HomeMy WebLinkAbout2002 CAFRCOMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2002
MINNESOTA
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1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
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FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
Comprehensive Annual Financial Report
of the
City of Andover, Minnesota
For the Year Ended
December 31, 2002
Prepared By: Finance Department
City of Andover
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CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
I. INTRODUCTORY SECTION
Letter of Transmittal2
Organization9
Organizational Chart10
II. FINANCIAL SECTION
Independent Auditor's Report12
Management's Discussion and Analysis14
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net AssetsStatement 124
Statement of ActivitiesStatement 225
Fund Financial Statements:
Balance Sheet - Governmental FundsStatement 326
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental FundsStatement 428
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds Statement 530
Statement of Net Assets - Proprietary FundsStatement 631
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary FundsStatement 732
Statement of Cash Flows - Proprietary FundsStatement 833
Statement of Fiduciary Net Assets - Fiduciary FundsStatement 934
Notes to Financial Statements35
Required Supplementary Information:
Budgetary Comparison Schedule - General FundStatement 1066
Notes to Required Supplementary Information:
Legal Compliance - Budgets68
Modified Approach for City Streets and Trails Infrastructure Capital Assets68
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 1173
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental FundsStatement 1274
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1376
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue FundsStatement 1478
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 1582
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service FundsStatement 1684
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 1788
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project FundsStatement 1890
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
ForestryStatement 1992
LRRWMOStatement 2093
Drainage and MappingStatement 2194
EDA GeneralStatement 2295
Trail and TransportationStatement 2396
Septic DisposalStatement 2497
Right-of-Way Management/UtilityStatement 2598
Capital Equipment ReserveStatement 2699
Developer Seal CoatingStatement 27100
Oak Wilt Suppression ProgramStatement 28101
Internal Service Funds:
Combining Statement of Net Assets - Internal Service FundsStatement 29103
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Internal Service FundsStatement 30104
Combining Statement of Cash Flows - Internal Service FundsStatement 31105
Agency Funds:
Combining Statement of Net Assets - Fuduciary FundsStatement 32107
Capital Assets Used in the Operation of Governmental Funds:
Schedule By SourceStatement 33109
Schedule By Function and ActivityStatement 34110
Schedule of Changes By Function and ActivityStatement 35112
Supplementary Financial Information:
Combined Schedule of IndebtednessExhibit 1114
Schedule of Tax Capacity Rates and LeviesExhibit 2116
Schedule of Deferred Tax Levies - General Obligation BondsExhibit 3117
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
III. STATISTICAL SECTION (UNAUDITED)
Government-Wide Information:
Government-Wide Expenses By FunctionTable 1120
Government-Wide Revenues By SourceTable 2121
Fund Information:
General Fund Revenues By Source - Last Ten Fiscal YearsTable 3122
General Fund Expenditures By Function - Last Ten Fiscal YearsTable 4123
Property Tax Levies and Collections - Last Ten Fiscal YearsTable 5124
Special Assessment Levies and Collections - Last Ten Fiscal YearsTable 6124
Computation of Legal Debt Margin - December 21, 2002 and 2001Table 7125
Assessed and Estimated Actual Value of Taxable Property - Years 1994 through 2003Table 8125
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita
Last Ten Fiscal YearsTable 9126
Ratio of Annual Debt Service Expenditures for General Bonded Debt
to Total General Governmental Expenditures - Last Ten Fiscal YearsTable 10127
Property Tax Rates - Direct and Overlapping Governments -
Years 1994 through 2003Table 11127
Computation of Direct and Overlapping Debt Including Debt RatiosTable 12128
Principal TaxpayersTable 13128
Building Permits, Property Values and Households - Last Ten Fiscal YearsTable 14129
DemographicsTable 15130
Miscellaneous Statistical DataTable 16131
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I. INTRODUCTORY SECTION
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1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
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FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
June 23, 2003
To the Honorable Mayor and City Council
City of Andover
1685 Crosstown Blvd. NW
Andover, Minnesota 55304
Dear Honorable Mayor and Council Members:
The Comprehensive Annual Financial Report is submitted in conformance with all applicable governing laws and regulations. The
following has set the standards forth:
*Andover City Policy and Code
*The State Auditor, State of Minnesota
*Government Finance Officers Association
*Governmental Accounting Standards Board
RESPONSIBILITY.
Responsibility for both the accuracy of the presented data and the completeness of the financial statements
including all disclosures rests with the City. We believe the data, as presented, is accurate in all material aspects. This report has been
presented in a manner designed to fairly set forth the financial position and results of operations as measured by the financial activity of
its various funds.
FINANCIAL STATEMENT FORMAT.
This Comprehensive Annual Financial Report is presented in three main sections:
I.Introductory
II.Financial
III.Statistical
Introduction
Theincludes a list of the City's principal officials as of December 31, 2002, the table of contents, organizational chart, and
Financial Section
this Letter of Transmittal. The includes: (1) independent auditor's opinion; (2) management’s discussion and analysis;
(3) government wide and fund financial statements; (4) notes to the financial statements; (5) required supplementary information; (6) the
Statistical Section
combining statements, individual fund statements; and, (7) the supplemental information. The includes tables and
reports of various economic, social, financial and fiscal data designed to reflect trends and ratios.
GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in
the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should
be read in conjunction with it. The City of Andover’s MD&A can be found immediately following the report of the independent
auditors.
REPORTING ENTITY.
All City funds, departments, commissions, and other organizations for which the City of Andover is
financially accountable are presented within the Comprehensive Annual Financial Report. The Andover Firefighters’ Relief Association
does not meet the established criteria for inclusion in the reporting entity, and accordingly are excluded from this report.
GENERAL INFORMATION.
The city we know today as Andover was first organized in 1857 under the name “Round Lake
Township.” However, in 1860 the name was changedto “Grow Township” in honor of Senator Galusha A. Grow of Pennsylvania.
Senator Grow spoke at a political campaign in Anoka that year, and the town name was changed to reflect Senator Grow because of his
strong advocacy of the Union cause. At that time, the population was 330 and included the geographical area we know today as Ham
Lake. In fact, the area of Ham Lake was considered a part of Grow Township until 1871.
In 1972, the Grow Township Board of Supervisors recognized that the town was growing at a very rapid rate. They felt a village form of
government would provide better services to the community. Board supervisors then voted in favor of proceeding with the incorporation
process. The board voted to submit a new name for the village. “Andover Village” was chosen because the name Andover had historical
interest. The historical interest, we believe, came from the Andover train station.
You may have heard the popular “train myth” about how Andover received its name. The myth states that a train tipped over in a
swamp, and an eyewitness, relaying the incident, said it “went over and over,” thereby naming the city “Andover.” However, research
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To the Honorable Mayor and City Council
City of Andover, Minnesota
Anoka County Union Newspaper -
reveals that the name Andover first appeared in an article dated March 14, 1899 in the before train
tracks were ever built in the city.
The article stated that the Eastern Minnesota line of the Great Northern Railway was in the process of constructing railroad tracks from
the Coon Creek Cut-off to the North. The railway announced that new railroad stations with mathematical precision were to be located
five miles apart from each other. Thenew stations (from Coon Creek to the North, along the new railroad line) were to be named
Andover, Cedar, Bethel, Isanti, Cambridge, Stanchfield, Braham, Grasston, Cornell, and Brook Park. On July 4, 1899, the first train
passed through the Andover Station. Where the railway came up with the name Andover still remains unknown.
Andover Village was established in 1972 and then became the City of Andover, a city of the fourth class, in 1974. Today the City of
Andover’s population exceeds 26,000, classifying it as a third class city.
The City of Andover as it exists today consists of 23,040 acres. Andover has a population estimated at 28,908. A rapidly growing
suburb of the northern metropolitan area, the City of Andover is approximately sixteen miles from Minneapolis.
SERVICES PROVIDED.
The City of Andover provides various services to the residents in the community. The current services are:
General Government:
Mayor and City councilFinancial administrationInformation systems
NewsletterElectionsFacility management
City clerkAssessingEngineering
AdministrationLegalRisk management
Human resourcesPlanning and zoning
Public Safety:
PoliceProtective inspectionAnimal control
Fire protectionCivil defense
Public Works:
Streets and highwaysStreet signsTraffic signals
Snow and ice removalCentral equipment maintenanceWater maintenance
Street lighting
Sanitation:
Storm sewersTree preservation & weed controlSanitary sewer maintenance
Parks and Recreation
Recycling
GOVERNMENT STRUCTURE.
Andover is a statutory city with the City Council appointing a City Administrator. The City
Administrator has operating responsibilities for all City functions.
IMPLEMENTATION OF GASB 34
In June 1999, the GASB issued Statement 34, which is the most comprehensive government accounting rule ever developed. This
standard substantially changes the way state and local governments report their financial activity. Andover has implemented these
changes for 2002. A summary of the most significant changes is as follows:
1.Government-wide financial statements are prepared using full accrual accounting
2.Basic fund financial statements present major funds instead of fund types
3.Budgetary comparisons include original and amended budgets
4.All infrastructures have been capitalized and all capital assets are depreciated except streets and trails that are under the
modified approach.
5.A management discussion and analysis is included as required supplemental information
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To the Honorable Mayor and City Council
City of Andover, Minnesota
ECONOMIC CONDITION AND OUTLOOK
Very moderate population growth is expected to continue in 2002 and 2003, with an estimated population of 34,500 by 2010. The rate of
residential growth slowed substantially in 1999 and 2000 as the availability of residentially zoned property decreased. The City
experienced a significant amount of commercial growth during 2000 and 2001. Continual commercial growth is anticipated over the next
five to ten years, beyond that growth will slow as the amount of undeveloped commercially zoned property also declines.
The City's General Fund has two major categories of revenue, which accounted for 74% of the total in 2002. They are general property
taxes at 58%, and intergovernmental revenues at 16%. Intergovernmental revenue includes state aids, such as local government aid,
market value homestead credit, highway maintenance aid, fire relief aid and police aid; and county grants, such as recycling and
community development. Local Government Aid (LGA) and Market Value Homestead Credit (MVHC) make up over 52% of
intergovernmental revenue, and total $119,827 and $420,560, respectively.
During the past several years, the State of Minnesota has made numerous changes to laws pertaining to the distribution of LGA,
Homestead and Agricultural Credit Aid (HACA) and MVHC.
The City was able to make up this loss through an increased tax levy. Thus, substantially increasing the local tax rate for 2002. The tax
laws that resulted in this change also greatly reduced school district property tax levies, resulting in no net tax increase for most
residential property owners. Sweeping changes approved in 2003 will result in the loss of approximately $590,000 in aid to Andover in
2003. The state will allow cities the ability to levy up to 60% of the lost 2003 aid in 2004.
LGA, HACA and MVHC for 1998 through 2003 are as follows:
YearLGAHACAMVHCTotal
1998$122,651$378,975$-$501,626
1999111,145462,796-573,941
2000119,752490,237-609,989
2001119,758489,991-609,749
2002119,827-563,754683,581
2003*--86,86486,864
*Due to the state budget deficit, the City will not be receiving any LGA and limited MVHC.
For 1998 through 2000, Cities with populations over 2,500 were under levy limit restrictions imposed by the State. Levy limits severely
curb the ability of Cities to generate additional tax revenue needed to respond to an increasing demand for services. For 1999 and 2000,
the levy limit formula was modified to allow for increases based on commercial and industrial growth. This was a favorable change for
Andover, as the City experienced a surge in commercial growth during the past few years. Levy limits were lifted for 2001 but were
reinstated for 2002 and 2003. Strict levy limits are anticipated for 2004 that will not allow cities the ability to capture residential and
commercial market value growth.
The State's property tax reform efforts have also included modifications to property class rates. Reductions in the class rates for all major
types of property have occurred in 1998, 1999, 2000, and for 2002. These changes resulted in a decrease in the taxable value of most
properties. These changes and the impact on various valued properties are shown in the following table:
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To the Honorable Mayor and City Council
City of Andover, Minnesota
Class Rate
199819992000 & 20012002
Residential Homestead
Value to $75,0001.00%1.00%1.00%1.00%
$76,000 to $500,0001.85%1.70%1.65%1.00%
Over $500,0001.85%1.70%1.65%1.25%
Commercial / Industrial
Value to $150,0002.70%2.45%2.40%1.50%
Value above $150,0004.00%3.50%3.40%2.00%
Tax Capacity
199819992000 & 20012002
Taxable Market Value
Residential Homestead
$100,000$1,213$1,175$1,163$1,000
$150,0002,1382,0251,9881,500
$200,0003,0632,8752,8132,000
$250,0003,9883,7253,6382,500
$300,0004,9134,5754,4633,000
Commercial / Industrial
$550,00020,05017,67517,20010,250
$750,00028,05024,67524,00014,250
$1,000,00038,05033,42532,50019,250
$2,500,00098,05085,92583,50049,250
The City received a substantial amount of revenue from licenses and permits from 1990 through 2002. The past 5 years are shown
below:
Increase
Revenues(Decrease)
1998$694,809n/a
1999609,344$(85,465)
2000623,66214,318
2001720,71297,050
2002588,965(131,747)
The $131,747 decrease in revenue for 2002 is due to reclassification of plan check fees ($263,535), which were previously recorded as
license and permit fee and are now recorded as a charges for services revenue. Revenue from residential building continued to modestly
increase through 2002 but will decline through 2003, as a reduced number of new residential lots are being added to the overall lot
inventory.
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from charges for
services totaled $722,690 in 2001, and $689,427 in 2002. The decline is the result of a reduction in fees generated from the declining
number of new development projects.
EMPLOYMENT
The City of Andover’s largest employers are government entities. The local school district has a significant presence in the community
and Anoka County’s Parks and Highway Departments and Sheriffs Office headquarters are located in Andover. The City of Andover is
best classified as a bedroom community, since a majority of the residents commute outside of Andover for employment opportunities.
The City does anticipate with the development of the Andover Station Commercial Park, that employment opportunities will be provided
to residents in the near future.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
Major employers in Andover are as follows:
Number of
FirmType of Business / ProductEmployees
ISD No 11 Anoka-HennepinElementary and secondary education523
Anoka County Parks and Highway DepartmentsCounty government and services247
Kottkes' Bus Service, Inc.Bus transportation173
Festival FoodsGrocery store120
Presbyterian Homes of AndoverSenior housing and assisted living facilities86
Ed Fields & Sons, Inc.Vegetable farming70
McDonald'sRestaurant60
Meadow Creek Christian SchoolPrivate education K-1260
City of AndoverMunicipal government and services59
MAJOR INITIATIVES
FOR THE YEAR.
The City has many accomplishments to report for 2002. The following list is a summary of some of the major
initiatives completed throughout the year.
Some additional noteworthy events/activities that have occurred in 2002 include:
1.The City Council gave final approval to the City’s 2020 Comprehensive Plan providing a blueprint for the long-term growth
and development of the City. This approval also initiated a major staff effort to designate a minimum of 1,000 acres of Rural
Reserve for future areas where urbanization is most likely to occur in compliance with Metropolitan Council planning
requirements.
2.The City Council received the Final Report from the Sports Complex Task Force regarding the need for a new 110,000 sq. ft.
City Community Center that includes a field house/gymnasium, indoor ice arena, aquatics center, aerobics area and meeting
facilities. The Council reviewed the report and is expected to make a decision in the early part of 2003. This effort symbolizes
the impact that citizen participation has on the future growth of the community in terms of needed public facilities and services.
3.The City Council authorized and adopted a number of new measures and planning initiatives to promote and maintain high
quality development practices that included the acceptance of a Neighborhood Business District Study, approval of new
Development Contract language controlling private development procedures, and approval of updating of the City’s Lawn
Establishment and Accessory Building Structures ordinances.
4.The City Council authorized the preparation of a City-wide Transportation Plan that will be a planning tool for the future
transportation needs of the community.
5.The City Council authorized the construction of a 6 million gallon a day (mgd) Water Treatment Plant and 1.5 million gallon
underground water storage reservoir that is to be completed in the summer of 2003.
6.The City Council authorized the construction of new Municipal Well #8, which has been designed and is under construction to
address current and future community water service needs.
7.Upon recommendation by the Parks and Recreation Commission, and approved by the City Council, City staff completed the
design and construction of over $600,000 in park and trail improvements.
8.The City Council authorized the development of a Sanitary Sewer Plan for land areas that may potentially be designated as
Rural Reserve. This plan will identify how sanitary sewer services could be provided to areas beyond the City’s 2020 MUSA
(Metropolitan Urban Service Area) boundaries.
9.Achievement of a Standards & Poor’s bond rating upgrade from an “A” rating to an “A+” rating. This rating upgrade is a true
achievement of the entire Management Team as the rating report references the strong management at the City of Andover.
10.The 2001 Audit of City Finances was reported with an “unqualified” audit opinion for the second year in a row and with no
reportable conditions.
11.The City Council approved the restructuring of the Finance Department leading to the creation of a new Assistant Finance
Director to effectively address changing demands and requirements associated with managing the City’s fiscal affairs.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
12.The introduction of a new Customer Service Satisfaction Program to measure the level of customer satisfaction with City
services and programs.
13.The renovation of the City’s Senior Center by Public Works Division staff underwritten through a combination of City and
Community Development Block Grant funding sources.
14.A full time Fire Marshal was hired in April of 2002 to oversee Fire Code inspections. The Fire Marshal will also review new
building and development plans.
15.The Fire Department took delivery and put into service a new 2,500-gallon water tanker near the end of July. The new water
tanker will help provide fire suppression services to all rural areas of the community, which do not have City water service.
16.During 2002, the Fire Department has conducted public fire education and fire safety for over 2,500 residents and students.
17.The Fire and Building Inspections Department conducted inspections and appropriate testing of new fire sprinkler and fire
alarm systems for several new facilities constructed in Andover. A representation of some of these facilities included the Rum
River Elementary School, the Andover High School, and the Andover Station Commercial center.
18.The updating and restructuring of the City of Andover Emergency Operations Plan by City departments under the leadership of
the Fire Department will help ensure appropriate emergency response in the event of a community emergency. The plan is
intended to assist City officials and emergency organizations to carry out their responsibilities for the protection of life and
property under a wide range of emergency situations.
19.For 2002, the Community Development Department Code Enforcement Office has processed over 900 code enforcement
complaints to maintain quality of life factors within the community.
Residential Development
In 2002, the City approved a number of new developments including Foxburgh Crossing, Constance Corners, Shady Oak Grove, Maple
rdth
Hollow, Woodland Estates 3 and 4 Additions, Aztec Estates and North Lake Ridge. Private development approved in 2002 included
Silver Meadows and Andover Marketplace. Private development activities in a number of subdivisions such as Nature’s Run,
Townhomes of Woodland Creek, Woodland Oaks, Chesterton Commons North and related Additions and Devonshire Estates approved
in 2001 came on line in 2002 requiring City technical oversight in a variety of different areas.
Commercial Industrial Development
The Economic Development Authority approved the final purchase of property by United Properties in Andover Station marking a
turning point for the redevelopment of this valuable land resource. A new 50,000 sq. ft. grocery store, adjacent 16,200 sq. ft retail tenant
space and a stand-alone 12,500 sq. ft. retail space was completed in October 2002. Also in Andover Station the City saw the completion
of a new steakhouse restaurant and three new office buildings. Elsewhere in the City was the completion of the Molly Professional
Building.
FOR THE FUTURE.
The City continues to focus on quality of life improvements throughout the City. These efforts cover a broad
array of areas including, protecting and improving the environment, revitalization of parks and public areas, expanding recreational
opportunities, providing cost-effective city services, increased communication between city representatives and the public and added
commercial/retail opportunities.
The City introduced a new Customer Service Satisfaction Program to measure the level of customer satisfaction with City services and
programs, continues to effectively use the City newsletter to provide citizens with up to date information on all aspects of city
government and programs. Additionally, accessibility to information and programs through the City’s webpage (www.ci.andover.mn.us)
is continually being upgraded.
FINANCIAL INFORMATION
INTERNAL CONTROL.
