HomeMy WebLinkAbout2004 CAFR1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
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, 2004
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
I. INTRODUCTORY SECTION
Letter of Transmittal2
Organization10
Organizational Chart11
Certificate of Achievement12
II. FINANCIAL SECTION
Independent Auditor's Report14
Management's Discussion and Analysis16
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net AssetsStatement 127
Statement of ActivitiesStatement 228
Fund Financial Statements:
Balance Sheet - Governmental FundsStatement 330
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental FundsStatement 432
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds Statement 535
Statement of Net Assets - Proprietary FundsStatement 636
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary FundsStatement 738
Statement of Cash Flows - Proprietary FundsStatement 840
Statement of Fiduciary Net Assets - Fiduciary FundsStatement 942
Notes to Financial Statements43
Required Supplementary Information:
Budgetary Comparison Schedule - General FundStatement 1072
Notes to Required Supplementary Information:
Legal Compliance - Budgets74
Modified Approach for City Streets and Trails Infrastructure Capital Assets74
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 1179
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental FundsStatement 1280
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1382
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue FundsStatement 1484
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 1588
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service FundsStatement 1690
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 1794
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project FundsStatement 1896
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
ForestryStatement 1998
LRRWMOStatement 2099
Drainage and MappingStatement 21100
EDA GeneralStatement 22101
Trail and TransportationStatement 23102
Right-of-Way Management/UtilityStatement 24103
Capital Equipment ReserveStatement 25104
Construction Seal CoatingStatement 26105
Community Development Block GrantStatement 27106
Community CenterStatement 28107
Charitable GamblingStatement 29108
Internal Service Funds:
Combining Statement of Net Assets - Internal Service FundsStatement 30110
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Internal Service FundsStatement 31111
Combining Statement of Cash Flows - Internal Service FundsStatement 32112
Agency Funds:
Combining Statement of Net Assets - Fuduciary FundsStatement 33114
Supplementary Financial Information:
Combined Schedule of IndebtednessExhibit 1116
Schedule of Tax Capacity Rates and LeviesExhibit 2118
Schedule of Deferred Tax Levies - General Obligation BondsExhibit 3119
Schedule of Fund TransfersExhibit 4120
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
III. STATISTICAL SECTION (UNAUDITED)
Government-Wide Information:
Government-Wide Expenses By FunctionTable 1124
Government-Wide Revenues By SourceTable 2125
Fund Information:
General Fund Revenues By Source - Last Ten Fiscal YearsTable 3126
General Fund Expenditures By Function - Last Ten Fiscal YearsTable 4127
Property Tax Levies and Collections - Last Ten Fiscal YearsTable 5128
Special Assessment Levies and Collections - Last Ten Fiscal YearsTable 6128
Assessed and Estimated Actual Value of Taxable Property - Years 1995 through 2004Table 7129
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita
Last Ten Fiscal YearsTable 8129
Ratio of Annual Debt Service Expenditures for General Bonded Debt
to Total General Governmental Expenditures - Last Ten Fiscal YearsTable 9130
Property Tax Rates - Direct and Overlapping Governments -
Years 1994 through 2003Table 10130
Computation of Direct and Overlapping Debt Including Debt RatiosTable 11131
Principal TaxpayersTable 12131
Building Permits, Property Values and Households - Last Ten Fiscal YearsTable 13132
DemographicsTable 14133
Miscellaneous Statistical DataTable 15134
I. INTRODUCTORY SECTION
1
1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
March 16, 2005
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
Introductionincludes a list of the City's principal officials as of December 31, 2004, the table of contents, organizational
The
Financial Section
chart, and 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 combining statements, individual fund statements; and, (7) the supplemental information.
Statistical Section
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 changed to “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.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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,
Anoka County Union Newspaper
research 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. The new 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 30,000. 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 had implemented
these changes in 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 2005 and 2006, 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 from 2000 through current 2004. 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 76% of the total in 2004. They are general
property taxes at 65%, and charges for services at 11%. In prior years, intergovernmental revenue was the second largest
category of revenue for the General Fund. Intergovernmental revenue includes state aids, such as local government aid (LGA),
market value homestead credit (MVHC), highway maintenance aid, fire relief aid and police aid; and county grants, such as
recycling and community development.
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 resulting in a significant reduction in intergovernmental revenue.
The City was able to make up this loss in aid through an increased tax levy, 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 resulted in the loss of approximately $590,000 in aid
to Andover. The state allowed cities the ability to levy up to 60% of the lost 2003 aid in 2004.
LGA, HACA and MVHC for 1998 through 2004 are as follows:
Year
LGAHACAMVHCTotal
1998122,651$ 378,975$ -$ 501,626$
1999111,145 462,796 - 573,941
2000119,752 490,237 - 609,989
2001119,758 489,991 - 609,749
2002119,827 - 563,754 683,581
2003*- - 65,632 65,632
2004*- - 57,934 57,934
*Due to the State Legislative actions to deal with the state budget deficit,
the City will not be receiving any LGA and significantly reduced 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 were in place for 2004 that did 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 & 2003
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 & 2003
Taxable Market Value
Residential Homestead
$ 1,213100,000$ 1,175$ 1,163$ 1,000$
2,138150,000 2,025 1,988 1,500
3,063200,000 2,875 2,813 2,000
3,988250,000 3,725 3,638 2,500
4,913300,000 4,575 4,463 3,000
Commercial / Industrial
$ 20,050550,000$ 17,675$ 17,200$ 10,250$
28,050750,000 24,675 24,000 14,250
38,0501,000,000 33,425 32,500 19,250
98,0502,500,000 85,925 83,500 49,250
The City received a substantial amount of revenue from licenses and permits from 1990 through 2004. The past six years are
shown below:
RevenuesChange
1999609,344$ n/a
2000623,662 14,318$
2001720,712 97,050
2002588,965 (131,747)
2003551,385 (37,580)
2004674,008 122,623
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 declined in 2003, as a reduced number of new residential lots are being added to
the overall lot inventory. License and permit fees increased substantially as the number of homes built went from 182 in 2003 to
251 in 2004.
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from
charges for services totaled $647,813 in 2003, and $798,795 in 2004. This increase can be linked to the robust housing market as
mentioned above.
EMPLOYMENT
The City of Andover’s largest employers are government entities. The Anoka-Hennepin 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
and other commercial developments that additional 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 education591
Anoka County Parks and Highway DepartmentsCounty government and services189
Kottkes' Bus Service, Inc.Bus transportation175
Festival FoodsGrocery store95
Columbia Park Medical GroupMedical clinic90
Meadow Creek Christian SchoolPrivate education K-1288
Farmstead at AndoverSenior housing and assisted living facilities84
Ed Fields & Sons, Inc.Vegetable farming70
City of AndoverMunicipal government and services68
McDonald'sRestaurant60
MAJOR INITIATIVES
FOR THE YEAR.
The City has many accomplishments to report for 2004. The following list is a summary of some of the
major initiatives completed throughout the year.
1) The first full year of operations of the City’s 6 million gallon per day (mgd) Water Treatment Plant. This facility
produces water to comply with new state and federal standards for drinking water; the automated production of treated
water meets and/or exceeds all federal health guidelines relating to drinking water standards. Plant completion also
included the construction of an underground 1.5 million gallon reservoir tank at a savings to utility customers of over
$1.3 million in capital costs.
2) The construction of a new Fire Station (#3) in the northeast section of the City to replace the existing fire facility
presently located on the City Center campus on Crosstown Boulevard. This project was authorized after analyzing
several factors associated with a growing service population, improving service response rates, relocation of the
existing station on the east side of heavily used commercial railroad tracks, obsolescence of the existing fire station in
terms of space and staffing needs and supplemented by an updated fire services study. Anticipated occupancy of this
new station is scheduled for January 2005.
3) The construction of a new 135,000 sq. ft. Community Center in partnership with the Greater Minneapolis YMCA. This
facility includes an indoor ice arena seating 800 spectators, an aquatics center with water slides and a fitness center to
be operated by the YMCA, and a fieldhouse, with running track and spectator seating for a wide range of indoor
sporting events. Fund raising in the form of a Capital Campaign continues forward to assist in project financing. The
decision to move forward with the project was made in early 2004, the ice arena opened in November of 2004 and the
rest of the facility is scheduled to open in August of 2005.
4) Continued negotiations with United Properties on the Andover Station south commercial and residential center has led
to the construction of a new 146,000 sq. ft. Target Greatland, a Walgreen’s and the creation of three additional building
pads in the land area. The Andover Economic Development Authority’s efforts required a dramatic reconfiguration of
the area to yield the aforementioned building pads while at the same time creating a host of outdoor pedestrian
amenities, complete with walking trails, a pergola, and a lighted fountain. In addition, Bruggeman Homes is in the
process of constructing 75 high-quality multi-family units on an 8.65 acre site located just south of the new Target
Greatland.
5) The successful hosting of the City’s Second Annual Business Appreciation Day to recognize and build awareness of
the local business community and strengthens relationships with this important element of the Andover community.
This event was coordinated through the Community Development Department and the Anoka Area Chamber of
Commerce.
6) The negotiated acquisition of property for the future expansion of the City Center campus to the west of existing Public
Works facilities. Land negotiations with the property owner resulted in a three phase acquisition schedule of
approximately 29 acres of land was completed in 2003. Throughout 2004, the City negotiated the acquisition of two
additional parcels of land along Crosstown Boulevard just west of the new Water Treatment Facility. These property
acquisitions are anticipated to serve the ultimate expansion of the Public Works facilities, with planning to be part of
the capital improvement planning process.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
7) The development of the Prairie Knoll Park complex including: two large soccer/football fields, one small field, a
parking lot, ice rink, a storage building and internal paved trails. This park was designed by the City‘s Engineering
Department and constructed by a partnership of Public Works staffing and volunteer labor. The final product is a true
testament of what can be accomplished when residents and City staff work together toward a common goal.
8) The successful negotiation with Anoka County to facilitate a signalized intersection at Hanson and Andover
Boulevards. Anoka County’s willingness to facilitate this unscheduled improvement will help the daily commute of a
significant number of Andover and Anoka County residents.
9) The marketing of a new commercial park within the City of Andover, Andover Station North. The Andover Economic
Development Authority along with City staff have created a concept plan for the development of this commercial park
with the expectation that building activity will take place in the summer of 2005 following the construction of Jay
Street in the development area. Adjacent to the commercial park, the City is working with Bruggeman Homes to build
approximately 140 high-quality multi-family units to complement the area.
10) A review of the City’s sewer staging plan was conducted to forecast where the urbanized growth of the City will take
place. The City utilizes this data to plan for infrastructure expansion, residential development, utility rate analysis and
City Department workload assessment.
11) The City Council gave final approval on a "Designated Rural Reserve" area for future urbanized growth in 2003. City
staff has continued to work with the residents and developers to appropriately plan for the 959 acres of land. It is
anticipated that the process to study the feasibility of providing City utility services and determining future
transportation connections in this area will progress over the next few years.
12) The City's first "Comprehensive Annual Financial Report" (CAFR) rather than "Audited Financial Report" for the year
ended December 31, 2002 was awarded the Government Finance Officer's Association’s "Excellence in Financial
Reporting Award.” The City completes this document internally and recognized significant cost savings in the form of
reduced financial consulting fees. The City‘s CAFR for the year ended December 31, 2003 also achieve this award,
and it is anticipated that the City’s 2004 CAFR will also achieve this award.
13) Awarded for the third year in a row the Government Finance Officers Association Distinguished Budget Presentation
Award for the City's 2004 Annual Budget. This award recognizes excellence in the preparation of the City’s budget
document as a policy document, an operations guide, as a financial plan and as a communications device.
14) Council approved the purchase of information technology hardware and software to start the process of digital imaging
a significant number of documents retained by the City. The imaging project will assist the City in staffing and data
storage efficiencies.
15) The completion of the cooperative effort by the City of Andover and Anoka County to signalize the intersection of
Prairie Road and Bunker Lake Boulevard. The signalization will not only provide for better traffic flow on the streets,
but will also provide for a safe pedestrian/trail crossing from the City of Andover to Anoka County’s Bunker Hills
Regional Park.
16) The Fire Department along with the Anoka County Sheriffs Department and Ham Lake fire department co-hosted the
annual Kids Safety Camp in June. This year’s camp was attended by children from all over the Andover, Ham Lake,
East Bethel and Oak Grove areas.
Residential Development
The City continued to grow at a rate which continues to create both immediate short-term and pressing long-term planning and
service related needs. In 2004, the City reviewed plans for a number of new residential developments including Country Oaks
nd
West, Deer Oaks, Hanson Meadows, Kimberly Oaks, Miller’s Woods, Oakview Park 2 Addition, Prairie Cove, Silver Meadows
West, Sophie’s Manor, and Whispering Acre.These plats include a total of 273 rural and urban single-family lots. Private
development activities in a number of subdivisions will require City technical oversight in a variety of different areas.
Commercial Industrial Development
Review of commercial developments also increased in 2004 with review of the CVS Pharmacy, Fairbanks retail building II
(Hanson Commons), Target Greatland, and Walgreens Pharmacy. These projects total 194,337 square feet of office and retail
spaces with potential expansion for each sector in the future.
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
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To the Honorable Mayor and City Council
City of Andover, Minnesota
recreational opportunities, providing cost-effective city services, increased communication between city representatives and the
public and added commercial/retail opportunities.
The City introduced a 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
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 four 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, 2004. This is
the third year in a row 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, 2005 continues to conform to the program requirements and have submitted it to the GFOA to determine its
eligibility for another award.
The GFOA also presented the Certificate of Achievement for Excellence in Financial Reporting Award to the City of Andover
for its 2003 Comprehensive Annual Financial Report. This is the second time the City of Andover has received this award. In
order to receive this award, a government unit must publish an easily readable and efficiently organized comprehensive annual
financial report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting
principles and applicable legal requirements. This award is valid for a period of one year only. We believe this report for 2004
continues to conform to the Certificate of Achievement 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.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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 and members of the City Council 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
City Administrator / Finance Director
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CITY OF ANDOVER, MINNESOT
A
ORGANIZATION
December 31, 2004
OfficeNameTerm
MayorMichael GamacheJanuary 2, 2007
Council MemberDon JacobsonJanuary 2, 2007
Council MemberMichael KnightJanuary 6, 2009
Council MemberKen OrttelJanuary 6, 2009
Council MemberJulie TrudeJanuary 2, 2007
City AdministratorJames DickinsonAppointed
Community Development DirectorWill NeumeisterAppointed
City EngineerDavid BerkowitzAppointed
Finance DirectorJames DickinsonAppointed
Building OfficialDon OlsonAppointed
Public Works SuperintendentFrank StoneAppointed
Fire ChiefDan WinkelAppointed
City Cler
kVicki VolkAppointed
AttorneyWilliam G. Hawkins & AssociatesAppointed
Fiscal ConsultantsEhlers & Associates, Inc.Appointed
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CITY OF ANDOVER
Organizational Chart
City Council
City AdministratorAdvisory Boards
City Attorney
EngineeringFinance
Building InspectionsCity ClerkFire ProtectionPlanning
AdministrationPublic WorksPolice Protection
Financial
EngineeringFire Protection
Clerk's OfficePlanning & ZoningStreets/Highways
AdministrativeCivil Defense
Administration
ServicesServices
Services
Right-of-WayInformation
ProtectiveElectionsSnow & Ice
Human Resources
Systems
ManagementRemoval
Inspections
Assessing
Animal ControlDrainage &Storm Sewer
Newsletter
Mapping
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Lower Rum River
EconomicStreet Lighting
Watershed MgmtManagement
Development
Organization
Authority
ForestryUnallocated
Signage
Community
Center
Trail &Capital Equipment
Traffic Signals
TransportationReserve
Construction
Debt Service Funds
Parks & Recreation
Seal Coating
Water TrunkUnfinanced Projects
Tree Preservation
Storm SewerTax Increment
Recycling
Projects
Sewer Trunk
Building FundWeed Control
Road & BridgePermanent
Water
Improvement
Revolving
Park DedicationG.O. Capital
Sewer
ProjectsNotes
RiskCentral Equipment
Management
11
12
II. FINANCIAL SECTION
13
14
15
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, 2004. 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 9 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 $127,339,779 (Net assets). Of this
amount, $22,815,335 (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 $5,413,510, primarily due to the addition of capital assets.
As of the close of the current fiscal year, the City of Andover’s governmental funds reported combined ending fund balances of $33,500,863.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Reserved85,586$ 35,783$ 5,934,346$ 7,293,690$ 13,349,405$
Designated3,216,979 1,927,381 - 15,213,110 20,357,470
Undesignated- 24,148 - (230,160) (206,012)
$ 1,987,3123,302,565$ 5,934,346$ 22,276,640$ 33,500,863$
The City’s total long-term liabilities increased by $18,554,088 during the current fiscal year, from $38,811,501 to $57,365,589.
