The URL can be used to link to this page

2012 CAFRCITY OF NEW HOPE NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2012 THIS PAGE IS LEFT BLANK INTENTIONALLY CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2012 KIRK MCDONALD - CITY MANAGER PREPARED BY: DEPARTMENT OF FINANCE Member GFOA of U.S. and Canada -1- 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, 2012 INTRODUCTORY SECTION Page No. Letter of Transmittal from City Manager 7 Certificate of Achievement for Excellence in Financial Reporting 12 Organizational Chart 13 Elected and Appointed Officials 14 FINANCIAL SECTION Independent Auditor's Report 17 Management's Discussion and Analysis 21 Basic Financial Statements Government -wide Financial Statements Statement of Net Position 33 Statement of Activities 34 Fund Financial Statements Governmental Funds 104 Balance Sheet 38 Reconciliation of the Balance Sheet to the Statement of Net Position 41 Statement of Revenues, Expenditures and Changes in Fund Balances 42 Reconciliation of the Statement of Revenues, Expenditures and 107 Changes in Fund Balances to the Statement of Activities 44 General Fund 110 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 45 Economic Development Authority Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 47 Proprietary Funds Statements of Net Position 48 Statements of Revenues, Expenses and Changes in Net Position 56 Statements of Cash Flows 60 Fiduciary Funds Statement of Fiduciary Net Position 68 Notes to the Financial Statements 69 Required Supplementary Information Schedule of Funding Progress for the Postemployment Benefit Plan 98 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 100 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 101 Nonmajor Special Revenue Funds Subcombining Balance Sheet 104 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 105 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Storm Sewer Fund 106 Solid Waste Management Fund 107 Nonmajor Debt Service Funds Subcombining Balance Sheet 110 Subcombining Statement of Revenues, Expenditures and changes in Fund Balances 111 -3- CITY OF NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2012 Page No. Combining and Individual Fund Financial Statements and Schedules - Continued Nonmajor Capital Projects Funds Subcombining Balance Sheet 114 Subcombining Statement of Revenues, Expenditures and changes in Fund Balances 116 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 119 Internal Service Funds Combining Statements of Net Position 126 Combining Statements of Revenues, Expenses and Changes in Net Position 128 Combining Statements of Cash Flows 130 Agency Fund Statement of Changes in Assets and Liabilities 132 STATISTICAL SECTION (UNAUDITED) Financial Trends Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 137 Net Position by Component 138 Changes in Net Position 140 Governmental Activities Tax Revenues by Source 145 Fund Balances of Governmental Funds 146 Changes in Fund Balances of Governmental Funds 148 Revenue Capacity General Government Tax Revenues by Source 151 Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 152 Property Tax Capacity Rates - Direct and Overlapping Governments 154 Principal Property Taxpayers 156 Property Tax Levies and Collections 159 Debt Capacity Ratios of Outstanding Debt by Type 160 Ratios of General Bonded Debt Outstanding 162 Computation of Direct and Overlapping Debt 163 Legal Debt Margin Information 164 Pledged Revenue Coverage 166 Demographic and Economic Information Demographic and Economic Statistics 167 Principal Employers 168 Operating Information Full -Time Equivalent City Government Employees by Function 170 Operating Indicators by Function 173 Capital Asset Statistics by Function 174 -4- INTRODUCTORY SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 -5- THIS PAGE IS LEFT BLANK INTENTIONALLY . _ � �4 i May 17, 2013 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, 2012, 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 fmancial 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, oven - iew, 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 20,486. 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 legislatiNe 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.mn.us City Hall: 763 -531 -5100 -Police (non - emergency): 763 -531 -5170 -Public Works: 763 -592 -6777 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 Cit- 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: police and fire protection, culture and recreation, public improvements, street maintenance, sanitary and storm sewer collection, water distribution, planning, zoning and building inspection services, and general administrative services. ECONOMIC OUTLOOK The City is a nearly fully developed community with little vacant land available for development. The City has a good mix of single /multi- family residential housing stock, parks and open space, and a strong commercial/industrial tax base. There are approximately 440 commerciaL'industrial/service businesses in the City, and the major employers are listed as follows: M ajor 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 errigo Company Pharmaceutical and medicine manufacturing 413 N avarre Corporation Computers Peripherals, and software 80 obom's Delivers Direct selling establishments 240 L iberty Diversified International Stationery supplies 200 D akota Growers Pasta Company Macaroni and spaghetti 200 aymouth Farms, Inc. Salted and roasted nuts and seeds 137 Parker-Hannifin Oildyne Division Fluid power cylinders and actuators 1135 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, Nev. Hope Mall, Winnetka Center, Post Haste Square, and the 42nd Avenue Redevelopment District. -8- Local commercial/industrial businesses are extremely important to the City. The City Council has undertaken programs and initiatives to address both commercial and industrial properties. These programs focus on: 1) retaining existing businesses, 2) assisting with expansions, 3) attracting new businesses to vacant available buildings, 4) attracting new construction to a limited number of available vacant sites, and 5) improving communication with businesses and responding more effectively to business concerns and inquiries. The City Council has continued the Outstanding Business Award Program initiated in 2006, to recognize the City's businesses' contributions to the local community. In 2009, a monthly business forum was established to share information and improve communications between businesses and the City and the forum continued through 2012. In 2012, $12,743,093 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 prop ide 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 2012. PLANNING AND DEVELOPMENT The following planning and development activities occurred in 2012: 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 42nd Avenues North) area of the city. The goal is to create a framework for future redevelopment in the City Center Area. Commercial/Industrial CommercialIndustrial redevelopment including; Midwest Steel - $863,000, New Hope Self Storage - $523,000, Perrigo /Paddock - $368,000, 5520 Highway 169 - $329,000, and several additional smallerprojects valued between $150,000 and $250,000. Ice Arena Interior work at the city's ice arena was valued at $519,000. New Houses Permits were issued for two new houses, each approximately $200,000. Housing The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs. Approximately $2.93 million was reinvested in the City's housing stock in 2012 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 2012 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. Center for Energy in the Environment offered housing loans through MHFA. 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- 273 inspections completed in 2012. 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 470 single family and two multi - family rental units were registered with the City. iii. A total of 3,477 multi - family rental units were registered with the City. c. Multifamily Property Manager's Association -quarterly meetings. 3. Metropolitan Council Livable Communities Act - annually renewed by the City. PARKS AND RECREATION The City provides the residents with a Mast 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 2013 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 ACKNOWLEDGEMENTS The Certificate of Achievement for Excellence in Financial Reporting - The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2011. Inorder 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- 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, 2011 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. 6LO2�� P *U President *low en rf = A' Executive Director -12- w ' 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, 2012 ELECTED Name Title Kathi Hemken Mayor John Elder Council Member Andrew Hoffe Council Member Eric Lammle Council Member Daniel Stauner Council Member I:\90111I Y0 o111 Name Title Kirk McDonald Guy Johnson Curtis Jacobsen Susan Rader Tim Fournier Rich Johnson Valerie Leone City Manager Director of Public Works Director of Community Development Director of Parks and Recreation Director of Police Human Resources Manager City Clerk -14- Term Expires 01/02/13 01/02/15 01/02/13 01/02/13 01/02/15 FINANCIAL SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 -15- THIS PAGE IS LEFT BLANK INTENTIONALLY -1�- MMKR CERTIFIE[ PUBLIC ACCOIJN'I'ANTS INDEPENDENT AUDITOR'S REPORT To the City Council and Management City of New Hope, Minnesota REPORT ON THE FINANCIAL STATEMENTS PRINICIPAI.S Thomas M. Nionrague, 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 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, 2012, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. The prior year partial comparative information presented has been derived from the City's financial statements for the year ended December 31, 2011, and in our report dated May 21, 2012, 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. MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR'S RESPONSIBILITY Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. (continued) Malloy, Montague, Karr>4v7ski, Radosevich, & Co., P.A. X353 Wayzata Boulcuard - Suitc 410 - Minncapoks, MN 55416 - Tclrphonc: 952- 545.0424 - Tcicfax: 952. 545 -0569 - www.mmkr.com OPINIONS In our opinion, the financial statements referred to on the previous page 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, 2012, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the general and major special revenue funds for the year then ended, in accordance with accounting principles generally accepted in the United States of America. As discussed in Note 6 of the notes to basic financial statements, the City has implemented Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Ou�flows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities during the year ended December 31, 2012. 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, 2011, from which it was derived. OTHER MATTERS Required Supplementary Information 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. Other Information 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 statements and schedules, 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 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. Such 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 combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. (continued) -18- OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 16, 2013 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Minneapolis, Minnesota May 16, 2013 -19- THIS PAGE IS LEFT BLANK INTENTIONALLY -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, 2012. 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 $66,887,813 (net position). Of this amount, $25,481,351 (unrestricted netposition) may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net position increased by $3,302,189. This was primarily a result of the following factors: of the $1,343,248 for tax increment revenue, roughly $471,000 was used towards net non - capitalized expenses affecting net position, $1,478,500 of property taxes revenues were for capital projects funds, of which roughly $317,000 was used towards net non - capitalized expenses affecting net position, operating contributions within public safety related to the City's investment in joint venture amounted to $1,017,828, and total net revenues from operation of the business -type activities of $646,886. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $22,452,403, a decrease of $141,011 in comparison with the prior year. Approximately 22.6 percent of this total amount ( $5,080,812) is available for spending at the City's discretion (unassigned fund balance). • At the end of the current fiscal year, unassigned fund balance for the General fund was $5,080,812 (49.4 percent) of total General fund 2012 expenditures and transfers out. • The City's total noncurrent liabilities increased by $3,464,975 (28.6 percent) during the current fiscal year. The key factor in this increase was the issuance of refunding bonds during 2012. 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. The financial statements include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of combining and individual fund financial statements and schedules which further explain and support the information in the 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 --------------- - - - - -, , 7 e"tWr Basic Required r ) & daddem Financial Supplementary aid Statements Information rfvcaQcyQi¢ -- - - - - - - - - - - - - - - - - - - , Government -Wide Fund Financial Financial to f4c Statements Statements 76xacaciae .5t1&Me"xte 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 position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time increases or decreases in net position 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 City's net position changed during the most recent fiscal year. All changes in net position 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, Temporary Financing, and HRA Bonds 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 or schedules 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 each of the enterprise 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 can be found on page 98 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 financial statements and schedules start on page 100 of this report. -23- Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $66,887,813 at the close of the most recent fiscal year. A portion of the City's net position (59.3 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 Summary of Net Position Governmental Activities 2011 Increase Assets Current and other assets Capital assets, net of depreciation 2012 (Restated) (Decrease) Business -type Activities 2011 Increase 2012 (Restated) (Decrease) $ 34,133,305 $ 33,834,135 $ 299,170 $ 3,454,689 $ 6,421,591 $ (2,966,902) 27,925,630 21,887,390 6,038,240 18,386,014 15,547,893 2,838,121 Total assets Liabilities Other liabilities Noncurrent liabilities Total liabilities Net position Net investment in capital assets Restricted Unrestricted Total net position 62,058,935 55,721,525 6,337,410 21,840,703 21,969,484 (128,781) 894,662 1,019,089 (124,427) 551,183 985,291 (434,108) 10,005,228 6,210,281 3,794,947 5,560,752 5,890,724 (329,972) 10,899,890 7,229,370 3,670,520 6,111,935 6,876,015 (764,080) 26,793,142 20,628,143 6,164,999 12,843,624 11,114,666 1,728,958 1,619,696 6,018,734 (4,399,038) 150,000 - 150,000 22,746,207 21,845,278 900,929 2,735,144 3,978,803 (1,243,659) $ 51,159,045 $ 48,492,155 $ 2 $ 15,728,768 $ 15,093,469 $ 635,299 An additional portion of the City's net position, $1,769,696, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted netposition, $25,481,351, may be used to meet the City'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 position, both for the City as a whole, as well as for its separate governmental and business -type activities. -24- The following table indicates the changes in net position for the City's governmental and business -type activities: City of New Hope's Changes in Net Position Governmental Activities Business -type Activities 2011 Increase 2011 Increase 2012 (Restated) (Decrease) 2012 (Restated) (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 $ 1,949,404 $ 2,052,357 $ (102,953) $ 8,021,311 $ 7,623,726 $ 397,585 2,162,263 783,382 1,378,881 22,340 24,031 (1,691) 245,290 1,107,042 (861,752) 106,291 114,826 (8,535) 9,129,247 8,784,948 344,299 - - - 1,343,248 1,400,163 (56,915) - - - 440,149 439,795 354 - - - 47,662 87,206 (39,544) - - - 429,595 745,484 (315,889) 57,384 71,089 (13,705) 69,321 13,568 55,753 - - - 15,816,179 15,413,945 402,234 8,207,326 7,833,672 373,654 General government 1,931,318 1,841,145 90,173 - Public safety 6,062,362 6,129,860 (67,498) - Public works 2,126,043 1,795,189 330,854 - - - Culture and recreation 1,928,591 1,882,279 46,312 - - - Economic development 762,202 536,433 225,769 - - - Interest on long -term debt 407,744 236,827 170,917 - - - Sewer utility - - - 2,220,438 2,068,282 152,156 Water utility - - - 3,682,602 3,530,521 152,081 Golf course - - 298,555 322,679 (24,124) Ice arena - - - 771,628 844,828 (73,200) Storm water - - - 425,112 485,943 (60,831) Street lighting - - - 104,721 113,753 (9,032) Total expenses 13,218,260 12,421,733 796,527 7,503,056 7,366,006 137,050 Changes in net position before transfers 2,597,919 2,992,212 (394,293) 704,270 467,666 236,604 Transfers- capital assets (23,679) - (23,679) 23,679 - 23,679 Transfers - internal activities 92,650 (2,163,781) 2,256,431 (92,650) 2,163,781 (2,256,431) Change in net position 2,666,890 828,431 1,838,459 635,299 2,631,447 (1,996,148) Net position (restated), January 1 48,492,155 47,663,724 828,431 15,093,469 12,462,022 2,631,447 Net position, December 31 $ 51,159,045 $ 48,492,155 $ 2 $ 15,728,768 $ 15,093,469 $ 635,299 -25- Governmental activities. Governmental activities increased the City's net position by $2,666,890, thereby accounting for 80.8 percent of the total growth in net position of the City. 