The City's accounting system was developed and is continually evaluated to assure the adequacy of internal
accounting controls. Internal accounting controls are designed to provide reasonable but not absolute assurance in the areas of: (1)
safeguarding assets against loss from unauthorized use or disposition; and (2) reliability of financial records and convenience of access
for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance adopted by the City of
Andover recognizes that: (1) the evaluation of cost and benefits requires estimates and judgments by management; and (2) the cost of a
control should not exceed the benefits likely to be derived. All internal controls are evaluated against the above criteria. It is our belief
that the City's internal accounting controls adequately safeguard the City's assets and also provide reasonable assurance of properly
recording financial transactions
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To the Honorable Mayor and City Council
City of Andover, Minnesota
BUDGETING CONTROLS.
In addition to internal accounting controls, the City maintains budgetary controls. The objective of these
budgetary controls is to ensure compliance with legal provisions embodied in the annual budget approved by the City Council. Activities
of the General Fund and Special Revenue Funds are included in the annual budget.
As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its
responsibility for sound financial management.
CASH MANAGEMENT.
Cash temporarily idle during the year was invested in demand deposits, certificates of deposit, U.S.
government and agency securities, state and local government securities and commercial paper.
The City's investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly,
deposits are required to be insured by federal depository insurance or collateralized. The City, its agent or a financial institution’s trust
department in the City’s name held all collateral on deposits.
RISK MANAGEMENT.
The City Finance Director performs the duties of risk management. The Finance Director continually reviews
the City's exposures to losses, evaluates insurance specifications, coordinates with an insurance broker the placement and renewal of
coverage and reviews programs to reduce costs and improve cash flow. Although the City experiences population growth, additional
miles of road, payroll, and expenditures increases, the City has been able to keep insurance costs fairly flat over the past few years.
OTHER INFORMATION
AWARDS.
The Government Finance Officers Association (GFOA) of the United States and Canada presented a Distinguished Budget
Presentation Award to the City of Andover for it’s annual budget for the fiscal year beginning January 1, 2002. This is the first time the
City of Andover has received this award. In order to receive this award, a governmental unit must publish a budget document that meets
program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. This award is valid
for a period of one year only. We believe that the annual budget for the fiscal year beginning January 1, 2003 continues to conform to
the program requirements and have submitted it to the GFOA to determine its eligibility for another award.
INDEPENDENT AUDIT.
State statutes require an annual audit by independent certified public accountants. HLB Tautges Redpath,
Ltd. was engaged by the City to render an opinion on the City's financial statements. The auditor's report on the basic financial
statements and combining and individual fund statements and schedules is included in the financial section of this report.
ACKNOWLEDGMENTS.
The preparation of this report could not have been accomplished without the efficient services of the
Finance Department staff and the consultation of the City's auditing firm. Staff members, Lee Brezinka, Deanna Connoy, Charlene
Welu, Shirley Clinton, and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report.
I also want to express our appreciation to the Mayor, members of the City Council and the City Administrator, John Erar, for their
interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner.
Respectfully submitted,
James Dickinson
Finance Director
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CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2002
OfficeName
Term
MayorMichael GamacheJanuary 4, 2005
Council MemberDon JacobsonJanuary 1, 2007
Council MemberMichael KnightJanuary 4, 2005
Council MemberKen OrttelJanuary 4, 2005
Council MemberJulie TrudeJanuary 1, 2007
City AdministratorJohn ErarAppointed
Community Development DirectorWill NeumeisterAppointed
City EngineerDavid BerkowitzAppointed
Finance DirectorJames DickinsonAppointed
Building OfficialDavid AlmgrenAppointed
Public Works SuperintendentFrank StoneAppointed
Fire ChiefDan WinkelAppointed
City ClerkVicki VolkAppointed
AttorneyWilliam G. Hawkins & AssociatesAppointed
Fiscal ConsultantsEhlers & Associates, Inc.Appointed
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CITY OF ANDOVER
Organizational Chart
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II. FINANCIAL SECTION
11
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Andover, Minnesota
We have audited the accompanying financial statements of the governmental activities, the
business type activities, each major fund, and the aggregate remaining fund information of the
City of Andover, Minnesota, as of and for the year ended December 31, 2002 which
collectively comprise the City’s basic financial statements as listed in the table of contents.
These financial statements are the responsibility of the City of Andover, Minnesota's
management. Our responsibility is to express an opinion on these basic financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Andover, Minnesota,
as of December 31, 2002, and the respective changes in financial position and cash flows,
where applicable, thereof for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
As described in Note 17 to the basic financial statements, the City of Andover, Minnesota
adopted the provisions of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements – and Management’s Discussion and Analysis – for State
12
and Local Governments, Statement 36, Recipient Reporting for Certain Shared
Nonexchange Revenues, Statement 37, Basic Financial Statements – and Management’s
Discussion and Analysis – for State and Local Governments: Omnibus, and Statement
38,Certain Financial Statement Note Disclosures, as of January 1, 2002. This results in a
change in the format and content of the basic financial statements.
In accordance with Government Auditing Standards, we have also issued a report dated
May 15, 2003 on our consideration of the City of Andover, Minnesota’s internal control over
financial reporting and our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
The Management’s Discussion and Analysis, the budgetary information and the modified
approach information on pages 14 through 22 and 66 through 69, respectively, are not a
required part of the basic financial statements but are supplementary information required by
the Governmental Accounting Standards Board. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the supplementary information. However, we did not audit the information
and express no opinion on it.
Our audit was made for the purpose of forming opinions on the financial statements that
collectively comprise the City of Andover, Minnesota’s basic financial statements. The
introductory section, combining and individual fund statements and schedules, supplementary
financial information and statistical information as listed in the table of contents are presented
for purposes of additional analysis and are not a required part of the basic financial statements.
Such information, except for that portion marked "unaudited," on which we express no
opinion, has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material respects, in relation to
the basic financial statements taken as a whole.
May 15, 2003
HLB TAUTGES REDPATH, LTD.
Certified Public Accountants
13
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Andover, we offer readers of the City of Andover’s financial statements this narrative overview and
analysis of the financial activities of the City for the fiscal year ended December 31, 2002. We encourage readers to consider the
information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be
found on pages 2 through 8 of this report.
Financial Highlights
The assets of the City of Andover exceeded its liabilities at the close of the most recent fiscal year by $117,862,727 (Net assets). Of this
amount, $7,194,038 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors in
accordance with the City's fund designations and fiscal policies.
The City’s total net assets increased by $4,587,115.
As of the close of the current fiscal year, the City of Andover’s governmental funds reported combined ending fund balances of
$17,231,677.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Reserved$72,327$-$1,665,451$899,238$2,637,016
Designated2,742,6451,083,966-11,565,95515,392,566
Undesignated-(1,804)-(796,101)(797,905)
$2,814,972$1,082,162$1,665,451$11,669,092$17,231,677
The City’s total long-term liabilities increased by $2,711,095 during the current fiscal year, from $35,276,748 to $37,987,843.
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental activities:
Bonds payable$34,915,000$-$(7,070,000)$27,845,000
Compensated absences313,934279-314,213
Total governmental activities35,228,934279(7,070,000)28,159,213
Business-type activities:
Bonds payable-9,780,000-9,780,000
Compensated absences47,814816-48,630
Total business-type activities47,8149,780,816-9,828,630
Total City long-term liabilities$35,276,748$9,781,095$(7,070,000)$37,987,843
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City of Andover’s basic financial statements. The City’s basic
financial statements comprise 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
themselves.
Government-wide financial statements
. The government-wide financial statements are designed to provide readers with a broad
overview of the City of Andover’s finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City of Andover’s assets and liabilities, with the difference between the two
reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of
the City of Andover is improving or deteriorating.
14
Management’s Discussion and Analysis
The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All
changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal
periods (e.g. uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City of Andover that are principally supported by taxes
and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of
their costs through user fees and charges (business-type activities). The governmental activities of the City of Andover include general
government, public safety, public works, sanitation, parks and recreation, recycling and economic development. The business-type
activities of the City of Andover include water and sewer.
The government-wide financial statements can be found on pages 24 and 25 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 of Andover, like other state and local governments, uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Andover can be divided into
three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds
. Governmental funds are used to account for essentially the same functions reported as governmental activities in
the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spend-able resources, as well as on balances of spend-able resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financial 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 statement. By doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the
governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City of Andover maintains seven individual major governmental funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the following
major funds: General fund; G.O. Improvement Bonds of 1997B and 1999 Debt Service Funds (DSF); and the following capital projects
funds (CPF): Water Trunk, Unfinanced, Road and Bridge, and Permanent Improvement Revolving.
Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this report.
The City of Andover adopts an annual appropriated budget for its general and special revenue funds.
A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 26 through 30 of this report.
Proprietary funds
. When the City charges customers for the services it provided – whether to outside customers or to other departments
of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities
are reported in the statement of net assets and the statement of revenues, expenses and changes in net assets.
The enterprise funds are the same as the business-type activities reported in the government-wide statements but provide more detail and
additional information, such as cash flows, for proprietary funds. The City of Andover uses enterprise funds to account for its water and
sanitary sewer operations.
Internal service funds are used to report activities that provide supplies and services for the City’s other departments, such as the
equipment maintenance and insurance funds. The internal service funds are reported with governmental activities in the government-
wide financial statements.
The basic proprietary fund financial statements can be found on pages 31 through 33 of this report.
Fiduciary funds
. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary
funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the
City of Andover’s own program. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statement can be found on page 34 of this report.
15
Management’s Discussion and Analysis
Notes to the financial statements
. The notes provided 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 can be found on pages 35 through
63 of this report.
Other information.
The combining statements referred to earlier in connection with non-major governmental funds is presented
immediately following the required supplementary information on budgetary comparisons, and on the modified approach for streets and
trails infrastructure. Combining and individual fund statements and schedules can be found on pages 73 through 112 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indictor of a government's financial position. In the case of the City of
Andover, assets exceeded liabilities by $117,862,727 at the close of the most recent fiscal year.
The largest portion of the City of Andover’s net assets ($88,081,913 or 75 percent) reflects its investment in capital assets (e.g. land,
buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Andover
uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the
City of Andover'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.
With the first year implementation of Governmental Accounting Standards Board Statement 34, the City is not presenting comparable
columns in the various comparison's and analyses for the previous year. Comparative information will be provided in future years.
CITY OF ANDOVER’S NET ASSETS
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Current and other assets$23,718,986$8,272,751$31,991,737
Capital assets93,236,46633,190,991126,427,457
Total assets116,955,45241,463,742158,419,194
Long-term liabilities outstanding28,159,2139,828,63037,987,843
Other liabilities1,739,603829,0212,568,624
Total liabilities29,898,81610,657,65140,556,467
Net assets:
Invested in capital assets, net of related debt64,911,47923,170,43488,081,913
Restricted5,882,4514,337,17010,219,621
Unrestricted16,262,7063,298,48719,561,193
Total net assets$87,056,636$30,806,091$117,862,727
A portion of the City of Andover's net assets represents resources that are subject to external restrictions on how they may be used. The
remaining balance of unrestricted net assets ($19,561,193) may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Andover is able to report positive balances in all three categories of net assets, both for
the government as a whole, as well as for its separate governmental and business-type activities.
16
Management’s Discussion and Analysis
Governmental Activities
Governmental activities increased the City of Andover's net assets by $4,880,593. Key elements of this increase are as follows:
City of Andover's Changes in Net Assets
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Revenues:
Program revenues:
Charges for services$1,801,772$2,378,114$4,179,886
Operating grants and contributions946,495-946,495
Capital grants and contributions5,849,683373,5506,223,233
General revenues:
Property taxes5,076,374-5,076,374
Tax increment842,607-842,607
Grants and contributions not restricted
to specific programs763,049-763,049
Unrestricted investments earnings821,002458,3111,279,313
Total revenues16,100,9823,209,97519,310,957
Expenses:
General government2,355,954-2,355,954
Public safety2,474,284-2,474,284
Public works4,819,429-4,819,429
Sanitation264,671-264,671
Parks and recreation856,806-856,806
Recycling116,344-116,344
Economic development720,460-720,460
Unallocated30,614-30,614
Interest on long-term debt1,667,943-1,667,943
Water-1,526,5261,526,526
Sewer-1,206,8651,206,865
Total expenses13,306,5052,733,39116,039,896
Increase (decrease) in net assets before gain
on the sale of fixed assets and transfers2,794,477476,5843,271,061
Gain on the sale of fixed assets1,316,054-1,316,054
Transfers770,062(770,062)-
Increase in net assets4,880,593(293,478)4,587,115
Net assets - January 1, 200282,176,04331,099,569113,275,612
Net assets - December 31, 2002$87,056,636$30,806,091$117,862,727
17
Management’s Discussion and Analysis
Below are specific graphs which provide comparisons of the governmental activities revenues and expenditures:
Governmental Activities - Revenues
Unrestricted
Charges for services
investments earnings
11%
Grants and
5%
Tax increment
contributions not
5%
restricted for specific
programs
5%
Property taxes
32%
Capital grants and
contributions
36%
Operating grants and
contributions
6%
Governmental Activities - Expenses
Interest on long-term
debt
General government
13%
Economic18%
development
5%
Recycling
1%
Parks and recreation
6%
Sanitation
2%
Public safety
19%
Public works
36%
18
Management’s Discussion and Analysis
Business-Type Activities
Business-type activities decreased net assets by $293,478. Below are graphs showing the business-type activities revenue and expense
comparisons:
Business-Type Activities - Revenues
Unrestricted
investments earnings
14%
Capital grants and
contributions
12%
Charges for services
74%
Business-Type Activities - Expenses
Sewer
44%
Water
56%
19
Management’s Discussion and Analysis
Financial Analysis of the Government's Funds
Governmental Funds
.The focus of the City of Andover’s governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the City of Andover’s financing requirements. In
particular, unreserved fund balance may serve as useful measure of a government’s net resources available for spending at the end of the
fiscal year.
At the end of the current fiscal year, the City of Andover's governmental funds reported combined ending fund balances of $17,231,677.
Approximately 85 percent of this total amount ($14,594,661) constitutes unreserved fund balance. The remainder of the fund balance
($2,637,016) is reserved because it has already been committed 1) to provide for prepaid items ($4,152), 2) to provide for inventory
($68,175), 3) to pay debt service ($1,665,451) and 4) bond proceeds specified for a project ($899,238).
The general fund decreased by $605,100 in 2002, which was primarily due to a transfer to the road and bridge capital projects fund to
supplement the pavement management program. Conversely, the road and bridge fund increased by that same amount.
In 2002, improvement bonds of 1997B and 1999 debt service funds decreased by $1,881,093 and $1,872,122 respectively, as outstanding
bonds were called and paid off early.
The permanent improvement revolving capital projects fund increased by $1,090,690, largely due to the of prepayments of assessments
on improvement projects.
The nonmajor special revenue funds decreased by $709,348 for 2002 which was primarily due to a transfer to the road and bridge capital
projects fund to supplement the pavement management program.
The non-major debt service funds decreased by $630,497, due to scheduled debt service payments.
Proprietary funds
. The City of Andover’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail.
The unrestricted net assets in the respective proprietary funds are enterprise funds $3,287,721 (water $1,540,135 and sewer $1,747,586)
and internal service funds $238,008. The water and sewer enterprise funds had decreases in net assets in 2002 of $296,830 and $7,414
respectively, and the internal service funds had increases in net assets of $66,032.
Budgetary Highlights
General Fund
The expenditure budget was amended to provide for salary and benefit adjustments that had not been dispersed to the various
departments when the budget was originally adopted. The City budgeted a contingency to provide for these increases. Also, the budget
was amended for the transfers out that had been previously designated in the prior years’ fund balance. The revenue budget was
amended to reallocate license and permit fees to charges for services.
Capital Asset and Debt Administration
Capital assets
. The City of Andover’s investment in capital assets for its governmental and business type activities as of December 31,
2002, amounts to $126,427,457 (net of accumulated depreciation). This investment in capital assets includes land, buildings,
infrastructure, machinery and equipment.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program, which includes streets and trails. Under GASB Statement No. 34, eligible infrastructure capital assets are not
required to be depreciated under the following requirements:
1)The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up
to-date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate
annual amount to maintain and preserve at the established condition assessment level.
2)The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established
and disclosed condition assessment level.
The City’s policy is to achieve an average rating of good (56 – 70) for all streets and trails. As of December 31, 2002, the City’s street
and trail system was rated at an Overall Condition Index (OCI) of 82, which is higher than the City’s policy level. The City’s streets and
trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun’s ultra-violet rays drying
out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water damage from
20
Management’s Discussion and Analysis
natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short-term
maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $1,590,268 on street and
trail maintenance for the year ending December 31, 2002. These expenditures delayed deterioration; however, the overall condition of
the system was not improved through these maintenance expenditures. The City has estimated that the amount of annual expenditures
required to maintain the City’s street and trail system at the average OCI rating of good is approximately $900,000.
Adjustments
BeginningDue ToEnding
Primary Government
BalanceRestatementAdditionsDeletionsBalance
Governmental activities:
Land and improvements$2,741,610$6,034,944$-$(763,444)$8,013,110
Streets and trails-66,955,0772,785,756-69,740,833
Construction in progress-3,450,484758,953(3,047,300)1,162,137
Buildings and improvements8,191,297(2,547,373)86,659(20,371)5,710,212
Furniture and equipment1,105,675(1,046,288)--59,387
Machinery and equipment5,940,492(926,461)655,113(269,510)5,399,634
Other park improvements-1,978,119796,803-2,774,922
Storm sewers-6,357,718688,242-7,045,960
Total capital assets 17,979,07480,256,2205,771,526(4,100,625)99,906,195
Less accumulated depreciation for:
Buildings and improvements-1,376,011191,260-1,567,271
Furniture and equipment-54,6851,045-55,730
Machinery and equipment-2,331,507425,936(229,418)2,528,025
Other park improvements-768,93894,958-863,896
Storm sewers-1,506,397148,410-1,654,807
Total accumulated depreciation-6,037,538861,609(229,418)6,669,729
Governmental activities
capital assets - net17,979,07474,218,6824,909,917(3,871,207)93,236,466
Business-type activities:
Land and improvements-33,900162,487-196,387
Construction in progress-2,117,0914,805,387(828,365)6,094,113
Buildings and improvements-4,402,174--4,402,174
Furniture and equipment982,013(952,658)--29,355
Machinery and equipment1,156,162(666,685)--489,477
Collection and distribution33,514,555(3,924,110)1,900,527-31,490,972
Total capital assets
being depreciated35,652,7301,009,7126,868,401(828,365)42,702,478
Less accumulated depreciation for:
Buildings and improvements-1,808,266182,210-1,990,476
Furniture and equipment111,487(82,132)--29,355
Machinery and equipment367,730(70,610)42,006-339,126
Collection and distribution7,533,203(991,487)610,814-7,152,530
Total accumulated depreciation8,012,420664,037835,030-9,511,487
Business-type activities
capital assets - net27,640,310345,6756,033,371(828,365)33,190,991
Total capital assets$45,619,384$74,564,357$10,943,288$(4,699,572)$126,427,457
Additional information on the City of Andover’s capital assets can be found in Note 5.
21
Management’s Discussion and Analysis
Long-term debt
. At the end of the current fiscal year, the City of Andover had total long-term debt outstanding of $37,987,843, an
increase of $2,711,095 from 2001. General obligation revenue bonds ($11,895,000) were used to finance the addition to the public works
facility and the water treatment facility (currently being constructed). Special assessment bonds ($2,795,000) financed improvement
projects within the City and are assessed to the benefiting properties. Tax increment bonds ($10,450,000) financed the City’s economic
development plan. Certificates of indebtedness ($1,565,000) financed capital equipment purchases. Permanent improvement revolving
bonds ($8,325,000) financed improvement projects within the City and are assessed to the benefiting properties. State aid bonds
($2,595,000) were used to finance Municipal State Aid (MSA) eligible road projects.
Additional long-term debt in the amount of $362,843 is for compensated absences.
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
G.O. revenue bonds$2,115,000$9,780,000$11,895,000
Special assessment bonds2,795,000-2,795,000
Tax increment bonds10,450,000-10,450,000
Certificates of indebtedness1,565,000-1,565,000
Permanent improvement revolving bonds8,325,000-8,325,000
State aid bonds2,595,000-2,595,000
Total bonds payable27,845,0009,780,00037,625,000
Compensated absences314,21348,630362,843
Total$28,159,213$9,828,630$37,987,843
The City of Andover maintains an A+ rating from Standard and Poor’s.
