 1,868,403 1,967,129 2,053,788 1,899,105 1,882,279 - - - 192,431 536,433 369,508 340,081 275,532 252,224 248,174 11,727,775 12,168,992 12,085,276 12,386,919 12,433,080 2,732,148 2,347,381 2,414,360 4,014,022 3,946,501 - - - 1,928,845 2,070,951 4,955,642 4,915,929 5,265,147 2,915,757 3,535,160 440,666 383,521 369,579 346,345 322,679 723,264 780,816 694,039 712,153 746,218 387,889 361,542 393,118 430,899 490,336 126,966 121,912 12 6, 983 104,099 113,753 6,634,427 6,563,720 6,848,866 6,438,098 7,279,097 $ 18,362,202 $ 18,732,712 $ 18,934,142 $ 18,825,017 $ 19,712,177 $ 1,314,007 $ 1,164,394 $ 1,048,549 $ 984,855 $ 220,629 251,622 151,180 134,680 218,732 877,159 - - - - 219,353 503,648 579,694 527,079 562,383 637,077 - - - 104,713 98,139 270,403 388,166 586,508 1,356,292 783,382 392,468 63,947 117,544 787,047 1,110,762 2,732,148 2,347,381 2,414,360 4,014,022 3,946,501 4,870,737 5,175,878 5,141,131 3,082,771 3,169,859 - - - 2,292,300 2,352,635 337,712 330,782 345,550 313,941 278,788 610,145 659,377 723,975 741,266 752,671 922,850 951,699 933,828 943,883 947,031 116,940 133,634 149,339 121,647 122,742 152,038 16,250 66,609 470,183 24,031 21,381 16,353 75,209 30,739 111,106 7,031,803 7,283,973 7,435,641 7,996,730 7,758,863 $ 9,763,951 $ 9,631,354 $ 9,850,001 $ 12,010,752 $ 11,705,364 -147- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET ASSETS - CONTINUED LAST NINE FISCAL YEARS (accrual basis of accounting) Net revenues (expenses) Governmental activities Business -type activities Fiscal Year 2003 2004 2005 2006 $ (6,932,030) $ (14,803,492) $ (8,921,587) $ (10,130,177) 20,399 648,299 236,391 165,205 Total primary government revenues (expenses) $ (6,911,631) $ (14,155,193) $ (8,685,196) $ (9,964,972) 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 $ 8,200,286 $ 7,312,104 $ 7,047,478 $ 7,097,895 - 1,131,601 991,476 1,195,726 - 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. -148- Fiscal Year 2007 2,008 2009 2010 2011 $ (8,995,627) $ (9,821,611) $ (9,670,916) $ (8,372,897) $ (8,486,579) 397,376 720,253 586,775 1,558,632 479,766 $ (8,598,251) $ (9,101,358) $ (9,084,141) $ (6,814,265) $ (8,006,813) $ 7,756,543 $ 8,416,466 $ 8,760,482 $ 8,730,979 $ 8,784,948 1,673,394 1,835,749 1,262,598 1,408,256 1,400,163 444,898 441,133 438,744 430,494 439,795 600,221 666,543 755,762 79,529 87,206 1,698,749 992,673 723,565 337,312 745,484 - - - 22,930 13,568 352,564 96,911 146,680 - - - (30,067) - 91,129 (1,767,108) 12,526,369 12,419,408 12,087,831 11,100,629 9,704,056 49,416 37,481 27,234 17,400 71,089 - 30,067 - (91,129) 1,767,108 49,416 67,548 27,234 (73,729) 1,838,197 $ 12,575,785 $ 12,486,956 $ 12,115,065 $ 11,026,900 $ 11,542,253 $ 3,530,742 $ 2,597,797 $ 2,416,915 $ 2,727,732 $ 1,217,477 446,792 787,801 614,009 1,484,903 2,317,963 $ 3,977,534 $ 3,385,598 $ 3,030,924 $ 4,212,635 $ 3,535,440 -149- THIS PAGE IS LEFT BLANK INTENTIONALLY -150- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST NINE 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 2011 8,784,948 1,400,163 439,795 10,624,906 Note: The City implemented GASB Statement No. 34 in fiscal 2003. Tax revenue source information is not available for previous fiscal years. -151- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2002 2003 2004 2005 General fund Reserved $ - $ - $ - $ - Unreserved 3,694,404 3,617,468 3,939,420 3,975,418 Nonspendable - - - - Unassigned - - - - Total general