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 57.7% Tax increments 8.5% ranchise taxes 2.8% Grants and contributions - unrestricted 0.3% Capital grants and---' contributions 1-6% Operating grants and contributions 13.7% Unrestricted vestment earnings 2.7% o \-Gain on sale of capital assets Charges for services 0.4% 12.3% -26- Business -type activities. The net position of business -type activities increased by $635,299, thereby accounting for 192 percent of the total growth in net position of the City. This increase was primarily the result of total net revenues from the programs of $646,886, particularly with storm water operations of $542,602. 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 Sewer utility Water utility Golf course Ice arena Storm water Street lighting ■ Expenses ■ Program revenues Revenue Sources - Business -type Activities Charges for services 97.7% .._ w_. and grants and ributions 1.3% Unrestricted investment earnings 0.7% -27- 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 $22,452,403, a decrease of $141,011 in comparison with the prior year. Approximately 22.6 percent of this total amount, $5,080,812, 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 ($14,925), 2) restricted ($5,657,606), 3) committed ($5,165,192), or 4) assigned ($6,533,868). For further classification refer to Note 3F on page 87 of this report. Activity in the City's major funds is discussed below: Fund Balance December 31, Increase Major Funds 2012 2011 (Decrease) General $ 5,095,737 $ 4,935,212 $ 160,525 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 49.4 percent of total 2012 expenditures and transfers out. Economic Development Authority $ 4,989,473 $ 4,479,550 $ 509,923 The increase in fund balance is primarily due to net transfers of $579,624 into the fund. HRA Construction $ 1,319,423 $ 5,554,293 $ (4,234,870) 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 decrease in fund balance is primarily a result of 1) capital outlay of $4.78 million, 2) transfers out of $607,224, and 3) TIF revenues of nearly $1.09 million. Temporary Financing $ 3,082,536 $ 3,007,417 $ 75,119 The Temporary financing fund is used for general capital improvements. For 2012, the fund had $120,000 in capital outlay expenditures. HRA Bonds $ 4,073,402 $ 292,921 $ 3,780,481 At year -end, this fund has $3,908,659 of cash held with fiscal agent, representing bond proceeds to be used to call refunded bonds at a later date. 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 position of the enterprise funds amounted to $3,530,929. 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 The City's General fund budget was not amended during the year. The budget called for no change in fund balance. Revenues provided positive budget variances and expenditures provided positive budget variances. Actual revenues were over budget by $176,894, and expenditures were under budget by $129,667. In addition the General fund transfers in were $46,036 less than budget due to more favorable results from the pool operations that required less subsidy from the Park Infrastructure fund. The transfers out of $100,000 related to the City Council approved transfer to establish a City Hall capital fund. This opportunity was not contemplated in the final budget for 2012. -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, 2012, was $46,311,644 (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 23.7 percent. Major capital asset events during the current fiscal year consisted of- 0 Multiple vehicle and equipment purchases totaling $956,175. + Completion of the 2011 Infrastructure, 2011 Sanitary Sewer Lining, and Energy Savings projects. Projects outstanding include the Boone Avenue Improvements, Civic Center Park Improvements, Interior Improvement Ice Arena, Crystal 2012 Street Improvements, 2013 Street Infrastructure, Hwy 169 Water Main Improvements, and Bass Lake Rd Water Main Improvements projects. Total project costs capitalized in 2012 for these and other projects were over $9.8 million. City of New Hope's Capital Assets (net of depreciation) Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $14,951,157. Of this amount $1,132,488 will be paid from general property taxes and $8,279,884 from redevelopment district tax increments. The remaining $5,538,785 of outstanding bonds at year end were lease revenue bonds and g.o. revenue bonds, for which the City has pledged revenue streams from the ice arena, 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 $4,258,396, all of which is either assigned or 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 2011 2011 Increase 2011 2011 Increase 2012 2012 (Restated) (Decrease) 2012 (Restated) (Decrease) 1,132,488 $ 1,259,247 $ (126,759) $ - $ - Land $ 994,268 $ 994,268 $ - $ 485,042 $ 485,042 $ - Buildings and structures 4,134,925 4,364,197 (229,272) 7,310,949 3,409,609 3,901,340 Vehicles and equipment 2,561,133 2,172,922 388,211 586,639 784,692 (198,053) Improvements other than Capital leases payable - - - 3,605 11,238 buildings 12,824,882 9,932,550 2,892,332 8,810,580 7,105,905 1,704,675 Construction in progress 7,410,422 4,423,453 2,986,969 1,192,804 3,762,645 (2,569,841) 5,915 Total $ 10,005,228 $ 6,210,281 $ 3,794,947 $ 5,560,752 Total $ 27,925,630 $ 21,887,390 $ 6,038,240 $ 18,386,014 $ 15,547,893 $ 2,838,121 Note 3E starting on page 83 of this report. Additional information on the City's capital assets can be found in Note 3C starting on page 80 of this report. Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $14,951,157. Of this amount $1,132,488 will be paid from general property taxes and $8,279,884 from redevelopment district tax increments. The remaining $5,538,785 of outstanding bonds at year end were lease revenue bonds and g.o. revenue bonds, for which the City has pledged revenue streams from the ice arena, 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 $4,258,396, all of which is either assigned or 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 2011 Increase 2011 Increase 2012 (Restated) (Decrease) 2012 (Restated) (Decrease) G.O. bonds and certificates $ 1,132,488 $ 1,259,247 $ (126,759) $ - $ - $ - G.O.taxincrementbonds 8,279,884 4,410,000 3,869,884 - - - Lease revenue bonds - - - 3,505,000 3,505,000 G.O. revenue bonds - - - 2,033,785 2,362,039 (328,254) Capital leases payable - - - 3,605 11,238 (7,633) Compensated absences 480,222 470,152 10,070 - - - Other postemployment benefits 112,634 70,882 41,752 18,362 12,447 5,915 Total $ 10,005,228 $ 6,210,281 $ 3,794,947 $ 5,560,752 $ 5,890,724 $ (329,972) The City achieved an "AA" rating from Standard and Poor's. Additional information on the City's long -term debt can be found in Note 3E starting on page 83 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 2013 and beyond. + The overall tax levy had a 3.71 percent increase in 2013. The increase was intended to capture the tax capacity from a major retired TIF district. • 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 2013 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, 2012 -31- THIS PAGE IS LEFT BLANK INTENTIONALLY -32- CITY OF NEW HOPE, MINNESOTA STATEMENT OF NET POSITION DECEMBER 31, 2012 ASSETS Cash and temporary investments Cash held with fiscal agent Restricted cash Receivables Taxes Accrued interest Accounts Loans Special assessments Internal balances Due from other governments Inventory Prepaid items Land held for resale Investment in joint ventures Capital assets Land and construction in progress Depreciable assets (net of accumulated deprecation) Governmental Activities Business -type Activities Total TOTAL ASSETS LIABILITIES Accrued salaries payable Accounts and contracts payable Due to other governments Accrued interest payable Deposits payable Noncurrent liabilities Due within one year Due in more than one year TOTAL LIABILITIES NET POSITION Net investment in capital assets Restricted for Economic development Debt service Public safety police expenditures Ice arena Unrestricted $ 22,395,101 $ 2,757,260 $ 25,152,361 3,908,659 - 3,908,659 - 150,000 150,000 150,743 - 150,743 138,090 - 138,090 145,227 1,129,808 1,275,035 428,830 - 428,830 409,807 204,737 614,544 1,110,785 (1,110,785) - 306,377 114,402 420,779 72,925 40,758 113,683 14,925 - 14,925 2,433,162 - 2,433,162 2,618,674 168,509 2,787,183 8,404,690 1,677,846 10,082,536 19,520,940 16,708,168 36,229,108 62,058,935 21,840,703 83,899,638 283,359 61,123 344,482 436,151 360,235 796,386 37,834 106,261 144,095 129,251 23,564 152,815 8,067 - 8,067 772,200 347,605 1,119,805 9,233,028 5,213,147 14,446,175 10,899,890 6,111,935 17,011,825 26,793,142 12,843,624 39,636,766 1,319,423 - 1,319,423 184,584 150,000 334,584 101,878 - 101,878 13,811 - 13,811 22,746,207 2,735,144 25,481,351 TOTAL NET POSITION The notes to the financial statements are an integral part of this statement. $ 51,159,045 $ 15,728,768 $ 66,887,813 -33- CITY OF NEW HOPE, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2012 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 $ 1,931,318 $ 177,174 $ 382,215 $ - 6,062,362 804,725 1,242,585 - 2,126,043 219,548 169,103 245,290 1,928,591 653,293 21,071 - 762,202 94,664 347,289 - 407,744 - - - 13,218,260 1,949,404 2,162,263 245,290 2,220,438 2,376,021 - - 3,682,602 3,581,225 19,840 13,053 298,555 296,316 - - 771,628 694,702 - 76,674 425,112 948,650 2,500 16,564 104,721 124,397 - - 7,503,056 8,021,311 22,340 106,291 $ 20,721,316 $ 9,970,715 $ 2,184,603 $ 351,581 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 - capital assets Transfers - internal activities Total general revenues and transfers Change in net position Net position (restated), January 1 Net position, December 31 The notes to the financial statements are an integral part of this statement. -34- Net (Expenses) Revenues and Changes in Net Position Governmental Business -type Activities Activities Total $ (1,371,929) $ - $ (1,371,929) (4,015,052) - (4,015,052) (1,492,102) - (1,492,102) (1,254,227) - (1,254,227) (320,249) - (320,249) (407,744) - (407,744) 92,650 (92,650) - (8,861,303) - (8,861,303) 2,666,890 635,299 3,302,189 - 155,583 155,583 - (68,484) (68,484) - (2,239) (2,239) - (252) (252) - 542,602 542,602 - 19,676 19,676 - 646,886 646,886 (8,861,303) 646,886 (8,214,417) 9,129,247 - 9,129,247 1,343,248 - 1,343,248 440,149 - 440,149 47,662 - 47,662 429,595 57,384 486,979 69,321 - 69,321 (23,679) 23,679 - 92,650 (92,650) - 11,528,193 (11,587) 11,516,606 2,666,890 635,299 3,302,189 48,492,155 15,093,469 63,585,624 $ 51,159,045 $ 15,728,768 $ 66,887,813 -35- THIS PAGE IS LEFT BLANK INTENTIONALLY -36- FUND FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 -37- CITY OF NEW HOPE, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2012 ASSETS Cash and temporary investments Cash held with fiscal agent Receivables Taxes Accrued interest Accounts Loans Special assessments Due from other governments Prepaid items Due from other funds Advances to other funds Land held for resale TOTAL ASSETS LIABILITIES Accrued salaries payable Accounts and contracts payable Due to other governments Deposits payable Due to other funds Advances from other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue - taxes Unavailable revenue - special assessments Unavailable revenue - loans TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES The notes to the financial statements are an integral part of this statement. 9001 9015/9501 9213 -9220 Economic Development HRA General Authority Construction $ 5,043,417 $ 2,747,314 $ 972,194 142,051 - 7,790 138,090 - - 115,999 2,547 - - 428,830 - 11,830 35,624 - 112,439 135,978 - 14,925 - - - 95,589 - - 1,990,595 - - - 2,433,162 $ 5,578,751 $ 5,436,477 S 3,413,146 $ 221,180 $ 6,329 $ - 125,509 17,708 7,039 17,918 - - 1,753 5,814 500 - - 95,589 - - 1,990,595 366,360 29,851 2,093,723 104,824 - - 11,830 35,624 - - 381,529 - 116,654 417,153 - 14,925 - - - - 1,319,423 4,989,473 - 5,080,812 - - 5,095,737 4,989,473 1,319,423 $ 5,578,751 $ 5,436,477 $ 3,413,146 -38- -39- 9242 9117 -9119 Other Total Temporary Governmental Governmental Financing HRA Bonds Funds Funds $ 2,763,299 $ 163,841 $ 4,095,368 $ 15,785,433 - 3,908,659 - 3,908,659 - 902 - 150,743 - - - 138,090 - - 26,681 145,227 - - - 428,830 212,221 - 150,132 409,807 - - - 248,417 - - - 14,925 30,000 - - 125,589 285,000 - - 2,275,595 - - - 2,433,162 $ 3,290,520 S 4,073,402 S 4,272,181 $ 26,064,477 $ 227,509 - - 239,162 389,418 - - - 17,918 - - - 8,067 - - - 95,589 - - - 1,990,595 - - 239,162 2,729,096 - - - 104,824 207,984 - 141,187 396,625 - - - 381,529 207,984 - 141,187 882,978 - - - 14,925 - 4,073,402 264,781 5,657,606 - - 175,719 5,165,192 3,082,536 - 3,451,332 6,533,868 - - - 5,080,812 3,082,536 4,073,402 3,891,832 22,452,403 $ 3,290,520 $ 4,073,402 $ 4,272,181 $ 26,064,477 -39- THIS PAGE IS LEFT BLANK INTENTIONALLY -40- CITY OF NEW HOPE, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS DECEMBER 31, 2012 Total fund balances - governmental funds Amounts reported for the governmental activities in the statement of net position 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 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 position. Internal service fund net position 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 reported as unavailable revenue in the funds. Taxes Special assessments Loans 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 Position. Total net position - governmental activities The notes to the financial statements are an integral part of this statement. $ 22,452,403 34,135,300 (9,890,083) (9,350,000) (62,372) 9,705,611 795,785 104,824 396,625 381,529 (129,251) 2,618,674 $ 51,159,045 -41- CITY OF NEW HOPE, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2012 The notes to the financial statements are an integral part of this statement. -42- 9001 9015/9501 9213 -9220 Economic Development HRA General Authority Construction REVENUES Taxes Property taxes $ 7,423,273 $ 85,000 $ - Tax increments - - 1,087,764 Franchise taxes 440,149 - Licenses and permits 238,943 - - Intergovernmental 500,547 330,951 - Charges for services 1,220,315 94,664 Fines and forfeitures 262,733 - - Special assessments 8,351 4,907 - Investment earnings 65,453 43,465 67,898 Miscellaneous 54,993 16,338 - TOTAL REVENUES 10,214,757 575,325 1,155,662 EXPENDITURES Current General government 1,567,301 - - Public safety 5,940,195 - Public works 926,056 Culture and recreation 1,598,725 - - Economic development - 304,064 - Capital outlay General government 45,357 - - Public safety 104,927 - Public works - - - Culture and recreation 635 - - Economic development - 340,962 4,783,308 Debt service Principal - - - Interest - - - Bond issuance costs - - - TOTAL EXPENDITURES 10,183,196 645,026 4,783,308 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 31,561 (69,701) (3,627,646) OTHER FINANCING SOURCES (USES) Transfers in 228,964 607,224 Refunding bonds issued - - - Premium on refunding bonds issued - - - Transfers out (100,000) (27,600) (607,224) TOTAL OTHER FINANCING SOURCES (USES) 128,964 579,624 (607,224) NET CHANGE IN FUND BALANCES 160,525 509,923 (4,234,870) FUND BALANCES (AS RESTATED), JANUARY 1 4,935,212 4,479,550 5,554,293 FUND BALANCES, DECEMBER 31 $ 5,095,737 $ 4,989,473 $ 1,319,423 The notes to the financial statements are an integral part of this statement. -42- 9242 9117 -9119 1,567,301 - - 6,014 5,946,209 - 266,704 1,192,760 - - 316 1,599,041 - - - 304,064 - - 45,357 - - - 104,927 120,000 - 1,229,233 1,349,233 - - 1,061,397 1,062,032 - - 5,124,270 - 205,000 Other Total Temporary 245,040 Governmental Governmental Financing BRA Bonds Funds Funds 120,000 554,391 2,714,237 19,000,158 $ - $ - $ 1,691,108 $ 9,199,381 - 255,484 - 1,343,248 - - - 440,149 - - - 238,943 - - 27,318 858,816 - - 242,919 1,557,898 - - 20,500 283,233 138,418 - 154,142 305,818 56,701 382 73,133 307,032 - - 8,742 80,073 195,119 255,866 2,217,862 14,614,591 1,567,301 - - 6,014 5,946,209 - 266,704 1,192,760 - - 316 1,599,041 - - - 304,064 - - 45,357 - - - 104,927 120,000 - 1,229,233 1,349,233 - - 1,061,397 1,062,032 - - 5,124,270 - 205,000 125,000 330,000 - 245,040 25,573 270,613 - 104,351 - 104,351 120,000 554,391 2,714,237 19,000,158 75,119 (298,525) (496,375) (4,385,567) - - 100,000 936,188 - 4,025,000 - 4,025,000 - 54,006 - 54,006 - - (35,814) (770,638) - 4,079,006 64,186 4,244,556 75,119 3,780,481 (432,189) (141,011) 3,007,417 292,921 4,324,021 22,593,414 $ 3,082,536 $ 4,073,402 $ 3,891,832 $ 22,452,403 -43- 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, 2012 Total net change in fund balances - governmental funds $ (141,011) 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 6,678,702 Depreciation expense (962,453) Costs of assets constructed by governmental funds and contributed to enterprise funds are expensed in the governmental funds. In the statement of activities however, the amount of the assets is transferred to the business -type activities. (23,679) 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 Position. Contributions to joint venture 1,017,828 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 