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental activities:
Bonds payable28,625,000$ 27,730,000$ (8,884,000)$ 47,471,000$
Compensated absences347,534 275,127 (263,306) 359,355
Total governmental activities28,972,534 28,005,127 (9,147,306) 47,830,355
Business-type activities:
Bonds payable9,780,000 - (310,000) 9,470,000
Compensated absences58,967 50,327 (44,060) 65,234
Total business-type activities9,838,967 50,327 (354,060) 9,535,234
Total City long-term liabilities38,811,501$ 28,055,454$ (9,501,366)$ 57,365,589$
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.
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,
16
Management’s Discussion and Analysis
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, sewer and storm sewer.
The government-wide financial statements can be found on pages 27 through 29 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; debt service funds (DSF): G.O. TIF Refunding Bonds 2004B and G.O. PIR Bonds 2000B; and the following capital projects
funds (CPF): Water Trunk, Road and Bridge, Community Center Project 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 30 through 35 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, sanitary
sewer and storm 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 36 through 41 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 42 of this report.
Notes to the financial statements
. The notes provide additional information that is essential to a full understanding of the data provided in
the government–wide and fund financial statements. The notes to the financial statements can be found on pages 43 through 69 of this report.
17
Management’s Discussion and Analysis
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 79 through 114 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 $127,339,779 at the close of the most recent fiscal year.
The largest portion of the City of Andover’s net assets ($87,342,022 or 69 percent) reflects its investment in capital assets (e.g. land,
buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Andover uses
these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of
Andover's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
CITY OF ANDOVER’S NET ASSETS
Governmental ActivitiesBusiness-Type ActivitiesTotals
200320042003200420032004
Current and other assets27,347,243$ 41,593,528$ 3,447,513$ 3,301,078$ 30,794,756$ 44,894,606$
Capital assets91,026,359 100,705,608 43,339,802 44,758,756 134,366,161 145,464,364
Total assets118,373,602 142,299,136 46,787,315 48,059,834 165,160,917 190,358,970
Long-term liabilities
outstanding28,972,534 47,830,355 9,838,967 9,535,234 38,811,501 57,365,589
Other liabilities4,189,504 5,437,833 233,643 215,769 4,423,147 5,653,602
Total liabilities33,162,038 53,268,188 10,072,610 9,751,003 43,234,648 63,019,191
Net assets:
Invested in capital assets,
net of related debt61,941,541 52,230,713 33,379,384 35,111,309 95,320,925 87,342,022
Restricted4,277,835 17,182,422 437,077 - 4,714,912 17,182,422
Unrestricted18,992,188 19,617,813 2,898,244 3,197,522 21,890,432 22,815,335
Total net assets85,211,564$ 89,030,948$ 36,714,705$ 38,308,831$ 121,926,269$ 127,339,779$
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 ($22,815,335) 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.
Government-wide Activities
Governmental activities increased the City of Andover's net assets by $3,819,384 and business-type activities increased net assets by
$1,594,126. Key elements of the activities are as follows:
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Management’s Discussion and Analysis
City of Andover's Changes in Net Assets
Governmental ActivitiesBusiness-Type ActivitiesTotal
200320042003200420022004
Revenues:
Program revenues:
Charges for services1,721,434$ 2,305,159$ 2,828,020$ 3,326,997$ 4,549,454$ 5,632,156$
Operating grants
and contributions732,011 1,640,389 - - 732,011 1,640,389
Capital grants
and contributions5,350,283 7,010,826 - 214,920 5,350,283 7,225,746
General revenues:
Property taxes5,682,498 6,260,772 - - 5,682,498 6,260,772
Tax increment1,140,040 1,186,396 - - 1,140,040 1,186,396
Grants and contributions
not restricted to
specific programs158,694 141,870 - - 158,694 141,870
Unrestricted investments
earnings568,042 681,563 (94,931) 7,895 473,111 689,458
Total revenues15,353,002 19,226,975 2,733,089 3,549,812 37,313,066 25,509,876
Expenses:
General government2,431,252 2,265,215 - - 2,431,252 2,265,215
Public safety 3,138,0692,766,694 - - 2,766,694 3,138,069
Public works3,361,255 5,268,813 - - 3,361,255 5,268,813
Sanitation160,548 26,843 - - 160,548 26,843
Parks and recreation802,131 2,028,177 - - 802,131 2,028,177
Recycling115,016 113,234 - - 115,016 113,234
Economic development470,172 941,624 - - 470,172 941,624
Interest on long-term debt1,255,888 1,708,303 - - 1,255,888 1,708,303
Water -- 1,737,596 1,956,995 1,737,596 1,956,995
Sewer -- 1,344,857 1,351,506 1,344,857 1,351,506
Storm sewer -- 168,203 389,290 168,203 389,290
Total expenses11,362,956 15,490,278 3,250,656 3,697,791 14,613,612 19,188,069
Increase (decrease) in net
assets before gain on the
sale of capital assets and
transfers3,990,046 3,736,697 (517,567) (147,979) 3,472,479 3,588,718
Gain on the sale of
capital assets591,063 1,817,938 - 6,854 591,063 1,824,792
Transfers(6,426,181) (1,735,251) 6,426,181 1,735,251 - -
Increase in net assets(1,845,072) 3,819,384 5,908,614 1,594,126 4,063,542 5,413,510
Net assets - January 187,056,636 85,211,564 30,806,091 36,714,705 117,862,727 121,926,269
Net assets - December 3185,$ 89,030,948211,564$ 36,714,705$ 38,308,831$ 121,926,269$ 127,339,779$
19
Management’s Discussion and Analysis
Governmental Activities
Following are specific graphs which provide comparisons of the governmental activities revenues and expenditures:
Governmental Activities - Revenues
Unrestricted investments
Charges for services
Grants and contributions
earnings
11%
not restricted for specific
3%
programs
1%
Tax increment
Gain on the sale of
6%
capital assets
9%
Property taxes
30%
Capital grants and
contributions
Operating grants and
32%
contributions
8%
Governmental Activities - Expenses
Interest on long-term
General government
debt
15%
11%
Economic development
Recycling
6%
1%
Parks and recreation
13%
Public safety
Sanitation
20%
0%
Public works
34%
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Management’s Discussion and Analysis
Business-Type Activities
Business-type activities increased net assets by $1,594,126. Below are graphs showing the business-type activities revenue and expense
comparisons:
Business-Type Activities - Revenues
Capital grants and
contributions
Unrestricted
6%
investments earnings
0%
Gain on the sale of
capital assets
0%
Charges for services
94%
Business-Type Activities - Expenses
Storm sewer
11%
Water
Sewer
52%
37%
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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 a 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 $33,500,863.
Approximately 60 percent of this total amount ($20,151,458) constitutes unreserved fund balance. The remainder of the fund balance
($13,349,405) is reserved because it has already been committed 1) to provide for prepaid items ($3,239), 2) to provide for inventory
($82,347), 3) to provide for economic development ($35,783), 4) to pay debt service ($5,934,346) and 5) bond proceeds specified for a
project ($7,293,690).
The general fund increased by $709,538 in 2004, which was directly related to increased revenues collected due to a robust housing market
and a very active commercial development. In addition, expenditures were under budget by $253,307 due to a mild winter, the refunding of a
lease revenue bond for which the debt service payments were coming out of the general fund in the form of a transfer and frugal department
management.
In 2004, the City issued the 2004B G.O. TIF Refunding bonds to advance refund the 1995D TIF Commercial Revitalization bonds in 2005.
As of December 31, 2004, the fund balance is $4,228,387.
In 2004, the City issued $19,580,000 Public Facility Lease Revenue bonds to finance the construction of a community center which includes
an ice arena, field house and an aquatics center.As of December 31, 2004, the fund balance is $7,056,233.
The permanent improvement revolving capital projects fund decreased by $1,402,214 due to calling of the outstanding debt of the 2000B PIR
bonds in 2004.
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 of $3,182,597 (water $1,860,923, sewer $1,242,046 and
storm sewer $79,628) and internal service funds of $270,251. The enterprise funds had increases in net assets in 2004 of $1,599,070 (water
$527,137, sewer $763,966 and storm sewer $307,967). The increases are primarily due to the capital contributions of equipment and
infrastructure. The internal service funds had decreases in net assets of $11,244.
Budgetary Highlights
General Fund
The revenue and expenditure budget was amended due to the state fire aid revenue exceeding the budget by $59,401 and being passed thru to
the Andover Fire Relief Association. Also, there were three other budget adjustments in 2004 for miscellaneous expenditures; two were for
budget carry-forwards from 2003 ($5,200) and one is a carry-forward into 2005 ($5,000).
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,
2004, amounts to $145,464,364 (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. In the fall of 2002, the City conducted a physical
condition assessment of the streets and trails constructed since 1974. This assessment will be performed every three years. 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-
22
Management’s Discussion and Analysis
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 $1,017,481 on
street and trail maintenance for the year ending December 31, 2004. 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 $1,000,000.
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Governmental activities:
Land and improvements8,268,153$ 132,467$ (858,316)$ 7,542,304$
Streets and trails70,608,788 928,615 - 71,537,403
Construction in progress3,654,326 12,174,498 (2,836,834) 12,991,990
Buildings and improvements5,752,375 99,459 (7,000) 5,844,834
Furniture and equipment87,615 66,475 - 154,090
Machinery and equipment5,090,351 462,559 (171,375) 5,381,535
Other park improvements3,000,719 481,690 (504,567) 2,977,842
Total capital assets 96,462,327 14,345,763 (4,378,092) 106,429,998
Less accumulated depreciation for:
Buildings and improvements1,682,384 204,379 (6,533) 1,880,230
Furniture and equipment58,186 6,048 - 64,234
Machinery and equipment2,721,590 428,610 (112,201) 3,037,999
Other park improvements973,808 135,927 (367,808) 741,927
Total accumulated depreciation5, 774,964435,968 (486,542) 5,724,390
Governmental activities
capital assets - net91,026,359 13,570,799 (3,891,550) 100,705,608
Business-type activities:
Land and improvements392,787 332,156 - 724,943
Construction in progress9,104,223 - (9,104,223) -
Buildings and improvements4,735,926 9,147,694 - 13,883,620
Furniture and equipment38,635 - - 38,635
Machinery and equipment900,842 115,083 (21,024) 994,901
Collection and distribution40,522,941 2,185,493 - 42,708,434
Total capital assets
being depreciated55,695,354 11,780,426 (9,125,247) 58,350,533
Less accumulated depreciation for:
Buildings and improvements2,181,029 351,359 - 2,532,388
Furniture and equipment29,819 928 - 30,747
Machinery and equipment539,277 76,462 (21,024) 594,715
Collection and distribution9,605,427 828,500 - 10,433,927
Total accumulated depreciation12, 1,257,249355,552 (21,024) 13,591,777
Business-type activities
capital assets - net43,339,802 10,523,177 (9,104,223) 44,758,756
Total capital assets134,366,161$ 24,093,976$ (12,995,773)$ 145,464,364$
Additional information on the City of Andover’s capital assets can be found in Note 5.
Long-term debt
. At the end of the current fiscal year, the City of Andover had total long-term debt outstanding of $57,365,589, an increase
of $18,554,088 from 2003. General obligation revenue bonds ($29,050,000) were used to finance the water treatment facility and the
community center (currently being constructed). Tax increment bonds ($13,215,000) financed the City’s economic development plan.
Certificates of indebtedness ($766,000) financed capital equipment purchases. Capital improvement bonds ($3,890,000) financed the
23
Management’s Discussion and Analysis
construction of Fire Station #3 and the purchase of the Public Works building from the EDA. Permanent improvement revolving bonds
($7,680,000) financed improvement projects within the City and are assessed to the benefiting properties. State aid bonds ($2,340,000) were
used to finance Municipal State Aid (MSA) eligible road projects.
Additional long-term debt in the amount of $424,589 is for compensated absences.
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
G.O. revenue bonds19,580,000$ 9,470,000$ 29,050,000$
Tax increment bonds13,215,000 - 13,215,000
Certificates of indebtedness766,000 - 766,000
Capital improvement bonds3,890,000 - 3,890,000
Permanent improvement revolving bonds7,680,000 - 7,680,000
State aid bonds2,340,000 - 2,340,000
Total bonds payable47,471,000 9,470,000 56,941,000
Compensated absences359,355 65,234 424,589
Total47,830,355$ 9,535,234$ 57,365,589$
The City of Andover maintains an A+ rating with a stable outlook 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 $46,859,544. Only $23,420,678 of the City's outstanding debt is counted within the
statutory limitation.
Additional information on the City of Andover’s long-term debt can be found in Note 6.
Requests for information.
This financial report is designed to provide a general overview of the City of Andover’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to the City of Andover, Attn: Finance Director, 1685 Crosstown Boulevard NW, Andover,
Minnesota 55304 or by calling 763-755-5100.
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BASIC FINANCIAL STATEMENTS
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26
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF NET ASSETSStatement 1
December 31, 2004
Primary Government
GovernmentBusiness-TypeTotals
ActivitiesActivities20042003
Assets:
Cash and investments23,896,753$ 2,306,628$ 26,203,381$ 25,655,468$
Cash and investments with escrow agent -13,460,149 13,460,149 -
Accrued interest 6,773271,232 278,005 74,306
Due from other governmental units146,324 9,484 155,808 79,934
Accounts receivable - net 920,348131,913 1,052,261 831,625
Prepaid items60,184 - 60,184 100,686
Property taxes receivable:
Unremitted -101,356 101,356 184,797
Delinquent105,549 - 105,549 124,610
Special assessments receivable:
Unremitted 602,486 2,546 11,029
Delinquent7,435 7,722 15,157 49,329
Deferred -3,244,260 3,244,260 3,496,053
Notes receivable46,157 - 46,157 15,595
Inventories - at cost119,730 50,063 169,793 171,324
Capital assets - net
Nondepreciable92,071,697 724,943 92,796,640 92,028,277
Depreciable8,633,911 44,033,813 52,667,724 42,337,884
Total assets142,299,136 48,059,834 190,358,970 165,160,917
Liabilities:
Interfund payable14,925 (14,925) - -
Accounts payable178,268 28,599 206,867 119,320
Contracts payable3,471,933 1,713 3,473,646 717,658
Developer advances207,097 - 207,097 2,197,711
Deposits payable3,750 6,784 10,534 8,234
Due to other governmental units83,374 6,983 90,357 115,846
Salaries payable48,297 9,168 57,465 142,474
Unearned revenue426,294 - 426,294 481,668
Accrued interest payable1,003,895 177,447 1,181,342 640,236
Compensated absences:
Due in more than one year 65,234359,355 424,589 406,501
Bonds/notes payable:
Due within one year 320,0008,487,000 8,807,000 7,229,000
Due in more than one year 9,150,00038,984,000 48,134,000 31,176,000
Total liabilities53,268,188 9,751,003 63,019,191 43,234,648
Net assets:
Invested in capital assets, net of related debt52,230,713 35,111,309 87,342,022 95,320,925
Restricted for:
Debt service6,104,771 - 6,104,771 2,173,972
Capital improvements7,293,690 - 7,293,690 895,367
Tax increment purposes3,783,961 - 3,783,961 1,645,573
Unrestricted19,617,813 3,197,522 22,815,335 21,890,432
Total net assets89,030,948$ 38,308,831$ 127,339,779$ 121,926,269$
The accompanying notes are an integral part of these financial statements.
27
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2004
Program Revenues
ChargesOperatingCapital
ForGrants andGrants and
ExpensesServicesContributionsContributions
Functions/Programs
Primary government:
Government activities:
General government$ 814,5182,265,215$ -$ 229,904$
Public safety 936,0613,138,069 323,930 -
Public works5,268,813 495,835 1,214,842 5,913,490
Sanitation26,843 - - -
Parks and recreation2,028,177 29,683 - 867,432
Recycling 29,062113,234 49,345 -
Economic development -941,624 - -
Interest on long-term debt1,708,303 - 52,272 -
Total government activities15,490,278 2,305,159 1,640,389 7,010,826
Business-type activities:
Water 1,723,0681,956,995 - 111,758
Sewer 1,361,8391,351,506 - 60,178
Storm sewer 242,090389,290 - 42,984
Total business-type activities3,697,791 3,326,997 - 214,920
Total primary governmen$ 5,632,15619,188,069$ 1,640,389$ 7,225,746$
t
The accompanying notes are an integral part of these financial statements.