fund $ 3,694,404 $ 3,617,468 $ 3,939,420 $ 3,975,418 All other governmental funds Reserved $ 9,438,987 $ - $ - $ - Unreserved, reported in Special Revenue funds 1,145,287 1,398,320 2,247,767 3,844,116 Debt Service funds - 8,437,888 7,886,432 6,383,506 Capital Project funds 3,123,980 4,440,084 4,040,937 6,877,231 Restricted - - - - Committed - - - - Assigned - - - - Total all other governmental funds $ 13,708,254 $ 14,276,292 $ 14,175,136 $ 17,104,853 Total all governmental funds $ 17,402,658 $ 17,893,760 $ 18,114,556 $ 21,080,271 Note: The City implemented GASB 54 in fiscal year 2011, resulting in significant reclassification of the components of fund balance. Years prior to 2011 have not been restated. -152- Fiscal Year 2006 2007 2008 2009 2010 2011 $ - $ - $ - $ - $ 63,753 $ - 4,227,954 4,249,604 3,952,477 4,354,351 4,527,847 - - - - - - 14,366 - - - - - 4,920,846 $ 4,227,954 $ 4,249,604 $ 3,952,477 $ 4,354,351 $ 4,591,600 $ 4,935,212 $ - $ - $ 2,433,162 $ 4,699,636 $ 9,043,337 $ - 4,385,348 4,748,023 2,993,986 3,266,399 3,129,062 - 6,294,149 5,992,108 6,571,884 6,450,295 - - 5,458,640 6,569,745 5,962,599 5,317,588 9,771,932 - - - - - - 7,559,164 - - - - - 4,666,447 - - - - - 7,412,421 $ 16,138,137 $ 17,309,876 $ 17,961,631 $ 19,733,918 $ 21,944,331 $ 19,638,032 $ 20,366,091 $ 21,559,480 $ 21,914,108 $ 24,088,269 $ 26,535,931 $ 24,573,244 -153- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) -154- Fiscal Year 2002 2003 2004 2005 Revenues Property taxes $ 8,219,656 $ 8,165,829 $ 8,429,780 $ 8,069,691 Tax increments - - - - Franchise taxes - - 428,265 435,875 Licenses and permits 311,494 366,327 500,141 398,843 Intergovernmental 3,755,153 2,036,314 1,605,507 2,415,857 Charges for services 1,414,779 1,179,690 1,224,439 1,008,883 Fines and forfeitures 293,391 297,428 268,358 240,273 Special assessments 487,991 587,753 497,664 417,697 Investment earnings - - - - Miscellaneous 1,081,984 624,467 836,520 837,789 Total revenues 15,564,448 13,257,808 13,790,674 13,824,908 Expenditures General government 2,015,233 2,358,512 2,102,852 1,857,955 Public safety 4,604,030 4,499,649 4,403,147 4,594,910 Public works 950,728 737,355 834,167 960,101 Culture and recreation 1,410,356 1,350,500 1,388,814 1,515,255 Economic development - - - - Miscellaneous 42,021 - - - Capital Outlay 5,627,892 1,342,454 7,898,496 2,342,117 Debt service Principal 2,905,000 2,435,000 1,385,000 1,650,000 Interest 627,891 454,481 431,621 480,746 Bond issuance costs - - - - Total expenditures 18,183,151 13,177, 951 18,444, 097 13 ,401, 084 Excess (deficiency) of revenues over (under) expenditures (2,618,703) 79,857 (4,653,423) 423,824 Other financing sources (uses) Transfers in 4,264,787 1,029,098 1,322,034 - Sales of capital assets 181,651 504,650 822,219 85,757 Bonds issued 785,000 - 4,080,000 1,370,000 Premium on bonds issued - - - - Ref ending bonds issued - - - 1,455,000 Bonds refunded - - - (1,425,000) Transfers out (3,283,307) (1,155,673) (1,350,034) (23,396) Total other financing sources (uses) 1,948,131 378,075 4,874,219 1,462,361 Net change in fund balances $ (670,572) $ 457,932 $ 220,796 $ 1,886,185 Debt service as a percentage of Noncapital expenditures 21.4% 23.4% 11.1% 17.1% -154- Fiscal Year 2006 2007 2008 2009 2010 2011 $ 8,330,410 $ 9,386,469 $ 9,910,002 $ 9,898,968 $ 8,694,245 $ 8,767,959 - - - - 1,408,256 1,400,163 433,806 444,898 441,133 438,744 430,494 439,795 