position. Also, governmental funds report the effect of 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. Refunding bonds issued (4,025,000) Add premium on refunding bonds issued (54,006) Principal repayments 330,000 Amortization of bond premium 5,881 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. (38,661) 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. Property taxes (70,134) Special assessments (87,846) Loan principal repayments (16,338) 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 position of the internal service funds (83,327) Plus: the change in internal balances for internal services used by business -type activities 136,934 Change in net position - governmental activities $ 2,666,890 The notes to the financial statements are an integral part of this statement. -44- CITY OF NEW HOPE, MINNESOTA GENERALFUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2012 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 (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 Actual Amounts Variance with Final Budget $ 7,452,622 $ 7,452,622 $ 7,423,273 $ (29,349) 458,000 458,000 440,149 (17,851) 259,680 259,680 238,943 (20,737) 402,400 402,400 500,547 98,147 1,077,383 1,077,3 83 1,220,315 142,932 280,000 280,000 262,733 (17,267) - - 8,351 8,351 87,078 87,078 65,453 (21,625) 20,700 20,700 54,993 34,293 10,037,863 10,037, 863 10,214,757 176,894 1,590,406 1,590,406 1,567,301 23,105 6,017,363 6,017,363 5,940,195 77,168 919,358 919,358 926,056 (6,698) 1,652,570 1,652,570 1,598,725 53,845 23,966 23,966 45,357 (21,391) 105,700 105,700 104,927 773 3,500 3,500 635 2,865 10,312, 863 10,312,863 10,183,196 129,667 (275,000) (275,000) 31,561 306,561 275,000 275,000 228,964 (46,036) (100,000) (100,000) 275,000 275,000 128,964 (146,036) 160,525 160,525 4,935,212 4,935,212 4,935,212 - $ 4,935,212 $ 4,935,212 $ 5,095,737 $ 160,525 The notes to the financial statements are an integral part of this statement. -45- THIS PAGE IS LEFT BLANK INTENTIONALLY -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, 2012 REVENUES Taxes Property taxes Intergovernmental Charges for services Special assessments Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Economic development Current Personnel services Supplies Other services and charges Capital outlay TOTAL EXPENDITURES DEFICIENCY OF REVENUES 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 $ - - - 330,951 330,951 100,000 100,000 94,664 (5,336) - - 4,907 4,907 38,990 38,990 43,465 4,475 - - 16,338 16,338 223,990 223,990 575,325 351,335 116,883 116,883 116,078 805 350 350 221 129 113,278 113,278 187,765 (74,487) - - 340,962 (340,962) 230,511 230,511 645,026 (414,515) (6,521) (6,521) (69,701) 607,224 (27,600) (27,600) (27,600) (63,180) 607,224 (27,600) (27,600) 579,624 607,224 (34,121) (34,121) 509,923 544,044 4,479,550 4,479,550 4,479,550 - $ 4,445.429 $ 4,445,429 $ 4,989,473 $ 544,044 The notes to the financial statements are an integral part of this statement. Actual Amounts -47- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET POSITION - CONTINUED ON THE FOLLOWING PAGES PROPRIETARY FUNDS DECEMBER 31, 2012 AND 2011 ASSETS CURRENT ASSETS Cash and temporary investments Cash held with fiscal agent Receivables Accounts Special assessments Due from other governments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Restricted cash 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 Restated Restated 2012 2011 2012 2011 $ 281,571 $ 413,985 $ 185,070 $ 706,617 251,710 254,548 605,777 558,616 62,220 58,987 109,544 99,147 - - 50,919 46,844 - - 29,530 28,309 595,501 727,520 980,840 1,439,533 - - 168,509 168,509 3,503,144 3,134,254 4,998,780 3,789,011 293,139 293,139 1,392,767 1,392,767 152,275 132,933 736,703 1,512,548 (1,974,807) (1,908,043) (2,099,815) (1,971,745) 1,973,751 1,652,283 5,028,435 4,722,581 1,973,751 1,652,283 5,196,944 4,891,090 2,569,252 2,379,803 6,177,784 6,330,623 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 Restated Restated 2012 2011 2012 2011 2012 2011 $ 17,093 $ 11,153 $ (22,340) $ 878,963 $ 2,094,675 $ 1,668,076 - - - 2,052,073 - - - - 170,893 77,699 96,040 94,701 - - - - 29,746 30,704 - - 63,483 24,921 - 52,908 11,228 11,453 - - - - 28,321 22,606 212,036 3,033,656 2,220,461 1,846,389 - - 150,000 - - - 250,625 250,625 - - 234,417 234,417 973,145 973,145 9,641,166 5,617,003 - - 130,373 106,694 - - 3,794,727 3,612,056 149,758 149,758 196,363 196,363 - - - - - 1,831,743 303,826 285,421 (823,900) (791,379) (2,922,036) (2,820,422) (544,636) (472,395) 680,001 688,843 6,915,493 4,824,687 3,788,334 3,659,499 680,001 688,843 7,065,493 4,824,687 3,788,334 3,659,499 708,322 711,449 7,277,529 7,858,343 6,008,795 5,505,888 -49- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET POSITION - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2012 AND 2011 Business -type Activities - Enterprise Funds ASSETS CURRENT ASSETS Cash and temporary investments Cash held with fiscal agent Receivables Accounts Special assessments Due from other governments Inventory TOTAL CURRENT ASSETS NONCURRENT ASSETS Restricted cash 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 9305 Street Lighting Totals Restated 2012 2011 2012 2011 $ 201,191 $ 175,212 $ 2,757,260 $ 3,854,006 - - - 2,052,073 5,388 9,091 1,129,808 994,655 3,227 2,926 204,737 191,764 - - 114,402 124,673 - - 40,758 39,762 209,806 187,229 4,246,965 7,256,933 - - 150,000 - - - 168,509 168,509 - - 485,042 485,042 - - 10,614,311 6,590,148 - - 12,427,024 10,642,015 - - 2,032,027 2,032,027 - - 1,192,804 3,762,645 - - (8,365,194) (7,963,984) - - 18,386,014 15,547,893 - - 18,704,523 15,716,402 209,806 187,229 22,951,488 22,973,335 The notes to the financial statements are an integral part of this statement. -50- Governmental Activities - Internal Service Funds 2012 2011 $ 6,609,668 $ 7,162,150 57,960 - 72,925 28,918 6,740,553 7,191,068 85,647 85,647 3,052,918 3,032,156 7,326,724 6,836,364 (6,784,876) (6,619,424) 3,680,413 3,334,743 3,680,413 3,334,743 10,420,966 10,525,811 -51- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET POSITION - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2012 AND 2011 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 Compensated absences payable, current portion Lease payable, current portion Bonds payable, current portion TOTAL CURRENT LIABILITIES 9300 9301 Sewer Utility Water Utility Restated Restated 2012 2011 2012 2011 $ 27,753 $ 10,361 $ 16,874 $ 10,697 126,612 28,325 109,046 54,256 - - 90,253 110,586 1,218 1,635 11,241 13,161 72,872 72,872 166,872 161,872 228,455 113,193 394,286 350,572 NONCURRENT LIABILITIES Advances from other funds - - - - Other postemployment benefits payable 4,779 3,121 5,864 3,935 Compensated absences payable - - - - Lease payable - - - - Bonds payable 71,536 144,851 1,055,815 1,216,258 TOTAL NONCURRENT LIABILITIES 76,315 147,972 1,061,679 1,220,193 TOTAL LIABILITIES 304,770 261,165 1,455,965 1,570,765 NET POSITION Net investment in capital assets 1,829,343 1,434,560 3,805,748 3,344,451 Restricted for debt service - - - - Unrestricted 435,139 684,078 916,071 1,415,407 TOTAL NET POSITION $ 2,264,482 $ 2,118,638 $ 4,721,819 $ 4,759,858 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 Restated Restated 2012 2011 2012 2011 2012 2011 $ 1,587 $ 860 $ 13,206 $ 11,079 $ 1,703 $ 803 1,750 1,555 32,857 631,126 80,956 87,922 172 - 15,836 1,560 - - - - 4,790 4,790 6,315 7,028 30,000 30,000 - - - - - - 3,605 8,307 - - - - - - 104,256 99,256 33,509 32,415 70,294 656,862 193,230 195,009 285,000 315,000 - - - - 1,865 1,419 4,333 2,868 1,521 1,104 - - - 2,931 - - - - 3 3,505,000 562,434 666,930 286,865 316,419 3,509,333 3,510,799 563,955 668,034 320,374 348,834 3,579,627 4,167,661 757,185 863,043 680,001 688,843 3,406,888 2,753,499 3,121,644 2,893,313 - - 150,000 - - - (292,053) (326,228) 141,014 937,183 2,129,966 1,749,532 $ 387,948 $ 362,615 $ 3,697,902 $ 3,690,682 $ 5,251,610 $ 4,642,845 -53- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET POSITION - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2012 AND 2011 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 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 Compensated absences payable Lease payable Bonds payable TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES NET POSITION Net investment in capital assets Restricted for debt service Unrestricted 9305 Street Lighting Totals Restated 2012 2011 2012 2011 $ - $ - $ 61,123 $ 33,800 9,014 9,547 360,235 812,731 - - 106,261 112,146 23,564 26,614 30,000 30,000 3,605 8,307 344,000 334,000 9,014 9,547 928,788 1,357,598 285,000 315,000 18,362 12,447 - 2,931 5,194,785 5,533,039 5,498,147 5,863,417 9,014 9,547 6,426,935 7,221,015 12,843,624 11,114,666 - - 150,000 - 200,792 177,682 3,530,929 4,637,654 TOTAL NET POSITION $ 200,792 $ 177,682 $ 16,524,553 $ 15,752,320 Total net position - enterprise funds $ 16,524,553 $ 15,752,320 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (795,785) (658,851) Net position - business -type activities The notes to the financial statements are an integral part of this statement. $ 15,728,768 $ 15,093,469 -54- Governmental Activities - Internal Service Funds 2012 2011 $ 55,850 $ 51,532 46,733 125,124 19,916 19,183 432,200 470,152 554,699 665,991 112,634 70,882 48,022 - 160,656 70,882 715,355 736,873 3,680,413 3,334,743 6,025,198 6,454,195 $ 9,705,611 $ 9,788,938 -55- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Business -type Activities - Enterprise Funds 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 Bond issuance costs Interest expense TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS CAPITAL CONTRIBUTIONS FROM OTHER FUNDS CAPITAL CONTRIBUTIONS TRANSFERS IN TRANSFERS OUT CHANGE IN NET POSITION NET POSITION (RESTATED), JANUARY 1 NET POSITION, DECEMBER 31 9300 9301 Sewer Utility Water Utility Restated Restated , )AV) �nii )nil) 'nii $ 2,376,021 $ 2,352,635 $ 3,532,349 $ 3,130,311 2,376,021 2,352,635 3,532,349 3,130,311 1,521,650 1,356,328 2,388,139 2,281,327 306,794 245,089 342,965 321,900 8,911 11,813 322,788 181,267 9,266 10,511 879 1,136 273,819 303,811 403,500 470,875 66,764 69,751 128,070 120,070 2,187,204 1,997,303 3,586,341 3,376,575 188,817 355,332 (53,992) (246,264) 5,102 10,943 6,789 3,926 - - 68,716 61,639 (2,871) (3,842) (27,401) (30,448) 2,231 7,101 48,104 35,117 191,048 362,433 (5,888) (211,147) - - 13,053 13,454 - - - 2,000,000 (45,204) (44,424) (45,204) (44,448) 145,844 318,009 (38,039) 1,757,859 2,118,638 1,800,629 4,759,858 3,001,999 $ 2,264,482 $ 2,118,638 $ 4,721,819 $ 4,759,858 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 Restated Restated 2012 2011 2012 2011 2012 2011 $ 289,448 $ 273,064 $ 694,702 $ 752,671 $ 948,650 $ 947,031 289,448 273,064 694,702 752,671 948,650 947,031 24,935 24,948 - - - - 141,244 163,139 310,928 288,663 70,095 53,692 33,072 34,391 29,180 23,410 8,607 11,678 22,360 22,185 211,650 263,310 685 623 34,325 36,077 59,648 56,886 224,361 278,240 32,521 32,524 101,614 101,613 72,241 64,982 288,457 313,264 713,020 733,882 375,989 409,215 991 (40,200) (18,318) 18,789 572,661 537,816 695 1,131 6,797 9,665 34,567 40,670 6,868 5,724 - 3,720 2,500 3,000 - - - (93,820) - - (6,900) (2,669) (57,933) (5,827) (15,285) (20,398) 663 4,186 (51,136) (86,262) 21,782 23,272 1,654 (36,014) (69,454) (67,473) 594,443 561,088 23,679 - - - - - - - 76,674 - 16,564 97,652 - - - 271,673 16,862 - - - - - (19,104) (19,020) 25,333 (36,014) 7,220 204,200 608,765 639,720 362,615 398,629 3,690,682 3,486,482 4,642,845 4,003,125 $ 387,948 $ 362,615 $ 3,697,902 $ 3,690,682 $ 5,251,610 $ 4,642,845 -57- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Business -type Activities - Enterprise Funds 9305 Street Lighting Totals Restated 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 Bond issuance costs Interest expense TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS CAPITAL CONTRIBUTIONS FROM OTHER FUNDS CAPITAL CONTRIBUTIONS TRANSFERS IN TRANSFERS OUT CHANGE IN NET POSITION NET POSITION (RESTATED), JANUARY 1 NET POSITION, DECEMBER 31 124,397 $ 122,742 $ 7,965,567 $ 7,578,454 124,397 122,742 7,965,567 7,578,454 - - 3,934,724 3,662,603 216 180 1,172,242 1,072,663 - - 402,558 262,559 103,463 112,141 348,303 409,906 1,042 1,432 996,695 1,147,321 - - 401,210 388,940 104,721 113,753 7,255,732 6,943,992 19,676 8,989 709,835 634,462 3,434 4,754 57,384 71,089 - - 78,084 74,083 - - - (93,820) - - (110,390) (63,184) 3,434 4,754 25,078 (11,832) 23,110 13,743 734,913 622,630 - - 23,679 - - - 106,291 111,106 - - 16,862 2,271,673 - - (109,512) (107,892) 23,110 13,743 772,233 2,897,517 177,682 163,939 15,752,320 12,854, 803 $ 200,792 $ 177,682 $ 16,524,553 $ 15,752,320 Change in net position - enterprise funds Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds. Change in net position - business -type activities The notes to the financial statements are an integral part of this statement. -58- $ 772,233 $ 2,897,517 (136,934) (266,070) $ 635,299 $ 2,631,447 Governmental Activities - Intemal Service Funds 2012 2011 2,350,144 2,107,784 108,234 17,116 2,458,378 2,124,900 969,395 960,492 338,332 396,513 75,539 84,583 749,092 815,552 586,291 523,152 2,718,649 2,780,292 (260,271) (655,392) 122,563 196,936 57,960 - 69,321 13,568 249,844 210,504 (10,427) (444,888) (72,900) (71,760) (83,327) (516,648) 9,788,938 10,305,586 $ 9,705,611 $ 9,788,938 -59- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED ON THE FOLLOWING PAGES PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 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 interfund 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 Investment earnings 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 POSITION Cash and temporary investments Cash held with fiscal agent Restricted cash TOTAL CASH AND CASH EQUIVALENTS The notes to the financial statements are an integral part of this statement. Business -type Activities - Enterprise Funds 9300 9301 Sewer Utility Water Utility Restated Restated $ 2,375,626 $ 2,356,108 $ 3,470,716 $ 3,139,154 - - 68,716 61,639 (1,715,359) (1,658,452) (3,082,070) (2,910,207) (287,744) (237,686) (334,859) (318,902) 372,523 459,970 122,503 (28,316) - - - 2,000,000 (45,204) (44,424) (45,204) (44,448) - - - (501,341) (45,204) (44,424) (45,204) 1,454,211 (388,232) (129,425) (433,924) (1,251,675) - - 13,053 13,454 - - - 241,162 - - 6 411,738 (72,872) (76,515) (161,871) (103,159) (3,731) (6,486) (29,798) (34,724) (464,835) (212,426) (605,635) (723,204) 5,102 10,943 6,789 3,926 (132,414) 214,063 (521,547) 706,617 413,985 199,922 706,617 - $ 281,571 $ 413,985 $ 185,070 $ 706,617 $ 281,571 $ 413,985 $ 185,070 $ 706,617 $ 281,571 $ 413,985 $ 185,070 $ 706,617 -60- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water Restated Restated $ 289,448 $ 273,164 $ 618,384 $ 743,668 $ 948,269 $ 952,473 6,868 5,724 - 3,720 2,500 3,000 (114,100) (119,145) (277,448) (365,893) (174,996) (272,868) (140,071) (162,866) (307,336) (285,501) (68,778) (56,296) 42,145 (3,123) 33,600 95,994 706,995 626,309 - - - 271,673 16,862 - - - - - (19,104) (19,020) (30,000) (34,561) - - - 501,341 - - - (40,850) - - (30,000) (34,561) - 230,823 (2,242) 482,321 - - (2,799,443) (1,224,720) (266,699) (378,654) - - 76,674 - - - - - - - 69,472 160,000 - - - 3,411,180 - - - - (7,633) (8,518) (99,257) (801,969) (6,900) (2,669) (113,371) (1,037) (16,237) (33,208) (6,900) (2,669) (2,843,773) 2,176,905 (312,721) (1,053,831) 695 1,131 6,797 9,665 34,567 40,670 5,940 (39,222) (2,803,376) 2,513,387 426,599 95,469 11,153 50,375 2,931,036 417,649 1,668,076 1,572,607 $ 17,093 $ 11,153 $ 127,660 $ 2,931,036 $ 2,094,675 $ 1,668,076 $ 17,093 $ 11,153 $ (22,340) $ 878,963 $ 2,094,675 $ 1,668,076 - - - 2,052,073 - - - - 150,000 - - - $ 17,093 $ 11,153 $ 127,660 $ 2,931,036 $ 2,094,675 $ 1,668,076 -61- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 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 interfund 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 Investment earnings 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 POSITION Cash and temporary investments Cash held with fiscal agent Restricted cash TOTAL CASH AND CASH EQUIVALENTS The notes to the financial statements are an integral part of this statement. Business -type Activities - Enterprise Funds 9305 Street Lighting Totals Restated $ 127,799 $ 123,522 $ 7,830,242 $ 7,588,089 - - 78,084 74,083 (105,038) (113,989) (5,469,011) (5,440,554) (216) (180) (1,139,004) (1,061,431) 22,545 9,353 1,300,311 1,160,187 - - 16,862 2,271,673 - - (109,512) (107,892) - - (30,000) (34,561) - - (40,850) - - (122,650) 2,088,370 (3,888,298) (2,984,474) - - 89,727 13,454 - - 69,472 401,162 - - 6,905 3,822,918 - - (341,633) (990,161) - - (170,037) (78,124) - - (4,233,864) 184,775 3,434 4,754 57,384 71,089 25,979 14,107 (2,998,819) 3,504,421 175,212 161,105 5,906,079 2,401,658 $ 201,191 $ 175,212 $ 2,907,260 $ 5,906,079 $ 201,191 $ 175,212 $ 2,757,260 $ 3,854,006 - - - 2,052,073 - - 150,000 - $ 201,191 $ 175,212 $ 2,907,260 $ 5,906,079 -62- Governmental Activities - Internal Service Funds 2,350,144 2,107,784 108,234 17,116 (1,215,448) (1,272,071) (913,255) (988,362) 329,675 (135,533) (72,900) (71,760) (72,900) (71,760) (1,002,643) (510,934) 70,823 13,568 (931,820) (497,366) 122,563 196,936 (552,482) (507,723) 7,162,150 7,669,873 $ 6,609,668 $ 7,162,150 6,609,668 $ 7,162,150 $ 6,609,668 $ 7,162,150 -63- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 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 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 bond discount Amortization of bond premium Capital assets contributed from other funds Capital assets purchased on account Loss on sale or disposal of capital assets The notes to the financial statements are an integral part of this statement. 