28
Statement 2
Net (Expense) Revenue and Changes in Net Assets
Primary Government
GovernmentalBusiness-TypeTotals (Memorandum Only)
ActivitiesActivities20042003
$ -(1,220,793)$ (1,220,793)$ (1,790,169)$
-(1,878,078) (1,878,078) (1,733,937)
-2,355,354 2,355,354 2,082,232
-(26,843) (26,843) (160,548)
-(1,131,062) (1,131,062) (432,780)
-(34,827) (34,827) (36,996)
-(941,624) (941,624) (470,172)
-(1,656,031) (1,656,031) (1,016,858)
-(4,533,904) (4,533,904) (3,559,228)
(122,169)- (122,169) (337,798)
70,511- 70,511 (35,273)
(104,216)- (104,216) (49,565)
(155,874)- (155,874) (422,636)
(155,874)(4,533,904) (4,689,778) (3,981,864)
General revenues:
General property taxes6,260,772 - 6,260,772 5,682,498
Tax increment collections1,186,396 - 1,186,396 1,140,040
Grants and contributions not
restricted to specific programs141,870 - 141,870 158,694
Unrestricted investment earnings681,563 7,895 689,458 473,111
Gain on sale of capital assets1,817,938 6,854 1,824,792 591,063
Transfers(1,735,251) 1,735,251 - -
Total general revenues, gain on sale of
capital assets and transfers8,353,288 1,750,000 10,103,288 8,045,406
Change in net assets3,819,384 1,594,126 5,413,510 4,063,542
Net assets - beginning85,211,564 36,714,705 121,926,269 117,862,727
Net assets - ending89,030,948$ 38,308,831$ 127,339,779$ 121,926,269$
29
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2004
G.O.
TIF RefundingRoad &Community
Bonds 2004BWater TrunkBridgeCenter Project
GeneralDSFCPFCPFCPF
Assets
Cash and investments$ 3,8313,223,291$ 1,974,938$ 2,265,528$ 1,684,368$
Cash and investments with escrow agent 4,189,429- - - 8,548,055
Accrued interest 8,400 35,127 7,821 8,427 128,709
Due from other governmental units -23,285 - 50,000 -
Accounts receivable - net -60,740 - - -
Interfund receivable -25,000 120,000 - -
Prepaid items -3,239 - - -
Property taxes receivable:
Unremitted -67,139 - 8,120 -
Delinquent -79,708 - - -
Special assessments receivable:
Unremitted -- 829 - -
Delinquent -917 4,429 1,209 -
Deferred -- 399,261 339,612 -
Notes receivable- - - - -
Interfund loan receivable -- - - -
Inventory -82,347 - - -
Total assets3,574,066 4,228,387 2,507,278 2,672,896 10,361,132
Liabilities and Fund Balances
Liabilities:
Interfund payable -- - - -
Accounts payable -58,894 - 1,890 85,567
Contracts payable16,092 - 10,242 11,956 3,213,815
Developer advances- - - 207,097 -
Deposits payable3,750 - - - -
Due to other governmental units -67,200 - 2,435 5,517
Salaries payable -40,618 - - -
Interfund loan payable -- - - -
Deferred revenue -84,947 403,690 340,821 -
Total liabilities -271,501 413,932 564,199 3,304,899
Fund balances:
Reserved for:
Prepaid items -3,239 - - -
Inventory -82,347 - - -
Economic development -- - - -
Debt service- 4,228,387 - - -
Projects- - - - 7,056,233
Interfund loan -- - - -
Unreserved reported in:
Designated:
General fund -3,216,979 - - -
Special revenue funds -- - - -
Capital projects funds -- 2,093,346 2,108,697 -
Undesignated:
Special revenue funds -- - - -
Debt service funds -- - - -
Capital projects funds -- - - -
Total fund balances 4,228,3873,302,565 2,093,346 2,108,697 7,056,233
Total liabilities and fund balance$ 4,228,3873,574,066$ 2,507,278$ 2,672,896$ 10,361,132$
s
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 ne
revenue attributable to business-type activities.
Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are no
reported in the funds.
Net assets of governmental activitie
s
The accompanying notes are an integral part of these financial statements
30
Statement 3
Permanent
Totals (Memorandum Only)
ImprovementOtherIntra
Governmental Funds
RevolvingGovernmentalActivity
CPFFundsEliminations20042003
$ 8,870,7095,687,930$ -$ 23,710,595$ 22,845,297$
722,665- - 13,460,149 -
59,00222,917 - 270,403 65,681
73,039- - 146,324 78,576
71,173- - 131,913 100,686
-125,000 (270,000) - -
-- - 3,239 3,239
-
26,097- - 101,356 184,797
25,841- - 105,549 124,610
1,657- - 2,486 10,767
880- - 7,435 43,631
380,3002,125,087 - 3,244,260 3,496,053
46,157- - 46,157 15,595
-- - - -
-- - 82,347 84,527
10,277,5207,960,934 (270,000) 41,312,213 27,053,459
270,000- (270,000) - -
24,227- - 170,578 87,492
163,61856,210 - 3,471,933 705,494
-- - 207,097 2,197,711
-- - 3,750 2,700
7,847- - 82,999 108,032
4,680- - 45,298 114,431
-- - - -
875,1502,125,087 - 3,829,695 4,161,557
1,345,5222,181,297 (270,000) 7,811,350 7,377,417
-- - 3,239 3,239
-- - 82,347 84,527
35,783- - 35,783 -
1,705,959- - 5,934,346 1,567,365
237,457- - 7,293,690 459,339
-- - - 150,000
-- - 3,216,979 2,505,261
1,927,381- - 1,927,381 1,207,537
5,231,4305,779,637 - 15,213,110 14,698,495
24,148- - 24,148 18,089
-- - - (9,706)
(230,160)- - (230,160) (1,008,104)
8,931,9985,779,637 - 33,500,863 19,676,042
$ 10,277,5207,960,934$ (270,000)$ 41,312,213$ 27,053,459$
$ 19,676,04233,500,863$
91,026,359100,705,608
3,679,8893,403,401
261,626255,326
(29,432,352)(48,834,250)
$ 85,211,56489,030,948$
31
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2004
G.O.G.O. PIR
TIF RefundingBonds
Bonds 2004B2000BWater Trunk
GeneralDSFDSFCPF
Revenues:
General property taxes$ -4,541,227$ -$ -$
Tax increment collections- - - -
Licenses and permits674,008 - - -
Intergovernmental -585,037 - -
Special assessments- - - 45,656
Charges for services -798,795 - -
Fines79,450 - - -
Investment income 35,48258,309 (404) 50,119
Miscellaneous
Park dedication fees- - - -
Connection charges- - - 1,335,347
Other -261,152 - 4,535
s 35,4826,997,978 (404) 1,435,657
Total revenue
Expenditures:
Current:
General government -1,996,633 - -
Public safety -2,730,047 - -
Public works1,085,837 - - 300,954
Sanitation26,732 - - -
Parks and recreation612,147 - - -
Recycling -114,052 - -
Economic development -- - -
Unallocated -21,992 - -
Capital outlay:
General government -- - -
Public safety -- - -
Public works- - - -
Sanitation- - - -
Parks and recreation- - - -
Debt service:
Principal retirement -- 2,740,000 -
Interest 42,422- 59,126 -
Paying agent fees -- 200 -
Professional services 32,577- 925 -
Construction/acquisition costs- - - -
Total expenditures6,587,440 74,999 2,800,251 300,954
s (39,517)410,538 (2,800,655) 1,134,703
Revenues over (under) expenditure
Other financing sources (uses):
Transfers in -299,000 2,790,826 441,850
Transfers out -- - (1,300,904)
Bonds issued- - - -
Refunding bonds issued- 4,260,000 - -
Payment to refunded bonds escrow agent -- - -
Bond premium- 7,904 - -
Bond discount- - - -
Proceeds from the sale of capital assets- - - -
Total other financing sources (uses)299,000 4,267,904 2,790,826 (859,054)
Net increase (decrease) in fund balance709,538 4,228,387 (9,829) 275,649
Fund balance - January 12,593,027 - 9,829 1,817,697
Fund balance - December 313,302,565$ 4,228,387$ -$ 2,093,346$
The accompanying notes are an integral part of these financial statements.
32
Statement 4
t
Permanen
Road &CommunityImprovementOtherIntraTotals (Memorandum Only)
BridgeCenter ProjectRevolvingGovernmentalActivityGovernmental Funds
CPFCPFCPFFundsEliminations20042003
$ -564,918$ -$ 1,166,617$ -$ 6,272,762$ 5,671,277$
-- - 1,193,467 - 1,193,467 1,136,574
-- - - - 674,008 551,385
-972,719 - 197,285 - 1,755,041 890,705
-41,941 3,963,036 192,695 - 4,243,328 5,121,636
-- - 590,450 - 1,389,245 863,794
-- - - - 79,450 68,686
131,12443,607 (6,168) 366,239 - 678,308 563,824
-- - 842,042 - 842,042 357,483
-- - 385,173 - 1,720,520 1,044,752
4,21668,900 20,678 320,556 (22,000) 658,037 392,752
135,3401,692,085 3,977,546 5,254,524 (22,000) 19,506,208 16,662,868
-- - 174,615 - 2,171,248 2,181,354
-- - 185,911 - 2,915,958 2,631,991
-1,707,369 949,547 900,782 - 4,944,489 3,136,081
-- - - - 26,732 80,901
559,979- - 142,974 - 1,315,100 613,078
-- - - - 114,052 114,784
-- - 918,451 - 918,451 471,172
-- - - - 21,992 25,865
-- - 193,408 - 193,408 28,228
-- - 95,803 - 95,803 129,825
-- 98,757 401,293 - 500,050 1,400,722
-- - - - - 311,577
90,387- - 540,739 - 631,126 739,981
-- - 4,099,000 - 6,839,000 6,124,000
-- - 961,815 - 1,063,363 1,276,057
-- - 3,987 - 4,187 3,424
-- - 57,180 - 90,682 28,012
10,213,956169,956 340,630 1,430,111 - 12,154,653 3,513,115
10,864,3221,877,325 1,388,934 10,106,069 - 34,000,294 22,810,167
(10,728,982)(185,240) 2,588,612 (4,851,545) (22,000) (14,494,086) (6,147,299)
-- - 4,998,289 (7,453,965) 1,076,000 1,328,909
(1,316,456)(430,096) (3,990,826) (1,177,121) 7,475,965 (739,438) (485,170)
19,580,000- - 1,700,000 - 21,280,000 6,904,000
-- - 2,190,000 - 6,450,000 -
-- - (2,145,864) - (2,145,864) -
-- - 15,534 - 23,438 5,188
(478,329)- - (19,554) - (497,883) (3,169)
-- - 2,872,654 - 2,872,654 841,906
17,785,215(430,096) (3,990,826) 8,433,938 22,000 28,318,907 8,591,664
7,056,233(615,336) (1,402,214) 3,582,393 - 13,824,821 2,444,365
-2,724,033 7,181,851 5,349,605 - 19,676,042 17,231,677
$ 7,056,2332,108,697$ 5,779,637$ 8,931,998$ -$ 33,500,863$ 19,676,042$
33
- This page intentionally left blank -
34
CITY OF ANDOVER, MINNESOT
A
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2004
20042003
Amounts reported for governmental activities in the
statement of activities (page 33) are different because:
Net changes in fund balances - total governmental funds (page 33)13,824,821$ 2,444,365$
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 reporte
d
as depreciation expense. This is the amount by which capital outlays exceeded depreciation
in the current period. 5,300,17812,805,778
The net effect of various miscellaneous transactions involving capital assets is to decrease
net assets (i.e., sales, trade-ins, and donations).(1,054,716) (240,365)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.(276,488) (1,320,562)
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 an
y
effect on net assets. This amount is the net effect of these differences in the treatment of
long-term debt and related items.(18,846,000) (780,000)
Transfer out of governmental capital assets contributed to Enterprise Funds.(2,071,813) (7,269,920)
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. (13,152)(555,898)
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 t
o
governmental activities. 34,384(6,300)
Change in net assets of governmental activities (page 29)3,819,384$ (1,845,072)$
The accompanying notes are an integral part of these financial statements.
35
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2004
WateSeweStorm Sewe
rrr
Asset
s
Current assets:
$ 871,6611,414,138$ 20,829$
Cash and cash equivalent
s
Accrued interes 2,7163,970 87
t
8,984- 500
Due from other governmental units
Accounts receivable - ne 390,695458,028 71,625
t
Prepaid items- - -
Special assessments receivable
-60 -
Unremitted
Delinquen 4,9212,419 382
t
-50,063 -
Inventories - at cost
Total current asset 1,278,9771,928,678 93,423
s
Noncurrent assets:
Capital assets:
Lan -724,943 -
d
-13,883,620 -
Buildings and structures
Machinery and equipmen 389,553248,419 395,564
t
21,206,74013,452,836 8,048,858
Distribution and collection system
Construction in progres -- -
s
21,596,29328,309,818 8,444,422
Total capital assets
Less: Allowance for depreciatio (5,811,328)(5,618,720) (2,161,729)
n
Total noncurrent asset 15,784,96522,691,098 6,282,693
s
Total asset 17,063,94224,619,776 6,376,116
s
Liabilitie
s
Current liabilities:
Accounts payabl 6,64818,206 3,745
e
827886 -
Contracts payable
Deposits payabl -6,784 -
e
-177,447 -
Interest payable
Due to other governmental unit 5,5451,325 113
s
3,0385,240 890
Salaries payable
Bonds payable - due within one yea -320,000 -
r
Total current liabilitie 16,058529,888 4,748
s
Noncurrent liabilities:
Bonds payable - due in more than one yea -9,150,000 -
r
Compensated absences payable 35,314 20,873 9,047
Total noncurrent liabilitie 20,8739,185,314 9,047
s
Total liabilitie 36,9319,715,202 13,795
s
Net asset
s
Invested in capital assets, net of related deb 15,784,96513,043,651 6,282,693
t
Restricte -- -
d
1,242,0461,860,923 79,628
Unrestricted
Total net asset$ 17,027,01114,904,574$ 6,362,321$
s
Net assets reported abov
e
Amounts reported for business-type activities in the statement of net assets are different becaus
e
Internal service funds are used by management to charge the cost of equipment maintenanc
e
and insurance to individual funds. This amount is the portion of net revenue attributable t
o
usiness-type activities
b.
Net assets of business-type activitie
s
The accompanying notes are an integral part of these financial statements
36
Statement
6
Totals
Governmental Activities -
TotalsInternal Service Funds
2004200320042003
$ 2,611,5442,306,628$ 186,158$ 198,627$
7,9536,773 829 672
1,3589,484 - -
730,939920,348 - -
52,867- 56,945 44,580
26260 - -
5,6987,722 - -
36,89250,063 37,383 49,905
3,447,5133,301,078 281,315 293,784
392,787724,943 - -
4,735,92613,883,620 - -
939,4771,033,536 - -
40,522,94142,708,434 - -
9,104,223- - -
55,695,35458,350,533 - -
(12,355,552)(13,591,777) - -
43,339,80244,758,756 - -
46,787,31548,059,834 281,315 293,784
27,43228,599 7,690 4,396
12,1641,713 - -
5,5346,784 - -
180,418177,447 - -
6,8156,983 375 999
21,1499,168 2,999 6,894
310,000320,000 - -
563,512550,694 11,064 12,289
9,470,0009,150,000 - -
58,96765,234 - -
9,528,9679,215,234 - -
10,092,4799,765,928 11,064 12,289
33,379,38435,111,309 - -
437,077- - -
2,878,3753,182,597 270,251 281,495
$ 36,694,83638,293,906$ 270,251$ 281,495$
$ 36,694,83638,293,906$
19,86914,925
$ 36,714,70538,308,831$
37
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 200
4
WateSeweStorm Sewe
rrr
Operating revenues:
User charges$ 1,338,8251,521,737$ 238,894$
Meters48,816 - -
Permit fees -13,350 -
Penalties14,606 18,914 3,196
Other 4,100124,559 -
Total operating revenues 1,361,8391,723,068 242,090
Operating expenses:
Personal service 178,923342,900 110,592
s
Supplies113,369 16,196 6,664
Other service charge 81,944454,038 81,783
s
Disposal charges 644,721- -
Depreciatio
n 437,329631,075 188,846
1,359,1131,541,382 387,885
Total operating expenses
2,726181,686 (145,795)
Operating income (loss)
Nonoperating revenues (expenses):
Investment income 4,0162,786 1,093
Proceeds from the sale of capital asset 3,4273,427 -
s
Interest expense -(426,467) -
Total nonoperating revenues (expenses) 7,443(420,254) 1,093
Income (loss) before contributions
and transfers(238,568) 10,169 (144,702)
Capital contributions608,267 1,220,797 457,669
Transfers:
Transfers in739,438 - -
Transfers ou (467,000)(582,000) (5,000)
t
Total transfers157,438 (467,000) (5,000)
763,966527,137 307,967
Change in net assets
Net assets - January 114,377,437 16,263,045 6,054,354
Net assets - December 3114,904,574$ 17,027,011$ 6,362,321$
Net changes in net assets reported above
Amounts reported for business-type activities in the statement of activities are different becaus
e
Transfer in of capital assets from governmental activities.
Contribution revenue reported above
.
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 t
o
business-type activities.