289,534 332,351 415,012 226,303 236,378 359,530 1,731,191 970,543 1,038,461 1,401,010 1,765,220 1,599,253 1,036,710 1,149,810 1,125,819 1,166,302 1,369,904 1,544,369 266,750 247,794 285,255 236,173 238,961 255,329 310,708 326,909 203,199 157,581 258,392 153,835 - - - - 393,913 548,548 1,031,207 1,747,196 906,365 791,039 87,607 115,183 13,430,316 14,605,970 14,325,246 14,316,120 14,883,370 15,183,964 1,771,012 1,959,594 1,949,002 1,726,566 1,883,729 1,560,511 4,739,323 5,281,122 5,880,729 5,933,364 5,791,511 5,933,201 825,199 883,268 830,900 740,014 989,734 1,079,884 1,607,849 1,638,354 1,687,171 1,698,807 1,599,381 1,560,486 - - - - 192,431 289,650 4,326,095 1,769,589 2,444,825 1,137,776 2,605,724 7,185,778 940,000 1,525,000 820,000 885,000 515,000 1,005,000 432,698 357,654 357,991 273,100 273,054 247,973 - - - - - 93,820 14,642,176 13,414,581 13,970,618 12,394,627 13,850,564 18,956,303 (1,211,860) 1,191,389 354,628 1,921,493 1,032,806 (3,772,339) - - 653,787 1,236,793 2,596,321 2,873,868 510,000 2,000 - - 1,954 - - - - - 1,245,000 3,505,000 - - - - 16,173 - (12,320) - (653,787) (984,125) (2,444,592) (4,569,216) 497,680 2,000 - 252,668 1,414,856 1,809,652 $ 1 80) $ 1,193,389 $ 354,628 $ 2,174,161 $ 2,447,662 $ (1,962,687) 11.2% 15.1% 9.7% 9.8% 6.4% 10.5% -155- THIS PAGE IS LEFT BLANK INTENTIONALLY -156- -157- CITY OF NEW HOPE, NIINNESOTA STATISTICAL SECTION (UNAUDITED) GENERAL GOVERNMENT TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Property Tax Franchise Year tax increments tax Total 2002 $ 6,966,400 $ 1,253,256 $ - $ 8,219,656 2003 6,994,779 1,171,050 - 8,165,829 2004 7,298,179 1,131,601 428,265 8,858,045 2005 7,078,215 991,476 435,875 8,505,566 2006 7,134,684 1,195,721 433,806 8,764,211 2007 7,713,075 1,673,394 444,898 9,831,367 2008 8,074,253 1,835,749 441,133 10,351,135 2009 8,636,370 1,262,598 438,744 10,337,712 2010 8,694,245 1,408,256 430,494 10,532,995 2011 8,767,959 1,400,163 439,795 10,607,917 -157- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) TAX CAPACITY, MARKE 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 Fiscal Year 2002 2003 2004 2005 $ 1,086,880,900 $ 1,190,848,500 $ 1,307,693,600 $ 1,423,083,200 $ 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 $ 17,385,942 144,681 17,530,623 (773,458) (1,937,115) 2,506,494 $ 17,326,544 Net tax capacity Tax levies Revenue Bonds and interest Total Tax capacity rate Revenue Bonds and interest Sewer district Total direct tax rate 53.790 % 49.590 % 46.280 % 0.277 % 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. -158- Fiscal Year 2006 2007 2008 2009 2010 2011 $ 1,618,178,200 $ 1,492,408,000 $ 7,624,400 $ 8,162,100 $ 1,625,802,600 $ 1,500,570,100 $ 1,571,305,700 $ 1,692,471,900 $ 1,750,807,800 $ 1,732,235,700 $ 1,629,433,100 $ 1,504,929,000 99.78 % 99.71 % $ 18,838,116 $ 20,386,553 $ 21,248,319 $ 21,095,335 $ 19,864,103 $ 18,462,796 163,526 172,470 151,679 146,456 148,346 159,492 19,001,642 20,559,023 21,399,998 21,241,791 20,012,449 18,622,288 (1,024,773) (1,471,827) (1,646,615) (1,365,233) (1,181,390) (1,044,830) (1,898,610) (2,035,088) (2,292,166) (2,518,620) (2,596,468) (2,466,459) 2,647,714 2,806,702 3,398,192 3,821,605 3,946,315 3,896,651 $ 18,725,973 $ 19,858,810 $ 20,859,409 $ 21,179,543 $ 20,180,906 $ 19,007,650 $ 9,053,443 $ 9,036,625 39,268 192,105 $ 9,092,711 $ 9,228,730 45.542 47.916 % 0.199 1.025 0.273 0.308 0.245 % 0.301 % 0.280 % 0.273 % 46.014 % 49.249 % -159- 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 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 42.375 2007 39.782 2.319 0.245 42.346 2008 39.308 2.386 0.301 41.995 2009 39.131 1.931 0.280 41.342 2010 45.542 0.199 0.273 46.014 2011 47.916 1.025 0.308 49.249 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). -160- Overlapping Rates School District County No. 281 Other Total 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 7.360 117.566 38.570 27.240 7.820 115.625 40.410 27.210 7.400 116.362 42.640 28.621 9.098 126.373 45.840 34.387 10.068 139.544 -161- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Totals $ 1,409,293 7.57 % Source: Hennepin County Auditor /Treasurer Department -162- 2011 Percent Tax of Total Taxpayer Capacity Rank Tax Capacity Geneva Management Service, LLC $ 159,250 1 0.86 % Paddock Property Ltd. Partnership 156,730 2 0.84 St. Therese Home, Inc. 148,763 3 0.80 Cobalt Industrial Reit 143,850 4 0.77 New Hope Distribution Center, LLC 139,250 5 0.75 Long Ridge Industrial Portfolio 135,250 6 0.73 Minn Masonic Home North Ridge 133,450 7 0.72 FLS Properties 132,250 8 0.71 New Hope / US Swim Partnership 131,250 9 0.70 Welsh Corporate Headquarters 129,250 10 0.69 Lang Nelson Association - - Hoyt / Winnetka LLC - - Oregon Estates Investment Company - - Northridge Property of New Hope - - Individual - - AMB Property LP - - Totals $ 1,409,293 7.57 % Source: Hennepin County Auditor /Treasurer Department -162- 2002 Tax Capacity 143,470 179,694 128,830 130,270 174,906 133,130 128,394 125,046 123,410 121,110 $ 1,388,260 Percent of Total Rank Tax Capacity 3 0.79 1 0.99 6 0.71 5 0.71 2 0.96 4 0.73 7 0.70 8 0.69 9 0.68 10 0.66 7.62 % -163- THIS PAGE IS LEFT BLANK INTENTIONALLY -164- CITY OF NEW HOPE, MINNESOTA 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. -165- (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 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 79,786 7,702,789 99.95 2007 8,093,813 7,984,889 98.65 104,887 8,089,776 99.95 2008 8,452,126 8,343,629 98.72 106,492 8,450,121 99.98 2009 8,457,346 8,382,201 99.11 71,251 8,453,452 99.95 2010 9,092,711 8,983,224 98.80 81,495 9,064,719 99.69 2011 9,228,730 9,063,615 98.21 - 9,063,615 98.21 Source: Hennepin County Auditor /Treasurer Department (1) Includes state paid property tax credits. -165- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Business -type 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 173 for personal income and population data. -166- Governmental Activities Activities General Special Tax Lease Fiscal Obligation Assessment Increment Revenue Revenue Year Bonds Bonds Bonds Bonds Bonds 2002 $ 2,905,000 $ 5,380,000 $ 2,485,000 $ - $ 4,575,000 2003 2,835,000 4,035,000 1,965,000 - 4,255,000 2004 2,135,000 3,540,000 5,755,000 - 3,935,000 2005 2,160,000 2,290,000 6,905,000 - 3,620,000 2006 1,515,000 2,020,000 6,395,000 - 3,300,000 2007 1,065,000 1,180,000 5,875,000 - 2,965,000 2008 605,000 1,045,000 5,360,000 - 2,620,000 2009 225,000 910,000 4,795,000 - 2,265,000 2010 1,280,000 775,000 4,605,000 - 2,930,000 2011 1,245,000 - 4,410,000 3,505,000 2,360,095 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 173 for personal income and population data. -166- Total Percentage Primary of Personal Government Income Per Capita $ 15,345,000 1.68 % 736 13,090,000 1.39 628 15,365,000 1.54 737 14,975,000 1.45 718 13,230,000 1.20 633 