9300 9301 Sewer Utility Water Utility Restated Restated 2012 2011 2012 2011 $ 188,817 $ 355,332 $ (53,992) $ (246,264) 66,764 69,751 128,070 120,070 - - 68,716 61,639 2,838 (1,110) (47,161) 5,743 (3,233) 4,583 (10,397) 7,181 - - (4,075) (4,081) - - (1,221) 5,531 98,287 24,011 54,790 25,038 17,392 5,859 6,177 1,450 - - (20,333) (6,171) 1,658 1,544 1,929 1,548 $ 372,523 $ 459,970 $ 122,503 $ (28,316) $ 673 $ 674 $ 672 $ 673 $ 1,116 $ 1,115 $ 1,149 $ 1,149 -64- -65- Business -type Activities - Enterprise Funds 9302 9303 9304 Golf Course Ice Arena Storm Water Restated Restated 2012 2011 2012 2011 2012 2011 $ 991 $ (40,200) $ (18,318) $ 18,789 $ 572,661 $ 537,816 32,521 32,524 101,614 101,613 72,241 64,982 6,868 5,724 - 3,720 2,500 3,000 - 100 (37,756) (23,141) (1,339) 2,531 - - - - 958 2,911 - - (38,562) 14,138 - - 225 (1,107) - - - - 195 (437) 8,754 (12,274) 58,657 17,673 727 (176) 2,127 1,974 900 (3,192) 172 - 14,276 (10,013) - - 446 449 1,465 1,188 417 588 $ 42,145 $ (3,123) $ 33,600 $ 95,994 $ 706,995 $ 626,309 1,147 $ 1,221 $ $ $ $ $ 1,386 $ 1,385 - $ $ $ $ 607,023 $ $ 65,623 -65- CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Business -type Activities - Enterprise Funds 9305 Street Lighting Totals Restated 2012 2011 2012 2011 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) $ 19,676 $ 8,989 $ 709,835 $ 634,462 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation - - 401,210 388,940 Other income related to operations - - 78,084 74,083 (Increase) decrease in assets Receivables Accounts 3,703 817 (79,715) (15,060) Special assessments (301) (37) (12,973) 14,638 Due from other governments - - (42,637) 10,057 Inventory - - (996) 4,424 Increase (decrease) in liabilities Accounts and contracts payable (533) (416) 220,150 53,595 Accrued salaries payable - - 27,323 5,915 Due to other governments - - (5,885) (16,184) Compensated absences payable - - - - Other postemployment benefits payable - - 5,915 5,317 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 22,545 $ 9,353 $ 1,300,311 $ 1,160.187 SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Amortization of bond discount $ - $ - $ 2,492 $ 2,568 Amortization of bond premium $ - $ - $ 3,651 $ 3,649 Capital assets contributed from other funds $ - $ - $ 23,679 $ - Capital assets purchased on account $ - $ - $ - $ 672,646 Loss on sale or disposal of capital assets $ - $ - $ - $ - The notes to the financial statements are an integral part of this statement. on Governmental Activities - Internal Service Funds 2012 2011 $ (260,271) $ (655,392) 586,291 523,152 (44,007) 20,976 (9,211) 5,955 4,318 (39,426) 733 (29,433) 10,070 6,572 41,752 32,063 $ 329,675 $ (135,533) $ $ 69,180 -67- CITY OF NEW HOPE, MINNESOTA STATEMENT OF FIDUCIARY NET POSITION AGENCY FUND DECEMBER 31, 2012 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 $ 46,081 $ 46,081 •: CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 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 City 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 position 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 fimctional activity. -69- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 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 City. 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. Unearned 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 unearned revenue. 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. 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. -70- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The Temporary Financing Capital Projects fund is used to account for various capital projects and capital outlay purchases until permanent financing is acquired. The HRA Bonds Debt Service fund accounts for revenue from tax increments and interest income to pay for the principal and interest on the City's tax increment bond issues. 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. 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 City'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 City'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. -71- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED D. Assets, liabilities, deferred inflows of resources, and net position /fund balance 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. The proprietary funds' portion in the government -wide cash and temporary investments pool is considered to be cash and cash equivalent for purposes of the Statements of Cash Flows. 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. Investments are stated at their estimated fair value. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. For cash held with fiscal agent, interest earned on those investments is allocated directly to that fund. 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. Restricted cash In accordance with the 2011A Taxable Lease Revenue Bonds covenant, on or before December 1, 2012 and annually thereafter, the City shall set aside scheduled amounts sufficient to pay the principal due on December 1, 2028. As of December 31, 2012, the balance reported as restricted for this purpose is $150,000. Property taxes The City 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. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred inflow of resources 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 2012. 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. -72- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 special assessments receivable in governmental funds are completely offset by a deferred inflow of resources for assessments not received within 60 days after year end. In government -wide financial statements, special assessments are recognized as revenues in the year for which they are certified. At December 31, 2012, the total delinquent special assessment receivable balance was $63,769. 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. 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. 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. Inventory and prepaid items of the governmental funds are recorded as expenditures when consumed rather than when purchased. 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. -73- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 Deferred inflows of resources Years 15 -50 15 -50 15 -50 3-20 In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: taxes, special assessments, and loans. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 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. Otherpostemployment benefits (OPEB) Under Minnesota statute 471.61, 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 position. The recognition of bond premiums and discounts are delayed and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as an expense in the period incurred. -74- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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. 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, which is the City's highest level of decision - making authority. Committed amounts cannot be used for any other purpose unless the City 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 City Council itself or by an official to which the governing body delegates the authority. The City 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. Net position Net position represents the difference between assets and liabilities. Net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net position - Consist of net position balances restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. Unrestricted net position - All other net position that do not meet the definition of "restricted" or "net investment in capital assets ". When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. -75- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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. 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. Storm Sewer ii. Solid Waste Management iii. 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 Police Forfeitures or Ice Arena Endowment special revenue funds. B. Excess of expenditures over appropriations For the year ended December 31, 2012, expenditures exceeded appropriations in the Economic Development Authority fund by $414,515. This excess was funded by revenues received more than anticipated and fund balance reserves. -76- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 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 City 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 $2,185,092 and the bank balance was $2,525,422. At December 31, 2012, 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. Investments 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 72 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. -77- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED • 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, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds. The City's investment policy does not limit the concentration of investments. As of December 31, 2012, the City had invested 5 percent or more of its total investment portfolio in the following issuers: the State of Illinois - 7.4 percent, the State of California - 7.6 percent, the State of Michigan - 5.7 percent, and New York City Transitional Finance Authority - 10.4 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. As of December 31, 2012, 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. -78- Credit Segmented Fair Value Quality/ Time and Carrying Types of Investments Ratings (1) Distribution (2) Amount Pooled investments Broker Money Market Funds N/A Less than 6 months $ 4,373,479 Non - pooled investments Negotiable Certificates of Deposit N/A Less than 6 months 489,872 Negotiable Certificates of Deposit N/A 6 months to 1 year 1,077,702 Negotiable Certificates of Deposit N/A 1 to 3 years 1,310,152 Negotiable Certificates of Deposit N/A More than 3 years 1,832,273 U-S. Government Agency Securities AA+ Less than 6 months 8,053 U-S. Government Agency Securities AA+ 1 to 3 years 1,242,642 U-S. Government Agency Securities AA+ More than 3 years 12,702 Municipal Bonds Aa2 Less than 6 months 802,528 Municipal Bonds A Less than 6 months 2,000,000 Municipal Bonds A- 6 months to 1 year 2,043,860 Municipal Bonds AA+ 6 months to 1 year 1,013,260 Municipal Bonds AA- 6 months to 1 year 505,600 Municipal Bonds AA- 1 to 3 years 2,125,629 Municipal Bonds AA+ 1 to 3 years 1,206,481 Municipal Bonds AAA 1 to 3 years 1,040,920 Municipal Bonds AAA More than 3 years 3,314,692 State and Local Government Securities AAA Less than 6 months 33,393 State and Local Government Securities AAA 1 to 3 years 2,635,821 Total investments $ 27.069.059 (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. -78- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED A reconciliation of cash and temporary investments as reported on the statement of net position follows: Carrying amount of deposits $ 2,185,092 Investments 27,069,059 Petty cash 2,950 Total $ 29,257,101 Statement of Net Position Cash and temporary investments $ 25,152,361 Cash held with fiscal agent 3,908,659 Restricted cash 150,000 Statement of Fiduciary Net Assets Cash and temporary investments 46,081 Total $ 29,257,101 B. Receivables 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, 2012 totaled $428,830. A portion of the loans receivable, $381,529, has been offset by a deferred inflow of resources in the fund financial statements, while the remaining has been committed to economic development. -79- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED C. Capital assets Capital asset activity for the year ended December 31, 2012 was as follows: Governmental activities Capital assets not being depreciated Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated Buildings and structures Vehicles and equipment Improvements other than buildings Total capital assets being depreciated Less accumulated depreciation for Buildings and structures Vehicles and equipment Improvements other than buildings Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net Restated Beginning Balance (1) Increases Ending Decreases Balance $ 994,268 $ - $ - $ 994,268 4,423,453 6,635,229 (3,648,260) 7,410,422 5,417,721 6,635,229 (3,648,260) 8,404,690 9,241,715 20,762 - 9,262,477 7,959,867 956,175 (422,341) 8,493,701 14,815,141 3,624,580 - 18,439,721 32,016,723 4,601,517 (422,341) 36,195,899 (4,877,518) (250,034) - (5,127,552) (5,786,945) (566,462) 420,839 (5,932,568) (4,882,591) (732,248) - (5,614,839) (15,547,054) (1,548,744) 420,839 (16,674,959) 16,469,669 3,052,773 (1,502) 19,520,940 $ 21,887,390 $ 9,688,002 $ (3,649,762) $ 27,925,630 (1) See Note 5 for further information of restated balance. -80- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Business -type Activities Capital assets not being depreciated Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated Buildings and structures Vehicles and equipment Improvements other than buildings Total capital assets being depreciated Less accumulated depreciation for Buildings and structures Vehicles and equipment Improvements other than buildings Total accumulated depreciation Total capital assets being depreciated, net Business -type activities capital assets, net Restated Beginning Balance (1) Increases Ending Decreases Balance $ 485,042 $ - $ - $ 485,042 3,762,645 3,215,650 (5,785,491) 1,192,804 4,247,687 3,215,650 (5,785,491) 1,677,846 6,590,148 4,024,163 - 10,614,311 2,032,027 - - 2,032,027 10,642,015 1,785,009 - 12,427,024 19,264,190 5,809,172 - 25,073,362 (3,180,539) (122,823) - (3,303,362) (1,247,335) (198,053) - (1,445,388) (3,536,110) (80,334) - (3,616,444) (7,963,984) (401,210) - (8,365,194) 11,300,206 5 - 16,708,168 $ 15,547,893 $ 8,623,612 $ (5,785,491) $ 18,386,014 (1) See Note 5 for further information of restated balance. Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government $ 95,781 Public safety 74,229 Public works 519,618 Culture and recreation 272,825 Internal service 586,291 Total depreciation expense - governmental activities $ 1,548,744 Business -type activities Sewer utility $ 66,764 Water utility 128,070 Golf course 32,521 Ice arena 101,614 Storm water 72,241 Total depreciation expense - business -type activities $ 401,210 -81- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Construction commitments The City has active construction projects as of December 31, 2012. At year -end, the City's commitments with the contractors are as follows: Project Boone Avenue Improvements Civic Center Park Improvements Golf Course Rain Garden Crystal 2012 Street Improvements Hwy 169 Water Main Improvement Bass Creek Restoration 2012 Sanitary Sewer Relining Total D. Interfund receivables, payables, and transfers The composition of internal balances as of December 31, 2012 is as follows: Receivable Fund Spent Remaining to date Commitment $ 645,883 67,794 57,120 149,955 200,089 54,601 116,820 $ 21,069 2,069 5,297 94,660 17,204 10,080 1,800 $ 1,292,262 $ 152,179 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 Bond retirement Finance capital purchase Bond retirement Amount $ 95,589 30,000 125,589 1,990,595 285,000 2,275,595 (2,086,184) 795,785 $ 1,110,785 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, 2012, the balance outstanding was $2,086,184. 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, 2012, the balance outstanding was $315,000. -82- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Interfund transfers at December 31, 2012 are as follows: • The General fund transferred $100,000 to the nonmajor governmental funds to establish the City Hall CIP fund. • 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 $27,600, $18,952, $45,204, $45,204, $19,104, and $72,900, respectively, to the General fund to cover administrative charges paid for by the General fund. • Transfers were made from the HRA Construction fund of $607,224 to the Economic Development Authority fund for previously unspent transfers. • Transfers of $16,862 were made out of the nonmajor governmental funds to the Storm Water enterprise fund as a result of closing funds. 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 zero net book value as of December 31, 2012. The future minimum lease obligation for 2013 is $3,736 and the net present value of the minimum lease payment as of December 31, 2012 is $3,605. 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. tax increment bonds and G.O. revenue bonds. The following G.O. bonds will be repaid from future tax levies. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End 2010B G.O. Certificates of Indebtedness $ 1,245,000 2.00-2.60% 11/23/10 02/01/20 $ 1,120,000 -83- Transfer in Economic Nonmajor Storm General Development Governmental Water Fund Fund Authority Funds Enterprise Total Transfer out General $ - $ - $ 100,000 $ - $ 100,000 Economic Development Authority 27,600 - - - 27,600 HRA Construction - 607,224 - - 607,224 Nonmajor governmental 18,952 - - 16,862 35,814 Sewer Utility enterprise 45,204 - - - 45,204 Water Utility enterprise 45,204 - - - 45,204 Storm Water enterprise 19,104 - - - 19,104 Internal Service 72,900 - - - 72,900 Total transfers $ 228,964 $ 607,224 $ 100,000 $ 16,862 $ 953,050 • The General fund transferred $100,000 to the nonmajor governmental funds to establish the City Hall CIP fund. • 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 $27,600, $18,952, $45,204, $45,204, $19,104, and $72,900, respectively, to the General fund to cover administrative charges paid for by the General fund. • Transfers were made from the HRA Construction fund of $607,224 to the Economic Development Authority fund for previously unspent transfers. • Transfers of $16,862 were made out of the nonmajor governmental funds to the Storm Water enterprise fund as a result of closing funds. 