State statutes limit the amount of general obligation debt a Minnesota city may issue to 2% of total Estimated Taxable Market Value.
The current debt limitation for the City of Andover is $34,388,588. Only $3,567,152 of the City's outstanding debt is counted within the
statutory limitation.
Requests for information.
This financial report is designed to provide a general overview of the City of Andover’s finances for all
those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the City of Andover, Attn: Finance Director, 1685 Crosstown Boulevard NW,
Andover, Minnesota 55304.
22
BASIC FINANCIAL STATEMENTS
23
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET ASSETSStatement 1
December 31, 2002
Primary Government
GovernmentBusiness-Type
ActivitiesActivitiesTotal
Assets:
Cash and investments$18,169,920$7,507,752$25,677,672
Restricted assets:
Cash and investments-45,50445,504
Accrued interest61,58324,93986,522
Due from other governmental units96,1971,38497,581
Accounts receivable - net162,584580,327742,911
Prepaid items40,00351,35091,353
Property taxes receivable:
Unremitted70,181-70,181
Delinquent109,923-109,923
Special assessments receivable:
Unremitted4,135324,167
Delinquent34,2253,17937,404
Deferred4,818,3602,6014,820,961
Notes receivable37,943-37,943
Inventories - at cost113,93255,683169,615
Capital assets - net93,236,46633,190,991126,427,457
Total assets116,955,45241,463,742158,419,194
Liabilities:
Interfund payable10,766(10,766)-
Accounts payable93,22514,151107,376
Contracts payable318,680560,804879,484
Deposits payable1,9002,1004,000
Due to other governmental units252,5585,299257,857
Salaries payable114,44116,876131,317
Unearned revenue468,046-468,046
Accrued interest payable479,987240,557720,544
Compensated absences:
Due in more than one year314,21348,630362,843
Bonds/notes payable:
Due within one year4,415,000-4,415,000
Due in more than one year23,430,0009,780,00033,210,000
Total liabilities29,898,81610,657,65140,556,467
Net assets:
Invested in capital assets, net of related debt64,911,47923,170,43488,081,913
Restricted for:
Debt service2,816,396-2,816,396
Capital improvements899,2384,337,1705,236,408
Tax increment purposes2,166,817-2,166,817
Unrestricted16,262,7063,298,48719,561,193
Total net assets$87,056,636$30,806,091$117,862,727
The accompanying notes are an integral part of these financial statements.
24
CITY OF ANDOVER, MINNESOTA
STATEMENT OF ACTIVITIESStatement 2
For The Year Ended December 31, 2002
Net (Expense) Revenue and
Program RevenuesChanges in Net Assets
ChargesOperatingCapitalPrimary Government
ForGrants andGrants andGovernmentalBusiness-Type
ExpensesServicesContributionsContributionsActivitiesActivitiesTotal
Functions/Programs
Primary government:
Government activities:
General government$2,355,954$536,000$12,137$38,053$(1,769,764)$-$(1,769,764)
Public safety2,474,284876,631240,019-(1,357,634)-(1,357,634)
Public works4,819,429358,194402,1265,526,3031,467,194-1,467,194
Sanitation264,671---(264,671)-(264,671)
Parks and recreation856,806--285,327(571,479)-(571,479)
Recycling116,34430,94754,183-(31,214)-(31,214)
Economic development720,460---(720,460)-(720,460)
Unallocated30,614---(30,614)-(30,614)
Interest on long-term debt1,667,943-238,030-(1,429,913)-(1,429,913)
Total government
activities13,306,5051,801,772946,4955,849,683(4,708,555)-(4,708,555)
Business-type activities:
Water1,526,5261,128,182-179,066-(219,278)(219,278)
Sewer1,206,8651,249,932-194,484-237,551237,551
Total business-type
activities2,733,3912,378,114-373,550-18,27318,273
Total primary government$16,039,896$4,179,886$946,495$6,223,233(4,708,555)18,273(4,690,282)
General revenues:
General property taxes5,076,374-5,076,374
Tax increment collections842,607-842,607
Grants and contributions not
restricted to specific programs763,049-763,049
Unrestricted investment earnings821,002458,3111,279,313
Gain on sale of capital assets1,316,054-1,316,054
Transfers770,062(770,062)-
Total general revenues, gain on sale of capital
assets and transfers9,589,148(311,751)9,277,397
Change in net assets4,880,593(293,478)4,587,115
Net assets - beginning82,176,04331,099,569113,275,612
Net assets - ending$87,056,636$30,806,091$117,862,727
The accompanying notes are an integral part of these financial statements.
25
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2002
G.O.G.O.
ImprovementImprovement
Bonds ofBonds of
1997B1999Water Trunk
GeneralDSFDSFCPF
Assets
Cash and investments$2,638,221$29,196$13,382$1,303,669
Accrued interest 9,38497-4,308
Due from other governmental units48,292---
Accounts receivable - net64,943---
Interfund receivable205,000---
Prepaid items4,152---
Property taxes receivable:
Unremitted45,981---
Delinquent82,812---
Special assessments receivable:
Unremitted---58
Delinquent1,905--1,311
Deferred-5,956-759,328
Notes receivable----
Inventory68,175---
Total assets3,168,86535,24913,3822,068,674
Liabilities and Fund Balances
Liabilities:
Interfund payable----
Accounts payable81,370---
Contracts payable11,733---
Deposits payable1,900---
Due to other governmental units64,877-13,382-
Salaries payable101,378---
Deferred revenue92,6355,956-760,639
Total liabilities353,8935,95613,382760,639
Fund balances:
Reserved for:
Prepaid items4,152---
Inventory68,175---
Debt service-29,293--
Projects----
Unreserved reported in:
Designated:
General Fund2,742,645---
Special Revenue Funds----
Capital Projects Funds---1,308,035
Undesignated:
Special Revenue Funds----
Capital Projects Funds----
Total fund balances2,814,97229,293-1,308,035
Total liabilities and fund balances$3,168,865$35,249$13,382$2,068,674
Fund balance reported above
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds.
Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds.
The assets and liabilities are included in the governmental activities statement of net assets along with a deduction of net
revenue attributable to business-type activities.
Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not
reported in the funds.
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements.
26
Statement 3
Permanent
Road &ImprovementOtherIntra
UnfinancedBridgeRevolvingGovernmentalActivity
CPFCPFCPFFundsEliminationsTotal
$10,743$1,460,042$5,871,401$6,674,509$-$18,001,163
-6,43119,25721,549-61,026
-16,482-31,423-96,197
---97,641-162,584
-450,000--(655,000)-
----.4,152
-6,234-17,966-70,181
---27,111-109,923
1,005-13,071-4,135
-2959530,619-34,225
238,072902,7201,491,0851,421,199-4,818,360
---37,943-37,943
-----68,175
249,8202,842,2047,381,8398,363,031(655,000)23,468,064
530,000--125,000(655,000)-
-20-6,476-87,866
-4,81425,328276,805-318,680
-----1,900
166,548343-6,550-251,700
---6,366-107,744
238,072903,0151,491,1801,977,000-5,468,497
934,620908,1921,516,5082,398,197(655,000)6,236,387
-----4,152
-----68,175
---1,636,158-1,665,451
---899,238-899,238
-----2,742,645
---1,083,966-1,083,966
-1,934,0125,865,3312,458,577-11,565,955
---(1,804)-(1,804)
(684,800)--(111,301)-(796,101)
(684,800)1,934,0125,865,3315,964,834-17,231,677
$249,820$2,842,204$7,381,839$8,363,031$(655,000)$23,468,064
$17,231,677
93,236,466
5,000,451
227,242
(28,639,200)
$87,056,636
27
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2002
G.O.G.O.
ImprovementImprovement
Bonds ofBonds of
1997B1999Water Trunk
GeneralDSFDSFCPF
Revenues:
General property taxes$3,782,334$-$-$-
Tax increment collections----
Licenses and permits588,965---
Intergovernmental1,043,272---
Special assessments-170,289332,64573,450
Charges for services689,427---
Fines73,475---
Investment income109,524--88,219
Miscellaneous
Park dedication fees----
Connection charges---931,718
Other208,790---
Total revenues6,495,787170,289332,6451,093,387
Expenditures:
Current:
General government2,044,792---
Public safety2,352,909---
Public works1,212,143--213,978
Sanitation107,661---
Parks and recreation643,712---
Recycling116,005---
Economic development----
Unallocated30,614---
Capital outlay:
General government58,943---
Public safety----
Public works----
Sanitation----
Parks and recreation18,738---
Debt service:
Principal retirement-2,325,0002,115,000-
Interest-167,385124,339-
Paying agent fees----
Professional services-2,86713,382-
Construction/acquisition costs----
Total expenditures6,585,5172,495,2522,252,721213,978
Revenues over (under) expenditures(89,730)(2,324,963)(1,920,076)879,409
Other financing sources (uses):
Transfers in217,437620,000310,371468,579
Transfers out(748,893)(176,130)(262,417)(652,209)
Proceeds from the sale of capital assets16,086---
Total other financing sources (uses)(515,370)443,87047,954(183,630)
Net increase (decrease) in fund balance(605,100)(1,881,093)(1,872,122)695,779
Fund balance - January 13,420,0721,910,3861,872,122612,256
Fund balance - December 31$2,814,972$29,293$-$1,308,035
The accompanying notes are an integral part of these financial statements.
28
Statement 4
Permanent
Road &ImprovementOtherIntra
UnfinancedBridgeRevolvingGovernmentalActivity
CPFCPFCPFFundsEliminationsTotal
$-$531,169$-$746,550$-$5,060,053
---878,567-878,567
-----588,965
-294,435-426,371-1,764,078
75,45494,9063,179,015258,037-4,183,796
---181,514-870,941
-----73,475
-105,361234,121275,671-812,896
---280,312-280,312
---349,952-1,281,670
--1,328128,787-338,905
75,4541,025,8713,414,4643,525,761-16,133,658
---129,200-2,173,992
-----2,352,909
358,9171,451,175773,195594,307-4,603,715
---2,552-110,213
---45,449-689,161
-----116,005
---720,960-720,960
-----30,614
-----58,943
---317,699-317,699
--148,984673,300-822,284
---65,215-65,215
--3,644678,750-701,132
---2,630,000-7,070,000
---1,476,785-1,768,509
---3,415-3,415
---8,601-24,850
--642,028116,925-758,953
358,9171,451,1751,567,8517,463,158-22,388,569
(283,463)(425,304)1,846,613(3,937,397)-(6,254,911)
435,4211,219,010-1,932,450(4,449,206)754,062
(508)(34,366)(755,923)(1,818,760)4,449,206-
---2,123,875-2,139,961
434,9131,184,644(755,923)2,237,565-2,894,023
151,450759,3401,090,690(1,699,832)-(3,360,888)
(836,250)1,174,6724,774,6417,664,666-20,592,565
$(684,800)$1,934,012$5,865,331$5,964,834$-$17,231,677
29
CITY OF ANDOVER, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2002
Amounts reported for governmental activities in the
statement of activities (page 29) are different because:
Net changes in fund balances - total governmental funds (page 29)$(3,360,888)
Governmental funds report capital outlays as expenditures. However, in the statement of
activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation expense. This is the amount by which capital outlays exceeded depreciation
depreciation in the current period.1,862,617
In the government-wide statement of activities, only the gain on the sale of capital assets is
reported, whereas in the governmental funds, the proceeds from the sale increase financial
resources. Thus, the change in net assets differs from the change in fund balance by the net
book value of the capital assets sold.(823,907)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.(22,782)
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net assets. This amount is the net effect of these differences in the treatment of
long-term debt and related items.7,070,000
Some expenses reported in the statement of activities do not require use of current financial
resources and, therefore, are not reported as expenditures in governmental funds.100,287
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
governmental activities.55,266
Change in net assets of governmental activities (page 25)$4,880,593
The accompanying notes are an integral part of these financial statements.
30
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET ASSETSStatement 6
PROPRIETARY FUNDS
December 31, 2002
Governmental
Activities
TotalInternal
WaterSewerCurrent YearService Funds
Assets
Current assets:
Cash and cash equivalents$6,108,769$1,398,983$7,507,752$168,757
Restricted assets:
Cash and cash equivalents45,504-45,504-
Accrued interest20,3204,61924,939557
Due from other governmental units-1,3841,384-
Accounts receivable - net258,913321,414580,327-
Prepaid items-51,35051,35035,851
Special assessments receivable:
Unremitted-3232
Delinquent-3,1793,179-
Deferred2,601-2,601-
Inventories - at cost55,683-55,68345,757
Total current assets6,491,7901,780,9618,272,751250,922
Noncurrent assets:
Capital assets:
Land196,387-196,387-
Buildings and structures4,402,174-4,402,174-
Machinery and equipment210,449308,383518,832-
Distribution and collection system12,219,76519,271,20731,490,972-
Construction in progress5,753,061341,0526,094,113-
Total capital assets22,781,83619,920,64242,702,478-
Less: Allowance for depreciation(4,542,313)(4,969,174)(9,511,487)-
Total noncurrent assets18,239,52314,951,46833,190,991-
Total assets24,731,31316,732,42941,463,742250,922
Liabilities
Current liabilities:
Accounts payable11,1872,96414,1515,359
Contracts payable560,77826560,804-
Deposits payable2,100-2,100-
Interest payable240,557-240,557-
Due to other governmental units1,7183,5815,299858
Salaries payable10,6996,17716,8766,697
Total current liabilities827,03912,748839,78712,914
Noncurrent liabilities:
Bonds payable - due in more than one year9,780,000-9,780,000-
Compensated absences payable 28,00320,62748,630-
Total noncurrent liabilities9,808,00320,6279,828,630-
Total liabilities10,635,04233,37510,668,41712,914
Net assets
Invested in capital assets, net of related debt8,218,96614,951,46823,170,434-
Restricted4,337,170-4,337,170-
Unrestricted1,540,1351,747,5863,287,721238,008
Total net assets$14,096,271$16,699,054$30,795,325$238,008
Net assets reported above$30,795,325
Amounts reported for business-type activities in the statement of net assets are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business-type activities.10,766
Net assets of business-type activities$30,806,091
The accompanying notes are an integral part of these financial statements.
31
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 7
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 2002
Governmental
Activities
TotalInternal
WaterSewerCurrent YearService Funds
Operating revenues:
User charges$1,056,666$1,229,730$2,286,396$435,998
Meters40,343-40,343-
Permit fees14,000-14,000-
Penalties16,97720,01836,995-
Other19618438031,235
Total operating revenues1,128,1821,249,9322,378,114467,233
Operating expenses:
Personal services335,845139,638475,483179,449
Supplies77,36013,58090,940125,844
Other service charges453,731103,167556,898104,014
Disposal charges-561,249561,249-
Depreciation433,937401,093835,030-
Total operating expenses1,300,8731,218,7272,519,600409,307
Operating income (loss)(172,691)31,205(141,486)57,926
Nonoperating revenues (expenses):
Investment income411,35246,959458,3118,106
Interest expense(240,557)-(240,557)-
Total nonoperating revenues (expenses)170,79546,959217,7548,106
Income (loss) before contributions and transfers(1,896)78,16476,26866,032
Capital contributions179,066194,484373,550-
Transfers out(474,000)(280,062)(754,062)-
Change in net assets(296,830)(7,414)(304,244)66,032
Net assets - January 1 as previously reported13,949,15116,804,74330,753,894171,976
Cumulative effect of change in accounting principal377,918(5,756)372,162-
Prior period adjustment66,032(92,519)(26,487)-
Net assets - January 1 as restated14,393,10116,706,46831,099,569171,976
Net assets - December 31$14,096,271$16,699,054$30,795,325$238,008
Net changes in net assets reported above$(304,244)
Amounts reported for business-type activities in the statement of activities are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business-type activities.10,766
Change in net assets of business-type activities$(293,478)
The accompanying notes are an intregral part of these financial statements.
32
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWSStatement 8
PROPRIETARY FUNDS
For The Year Ended December 31, 2002
Governmental
Activities
TotalInternal
WaterSewerCurrent YearService Funds
Cash flows from operating activities:
Receipts from customers and users$1,099,856$1,213,772$2,313,628$467,233
Payment to suppliers(544,991)(681,472)(1,226,463)(284,286)
Payment to employees(336,550)(137,288)(473,838)(180,300)
Net cash flows from operating activities218,315395,012613,3272,647
Cash flows from noncapital financing activities:
Receipt of advances from other funds11,591-11,591-
Payment of advances to other funds-(9,815)(9,815)-
Transfers out(474,000)(280,062)(754,062)-
Net cash flows from noncapital financing activities(462,409)(289,877)(752,286)-
Cash flows from capital and related financing activities:
Acquisition of capital assets(5,105,708)-(5,105,708)-
Receipt of bonds9,780,000-9,780,000-
Net cash flows from capital and related financing activities4,674,292-4,674,292-
Cash flows from investing activities:
Investment income401,28751,278452,5657,765
Net increase in cash and cash equivalents4,831,485156,4134,987,89810,412
Cash and cash equivalents - January 11,322,7881,242,5702,565,358158,345
Cash and cash equivalents - December 31$6,154,273$1,398,983$7,553,256$168,757
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) $(172,691)$31,205$(141,486)$57,926
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation433,937401,093835,030-
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units-275275-
Decrease (increase) in accounts receivable(25,725)(35,134)(60,859)-
Decrease (increase) in prepaid items-(6,086)(6,086)(35,851)
Decrease (increase) in special assessments(2,601)13,20310,602-
Decrease (increase) in inventory(362)20(342)(16,451)
Increase (decrease) in accounts payable(14,954)(1,017)(15,971)(2,984)
Increase (decrease) in contracts payable-2626-
Increase (decrease) in deposits payable500-500-
Increase (decrease) in due to other governmental units9163,5814,497858
Increase (decrease) in salaries payable(1,476)2,305829571
Increase (decrease) in deferred revenue-(14,504)(14,504)-
Increase (decrease) in compensated absences77145816(1,422)
Total adjustments391,006363,807754,813(55,279)
Net cash provided by operating activities$218,315$395,012$613,327$2,647
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds in 2002.$179,066$194,484$373,550
The accompanying notes are an integral part of these financial statements.
33
CITY OF ANDOVER, MINNESOTA
STATEMENT OF FIDUCIARY NET ASSETSStatement 9
FIDUCIARY FUNDS
December 31, 2002
Agency
Funds
Assets
Cash and investments$329,347
Liabilities
Contracts payable2,248
Deposits payable327,099
Total liabilities$329,347
The accompanying notes are an integral part of these financial statements.
34
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Note 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Andover was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of government. The
governing body consists of a five-member City council elected by voters of the City.
The financial statements of the City of Andover have been prepared in conformity with generally accepted accounting principles as
applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant
accounting policies.
A.FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the
City of Andover (the primary government) and its component units. The component units discussed below are included in the
City's reporting entity because of the significance of their operational or financial relationships with the City.
COMPONENT UNITS
In conformity with generally accepted accounting principles, the financial statements of the component units have been
included in the financial reporting entity as blended component units.
The Andover Economic Development Authority (EDA) is an entity legally separate from the City. However, for financial
reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council
serve as EDA Board Members and its purpose is to promote development within the City of Andover. The activity of the
EDA is reported in the EDA General Special Revenue Fund. Separate financial statements are not prepared for the EDA.
B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report
information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the
Governmental activities
effect of interfund activity has been removed from these statements., which normally are supported by
business-type activities
taxes and intergovernmental revenues, are reported separately from , 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 business-type activity
Direct expenses
are offset by program revenues. are those that are clearly identifiable with a specific function or business-type
Program revenues
activity. include 1) charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted
to meeting the operational or capital requirements of a particular function or business type activity. Taxes and other items not
general revenues
included among program revenues are reported instead as .
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the
latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
economic resources measurement focusaccrual basis
The government-wide financial statements are reported using the and the
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
35
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
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.
current financial resources measurement focusmodified
Governmental fund financial statements are reported using the and the
accrual basis of accounting
. Revenues are recognized as soon as they are both measurable and available. Revenues are
available
considered to be when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are
collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are
collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred,
as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and
claims and judgments, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current
fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual
as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is
received by the government.