Change in net assets of business-type activitie
s
The accompanying notes are an intregral part of these financial statements
38
Statement 7
Totals
Intra
Governmental Activities -
ActivitTotalsInternal Service Funds
y
Eliminations2004200320042003
$ 3,099,456-$ 2,741,767$ 646,785$ 427,001$
48,816- 28,392 - -
13,350- 8,350 - -
36,716- 49,511 - -
128,659- - 26,020 232,859
3,326,997- 2,828,020 672,805 659,860
632,415- 521,108 254,409 224,583
136,229- 135,232 170,615 143,102
595,765(22,000) 592,506 262,280 252,906
644,721- 603,070 - -
1,257,250- 962,813 - -
3,266,380(22,000) 2,814,729 687,304 620,591
60,61722,000 13,291 (14,499) 39,269
7,895- (94,931) 3,255 4,218
6,854- - - -
(426,467)- (445,030) - -
(411,718)- (539,961) 3,255 4,218
(351,101)22,000 (526,670) (11,244) 43,487
2,286,733- 7,269,920 - -
739,438- 505,170 - -
(1,076,000)(22,000) (1,348,909) - -
(336,562)(22,000) (843,739) - -
1,599,070- 5,899,511 (11,244) 43,487
36,694,836- 30,795,325 281,495 238,008
$ 38,293,906-$ 36,694,836$ 270,251$ 281,495$
$ 5,899,5111,599,070$
7,269,9202,286,733
(7,269,920)(2,286,733)
9,103(4,944)
$ 5,908,6141,594,126$
39
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF CASH FLOW
S
PROPRIETARY FUNDS
For The Year Ended December 31, 2004
WateSeweStorm Sewe
rrr
Cash flows from operating activities
:
Receipts from customers and user$ 1,320,4581,566,970$ 240,212$
s
(685,610)(587,367) (94,076)
Payment to supplier
s
Payment to employee (178,554)(348,725) (110,682)
s
Net cash flows from operating activitie 456,294630,878 35,454
s
Cash flows from noncapital financing activities
:
Receipt of advances from other fund -12,000 -
s
Payment of advances to other fund -- (12,000)
s
Transfers in -739,438 -
Transfers ou (467,000)(582,000) (5,000)
t
Net cash flows from noncapital financing activitie (467,000)169,438 (17,000)
s
Cash flows from capital and related financing activities
:
Acquisition of capital asset (6,920)(382,551) -
s
Interest paid on deb -(429,438) -
t
-(310,000) -
Payment of bonds
Proceeds from the sale of capital asset 3,4273,427 -
s
Net cash flows from capital and related financing activitie (3,493)(1,118,562) -
s
Cash flows from investing activities
:
Investment incom 3,8934,176 1,006
e
(10,306)(314,070) 19,460
Net increase in cash and cash equivalents
Cash and cash equivalents - January 11,728,208 881,967 1,369
$ 871,6611,414,138$ 20,829$
Cash and cash equivalents - December 3
1
Reconciliation of operating income to net cash provide
d
(used) by operating activities
:
Operating income (loss) 181,686$ 2,726$ (145,795)$
Adjustments to reconcile operating income (loss
)
to net cash flows from operating activities
:
Depreciatio 437,329631,075 188,846
n
Changes in assets and liabilities:
Decrease (increase) in due from other governmental unit (8,126)- -
s
Decrease (increase) in accounts receivabl (31,894)(156,019) (1,496)
e
Decrease (increase) in prepaid item 52,867- -
s
Decrease (increase) in special assessment (1,361)(79) (382)
s
Decrease (increase) in inventor -(13,171) -
y
3,557(3,236) 846
Increase (decrease) in accounts payable
Increase (decrease) in contracts payabl 827(4,803) (6,475)
e
-1,250 -
Increase (decrease) in deposits payable
Increase (decrease) in due to other governmental unit 1,703(1,310) (225)
s
(4,199)(6,077) (1,705)
Increase (decrease) in salaries payable
Increase (decrease) in compensated absence 2,8651,562 1,840
s
Total adjustment 453,568449,192 181,249
s
Net cash provided by operating activitie$ 456,294630,878$ 35,454$
s
Noncash investing, capital and financing activities
:
Assets contributed to the Enterprise Fund$ 1,220,797608,267$ 457,669$
s
The accompanying notes are an integral part of these financial statements
40
Statement 8
Totals
Governmental Activities -
TotalsInternal Service Funds
2004200320042003
$ 2,677,2863,127,640$ 672,805$ 659,860$
(1,865,459)(1,367,053) (430,068) (409,707)
(504,982)(637,961) (258,304) (224,386)
306,8451,122,626 (15,567) 25,767
12,00012,000 - -
(12,000)(12,000) - -
505,170739,438 - -
(1,328,909)(1,054,000) - -
(823,739)(314,562) - -
(3,841,704)(389,471) - -
(505,169)(429,438) - -
-(310,000) - -
-6,854 - -
(4,346,873)(1,122,055) - -
(77,945)9,075 3,098 4,103
(4,941,712)(304,916) (12,469) 29,870
7,553,2562,611,544 198,627 168,757
$ 2,611,5442,306,628$ 186,158$ 198,627$
$ (6,709)38,617$ (14,499)$ 39,269$
962,8131,257,250 - -
26(8,126) - -
(150,612)(189,409) - -
(1,517)52,867 (12,365) (8,729)
(148)(1,822) - -
18,791(13,171) 12,522 (4,148)
13,2811,167 3,294 (963)
(548,640)(10,451) - -
3,4341,250 - -
1,516168 (624) 141
4,273(11,981) (3,895) 197
10,3376,267 - -
313,5541,084,009 (1,068) (13,502)
$ 306,8451,122,626$ (15,567)$ 25,767$
$ 7,269,9202,286,733$ -$ -$
41
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF FIDUCIARY NET ASSETSStatement 9
FIDUCIARY FUNDS
Agency Funds
December 31, 2004
20042003
Assets
Cash and investments308,560$ 435,696$
Liabilities
Accounts payable- 489
Contracts payable6,848 3,620
Deposits payable301,712 431,587
Total liabilities308,560$ 435,696$
The accompanying notes are an integral part of these financial statements.
42
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 1 SUMMARY 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 financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the
year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met. The City’s only fiduciary funds are agency funds. Agency funds are custodial in
nature (assets equal liabilities) and do not involve measurement of results of operations.
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
43
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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. Tax Increment Finance (TIF) Refunding Bonds 2004B Debt Service Fund (DSF)
The was established to refund debt
associated with several improvement projects in 1995 and 1996. The refunded issue bond proceeds were used to provide
funds for the financing of certain capital and administration cost of Development District No. 1 within the City, including
but not limited to the purchase of land, land cleanup, streets, sanitary sewer, water main, storm sewer, sidewalks and curb
& gutter.
G.O. Permanent Improvement Revolving (PIR) 2000B Debt Service Fund (DSF)
The was used to finance assessable
improvements within the City and are repaid primarily from special assessments levied against benefited properties.
Water Trunk Capital Projects Fund (CPF)
The is used to account for water access fees and trunk improvements as part of
development. It is also used to reserve monies that will be needed for capital infrastructure replacements in the future.
Road and Bridge CPF
The accounts for all road projects and the pavement management program, which includes annual
seal coating, crack sealing and overlays for roads.
Community Center Project CPF
The is used to account for the bond proceeds associated with the construction of a
community center consisting of an ice arena, field house and aquatics center.
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.
Storm Sewer Fund
The accounts for the storm sewer utility charges, which are used to finance the storm sewer operating
expenses.
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, and/or other governmental units. It is used to account for the collection and distribution of funds
relating to development activities and retiree insurance premiums.
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
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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.
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.
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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:
Capital Equipment Reserve79,000$ 207,619$ 128,619$
Community Development Block Grant- 14,196 14,196
Community Center 73,213- 73,213
Charitable Gambling- 1,000 1,000
The over 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.
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, 2004 are planned to be eliminated in 2005. 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.
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 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.
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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.
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, 2004, 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 improvements10 - 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 in the Fall of 2002 of the condition of the streets and trails constructed
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
since 1974. 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
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.
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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.
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 ($48,834,250) difference are as follows:
Bonds payable(47,471,000)$
Accrued interest payable(1,003,895)
Compensated absences(359,355)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net assets - governmental activities(48,834,250)$
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
$255,326 difference are as follows:
Internal Service Funds net assets270,251$
Net revenue attributable to business-type activities(14,925)
Net adjustment to increase fund balance - total governmental
funds to arrive at net assets - governmental activities255,326$
2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE
STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation
net changes in fund balances – total governmental fundschanges in net assets of governmental activities
between 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
50
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
over their estimated useful lives and reported as depreciation expense.” The details of this $12,805,778 difference are as
follows:
Capital outlay$1,426,089
Construction/acquisition costs12,154,653
Depreciation expense(774,964)
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities12,805,778$
Another element of that reconciliation states that “The net effect of various miscellaneous transactions involving capital
assets (i.e., sales, trade-ins, and donations) is to decrease net assets.” The details of this ($1,054,716) difference are as
follows:
In the statement of activities, only the gain on the sale of capital
assets is reported. However, in the governmental funds, the
proceeds from the sale increase financial resources. Thus, the
change in net assets differs from the change in fund balance by
the cost of the capital assets sold.(1,054,716)$
Donations of capital assets increase net assets in the statement of
activities, but do not appear in the governmental funds because
they are not financial resources.-
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(1,054,716)$
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 ($276,488) difference are as follows:
General property taxes deferred revenue:
At December 31, 2003(105,044)$
At December 31, 200493,054
Tax increment taxes deferred revenue:
At December 31, 2003(19,566)
At December 31, 200412,495
Special assessments deferred revenue:
At December 31, 2003(3,539,684)
At December 31, 20043,251,695
Notes receivable deferred revenue:
At December 31, 2003(15,595)
At December 31, 200446,157
Net adjustments to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(276,488)$
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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
($18,846,000) difference are as follows:
Debt issued or incurred:
Issuance of capital improvement bonds(3,890,000)$
Issuance of revenue bonds(19,580,000)
Issuance of tax increment refunding bonds(4,260,000)
Principal repayments:
General obligation revenue bonds2,045,000
Special assessment bonds4,950,000
Tax increment bonds860,000
Certificates of indebtedness899,000
State aid bonds130,000
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(18,846,000)$
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 ($555,898) difference are as follows:
Compensated absences(11,822)$
Accrued interest(544,076)
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(555,898)$
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 ($6,300) difference are as follows:
Internal Service Funds change in net assets(11,244)$
Net revenue attributable to business-type activities4,944
Net adjustment to increase fund balance - total
governmental funds to arrive at net assets -
governmental activities(6,300)$
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.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Clerk/Treasurer or in a financial
institution other that that furnishing the collateral. Authorized collateral includes the following:
a) United States government treasury bills, treasury notes, treasury bonds;
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service
available to the government entity;
c) General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national
bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA”
or better by a national bond rating service;
d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds
deposited by that same local government entity;
e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence
that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; and
f) Time deposits that are fully insured by the Federal Deposits Insurance Corporation.
Balances at December 31, 2004 are as follows:
BankCarrying
BalancesAmount
1) Insured or collateralized by securities held by the City
or its agent in the City's name.2,903,781$ 2,582,321$
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.- -
Totals2,903,781$ 2,582,321$
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) Obligations of the State of Minnesota or any of its municipalities as follows:
1) any security which is a general obligation of any state or local government with taxing powers which is rated “A” or
better by a national bond rating service;
2) any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or
better by a national bond rating service; and
3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is
rated “A” or better by a national bond rating agency.
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 $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York;
certain Minnesota securities broker-dealers; or, a bank qualified as a depositor.
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178,
subdivision 5; or 475.61, subdivision 6.
Balances at December 31, 2004:
Carrying
Custodial Credit Risk CategoryAmount
Securities Type123(at Fair Value)
Guaranteed investment contracts13,460,149$-$ -$ 13,460,149$
Negotiable CD's1,364,913 - - 1,364,913
State and local government securities2,754,873 - - 2,754,873
U.S. government and agency securities12,974,011 - - 12,974,011
Commercial paper -3,555,704 - 3,555,704
Totals34,109,650$-$ -$ 34,109,650
Investments not subject to credit risk categorization:
Minnesota municipal investment pool50,635
Open end mutual funds3,227,434
Total investments37,387,719
Deposits - checking account and CD's2,582,321
Total deposits and investments39,970,040
Petty Cash2,050
Total cash and investments (including cash equivalents)39,972,090$
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.
Note 3 RECEIVABLES
Significant receivables balances not expected to be collected within one year of December 31, 2004 are as follows:
Due FromDelinquentDelinquentSpecial
OtherPropertyTaxAssessment
GovernmentsTaxesIncrementReceivableTotal
Major Funds:
General Fund-$ 11,159$ -$ -$ 11,159$
Water Trunk CPF- - - 350,228 350,228
Road and Bridge CPF- - - 311,197 311,197
Permanent Improvement Revolving CPF- - - 1,321,188 1,321,188
Nonmajor Funds32,923 1,869 625 299,606 335,023
Total32,923$ 13,028$ 625$ 2,282,219$ 2,328,795$
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 Fund79,708$ -$
Nonmajor Funds13,346 -
Delinquent tax increment collections
TIF Commercial Revitalization DSF12,495 -
Special assessments not yet due:
General Fund917 -
Water Trunk CPF403,690 -
Road & Bridge CPF340,821 -
Permanent Improvement Revolving CPF2,125,087 -
Nonmajor Funds381,180 -
Notes receivable not yet due:
Nonmajor funds46,157 -
Unearned miscellaneous fees:
General Fund- 4,322
Nonmajor funds- 6,000
Unearned construction seal coating fees:
Nonmajor funds- 415,971
Total3,403,401$ 426,293$
Note 4 LOANS 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 2004.
As part of a rental rehabilitation revolving loan program, the City entered into a loan agreement with a property owner in April 2004.
The loan is for the rehabilitation of a rental property located within the City. The loan bears an interest rate of 3.0 % and calls for 180
equal monthly payments to be made to the City through July 2019. At December 31, 2004, the remaining principal balance due of
$46,157 is offset by deferred revenue as it is not available to finance current activities.
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 5 CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government-wide
statement of net assets. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting
for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A more
detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All other
capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and
depreciation expense have been recorded.Adjustments due to restatement represent the changes due to an extensive inventory of all
capital assets, implementation of GASB Statement No. 34 and a policy change related to capitalization thresholds. Capital asset activity
for the year ended December 31, 2004 as previously reported was as follows:
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements8,268,153$ 132,467$ (858,316)$ 7,542,304$
Streets and trails70,608,788 928,615 - 71,537,403
Construction in progress3,654,326 12,174,498 (2,836,834) 12,991,990
Total capital assets not being depreciated82,531,267 13,235,580 (3,695,150) 92,071,697
Capital assets being depreciated:
Buildings and improvements5,752,375 99,459 (7,000) 5,844,834
Furniture and equipment87,615 66,475 - 154,090
Machinery and equipment5,090,351 462,559 (171,375) 5,381,535
Other park improvements3,000,719 481,690 (504,567) 2,977,842
Total capital assets being depreciated13,931,060 1,110,183 (682,942) 14,358,301
Less accumulated depreciation for:
Buildings and improvements1,682,384 204,379 (6,533) 1,880,230
Furniture and equipment58,186 6,048 - 64,234
Machinery and equipment2,721,590 428,610 (112,201) 3,037,999
Other park improvements973,808 135,927 (367,808) 741,927
Total accumulated depreciation5, 774,964435,968 (486,542) 5,724,390
Total capital assets being depreciated - net8,495,092 335,219 (196,400) 8,633,911
Governmental activities capital assets - net91,026,359$ 13,570,799$ (3,891,550)$ 100,705,608$
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Business-type activities:
Capital assets not being depreciated:
Land and improvements392,787$ 332,156$ -$ 724,943$
Construction in progress9,104,223 - (9,104,223) -
Total capital assets not being depreciated9,497,010 332,156 (9,104,223) 724,943
Capital assets being depreciated:
Buildings and improvements4,735,926 9,147,694 - 13,883,620
Furniture and equipment38,635 - - 38,635
Machinery and equipment900,842 115,083 (21,024) 994,901
Collection and distribution40,522,941 2,185,493 - 42,708,434
Total capital assets being depreciated46,198,344 11,448,270 (21,024) 57,625,590
Less accumulated depreciation for:
Buildings and improvements2,181,029 351,359 - 2,532,388
Furniture and equipment29,819 928 - 30,747
Machinery and equipment539,277 76,462 (21,024) 594,715
Collection and distribution9,605,427 828,500 - 10,433,927
Total accumulated depreciation12, 1,257,249355,552 (21,024) 13,591,777
Total capital assets being depreciated - net33,842,792 10,191,021 - 44,033,813
Business-type activities capital assets - net43,339,802 10,523,177 (9,104,223) 44,758,756
$$$$
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government66,801$
Public safet211,416
y
Public works268,231
Parks and recreation228,516
Total depreciation expense - governmental activities774,964
$
Business-type activities
Wate$631,075
r
Sewe437,329
r
Storm sewe188,846
r
Total depreciation expense - business-type activities1,257,250
$
CONSTRUCTION COMMITMENTS
At December 31, 2004, the City had construction project contracts in progress. The commitments related to the remaining contract
balances are summarized as follows:
ContractRemaining
Project #ProjectAmountCommitment
02-27Community Center$ 7,060,64817,852,059$
02-46Fire Station #31,193,320 37,355
Total19,045,379$ 7,098,003$
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 6 LONG-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.