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 zero net book value as of December 31, 2012. The future minimum lease obligation for 2013 is $3,736 and the net present value of the minimum lease payment as of December 31, 2012 is $3,605. 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. tax increment bonds and G.O. revenue bonds. The following G.O. bonds will be repaid from future tax levies. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End 2010B G.O. Certificates of Indebtedness $ 1,245,000 2.00-2.60% 11/23/10 02/01/20 $ 1,120,000 -83- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual debt service to maturity for G.O. bonds are as follows: Year Ending December 31, Principal Interest Total 2013 $ 130,000 $ 22,797 $ 152,797 2014 135,000 20,148 155,148 2015 135,000 17,447 152,447 2016 140,000 14,698 154,698 2017 140,000 11,897 151,897 2018-2020 440,000 16,529 456,529 Total $ 1,120,000 $ 103,516 $ 1,223,516 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 55 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 $450,040 and $255,484, respectively. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G-O. Tax Increment Bonds of 2004 G.O. Tax Increment Bonds of 2005 G.O. Tax Increment Refunding Bonds, Series, 2012A G.O. Taxable Tax Increment Refunding Bonds, Series, 2012B Total G.O. tax increment bonds $ 4,080,000 3.10-3-25 % 04/01/04 02/01/14 $ 2,950,000 1,370,000 5.60 03/01/05 02/01/14 2,695,000 2.00-2.45 1,330,000 1.35-4-65 01/11/12 02/01/25 1,255,000 2,695,000 01/11/12 02/01/31 1,330,000 $ 8,230,000 The annual debt service to maturity for G.O. tax increment bonds are as follows: Year Ending Governmental Activities December 31, Principal Interest Total 2013 $ 210,000 $ 282,476 $ 492,476 2014 3,995,000 190,531 4,185,531 2015 270,000 99,696 369,696 2016 275,000 94,588 369,588 2017 275,000 89,288 364,288 2018-2022 1,540,000 355,184 1,895,184 2023-2027 1,270,000 164,912 1,434,912 2028-2031 395,000 35,886 430,886 Total $ 8,230,000 $ 1,312,561 $ 9,542,561 Governmental Activities -84- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Lease revenue bonds The following bonds were issued to finance the Energy Conservation project and will be repaid primarily with energy savings and revenues pledged from the Ice Arena fund. Annual principal and interest payments on the bonds are expected to require less than 8 percent of revenues from the Ice Arena fund. Principal and interest paid for the current year and total customer revenues for the Ice Arena fund were $112,920 and $694,702, respectively. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End 2011A Taxable Lease Revenue Bonds $ 3,505,000 5.00 % 12/01/11 12/01/28 $ 3,505,000 The annual debt service to maturity for all lease revenue bonds are as follows: Year Ending Business -type Activities Interest December 31, Principal Interest Total 2013 $ - $ 57,482 $ 57,482 2014 - 57,482 57,482 2015 - 57,482 57,482 2016 - 57,482 57,482 2017 - 57,482 57,482 2018-2022 - 287,410 287,410 2023-2027 - 287,410 287,410 2028 3,505,000 57,482 3,562,482 Total $ 3,505,000 $ 919,712 $ 4,424,712 G.O. revenue bonds The following bonds were issued to finance capital improvements in the enterprise funds. They will be repaid from future 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 3, 6, and 12 percent of revenues from the Sewer Utility, Water Utility, and Storm Water funds, respectively. Principal and interest paid for the current year and total customer revenues for the Sewer Utility fund were $76,603 and $2,376,021, respectively. Principal and interest paid for the current year and total customer revenues for the Water Utility fund were $191,669 and $3,532,349, respectively. Principal and interest paid for the current year and total customer revenues for the Storm Water fund were $115,494 and $948,650, respectively. -85- Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End 2010A G.O. Utility Revenue Bonds $ 1,200,000 2.00-3.25 % 05/06/10 02/01/21 $ 1,100,000 2010B G-O. Water Revenue Refunding Bonds 605,000 2.00-3.00 11/23/10 02/01/22 560,000 2011 G.O. Water Revenue Bonds 411,738 1.70 02/23/11 08/20/29 373,000 Total G.O. revenue bonds $ 2,033,000 -85- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 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, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2029 Total Changes in long -term liabilities Business -type Activities Principal Interest Total $ 344,000 $ 42,760 $ 386,760 339,000 35,986 374,986 150,000 31,163 181,163 150,000 28,081 178,081 150,000 24,766 174,766 733,000 62,685 795,685 117,000 10,286 127,286 50,000 1,277 51,277 $ 2,033,000 $ 237,004 S 2,270,004 Long -term liability activity for the year ended December 31, 2012, was as follows: Restated Beginning Balance (1) Governmental activities Bonds payable G.O. bonds and certificates G.O. tax increment bonds Add: premiums on bonds Total bonds payable, net Compensated absences payable Other postemployment benefits payable Governmental activity long -term liabilities Business -type activities Bonds payable G.O. revenue bonds Lease revenue bonds Add: premiums on bonds Less: bond discount Total bonds payable, net Capital leases payable Other postemployment benefits payable Business -type activity long -term liabilities Ending Due Within Increases Decreases Balance One Year $ 1,245,000 $ - $ (125,000) $ 1,120,000 $ 130,000 4,410,000 4,025,000 (205,000) 8,230,000 210,000 14,247 54,006 (5,881) 62,372 - 5,669,247 4,079,006 (335,881) 9,412,372 340,000 470,152 597,783 (587,713) 480,222 432,200 70,882 87,121 (45,369) 112,634 - $ 6,210,281 $ 4,763,910 $ (968,963) $ 10,005,228 $ 772,200 $ 2,360,095 $ 6,905 $ (334,000) $ 2,033,000 $ 344,000 3,505,000 - - 3,505,000 - 12,356 - (3,651) 8,705 - (10,412) - 2,492 (7,920) - 5,867,039 6,905 (335,159) 5,538,785 344,000 11,238 - (7,633) 3,605 3,605 12,447 12,332 (6,417) 18,362 - $ 5,890,724 $ 19,237 $ (349,209) $ 5,560,752 $ 347,605 (1) See Note 5 for further information of restated balance. 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. :• CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Advanced refunding On January 1, 2012 the City issued $2,695,000 of G.O. Tax Increment Refunding Bonds, Series 2012A (2012A bonds) and $1,330,000 G.O. Taxable Tax Increment Refunding Bonds, Series 2012B (201213 bonds). The 2012A bonds bear an average coupon rate of 2.13 percent and will be used to call $2,585,000 of the outstanding principal of the G.O. Tax Improvement Bonds of 2004 on February 1, 2014. The 2012B bonds bear an average coupon rate of 3.83 percent and will be used to call $1,195,000 of the outstanding principal of the G.O. Tax Improvement Bonds of 2005 on February 1, 2014. As a result of the refunding issues, the City will save a total of $271,601 in debt service payments and achieve an economic gain (the present value of the difference between the old and the new debt service) of $219,655. F. Components of fund balance At December 31, 2012, 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: Economic Other Development BRA Temporary BRA Governmental Purpose General Authority Construction Financing Bonds Funds Total Nonspendable Prepaid items $ 14,925 $ $ $ $ $ $ 14,925 Restricted for Economic development $ - $ - $ 1,319,423 $ - $ - $ - $ 1,319,423 Debt service - - - 4,073,402 149,092 4,222,494 Public safety police expenditures - - 101,878 101,878 Ice arena - - - 13,811 13,811 Total restricted $ $ $ 1,319,423 $ $ 4,073,402 $ 264,781 $ 5,657,606 Committed to Operations $ $ $ - $ $ - $ 175,719 $ 175,719 Economic development 4,989,473 - 4,989,473 Total committed $ $_4,989 473 $ $ $ $ 175,719 $ 5,165,192 Assigned to Debt service $ $ $ $ $ $ 35,902 $ 35,902 Street improvements 2,158,764 2,158,764 General improvements 3,082,536 - 3,082,536 Capital equipment - 348,301 348,301 City hall improvements 100,747 100,747 Park improvements - - - 807,618 807,618 Total assigned $ $ $ $ 3,082,536 $ $ 3,451,332 $ 6,533,868 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. -87- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED 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.nmpera.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. 2. Funding policy Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the State legislature. The City makes annual contributions to the pension plans equal to the amount required by 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 2012. PEPFF members were required to contribute 9.60 percent of their annual covered salary in 2012. 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, 2012, 2011 and 2010 were $254,832, $250,873, and $217,644, respectively. The City's contributions to PEPFF for the years ending December 31, 2012, 2011 and 2010 were $320,482, $314,461, and $344,624, respectively. The City's contributions were equal to the contractually required contributions for each year as set by Minnesota statute. ma CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED B. Postemployment benefits other than pensions 1. Plan description The City administers a single - employer defined benefit healthcare plan ( "the Retiree Health Plain. 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 2012, the City contributed $51,786 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. 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 2,917 Adjustment to annual required contribution (3,263) Annual OPEB cost (expense) 99,453 Contributions made (51,786) Increase in net OPEB obligation 47,667 Net OPEB obligation - January 1, 2012 83,329 Net OPEB obligation - December 31, 2012 $ 130,996 -89- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2012 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 12/31/12 $ 99,453 52.1 % $ 130,996 12/31/11 99,608 62.5 83,329 12/31/10 20,769 34.6 45,949 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. 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. -90- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED 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, 2012 was thirty years. 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, 2012. 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. -91- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED D. Risk management The City is exposed to various risks of 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, 2012, 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, 2012 is undetermined. F. Joint ventures and governed organizations Joint ventures Joint Water Commission The City is a party to a joint powers agreement through which the Golden Valley, Crystal, and New Hope Joint Water Commission (JWC) is formed. The agreement provides for the operation and ownership of a water supply, distribution, and support system in and for the cities of Golden Valley, Crystal, and New Hope. Each member city is entitled to appoint one member to the JWC board. 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 asset recorded in the Water fund as an investment in the JWC for $168,509 represents the original contributions for working capital; however, the City's share of subsequent construction costs are not determinable. Therefore, the City's Water enterprise fund has not recorded any subsequent amounts as an equity investment or contributed capital related to the JWC. The following financial information is taken from the JWC's audited financial statements for the year ended December 31, 2012: Total assets $4,223,876 Total liabilities $ 866,561 Total net position $3,357,315 Total revenue $8,811,370 Total expenses $8,039,752 -92- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED Of the total revenues, $8,639,175 represented assessments paid by member cities. The City's share of JWC's total member assessments for the year ended December 31, 2012 was $2,121,181 or 24.6 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 City 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 following financial information is taken from the District's audited financial statements for the year ended December 31, 2011, the most recent information available at the date of this report: Total assets $5,959,672 Total liabilities $ 615,439 Total net position $5,344,233 Total revenue $3,321,362 Total expenses $2,116,377 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, 2012, the amount reported as investment in joint venture was $2,618,674. According to a formula in the agreement, the City's share of the District's budget is 49.7 percent. Payments to the District in 2012 totaled $952,009. The District's financial statements for the period ended December 31, 2012 are available at the District office located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428. Jointly controlled organizations 1. 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, 2012 was $25,273, representing 7.9 percent of members' contributions for the year. 2. 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 $14,115 for these services in 2012. 3. 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 2012, total charges of $215,334 were incurred for these services. -93- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 4: OTHER INFORMATION - CONTINUED 4. 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. Each member city is entitled to appoint one representative to BCWMC board. The nine- member board develops a budget for the year each July 1. Each member City contributes funds to cover the budgeted costs of operations based half on the assessed valuation of all taxable property, and half on the total area each member city has within the boundaries of the watershed. Any capital costs incurred by the BCWMC are apportioned to the members based half on the real property valuation of each member city within the watershed, and half on the total area each member city has within the boundaries of the watershed. The City's 2012 contribution to the BCWMC for its fiscal year ended December 31, 2012 was $25,533, representing 5.5 percent of member's contributions for the year. 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 2012, the City incurred charges of $410,200 for application support, systems development, Internet access, and network support services. Note 5: RESTATEMENT The following restatement was recorded related to a capital project and related bond issuance initially reported in the governmental Energy Conservation Project capital project fund. The assets were initially intended to be transferred to the Ice Arena fund upon completion with the Ice Arena fund to annually transfer cash needed to cover debt service payments. The following is a summary of the accounts affected by this restatement; the change in fund balance /net position reflects the restatement as reported in the basic financial statements: Governmental Proprietary Fund Fund Energy Conservation Governmental Business -type Accounts Adjusted/Restated Project Activities Ice Arena Activities Assets Cash $ (2,583,133) $ (2,583,133) $ 2,583,133 $ 2,583,133 Accounts receivable (3,720) (3,720) 3,720 3,720 Capital assets - (1,831,743) 1,831,743 1,831,743 Total assets _L12,586,853), $ (4,418,596) $ 4,418,596 $ 4,418,596 Liabilities Accounts payable $ (607,023) $ (607,023) $ 607,023 $ 607,023 Accrued interest payable - (4,790) 4,790 4 Bonds payable - (3,505,000) 3,505,000 3,505,000 Total liabilities (607,023) (4,116,813) 4,116,813 4,116,813 Fund balance /net position (1,979,830) (301,783) 301,783 301,783 Total liabilities and fund balance /net position $ (2,586,853) $ (4,418,596) $ 4,418,596 $ 4,418,596 Revenues Bond proceeds $ (3,505,000) - Transfers in (396,673) (396,673) 396,673 396,673 Miscellaneous (3,720) (3,720) 3,720 3,720 Total revenues (3,905,393) (400,393) 400,393 400,393 Expenditures /expenses Capital outlay expenditures 1,831,743 - - - Bond issuance costs 93,820 93,820 (93,820) (93,820) Interest expense - 4,790 (4,790) (4,790) Total expenditures /expenses 1,925,563 98,610 (98,610) (98,610) Change in fund balance /net position $ (1,979,830) $ (301,783) $ 301,783 $ 301,783 This restatement and the change in accounting principle disclosed in Note 6 impact total restated net position. -94- CITY OF NEW HOPE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 Note 6: CHANGE IN ACCOUNTING PRINCIPLE During fiscal year 2012, the City implemented several new accounting pronouncements issued by the Government Accounting Standards Board (GASB), including Statement No. 63, "Financial Reporting of Deferred Ou flows of Resources, Deferred Inflows of Resources, and Net Position " and Statement No. 65, "Items Previously Reported as Assets and Liabilities ". These standards required a retroactive implementation which resulted in the restatement of beginning balances in the December 31, 2012 financial statements. Changes related to these standards are reflected in the financial statements and schedules and related disclosures are included in Note 1. As a result of the restatement of beginning balances, the following schedule reconciles the previously reported December 31, 2010 balances to the December 31, 2012 financial statements: Activities/Fund Governmental activities Business -type activities Proprietary funds Sewer Utility Water Utility Golf Course Ice Arena Storm Water Street Lighting Internal balances for internal services used by business -type activities Total proprietary funds Net Position December 