The government reports the following major governmental funds:
General Fund
Theis the government’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
G.O. Improvement Bonds of 1997B Debt Service Fund (DSF)
The was established to account for debt associated with
several improvement projects in 1997. The proceeds were used to provide funds for the financing of assessable
improvements within the City, including but not limited to streets, sanitary sewer, water main, storm sewer, sidewalks and
curb & gutter.
G.O. Improvement Bonds of 1999 DSF
The was established to account for debt associated with several improvement
projects in 1999. The proceeds were used to provide funds for the financing of assessable improvements within the City,
including but not limited to sanitary sewer and water line connections, storm sewer, streets, sidewalks and curb & gutter.
Water Trunk Capital Projects Fund (CPF)
The is used to account for water access fees and trunk improvements as part of
It is also used to reserve monies that will be needed for capital infrastructure replacements in the
development.
future.
Unfinanced CPF
The is used to account for projects that have been internally financed by the City where it is not practical
to issue bonds to finance.
Road and Bridge CPF
The accounts for all road projects and the pavement management program, which includes annual
seal coating and overlays for roads.
Permanent Improvement Revolving CPF
The serves as a long-term funding source for large capital improvement
expenditures.
The government reports the following major proprietary funds:
Water Fund
The accounts for the water service charges, which are used to finance the water system operating expenses.
Sewer Fund
The accounts for the sewer service charges, which are used to finance the sanitary sewer system operating
expenses.
36
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Additionally, the government reports the following fund types:
Internal Service Funds
are used to provide equipment maintenance and insurance to other departments of the City on a
cost reimbursement basis.
Agency Funds
The are used to account for assets held by the City in a trustee capacity or as an agent for individuals,
private organizations, other governmental units, and/or other funds.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both
the government-wide and proprietary-fund financial statements to the extent that those standards do not conflict with or
contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following
subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The
government has elected not to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions
to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external
organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other
funds of the City of Andover. Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
program revenues
Amounts reported as include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
general revenues
Internally dedicated resources are reported as rather than as program revenues. Likewise, general revenues
include all taxes.
operatingnonoperating
Proprietary funds distinguish revenues and expenses from 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 water and sewer enterprise funds are charges to customers for sales
and services. Operating expenses for enterprise 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 nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to use restricted
resources first, and then unrestricted resources as they are needed.
D.BUDGETS
Budgets are legally adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets
are legally adopted for the General and Special Revenue Funds. Budgeted expenditure appropriations lapse at year-end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are
recorded in order to reserve that portion of the appropriation, is not employed by the City because it is at present not
considered necessary to assure effective budgetary control or to facilitate effective cash management.
E.LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1.The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the
following January 1. The budget includes proposed expenditures and the means of financing them.
37
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
2.Public hearings are conducted to obtain taxpayer comments.
3.The budget is legally enacted through City Council action.
4.Expenditures may legally exceed budgeted appropriations at the fund level through City Council action. Also, the
City Council may authorize transfers of budgeted amounts between departments within any fund.
5.Formal budgetary integration is employed as a management control device during the year for the General Fund and
Special Revenue Funds. Budgetary control for Capital Projects Funds is accomplished through the use of project
controls.
6.The legal level of budgetary control is at the department level for the General Fund and at the fund level for the
Special Revenue Funds. Also inherent in this controlling function is the management philosophy that the existence of
a particular item or appropriation in the approved budget does not automatically mean that it will be spent. The
budget process has flexibility in that, where need has been properly demonstrated, an adjustment can be made within
the department budget by the City Administrator or between departments by the City Council.
7.The City Council made supplemental budget appropriations throughout the year. Individual amendments were not
material in relation to the original appropriations which were adjusted.
The following is a listing of Special Revenue Funds whose expenditures exceed budget appropriations:
FinalOver
BudgetActualBudget
Special Revenue Funds:
Forestry$17,316$17,577$261
EDA general138,728155,68416,956
Oak wilt suppression8,60010,2501,650
Theover expenditures were funded by greater than anticipated revenues and/or available fund balance.
F.CASH AND INVESTMENTS
Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such
investments are allocated to the individual funds on the basis of applicable cash balance participation of each fund.
The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund
shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate
resources are received. These interfund balances are eliminated on the government-wide financial statements.
Investments are stated at fair value, based upon quoted market prices. Short-term investments, such as commercial paper and
banker’s acceptances, are reported as amortized cost.
For purposes of the Statement of Cash Flows of Proprietary Fund Types, cash equivalents are defined as short-term, highly
liquid investments that are both:
a.readily convertible to known amounts of cash, or
b.so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
The City’s policy considers cash equivalents to be those that meet the above criteria and have original maturities of three
months or less.
38
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
G.RECEIVABLES AND PAYABLES
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered.
Short-term interfund loans are classified as “interfund receivables/payables.” All short-term interfund receivables and payables
at December 31, 2002 are planned to be eliminated in 2003. Long-term interfund loans are classified as “interfund loan
receivable/payable.” Any residual balances outstanding between the governmental activities and business-type activities are
reported in the government-wide financial statements as “internal balances.”
Interfund loan receivables, as reported in the fund financial statements, are offset by a fund balance reserve account in
applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial
resources.
Property taxes and special assessments receivable have been reported net of estimated uncollectible accounts. (See Note 1 H, I
and L) Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible
amounts are not material for other receivables and have not been reported.
H.PROPERTY TAX REVENUE RECOGNITION
The City levies its property tax for the subsequent year during the month of December and it is certified to Anoka County.
December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such
taxes become a lien on the following January 1. Anoka County is the collecting agency for the levy and remits the collections to
the City three times a year. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying the applicable tax rate to the tax
capacity of individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special
assessments, except for certain prepayments paid directly to the City.
The County Auditor submits a list of taxes to be collected on each parcel of property to the County Treasurer in January of
each year. The County Treasurer collects all taxes and is required to mail copies of all personal property tax statements by
April 15, and copies of all real estate tax statements by April 15, of each year. Property owners are required to pay one-half of
their real estate taxes due by May 15 and the balance by October 15.
If taxes due May 15 are not paid on time, a penalty of 3% is assessed on homesteaded property and 7% on nonhomesteaded
property. An additional 1% penalty is added each month the taxes remain unpaid, until October 15. If the taxes due May 15
are not paid by October 15, a 2% penalty per month is added to homesteaded property and 4% per month to nonhomesteaded
property until January 1.
If the taxes are not paid by January 1, further penalties are added. Penalties and interest apply to both taxes and special
assessments. There are some exceptions to the above penalties, but they are not material.
Within 30 days after the tax settlement date, the County Treasurer is required to pay 70% of the estimated collections of taxes
and special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60
days after settlement, provided that after 45 days interest accrues at the rate of 8% per annum.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not
material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current
period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are
39
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following
January) and taxes and credits not received at the year-end are classified as delinquent and due from County taxes receivable.
The portion of delinquent taxes not collected by the City in January is fully offset by deferred revenue because they are not
available to finance current expenditures.
I.SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment
improvement projects in accordance with State 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.
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. Proceeds of sales from tax forfeit properties are allocated first to the
County’s costs of administering all tax forfeit properties. Pursuant to State 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.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council.
Uncollectible special assessments are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes revenue from special assessments 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 that are collected by the County by December 31 (remitted to the City the following
January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred
assessments receivable in governmental funding are completely offset by deferred revenues.
J.INVENTORIES
Inventories of the Governmental Funds and the Proprietary Funds are stated at cost, which approximates market, using the
first-in, first-out (FIFO) method.
Inventories of Governmental funds are recorded as expenditures when consumed rather than when purchased.
K.PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government-wide and fund financial statements.
40
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
L.CAPITAL ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and 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 government as assets with an initial, individual cost of more than $5,000 (amount
not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical
cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The City has chosen the modified approach for reporting street and trail system capital assets.
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. For the year ended December 31, 2002, no interest was capitalized in connection with construction in progress.
Property, plant and equipment of the primary government, as well as the component units, is depreciated using the straight line
method over the following estimated useful lives:
AssetsLife
Buildings and improvements10 - 30 years
Furniture and equipment5 - 10 years
Machinery and equipment5 - 10 years
Other park improvements20 - 30 years
Storm sewer50 years
Distribution and collection systems50 years
The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting of its streets
and trails. The City conducted a physical assessment of the streets and trails condition in Fall of 2002. This condition
assessment will be performed every 3 years. Each segment of City owned street or trail was assigned a physical condition
based on potential defects. A Overall Condition Index (OCI) was assigned to each segment. The index is expressed in a
continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned to those
segments that have the characteristic of a new street or trail. The following conditions were defined:
RangeDescription
86 - 100Excellent
71 - 85Very good
56 - 70Good
41 - 55Fair
26 - 40Poor
11 - 25Very poor
0 - 10Failed
The City’s policy relative to maintaining the street and trail assets is to achieve an average rating of good for all segments. This
acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the
users of the system.
M.COMPENSATED ABSENCES
City employees earn vacation and sick pay accruing each payroll period. Unused vacation can be accrued by the employees up
to a maximum of 200 hours as of the anniversary date of the individual’s employment with the City, unless a specific
41
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
authorization is granted to an employee. All vacation pay is accrued when incurred in the government-wide and proprietary
fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for
example, as a result of employee resignations and retirements.
Employees can also accrue an unlimited amount of unused sick leave. Employees with two or more years of service are entitled
to receive severance pay equal to a percentage of unused sick pay ranging from 20-50 percent based on years of service, up to a
maximum of 400 hours. The liability for severance pay is accounted for the same as accrued vacation pay.
N.LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and
other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or
proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are immaterial and are
expensed in the year of bond issuance.
In the fund financial statements, governmental fund types recognize bond premiums 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.
O.FUND EQUITY
In the fund financial statements, governmental funds report reservations of fund balance for amounts not appropriable for
expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of
financial resources.
P.INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute
reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are
recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is
reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash
between funds. All other interfund transactions are reported as transfers.
Q.RESTRICTED ASSETS
Certain assets in the water fund are restricted for future debt service payments.
R.USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires
management to make estimates that affect amounts reported in the financial statements during the reporting period.Actual
results could differ from such estimates.
42
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
S.RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
1.EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET
AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS
fund balance – total governmental funds net
The governmental fund balance sheet includes a reconciliation between and
assets– governmental activities
as reported in the government-wide statement of net assets. One element of that
reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period
and therefore are not reported in the funds.” The details of this ($28,639,200) difference are as follows:
Bonds payable$(27,845,000)
Accrued interest payable(479,987)
Compensated absences(314,213)
Net adjustment to reduce fund balance - total
governmental funds to arrive at net assets -
governmental activities$(28,639,200)
Another element of that reconciliation states that “internal service funds are used by management to charge the cost of
equipment maintenance and insurance to individual funds. The assets and liabilities are included in the governmental
statement of net assets along with a deduction of net revenue attributable to business-type activities.” The details of this
$227,242 difference are as follows:
Internal Service Funds net assets$238,008
Net revenue attributable to business-type activities(10,766)
Net adjustment to increase fund balance - total
governmental funds to arrive at net assets -
governmental activities$227,242
2.EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES AND THE GOVERNMENT-WIDE
STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between
net changes in fund balances – total governmental fundschanges in net assets of governmental activities
and as reported in
the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report
capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense.” The details of this $1,862,617 difference are as follows:
Capital outlay$1,965,273
Construction/acquisition costs758,953
Depreciation expense(861,609)
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities$1,862,617
43
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Another element of that reconciliation states “Revenues on the Statement of Activities that do not provide current
financial resources are not reported as revenues in the funds.” The details of this ($22,782) difference are as follows:
General property taxes deferred revenue:
At December 31, 2001$(77,502)
At December 31, 200293,823
Tax increment taxes deferred revenue:
At December 31, 2001(52,060)
At December 31, 200216,100
Special assessments deferred revenue:
At December 31, 2001(4,834,574)
At December 31, 20024,852,585
Notes receivable deferred revenue:
At December 31, 2001(59,097)
At December 31, 200237,943
Net adjustments to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities$(22,782)
Another element of that reconciliation states “the issuance of long-term debt (e.g., bonds, leases) provides current financial
resources to governmental funds, while the repayment of the long-term debt consumes the current financial resources of
governmental funds.” Neither transaction, however, has any effect on net assets. The details of this $7,070,000 difference
are as follows:
Principal repayments:
General obligation revenue bonds$60,000
Special assessment bonds5,790,000
Tax increment bonds590,000
Certificates of indebtedness470,000
State aid bonds160,000
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities$7,070,000
Another element of that reconciliation states that “Some expenses reported in the statement of activities do not require the
use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this
$100,287 difference are as follows:
Compensated absences$(279)
Accrued interest100,566
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities$100,287
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Another element of that reconciliation states that “internal service funds are used by management to charge the cost of
equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to
governmental activities.” The details of this $55,266 difference are as follows:
Internal Service Funds change in net assets$66,032
Net revenue attributable to business-type activities(10,766)
Net adjustment to increase fund balance - total
governmental funds to arrive at net assets -
governmental activities$55,266
Note 2 DEPOSITS AND INVESTMENTS
DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, 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% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged).
Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or
local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City
Treasurer or in a financial institution other than that furnishing the collateral.
Balances at December 31, 2002 are as follows:
BankCarrying
BalancesAmount
1) Insured or collateralized by securities held by the City
or its agent in the City's name.$300,947$1,051,469
2) Collateralized with securities held by the pledging
institution trust department in the City's name.--
3) Uncollateralized or collateralized with securities not in
the City's name.--
Totals$300,947$1,051,469
INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a)Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by
an act of congress, excluding mortgage-backed securities defined as high risk.
b)Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments
are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements.
c)General obligations of the State of Minnesota or any of its municipalities.
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
d)Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
e)Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in
270 days or less.
f)Repurchase or reverse repurchase agreements 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;
certain Minnesota securities broker-dealers; or, a bank qualified as a depositor.
Balances at December 31, 2002:
Carrying
Custodial Credit Risk CategoryAmount
Securities Type123(at Fair Value)
Negotiable CD's$5,339,953$-$-$5,339,953
State and local government securities836,165--836,165
U.S. government and agency securities12,674,069--12,674,069
Commercial paper5,456,601--5,456,601
Totals$24,306,788$-$-24,306,788
Investments not subject to credit risk categorization:
Minnesota municipal investment pool49,765
Open end mutual funds314,154
Total investments24,670,707
Deposits - checking account1,051,469
Total deposits and investments25,722,176
Petty Cash1,000
Total cash and investments (including cash equivalents)$25,723,176
The City's investments are categorized above to give an indication of the level of custodial credit risk assumed at year-end. Category
1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name.
Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department
or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the
counterparty or by its trust department or agent but not in the City's name.
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Note 3RECEIVABLES
Significant receivables balances not expected to be collected within one year of December 31, 2002 are as follows:
DelinquentDelinquentSpecial
PropertyTaxAssessmentNotes
TaxesIncrementReceivableReceivableTotal
Major Funds:
General Fund$39,750$-$1,905$-$41,655
G.O. Improvement Bonds of 1997B DSF--5,102-5,102
Water Trunk CPF--692,020-692,020
Unfinanced CPF--205,844-205,844
Road and Bridge CPF--838,606-838,606
Permanent Improvement Revolving CPF--1,358,972-1,358,972
Nonmajor Funds5,28612,2361,243,06515,5951,276,182
Total$45,036$12,236$4,345,514$15,595$4,418,381
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate
liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received,
but not yet earned. At the end of the current fiscal year, the various components of deferred revenue reported in the governmental funds
were as follows:
UnavailableUnearned
Delinquent property taxes receivable:
General Fund$82,812-
Nonmajor Funds11,011-
Delinquent tax increment collections (Nonmajor Funds)16,100-
Special assessments not yet due:
General Fund1,905-
G.O. Improvement Bonds of 1997B DSF5,956-
Water Trunk CPF760,639-
Unfinanced CPF238,072-
Road & Bridge CPF903,015-
Permanent Improvement Revolving CPF1,491,180-
Nonmajor Funds1,451,818-
Notes receivable not yet due:
Nonmajor funds37,943-
Unearned miscellaneous fees:
General Fund-3,930
Unearned developer seal coating fees:
Nonmajor funds-460,127
Grant drawdowns prior to meeting all eligibility requirements:
General Fund-3,989
Total$5,000,451$468,046
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Note 4LOANS RECEIVABLE
As part of a development agreement entered into with a private developer in May 1989, the City received a promissory note for
$243,520. The note is to reimburse the City for the fiscal disparities contributions the City lost due to the establishment of a tax
increment financing district for the development project. The note bears an interest rate of 5.50% and calls for 180 equal monthly
payments to be made to the City through August 2003. At December 31, 2002, the remaining principal due of $37,943 is offset by
deferred revenue as it is not available to finance current activities.
Note 5CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government-wide
statement of net assets. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure
reporting for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A
more detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All
other capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and
depreciation expense have been recorded. Adjustments due to restatement represent the changes due to an extensive inventory of all
capital assets, implementation of GASB Statement No. 34 and a policy change related to capitalization thresholds.Capital asset activity
for the year ended December 31, 2002 as previously reported was as follows:
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Adjustments
BeginningDue ToEnding
Primary Government
BalanceRestatementAdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements$2,741,610$6,034,944$-$(763,444)$8,013,110
Streets and trails-66,955,0772,785,756-69,740,833
Construction in progress-3,450,484758,953(3,047,300)1,162,137
Total capital assets
not being depreciated2,741,61076,440,5053,544,709(3,810,744)78,916,080
Capital assets being depreciated:
Buildings and improvements8,191,297(2,547,373)86,659(20,371)5,710,212
Furniture and equipment1,105,675(1,046,288)--59,387
Machinery and equipment5,940,492(926,461)655,113(269,510)5,399,634
Other park improvements-1,978,119796,803-2,774,922
Storm sewers-6,357,718688,242-7,045,960
Total capital assets
being depreciated15,237,4643,815,7152,226,817(289,881)20,990,115
Less accumulated depreciation for:
Buildings and improvements-1,376,011191,260-1,567,271
Furniture and equipment-54,6851,045-55,730
Machinery and equipment-2,331,507425,936(229,418)2,528,025
Other park improvements-768,93894,958-863,896
Storm sewers-1,506,397148,410-1,654,807
Total accumulated depreciation-6,037,538861,609(229,418)6,669,729
Total capital assets being
depreciated - net15,237,464(2,221,823)1,365,208(60,463)14,320,386
Governmental activities
capital assets - net$17,979,074$74,218,682$4,909,917$(3,871,207)$93,236,466
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Adjustments
BeginningDue ToEnding
Primary Government
BalanceRestatementAdditionsDeletionsBalance
Business-type activities:
Capital assets not being depreciated:
Land and improvements$-$33,900$162,487$-$196,387
Construction in progress-2,117,0914,805,387(828,365)6,094,113
Total capital assets
not being depreciated-2,150,9914,967,874(828,365)6,290,500
Capital assets being depreciated:
Buildings and improvements-4,402,174--4,402,174
Furniture and equipment982,013(952,658)--29,355
Machinery and equipment1,156,162(666,685)--489,477
Collection and distribution33,514,555(3,924,110)1,900,527-31,490,972
Total capital assets
being depreciated35,652,730(1,141,279)1,900,527-36,411,978
Less accumulated depreciation for:
Buildings and improvements-1,808,266182,210-1,990,476
Furniture and equipment111,487(82,132)--29,355
Machinery and equipment367,730(70,610)42,006-339,126
Collection and distribution7,533,203(991,487)610,814-7,152,530
Total accumulated depreciation8,012,420664,037835,030-9,511,487
Total capital assets being
depreciated - net27,640,310(1,805,316)1,065,497-26,900,491
Business-type activities
capital assets - net$27,640,310$345,675$6,033,371$(828,365)$33,190,991
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government$197,528
Public safety132,077
Public works208,680
Sanitation, included depreciation of general infrastructure assets155,011
Parks and recreation168,313
Total depreciation expense - governmental activities$861,609
Business-type activities
Water$433,937
Sewer401,093
Total depreciation expense - business-type activities$835,030
50
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
CONSTRUCTION COMMITMENTS
At December 31, 2002, the City had construction project contracts in progress. The commitments related to the remaining contract
balances are summarized as follows:
ContractRemaining
Project #ProjectAmountCommitment
99-15Water Treatment Facility$8,152,744$3,284,033
01-30Prairie Road Reconstruction480,000172,949
Total$8,632,744$3,456,982
Note 6LONG-TERM DEBT
The City issues general obligation bonds and equipment certificates to provide funds for the acquisition and construction of major capital
facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts
to be repaid from business-type activities.