IssueMaturityInterestOriginalPayable
DateDateRateIssue12/31/04
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
2004 EDA Public Facility Lease Revenue Bonds4/23/20042/1/20342.125-5.400%19,580,000$ 19,580,000$
Tax Increment Bonds:
1995D G.O. Tax Increment Bonds10/1/19952/1/20134.50-5.60%6,055,000 4,525,000
1999 G.O. Tax Increment Bonds6/1/199912/1/20124.00-5.00%1,500,000 1,120,000
2000A G.O. Tax Increment Bonds9/1/20002/1/20106.80-7.10%2,445,000 1,965,000
2003B G.O. Tax Increment Refunding Bonds6/1/20038/1/20102.00-3.00%1,530,000 1,345,000
2004B G.O. Tax Increment Refunding Bonds3/16/20048/1/20102.00-3.25%4,260,000 4,260,000
Total tax increment bonds15,790,000 13,215,000
Certificates of Indebtedness:
2001C G.O. Capital Notes6/5/20012/1/20062.90-3.80%1,210,000 520,000
2003C G.O. Equipment Certificates12/18/200312/1/20061.50%400,000 246,000
Total certificates of indebtedness1,610,000 766,000
Capital Improvement Bonds
2004A G.O. Capital Improvement Bonds3/16/20042/1/20172.00-3.75%3,890,000 3,890,000
Permanent Improvement Revolving (PIR) Bonds:
2001A G.O. PIR Bonds6/5/20012/1/20073.20-4.00%4,975,000 3,100,000
2003A G.O. PIR Bonds6/1/20032/1/20102.00-2.60%4,580,000 4,580,000
Total permanent improvement revolving bonds9,555,000 7,680,000
State Aid Bonds:
2001B G.O. State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000 2,340,000
Total - bonded indebtedness53,180,000 47,471,000
Compensated absences payable- 359,355
Total governmental activities indebtedness53,180,000 47,830,355
BUSINESS-TYPE ACTIVITIES
General Obligation Revenue Bonds
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000 9,470,000
Compensated absences payable- 65,234
Total business-type activities indebtedness9,780,000 9,535,234
Total City indebtedness62,960,000$ 57,365,589$
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
G.O. Revenue BondsTax Increment BondsCertificates of Indebtedness
PrincipalInterestPrincipalInterestPrincipalInterest
2005-$ 1,194,167$ 6,150,000$ 419,220$ 377,000$ 18,465$
2006185,000 964,102 1,010,000 246,045 389,000 6,921
2007185,000 959,731 1,045,000 209,570 - -
2008190,000 954,381 1,110,000 169,820 - -
2009390,000 944,806 1,170,000 124,895 - -
2010-20142,175,000 4,479,736 2,730,000 158,458 - -
2015-20192,725,000 3,910,356 - - - -
2020-20243,485,000 3,128,153 - - - -
2025-20294,480,000 2,104,960 - - - -
2030-20345,765,000 779,350 - - - -
Total19,580,000$ 19,419,742$ 13,215,000$ 1,328,008$ 766,000$ 25,386$
Governmental Activities
Permanent Improvement
Capital Improvement BondsRevolving BondsState Aid Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2005120,000$ 115,968$ 1,705,000$ 192,153$ 135,000$ 102,081$
2006235,000 112,418 1,765,000 139,970 140,000 96,957
2007240,000 107,668 1,825,000 84,005 150,000 91,298
2008255,000 102,080 770,000 47,305 155,000 85,120
2009265,000 95,580 795,000 30,463 160,000 78,583
2010-20141,575,000 350,054 820,000 10,660 925,000 277,104
2015-20191,200,000 67,925 - - 675,000 51,410
Total3,890,000$ 951,693$ 7,680,000$ 504,556$ 2,340,000$ 782,553$
Business-Type Activities
G.O. Revenue Bonds
PrincipalInterest
2005320,000$ 421,392$
2006335,000 411,720
2007345,000 400,662
2008360,000 388,228
2009375,000 374,439
2010-20142,175,000 1,615,166
2015-20192,765,000 1,049,816
2020-20242,795,000 288,625
Total9,470,000$ 4,950,048$
It is not practical to determine the specific year for payment of long-term accrued compensated absences.
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2004, was as follows:
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
G.O. revenue bonds2,045,000$ 19,580,000$ (2,045,000)$ 19,580,000$ -$
Special assessment bonds1,255,000 - (1,255,000) - -
Tax increment bonds9,815,000 4,260,000 (860,000) 13,215,000 6,150,000
Certificates of indebtedness1,665,000 - (899,000) 766,000 377,000
Capital improvement bonds- 3,890,000 - 3,890,000 120,000
Permanent improvement revolving bonds11,375,000 - (3,695,000) 7,680,000 1,705,000
State aid bonds2,470,000 - (130,000) 2,340,000 135,000
Total bonds payable28,625,000 27,730,000 (8,884,000) 47,471,000 8,487,000
Compensated absences347,534 275,127 (263,306) 359,355 -
Total governmental activities
long-term liabilities28,972,534$ 28,005,127$ (9,147,306)$ 47,830,355$ 8,487,000$
Business-type activities:
Bonds payable:
G.O. revenue bonds9,780,000$ -$ (310,000)$ 9,470,000$ 320,000$
Compensated absences58,967 50,327 (44,060) 65,234 -
Total business-type activities
long-term liabilities9,838,967$ 50,327$ (354,060)$ 9,535,234$ 320,000$
For the governmental activities, bonds payable can be summarized in the following categories:
G.O. revenue bonds
The were used to construct a 132,000 square foot community center. The bonds are payable from annual
lease payments received by the EDA from the YMCA, operating revenues from the ice arena and fieldhouse, and, if necessary,
a debt service tax levy. 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.
capital improvement bonds
The were used to purchase the 30,000 square foot public works building from the EDA and to
finance the construction of a new fire station. The bonds 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.
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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
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.
compensated absences
For the governmental activities, are generally liquidated through the General Fund.
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.
ADVANCE REFUNDING
On March 16, 2004, the City placed funds in trust with escrow agent to advance refund the 2005 through 2016 maturities
aggregating $2,045,000 in principal of the City’s 1997 Public Project Revenue Bonds with an average interest rate of 5.73%, dated
September 1, 1997. The City’s net contribution of $2,145,864 (after payment of $44,136 in costs of the advance refunding) were
used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with the escrow agent to
provide for all future debt service payments on the 1997 Public Project Revenue Bonds. As a result, the 1997 Public Project
Revenue Bonds are considered to be defeased and the liability for those bonds has been removed from the general long-term debt
account group.
The City advance refunded the 1997 Public Project Revenue Bonds to reduce its total debt service payments over the next twelve
years by $282,287 and to obtain an economic gain (difference between the present value of the debt service payments on the old
debt and new debt) of $244,276.
CROSSOVER REFUNDING
On March 16, 2004, the City issued $4,260,000 in General Obligation Tax Increment Refunding Bonds, Series 2004B with an
average interest rate of 2.78% to advance refund $4,260,000 of outstanding 1995D Series Bonds with an average interest rate of
5.35%. The net proceeds of $4,267,904 were used to purchase U.S. Government Securities. Those securities were deposited in an
irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called
principal on the refunded bonds on February 1, 2005.
The City advance refunded the 1995D Tax Increment Bonds to reduce its total debt service payments over the next eight years by
$427,273 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new
debt) of $370,143.
The City is responsible for the debt service of the refunded bonds through the crossover date (February 1, 2005) and the debt service
of the refunding bonds after the crossover date. The debt service of the refunding bonds before the crossover date is payable from
the escrow account. Assets held with the escrow agent total $4,189,429 at December 31, 2004.
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
The financial statements present each bond issue and the escrow account assets pursuant to GASB No. 7. The effect on the
financial statements is to report greater debt than, in substance, the City will be responsible for paying.
RefundedRefundingDebt Service Commitment
PaymentBondsBondsEscrow
DateTotalTotalAccountCity
8/1/2004118,175$ 42,422$ 42,422$ 118,175$
2/1/20054,643,175 56,563 4,231,563 468,175
8/1/2005- 56,563 - 56,563
2/1/2006- 536,562 - 536,562
8/1/2006- 51,763 - 51,763
2/1/2007- 541,763 - 541,763
8/1/2007- 46,862 - 46,862
2/1/2008- 551,863 - 551,863
8/1/2008- 40,550 - 40,550
2/1/2009- 560,550 - 560,550
8/1/2009- 34,050 - 34,050
2/1/2010- 564,050 - 564,050
8/1/2010- 26,762 - 26,762
2/1/2011- 591,763 - 591,763
8/1/2011- 18,287 - 18,287
2/1/2012- 598,288 - 598,288
8/1/2012- 9,587 - 9,587
2/1/2013- 599,588 - 599,588
$ 4,927,8364,761,350$ 4,273,985$ 5,415,201$
Note 7 LEGAL 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 2004 and 2003 is computed as follows:
December 31,
20042003
Estimated taxable market value2,342,977,200$1,966,284,300$
Debt limit (2% of market value)46,859,544 39,325,686
Amount of debt applicable to debt limit:
Total bonded debt56,941,000$ 38,405,000$
Less: Nonapplicable debt
G.O. water revenue bonds(9,470,000) (9,780,000)
Special assessment bonds- (1,255,000)
Tax increment bonds(13,215,000) (9,815,000)
Permanent improvement revolving bonds(7,680,000) (11,375,000)
State aid bonds(2,340,000) (2,470,000)
Less: Cash and investments in related
debt service funds(815,322) (82,515)
Total debt applicable to debt limit23,420,678 3,627,485
Legal debt margin23,438,866$ 35,698,201$
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 8 DEFINED 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.
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, 2004, 2003 and 2002 were$155,794, $148,660 and
$144,981, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December
31, 2004, 2003 and 2002 were $11,848, $10,137 and $6,381, respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by state statute.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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
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
The State of Minnesota contributes amortization aid, or two percent fire aid, in accordance with state statute requirements.
Plan members are not required to contribute to the plan. The state legislature may amend contribution requirements of the City
and State. The City is allowed to make voluntary contributions of other public funds pursuant to Minnesota Statutes Chapter
69. Contributions for the last three years are as follows:
Year
EndingCityStateTotal
12/31/200243,750$ 98,400$ 142,150$
12/31/200342,500 122,867 165,367
12/31/200445,000 160,651 205,651
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 9 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2004 are as follows:
FundReceivablePayable
Governmental Funds:
Major Funds:
General Fund25,000$ -$
Water Trunk CPF120,000 -
Permanent Improvement Revolving CPF125,000 -
Nonmajor Governmental Funds- 270,000
Total governmental funds270,000$ 270,000$
Interfund receivables and payables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the
fiscal year.
Interfund transfers:
FundTransfer InTransfer Out
Governmental Funds:
Major Funds:
General Fund299,000$ -$
G.O. PIR Bonds 2000B CPF2,790,826 -
Water Trunk CPF441,850 1,300,904
Road & Bridge CPF- 430,096
Community Center Project CPF- 1,316,456
Permanent Improvement Revolving CPF- 3,990,826
Nonmajor Funds4,998,289 1,177,121
Total Governmental Funds8,529,965 8,215,403
Proprietary Funds:
Wate 582,000739,438
r
Sewe 467,000-
r
Storm Sewe 5,000-
r
Total Proprietary Funds739,438 1,054,000
Total9,269,403 9,269,403
$$
Interfund transfers 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 $1,316,456 from the
Community Center Project CPF to the Building Fund CPF for reimbursement of prior year expenditures associated with the community
center project funded by the Building Fund CPF.
Additionally, computer service fees paid by the Water and Sewer Enterprise Funds to the General Fund have been reclassified as
transfers on the Government-Wide Statement of Activities as follows:
Transfer InTransfer Out
Governmental Activities22,000$ -$
Business-Type Activities- 22,000
Total22,000 22,000
$$
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 10 TAX 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:4,607$
Current net tax capacity:212,162
Captured net tax capacity - retained by the Cit$207,555
y
2.Name of District:Andover Redevelopment District 1-2
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 2012
Original net tax capacity:56,703$
Current net tax capacity:1,101,101
Captured net tax capacity - retained by the Cit$1,044,398
y
Total District Bonds issued19,250,000$
Amount redeemed(6,035,000)
Bonds outstanding December 31, 200413,215,000$
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:7,314$
Current net tax capacity:139,824
Captured net tax capacity - retained by the Cit$132,510
y
Note 11 DEFICIT FUND BALANCES/RETAINED EARNINGS
The City has deficit fund balances at December 31, 2004 as follows:
FundAmount
Special Revenue Funds:
LRRWMO5,029$
Capital Projects Funds:
Unfinanced118,859
Storm Sewer Project111,301
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 12 CONTINGENCIES
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.
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, 2004.
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 13 DEFERRED 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
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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, 2004. Future
scheduled tax levies for all bonds outstanding at December 31, 2004 totaled $38,660,109.
Note 14 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
Fund equities are classified as follows to reflect limitations and restrictions of the respective funds:
20042003
Governmental Funds:
Major Funds:
General Fund
Reserved for prepaid items3,239$ 3,239$
Reserved for inventory 84,52782,347
Designated for legal defense150,000 -
Designated for snow emergency -50,000
Designated for facility management50,000 -
Designated for economic development100,000 -
Designated for information technology -50,000
Designated for working cash flow2,816,979 2,505,261
G.O. TIF Refunding Bonds 2004B DSF
Reserved for debt service4,228,387 -
Water Trunk CPF
Designated for projects2,093,346 1,817,697
Road & Bridge CPF
Designated for projects2,108,697 2,724,033
Community Center Project CPF
Reserved for projects7,056,233 -
Permanent Improvement Revolving CPF
Reserved for interfund loan- 150,000
Designated for projects5,779,637 7,031,851
Nonmajor Funds
Reserved for economic development35,783 -
Reserved for debt service1,705,959 1,557,536
Reserved for projects237,457 459,339
Designated for working cash flow654,403 74,278
Designated for projects5,977,992 3,526,367
Designated for equipment526,416 731,806
Total Governmental Funds33,706,875 20,665,934
Proprietary Funds:
Water
Reserved for projects- 437,077
Total33,706,875$ 21,103,011$
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 15 POST 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 16 CONDUIT 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, 2004, the following revenue bonds were outstanding:
Date ofOriginalOutstanding
ProjectIssueIssueRetired12/31/2004
Downtown Center7/15/19975,645,000$ (2,220,000)$ 3,425,000$
Downtown Center7/15/19971,250,000 (725,000) 525,000
Presbyterian Homes of Andover, Inc.12/1/1998720,000 (432,000) 288,000
Presbyterian Homes of Andover, Inc.11/1/200313,145,000 (211,131) 12,933,869
Total20,760,000$ (3,588,131)$ 17,171,869$
Note 17 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for
these financial statements:
Statement No. 40Deposit and Investment Risk Disclosures—an amendment of GASB Statement No. 3.
The provisions of this
Statement are effective for financial statements for periods beginning after June 15, 2004.
Statement No. 42Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries.
The
provisions of this Statement are effective for fiscal periods beginning after December 15, 2004.
Statement No. 43Financial Reporting for Post Employment Benefit Plans Other Than Pension Plans.
The requirements of this
one year prior
Statement for OPEB plan reporting are effective to the effective date of the related Statement # 45 for the employer
(single-employer plan) or for the largest participating employer in the plan (multiple-employer plan).
Statement No. 44Economic Condition Reporting: The Statistical Section – an amendment to NCGA Statement 1.
The provisions
of this Statement are effective for statistical sections prepared for periods beginning after June 15, 2005.
Statement No. 45Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pension Plans.
Implementation is required in three phases based on a government’s total annual revenues in the first fiscal year ending after June
phase 1 governments
15, 1999. This Statement is effective for periods beginning after December 15, 2006, for (those with total
phase 2 governments
annual revenues of $100 million or more); after December 15, 2007, for (those with total annual revenues of
phase 3 governments
$10 million or more but less than $100 million); and after December 15, 2008, for (those with total annual
revenues of less than $10 million). Early implementation is encouraged.
The effect these standards may have on future financial statements is not determinable at this time.