31, 2010 as Previously Reported Restatement (1) Net Position January 1, 2011 as Restated $ 47,745,794 $ (82,070) $ 47,663,724 $ 12,530,561 $ (68,539) $ 12,462,022 $ 1,808,905 $ (8,276) $ 1,800,629 3,030,170 (28,171) 3,001,999 398,629 398,629 3,486,482 - 3,486,482 4,035,217 (32,092) 4,003,125 163,939 163,939 (392,781) (392,781) $ 12,530,561 $ (68,539) $ 12,462,022 (1) Write -off of unamortized bond issuance cost balances at December 31, 2010. As a result of the restatement of beginning balances, the following schedule reconciles the previously reported December 31, 2011 balances to the December 31, 2012 financial statements: Activities/Fund Governmental activities Business -type activities Proprietary funds Sewer Utility Water Utility Golf Course Ice Arena Storm Water Street Lighting Internal balances for internal services used by business -type activities Total proprietary funds Net Position December 31, 2011 Net Position as Previously January 1, 2012 Reported Restatement (2) Restatement (3) as Restated $ 48,963,271 $ (301,783) $ (169,333) $ 48,492,155 $ 14,848,524 $ 301,783 $ (56,838) $ 15,093,469 $ 2,124,245 $ $ (5,607) $ 2,118,638 4,783,390 (23,532) 4,759,858 362,615 362,615 3,388,899 301,783 3,690,682 4,670,544 - (27,699) 4,642,845 177,682 177,682 (658,851) - (658,851) $ 14,848,524 $ 301,783 $ (56,838) $ 15,093,469 (2) Restatement (see Note 5). (3) Write -off of unamortized bond issuance cost balances at December 31, 2011. -95- THIS PAGE IS LEFT BLANK INTENTIONALLY -96- REQUIRED SUPPLEMENTARY INFORMATION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 -97- CITY OF NEW HOPE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2012 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 -98- UAAL as a Percentage Covered of Covered Payroll Payroll $ 4,266,321 23.5 % 6,256,409 3.0 -98- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 -99- CITY OF NEW HOPE, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2012 ASSETS Cash and temporary investments Receivables Accounts Special assessments TOTAL ASSETS LIABILITIES Accounts and contracts payable DEFERRED INFLOWS OF RESOURCES Unavailable revenue - special assessments FUND BALANCES Restricted for Debt service Public safety police expenditures Ice arena Committed to operations Assigned to Debt service Capital equipment Street improvements City hall improvements Park improvements TOTAL FUND BALANCES - 149,092 - 149,092 101,878 - - 101,878 13,811 - - 13,811 175,719 - - 175,719 - 35,902 - 35,902 - - 348,301 Total - - 2,158,764 2,158,764 - - 100,747 Nonmaj or Special Debt Capital Governmental Revenue Service Projects Funds $ 256,497 $ 184,994 $ 3,653,877 $ 4,095,368 25,966 - 715 26,681 8,945 - 141,187 150,132 $ 291,408 $ 184,994 $ 3,795,779 $ 4,272,181 $ 239,162 $ 239,162 - - 141,187 141,187 - 149,092 - 149,092 101,878 - - 101,878 13,811 - - 13,811 175,719 - - 175,719 - 35,902 - 35,902 - - 348,301 348,301 - - 2,158,764 2,158,764 - - 100,747 100,747 - - 807,618 807,618 291,408 184,994 3,415,430 3,891,832 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 291,408 $ 184,994 $ 3,795,779 $ 4,272,181 -100- CITY OF NEW HOPE, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2012 REVENUES Taxes Property taxes Intergovernmental Charges for services Fines and forfeitures Special assessments Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Current Public safety Public works Culture and recreation Capital outlay Public works Culture and recreation Debt service Principal Interest TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Nonmaj or Special Debt Capital Governmental Revenue Service Projects Funds $ 50,806 $ 161,802 $ 1,478,500 $ 1,691,108 - - 27,318 27,318 219,036 - 23,883 242,919 20,500 - - 20,500 - - 154,142 154,142 4,387 1,443 67,303 73,133 5,100 - 3,642 8,742 299,829 163,245 1,754,788 2,217,862 6,014 - - 6,014 266,704 - - 266,704 316 - - 316 - - 1,229,233 1,229,233 - - 1,061,397 1,061,397 - 125,000 - 125,000 - 25,573 - 25,573 273,034 150,573 2,290,630 2,714,237 26,795 12,672 (535,842) (496,375) - - 100,000 100,000 (16,862) - (18,952) (35,814) TOTAL OTHER FINANCING SOURCES (USES) (16,862) - 81,048 64,186 NET CHANGE IN FUND BALANCES 9,933 12,672 (454,794) (432,189) FUND BALANCES (AS RESTATED), JANUARY 1 281,475 172,322 3,870,224 4,324,021 FUND BALANCES, DECEMBER 31 S 291,408 $ 184,994 $ 3,415,430 $ 3,891,832 -101- THIS PAGE IS LEFT BLANK INTENTIONALLY -102- CITY OF NEW HOPE, NHNNESOTA NONMAJOR SPECIAL REVENUE FUNDS 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. Ice Arena Endowment Fund - This fund is used to account for contributions and other receipts to be used for future capital needs and budget requirements of the New Hope Ice Arena. -103- CITY OF NEW HOPE, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS SUBCOMBINING BALANCE SHEET DECEMBER 31, 2012 -104- 9013/9014 9021 9016 9017 Police Solid Waste Ice Arena Storm Sewer Forfeitures Management Endowment Total ASSETS Cash and temporary investments $ - $ 101,878 $ 140,808 $ 13,811 $ 256,497 Receivables Accounts - - 25,966 - 25,966 Special assessments - - 8,945 - 8,945 TOTAL ASSETS $ - $ 101,878 $ 175,719 $ 13,811 $ 291,408 FUND BALANCES Restricted for Public safety police expenditures $ - $ 101,878 $ - $ - $ 101,878 Ice arena - - - 13,811 13,811 Committed to operations - - 175,719 - 175,719 TOTAL FUND BALANCES $ - $ 101,878 $ 175,719 $ 13,811 $ 291,408 -104- 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, 2012 9013/9014 9021 9016 9017 Police Solid Waste Ice Arena Storm Sewer Forfeitures Management Endowment REVENUES Taxes Property taxes Charges for services Fines and forfeitures Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Current Public safety Supplies Public works Other services and charges Culture and recreation Supplies TOTAL EXPENDITURES EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES Transfers out NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY I FUND BALANCES, DECEMBER 31 $ 50,806 $ - $ - $ - $ 50,806 - - 219,036 - 219,036 - 20,500 - - 20,500 - 1,639 2,546 202 4,387 - - - 5,100 5,100 50,806 22,139 221,582 5,302 299,829 - 6,014 - 50,806 - 215,898 50,806 6,014 215,898 - 16,125 5,684 Total - 6,014 - 266,704 316 316 316 273,034 4,986 26,795 (16,862) - - - (16,862) (16,862) 16,125 5,684 4,986 9,933 16,862 85,753 170,035 8,825 281,475 $ - $ 101,878 $ 175,719 $ 13,811 $ 291,408 -105- 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, 2012 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Taxes Property taxes $ 50,806 $ 50,806 $ 50,806 $ - EXPENDITURES Current Public works Other services and charges EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES Transfers out NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 50,806 50,806 50,806 (16,862) (16,862) - - (16,862) (16,862) 16,862 16,862 16,862 - $ 16,862 $ 16,862 $ - $ (16,862) -106- 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, 2012 EXPENDITURES Current Public works Other services and charges 253,735 253,735 215,898 37,837 NET CHANGE IN FUND BALANCES Budgeted Amounts Actual Variance with FUND BALANCES, JANUARY 1 Original Final Amounts Final Budget REVENUES $ 172,194 $ 172,194 $ 175,719 $ 3,525 Charges for services $ 253,300 $ 253,300 $ 219,036 $ (34,264) Investment earnings 2,594 2,594 2,546 (48) TOTAL REVENUES 255,894 255,894 221,582 (34,312) EXPENDITURES Current Public works Other services and charges 253,735 253,735 215,898 37,837 NET CHANGE IN FUND BALANCES 2,159 2,159 5,684 3,525 FUND BALANCES, JANUARY 1 170,035 170,035 170,035 - FUND BALANCES, DECEMBER 31 $ 172,194 $ 172,194 $ 175,719 $ 3,525 -107- THIS PAGE IS LEFT BLANK INTENTIONALLY -108- CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE FUNDS The Debt Service funds are used to account for the payment of principal and interest on the City's general obligation bonds. Revenues for this purpose include ad valorem property taxes, special assessments, investment income, and other revenue. General Obligation Taxable Fund - This fund accounts for excess revenues from property tax, interest income, and transfers collected 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. -109- CITY OF NEW HOPE, MINNESOTA NONMAJOR DEBT SERVICE FUNDS SUBCOMBINING BALANCE SHEET DECEMBER 31, 2012 ASSETS Cash and temporary investments FUND BALANCES Restricted for debt service Assigned to debt service TOTAL FUND BALANCES 9140 General Obligation Taxable 9145 2010B G.O. Equipment Bonds Total $ 35,902 $ 149,092 $ 184,994 $ - $ 149,092 $ 149,092 35,902 - 35,902 $ 35,902 $ 149,092 $ 184,994 -110- 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, 2012 9140 9145 General 2010B Obligation G.O. Equipment Taxable Bonds REVENUES Taxes Property taxes Investment earnings TOTAL REVENUES EXPENDITURES Debt service Principal Interest TOTAL EXPENDITURES NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Total $ - $ 161,802 $ 161,802 650 793 1,443 650 162,595 163,245 125,000 125,000 25,573 25,573 - 150,573 150,573 650 12,022 12,672 35,252 137,070 172,322 $ 35,902 $ 149,092 $ 184,994 -111- THIS PAGE IS LEFT BLANK INTENTIONALLY -112- 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. City Hall CIP Fund - This fund accounts for the accumulation of reserves for City Hall projects. Street Infrastructure Fund - This fund is used to account for street improvements throughout the City. Park Infrastructure Fund - This fund is used to account for park improvement projects. Energy Conservation Project Fund - This fund accounts for the accumulation of resources for major construction of the energy conservation project not accounted for in the enterprise funds. -113- CITY OF NEW HOPE, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS SUBCOMBINING BALANCE SHEET DECEMBER 31, 2012 ASSETS Cash and temporary investments Receivables Accounts receivable Special assessments TOTAL ASSETS LIABILITIES Accounts and contracts payable DEFERRED INFLOWS OF RESOURCES Unavailable revenue - special assessments FUND BALANCES Assigned to Capital equipment Street improvements City hall improvements Park improvements TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES 9010 9202 9203 Fire City Hall Street Capital Projects CIP Infrastructure $ 348,301 $ 100,747 $ 2,349,323 - - 141,187 $ 348,301 $ 100,747 $ 2,490,510 $ - $ - $ 190,559 - - 141,187 348,301 - - - - 2,158,764 - 100,747 - 348,301 100,747 2,158,764 $ 348,301 $ 100,747 $ 2,490,510 -114- 9233 9245 Energy Park Conservation Infrastructure Project Total $ 855,506 $ - $ 3,653,877 715 - 715 - - 141,187 $ 856,221 $ - $ 3,795,779 $ 48,603 $ - $ 239,162 - - 141,187 - - 348,301 - - 2,158,764 - - 100,747 807,618 - 807,618 807,618 - 3,415,430 $ 856,221 $ - $ 3,795,779 -115- 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, 2012 9010 9202 9203 Fire City Hall Street Capital Projects CIP Infrastructure REVENUES Taxes Property taxes Intergovernmental State Charges for services Special assessments Investment earnings Miscellaneous TOTAL REVENUES EXPENDITURES Capital outlay Public works Culture and recreation 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 (AS RESTATED), JANUARY 1 FUND BALANCES, DECEMBER 31 $ - $ - $ 1,182,500 27,318 154,142 6,310 747 37,494 6,310 6,310 747 1,401,454 - 1,229,233 - 1,229,233 747 172,221 100,000 - 100,000 - 6,310 100,747 172,221 341,991 - 1,986,543 $ 348,301 $ 100,747 $ 2,158,764 -116- 9233 9245 Energy Park Conservation Infrastructure Project Total $ 296,000 $ - $ 1,478,500 - - 27,318 23,883 - 23,883 - - 154,142 21,554 1,198 67,303 3,642 - 3,642 345,079 1,198 1,754,788 - - 1,229,233 892,129 169,268 1,061,397 892,129 169,268 2,290,630 (547,050) (168,070) (535,842) (18,952) (18,952) 100,000 (18,952) 81,048 (566,002) (168,070) (454,794) 1,373,620 168,070 3,870,224 $ 807,618 $ - $ 3,415,430 -117- THIS PAGE IS LEFT BLANK INTENTIONALLY -118- 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, 2012 (With comparative actual amounts for the year ended December 31, 2011) Charges for services General government 192,823 2012 223,210 30,387 2011 Public safety Budgeted Amounts Actual Variance with Actual 303,856 Original Final Amounts Final Budget Amounts REVENUES Culture and recreation 545,460 545,460 641,400 95,940 Taxes Total charges for services 1,077,383 1,077,383 1,220,315 142,932 Property taxes $ 7,452,622 $ 7,452,622 $ 7,423,273 $ (29,349) $ 6,960,834 Franchise taxes 458,000 458,000 440,149 (17,851) 439,795 Total taxes 7,910,622 7,910,622 7,863,422 (47,200) 7,400,629 88,821 Miscellaneous 20,700 20,700 Licenses and permits 34,293 30,885 TOTAL REVENUES 10,037,863 10,037,863 Business regulatory licenses 52,380 52,380 68,614 16,234 55,752 Non - business licenses and permits 207,300 207,300 170,329 (36,971) 317,974 Total licenses and permits 259,680 259,680 238,943 (20,737) 373,726 Intergovernmental Market value credits - - - - 1,280 Local government aid - - 41,968 41,968 41,843 Highway maintenance aid 160,000 160,000 169,103 9,103 162,707 Other federal, state, and local grants 42,400 42,400 92,603 50,203 131,126 State insurance premium tax 200,000 200,000 196,873 (3,127) 202,890 Total intergovernmental 402,400 402,400 500,547 98,147 539,846 Charges for services General government 192,823 192,823 223,210 30,387 262,574 Public safety 334,600 334,600 351,163 16,563 303,856 Public works 4,500 4,500 4,542 42 4,058 Culture and recreation 545,460 545,460 641,400 95,940 619,918 Total charges for services 1,077,383 1,077,383 1,220,315 142,932 1,190,406 Fines and forfeitures 280,000 280,000 262,733 (17,267) 241,504 Special assessments - - 8,351 8,351 6,705 Investment earnings 87,078 87,078 65,453 (21,625) 88,821 Miscellaneous 20,700 20,700 54,993 34,293 30,885 TOTAL REVENUES 10,037,863 10,037,863 10,214,757 176,894 9,872,522 -119- 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, 2012 (With comparative actual amounts for the year ended December 31, 2011) City manager Personnel services 294,111 2012 306,257 (12,146) 2011 Supplies Budgeted Amounts Actual Variance with Actual 1,811 Original Final Amounts Final Budget Amounts EXPENDITURES Total 314,919 Current 328,344 (13,425) 311,119 Elections General government Personnel services 34,428 Mayor and City Council 26,845 7,583 - Supplies - Personnel services $ 45,511 $ 45,511 $ 46,188 $ (677) $ 45,248 Supplies - - 1,949 (1,949) 2,106 Other services and charges 29,726 29,726 29,098 628 29,088 Total 75,237 75,237 77,235 (1,998) 76,442 City hall 90,167 (2,175) 84,142 Supplies 1,000 Supplies 19,500 19,500 12,328 7,172 15,666 Other services and charges 259,205 259,205 230,871 28,334 253,574 Total 278,705 278,705 243,199 35,506 269,240 City manager Personnel services 294,111 294,111 306,257 (12,146) 288,304 Supplies 1,500 1,500 1,752 (252) 1,811 Other services and charges 19,308 19,308 20,335 (1,027) 21,004 Total 314,919 314,919 328,344 (13,425) 311,119 Elections Personnel services 34,428 34,428 26,845 7,583 - Supplies - - 1,008 (1,008) - Other services and charges 6,350 6,350 4,638 1,712 4,203 Total 40,778 40,778 32,491 8,287 4,203 Finance Personnel services 87,992 87,992 90,167 (2,175) 84,142 Supplies 1,000 1,000 1,767 (767) 1,243 Other services and charges 145,647 145,647 144,087 1,560 150,506 Total 234,639 234,639 236,021 (1,382) 235,891 Auditing Other services and charges 25,000 25,000 21,625 3,375 28,360 Assessing Other services and charges 104,000 104,000 104,636 (636) 102,523 Legal Other services and charges 25,000 25,000 20,199 4,801 29,872 -120- 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, 2012 (With comparative actual amounts for the year ended December 31, 2011) 2012 2011 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued General government - continued Human resources Personnel services $ 192,100 $ 192,100 $ 197,279 $ (5,179) $ 192,022 Supplies 1,000 1,000 1,117 (117) 738 Other services and charges 18,687 18,687 40,879 (22,192) 35,116 Total 211,787 211,787 239,275 (27,488) 227,876 Planning and zoning Personnel services 99,439 99,439 76,901 22,538 92,031 Supplies - - 4 (4) 250 Other services and charges 45,029 45,029 54,092 (9,063) 56,779 Total 144,468 144,468 130,997 13,471 149,060 Communication Personnel services 85,193 85,193 89,741 (4,548) 81,655 Supplies 2,375 2,375 1,784 591 2,799 Other services and charges 48,305 48,305 41,754 6,551 39,813 Total 135,873 135,873 133,279 2,594 124,267 Total general government 1,590,406 1,590,406 1,567,301 23,105 1,558,853 Public safety Police Personnel services 3,589,524 3,589,524 3,507,118 82,406 3,468,203 Supplies 67,209 67,209 67,848 (639) 79,805 Other services and charges 789,058 789,058 793,973 (4,915) 770,346 Total 4,445,791 4,445,791 4,368,939 76,852 4,318,354 Police reserves Personnel services 16,498 16,498 11,926 4,572 8,936 Supplies 4,155 4,155 4,824 (669) 2,679 Other services and charges 16,814 16,814 15,438 1,376 14,198 Total 37,467 37,467 32,188 5,279 25,813 Fire and safety Supplies 1,000 1,000 4,714 (3,714) 626 Other services and charges 984,815 984,815 986,141 (1,326) 1,045,157 Total 985,815 985,815 990,855 (5,040) 1,045,783 Animal control Personnel services 86,496 86,496 79,954 6,542 84,165 Supplies 1,020 1,020 617 403 - Other services and charges 27,168 27,168 25,832 1,336 29,956 Total 114,684 114,684 106,403 8,281 114,121 -121- 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, 2012 (With comparative actual amounts for the year ended December 31, 2011) Swimming pool Personnel services 112,802 2012 94,715 18,087 2011 Supplies Budgeted Amounts Actual Variance with Actual 35,552 Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Total 198,865 198,865 163,076 35,789 Current - continued Total culture and recreation 1,652,570 1,652,570 1,598,725 53,845 Public safety - continued Total current expenditures 10,179,697 