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
GOVERNMENTAL ACTIVITIES
IssueMaturityInterestOriginalPayable
DateDateRateIssue12/31/02
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
1997 Public Project Revenue Bonds9/1/199712/1/20164.50-5.90%$2,350,000$2,115,000
Special Assessment Bonds:
1993A G.O. Improvement Bonds8/1/19938/1/20034.00-4.75%3,650,000365,000
1994C G.O. Improvement Bonds10/1/19942/1/20065.05-5.75%1,140,000460,000
1995A G.O. Improvement Bonds7/1/19952/1/20064.85-5.30%2,605,0001,195,000
1997B G.O. Improvement Bonds7/1/199712/1/20033.90-4.70%6,315,000775,000
Total special assessment bonds13,710,0002,795,000
Tax Increment Bonds:
1994B G.O. Tax Increment Refunding Bonds5/1/19945/1/20046.97-7.87%885,000165,000
1995D Tax Increment Bonds10/1/19952/1/20134.50-5.60%6,055,0005,000,000
1996 Tax Increment Bonds6/1/19968/1/20124.75-5.40%2,055,0001,620,000
1999 Tax Increment Bonds6/1/199912/1/20124.00-5.00%1,500,0001,370,000
2000A Tax Increment Bonds9/1/20002/1/20106.80-7.10%2,445,0002,295,000
Total tax increment bonds12,940,00010,450,000
Certificates of Indebtedness:
1999 G.O. Equipment Certificates6/1/19992/1/20043.70-4.00%1,050,000575,000
2001C G.O. Capital Notes6/5/20012/1/20062.90-3.80%1,210,000990,000
Total certificates of indebtedness2,260,0001,565,000
Permanent Improvement Revolving Bonds:
2000B Permanent Improv. Revolving Bonds9/1/20002/1/20074.20-4.375%3,350,0003,350,000
2001A Permanent Improv. Revolving Bonds6/5/20012/1/20073.20-4.00%4,975,0004,975,000
Total permanent improvement revolving bonds8,325,0008,325,000
State Aid Bonds:
2001B State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,0002,595,000
Total - bonded indebtedness42,340,00027,845,000
Compensated absences payable-314,213
Total governmental activities indebtedness42,340,00028,159,213
BUSINESS-TYPE ACTIVITIES
General Obligation Revenue Bonds
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,0009,780,000
Compensated absences payable-48,630
Total business-type activities indebtedness9,780,0009,828,630
Total City indebtedness$52,120,000$37,987,843
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
G.O. Revenue BondsSpecial Assessment BondsTax Increment Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2003$70,000$120,310$1,540,000$129,180$650,000$565,472
200480,000116,740415,00055,835790,000528,739
200590,000112,580435,00033,453920,000483,155
2006100,000107,810405,00010,9461,025,000430,885
2007110,000102,410--1,080,000374,275
2008-2012750,000406,408--5,360,000924,390
2013-2017915,000140,987--625,00017,500
Total$2,115,000$1,107,245$2,795,000$229,414$10,450,000$3,324,416
Governmental Activities
Permanent Improvement
Certificates of IndebtednessRevolving BondsState Aid Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2003$500,000$48,938$1,530,000$297,195$125,000$111,030
2004545,00029,6171,595,000239,751130,000106,788
2005255,00014,7241,660,000177,365135,000102,081
2006265,0005,0351,735,000109,915140,00096,957
2007--1,805,00037,469150,00091,298
2008-2012----845,000355,382
2013-2017----1,070,000136,834
Total$1,565,000$98,314$8,325,000$861,695$2,595,000$1,000,370
Business-Type Activities
G.O. Revenue Bonds
PrincipalInterest
2003$-$505,170
2004310,000429,437
2005320,000421,393
2006335,000411,720
2007345,000400,662
2008-20121,980,0001,788,835
2013-20172,505,0001,299,811
2018-20223,230,000608,753
2023755,00018,875
Total$9,780,000$5,884,656
It is not practical to determine the specific year for payment of long-term accrued compensated absences.
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
CHANGE IN LONG-TERMLIABILITIES
Long-term liability activity for the year ended December 31, 2002, was as follows:
BeginningEndingDue Within
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
G.O. revenue bonds$2,175,000$-$(60,000)$2,115,000$70,000
Special assessment bonds8,585,000-(5,790,000)2,795,0001,540,000
Tax increment bonds11,040,000-(590,000)10,450,000650,000
Certificates of indebtedness2,035,000-(470,000)1,565,000500,000
Permanent improvement revolving bonds8,325,000--8,325,0001,530,000
State aid bonds2,755,000-(160,000)2,595,000125,000
Total bonds payable34,915,000-(7,070,000)27,845,0004,415,000
Compensated absences313,934279-314,213-
Total governmental activities
long-term liabilities$35,228,934$279$(7,070,000)$28,159,213$4,415,000
Business-type activities:
Bonds payable:
G.O. revenue bonds$-$9,780,000$-$9,780,000$-
Compensated absences47,814816-48,630-
Total business-type activities
long-term liabilities$47,814$9,780,816$-$9,828,630$-
For the governmental activities, bonds payable can be summarized in the following categories:
G.O. revenue bonds
The were used to construct a 30,000 square foot public works building adjacent to the existing public
works facility. The bonds are payable from annual lease payments received by the EDA from the City. These bonds do
constitute debt for the purpose of computing statutory debt limits.
special assessment bonds
The are used to finance assessable improvements within the City, including but not limited to
sanitary sewer and water line connections, storm sewer, streets, sidewalks and curb & gutter. The bonds are payable primarily
from special assessments levied against properties benefited by the improvements. In addition, the bonds are general
obligations of the City for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount.
tax increment bonds
The are used to finance land acquisition and other public costs to facilitate development in the City’s tax
increment district. The bonds are payable from tax increment revenues generated by existing and new development with the
district. In addition, the bonds are general obligations of the City for which its full faith, credit and taxing powers are pledged
without limitation as to rate or amount.
certificates of indebtedness
The are used to finance the purchase of capital equipment. The certificates are general obligations of
the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the certificates.
permanent improvement revolving bonds
The are used to finance assessable improvements within the City, including but not
limited to sanitary sewer and water line connections, storm sewer, streets, sidewalks and curb & gutter. The bonds are payable
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
primarily from special assessments levied against properties benefited by the improvements. In addition, the bonds are general
obligations of the City for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount.
state aid bonds
The were used to finance the Municipal State Aid (MSA) eligible costs of the Andover Boulevard project. The
bonds are payable entirely from state-aid received by the City from construction and maintenance of the state aid street system.
The City has pledged an amount of money from its account in the state-aid street fund sufficient to pay the principal and
interest of the bonds. In addition, the bonds are general obligations of the City for which its full faith, credit and taxing powers
are pledged without limitation as to rate or amount.
G.O. revenue bonds
For the business-type activities, the are being used to finance the construction of various water system
improvements within the City. The bonds are payable from net revenues of the water system and are general obligations of the City
for which its full faith, credit and taxing powers are pledged.
Note 7LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes.
The City of Andover's legal debt margin for 2002 is computed as follows:
12/31/2002
Estimated taxable market value$1,719,429,400
Debt limit (2% of market value)34,388,588
Amount of debt applicable to debt limit:
Total bonded debt$37,625,000
Less: Nonapplicable debt
G.O. water revenue bonds(9,780,000)
Special assessment bonds(2,795,000)
Tax increment bonds(10,450,000)
Permanent improvement revolving bonds(8,325,000)
State aid bonds(2,595,000)
Less: Cash and investments in related
debt service funds(112,848)
Total debt applicable to debt limit3,567,152
Legal debt margin$30,821,436
Note 8DEFINED BENEFIT PENSION PLANS - STATEWIDE
A.PLAN DESCRIPTION
All full-time and certain part-time employees of the City of Andover are covered by defined benefit plans administered by the
Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund
(PERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans.
Minnesota Statute
These plans are established and administered in accordance with , Chapters 353 and 356.
PERF 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,
firefighters and peace officers who qualify for membership by statute are covered by the PEPFF.
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
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 PERF’s Coordinated and Basic Plan members. The retiring member receives the
higher of a 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% of average salary for each of the first 10 years of service and 2.7% for each
remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years
and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members
and 1.7% 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 and PERF 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
PERF and PEPFF. That report may be obtained on the web at mnpera.com, by writing to PERA, 60 Empire Drive #200, St.
Paul, Minnesota, 55103-1855 or by calling (651) 296-7460 or 1-800-652-9026.
B.FUNDING POLICY
Minnesota Statutes
Chapter 353 sets the rates for employer and employee contributions. These statutes are established and
amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by
state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 5.10%,
respectively, of their annual covered salary. PEPFF members are required to contribute 6.20% of their annual covered salary.
The City of Andover is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan
PERF members, 5.53% for Coordinated Plan PERF members, and 9.30% for PEPFF members. The City’s contributions to the
Public Employees Retirement Fund for the years ending December 31, 2002, 2001 and 2000 were $144,981, $127,471 and
$112,392, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December
31, 2002, 2001 and 2000 were $6,381, $5,866 and $5,512, respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by state statute.
C.DEFINED CONTRIBUTION LUMP SUM SERVICE PENSION PLAN – VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION
PLAN DESCRIPTION
Members of the City’s volunteer fire department are members of the Andover Firefighters’ Relief Association. The
Association is the administrator of a single-employer defined contribution plan available to firefighters that was established
Minnesota Statutes
October 9, 1979 and operates under the provisions of Section 424A. It is governed by a board of six
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
members elected by the members of the Association for three-year terms. The City’s Mayor, City Clerk and Fire Chief are ex-
officio members of the Board of Trustees.
The Association provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of
eligible members.
1.Twenty-Year Service Pension – In order to be entitled to a pension benefit, a firefighter must have completed a
minimum of five years of service with the Department and five years membership in the Association and attain the
age of 50 years. The firefighter will then be 40% vested. This percentage increases 4% per year until the twentieth
year when 100% vesting will occur. Because this is a defined contribution plan, the amount of the retirement benefit
is not predetermined, but rather is based on the individual member’s allocable portion of contributions made during
the participation period.
2.Deferred Pension – If the retired or terminated member has not attained age 50 years and is otherwise eligible for the
pension benefit, the balance of the member’s account will be credited with earned interest at the rate permitted by
Minnesota Statutes
Section 424.A02, Subd.7.
3.Disability Benefit – If a member of the Association becomes totally and permanently disabled due to injury,
disability, sickness or dismemberment as a result of performance of duty, a disability payment will be made after one
hundred days of disability.
4.Death Benefit – In the event of death of an active member or deferred pensioner, the member’s individual account
balance will be paid to the surviving spouse, surviving children or the estate of the member after approval by the
Board.
The Association issues a publicly available financial report that includes financial statements and required supplementary
information. That report may be obtained by writing to Andover Firefighters’ Relief Association, 13875 Crosstown Boulevard,
Andover, Minnesota 55304.
FUNDING POLICY
Minnesota Statutes Chapter 69.772 sets the minimum contribution requirement for the City and State Aid on an annual basis.
These statutes are established and amended by the state legislature. The Association is comprised of volunteers; therefore,
members have no contribution requirements. The City’s annual pension cost for the current year and related information for
the plan is as follows:
Three-Year Trend Information
AnnualPercentageNet
YearPensionof APCPension
EndingCostContributedObligation
12/31/2000$104,082100%$-
12/31/2001126,633100%-
12/31/2002142,150100%-
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Note 9INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2002 are as follows:
FundReceivablePayable
Governmental Funds:
Major Funds:
General Fund$205,000$-
Road and Bridge CPF450,000-
Unfinanced CPF-530,000
Nonmajor Governmental Funds-125,000
Total$655,000$655,000
Interfund transfers:
Transfer InTransfer Out
Governmental Funds:
Major Funds:
General Fund$217,437$748,893
G.O. Improvement Bonds of 1997B DSF620,000176,130
G.O. Improvement Bonds of 1999 DSF310,371262,417
Water Trunk CPF468,579652,209
Unfinanced CPF435,421508
Road and Bridge CPF1,219,01034,366
Permanent Improvement Revolving CPF-755,923
Nonmajor Funds1,932,4501,818,760
Total Governmental Funds5,203,2684,449,206
Proprietary Funds:
Water-474,000
Sewer-280,062
Total Proprietary Funds-754,062
Total$5,203,268$5,203,268
Interfundtransfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund.
Most of the City’s interfund transfers fall under that category. Non-routine transfers include a one-time transfer of $565,233 from the
General Fund and $653,777 from the Capital Equipment Reserve Special Revenue Fund to the Road and Bridge Capital Projects Fund, to
provide part of the financing needed to start the pavement management program.
Additionally, computer service fees paid by the Water and Sewer Funds to the General Fund have been reclassified as transfers on the
Government-Wide Statement of Activities as follows:
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Transfer InTransfer Out
Governmental Activities$16,000$-
Business-Type Activities-16,000
Total$16,000$16,000
Note 10TAX INCREMENT DISTRICTS
The City of Andover is the administering authority for the following tax increment finance districts:
1.Name of District:Andover Redevelopment District 1-1
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 2012
Original net tax capacity:$14,775
Current net tax capacity:206,702
Captured net tax capacity - retained by the City$191,927
2.Name of District:Andover Redevelopment District 1-2
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 2012
Original net tax capacity:$67,049
Current net tax capacity:871,018
Captured net tax capacity - retained by the City$803,969
Total District Bonds issued$13,460,000
Amount redeemed(3,010,000)
Bonds outstanding December 31, 2002$10,450,000
3.Name of District:Tax Increment Financing District 1-3
(Farmstead Project)
Type of District:Redevelopment
Authorizing Law:M.S. Section 469
Established:1997
Duration of District:Through 2024
Original net tax capacity:$8,458
Current net tax capacity:150,544
Captured net tax capacity - retained by the City$142,086
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Note 11DEFICIT FUND BALANCES/RETAINED EARNINGS
The City has deficit fund balances/retained earnings at December 31, 2002 as follows:
FundAmount
Special Revenue Funds:
Drainage and Mapping$10,445
Capital Projects Funds:
Unfinanced684,800
Storm Sewer Project111,301
Note 12CONTINGENCIES
A.RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and omissions;
injuries to employees; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust
(LMCIT), a public entity risk pool for its general property and casualty, workers’ compensation, and other miscellaneous
insurance coverages.
Workers compensation coverage is provided through a pooled self-insurance program through the LMCIT. The City pays an
annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The
LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers
compensation, the City enrolls with a state-certified managed care organization to receive a 5% premium credit towards the cost
of coverage. The City also has a $500 deductible per occurrence to further decrease the cost of coverage. Final premiums are
determined after an audit of payroll subsequent to the close of the agreement year and are subject to revisions in rates, payrolls
and experience modification. The amount of premium adjustment, if any, is considered immaterial and not recorded until
received or paid.
Property, casualty, and automobile insurance coverage are provided through a pooled self-insurance program through the
LMCIT. The City pays an annual premium to the LMCIT. The LMCIT reinsures through commercial companies for claims
in excess of various amounts. The City retains risk for the deductible portions. These deductibles are considered immaterial to
the financial statements.
The City continues to carry commercial insurance for all other risks of loss, including employee health and disability insurance.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any
of the past three fiscal years.
B.LITIGATION
The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are
either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by
plaintiffs, with the exception of one lawsuit related to development activities. The outcome of the lawsuit cannot be
determined at this time, an unfavorable outcome would be between $0 and $350,000.
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
C.FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental 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, 2002.
D.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 increments could become a liability of the applicable fund. Management has indicated that
they are not aware of any instances of noncompliance that would have a material effect on the financial statements.
Note 13DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT
General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the
City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a
bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in
the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax
levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy
any additional taxes found necessary for full payment of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2002. Future
scheduled tax levies for all bonds outstanding at December 31, 2002 totaled $15,437,732.
Note 14DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
Fund equities are classified as follows to reflect limitations and restrictions of the respective funds:
SpecialDebtCapital
GeneralRevenueServiceProjectsEnterpriseTotal
Reserved for:
Prepaid items$4,152$-$-$-$-$4,152
Inventory68,175----68,175
Debt service--1,665,451--1,665,451
Projects---899,2384,337,1705,236,408
Designated for:
Working capital2,742,64563,412---2,806,057
Projects-353,446-11,565,955-11,919,401
Equipment-667,108---667,108
$2,814,972$1,083,966$1,665,451$12,465,193$4,337,170$22,366,752
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
Note 15POST EMPLOYMENT BENEFITS
The City provides the ability for employees to maintain insurance coverage with the City after retirement. The retired employee is
responsible for 100% of the cost. The employee has the option of taking of payout of sick leave or have the monies deposited in a
separate medical premium account to be used towards insurance premiums.
Note 16CONDUIT DEBT OBLIGATION
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express
purpose of providing capital financing for a specific third party. The City has issued various revenue bonds to provide
funding to private-sector entities for projects deemed to be in the public interest. Although these bonds bear the name of
the City, the City has no obligation for such debt beyond the resources provided by related leases or loans. Accordingly,
the bonds are not reported as liabilities in the financial statements of the City.
As of December 31, 2002, the following revenue bonds were outstanding:
Date ofOriginalOutstanding
ProjectIssueIssueRetired12/31/2002
Downtown Center7/15/1997$5,645,000$(1,525,000)$4,120,000
Downtown Center7/15/19971,250,000(460,000)790,000
Presbyterian Homes of Andover, Inc.12/1/199813,980,000(525,000)13,455,000
Presbyterian Homes of Andover, Inc.12/1/1998720,000(144,000)576,000
Total$21,595,000$(2,654,000)$18,941,000
Note 17CHANGE IN ACCOUNTING PRINCIPLE / PRIOR PERIOD ADJUSTMENT
Basic Financial Statements – and
In June 1999, the Governmental Accounting Standards Board (GASB) approved Statement No. 34,
Management’s Discussion and Analysis – for State and Local Governments
. The City is required to implement GASB 34 no later than
the year ended December 31, 2003. The City elected to implement GASB 34, including the infrastructure–related portion, during 2002.
The most significant effects of implementing GASB 34 during 2002 are as follows:
x
Government-wide financial statements are prepared using full accrual accounting for all the City’s activities.
x
Infrastructure and construction in progress for governmental activities has been capitalized and all capital assets (except streets
and trails) are depreciated on the government-wide financial statements. See Note 4 for restatement of previously reported
amounts.
x
The basic fund financial statements focus on major funds rather than fund types.
x
A Management Discussion and Analysis (MD&A) is included as required supplementary information.
These and other changes are reflected in the accompanying financial statements (including notes to the financial statements).
The City also implemented the following pronouncements during 2002, which did not have a material effect on the accompanying
financial statements:
x
Recipient Reporting for Certain Shared Nonexchange Revenues
GASB Statement 36, – an Amendment to GASB Statement 33.
x
Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local
GASB Statement 37,
Governments: Omnibus
– an Amendment of GASB Statements No. 21 and No. 34.
x
Certain Financial Statement Note Disclosures
GASB Statement 38, .