11,085,000 1.01 532 9,630,000 0.87 462 8,195,000 0.79 396 9,590,000 0.83 472 11,520,095 1.05 566 -167- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Percentage Less Actual Value Amounts Per Property General Available in Net Fiscal Obligation Debt Service Bonded Year Bonds Funds Debt 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 2011 5,655,000 465,243 5,189,757 Percentage of Estimated Actual Value of Taxable Per Property Capita 0.122 % 64 0.033 19 0.271 170 0.349 239 0.231 174 0.126 102 0.025 21 (0.030) (25) 0.146 117 0.345 255 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 173 for population data. -168- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 2011 Direct debt City of New Hope Overlapping debt Hennepin County Independent School District #281, Robbinsdale Metropolitan Council Three Rivers Park District Total overlapping debt Total direct and overlapping debt * 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 -169- Percentage City's Outstanding Applicable to Share Debt District * of Debt $ 11,520,095 100.00 % $ 11,520,095 $ 1,129,045 1.26 % $ 14,226 172,465,000 19.35 33,371,978 167,600,000 0.57 955,320 73,985,000 1.74 1,287,339 $ 415,179,045 8.58 % $ 35,628,862 $ 426,699,140 11.05 % $ 47,148,957 * 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 -169- 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. -170- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 2002 2003 2004 2005 Debt limit $ 21,737,618 $ 23,816,970 $ 26,153,872 $ 28,461,664 Total net debt applicable to limit 1,472,376 1,353,643 588,019 892,849 Legal debt margin $ 20,265,242 $ 22,463,327 $ 25,565,853 $ 27,568,815 Total net debt applicable to the limit as a percentage of debt limit 6.77% 5.68% 2.25% 3.14% 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. -170- Fiscal Year 2006 2007 2008 2009 2010 2011 General obligation bonds 1,245,000 Less: amount available in debt service funds (172,322) $ 31,426,114 $ 33,849,438 $ 52,524,234 $ 51,967,071 $ 48,774,078 $ 45,017,103 191,516 108,094 72,562 37,561 1,246,878 1,072,678 $ 31,234,598 $ 33,741,344 $ 52,451,672 $ 51,929,510 $ 47,527,200 $ 43,944,425 0.61 % 0.32% 0.14% 0.07% 2.56% 2.38% Legal Debt Margin Calculation for Fiscal Year 2011 Taxable market value $ 1,500,570,100 Debt limit (3 percent of market value) $ 45,017,103 Debt applicable to limit General obligation bonds 1,245,000 Less: amount available in debt service funds (172,322) Total net debt applicable to limit 1,072,678 Legal debt margin $ 43,944,425 -171- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS (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, and Sewer Utility Fund. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. -172- Revenue Bonds (3) (1) (2) Net Fiscal Gross Operating Revenue Debt Service Year Revenue Expenses Available Principal Interest Coverage 2002 $ 4,938,117 $ 4,174,288 $ 763,829 $ 290,000 $ 179,895 162.55 % 2003 5,755,673 5,205,356 550,317 320,000 205,002 104.82 2004 6,335,891 5,517,433 818,458 320,000 194,823 158.98 2005 5,723,843 4,803,961 919,882 315,000 181,163 185.40 2006 5,848,087 5,306,582 541,505 320,000 163,874 111.91 2007 6,317,849 4,867,502 1,450,347 335,000 151,830 297.92 2008 6,520,685 5,153,960 1,366,725 345,000 139,000 282.38 2009 6,524,839 5,535,015 989,824 355,000 121,865 207.57 2010 7,131,115 5,046,701 2,084,414 1,520,000 168,236 123.47 2011 6,646,747 5,527,230 1,119,517 981,643 74,418 106.01 (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, and Sewer Utility Fund. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. -172- CITY OF NEW HOPE, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (1) Population was estimated by the City Planning and Development Department for fiscal 2002 -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. -173- Per Capita Total Fiscal Personal Personal Median School Unemployment Year Population (1) Income (2) Income (3) Age (4) Enrollment (5) Rate (6) 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 38.3 12,600 6.9 2009 20,718 49,789 1,031,528,502 38.3 12,000 7.2 2010 20,339 56,564 1,150,455,196 38.0 11,839 7.0 2011 20,339 54,008 1,098,468,712 36.0 11,804 5.6 (1) Population was estimated by the City Planning and Development Department for fiscal 2002 -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. -173- CITY OF NEW HOPE, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (1) Total 10,805 * 48.53 % Source: Minnesota Department of Employment and Economic Development. * This is for Quarter 3 of 2011, 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. -174- 2011 Percentage of Total City Employer Employees Rank Employment Independent School District No. 281 2,200 1 20.36 % North Ridge Care Center 789 2 7.30 Saint Therese Home of New Hope 650 3 6.02 Perrigo Company 413 4 3.82 Navarre Corporation 280 5 2.59 Coborn's Delivers 240 6 2.22 Liberty Diversified International 200 7 1.85 Dakota Growers Pasta 200 8 1.85 Waymouth Farms, Inc. 137 9 1.27 Parker - Hannifin Oildyne Division 135 10 1.25 Total 10,805 * 48.53 % Source: Minnesota Department of Employment and Economic Development. * This is for Quarter 3 of 2011, 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. -174- 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 % -175- CITY OF NEW HOPE, MINNESOTA FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Function 2002 2003 2004 2005 General government Public safety Police Officers Civilians Public works Culture and recreation Total Source: Various City departments. 21 20 19 18 27 27 28 28 7 5 5 6 22 22 23 21 10 9 9 9 87 83 84 82 -176- 2006 2007 2008 2009 2010 2011 19 21 18 18 15 15 27 30 31 31 30 31 6 7 7 7 7 6 21 23 23 21 22 24 9 9 8 8 8 7 82 90 87 85 82 83 -177- THIS PAGE IS LEFT BLANK INTENTIONALLY -178- CITY OF NEW HOPE, MINNESOTA OPERATING INDICATORS BY FUNCTION LAST FOUR FISCAL YEARS Function 2008 2009 Function Public works Street resurfacing (miles) Potholes repaired Culture and recreation Program registration - adults Program registration - youth Attendance at sponsored events Golf Course Rounds of golf at the Municipal course Ice Arena Hours of ice time rental Water Water main breaks Average daily consumption (thousands of gallons) Sewer Average daily treatment (thousands of gallons) 2010 2011 2 2 2 4 150 450 552 500 3,874 3,313 3,796 5,271 5,747 6,360 5,287 5,323 140,600 139,318 137,199 146,305 22,900 23,917 21,686 18,788 3,905 4,027 3,980 3,903 33 37 19 26 2,003 1,921 1,746 1,712 2,360 1,740 1,895 2,253 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. -179- CITY OF NEW HOPE, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Function 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 2002 2003 2004 2005 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- 2006 2007 2008 2009 2010 2011 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-