69
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70
REQUIRED SUPPLEMENTARY INFORMATION
71
CITY OF ANDOVER, MINNESOT
A
REQUIRED SUPPLEMENTARY INFORMATIOStatement 10
N
BUDGETARY COMPARISON SCHEDULE - GENERAL FUN
D
For The Year Ended December 31, 200
4
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted Amounts
Positive2003
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes4,459,238$ 4,459,238$ 4,541,227$ 81,989$ 4,286,838$
Licenses and permits571,295 571,295 674,008 102,713 551,385
624,930565,529 585,037 (39,893) 508,054
Intergovernmental
Charges for service 626,520626,520 798,795 172,275 647,813
s
Fines84,000 84,000 79,450 (4,550) 68,686
Investment incom 55,04955,049 58,309 3,260 (6,407)
e
Miscellaneous238,600 238,600 261,152 22,552 226,868
6,659,6326,600,231 6,997,978 338,346 6,283,237
Total revenues
Expenditures:
Current:
General government:
Mayor and City council93,559 93,559 90,304 3,255 91,883
27,50027,500 16,484 11,016 21,674
Newsletter
City cler 124,883124,883 124,781 102 129,195
k
Administration125,797 125,797 125,536 261 127,725
Human resources52,731 52,731 52,624 107 49,490
Financial administration250,596 250,596 250,251 345 246,526
Elections31,722 31,722 35,030 (3,308) 11,430
Assessing117,000 117,000 110,890 6,110 106,933
Legal139,254 139,254 147,907 (8,653) 146,365
Planning and zoning287,599 289,599 268,908 20,691 262,461
Information systems129,099 129,099 128,191 908 131,096
Facility managemen 335,459335,459 302,030 33,429 267,057
t
Engineerin 355,462360,462 343,697 11,765 323,479
g
2,072,6612,075,661 1,996,633 76,028 1,915,314
Total general government
Public safety:
Police1,500,424 1,500,424 1,500,424 - 1,421,312
832,081772,680 821,823 10,258 769,143
Fire protection
Protective inspectio 392,133392,133 389,772 2,361 426,219
n
Civil defens 10,25110,251 10,159 92 6,655
e
Animal control6,650 6,650 7,869 (1,219) 8,662
Total public safety2,682,138 2,741,539 2,730,047 11,492 2,631,991
Public works:
Streets and highways454,938 454,938 406,285 48,653 313,691
467,928467,928 372,297 95,631 483,288
Snow and ice removal
Street lighting173,675 173,675 173,535 140 174,704
Street signs115,609 115,609 113,840 1,769 115,205
Traffic signals19,800 19,800 19,880 (80) 21,690
Total public works1,231,950 1,231,950 1,085,837 146,113 1,108,578
Sanitation:
Storm sewers- - - - 50,443
38,31538,315 26,732 11,583 30,458
Tree preservation and weed control
Total sanitation38,315$ 38,315$ 26,732$ 11,583$ 80,901$
(Continued)
72
CITY OF ANDOVER, MINNESOT
A
REQUIRED SUPPLEMENTARY INFORMATIOStatement 10
N
BUDGETARY COMPARISON SCHEDULE - GENERAL FUN(Continued)
D
For The Year Ended December 31, 200
4
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted Amounts
Positive2003
OriginalFinalActual(Negative)Actual
Expenditures:
Current: (continued)
Parks and recreation613,528$ 613,528$ 612,147$ 1,381$ 574,719$
115,754112,554 114,052 1,702 114,784
Recycling
22,00022,000 21,992 8 25,865
Unallocated
Total current6,776,146 6,835,747 6,587,440 248,307 6,452,152
Capital outlay
Public works- - - - 17,714
Parks and recreation- - - - 24,285
Total capital oulay- - - - 41,999
Total expenditures6,776,146 6,835,747 6,587,440 248,307 6,494,151
(176,115)(175,915) 410,538 586,653 (210,914)
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in299,000 299,000 299,000 - 165,000
(196,740)(196,740) - (196,740) (190,310)
Transfers out
Proceeds from the sale of capital assets- - - - 14,279
Total other financial sources (uses)102,260 102,260 299,000 (196,740) (11,031)
Net increase in fund balance(73,655)$ (73,855)$ 709,538 389,913$ (221,945)
Fund balance - January 12,593,027 2,814,972
Fund balance - December 313,302,565$ 2,593,027$
73
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2004
Note A LEGAL 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:
Elections31,722$ 35,030$ 3,308$
Legal139,254 147,907 8,653
Public safety:
Animal control6,650 7,869 1,219
Public works:
Traffic signals19,800 19,880 80
Note B MODIFIED 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 constructed since 1974. 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
74
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2004
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 $1,017,481 on street and trail maintenance for the year ending December 31, 2004. 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
$1,000,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
2002900,000$ 1,590,268$ 82
2003950,000 956,688 82
20041,000,000 1,017,481 82
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.
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76
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
77
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.
78
CITY OF ANDOVER, MINNESOT
A
COMBINING BALANCE SHEETStatement 11
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2004
With Comparative Totals For December 31, 2003
Totals
CapitalNonmajor Governmental Funds
SpecialDebt
RevenuServiceProjects20042003
e
Assets
$ 918,7062,358,219$ 5,593,784$ 8,870,709$ 6,936,973$
Cash and investments
Cash and investments with escrow agent 722,665- - 722,665 -
Accrued interest 9,740 23,691 25,571 59,002 18,592
Due from other governmental units 18,61621,500 32,923 73,039 41,582
-71,173 - 71,173 47,009
Accounts receivable - net
Interfund receivable -- - - 20,000
Property taxes receivable:
Unremitte 22,2823,150 665 26,097 87,117
d
25,491350 - 25,841 32,657
Delinquent
Special assessments receivable:
-- 1,657 1,657 9,930
Unremitted
Delinquent -- 880 880 39,681
144,934- 235,366 380,300 669,076
Deferred
Notes receivable46,157 - - 46,157 15,595
Total assets2,510,289 1,876,385 5,890,846 10,277,520 7,918,212
Liabilities, equity and other credits
Liabilities:
Interfund payable25,000 - 245,000 270,000 775,000
Accounts payable23,163 - 1,064 24,227 29,805
Contracts payable389 - 163,229 163,618 363,464
Due to other governmental units -1,267 6,580 7,847 6,863
Salaries payable4,680 - - 4,680 8,371
Interfund loan payable- - - - 150,000
170,426468,478 236,246 875,150 1,235,104
Deferred revenue
Total liabilities522,977 170,426 652,119 1,345,522 2,568,607
Equity and other credits:
Fund balance (deficit):
1,705,95935,783 237,457 1,979,199 2,016,875
Reserved
Unreserved:
-1,927,381 5,231,430 7,158,811 4,332,451
Designated
Undesignated -24,148 (230,160) (206,012) (999,721)
Total equity and other credits1,987,312 1,705,959 5,238,727 8,931,998 5,349,605
Total liabilities, equity and other credits2,510,289$ 1,876,385$ 5,890,846$ 10,277,520$ 7,918,212$
79
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 12
CHANGES IN FUND BALANCE
S
NONMAJOR GOVERNMENTAL FUND
S
For The Year Ended December 31, 200
4
With Comparative Totals For The Year Ended December 31, 2003
Totals
CapitalNonmajor Governmental Funds
Special Debt
RevenuServiceProjects20042003
e
Revenues:
General property taxes212,608$ 907,722$ 46,287$ 1,166,617$ 840,852$
Tax increment collections- 1,072,852 120,615 1,193,467 1,136,574
134,52962,322 434 197,285 364,916
Intergovernmental
Special assessments- 152,462 40,233 192,695 743,158
Charges for service -590,450 - 590,450 215,981
s
Investment incom 17,74473,153 275,342 366,239 119,513
e
Miscellaneous
Park dedication fees- - 842,042 842,042 357,483
Connection charge -- 385,173 385,173 246,773
s
Othe
r 50,52313,767 256,266 320,556 185,884
Total revenues 2,335,832952,300 1,966,392 5,254,524 4,211,134
Expenditures:
Current:
-38,458 136,157 174,615 137,083
General government
Public safety- - 185,911 185,911 -
Public works278,137 - 622,645 900,782 639,157
Parks and recreation73,213 - 69,761 142,974 38,359
Economic developmen -179,322 739,129 918,451 471,172
t
Capital outlay:
General governmen -- 193,408 193,408 -
t
Public safety12,995 - 82,808 95,803 21,276
Public works185,334 - 215,959 401,293 202,037
Sanitation- - - - 3,041
Parks and recreation50,888 - 489,851 540,739 697,043
Debt service:
Principal retirement- 4,099,000 - 4,099,000 4,374,000
Interest- 961,815 - 961,815 1,092,782
Paying agent fee 3,987- - 3,987 2,656
s
Professional service- 57,180 - 57,180 27,500
Construction/acquisition costs- - 1,430,111 1,430,111 791,739
Total expenditures818,347 5,121,982 4,165,740 10,106,069 8,497,845
(2,786,150)133,953 (2,199,348) (4,851,545) (4,286,711)
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in520,000 2,957,935 1,520,354 4,998,289 4,775,058
(54,815)(34,000) (1,088,306) (1,177,121) (3,125,583)
Transfers out
Bonds issue -- 1,700,000 1,700,000 1,930,000
d
Refunding bonds issue 2,190,000- - 2,190,000 -
d
Payment to refunded bonds escrow agen (2,145,864)- - (2,145,864) -
t
Bond premiu 8,032- 7,502 15,534 5,188
m
Bond discoun (11,009)- (8,545) (19,554) -
t
Proceeds from sale of capital assets141,733 - 2,730,921 2,872,654 796,891
Total other financing sources (uses)627,733 2,944,279 4,861,926 8,433,938 4,381,554
Net increase (decrease) in fund balance761,686 158,129 2,662,578 3,582,393 94,843
Fund balance - January 11,225,626 1,547,830 2,576,149 5,349,605 5,254,762
Fund balance - December 311,987,312$ 1,705,959$ 5,238,727$ 8,931,998$ 5,349,605$
80
NONMAJOR SPECIAL 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.
- This fund is used to account for the City’s involvement with the Lower Rum River Watershed
LRRWMO
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.
- This fund is used to account for activity associated with the management of the
Right-of-Way Management/Utility
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.
Construction 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.
Community Development Block Grant - This fund accounts for the financial operations of a federal grant for rental
housing rehabilitation.
- This fund is used to account for the operations of the Andover/YMCA Community Center,
Community Center
particularly the ice arena, field house and concessions. The aquatic’s portion of the Community Center is under the
operations of the YMCA.
- This fund accounts for the 10% of net profits received from gambling activities by the
Charitable Gambling
Andover Lions and Andover Baseball Association. According to state statute, all expenditures from this fund must
be for police, fire and other emergency or public safety-related services, equipment, and training, excluding pension
obligations.
81
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2004
With Comparative Totals For December 31, 2003
Drainage
andEDATrail and
ForestryLRRWMOMappingGeneralTransportation
Assets
Cash and investments1,431$ 4,870$ 44,147$ 79,716$ 183,778$
Accrued interest- - 167 211 897
Due from other governmental units21,500 - - - -
Accounts receivable- - - 11,006 -
Property taxes receivable:
Unremitted- 489 - - -
Delinquent- 350 - - -
Notes receivable- - - - -
Total assets22,931 5,709 44,314 90,933 184,675
Liabilities and Fund Balance
Liabilities:
Interfund payable15,000 10,000 - - -
Accounts payable1,101 - - 1,114 8,339
Contracts payable- 97 - 292 -
Due to other governmental units7 33 - 144 -
Salaries payable55 258 - 1,195 -
Deferred revenue- 350 - - -
Total liabilities16,163 10,738 - 2,745 8,339
Fund balance (deficit):
- - - -
Reserved for economic development-
Unreserved:
Designated for working capital6,768 - 15,137 88,188 -
Designated for projects- - - - 176,336
Designated for equipment- - - - -
Undesignated- (5,029) 29,177 - -
Total fund balance (deficit)6,768 (5,029) 44,314 88,188 176,336
Total liabilities and fund balance22,931$ 5,709$ 44,314$ 90,933$ 184,675$
82
Statement 13
Right-of-WayCapitalCommunityTotals
Management/EquipmentConstructionDevelopmentCommunityCharitableNonmajor Special Revenue Funds
UtilityReserveSeal CoatingBlock GrantCenterGambling20042003
$ 762,923191,685$ 557,590$ 35,979$ 488,510$ 7,590$ 2,358,219$ 1,658,599$
3,335797 2,451 169 1,713 - 9,740 5,328
-- - - - - 21,500 8,659
-60,167 - - - - 71,173 47,009
2,661- - - - - 3,150 1,970
-- - - - - 350 399
-- - 46,157 - - 46,157 -
768,919252,649 560,041 82,305 490,223 7,590 2,510,289 1,721,964
-- - - - - 25,000 -
7,772- - - 4,837 - 23,163 1,441
-- - - - - 389 6,935
321102 - 365 295 - 1,267 1,097
-804 - - 2,368 - 4,680 8,371
-- 415,971 46,157 6,000 - 468,478 478,494
8,093906 415,971 46,522 13,500 - 522,977 496,338
-- - 35,783 - - 35,783 -
-67,587 - - 476,723 - 654,403 74,278
242,000184,156 144,070 - - - 746,562 401,453
518,826- - - - 7,590 526,416 731,806
-- - - - - 24,148 18,089
760,826251,743 144,070 35,783 476,723 7,590 1,987,312 1,225,626
$ 768,919252,649$ 560,041$ 82,305$ 490,223$ 7,590$ 2,510,289$ 1,721,964$
83
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
S
NONMAJOR SPECIAL REVENUE FUND
S
For The Year Ended December 31, 200
4
With Comparative Totals For The Year Ended December 31, 200
3
Drainag
e
andEDATrail and
ForestrLRRWMMappinGeneraTransportatio
yOgln
Revenues
:
General property taxe$ 27,458-$ -$ -$ -$
s
Intergovernmenta 25513,341 - - -
l
-3,510 22,968 126,551 177,789
Charges for services
Investment incom (480)(532) 1,177 1,425 8,958
e
-- - 2,954 -
Miscellaneous
Total revenue 27,23316,319 24,145 130,930 186,747
s
Expenditures:
Current:
General governmen -- - - -
t
Public works23,160 30,424 7,333 - 21,491
-- - - -
Parks and recreatio
n
Economic developmen -- - 165,126 -
t
Capital outlay:
Public safet -- - - -
y
Public works- - - - 79,056
Parks and recreatio -- - - -
n
Total expenditure 30,42423,160 7,333 165,126 100,547
s
Revenues over (under) expenditure (3,191)(6,841) 16,812 (34,196) 86,200
s
Other financing sources (uses)
:
Transfers in- - - - -
Transfers ou -- - - -
t
-- - 101,440 -
Proceeds from sale of capital assets
-- - 101,440 -
Total financing sources (uses)
(3,191)(6,841) 16,812 67,244 86,200
Net increase (decrease) in fund balance
Fund balance (deficit) - January 113,609 (1,838) 27,502 20,944 90,136
Fund balance (deficit) - December 316,768$ (5,029)$ 44,314$ 88,188$ 176,336$
84
Statement 1
4
Right-of-WaCapitaCommunitTotals
yly
ManagementEquipmenConstructioDevelopmenCommunitCharitablNonmajor Special Revenue Funds
/tntye
UtilitReservSeal CoatinBlock GranCenteGamblin20042003
yegtrg
$ 185,150-$ -$ -$ -$ -$ 212,608$ 89,658$
1,737- - 46,989 - - 62,322 34,191
-94,856 135,093 - 29,683 - 590,450 215,981
22,5345,330 12,796 1,692 20,253 - 73,153 51,903
925- - 1,298 - 8,590 13,767 115,125
210,346100,186 147,889 49,979 49,936 8,590 952,300 506,858
37,458- - - - 1,000 38,458 18,051
-56,032 139,697 - - - 278,137 184,449
-- - - 73,213 - 73,213 -
-- - 14,196 - - 179,322 182,038
12,995- - - - - 12,995 21,276
106,278 - - - - 185,334 43,864
-
50,888- - - - - 50,888 -
207,61956,032 139,697 14,196 73,213 1,000 818,347 449,678
2,72744,154 8,192 35,783 (23,277) 7,590 133,953 57,180
20,000- - - 500,000 - 520,000 106,554
(34,000)- - - - - (34,000) (40,021)
40,293- - - - - 141,733 19,751
26,293- - - 500,000 - 627,733 86,284
29,02044,154 8,192 35,783 476,723 7,590 761,686 143,464
731,806207,589 135,878 - - - 1,225,626 1,082,162
$ 760,826251,743$ 144,070$ 35,783$ 476,723$ 7,590$ 1,987,312$ 1,225,626$
85
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86
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for six types of bonded indebtedness:
G.O. Revenue Bonds
Special Assessment Bonds
Tax Increment Bonds
Certificates of Indebtedness
Capital Improvement Bonds
Permanent Improvement Revolving Bonds
State Aid Bonds
G.O. Revenue Bonds - (EDA Public Project Revenue Bonds of 1997 and EDA Public Facility Lease Revenue
Bonds 2004) are repaid from annual lease payments from the City, YMCA, Community Center operations and
general property tax.
Special Assessment Bonds - (issues 1994C and 1995A) are used to finance assessable improvements within the City
and are repaid primarily from special assessments levied against benefited properties.
- (Tax Increment Bonds of 1994B, 1995D, 1999, 2000A and 2003B Refunding) are repaid
Tax Increment Bonds
primarily from tax increments.