10,179,697 10,032,277 147,420 Protective inspection Personnel services $ 342,890 $ 342,890 $ 353,269 $ (10,379) $ 341,513 Supplies 1,650 1,650 1,590 60 1,735 Other services and charges 89,066 89,066 86,951 2,115 83,286 Total 433,606 433,606 441,810 (8,204) 426,534 Total public safety 6,017,363 6,017,363 5,940,195 77,168 5,930,605 Public works Street maintenance Personnel services 489,631 489,631 471,567 18,064 430,457 Supplies 116,088 116,088 125,641 (9,553) 86,694 Other services and charges 298,639 298,639 321,704 (23,065) 283,175 Total 904,358 904,358 918,912 (14,554) 800,326 Engineering Other services and charges 15,000 15,000 7,144 7,856 11,710 Total public works 919,358 919,358 926,056 (6,698) 812,036 Culture and recreation Recreation Personnel services 457,899 457,899 475,863 (17,964) 481,429 Supplies 72,055 72,055 76,026 (3,971) 81,650 Other services and charges 179,632 179,632 177,760 1,872 178,756 Total 709,586 709,586 729,649 (20,063) 741,835 Parks Personnel services 507,650 507,650 465,076 42,574 431,787 Supplies 34,825 34,825 35,259 (434) 27,353 Other services and charges 201,644 201,644 205,665 (4,021) 195,984 Total 744,119 744,119 706,000 38,119 655,124 Swimming pool Personnel services 112,802 112,802 94,715 18,087 86,431 Supplies 42,940 42,940 35,191 7,749 35,552 Other services and charges 43,123 43,123 33,170 9,953 37,306 Total 198,865 198,865 163,076 35,789 159,289 Total culture and recreation 1,652,570 1,652,570 1,598,725 53,845 1,556,248 Total current expenditures 10,179,697 10,179,697 10,032,277 147,420 9,857,742 -122- 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, 2012 (With comparative actual amounts for the year ended December 31, 2011) EXCESS (DEFICIENCY) OF REVENUES OVER (TINDER) EXPENDITURES (275,000) (275,000) 31,561 306,561 2,388 OTHER FINANCING SOURCES (USES) Transfers in 275,000 275,000 228,964 (46,036) 341,224 Transfers out - - (100,000) (100,000) - TOTAL OTHER FINANCING SOURCES (USES) 275,000 275,000 128,964 (146,036) 341,224 NET CHANGE IN FUND BALANCES - - 160,525 160,525 343,612 FUND BALANCES, JANUARY 1 4,935,212 4,935,212 4,935,212 - 4,591,600 FUND BALANCES, DECEMBER 31 $ 4,935,212 $ 4,935,212 $ 5,095,737 $ 160,525 $ 4,935,212 -123- 2012 2011 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Capital outlay General government $ 23,966 $ 23,966 $ 45,357 $ (21,391) $ - Public safety 105,700 105,700 104,927 773 12,392 Culture and recreation 3,500 3,500 635 2,865 - Total capital outlay 133,166 133,166 150,919 (17,753) 12,392 TOTAL EXPENDITURES 10,312,863 10,312,863 10,183,196 129,667 9,870,134 EXCESS (DEFICIENCY) OF REVENUES OVER (TINDER) EXPENDITURES (275,000) (275,000) 31,561 306,561 2,388 OTHER FINANCING SOURCES (USES) Transfers in 275,000 275,000 228,964 (46,036) 341,224 Transfers out - - (100,000) (100,000) - TOTAL OTHER FINANCING SOURCES (USES) 275,000 275,000 128,964 (146,036) 341,224 NET CHANGE IN FUND BALANCES - - 160,525 160,525 343,612 FUND BALANCES, JANUARY 1 4,935,212 4,935,212 4,935,212 - 4,591,600 FUND BALANCES, DECEMBER 31 $ 4,935,212 $ 4,935,212 $ 5,095,737 $ 160,525 $ 4,935,212 -123- THIS PAGE IS LEFT BLANK INTENTIONALLY -124- 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. -125- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF NET POSITION DECEMBER 31, 2012 AND 2011 ASSETS CURRENT ASSETS Cash and temporary investments Due from other governments 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 Compensated absences payable TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES NET POSITION Net investment in capital assets Unrestricted TOTAL NET POSITION 9402 9408 Central Garage Employee Leave $ 5,329,235 $ 6,033,520 $ 620,433 $ 491,713 72,925 28,918 - - 5,402,160 6,062,438 620,433 491,713 85,647 3,052,918 7,012,114 (6,631,909) 3,518,770 8,920,930 85,647 - 3,032,156 - 6,618,220 - 6,48( 5,819) - 3,250,204 - - 9,312,642 620,433 491,713 15,455 13,362 36,622 34,920 33,909 113,605 - - - - 432,200 470,152 49,364 126,967 468,822 505,072 48,022 - - - 48,022 - 49,364 126,967 516,844 505,072 3,518,770 3,250,204 - - 5,352,796 5,935,471 103,589 (13,359) $ 8,871,566 $ 9,185,675 $ 103,589 $ (13,359) -126- 9407 9410 Insurance Reserve Information Technology Totals 2012 2011 2012 2011 2012 2011 $ 507,917 $ 461,352 $ 152,083 $ 175,565 $ 6,609,668 $ 7,162,150 - - 57,960 - 57,960 - - - - - 72,925 28,918 507,917 461,352 210,043 175,565 6,740,553 7,191,068 - - - - 85,647 85,647 - - - - 3,052,918 3,032,156 - - 314,610 218,144 7,326,724 6,836,364 - - (152,967) (133,605) (6,784,876) (6,619,424) - - 161,643 84,539 3,680,413 3,334,743 507,917 461,352 371,686 260,104 10,420,966 10,525,811 - - 3,773 3,250 55,850 51,532 - 221 12,824 11,298 46,733 125,124 - - 19,916 19,183 19,916 19,183 - - - - 432,200 470,152 - 221 36,513 33,731 554,699 665,991 112,634 70,882 - - 112,634 70,882 - - - - 48,022 - 112,634 70,882 - - 160,656 70,882 112,634 71,103 36,513 33,731 715,355 736,873 - - 161,643 84,539 3,680,413 3,334,743 395,283 390,249 173,530 141,834 6,025,198 6,454,195 $ 395,283 $ 390,249 $ 335,173 $ 226,373 $ 9,705,611 $ 9,788,938 -127- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 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 Investment earnings Miscellaneous revenues Gain on sale of capital assets TOTAL NONOPERATING REVENUES INCOME (LOSS) BEFORE TRANSFERS TRANSFERS OUT CHANGE IN NET POSITION NET POSITION, JANUARY 1 NET POSITION, DECEMBER 31 9402 9408 Central Garage Employee Leave 2012 2011 2012 2011 $ 1,047,576 $ 1,017,060 $ 558,092 $ 466,263 1,047,576 1,017,060 558,092 466,263 364,911 361,667 451,269 458,909 270,303 358,798 - - 39,613 49,694 - - 265,224 380,253 - - 566,929 501,935 - - 1,506,980 1,652,347 451,269 458,909 (459,404) (635,287) 106,823 7,354 101,174 167,756 10,125 12,637 69,321 13,568 - - 170,495 181,324 10,125 12,637 (288,909) (453,963) 116,948 19,991 (25,200) (24,828) - - (314,109) (478,791) 116,948 19,991 9,185,675 9,664,466 (13,359) (33,350) $ 8,871,566 $ 9,185,675 $ 103,589 $ (13,359) -128- 9407 Insurance Reserve 2012 2011 9410 Information Technology 2012 2011 Totals 2012 2011 $ 90,032 $ 49,745 $ 654,444 $ 574,716 $ 2,350,144 $ 2,107,784 108,234 17,116 - - 108,234 17,116 198,266 66.861 654,444 574,716 2,458,378 2,124,900 41,752 32,063 111,463 107,853 969,395 960,492 - - 68,029 37,715 338,332 396,513 - - 35,926 34,889 75,539 84,583 159,946 66,827 323,922 368,472 749,092 815,552 - - 19,362 21,217 586,291 523,152 201,698 98,890 558,702 570,146 2,718,649 2,780,292 (3,432) (32,029) 95,742 4,570 (260,271) (655,392) 8,466 12,420 2,798 4,123 122,563 196,936 - - 57,960 - 57,960 - - - - - 69,321 13,568 8,466 12,420 60,758 4,123 249,844 210,504 5,034 (19,609) 156,500 8,693 (10,427) (444,888) - - (47,700) (46,932) (72,900) (71,760) 5,034 (19,609) 108,800 (38,239) (83,327) (516,648) 390,249 409,858 226,373 264,612 9,788,938 10,305,586 $ 395,283 $ 390,249 $ 335,173 $ 226,373 $ 9,705,611 $ 9,788,938 -129- CITY OF NEW HOPE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 9402 9408 Central Garage Employee Leave CASH FLOWS FROM OPERATING ACTIVITIES 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 out CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from sale of assets $ 1,047,576 $ 1,017,060 $ 558,092 $ 466,263 (629,663) (767,903) - - (362,818) (359,460) (439,497) (494,264) 55,095 (110,303) 118,595 (28,001) (25,200) (24,828) - - (906,177) (510,934) - - 70,823 13,568 - - NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Investment earnings 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 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 Loss on sale or disposal of capital assets (835,354) (497,366) - - 101,174 167,756 10,125 12,637 (704,285) (464,741) 128,720 (15,364) 6,033,520 6,498,261 491,713 507,077 $ 5,329,235 $ 6,033,520 $ 620433 $ 491,713 $ (459,404) $ (635,287) $ 106,823 $ 7,354 566,929 501,935 - - (44,007) 20,976 - - (10,516) (134) - - 2,093 2,207 1,702 (41,927) - - 10,070 6,572 $ 55,095 $ (110,303) $ 118,595 $ (28,001) $ - $ 69,180 - $ 1,502 $ $ $ -130- 9407 Insurance Reserve 2012 2011 9410 Information Technology 2012 2011 Totals 2012 2011 $ 90,032 $ 49,745 $ 654,444 $ 574,716 $ 2,350,144 $ 2,107,784 108,234 17,116 - - 108,234 17,116 (160,167) (42,069) (425,618) (462,099) (1,215,448) (1,272,071) - (27,079) (110,940) (107,559) (913,255) (988,362) 38,099 (2,287) 117,886 5,058 329,675 (135,533) - - (47,700) (46,932) (72,900) (71,760) - - (96,466) - (1,002,643) (510,934) - - - - 70,823 13,568 - - (96,466) - (931,820) (497,366) 8,466 12,420 2,798 4,123 122,563 196,936 46,565 10,133 (23,482) (37,751) (552,482) (507,723) 461,352 451,219 175,565 213,316 7,162,150 7,669,873 $ 507,917 $ 461,352 $ 152,083 $ 175,565 $ 6,609,668 $ 7,162,150 $ (3,432) $ (32,029) $ 95,742 $ 4,570 $ (260,271) $ (655,392) 19,362 21,217 586,291 523,152 - - (44,007) 20,976 (221) (2,321) 1,526 8,410 (9,211) 5,955 - - 523 294 4,318 (39,426) - - 733 (29,433) 733 (29,433) - - - - 10,070 6,572 41,752 32,063 - - 41,752 32,063 $ 38,099 $ (2,287) $ 117,886 $ 5,058 $ 329,675 $ (135,533) 69,180 $ $ $ $ $ 1,502 $ -131- CITY OF NEW HOPE, MINNESOTA AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2012 PASS - THROUGH GRANT FUND ASSETS Cash and temporary investments Balance January 1 Additions Balance Deductions December 31 LIABILITIES Deposits payable $ 45,694 $ 66,780 $ (66,393) $ 46,081 $ 45,694 $ 66,780 $ (66,393) $ 46,081 -132- STATISTICAL SECTION (UNAUDITED) CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 -133- THIS PAGE IS LEFT BLANK INTENTIONALLY -134- STATISTICAL SECTION (Unaudited) This part of the City'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 City'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 City's current levels of outstanding debt and the City'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 City 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. -135- THIS PAGE IS LEFT BLANK INTENTIONALLY -136- CITY OF NEW HOPE, MINNESOTA SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTAL FUNDS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Total 2012 2011 REVENUES 5,933,201 Taxes 1,079,884 Property taxes $ 9,199,381 Tax increments 1,343,248 Franchise taxes 440,149 Licenses and permits 238,943 Intergovernmental 858,816 Charges for services 1,557,898 Fines and forfeitures 283,233 Special assessments 305,818 Investment earnings 307,032 Miscellaneous 80,073 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 $ 8,767,959 1,400,163 439,795 359,530 1,599,253 1,544,369 255,329 153,835 548,548 115,183 $ 14,614,591 $ 15,183,964 $ 713 $ 741 $ 1,567,301 $ 1,560,511 5,946,209 5,933,201 1,192,760 1,079,884 1,599,041 1,560,486 304,064 289,650 7,685,819 7,185,778 330,000 1,005,000 270,613 247,973 104,351 93,820 $ 19,000,158 $ 18,956,303 $ 927 $ 925 $ 9,350,000 456 $ 5,095,737 249 $ 5,655,000 276 $ 4,935,212 241 3.25 % 3.25 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. Percent Increase (Decrease) 4.92 % (4.06) 0.08 (33.54) (46.30) 0.88 10.93 98.80 (44.03) (30.48) (3.75) % (3.75) % 0.44 % 0.22 10.45 2.47 4.98 6.96 (67.16) 9.13 11.22 0.23 % 0.23 % 65.34 % 65.34 -137- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted Unrestricted Total business -type activities net position Total primary government Net investment in capital assets Restricted Unrestricted Total primary government Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been restated for 2011 for this accounting change. Years prior to 2011 have not been restated. -138- 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. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been restated for 2011 for this accounting change. Years prior to 2011 have not been restated. -138- Fiscal Year $ 8,018,286 $ 9,008,538 2011 9,395,068 2007 2008 2009 2010 (Restated) 2012 $ 14,572,777 $ 16,099,860 $ 16,411,454 $ 16,495,175 $ 20,628,143 $ 26,793,142 18,030,936 17,857,296 19,454,696 9,279,142 6,018,734 1,619,696 7,399,637 8,643,991 9,151,912 21,971,477 21,845,278 22,746,207 $ 40,003,350 $ 42,601,147 $ 45,018,062 $ 47,745,794 $ 48,492,155 $ 51,159,045 $ 8,018,286 $ 9,008,538 $ 9,395,068 $ 9,989,405 $ 11,114,666 $ 12,843,624 - - - - - 150,000 1,625,562 1,423,111 1,650,590 2,541,156 3,978,803 2,735,144 $ 9,643,848 $ 10,431,649 $ 11,045,658 $ 12,530,561 $ 15,093,469 $ 15,728,768 $ 22,591,063 $ 25,108,398 $ 25,806,522 $ 26,484,580 $ 31,742,809 $ 39,636,766 18,030,936 17,857,296 19,454,696 9,279,142 6,018,734 1,769,696 9,025,199 10,067,102 10,802,502 24,512,633 25,824,081 25,481,351 $ 49,647,198 $ 53,032,796 $ 56,063,720 $ 60,276,355 $ 63,585,624 $ 66,887,813 -139- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 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 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 10,539,967 17,650,943 11,534,358 12,230,247 262,245 163,419 124,235 142,197 4,860,434 4,253,600 4,083,803 4,680,584 407,835 428,575 457,175 420,223 705,705 757,160 677,911 724,020 346,103 395,156 689,622 607,298 94,121 98,786 109,960 106,052 6,414,198 5,933,277 6,018,471 6,538,177 $ 16,954,165 $ 23,584,220 $ 17,552,829 $ 18,768,424 $ 1,364,091 $ 1,484,651 $ 1,183,365 $ 1,084,659 262,245 163,419 124,235 142,197 - - - 4,843 427,069 423,831 476,484 452,889 810,372 289,368 331,591 263,548 744,160 486,182 497,096 151,934 Total governmental activities program revenues 3,607,937 2,847,451 2,612,771 2,100,070 Business -type activities Charges for services Sewer - - - - Water 4,753,974 4,473,274 4,284,906 4,491,025 Golf course 357,861 341,707 337,730 345,828 Ice arena 596,642 658,786 591,555 622,428 Storm water 594,985 823,123 856,761 881,682 Street lighting 110,535 111,237 111,551 115,162 Operating grants and contributions 20,600 273 16,968 108,371 Capital grants and contributions - 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 -140- Fiscal Year 2007 2008 2009 2010 2011 (Restated) 2012 $ 3,547,855 $ 2,492,386 $ 2,244,977 $ 2,552,425 $ 1,841,145 $ 1,931,318 5,291,323 5,988,010 6,218,996 5,864,775 6,129,860 6,062,362 650,686 1,381,386 1,291,983 1,625,959 1,795,189 2,126,043 1,868,403 1,967,129 2,053,788 1,899,105 1,882,279 1,928,591 - - - 192,431 536,433 762,202 369,508 340,081 275,532 252,224 236,827 407,744 11,727,775 12,168,992 12,085,276 12,386,919 12,421,733 13,218,260 2,732,148 2,347,381 2,414,360 4,014,022 3,942,781 4,356,957 - - - 1,928,845 2,068,282 2,220,438 4,955,642 4,915,929 5,265,147 2,915,757 3,530,521 3,682,602 440,666 383,521 369,579 346,345 322,679 298,555 723,264 780,816 694,039 712,153 844,828 771,628 387,889 361,542 393,118 430,899 485,943 425,112 126,966 121,912 126,983 104,099 113,753 104,721 6,634,427 6,563,720 6,848,866 6,438,098 7,366,006 7,503,056 $ 18,362,202 $ 18,732,712 $ 18,934,142 $ 18,825,017 $ 19,787,739 $ 20,721,316 $ 1,314,007 $ 1,164,394 $ 1,048,549 $ 984,855 $ 220,629 $ 177,174 251,622 151,180 134,680 218,732 877,159 804,725 - - - - 219,353 219,548 503,648 579,694 527,079 562,383 637,077 653,293 - - - 104,713 98,139 94,664 270,403 388,166 586,508 1,356,292 783,382 2,162,263 392,468 63,947 117,544 787,047 1,107,042 245,290 2,732,148 2,347,381 2,414,360 4,014,022 3,942,781 4,356,957 - - - 2,292,300 2,352,635 2,376,021 4,870,737 5,175,878 5,141,131 3,082,771 3,169,859 3,581,225 337,712 330,782 345,550 313,941 278,788 296,316 610,145 659,377 723,975 741,266 752,671 694,702 922,850 951,699 933,828 943,883 947,031 948,650 116,940 133,634 149,339 121,647 122,742 124,397 152,038 16,250 66,609 470,183 24,031 22,340 21,381 16,353 75,209 30,739 114,826 106,291 7,031,803 7,283,973 7,435,641 7,996,730 7,762,583 8,149,942 $ 9,763,951 $ 9,631,354 $ 9,850,001 $ 12,010,752 $ 11,705,364 $ 12,506,899 -141- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year Net revenues (expenses) Governmental activities Business -type activities Total primary government revenues (expenses) General Revenues and Other Changes in Net Position 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 Position Governmental activities Business -type activities Total primary government 2003 2004 2005 2006 $ (6,932,030) $ (14,803,492) $ (8,921,587) $ (10,130,177) 20,399 648,299 236,391 165,205 $ (6,911,63I) $ (14,155,193) $ (8,685,196) $ (9,964,972) $ 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. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been restated for 2011 for this accounting change. Years prior to 2011 have not been restated. -142- Fiscal Year $ 7,756,543 $ 8,416,466 $ 8,760,482 $ 8,730,979 2011 $ 9,129,247 2007 2008 2009 2010 (Restated) 2012 $ (8,995,627) $ (9,821,611) $ (9,670,916) $ (8,372,897) $ (8,478,952) $ (8,861,303) 397,376 720,253 586,775 1,558,632 396,577 646,886 $ (8,598,251) $ (9,101,358) $ (9,084,141) $ (6,814,265) $ (8,082,375) $ (8,214,417) $ 7,756,543 $ 8,416,466 $ 8,760,482 $ 8,730,979 $ 8,784,948 $ 9,129,247 1,673,394 1,835,749 1,262,598 1,408,256 1,400,163 1,343,248 444,898 441,133 438,744 430,494 439,795 440,149 600,221 666,543 755,762 79,529 87,206 47,662 1,698,749 992,673 723,565 337,312 745,484 429,595 - - - 22,930 13,568 69,321 352,564 96,911 146,680 - - - - (30,067) - 91,129 (2,163,781) 68,971 12,526,369 12,419,408 12,087,831 11,100,629 9,307,383 11,528,193 49,416 37,481 27,234 17,400 71,089 57,384 - 30,067 - (91,129) 2,163,781 (68,971) 49,416 67,548 27,234 (73,729) 2,234,870 (11,587) $ 12,575,785 $ 12,486,956 $ 12,115,065 $ 11,026,900 $ 11,542,253 $ 11,516,606 $ 3,530,742 $ 2,597,797 $ 2,416,915 $ 2,727,732 $ 828,431 $ 2,666,890 446,792 787,801 614,009 1,484,903 2,631,447 635,299 $ 3,977,534 $ 3,385,598 $ 3,030,924 $ 4,212,635 $ 3,459,878 $ 3,302,189 -143- THIS PAGE IS LEFT BLANK INTENTIONALLY -144- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST TEN 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 2012 9,129,247 1,343,248 440,149 10,912,644 -145- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 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. -146- 2003 2004 2005 2006 General fund Reserved - Unreserved 3,617,468 3,939,420 3,975,418 4,227,954 Nonspendable - - - - Unassigned - - - - Total general fund $ 3,617,468 $ 3,939,420 $ 3,975,418 $ 4,227,954 All other governmental funds Reserved - Unreserved, reported in Special Revenue funds 1,398,320 2,247,767 3,844,116 4,385,348 Debt Service funds 8,437,888 7,886,432 6,383,506 6,294,149 Capital Project funds 4,440,084 4,040,937 6,877,231 5,458,640 Restricted - - - - Committed - - - - Assigned - - - - Total all other governmental funds $ 14,276,292 $ 14,175,136 $ 17,104,853 $ 16,138,137 Total all governmental funds $ 17,893,760 $ 18,114,556 $ 21,080,271 $ 20,366,091 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. -146- Fiscal Year 2011 2007 2008 2009 2010 (Restated) 2012 $ - $ - $ - $ 63,753 $ - $ - 4,249,604 3,952,477 4,354,351 4,527,847 - - - - - - 14,366 14,925 - - - 4,920,846 5,080,812 $ 4,249,604 $ 3,952,477 $ 4,354,351 $ 4,591,600 $ 4,935,212 $ 5,095,737 $ - $ 2,433,162 $ 4,699,636 $ 9,043,337 $ - $ - 4,748,023 2,993,986 3,266,399 3,129,062 - - 5,992,108 6,571,884 6,450,295 - - - 6,569,745 5,962,599 5,317,588 9,771,932 - - - - - - 6,114,114 5,657,606 - - - - 4,666,447 5,165,192 - - - - 6,877,641 6,533,868 $ 17,309,876 $ 17,961,631 $ 19,733,918 $ 21,944,331 $ 17,658,202 $ 17,356,666 $ 21,559,480 $ 21,914,108 $ 24,088,269 $ 26,535,931 $ 22,593,414 $ 22,452,403 -147- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year Revenues Property taxes Tax increments Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Investment earnings Miscellaneous Total revenues Expenditures General government Public safety Public works Culture and recreation Economic development Capital outlay Debt service Principal Interest Bond issuance costs 2003 2004 2005 2006 $ 8,165,829 $ 8,429,780 $ 8,069,691 $ 8,330,410 - 428,265 435,875 433,806 366,327 500,141 398,843 289,534 2,036,314 1,605,507 2,415,857 1,731,191 1,179,690 1,224,439 1,008,883 1,036,710 297,428 268,358 240,273 266,750 587,753 497,664 417,697 310,708 624,467 836,520 837,789 1,031,207 13,257,808 13,790,674 13, 824,908 13,430,316 4,080,000 2,358,512 2,102,852 1,857,955 1,771,012 4,499,649 4,403,147 4,594,910 4,739,323 737,355 834,167 960,101 825,199 1,350,500 1,388,814 1,515,255 1,607,849 1,342,454 7,898,496 2,342,117 4,326,095 2,435,000 1,385,000 1,650,000 940,000 454,481 431,621 480,746 432,698 Total expenditures 13,177,951 18,444,097 13,401,084 14,642,176 Excess (deficiency) of revenues over (under) expenditures 79,857 (4,653,423) 423,824 (1,211,860) Other financing sources (uses) Transfers in 1,029,098 1,322,034 - - Sales of capital assets 504,650 822,219 85,757 510,000 Bonds issued - 4,080,000 1,370,000 - Premium on bonds issued - - - - Refunding bonds issued - - 1,455,000 - Bonds refunded - - (1,425,000) - Transfers out (1,155,673) (1,350,034) (23,396) (12,320) Total other financing sources (uses) 378,075 4,874,219 1,462,361 497,680 Net change in fund balances $ 457,932 $ 220,796 $ 1,886,185 $ (714,180) Debt service as a percentage of Noncapital expenditures 23.4% 11.1% 17.1% 11.2% -148- Fiscal Year 2011 2007 2008 2009 2010 (Restated) 2012 $ 9,386,469 $ 9,910,002 $ 9,898,968 $ 8,694,245 $ 8,767,959 $ 9,199,381 - - - 1,408,256 1,400,163 1,343,248 444,898 441,133 438,744 430,494 439,795 440,149 332,351 415,012 226,303 236,378 359,530 238,943 970,543 1,038,461 1,401,010 1,765,220 1,599,253 858,816 1,149,810 1,125,819 1,166,302 1,369,904 1,544,369 1,557,898 247,794 285,255 236,173 238,961 255,329 283,233 326,909 203,199 157,581 258,392 153,835 305,818 - - - 393,913 548,548 307,032 1,747,196 906,365 791,039 87,607 115,183 80,073 14,605,970 14,325,246 14,316,120 14,883,370 15,183,964 14,614,591 1,959,594 1,949,002 1,726,566 1,883,729 1,560,511 1,567,301 5,281,122 5,880,729 5,933,364 5,791,511 5,933,201 5,946,209 883,268 830,900 740,014 989,734 1,079,884 1,192,760 1,638,354 1,687,171 1,698,807 1,599,381 1,560,486 1,599,041 - - - 192,431 289,650 304,064 1,769,589 2,444,825 1,137,776 2,605,724 5,263,935 7,685,819 1,525,000 820,000 885,000 515,000 1,005,000 330,000 357,654 357,991 273,100 273,054 247,973 270,613 - - - - 93,820 104,351 13,414,581 13,970,618 12,394,627 13,850,564 17,034,460 19,000,158 1,191,389 354,628 1,921,493 1,032,806 (1,850,496) (4,385,567) - 653,787 1,236,793 2,596,321 2,477,195 936,188 2,000 - - 1,954 - - - - - 1,245,000 - - - - - 16,173 - 54,006 - - - - - 4,025,000 - (653,787) (984,125) (2,444,592) (4,569,216) (770,638) 2,000 - 252,668 1,414,856 (2,092,021) 4,244,556 $ 1,193,389 $ 354,628 $ 2,174,161 $ 2,447,662 $ (3,942,517) $ (141,011) 15.1% 9.7% 9.8% 6.4% 9.8% 4.9% -149- THIS PAGE IS LEFT BLANK INTENTIONALLY -150- -151- 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 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 2012 9,199,381 1,343,248 440,149 10,982,778 -151- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) TAX CAPACITY, MARKET VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (Shown by year of tax collectability) Tax capacity rate Revenue Bonds and interest Sewer district Total direct tax rate 49.590 % 46.280 % 46.276 % 42.375 % 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. -152- Fiscal Year 2003 2004 2005 2006 Taxable market value Real property Personal property Total taxable market value Estimated actual value of taxable property $ 1,190,848,500 $ 1,307,693,600 $ 1,423,083,200 $ 1,571,305,700 Taxable market value as a percentage of estimated actual value Tax capacity Real property $ 15,270,524 $ 16,113,831 $ 17,385,942 $ 18,838,116 Personal property 133,023 138,157 144,681 163,526 Subtotal 15,403,547 16,251,988 17,530,623 19,001,642 Less: tax increment (883,555) (836,351) (773,458) (1,024,773) Less: contribution to fiscal disparities (1,785,912) (1,950,724) (1,937,115) (1,898,610) Add: distribution from fiscal disparities 2,173,844 2,419,948 2,506,494 2,647,714 Net tax capacity $ 14,907,924 $ 15,884,861 $ 17,326,544 $ 18,725,973 Tax levies Revenue Bonds and interest Total Tax capacity rate Revenue Bonds and interest Sewer district Total direct tax rate 49.590 % 46.280 % 46.276 % 42.375 % 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. -152- Fiscal Year 2007 2008 2009 2010 2011 2012 -153- $ 1,618,178,200 $ 1,492,408,000 $ 1,321,463,913 7,624,400 8,162,100 8,515,600 $ 1,625,802,600 $ 1,500,570,100 $ 1,329,979,513 $ 1,692,471,900 $ 1,750,807,800 $ 1,732,235,700 $ 1,629,433,100 $ 1,504,929,000 $ 1,438,796,300 99.78 % 99.71 % 92.44 % $ 20,386,553 $ 21,248,319 $ 21,095,335 $ 19,864,103 $ 18,462,796 $ 16,686,170 172,470 151,679 146,456 148,346 159,492 165,812 20,559,023 21,399,998 21,241,791 20,012,449 18,622,288 16,851,982 (1,471,827) (1,646,615) (1,365,233) (1,181,390) (1,044,830) (944,560) (2,035,088) (2,292,166) (2,518,620) (2,596,468) (2,466,459) (2,380,423) 2,806,702 3,398,192 3,821,605 3,946,315 3,896,651 3,605,075 $ 19,858,810 $ 20,859,409 $ 21,179,543 $ 20,180,906 $ 19,007,650 $ 17,132,074 $ 9,053,443 $ 9,036,625 $ 9,066,928 39,268 192,105 161,802 $ 9,092,711 $ 9,228,730 $ 9,228,730 45.542 47.916 % 53.842 % 0.199 1.025 0.967 0.273 0.308 0.387 42.346 % 41.995 % 41.342 % 46.014 % 49.249 % 55.196 % -153- 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 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 2012 53.842 0.967 0.387 55.196 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). -154- Overlapping Rates School District County No. 281 Other Total 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 48.231 32.810 10.422 146.659 -155- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Lang Nelson Association Hoyt / Winnetka LLC AMB Property LP Totals $ 1,425,828 8.45 % Source: Hennepin County Auditor/Treasurer Department -156- 2012 Percent Tax of Total Taxpayer Capacity Rank Tax Capacity FLS Properties $ 159,250 1 0.94 % St. Therese Home, Inc. 153,138 2 0.91 Paddock Property Ltd. Partnership 151,890 3 0.90 Cobalt Industrial Reit 143,850 4 0.85 Geneva Management Service, LLC 143,250 5 0.85 New Hope Distribution Center, LLC 139,250 6 0.83 Roland A Stinski 135,250 7 0.80 Long Ridge Industrial Portfolio 135,250 7 0.80 Minn Masonic Home North Ridge 133,450 9 0.79 New Hope / US Swim Partnership 131,250 10 0.78 Lang Nelson Association Hoyt / Winnetka LLC AMB Property LP Totals $ 1,425,828 8.45 % Source: Hennepin County Auditor/Treasurer Department -156- 2003 Percent Tax of Total Capacity Rank Tax Capacity $ 122,250 9 0.77 % 138,400 5 0.87 141,250 2 0.89 149,250 1 0.94 123,450 8 0.78 140,925 3 0.89 130,270 6 0.82 124,750 7 0.79 139,250 4 0.88 121,110 10 0.76 $ 1,330,905 8.39 % -157- THIS PAGE IS LEFT BLANK INTENTIONALLY -158- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Percentage of Levy Collected Collection in subsequent years (1) $ 65,126 98.64 Collection Fiscal Total of Current Year Levy Year's Levy 2003 $ 7,015,141 $ 6,950,015 2004 7,430,161 7,329,071 2005 7,660,102 7,582,360 2006 7,706,733 7,623,003 2007 8,093,813 7,984,889 2008 8,452,126 8,343,629 2009 8,457,346 8,382,201 2010 9,092,711 8,983,224 2011 9,228,730 9,063,615 2012 9,228,730 9,102,355 Percentage of Levy Collected Collection in subsequent years 99.07 % $ 65,126 98.64 101,090 98.99 73,061 98.91 83,730 98.65 107,241 98.72 108,497 99.11 75,145 98.80 56,793 98.21 76,397 98.63 - Source: Hennepin County Auditor/Treasurer Department (1) Includes state paid property tax credits. -159- Percent of Total Total Collections Collections to Levy $ 7,015,141 100.00 % 7,430,161 100.00 7,655,421 99.94 7,706,733 100.00 8,092,130 99.98 8,452,126 100.00 8,457,346 100.00 9,040,017 99.42 9,140,012 99.04 9,102,355 98.63 -159- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Demographic and Economic Statistics on page 167 for personal income and population data. -160- Governmental Activities Business -type Activities General Special Tax Lease Fiscal Obligation Assessment Increment Revenue Revenue Year Bonds Bonds Bonds Bonds Bonds 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 2012 1,120,000 - 8,230,000 3,505,000 2,033,000 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Demographic and Economic Statistics on page 167 for personal income and population data. -160- Total Percentage Primary of Personal Government Income Per Capita $ 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 1.04 562 14,888,000 1.26 727 -161- 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 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 2012 9,350,000 4,222,494 5,127,506 Percentage of Estimated Actual Value of Taxable Per Property Capita 0.033 % 19 0.271 170 0.349 239 0.231 174 0.126 102 0.025 21 (0.030) (25) 0.146 117 0.345 253 0.356 250 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 152 for property value data. See Demographic and Economic Statistics on page 167 for population data. -162- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 2012 Direct debt City of New Hope (1) Overlapping debt Hennepin County Independent School District #281, Robbinsdale Metropolitan Council Hennepin Region RR Authority Three Rivers Park District Total overlapping debt Total direct and overlapping debt (1) Excludes debt payable from tax increment revenue and enterprise revenue. * The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the county's total taxable market value. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognized that, when considering the government's ability to issue and repay long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided by Hennepin County. -163- Percentage City's Outstanding Applicable to Share Debt District * of Debt $ 1,120,000 100.00 % $ 1,120,000 $ 1,068,640,000 1.06 % $ 11,327,584 168,430,000 18.78 31,631,154 1,724,988,995 0.48 8,279,947 39,110,000 1.06 414,566 96,005,000 1.44 1,382,472 $ 3,097,173,995 1.71 % $ 53,035,723 $ 3,098,293,995 1.75 % $ 54,155,723 (1) Excludes debt payable from tax increment revenue and enterprise revenue. * The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the county's total taxable market value. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognized that, when considering the government's ability to issue and repay long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided by Hennepin County. -163- CITY OF NEW HOPE, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 2003 2004 2005 2006 Debt limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit $ 23,816,970 $ 26,153,872 $ 28,461,664 $ 31,426,114 1,353,643 588,019 892,849 191,516 $ 22,463,327 $ 25,565,853 $ 27,568,815 $ 31,234,598 5.68% 2.25% 3.14% 0.61% 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. -164- Fiscal Year 2007 2008 2009 2010 2011 2012 $ 33,849,438 $ 52,524,234 $ 51,967,071 $ 48,774,078 $ 45,017,103 $ 39,899,385 108,094 72,562 37,561 1,246,878 1,072,678 970,908 $ 33,741,344 $ 52,451,672 $ 51,929,510 $ 47,527,200 $ 43,944,425 $ 38,928,477 0.32% 0.14% 0.07% 2.56% 2.38% 2.43% Legal Debt Margin Calculation for Fiscal Year 2012 Taxable market value $ 1,329,979,513 Debt limit (3 percent of market value) $ 39,899,385 Debt applicable to limit General obligation bonds Less: amount available in debt service funds Total net debt applicable to limit Legal debt margin -165- 1,120,000 (149,092) 970,908 $ 38,928,477 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, Water Utility, Sewer Utility, and Ice Arena funds. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. -166- Revenue Bonds (3) (1) (2) Net Fiscal Gross Operating Revenue Debt Service Year Revenues Expenses Available Principal Interest Coverage 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 2012 7,676,193 6,493,865 1,182,328 334,000 162,686 238.04 (1) Gross revenues include interest and other nonoperating revenues. (2) Operating expenses exclude depreciation. (3) Revenues and expenses include the Storm Water, Water Utility, Sewer Utility, and Ice Arena funds. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. -166- 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 2003 -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. -167- Per Capita Total Fiscal Personal Personal Median School Unemployment Year Population (1) Income (2) Income (3) Age (4) Enrollment (5) Rate (6) 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 39.4 11,839 7.0 2011 20,486 54,008 1,106,407,888 39.4 11,804 5.6 2012 20,486 57,476 1,177,453,336 39.4 12,126 4.8 (1) Population was estimated by the City Planning and Development Department for fiscal 2003 -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. -167- CITY OF NEW HOPE, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (1) Total 11,319 46.33 % Source: Minnesota Department of Employment and Economic Development. (1) Information for current and nine years ago was not available. 2011 was the last year available and 2006 was the first year available. -168- 2011 Percentage of Total City Employer Employees Rank Employment Independent School District No. 281 2,200 1 19.44 % North Ridge Care Center 789 2 6.97 Saint Therese Home of New Hope 650 3 5.74 Perrigo Company 413 4 3.65 Navarre Corporation 280 5 2.47 Coborn's Delivers 240 6 2.12 Liberty Diversified International 200 7 1.77 Dakota Growers Pasta 200 8 1.77 Waymouth Farms, Inc. 137 9 1.21 Parker - Hannifin Oildyne Division 135 10 1.19 Total 11,319 46.33 % Source: Minnesota Department of Employment and Economic Development. (1) Information for current and nine years ago was not available. 2011 was the last year available and 2006 was the first year available. -168- 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 % -169- CITY OF NEW HOPE, MINNESOTA FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Function 2003 2004 2005 2006 2007 General government Public safety Police Officers Civilians Public works Culture and recreation Total Source: Various City departments. 20 19 18 19 21 27 28 28 27 30 5 5 6 6 7 22 23 21 21 23 9 9 9 9 9 83 84 82 82 90 -170- 2008 2009 2010 2011 2012 18 18 15 15 15 31 31 30 31 30 7 7 7 6 7 23 21 22 24 24 8 8 8 7 6 87 85 82 83 82 -171- THIS PAGE IS LEFT BLANK INTENTIONALLY -172- CITY OF NEW HOPE, MINNESOTA OPERATING INDICATORS BY FUNCTION LAST FIVE FISCAL YEARS Function 2008 2009 2010 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) 2011 2012 2 2 2 4 - 150 349 734 648 687 3,874 3,313 3,796 5,271 5,598 5,747 6,360 5,287 5,323 7,442 140,600 139,318 137,199 146,305 148,966 22,900 23,917 21,686 18,788 19,568 3,905 4,027 3,980 3,903 3,625 33 37 19 32 26 2,003 1,921 1,746 1,712 1,828 2,360 1,740 1,895 2,253 2,189 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. -173- CITY OF NEW HOPE, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Function 2003 2004 2005 2006 Function Public Safety Police stations Fire stations Public Works City streets (miles) State and County streets (miles) Sidewalks (miles) Street lights Railroad bridges Pedestrian bridges Culture and recreation Parks Swimming pools Olympic Recreational Outdoor theatre Tennis courts Water Water main (miles) Fire hydrants Maximum daily capacity (thousands of gallons) Sewer Sanitary sewer main (miles) Storm sewer lines (miles) Ice Arenas Golf courses 1 1 1 1 3 3 3 3 64.0 64.0 64.0 64.0 8.5 8.5 8.5 8.5 26.4 26.4 26.4 26.4 580.0 580.0 580.0 580.0 2.0 2.0 2.0 2.0 4.0 4.0 4.0 4.0 23 23 23 23 1 1 1 1 1 1 1 1 1 1 1 1 17 17 17 17 63 63 63 63 690 690 690 690 21,000,000 21,000,000 21,000,000 21,000,000 74 74 74 74 56 56 56 56 1 1 1 1 1 1 1 1 Source: Various City departments. Note: No capital asset indicators are available for the general government function. -174- 2007 2008 2009 2010 2011 2012 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 -175-