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
During 2002, the City amended its capital asset policy. This policy increased the capitalization threshold from $1,000 to $5,000. This
approved change has resulted in the City adjusting its fixed asset listing to only include assets that comply with the amended policy. The
City also performed an extensive physical inventory of all fixed assets which resulted in corrections to prior year financial statements. A
summary of these changes is as follows:
Capital Assets -
GovernmentalNet Assets - Enterprise Funds
FundsWaterSewerTotal
January 1, 2002, as previously reported$17,979,074$13,949,151$16,804,743$30,753,894
Cumulative effect of change in accounting principle:
Infrastructure and construction in progress76,763,279---
Capital asset threshold(644,631)377,918(5,756)372,162
Prior period adjustments4,137,57266,032(92,519)(26,487)
January 1, 2002, as restated$98,235,294$14,393,101$16,706,468$31,099,569
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATIONStatement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
General property taxes$4,271,900$4,271,900$3,782,334$(489,566)
Licenses and permits910,790627,000588,965(38,035)
Intergovernmental632,149632,1491,043,272411,123
Charges for services442,590726,380689,427(36,953)
Fines78,00078,00073,475(4,525)
Investment income185,000185,000109,524(75,476)
Miscellaneous224,500224,500208,790(15,710)
Total revenues6,744,9296,744,9296,495,787(249,142)
Expenditures:
Current:
General government:
Mayor and City council67,74867,74867,69256
Newsletter28,35028,35025,6342,716
City clerk126,605129,301125,5583,743
Administration120,301122,868121,5391,329
Human resources161,37992,00187,7564,245
Financial administration263,713273,852273,152700
Elections43,81343,86038,7125,148
Assessing102,000102,000100,9791,021
Legal133,200133,200142,411(9,211)
Planning and zoning258,584259,070242,37316,697
Information systems131,414130,689128,7591,930
Facility management501,378317,718305,02412,694
Engineering377,324386,007385,203804
Total general government2,315,8092,086,6642,044,79241,872
Public safety:
Police1,203,4961,203,4961,234,866(31,370)
Fire protection748,276742,621705,32037,301
Protective inspection398,437409,070394,04115,029
Civil defense16,55816,6549,6067,048
Animal control13,78013,7809,0764,704
Total public safety2,380,5472,385,6212,352,90932,712
Public works:
Streets and highways393,931398,090392,6525,438
Snow and ice removal533,473540,674521,70018,974
Street lighting177,550177,550165,06212,488
Street signs118,161120,157118,2651,892
Traffic signals30,00030,00014,46415,536
Total public works1,253,1151,266,4711,212,14354,328
Sanitation:
Storm sewers126,298127,90363,73364,170
Tree preservation and weed control44,50544,88643,928958
Total sanitation$170,803$172,789$107,661$65,128
(Continued)
66
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATIONStatement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND(Continued)
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Expenditures:
Current: (continued)
Parks and recreation$627,967$636,322$643,712$(7,390)
Recycling117,929119,628116,0053,623
Unallocated46,08938,90430,6148,290
Total current6,912,2596,706,3996,507,836198,563
Capital outlay
General government65,00065,00058,9436,057
Parks and recreation--18,738(18,738)
Total capital oulay65,00065,00077,681(12,681)
Total expenditures6,977,2596,771,3996,585,517185,882
Revenues over (under) expenditures(232,330)(26,470)(89,730)(435,024)
Other financing sources (uses):
Transfers in242,422259,119217,437(41,682)
Transfers out-(748,893)(748,893)-
Proceeds from the sale of capital assets--16,086(16,086)
Total other financial sources (uses)242,422(489,774)(515,370)(57,768)
Net increase in fund balance$10,092$(516,244)(605,100)$(492,792)
Fund balance - January 13,420,072
Fund balance - December 31$2,814,972
67
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2002
Note ALEGAL COMPLIANCE – BUDGETS
The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of
America. The legal level of budgetary control is at the departmental level for the General Fund. The following is a listing of General
Fund departments whose expenditures exceed budget appropriations.
FinalOver
BudgetActualBudget
General Fund:
General government:
Legal$133,200$142,411$9,211
Public safety:
Police1,203,4961,234,86631,370
Parks and recreation636,322662,45026,128
Note BMODIFIED APPROACH FOR CITY STREETS AND TRAILS INFRASTRUCTURE CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines
infrastructure as the basic physical assets including the street and trail system; water treatment and distribution system; wastewater
collection system; park and recreation lands and improvement system; storm water conveyance system; and building combined with site
amenities such as parking and landscape areas used by the City in the conduct of its business. Each major infrastructure can be divided
into subsystems. For example, the street and trail system can be divided into pavement widths, curb type and sidewalk. City owned
streets could further be classified as collector or local. Subsystem detail is not presented in these basic financial statements; however, the
City maintains detailed information on these subsystems.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the
following requirements:
1)The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up
to-date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate
annual amount to maintain and preserve at the established condition assessment level.
2)The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established
and disclosed condition assessment level.
In fall of 2002, the City conducted a physical condition assessment of the streets and trails. This assessment will be performed every
three years. Each street and trail segment was assigned a physical condition based on potential defects. An Overall Condition Index
(OCI) was assigned to each street and trail and expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable
physical condition and 100 is assigned the physical characteristics of a new street or trail. The following conditions were defined:
ConditionRating
Excellent86 - 100
Very Good71 - 85
Good56 - 70
Fair41 - 55
Poor26 - 40
Very Poor11 - 25
Substandard0 - 10
68
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2002
As of December 31, 2002, the City’s street and trail system was rated at an OCI index of 82 on the average with detail condition as
follows:
% of Street
Conditionand Trails
Excellent to Good88%
Fair7%
Poor to Substandard5%
The City’s streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun’s
ultra-violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations;
(4) water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system
through short-term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended
$1,590,268 on street and trail maintenance for the year ending December 31, 2002. These expenditures delayed deterioration; however,
the overall condition of the system was not improved through these maintenance expenditures. The City has estimated that the amount
of annual expenditures required to maintain the City’s street and trail system at the average OCI rating of good is approximately
$900,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
2002$900,000$1,590,26882
The City has an on-going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve
the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part of
its Pavement Management Program.
69
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70
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
71
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to
expenditures for specified purposes. Revenues for these funds can come from a variety of sources, such as taxes,
fees, gifts and grants or contributions from other governmental entities. Expenditures from these funds are normally
restricted by statute, local ordinance or grant agreements. The funds may be used for either operations or capital
outlay as legal restrictions mandate.
DEBT SERVICE FUNDS
A Debt Service Fund accounts for the accumulation of resources for, and the payment of general long-term principal,
interest and other related costs.
CAPITAL PROJECTS FUNDS
A Capital Projects Fund is used to account for acquisition or construction of major capital facilities financed mainly
with governmental fund resources, general obligation debt, special assessments, special assessment debt, grants or
other resources that are not part of Proprietary Funds or Trust Funds.
72
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEETStatement 11
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2002
Total
Nonmajor
SpecialDebtCapitalGovernmental
RevenueServiceProjectsFunds
Assets
Cash and investments$1,493,717$1,612,760$3,568,032$6,674,509
Accrued interest 4,8785,24311,42821,549
Due from other governmental units--31,42331,423
Accounts receivable - net83,326-14,31597,641
Property taxes receivable:
Unremitted2,35915,08552217,966
Delinquent67326,438-27,111
Special assessments receivable:
Unremitted-3,071-3,071
Delinquent-30,619-30,619
Deferred-1,087,931333,2681,421,199
Notes receivable--37,94337,943
Total assets1,584,9532,781,1473,996,9318,363,031
Liabilities, equity and other credits
Liabilities:
Interfund payable12,000-113,000125,000
Accounts payable947-5,5296,476
Contracts payable21,834-254,971276,805
Due to other governmental units844-5,7066,550
Salaries payable6,366--6,366
Deferred revenue460,8001,144,989371,2111,977,000
Total liabilities502,7911,144,989750,4172,398,197
Equity and other credits:
Fund balance (deficit):
Reserved-1,636,158899,2382,535,396
Unreserved:
Designated1,083,966-2,458,5773,542,543
Undesignated(1,804)-(111,301)(113,105)
Total equity and other credits1,082,1621,636,1583,246,5145,964,834
Total liabilities, equity and other credits$1,584,953$2,781,147$3,996,931$8,363,031
73
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 12
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2002
Total Nonmajor
SpecialDebtCapitalGovernmental
RevenueServiceProjectsFunds
Revenues:
General property taxes$200,991$501,108$44,451$746,550
Tax increment collections-732,555146,012878,567
Intergovernmental33,114362,65330,604426,371
Special assessments-217,00341,034258,037
Charges for services181,514--181,514
Investment income48,48377,613149,575275,671
Miscellaneous
Park dedication fees--280,312280,312
Connection charges--349,952349,952
Other93,278-35,509128,787
Total revenues557,3801,890,9321,077,4493,525,761
Expenditures:
Current:
General government107,431-21,769129,200
Public works110,521-483,786594,307
Sanitation271-2,2812,552
Parks and recreation--45,44945,449
Economic development155,684-565,276720,960
Capital outlay:
Public safety27,717-289,982317,699
Public works106,003-567,297673,300
Sanitation65,215--65,215
Parks and recreation31,898-646,852678,750
Debt service:
Principal retirement-2,630,000-2,630,000
Interest-1,476,785-1,476,785
Paying agent fees-3,415-3,415
Professional service-8,601-8,601
Construction/acquisition costs--116,925116,925
Total expenditures604,7404,118,8012,739,6177,463,158
Revenues over (under) expenditures(47,360)(2,227,869)(1,662,168)(3,937,397)
Other financing sources (uses):
Transfers in38,4441,598,105295,9011,932,450
Transfers out(745,337)(733)(1,072,690)(1,818,760)
Proceeds from sale of capital assets44,905-2,078,9702,123,875
Total other financing sources (uses)(661,988)1,597,3721,302,1812,237,565
Net increase (decrease) in fund balance(709,348)(630,497)(359,987)(1,699,832)
Fund balance - January 11,791,5102,266,6553,606,5017,664,666
Fund balance - December 31$1,082,162$1,636,158$3,246,514$5,964,834
74
NONMAJORSPECIAL REVENUE FUNDS
The City of Andover had the following Special Revenue Funds during the year:
Forestry- This fund was established to account for the protection of forest resources and the development of control
plans to ensure preservation or restoration of these resources.
LRRWMO- This fund is used to account for the City’s involvement with the Lower Rum River Watershed
Management Organization (LRRWMO).
Drainage and Mapping- This fund accounts for resources necessary to maintain existing maps and developing new
maps and mapping systems for the City.
EDA General- This fund was established to account for activities designed to promote quality economic
development within in the community.
Trail and Transportation- This fund is used to account for contributions associated with land development to be
used for constructing and upgrading the City’s trail system.
Septic Disposal- This fund accounts for the activity of sewage dumping through an approved dumping station in the
City. Currently no station exists and this fund was closed in 2002.
Right-of-Way Management/Utility- This fund is used to account for activity associated with the management of the
public right-of-ways.
Capital Equipment Reserve- This fund is used to account for the capital equipment/projects levy and the various
capital expenditures it will be used for.
Developer Seal Coating- This fund accounts for the contributions associated with land development to be used for
the respective developments first application of crack seal and seal coat.
Oak Wilt Suppression Program- This fund is used to account for grants from the state and federal government used
to assist in the suppression or removal of oak wilt diseased trees.
75
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2002
Drainage
and
ForestryLRRWMOMapping
Assets
Cash and investments$13,440$24,639$1,602
Accrued interest4481-
Accounts receivable---
Property taxes receivable:
Unremitted-272-
Delinquent-673-
Total assets13,48425,6651,602
Liabilities and Fund Balance
Liabilities:
Interfund payable--12,000
Accounts payable--47
Contracts payable---
Due to other governmental units-94-
Salaries payable-721-
Deferred revenue-673-
Total liabilities-1,48812,047
Fund balance (deficit):
Unreserved:
Designated for working capital6,19415,536-
Designated for projects7,290--
Designated for equipment---
Undesignated-8,641(10,445)
Total fund balance (deficit)13,48424,177(10,445)
Total liabilities and fund balance$13,484$25,665$1,602
76
Statement 13
Total
Right-of-WayCapitalNonmajor
EDATrail andManagement/EquipmentDeveloperSpecial Revenue
GeneralTransportationUtilityReserveSeal CoatingFunds
$14,470$72,694$117,907$662,832$586,133$1,493,717
-2403892,1891,9354,878
863-82,463--83,326
---2,087-2,359
-----673
15,33372,934200,759667,108588,0681,584,953
-----12,000
900----947
7721,757---21,834
59720133--844
4,627-1,018--6,366
----460,127460,800
6,20121,7771,151-460,127502,791
9,132-32,550--63,412
-51,157167,058-127,941353,446
---667,108-667,108
-----(1,804)
9,13251,157199,608667,108127,9411,082,162
$15,333$72,934$200,759$667,108$588,068$1,584,953
77
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2002
Drainage
andEDA
ForestryLRRWMOMappingGeneral
Revenues:
General property taxes$-$23,186$-$-
Intergovernmental-2,819--
Charges for Services6,742-10,6912
Investment income2001,164--
Miscellaneous--62988,000
Total revenues6,94227,16911,32088,002
Expenditures:
Current:
General government----
Public works17,57724,6749,347-
Sanitation----
Economic development---155,684
Capital outlay:
Public safety----
Public works----
Sanitation----
Parks and recreation----
Total expenditures17,57724,6749,347155,684
Revenues over (under) expenditures(10,635)2,4951,973(67,682)
Other financing sources (uses):
Transfers in--1,630-
Transfers out(5,631)---
Proceeds from sale of capital assets----
Total financing sources (uses)(5,631)-1,630-
Net increase (decrease) in fund balance(16,266)2,4953,603(67,682)
Fund balance (deficit) - January 129,75021,682(14,048)76,814
Fund balance (deficit) - December 31$13,484$24,177$(10,445)$9,132
78
Statement 14
Total
Nonmajor
Right-of-WayCapitalOak WiltSpecial
Trail andSepticManagement/EquipmentDeveloperSuppressionRevenue
TransportationDisposalUtilityReserveSeal CoatingProgramFunds
$-$-$-$177,805$-$-$200,991
---20,295-10,00033,114
26,344-137,735---181,514
1,798-6,87710,86427,580-48,483
---4,649--93,278
28,142-144,612213,61327,58010,000557,380
---107,431--107,431
5,888-42,785--10,250110,521
-271----271
------155,684
---27,717--27,717
106,003-----106,003
---65,215--65,215
---31,898--31,898
111,89127142,785232,261-10,250604,740
(83,749)(271)101,827(18,648)27,580(250)(47,360)
---20,73310,4505,63138,444
-(8,189)-(731,517)--(745,337)
---44,905--44,905
-(8,189)-(665,879)10,4505,631(661,988)
(83,749)(8,460)101,827(684,527)38,0305,381(709,348)
134,9068,46097,7811,351,63589,911(5,381)1,791,510
$51,157$-$199,608$667,108$127,941$-$1,082,162
79
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80
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for six types of bonded indebtedness:
x
G.O. Revenue Bonds
x
Special Assessment Bonds
x
Tax Increment Bonds
x
Certificates of Indebtedness
x
Permanent Improvement Revolving Bonds
x
State Aid Bonds
G.O. Revenue Bonds– (EDA Public Project Revenue Bonds of 1997) are repaid from annual lease payments from the
City.
Special Assessment Bonds– (issues 1986C/1997C, 1993A, 1994C, 1995A and 1997A) are used to finance assessable
improvements within the City and are repaid primarily from special assessments levied against benefited properties.
Tax Increment Bonds– (Tax Commercial Revitalization and Tax Increment Bonds of 1994B, 1999 and 2000A) are
repaid primarily from tax increments.
Certificates of Indebtedness– (G.O. Refunding Bonds of 1998, G.O. Equipment Certificate of 1999 and 2001C Capital
Notes) are repaid primarily from general property taxes.
Permanent Improvement Revolving (PIR) Bonds– (G.O. PIR Bonds of 2000B and 2001A) are used to finance
assessable improvements within the City and are repaid primarily from special assessments levied against benefited
properties.
State Aid Bonds– (2001B State Aid Bonds) are used to finance MSA eligible cost for road construction and
improvements. These bonds are repaid from a portion of state aid allotments received by the City.
81
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2002
EDA Public
TIFG.O.G.O.G.O.Project
TIFBondsImprovementImprovementImprovementRevenue
Commercialof 1994BBonds ofBonds ofBonds ofBonds
RevitalizationProject 1-21993A1994C1995Aof 1997
Assets
Cash and investments$470,627$106,278$12,182$85,192$373,853$15,025
Accrued interest1,55335472811,235-
Property taxes receivable:
Unremitted5,2961,021----
Delinquent16,100-----
Special assessments receivable:
Unremitted--1,1581,589324-
Delinquent24,426-3,6922,178323-
Deferred393,030-213,768303,192177,941-
Total assets911,032107,653230,807392,432553,67615,025
Liabilities and Fund Balance
Liabilities:
Deferred revenue433,556-217,460305,370178,265-
Fund balance (deficit):
Reserved for debt service477,476107,65313,34787,062375,41115,025
Total liabilities and fund balance$911,032$107,653$230,807$392,432$553,676$15,025
82
Statement 15
Total
G.O.G.O.G.O.Nonmajor
EquipmentTIFTIFPIR FundCapitalPIR FundStateDebt
CertificateBondsBondsBonds ofNotesBonds ofAid BondsService
of 1999of 1999of 2000A2000B2001C2001A2001BFunds
$29,512$47,362$151,471$11,886$68,311$35,531$205,530$1,612,760
97156500392251176795,243
3,157912,707-2,813--15,085
5,467---4,871--26,438
-------3,071
-------30,619
-------1,087,931
38,23347,609154,67811,92576,22035,648206,2092,781,147
5,467---4,871--1,144,989
32,76647,609154,67811,92571,34935,648206,2091,636,158
$38,233$47,609$154,678$11,925$76,220$35,648$206,209$2,781,147
83
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2002
G.O.EDA Public
TIFImprovementG.O.G.O.G.O.Project
TIFBondsRefundingImprovementImprovementImprovementRevenue
Commercialof 1994BBonds ofBonds ofBonds ofBonds ofBonds
RevitalizationProject 1-21986C/1997C1993A1994C1995Aof 1997
Revenues:
General property taxes$-$-$-$5,524$-$-$-
Tax increment collections425,46081,961-----
Intergovernmental40,3077,770-----
Special assessments64,509--84,93554,86412,695-
Investment income17,8793,792-2,2415,10423,150-
Total revenues548,15593,523-92,70059,96835,845-
Expenditures:
Debt service:
Principal retirement320,00090,000-365,000115,000265,00060,000
Interest351,61316,455-42,90328,59068,294123,311
Paying agent fees300--471497449-
Professional services--2,867---2,867
Total expenditures671,913106,4552,867408,374144,087333,743186,178
Revenues over (under) expenditures(123,758)(12,932)(2,867)(315,674)(84,119)(297,898)(186,178)
Other financing sources (uses):
Transfers in152,68324,245-125,00021,560312,985183,660
Transfers out-------
Total other financing sources (uses)152,68324,245-125,00021,560312,985183,660
Net increase (decrease) in fund balance28,92511,313(2,867)(190,674)(62,559)15,087(2,518)
Fund balance - January 1448,55196,3402,867204,021149,621360,32417,543
Fund balance - December 31$477,476$107,653$-$13,347$87,062$375,411$15,025
84
Statement 16
Total
G.O.G.O.G.O.G.O.G.O.Nonmajor
ImprovementRefundingEquipmentTIFTIFPIR FundCapitalPIR FundStateDebt
Bonds ofBonds ofCertificateBondsBondsBonds ofNotesBonds ofAid BondsService
1997A1998of 1999of 1999of 2000A2000B2001C2001A2001BFunds
$-$-$261,887$-$-$-$233,697$-$-$501,108
---7,653217,481----732,555
--29,31569420,604-25,933-238,030362,653
---------217,003
--1,3242,7996,8268412,5181,02410,11577,613
--292,52611,146244,911841262,1481,024248,1451,890,932
605,000-250,00080,000100,000-220,000-160,0002,630,000
42,3898933,18663,475166,660144,54248,584211,733134,9611,476,785
----2882883743743743,415
2,867--------8,601
650,25689283,186143,475266,948144,830268,958212,107295,3354,118,801
(650,256)(89)9,340(132,329)(22,037)(143,989)(6,810)(211,083)(47,190)(2,227,869)
296,325--36,64769,432144,22320,000211,345-1,598,105
-(733)-------(733)
296,325(733)-36,64769,432144,22320,000211,345-1,597,372
(353,931)(822)9,340(95,682)47,39523413,190262(47,190)(630,497)
353,93182223,426143,291107,28311,69158,15935,386253,3992,266,655
$-$-$32,766$47,609$154,678$11,925$71,349$35,648$206,209$1,636,158
85
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86
NONMAJORCAPITAL PROJECT FUNDS
The City of Andover had the following Capital Project Funds during the year:
Storm Sewer Project- This fund was established to account for storm sewer fees and improvements as part of
development and ongoing maintenance.
Sewer Trunk Project- This fund was established to account for access fees and sanitary sewer improvements. It is
also used to reserve monies that will be needed for capital infrastructure replacements in the future.