Certificates of Indebtedness - (G.O. Equipment Certificate of 1999, 2001C Capital Notes, G.O. Equipment
Certificate of 2003 and G.O. Equipment Certificate 2003C) are repaid primarily from general property taxes.
Capital Improvement Bonds - (G.O. Capital Improvement Bonds 2004A) are repaid primarily from general property
taxes
Permanent Improvement Revolving (PIR) Bonds - (G.O. PIR Bonds of 2001A and 2003A) 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.
87
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2004
With Comparative Totals For December 31, 2003
TIF G.O.
CommercialTIFTIFCapital PIR FundState
RevitalizationBondsBondsNotesBonds ofAid Bonds
1995Dof 1999of 2000A2001C2001A2001B
Assets
Cash and investments273,279$ 132,835$ 216,285$ 56,202$ 32,921$ 17,352$
Cash and investments with escrow agent -- - - - -
Accrued interest 625669 190 - 135 71
Due from other governmental units18,616 - - - - -
Interfund receivable- - - - - -
Property taxes receivable:
Unremitted 1,4462,124 2,883 8,240 - -
Delinquent12,495 - - 7,798 - -
Special assessments receivable:
Unremitted -- - - - -
Delinquent- - - - - -
Deferred -144,934 - - - -
Total assets452,117 134,906 219,358 72,240 33,056 17,423
Liabilities and Fund Balance
Liabilities:
Interfund payable- - - - - -
Deferred revenue157,430 - - 7,798 - -
Total liabilities157,430 - - 7,798 - -
Fund balance (deficit):
Reserved for debt service294,687 134,906 219,358 64,442 33,056 17,423
Unreserved:
Undesignated- - - - - -
Total fund balance (deficit)294,687 134,906 219,358 64,442 33,056 17,423
Total liabilities and fund balance452,117$ 134,906$ 219,358$ 72,240$ 33,056$ 17,423$
88
Statement 15
EDA Public
G.O.G.O. TIFG.O.Facility LeaseG.O. Capital
PIR FundRefundingCapital RevenueImprovementTotals
Bonds ofBondsNotesBondsBondsNonmajor Debt Service Funds
2003A2003B2003C20042004A20042003
$ 110,16443,213$ 4,832$ 4,645$ 26,978$ 918,706$ 1,455,266$
-- - 722,665 - 722,665 -
-178 146 21,641 36 23,691 4,121
-- - - - 18,616 -
-- - - - - 20,000
2,585- 5,004 - - 22,282 84,225
-- 5,198 - - 25,491 32,258
-- - - - - 4,218
-- - - - - 39,541
-- - - - 144,934 544,514
112,74943,391 15,180 748,951 27,014 1,876,385 2,184,143
-- - - - - 20,000
-- 5,198 - - 170,426 616,313
-- 5,198 - - 170,426 636,313
112,74943,391 9,982 748,951 27,014 1,705,959 1,557,536
-- - - - - (9,706)
112,74943,391 9,982 748,951 27,014 1,705,959 1,547,830
$ 112,74943,391$ 15,180$ 748,951$ 27,014$ 1,876,385$ 2,184,143$
89
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AN
D
CHANGES IN FUND BALANCE
S
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2004
With Comparative Totals For The Year Ended December 31, 2003
EDA Public
TIF G.O.G.O.TIF ProjectG.O.
BondsImprovemenImprovemenCommercialRevenueEquipmentTITI
ttFF
of 1994BBonds oBonds oRevitalizationBondsCertificateBondsBonds
ff
Project 1-21994C19951995Dof 1997of 1999of 1999of 2000
AA
Revenues:
General property taxes-$ -$ -$ -$ -$ 297,020$ -$ -$
Tax increment collections- - - 252,120 - - 171,656 342,240
Intergovernmental- - - 17,318 - 2,793 11,831 23,547
Special assessments- 38,256 94,421 19,785 - - - -
Investment income(2,342) (1,310) (16,710) 1,644 (2,586) (4,212) 3,611 255
Miscellaneous- - 50,523 - - - - -
Total revenues(2,342) 36,946 128,234 290,867 (2,586) 295,601 187,098 366,042
Expenditures:
Debt service:
Principal retirement75,000 340,000 915,000 250,000 - 305,000 140,000 210,000
Interest2,951 9,531 23,798 242,225 - 6,100 54,250 150,713
Paying agent fees 652- 625 350 - - - 345
Professional services- 925 3,918 - - - - -
Total expenditures77,951 351,108 943,341 492,575 - 311,100 194,250 361,058
Revenues over (under) expenditures(80,293) (314,162) (815,107) (201,708) (2,586) (15,499) (7,152) 4,984
Other financing sources (uses):
Transfers in- 276,141 664,720 4,651 - - - -
Transfers out(4,651) - (30,054) - (20,110) - - -
Bonds issued -- - - - - - -
Refunding bonds issued -- - - - - - -
Payment to refunded bonds escrow agent -- - - - - - -
Bond premium- - - - - - - -
Bond discount -- - - - - - -
Total other financing sources (uses)(4,651) 276,141 634,666 4,651 (20,110) - - -
Net increase (decrease) in fund balance(84,944) (38,021) (180,441) (197,057) (22,696) (15,499) (7,152) 4,984
Fund balance - January 184,944 38,021 180,441 491,744 22,696 15,499 142,058 214,374
Fund balance - December 31-$ -$ -$ 294,687$ -$ -$ 134,906$ 219,358$
90
Statement 16
EDA Public
G.O.G.O.G.O.G.O. TIFG.O.Facility LeaseG.O. Capital
Capital PIR FunStateEquipmentPIR FunRefundingEquipmentRevenueImprovemenTotals
ddt
NotesBonds oAid BondCertificateBonds oBondsCertificateBondsBondsNonmajor Debt Service Funds
fsf
2001C20012001B200320032003B2003C2004200420042003
AAA
$ -233,332$ -$ 215,456$ -$ -$ 161,914$ -$ -$ 907,722$ 705,285$
-- - - - 306,836 - - - 1,072,852 991,980
-2,364 52,273 1,820 - 21,147 1,436 - - 134,529 330,187
-- - - - - - - - 152,462 263,270
1,561(2,661) (76) (5,052) 1,418 (786) 1,332 26,381 17,277 17,744 12,576
-- - - - - - - - 50,523 -
1,561233,035 52,197 212,224 1,418 327,197 164,682 26,381 17,277 2,335,832 2,303,298
955,000240,000 130,000 200,000 - 185,000 154,000 - - 4,099,000 4,374,000
134,93923,518 106,788 2,518 115,389 39,457 5,700 - 43,938 961,815 1,092,782
403403 403 - 403 403 - - - 3,987 2,656
-- - - - - - - 52,337 57,180 27,500
1,090,342263,921 237,191 202,518 115,792 224,860 159,700 - 96,275 5,121,982 5,496,938
(1,088,781)(30,886) (184,994) 9,706 (114,374) 102,337 4,982 26,381 (78,998) (2,786,150) (3,193,640)
1,090,00020,000 - - 110,000 - 5,000 722,570 64,853 2,957,935 3,432,296
-- - - - - - - - (54,815) (1,836,900)
-- - - - - - - - - 1,530,000
-- - - - - - - 2,190,000 2,190,000 -
-- - - - - - - (2,145,864)(2,145,864) -
-- - - - - - - 8,032 8,032 5,188
-- - - - - - - (11,009) (11,009) -
1,090,00020,000 - - 110,000 - 5,000 722,570 106,012 2,944,279 3,130,584
1,219(10,886) (184,994) 9,706 (4,374) 102,337 9,982 748,951 27,014 158,129 (63,056)
31,83775,328 202,417 (9,706) 47,765 10,412 - - - 1,547,830 1,610,886
$ 33,05664,442$ 17,423$ -$ 43,391$ 112,749$ 9,982$ 748,951$ 27,014$ 1,705,959$ 1,547,830$
91
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92
NONMAJOR CAPITAL PROJECT FUNDS
The City of Andover had the following Capital Projects 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.
- This fund was established to account for access fees and sanitary sewer improvements.
Sewer Trunk
Unfinanced - This fund was established to account for projects that have been internally financed by the City where
it is not practical to issue bonds to finance.
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.
- This fund was established to account for contributions associated with land development to be
Park Dedication
used for constructing and upgrading the City’s park system.
Building Fund - This fund was established to account for miscellaneous building improvements for all facilities.
Capital Notes 2003C - This fund was established to account for the purchase of capital equipment that was financed
through the issuance of capital notes.
- This fund was established to account for the construction of a fire station with the use of bond
Fire Station #3
proceeds.
State Aid Bonds 2001B - This fund was established to account for the construction and maintenance of various
MSA eligible projects.
93
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING BALANCE SHEE
T
NONMAJOR CAPITAL PROJECTS FUND
S
December 31, 200
4
Comparative Totals For December 31, 200
3
StorTax
m
SeweSeweIncremen
rrt
ProjecTrunkUnfinancedProjects
t
Asset
s
Cash and investment$ 983,2848,699$ 5,092$ 3,765,538$
s
4,008- - 16,119
Accrued interes
t
Due from other governmental unit -- - 31,423
s
Property taxes receivable:
Unremitte -- - -
d
Special assessments receivable
Unremitte 608- 1,049 -
d
880- - -
Delinquent
Deferre 144,760- 85,221 5,385
d
-- - -
Notes receivable
Total asset 1,133,5408,699 91,362 3,818,465
s
Liabilities and Fund Balanc
e
Liabilities:
Interfund payable -120,000 125,000 -
s
-- - 383
Accounts payable
Contracts payabl 3,774- - 22,156
e
-- - 6,580
Due to other governmental units
Interfund loan payabl -- - -
e
145,640- 85,221 5,385
Deferred revenue
149,414120,000 210,221 34,504
Total liabilities
Fund balance (deficit):
Reserved for project -- - -
s
Unreserved:
Designated for project 984,126- - 3,783,961
s
-(111,301) (118,859) -
Undesignated
Total fund balance (deficit)(111,301) 984,126 (118,859) 3,783,961
$ 1,133,5408,699$ 91,362$ 3,818,465$
Total liabilities and fund balanc
e
94
Statement 17
Totals
Capital
ParkBuildinNoteFireNonmajor Capital Projects Funds
gs
Fund2003CStation #320042003
Dedication
$ 237,041222,209$ 49,384$ 322,537$ 5,593,784$ 3,823,108$
7021,226 336 3,180 25,571 9,143
-1,500 - - 32,923 32,923
-665 - - 665 922
-- - - 1,657 5,712
-- - - 880 140
-- - - 235,366 124,562
-- - - - 15,595
237,743225,600 49,720 325,717 5,890,846 4,012,105
-- - - 245,000 755,000
-- - 681 1,064 28,364
-- - 137,299 163,229 356,529
-- - - 6,580 5,766
-- - - - 150,000
- - 236,246 140,297
--
-- - 137,980 652,119 1,435,956
-- 49,720 187,737 237,457 459,339
237,743225,600 - - 5,231,430 3,124,914
-- - - (230,160) (1,008,104)
237,743225,600 49,720 187,737 5,238,727 2,576,149
$ 237,743225,600$ 49,720$ 325,717$ 5,890,846$ 4,012,105$
95
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2004
With Comparative Totals For The Year Ended December 31, 2003
StormTax
SewerSewerIncrement
ProjectTrunkUnfinancedProjects
Revenues:
General property taxes-$ -$ -$ -$
Tax increment collections- - - 120,615
Intergovernmental- - - -
Special assessments- 16,959 22,178 1,096
Investment income- 39,185 (5,348) 196,527
Miscellaneous
Park dedication fees- - - -
Connection charges- 385,173 - -
Other 64,378- - 15,622
Total revenues- 505,695 16,830 333,860
Expenditures:
Current:
General government -- 9,041 -
Public safety -- - -
Public works- 187,144 - -
Parks and recreation- - - -
Economic development -- - 739,129
Capital outlay:
General government -- - -
Public safety -- - -
Public works- - - -
Sanitation- - - -
Parks and recreation- - - -
Construction/acquisition costs- - - 164,272
Total expenditures- 187,144 9,041 903,401
Revenues over (under) expenditures- 318,551 7,789 (569,541)
Other financing sources (uses):
Transfers in - 407,850 518,618 -
Transfers out (484,014)- - -
Bonds issued- - - -
Bond premium- - - -
Bond discount- - - -
Proceeds from sale of capital assets- - - 2,712,325
Total other financing sources (uses)- (76,164) 518,618 2,712,325
Net increase (decrease) in fund balance- 242,387 526,407 2,142,784
Fund balance - January 1(111,301) 741,739 (645,266) 1,641,177
Fund balance - December 31(111,301)$ 984,126$ (118,859)$ 3,783,961$
96
Statement 18
CapitalStateTotals
ParkBuildingNotesFireAid BondsNonmajor Capital Projects Funds
DedicationFund2003CStation #32001B20042003
$ -46,287$ -$ -$ -$ 46,287$ 45,909$
-- - - - 120,615 144,594
-434 - - - 434 538
-- - - - 40,233 479,888
(2,565)9,607 6,439 55,335 (23,838) 275,342 55,034
-842,042 - - - 842,042 357,483
-- - - - 385,173 246,773
157,54118,725 - - - 256,266 70,759
154,976917,095 6,439 55,335 (23,838) 1,966,392 1,400,978
127,116- - - - 136,157 119,032
-- 22,715 163,196 - 185,911 -
-- - - 435,501 622,645 454,708
-69,761 - - - 69,761 38,359
-- - - - 739,129 289,134
132,466- 60,942 - - 193,408 -
-- 49,580 33,228 - 82,808 -
-- 215,959 - - 215,959 158,173
-- - - - - 3,041
-463,207 26,644 - - 489,851 697,043
-- - 1,265,839 - 1,430,111 791,739
259,582532,968 375,840 1,462,263 435,501 4,165,740 2,551,229
(104,606)384,127 (369,401) (1,406,928) (459,339) (2,199,348) (1,150,251)
593,886- - - - 1,520,354 1,236,208
-(500,000) - (104,292) - (1,088,306) (1,248,662)
-- - 1,700,000 - 1,700,000 400,000
-- - 7,502 - 7,502 -
-- - (8,545) - (8,545) -
-- 18,596 - - 2,730,921 777,140
593,886(500,000) 18,596 1,594,665 - 4,861,926 1,164,686
489,280(115,873) (350,805) 187,737 (459,339) 2,662,578 14,435
(251,537)341,473 400,525 - 459,339 2,576,149 2,561,714
$ 237,743225,600$ 49,720$ 187,737$ -$ 5,238,727$ 2,576,149$
97
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - FORESTRStatement 19
Y
SCHEDULE OF REVENUES, EXPENDITURES AN
D
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 200
4
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted Amounts
Positive2003
OriginalFinalActual(Negative)Actual
Revenues:
$ --$ 13,341$ 13,341$ 27,215$
Intergovernmental
Charges for service 6,7006,700 3,510 (3,190) 4,318
s
Investment incom 200200 (532) (732) 328
e
6,9006,900 16,319 9,419 31,861
Total revenues
Expenditures:
Current:
Public works9,298 9,298 23,160 (13,862) 31,736
Net increase (decrease) in fund balance(2,398)$ (2,398)$ (6,841) 23,281$ 125
Fund balance (deficit) - January 113,609 13,484
Fund balance (deficit) - December 316,768$ 13,609$
98
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - LRRWMOStatement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive2003
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes30,000$ 30,000$ 27,458$ (2,542)$ 21,771$
Intergovernmental- - 255 255 256
Investment income200 200 (480) (680) (576)
Total revenues30,200 30,200 27,233 (2,967) 21,451
Expenditures:
Current:
Public works31,466 31,466 30,424 1,042 42,459
Revenues over (under) expenditures(1,266) (1,266) (3,191) (1,925) (21,008)
Other financing sources (uses):
Transfers out -- - - (5,007)
Net increase (decrease) in fund balance(1,266)$ (1,266)$ (3,191) (1,925)$ (26,015)
Fund balance (deficit) - January 1(1,838) 24,177
Fund balance (deficit) - December 31(5,029)$ (1,838)$
99
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - DRAINAGE AND MAPPINGStatement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive2003
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services10,500$ 10,500$ 22,968$ 12,468$ 8,444$
Investment income- - 1,177 1,177 2,048
Total Revenues10,500 10,500 24,145 13,645 10,492
Expenditures:
Current:
Public works15,150 15,150 7,333 7,817 12,602
Revenues over (under) expenditures(4,650) (4,650) 16,812 21,462 (2,110)
Other financing sources (uses):
Transfers in -- - - 40,057
Net increase (decrease) in fund balance(4,650)$ (4,650)$ 16,812 21,462$ 37,947
Fund balance (deficit) - January 127,502 (10,445)
Fund balance (deficit) - December 3144,314$ 27,502$
100
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - EDA GENERALStatement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive2003
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services114,490$ 114,490$ 126,551$ 12,061$ 32,863$
Investment income- - 1,425 1,425 -
Miscellaneous- - 2,954 2,954 114,490
Total revenues114,490 114,490 130,930 16,440 147,353
Expenditures:
Current:
Economic development 155,443155,443 165,126 (9,683) 182,038
Capital outlay:
Economic developmen
t 72,00072,000 - 72,000 -
Total expenditures227,443 227,443 165,126 62,317 182,038
Revenues over (under) expenditures(112,953) (112,953) (34,196) 78,757 (34,685)
Other financing sources (uses):
Transfers in -- - - 46,497