Tax Increment Projects– This fund was established to account for activities in TIF districts 1-1, 1-2 and all TIF land
sales and expenditures to reach the goals of the TIF district plans.
Park Dedication- This fund was established to account for contributions associated with land development to be
used for constructing and upgrading the City’s park system.
Building Fund- This fund was established to account for miscellaneous building improvement projects for all
facilities.
Old City Hall Remodel- This fund was established to account for the remodel of old city hall and was closed in 2002.
Kelsey Round Lake Park Project- This fund was established to account the activity of the Kelsey Round Lake Project
and was closed in 2002.
Improvement Bonds of 1999C Project- This fund was established to account for various residential improvement
projects within the City that were financed by G.O. Improvement Bonds. This fund was closed in 2002.
Ball Field Development- This fund was established to account for the construction of ball fields at the new Andover
High School. This fund was closed in 2002.
Capital Notes 2001C- This fund was established to account for the purchase of capital equipment that was financed
through the issuance of capital notes. This fund was closed in 2002.
State Aid Bonds 2001B- This fund was established to account for the construction and maintenance of various MSA
eligible projects.
87
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2002
StormSewerTax
SewerTrunkIncrement
ProjectProjectProjects
Assets
Cash and investments$1,699$12,001$2,240,570
Accrued interest-757,070
Due from other governmental units--31,423
Accounts receivable--14,315
Property taxes receivable:
Unremitted---
Special assessments receivable:
Deferred-326,4686,800
Notes receivable--37,943
Total assets1,699338,5442,338,121
Liabilities and Fund Balance
Liabilities:
Interfund payables113,000--
Accounts payable---
Contracts payable-418165,698
Due to other governmental units--5,606
Deferred revenue-326,46844,743
Total liabilities113,000326,886216,047
Fund balance (deficit):
Reserved for projects---
Unreserved:
Designated for projects-11,6582,122,074
Undesignated(111,301)--
Total fund balance (deficit)(111,301)11,6582,122,074
Total liabilities and fund balance$1,699$338,544$2,338,121
88
Statement 17
Total
Nonmajor
CapitalStateCapital
ParkBuildingNotesAid BondsProjects
DedicationFund2001C2001BFunds
$349,711$14,744$16,861$932,446$3,568,032
1,15549-3,07911,428
----31,423
----14,315
522---522
----333,268
----37,943
351,38814,79316,861935,5253,996,931
----113,000
5,419110--5,529
35,707-16,86136,287254,971
100---5,706
----371,211
41,22611016,86136,287750,417
---899,238899,238
310,16214,683--2,458,577
----(111,301)
310,16214,683-899,2383,246,514
$351,388$14,793$16,861$935,525$3,996,931
89
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2002
StormSewerTax
SewerTrunkIncrementParkBuilding
ProjectProjectProjectsDedicationFund
Revenues:
General property taxes$-$-$-$44,451$-
Tax increment collections--146,012--
Intergovernmental-25,530-5,074-
Special assessments-39,9371,097--
Investment income--135,48211,991661
Miscellaneous
Park dedication fees---280,312-
Connection charges-349,952---
Other--21,1629,0155,332
Total revenues-415,419303,753350,8435,993
Expenditures:
Current:
General government----21,769
Public works-291,846---
Sanitation2,281----
Parks and recreation---45,449-
Economic development--565,276--
Capital outlay:
Public safety-----
Public works-----
Parks and recreation---602,944-
Construction/acquisition costs--116,925--
Total expenditures2,281291,846682,201648,39321,769
Revenues over (under) expenditures(2,281)123,573(378,448)(297,550)(15,776)
Other financing sources (uses):
Transfers in -277,833--8,310
Transfers out-(602,039)(283,007)-(9,758)
Proceeds from sale of capital assets--2,061,402--
Total other financing sources (uses)-(324,206)1,778,395-(1,448)
Net increase (decrease) in fund balance(2,281)(200,633)1,399,947(297,550)(17,224)
Fund balance - January 1(109,020)212,291722,127607,71231,907
Fund balance - December 31$(111,301)$11,658$2,122,074$310,162$14,683
90
Statement 18
Total
Nonmajor
Old CityKelsey RoundImprovementBallCapitalStateCapital
HallLake ParkBonds ofFieldNotesAid BondsProjects
RemodelProject1999C ProjectDevelopment2001C2001BFunds
$-$-$-$-$-$-$44,451
------146,012
------30,604
------41,034
-----1,441149,575
------280,312
------349,952
------35,509
-----1,4411,077,449
------21,769
-712,233-50,543139,093483,786
------2,281
------45,449
------565,276
----289,982-289,982
----281,178286,119567,297
---43,908--646,852
------116,925
-712,23343,908621,703425,2122,739,617
-(71)(2,233)(43,908)(621,703)(423,771)(1,662,168)
-9,758----295,901
(8,310)-(169,576)---(1,072,690)
----17,568-2,078,970
(8,310)9,758(169,576)-17,568-1,302,181
(8,310)9,687(171,809)(43,908)(604,135)(423,771)(359,987)
8,310(9,687)171,80943,908604,1351,323,0093,606,501
$-$-$-$-$-$899,238$3,246,514
91
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRYStatement 19
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Intergovernmental$5,000$5,000$-$(5,000)
Charges for Services14,00014,0006,742(7,258)
Investment income750750200(550)
Total revenues19,75019,7506,942(12,808)
Expenditures:
Current:
Public works17,31617,31617,577(261)
Revenues over (under) expenditures2,4342,434(10,635)(12,547)
Other financing sources (uses):
Transfers out-(5,296)(5,631)(335)
Net increase (decrease) in fund balance$2,434$(2,862)(16,266)$(12,882)
Fund balance (deficit) - January 129,750
Fund balance (deficit) - December 31$13,484
92
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMOStatement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
General property taxes$25,959$25,959$23,186$(2,773)
Intergovernmental--2,8192,819
Investment income1251251,1641,039
Total revenues26,08426,08427,1691,085
Expenditures:
Current:
Public works26,91026,91024,6742,236
Net increase (decrease) in fund balance$(826)$(826)2,495$(1,151)
Fund balance (deficit) - January 121,682
Fund balance (deficit) - December 31$24,177
93
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DRAINAGE AND MAPPINGStatement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Charges for Services$48,000$48,000$10,691$(37,309)
Investment income1,2001,200-(1,200)
Miscellaneous1,3001,300629(671)
Total revenues50,50050,50011,320(39,180)
Expenditures:
Current:
Public works51,93551,9359,34742,588
Revenues over (under) expenditures(1,435)(1,435)1,973(81,768)
Other financing sources (uses):
Transfers in-1,6301,630-
Net increase (decrease) in fund balance$(1,435)$1953,603$(81,768)
Fund balance (deficit) - January 1(14,048)
Fund balance (deficit) - December 31$(10,445)
94
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERALStatement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Charges for Services$-$-$2$2
Investment income5,0005,000-(5,000)
Miscellaneous132,378132,37888,000(44,378)
Total revenues137,378137,37888,002(49,376)
Expenditures:
Current:
Economic development138,728138,728155,684(16,956)
Net increase (decrease) in fund balance$(1,350)$(1,350)(67,682)$(32,420)
Fund balance (deficit) - January 176,814
Fund balance (deficit) - December 31$9,132
95
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - TRAIL AND TRANSPORTATIONStatement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Charges for Services$20,800$20,800$26,344$5,544
Investment income3,0003,0001,798(1,202)
Total revenues23,80023,80028,1424,342
Expenditures:
Current:
Public works--5,888(5,888)
Capital outlay:
Public works128,150128,150106,00322,147
Total expenditures128,150128,150111,89116,259
Net increase (decrease) in fund balance$(104,350)$(104,350)(83,749)$(11,917)
Fund balance (deficit) - January 1134,906
Fund balance (deficit) - December 31$51,157
96
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - SEPTIC DISPOSALStatement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Charges for Services$500$500$-$(500)
Investment income200200-(200)
Total revenues700700-(700)
Expenditures:
Current:
Sanitation1,1201,120271849
Revenues over (under) expenditures(420)(420)(271)(1,549)
Other financing sources (uses):
Transfers out-(8,464)(8,189)-
Net increase (decrease) in fund balance$(420)$(8,884)(8,460)$(1,549)
Fund balance (deficit) - January 18,460
Fund balance (deficit) - December 31$-
97
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITYStatement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Charges for Services$30,975$30,975$137,735$106,760
Investment income8008006,8776,077
Total revenues31,77531,775144,612112,837
Expenditures:
Current:
Public works50,89150,89142,7858,106
Net increase (decrease) in fund balance$(19,116)$(19,116)101,827$104,731
Fund balance (deficit) - January 197,781
Fund balance (deficit) - December 31$199,608
98
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CAPITAL EQUIPMENT RESERVEStatement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
General property taxes$200,000$200,000$177,805$(22,195)
Intergovernmental--20,29520,295
Investment income40,00040,00010,864(29,136)
Miscellaneous--4,6494,649
Total revenues240,000240,000213,613(26,387)
Expenditures:
Current:
General government284,063284,063107,431176,632
Capital outlay:
Public safety30,00030,00027,7172,283
Sanitation65,12965,12965,215(86)
Parks and recreation--31,898(31,898)
Total expenditures379,192379,192232,261146,931
Revenues over (under) expenditures(139,192)(139,192)(18,648)(173,318)
Other financing sources (uses):
Transfers in20,00020,73320,733-
Transfers out-(671,364)(731,517)(60,153)
Proceeds from the sale of capital assets--44,90544,905
Total financing sources (uses)20,000(650,631)(665,879)(15,248)
Net increase (decrease) in fund balance$(119,192)$(789,823)(684,527)$(188,566)
Fund balance (deficit) - January 11,351,635
Fund balance (deficit) - December 31$667,108
99
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DEVELOPER SEAL COATINGStatement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Investment income$15,000$15,000$27,580$12,580
Other financing sources (uses):
Transfers in-10,45010,450-
Net increase (decrease) in fund balance$15,000$25,45038,030$12,580
Fund balance (deficit) - January 189,911
Fund balance (deficit) - December 31$127,941
100
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - OAK WILT SUPPRESSION PROGRAMStatement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2002
Variance with
Final Budget -
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
Revenues:
Intergovernmental$6,425$6,425$10,000$3,575
Investment income5050-(50)
Miscellaneous2,0002,000-(2,000)
Total revenues8,4758,47510,0001,525
Expenditures:
Current:
Public works8,6008,60010,250(1,650)
Revenues over (under) expenditures(125)(125)(250)3,175
Other financing sources (uses):
Transfers in5,0005,2965,631335
Net increase (decrease) in fund balance$4,875$5,1715,381$3,510
Fund balance (deficit) - January 1(5,381)
Fund balance (deficit) - December 31$-
101
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of goods or services provided by one department or
agency to other departments or agencies of the government and to other government units, on a cost reimbursement
basis.The City of Andover had the following Internal Service Funds during the year:
Central Equipment Maintenance– This fund accounts for the maintenance of the equipment for the City.
Risk Management– This fund accounts for the expenditures in payment of insurance deductibles, loss reduction,
safety training and administrative expense.
102
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET ASSETSStatement 29
INTERNAL SERVICE FUNDS
December 31, 2002
Central
EquipmentRiskTotal
MaintenanceManagementCurrent Year
Assets
Current assets:
Cash and cash equivalents$97,499$71,258$168,757
Accrued interest322235557
Prepaid items-35,85135,851
Inventories - at cost45,757-45,757
Total assets143,578107,344250,922
Liabilities
Current liabilities:
Accounts payable5,359-5,359
Due to other governmental units80850858
Salaries payable6,3003976,697
Total liabilities12,46744712,914
Net assets
Unrestricted$131,111$106,897$238,008
103
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 30
CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2002
Central
EquipmentRiskTotal
MaintenanceManagementCurrent Year
Operating revenues:
User charges$435,998$-$435,998
Other-31,23531,235
Total operating revenues435,99831,235467,233
Operating expenses:
Personal services169,6719,778179,449
Supplies125,682162125,844
Other service charges96,1547,860104,014
Total operating expenses391,50717,800409,307
Operating income (loss)44,49113,43557,926
Nonoperating revenues (expenses):
Investment income4,3733,7338,106
Change in net assets48,86417,16866,032
Net assets - January 182,24789,729171,976
Net assets - December 31$131,111$106,897$238,008
104
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWSStatement 31
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2002
Central
EquipmentRiskTotal
MaintenanceManagementCurrent Year
Cash flows from operating activities:
Receipts from customers and users$435,998$31,235$467,233
Payment to suppliers(240,338)(43,948)(284,286)
Payment to employees(170,611)(9,689)(180,300)
Net cash flows from operating activities25,049(22,402)2,647
Cash flows from investing activities:
Investment income4,0513,7147,765
Net increase in cash and cash equivalents29,100(18,688)10,412
Cash and cash equivalents - January 168,39989,946158,345
Cash and cash equivalents - December 31$97,499$71,258$168,757
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) $44,491$13,435$57,926
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in prepaid items-(35,851)(35,851)
Decrease (increase) in inventory(16,451)-(16,451)
Increase (decrease) in accounts payable(2,859)(125)(2,984)
Increase (decrease) in due to other governmental units80850858
Increase (decrease) in salaries payable48289571
Increase (decrease) in compensated absences(1,422)-(1,422)
Total adjustments(19,442)(35,837)(55,279)
Net cash provided by operating activities$25,049$(22,402)$2,647
105
AGENCY FUNDS
Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,
private organizations, other governmental units and/or other funds. The City of Andover had the following Agency
Funds during the year:
General Escrow– This fund is used to account for distribution of funds for insurance premiums of retirees.
General Agency– This fund is used to account for the collection and distribution of funds relating to development
activities.
106
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET ASSETSStatement 32
FIDUCIARY FUNDS
December 31, 2002
Agency
GeneralGeneral
Escrow FundAgency FundTotal
Assets
Cash and investments$23,891$305,456$329,347
Liabilities
Contracts payable-2,2482,248
Deposits payable23,891303,208327,099
Total liabilities$23,891$305,456$329,347
107
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
108
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF CAPITAL ASSETS USED IN THE OPERATIONStatement 33
OF GOVERNMENTAL FUNDS
SCHEDULE BY SOURCE
For The Year Ended December 31, 2002
BalanceAdjustmentsBalance
January 1,Due ToDecember 31,
Description2002RestatementAdditionsDeletions2002
Land and improvements$2,741,610$6,034,944$-$(763,444)$8,013,110
Buildings and improvements8,191,297(2,547,373)86,659(20,371)5,710,212
Furniture and equipment1,105,675(1,046,288)--59,387
Machinery and equipment5,940,492(926,461)655,113(269,510)5,399,634
Other park improvements-1,978,119796,803-2,774,922
Streets and trails-66,955,0772,785,756-69,740,833
Storm sewers-6,357,718688,242-7,045,960
Construction in progress-3,450,484758,953(3,047,300)1,162,137
Totals$17,979,074$80,256,220$5,771,526$(4,100,625)$99,906,195
Investments in General Fixed Assets from:
General Fund$648,459
Special Revenue Funds568,533
Capital Project Funds98,573,133
Donations41,099
Other74,971
Total investments in general fixed assets$99,906,195
109
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSETS USED IN THE OPERATION
OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2002
Land &Buildings &Furniture &Machinery &
Function and ActivityImprovementsImprovementsEquipmentEquipment
General government:
Administration$-1,710,318$-$-
Financial adminstration--22,787-
Planning and zoning---14,312
Engineering--18,29786,225
Total general government-1,710,31841,084100,537
Public safety:
Fire protection-1,254,56618,3032,100,187
Protective inspection---104,107
Civil defense-124,320-6,928
Total public safety-1,378,88618,3032,211,222
Public works:
Streets and highways-2,248,321-2,225,448
Snow and ice removal---6,390
Street signs---22,679
Total public works-2,248,321-2,254,517
Sanitation:
Storm sewers---90,989
Parks and recreation3,027,659372,687-742,369
Economic development4,985,451---
Construction in progress----
Totals$8,013,110$5,710,212$59,387$5,399,634
110
Statement 34
Other ParkStreets &StormConstruction
ImprovementsTrailsSewersIn ProgressTotal
$-$-$-$-$1,710,318
----22,787
----14,312
----104,522
----1,851,939
----3,373,056
----104,107
----131,248
----3,608,411
-69,740,833--74,214,602
----6,390
----22,679
-69,740,833--74,243,671
--7,045,960-7,136,949
2,774,922---6,917,637
----4,985,451
---1,162,1371,162,137
$2,774,922$69,740,833$7,045,960$1,162,137$99,906,195
111
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSETS USED IN THE OPERATIONStatement 35
OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2002
BalanceAdjustmentsBalance
January 1,Due ToDecember 31,
Function and Activity2002RestatementAdditionsDeletions2002
General government:
Mayor and City council$16,209$(16,209)$-$-$-
City clerk13,598(13,598)---
Administration1,689,875(38,500)58,943-1,710,318
Financial adminstration60,873(38,086)--22,787
Planning and zoning48,888(34,576)--14,312
Information services32,957(32,957)---
Engineering161,289(56,767)--104,522
Total general government2,023,689(230,693)58,943-1,851,939
Public safety:
Fire protection3,425,660(238,543)289,982(104,043)3,373,056
Protective inspection145,813(41,706)--104,107
Civil defense120,8383,06427,717(20,371)131,248
Total public safety3,692,311(277,185)317,699(124,414)3,608,411
Public works:
Streets and highways6,750,13664,638,3252,991,608(165,467)74,214,602
Snow and ice removal7,514(1,124)--6,390
Street signs38,872(16,193)--22,679
Total public works6,796,52264,621,0082,991,608(165,467)74,243,671
Sanitation:
Storm sewers599,5795,849,128688,242-7,136,949
Parks and recreation4,855,7391,105,817956,081-6,917,637
Recycling11,234(11,234)---
Economic development-5,748,895-(763,444)4,985,451
Construction in progress-3,450,484758,953(3,047,300)1,162,137
Totals$17,979,074$80,256,220$5,771,526$(4,100,625)$99,906,195
112
SUPPLEMENTARY FINANCIAL INFORMATION
113
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2002
Authorized
IssueMaturityInterestand
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
1997 Public Project Revenue Bonds9/1/199712/1/20164.50-5.90%$2,350,000
Special Assessment Bonds:
1993A G.O. Improvement Bonds8/1/19938/1/20034.00-4.75%3,650,000
1994C G.O. Improvement Bonds10/1/19942/1/20065.05-5.75%1,140,000
1995A G.O. Improvement Bonds7/1/19952/1/20064.85-5.30%2,605,000
1997A G.O. Improvement Bonds5/1/199712/1/20024.20-4.80%3,120,000
1997B G.O. Improvement Bonds7/1/199712/1/20033.90-4.70%6,315,000
1999 G.O. Improvement Bonds10/1/199912/1/20043.75-4.40%3,525,000
Total special assessment bonds20,355,000
Tax Increment Bonds:
1994B G.O. Tax Increment Refunding Bonds5/1/19945/1/20046.97-7.87%885,000
1995D Tax Increment Bonds10/1/19952/1/20134.50-5.60%6,055,000
1996 Tax Increment Bonds6/1/19968/1/20124.75-5.40%2,055,000
1999 Tax Increment Bonds6/1/199912/1/20124.00-5.00%1,500,000
2000A Tax Increment Bonds9/1/20002/1/20106.80-7.10%2,445,000
Total tax increment bonds12,940,000
Certificates of Indebtedness:
1999 G.O. Equipment Certificates6/1/19992/1/20043.70-4.00%1,050,000
2001C G.O. Capital Notes6/5/20012/1/20062.90-3.80%1,210,000
Total certificates of indebtedness2,260,000
Permanent Improvement Revolving Bonds:
2000B Permanent Improvement Revolving Bonds9/1/20002/1/20074.20-4.375%3,350,000
2001A Permanent Improvement Revolving Bonds6/5/20012/1/20073.20-4.00%4,975,000
Total permanent improvement revolving bonds8,325,000
State Aid Bonds:
2001B State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000
Total Bonded Indebtedness48,985,000
Compensated absences314,213
Total governmental activities indebtedness49,299,213
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000
Compensated absences48,630
Total business-type activities indebtedness9,828,630
Total City indebtedness$59,127,843
114
Exhibit 1
Principal Payments
2003 Payment
PriorCurrentOutstanding
YearsYear12/31/02PrincipalInterestTotal
$175,000$60,000$2,115,000$70,000$120,310$190,310
2,920,000365,000365,000365,00017,338382,338
565,000115,000460,000120,00022,302142,302
1,145,000265,0001,195,000280,00054,665334,665
2,515,000605,000----
3,215,0002,325,000775,000775,00034,875809,875
1,410,0002,115,000----
11,770,0005,790,0002,795,0001,540,000129,1801,669,180
630,00090,000165,00090,0009,43599,435
830,000225,0005,000,000225,000253,275478,275
340,00095,0001,620,000105,00083,587188,587
50,00080,0001,370,000110,00059,475169,475
50,000100,0002,295,000120,000159,700279,700
1,900,000590,00010,450,000650,000565,4721,215,472
225,000250,000575,000270,00017,600287,600
-220,000990,000230,00031,338261,338
225,000470,0001,565,000500,00048,938548,938
--3,350,000610,000131,063741,063
--4,975,000920,000166,1321,086,132
--8,325,0001,530,000297,1951,827,195
-160,0002,595,000125,000111,030236,030
14,070,0007,070,00027,845,0004,415,0001,272,1255,687,125
--314,213---
14,070,0007,070,00028,159,2134,415,0001,272,1255,687,125
--9,780,000-505,170505,170
--48,630---
--9,828,630-505,170505,170
$14,070,000$7,070,000$37,987,843$4,415,000$1,777,295$6,192,295
115
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF TAX CAPACITY RATES AND LEVIESExhibit 2
Taxes Payable
20032002
Tax capacity values$17,951,904$15,712,356
Captured tax increment value(1,199,777)(900,404)
Fiscal disparities - contribution(503,337)(457,955)
Local taxable value16,248,79014,353,997
Fiscal disparities - distribution2,510,3732,236,181
Adjusted tax capacity$18,759,163$16,590,178
20032002
CertifiedTax CapacityCertifiedTax Capacity
LevyRateLevyRate
General Revenue Levy:
General Fund$4,505,780$4,157,891
Fire Relief43,75043,750
Capital Equipment/Projects203,200200,000
Parks Projects50,80050,000
Road and Bridge619,611597,396
Total General Revenue Levy5,423,14128.899%5,049,03729.863%
Debt Service Levy:
1999 G.O. Equipment Certificate301,980291,703
2001C G.O. Capital Note274,404259,978
2003 G.O. Equipment Certificate200,000-
Total Debt Service Levy776,3844.138%551,6813.263%
Lower Rum River Watershed24,0000.339%25,7590.385%
Total$6,223,52533.376%$5,626,47733.511%
116
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIESExhibit 3
GENERAL OBLIGATION BONDS
December 31, 2002
Tax Increment BondsCertificates of Indebtedness
Taxes
Payable1994B1995D199619992000A19992001CTotal
2003$99,435$478,275$188,588$169,475$279,700$287,600$261,338$1,764,411
200477,951492,225193,600194,250360,713311,100263,5171,893,356
2005-577,950198,080188,650438,475-269,7241,672,879
2006-634,350206,955182,980431,600-270,0351,725,920
2007-638,125209,955177,170429,025--1,454,275
2008-639,988217,305171,290439,788--1,468,371
2009-639,875223,725165,270447,275--1,476,145
2010-637,962229,365159,110222,633--1,249,070
2011-658,525239,030152,880---1,050,435
2012-651,500242,420146,450---1,040,370
2013-642,500-----642,500
$177,386$6,691,275$2,149,023$1,707,525$3,049,209$598,700$1,064,614$15,437,732
117
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118
III. STATISTICAL SECTION (UNAUDITED)
119
CITY OF ANDOVER, MINNESOTA
GOVERNMENT-WIDE EXPENSES BY FUNCTIONTable 1
2002
(Unaudited)
Fiscal
Year
Function2002
General government$2,355,954
Public safety2,474,284
Public works4,819,429
Sanitation264,671
Parks and recreation856,806
Recycling116,344
Economic development720,460
Unallocated30,614
Interest on long-term debt1,667,943
Water1,526,526
Sewer1,206,865
Total$16,039,896
Government-wide expenses are not available for years prior to 2002.
2002 GOVERNMENT-WIDE EXPENSES BY FUNCTION
Sewer
General government
8%
15%
Water
10%
Interest
Public safety
10%
15%
Econ dev
4%
Recycling
1%
Park & rec
5%
Public works
Sanitation
30%
2%
120
CITY OF ANDOVER, MINNESOTA
GOVERNMENT-WIDE REVENUES BY SOURCETable 2
2002
(Unaudited)
Fiscal
Year
2002
Program Revenues:
Charges for services$4,179,886
Operating grants and contributions946,495
Capital grants and contributions6,223,233
General Revenues:
General property taxes5,076,374
Tax increment collections842,607
Grants and contributions not restricted
to specific programs763,049
Unrestricted investment earnings1,279,313
Gain on sale of capital assets1,316,054
Total$20,627,011
Government-wide revenues are not available for years prior to 2002.
2002 GOVERNMENT-WIDE REVENUES BY SOURCE
Gain on sale of
Unrestricted
capital assets
investment earnings
6%
6%
Charges for services
Grants and
20%
contributions not
restricted to specific
programs
4%
Operating grants &
Tax increment
contributions
collections
5%
4%
General property
taxes
Capital grants &
25%
contributions
30%
121
CITY OF ANDOVER, MINNESOTA
GENERAL FUNDTable 3
REVENUES BY SOURCE
Last Ten Fiscal Years
(Unaudited)
GeneralLicenseCharges
FiscalPropertyandInter-forInvestment
YearTaxesPermitsgovernmentalServicesFinesIncomeMiscellaneousTotal
1993$1,241,114$470,371$710,910$152,868$38,178$36,938$38,574$2,688,953
19941,472,108410,733745,156227,96040,49643,04348,2802,987,776
19951,810,213410,212747,627549,60646,15215,71616,2703,595,796
19962,180,470390,327857,689447,19957,12552,653116,3964,101,859
19972,383,965456,413988,814578,22148,80071,224186,8634,714,300
19982,804,065694,809880,6971,018,44148,923177,570180,8655,805,370
19993,125,776609,344864,985754,62978,39662,041205,9245,701,095
20003,571,186623,662969,317900,23582,443104,657204,5806,456,080
20013,982,174720,7121,095,727722,69073,699128,701201,2216,924,924
20023,782,334588,9651,043,272689,42773,475109,524208,7906,495,787
2002 GENERAL FUND REVENUES BY SOURCE
Investment Income
Miscellaneous
2%
3%
Charges for Services
11%
Intergovernmental
16%
General Property Tax
58%
License & Permits
9%
Fines
1%
122
CITY OF ANDOVER, MINNESOTA
GENERAL FUNDTable 4
EXPENDITURES BY FUNCTION
Last Ten Fiscal Years
(Unaudited)
FiscalGeneralPublicPublicParks andEconomic
YearGovernmentSafetyWorksSanitationRecreationRecyclingDevelopmentUnallocatedTotal
1993$720,178$937,371$520,802$36,904$232,809$50,461$22,836$53,691$2,575,052
1994804,726970,174625,80551,522294,15849,57421,91686,2782,904,153
1995932,4601,060,210637,55134,795329,41658,2602293,5463,146,260
19961,068,5851,320,680947,47260,517455,51755,170-154,0854,062,026
19971,252,0471,409,0871,044,18395,632383,05962,281-212,5034,458,792
19981,551,4101,528,2821,005,394101,039461,13176,773-75,9504,799,979
19991,700,0861,820,4361,363,875119,957579,91688,307-97,0325,769,609
20001,840,6441,968,7651,591,137100,073538,52391,071-133,3216,263,534
20011,750,5742,087,9241,284,491135,189584,647108,390-145,0686,096,283
20022,103,7352,352,9091,212,143107,661662,450116,005-30,6146,585,517
2002 GENERAL FUND EXPENDITURES BY FUNCTION
Unallocated
Recycling
0%
2%
Park & rec
10%
Sanitation
2%
General government
32%
Public works
18%
Public safety
36%
123
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONSTable 5
Last Ten Fiscal Years
(Unaudited)
TotalDelinquent
TotalCurrentPercentDelinquentTotalCollectionsOutstandingTaxes
TaxTaxof LevyTaxTaxas a Percent ofDelinquentas a Percent of
YearLevyCollectionCollectedCollectionsCollectionsCurrent LevyTaxesCurrent Levy
1993$1,588,431$1,556,62298.00%$31,536$1,588,15899.98%$56,9743.59%
19941,806,2931,774,50798.24%43,5661,818,073100.65%61,4363.40%
19952,139,2782,114,58798.85%44,0842,158,671100.91%50,8272.38%
19962,083,0312,075,33699.63%29,2312,104,567101.03%49,1952.36%
19972,332,2112,306,99998.92%27,2492,334,248100.09%50,2382.15%
19982,698,8712,632,77297.55%27,9942,660,76698.59%151,7165.62%
19993,099,4612,960,83995.53%30,3012,991,14096.51%362,24311.69%
20003,321,9073,283,67198.85%171,7023,455,373104.02%83,2152.51%
20013,873,9483,824,25798.72%39,2263,863,48399.73%129,5623.34%
20024,206,4014,147,76498.61%42,7884,190,55299.62%126,3503.00%
CITY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONSTable 6
Last Ten Fiscal Years
(Unaudited)
TotalDelinquent
CollectionsTaxes
CurrentCurrentPercent ofDelinquentTotalas a Percent ofOutstandingas a Percent of
AssessmentsAssessmentsAssessmentsAssessmentAssessmentCurrentDelinquentCurrent
YearDueCollectedCollectedCollectionsCollectionsAssessments DueAssessmentsAssessments Due
1993$816,859$793,12897.09%$68,760$861,888105.51%$144,92517.74%
1994557,611505,50090.65%44,004549,50498.55%153,74327.57%
1995569,629517,98190.93%28,672546,65395.97%87,35515.34%
1996573,477531,08192.61%28,594559,67597.59%55,7819.73%
1997511,834494,28196.57%27,445521,726101.93%32,1746.29%
1998540,783458,65584.81%19,787478,44288.47%72,34213.38%
1999472,647444,08093.96%38,568482,648102.12%71,48915.13%
2000433,242424,85498.06%36,374461,228106.46%15,8713.66%
2001432,207410,38094.95%5,933416,31396.32%26,2646.08%
2002328,831307,05193.38%5,694312,74595.11%37,40411.37%
124
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGINTable 7
December 31, 2002 and 2001
(Unaudited)
December 31, 2002December 31, 2001
$1,719,429,400$1,497,078,400
Estimated taxable market value
34,388,58829,941,568
Debt limit (2% of market value)
Amount of debt applicable to debt limit:$37,625,000$34,915,000
Total bonded debt
Less: Nonapplicable debt(9,780,000)-
G.O. water revenue bonds(2,795,000)(8,585,000)
Special assessment bonds(10,450,000)(11,040,000)
Tax increment bonds(8,325,000)(8,325,000)
Permanent improvement revolving bonds(2,595,000)(2,755,000)
State aid bonds
Less: Cash and investments in related(112,848)(94,728)
debt service funds
3,567,1524,115,272
Total debt applicable to debt limit
$30,821,436$25,826,296
Legal debt margin
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYTable 8
Years 1994 through 2003
(Unaudited)
Ratio of Tax
Real PropertyPersonal PropertyTotal
Capacity to
TaxEstimatedTaxEstimatedTaxEstimatedTotal Estimated
YearCapacityActual ValueCapacityActual ValueCapacityActual ValueActual Value
1994n/an/an/an/a$9,114,246n/an/a
1995n/an/an/an/a10,271,906n/an/a
1996n/an/an/an/a12,019,964n/an/a
1997n/an/an/an/a13,342,748n/an/a
1998n/an/an/an/a13,887,786n/an/a
1999n/an/an/an/a14,605,633n/an/a
2000$15,690,055$1,146,868,600$615,830$18,139,60016,305,885$1,165,008,2001.40%
200118,348,6621,312,767,000620,79718,285,50018,969,4591,331,052,5001.43%
200215,336,0751,479,078,600359,54017,999,80015,695,6151,497,078,4001.05%
200317,549,0641,699,227,100402,84020,202,30017,951,9041,719,429,4001.04%
Source: Anoka County Property Tax Division
125
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBTTable 9
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
(Unaudited)
LessRatio of
GrossCash andNetNet BondedNet Bonded
Net TaxBondedInvestmentsBondedDebt toDebt
YearPopulation (1)CapacityDebt (2)On HandDebtTax CapacityPer Capita
199318,304$9,414,093$2,268,000$(3,475)$2,264,52524%$124
199419,4659,993,7052,060,000(18,672)2,041,32820%105
199520,49710,877,3892,207,000(39,677)2,167,32320%106
199621,49512,803,2011,851,000(57,068)1,793,93214%83
199722,36914,112,3043,835,000(130,087)3,704,91326%166
199823,21314,674,0203,430,000(161,907)3,268,09322%141
199924,35815,439,0154,005,000(249,278)3,755,72224%154
200026,58817,207,5903,520,000(13,984)3,506,01620%132
200127,44620,188,3874,210,000(94,728)4,115,27220%150
200228,90816,573,7133,680,000(112,848)3,567,15222%123
(1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
126
CITY OF ANDOVER, MINNESOTA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FORTable 10
GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES
Last Ten Fiscal Years
(Unaudited)
Ratio of
TotalDebt Service
InterestTotalGeneralto General
Debtand FiscalDebtGovernmentalGovernmental
YearPrincipalChargesServiceExpenditures (1)Expenditures
1993$5,748,000$1,598,407$7,346,407$13,951,26253%
19946,468,0001,391,1807,859,18016,070,30549%
19957,843,0001,283,0409,126,04020,191,97945%
19963,551,0001,399,2424,950,24216,491,20130%
19977,621,0001,632,9639,253,96326,041,86436%
19984,585,0001,537,5916,122,59118,409,96633%
19993,775,0001,377,2095,152,20919,937,02326%
20004,580,0001,392,3155,972,31521,766,36527%
20014,845,0001,753,9816,598,98120,273,05733%
20027,070,0001,796,7748,866,77422,388,56940%
(1) Includes all governmental fund types: The General Fund, Special Revenue Funds, Debt Service Funds and
Capital Projects Funds.
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - Table 11
DIRECT AND OVERLAPPING GOVERNMENTS
Years 1994 through 2003
(Unaudited)
Taxes
PayableCity (1)SchoolCountyOtherTotal
1994-----
1995-----
199619.59766.94831.0361.760119.341
199719.80457.91130.9101.780110.405
199821.82454.49730.6182.407109.346
199923.50857.09532.2652.472115.340
200022.73555.58930.8613.134112.319
200122.73650.23028.8592.850104.675
200233.51129.07037.9763.745104.302
200333.37627.80237.7143.755102.647
(1) Includes the Lower Rum River Watershed
Source: Anoka County Property Tax Division
127
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBTTable 12
INCLUDING DEBT RATIOS
December 31, 2002
(Unaudited)
BondedPercentageCity
Gross DebtApplicable toShare of
OutstandingCityDebt
Overlapping Debt:
Anoka County$93,445,0009.0659%$8,471,630
School Districts:
ISD No. 11 Anoka-Hennepin219,612,17712.7111%27,915,123
ISD No. 15 St. Francis60,875,0007.6764%4,673,009
Metro Council842,400,6180.8435%7,105,649
Total Overlapping Debt1,216,332,79548,165,411
Direct Debt:
City of Andover37,625,000100.0000%37,625,000
Total Overlapping and Direct Debt$1,253,957,795$85,790,411
Debt Ratios:
Ratio of debt per capita (27,446 population)$3,126
Ratio of debt to estimated market value of $1,706,397,0005.03%
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 13
December 31, 2002
(Unaudited)
EstimatedNet
PropertyMarketTax
Taxpayers
ClassificationValueCapacity
Anoka Electric / ConnexusUtility$10,198,200$187,734
Presbyterian Homes of AndoverApartment10,036,200150,544
Andover LTD PartnershipMall7,301,300145,276
116 LLCC/I5,752,700114,304
Minnegasco, Inc.Utility5,443,200108,114
United Power AssociationUtility3,541,50068,054
Columbia Park PropertiesMedical Clinic2,640,70052,064
William RademacherC/I2,554,20049,584
Northern States PowerUtility1,454,30029,086
Health PartnersMedical Clinic1,480,30028,856
Kottkes Bus Service, Inc.C/I1,324,50025,740
128
CITY OF ANDOVER, MINNESOTA
BUILDING PERMITS, PROPERTY VALUES AND HOUSEHOLDSTable 14
Last Ten Fiscal Years
(Unaudited)
New Single Family HomesNew Commercial / IndustrialAll Permits (1)
YearPermitsValuationPermitsValuationPermitsValuationHouseholds (2)
1993514$51,482,0005$855,400867$53,950,7485,408
199440040,557,00093,903,72385947,478,8495,917
199530532,202,7761225,133,79683760,590,4236,300
199627228,776,00053,166,05181534,703,3806,610
199728230,844,00057,133,27591042,938,7266,881
199844853,742,1331012,625,9601,05769,529,3497,152
199941147,763,20051,404,0841,10755,075,0897,568
200034246,322,0001412,672,4481,13565,293,6148,107
200128543,378,128821,086,4811,22879,926,9738,439
200221831,848,0001910,616,85199750,401,1598,870
(1) Includes additions and remodelings.
(2) Source: Metropolitan Council
129
CITY OF ANDOVER, MINNESOTA
DEMOGRAPHICSTable 15
(Unaudited)
Percent
U.S. Census
of Change
199020002002*1990 - 2000
Population15,21626,58828,90874.74%
Households4,5198,1078,87079.40%
Household Size (Population/Household)3.373.283.26-2.60%
POPULATION DEMOGRAPHICS (2000 U.S. CENSUS)
Populaton by Age (2000 U.S. Census):PersonsPercent
4 and under2,4429.2%
5 - 92,82210.6%
10 - 142,76310.4%
15 - 192,0247.6%
20 - 249853.7%
25 - 343,84914.5%
35 - 445,83222.0%
45 - 543,48913.1%
55 - 591,0824.1%
60 - 645412.0%
65 - 744591.7%
75 - 842140.8%
85 and over860.3%
Total population26,588100.0%
Total female population13,069
Total male population13,519
2000 median age31.9 yrs
Occupation Breakdown:
Management, professional and related occupations37.0%
Service occupations10.5%
Sales and office occupations28.6%
Farming, fishing and forestry occupations0.1%
Construction, extraction and maintenance occupations10.0%
Production, transportation and material moving occupations13.8%
City ofAnokaState of
AndoverCountyMinnesota
Income Statistics:
1999 per capita income$26,317$23,297$23,198
1999 median household income76,24157,75447,111
1999 median family income78,78564,26156,874
2000 median gross rent772649566
2000 median value owner occupied housing158,400131,300122,400
130
CITY OF ANDOVER, MINNESOTA
MISCELLANEOUS STATISTICAL DATATable 16
December 31, 2002
(Unaudited)
Date incorporated1974
Form of governmentPlan A
Miles of streets
City174
County43
Storm sewer (miles)37
Watermain (miles)52
Sanitary sewer (miles)76
Parks:
Number59
Developed acreage541
Trails (miles)22
Acreage:
Developed13,360
Undeveloped9,680
Population:
2002 Estimate28,908
2000 U.S. Census26,588
1990 U.S. Census15,216
Housing units:
2002 Estimate8,870
2000 U.S. Census8,107
1990 U.S. Census4,519
Largest Employers in the City
Number of
FirmType of Business / ProductEmployees
ISD No 11 Anoka-HennepinElementary and secondary education523
Anoka County Parks and Highway DepartmentsCounty government and services247
Kottkes' Bus Service, Inc.Bus transportation173
Festival FoodsGrocery store120
Presbyterian Homes of AndoverSenior housing and assisted living facilities86
Ed Fields & Sons, Inc.Vegetable farming70
McDonald'sRestaurant60
Meadow Creek Christian SchoolPrivate education K-1260
City of AndoverMunicipal government and services59
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