Proceeds from sale of capital assets101,440 101,440 101,440 - -
Total financing sources (uses)101,440 101,440 101,440 - 46,497
Net increase (decrease) in fund balance(11,513)$ (11,513)$ 67,244 78,757$ 11,812
Fund balance (deficit) - January 120,944 9,132
Fund balance (deficit) - December 3188,188$ 20,944$
101
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - TRAIL AND TRANSPORTATIONStatement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive2003
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental100,000$ 100,000$ -$ (100,000)$ 5,925$
Charges for services78,450 78,450 177,789 99,339 79,930
Investment income1,500 1,500 8,958 7,458 2,997
Total revenues179,950 179,950 186,747 6,797 88,852
Expenditures:
Current:
Public works- - 21,491 (21,491) 6,009
Capital outlay:
Public works225,000 225,000 79,056 145,944 43,864
Total expenditures225,000 225,000 100,547 124,453 49,873
Net increase (decrease) in fund balance(45,050)$ (45,050)$ 86,200 131,250$ 38,979
Fund balance (deficit) - January 190,136 51,157
Fund balance (deficit) - December 31176,336$ 90,136$
102
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITYStatement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services14,250$ 14,250$ 94,856$ 80,606$ 69,065$
Investment income2,000 2,000 5,330 3,330 7,355
Total revenues16,250 16,250 100,186 83,936 76,420
Expenditures:
Current:
Public works65,299 65,299 56,032 9,267 58,425
Revenues over (under) expenditures(49,049) (49,049) 44,154 93,203 17,995
Other financing sources (uses):
Transfers out -- - - (10,014)
Net increase (decrease) in fund balance(49,049)$ (49,049)$ 44,154 93,203$ 7,981
Fund balance (deficit) - January 1207,589 199,608
Fund balance (deficit) - December 31251,743$ 207,589$
103
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CAPITAL EQUIPMENT RESERVEStatement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive2003
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes203,200$ 203,200$ 185,150$ (18,050)$ 67,887$
Intergovernmental- - 1,737 1,737 795
Investment income15,000 15,000 22,534 7,534 19,957
Miscellaneous- - 925 925 635
Total revenues218,200 218,200 210,346 (7,854) 89,274
Expenditures:
Current:
General government -- 37,458 (37,458) 18,051
Capital outlay:
Public safety 79,00079,000 12,995 66,005 21,276
Public works- - 106,278 (106,278) -
Parks and recreation- - 50,888 (50,888) -
Total expenditures79,000 79,000 207,619 (128,619) 39,327
Revenues over (under) expenditures139,200 139,200 2,727 (136,473) 49,947
Other financing sources (uses):
Transfers in 20,00020,000 20,000 - 20,000
Transfers out (34,000)(34,000) (34,000) - (25,000)
Proceeds from the sale of capital assets- - 40,293 40,293 19,751
Total financing sources (uses)(14,000) (14,000) 26,293 40,293 14,751
Net increase (decrease) in fund balance125,200$ 125,200$ 29,020 (96,180)$ 64,698
Fund balance (deficit) - January 1731,806 667,108
Fund balance (deficit) - December 31760,826$ 731,806$
104
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATINGStatement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services208,124$ 208,124$ 135,093$ (73,031)$ 21,361$
Investment income10,000 10,000 12,796 2,796 19,794
Total revenues218,124 218,124 147,889 (70,235) 41,155
Expenditures:
Current:
Public works208,124 208,124 139,697 68,427 33,218
Net increase (decrease) in fund balance426,248$ 426,248$ 8,192 (1,808)$ 7,937
Fund balance (deficit) - January 1135,878 127,941
Fund balance (deficit) - December 31144,070$ 135,878$
105
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANTStatement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental-$ -$ 46,989$ 46,989$ -$
Investment income- - 1,692 1,692 -
Miscellaneous- - 1,298 1,298 -
Total revenues- - 49,979 49,979 -
Expenditures:
Current:
Economic Development -- 14,196 (14,196) -
Net increase (decrease) in fund balance-$ -$ 35,783 64,175$ -
Fund balance (deficit) - January 1- -
Fund balance (deficit) - December 3135,783$ -$
106
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - COMMUNITY CENTERStatement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services-$ -$ 29,683$ 29,683$ -$
Investment income- - 20,253 20,253 -
Total revenues- - 49,936 49,936 -
Expenditures:
Current:
Parks and recreation- - 73,213 (73,213) -
Revenue over (under) expenditures- - (23,277) (23,277) -
Other financing sources (uses)
Transfers in -- 500,000 500,000 -
Net increase (decrease) in fund balance-$ -$ 476,723 476,723$ -
Fund balance (deficit) - January 1- -
Fund balance (deficit) - December 31476,723$ -$
107
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CHARITABLE GAMBLINGStatement 29
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2004
With Comparative Actual Amounts For The Year Ended December 31, 2003
Variance with
Final Budget -
Budgeted AmountsPositive
OriginalFinalActual(Negative)Actual
Revenues:
Miscellaneous-$ -$ 8,590$ 8,590$ -$
Expenditures:
Current:
General government -- 1,000 (1,000) -
Net increase (decrease) in fund balance-$ -$ 7,590 9,590$ -
Fund balance (deficit) - January 1- -
Fund balance (deficit) - December 317,590$ -$
108
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.
109
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF NET ASSETSStatement 30
INTERNAL SERVICE FUNDS
December 31, 2004
With Comparative Totals for December 31, 2003
Central
EquipmentRiskTotals
MaintenanceManagement20042003
Assets
Current assets:
Cash and cash equivalents126,737$ 59,421$ 186,158$ 198,627$
Accrued interest 198631 829 672
Prepaid items- 56,945 56,945 44,580
Inventories - at cost37,383 - 37,383 49,905
Total assets164,751 116,564 281,315 293,784
Liabilities
Current liabilities:
Accounts payable7,190 500 7,690 4,396
Due to other governmental units357 18 375 999
Salaries payable2,795 204 2,999 6,894
Total liabilities10,342 722 11,064 12,289
Net assets
Unrestricted154,409$ 115,842$ 270,251$ 281,495$
110
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 31
CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2004
With Comparative Totals For The Year Ended December 31, 2003
Central
EquipmentRiskTotals
MaintenanceManagement20042003
Operating revenues:
User charges427,003$ 219,782$ 646,785$ 427,001$
Other 25,500520 26,020 232,859
Total operating revenues427,523 245,282 672,805 659,860
Operating expenses:
Personal services181,976 72,433 254,409 224,583
Supplies170,615 - 170,615 143,102
Other service charges94,016 168,264 262,280 252,906
Total operating expenses446,607 240,697 687,304 620,591
Operating income (loss)(19,084) 4,585 (14,499) 39,269
Nonoperating revenues (expenses):
Investment income2,795 460 3,255 4,218
Change in net assets(16,289) 5,045 (11,244) 43,487
Net assets - January 1170,698 110,797 281,495 238,008
Net assets - December 31154,409$ 115,842$ 270,251$ 281,495$
111
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF NET ASSETSStatement 33
FIDUCIARY FUNDS
December 31, 2004
BalanceBalance
January 1,December 31,
2004AdditionsDeletions2004
General Escrow Fund
Assets
Cash and investments41,313$ 1,301$ (14,625)$ 27,989$
Liabilities
Deposits payable41,313 1,301 (14,625) 27,989
Total liabilities41,313$ 1,301$ (14,625)$ 27,989$
General Agency Fund
Assets
Cash and investments394,383$ 1,784,938$ (1,898,750)$ 280,571$
Liabilities
Accounts payable489 10,972 (11,461) -
Contracts payable3,620 6,849 (3,621) 6,848
Deposits payable390,274 1,767,117 (1,883,668) 273,723
Total liabilities394,383$ 1,784,938$ (1,898,750)$ 280,571$
Total Fiduciary Funds
Assets
Cash and investments435,696$ 1,786,239$ (1,913,375)$ 308,560$
Liabilities
Accounts payable489 10,972 (11,461) -
Contracts payable3,620 6,849 (3,621) 6,848
Deposits payable431,587 1,768,418 (1,898,293) 301,712
Total liabilities435,696$ 1,786,239$ (1,913,375)$ 308,560$
112
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 and/or other governmental units. 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.
113
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF NET ASSETSStatement 33
FIDUCIARY FUNDS
December 31, 2004
BalanceBalance
January 1,December 31,
2004AdditionsDeletions2004
General Escrow Fund
Assets
Cash and investments41,313$ 1,301$ (14,625)$ 27,989$
Liabilities
Deposits payable41,313 1,301 (14,625) 27,989
Total liabilities41,313$ 1,301$ (14,625)$ 27,989$
General Agency Fund
Assets
Cash and investments394,383$ 1,784,938$ (1,898,750)$ 280,571$
Liabilities
Accounts payable489 10,972 (11,461) -
Contracts payable3,620 6,849 (3,621) 6,848
Deposits payable390,274 1,767,117 (1,883,668) 273,723
Total liabilities394,383$ 1,784,938$ (1,898,750)$ 280,571$
Total Fiduciary Funds
Assets
Cash and investments435,696$ 1,786,239$ (1,913,375)$ 308,560$
Liabilities
Accounts payable489 10,972 (11,461) -
Contracts payable3,620 6,849 (3,621) 6,848
Deposits payable431,587 1,768,418 (1,898,293) 301,712
Total liabilities435,696$ 1,786,239$ (1,913,375)$ 308,560$
114
SUPPLEMENTARY FINANCIAL INFORMATION
115
CITY OF ANDOVER, MINNESOT
A
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2004
Authorized
IssueMaturityInterestand
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
1997 Public Project Revenue Bonds9/1/199712/1/20164.50-5.90%2,350,000$
2004 EDA Public Facility Lease Revenue Bonds4/23/20042/1/20342.215-5.400%19,580,000
21,930,000
Special Assessment Bonds:
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
Total special assessment bonds3,745,000
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
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
2003B G.O. Tax Increment Refunding Bonds6/1/20038/1/20102.00-3.00%1,530,000
2004B G.O. Tax Increment Refunding Bonds3/16/20048/1/20102.00-3.25%4,260,000
Total tax increment bonds16,675,000
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
2003 G.O. Equipment Certificates3/11/20036/1/20041.50-1.75%394,000
2003C G.O. Equipment Certificates12/18/200312/1/20061.50%400,000
Total certificates of indebtedness3,054,000
Capital Improvement Bonds
2004A G.O. Capital Improvement Bonds3/16/20042/1/20172.00-3.75%3,890,000
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
2003A Permanent Improvement Revolving Bonds6/1/20032/1/20102.00-2.60%4,580,000
Total permanent improvement revolving bonds12,905,000
State Aid Bonds:
2001B State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000
Total Bonded Indebtedness64,954,000
Compensated absences359,355
Total governmental activities indebtedness65,313,355
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000
Compensated absences65,234
Total business-type activities indebtedness9,845,234
Total City indebtedness$75,158,589
116
Exhibit 1
Principal Payments
PriorCurrentOutstanding2005 Payment
YearsYear12/31/04PrincipalInterestTotal
$ 2,045,000305,000$ -$ -$ -$ -$
-- 19,580,000 - 1,194,167 1,194,167
2,045,000305,000 19,580,000 - 1,194,167 1,194,167
340,000800,000 - - - -
915,0001,690,000 - - - -
1,255,0002,490,000 - - - -
75,000810,000 - - - -
250,0001,280,000 4,525,000 4,525,000 118,175 4,643,175
140,000240,000 1,120,000 1,120,000 24,325 1,144,325
210,000270,000 1,965,000 305,000 133,475 438,475
185,000- 1,345,000 200,000 30,120 230,120
-- 4,260,000 - 113,125 113,125
860,0002,600,000 13,215,000 6,150,000 419,220 6,569,220
305,000745,000 - - - -
520,000 255,000 14,724 269,724
240,000450,000
200,000194,000 - - - -
154,000- 246,000 122,000 3,741 125,741
899,0001,389,000 766,000 377,000 18,465 395,465
-- 3,890,000 120,000 115,968 235,968
2,740,000610,000 - - - -
955,000920,000 3,100,000 990,000 100,398 1,090,398
-- 4,580,000 715,000 91,755 806,755
3,695,0001,530,000 7,680,000 1,705,000 192,153 1,897,153
130,000285,000 2,340,000 135,000 102,081 237,081
8,884,0008,599,000 47,471,000 8,487,000 2,042,054 10,529,054
-- 359,355 - - -
8,884,0008,599,000 47,830,355 8,487,000 2,042,054 10,529,054
310,000- 9,470,000 320,000 421,392 741,392
-- 65,234 - - -
310,000- 9,535,234 320,000 421,392 741,392
$ 9,194,0008,599,000$ 57,365,589$ 8,807,000$ 2,463,446$ 11,270,446$
117
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF TAX CAPACITY RATES AND LEVIESExhibit 2
Taxes Payable
20052004
Tax capacity values$ 20,556,10423,447,444$
Captured tax increment value(1,501,234) (1,384,463)
Fiscal disparities - contribution(695,012) (567,147)
Local taxable value21,251,198 18,604,494
Fiscal disparities - distribution2,956,709 2,862,334
Adjusted tax capacit$ 21,466,82824,207,907$
y
20052004
dTax CapacityCertifiedTax Capacity
Certifie
LevyRateLevyRate
General Revenue Levy:
General Fund4,831,158$ 4,850,296$
Fire Relief 43,75043,750
Capital Equipment/Projects203,200 203,200
Parks Projects52,800 50,800
Road and Bridge679,899 619,611
Pedestrian Trail Maintenance46,000 -
Total General Revenue Levy 24.182%5,767,6575,856,807 26.651%
Debt Service Levy:
1999 G.O. Equipment Certificate- 326,655
2001C G.O. Capital Note283,210 276,693
2003 G.O. Equipment Certificate- 212,695
2003C G.O. Equipment Certificate132,030 168,000
2004A G.O. Capital Improvement Bonds247,766 -
2004 EDA Public Facility Revenue Bonds807,000 -
2005 G.O. Equipment Certificate200,000 -
Total Debt Service Levy 6.895%984,0431,670,006 4.547%
Lower Rum River Watershed 0.338%30,00030,000 0.394%
Total7,556,813$ 31.415%6,781,700$ 31.592%
118
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF DEFERRED TAX LEVIESExhibit 3
GENERAL OBLIGATION BOND
S
December 31, 2004
TaxesTax Increment Bonds
Payable1995D19992000A2003B2004BTotal
2005468,175$ 1,144,325$ 438,475$ 230,120$ 113,125$ 2,394,220$
2006- - 431,600 236,120 588,325 1,256,045
2007- - 429,025 236,920 588,625 1,254,570
2008- - 439,787 247,620 592,412 1,279,819
2009- - 447,275 253,020 594,600 1,294,895
2010- - 222,633 257,500 2,408,325 2,888,458
$ 1,144,325468,175$ 2,408,795$ 1,461,300$ 4,885,412$ 10,368,007$
CapitalEDA Public
ImprovementFacility LeaseTotal
TaxesBondsRevenue BondsDeferred TaCertificates of Indebtednessx
Payable2001C2003CTotal2004Aof 2004Levies
2005269,724$ 125,741$ 395,465$ 235,968$ 1,194,168$ 4,219,821$
2006270,035 125,886 395,921 347,418 1,149,102 3,148,486
2007- - - 347,668 1,144,731 2,746,969
2008- - - 357,080 908,695 2,545,594
2009- - - 360,580 699,806 2,355,281
2010- - - 368,418 700,684 3,957,560
2011- - - 375,143 694,891 1,070,034
2012- - - 385,993 697,456 1,083,449
2013- - - 390,905 693,534 1,084,439
2014- - - 404,596 693,171 1,097,767
2015- - - 417,000 695,221 1,112,221
2016- - - 423,050 694,846 1,117,896
2017- - - 427,875 689,947 1,117,822
2018- - - - 690,822 690,822
2019- - - - 691,346 691,346
2020- - - - 690,203 690,203
2021- - - - 688,338 688,338
2022- - - - 690,656 690,656
2023- - - - 687,079 687,079
2024- - - - 687,603 687,603
2025- - - - 686,950 686,950
2026- - - - 685,110 685,110
2027- - - - 687,100 687,100
2028- - - - 687,790 687,790
2029- - - - 682,310 682,310
2030- - - - 685,530 685,530
2031- - - - 682,320 682,320
2032- - - - 682,680 682,680
2033- - - - 681,480 681,480
2034- - - - 1,015,453 1,015,453
$ 251,627539,759$ 791,386$ 4,841,694$ 22,659,022$ 38,660,109$
119
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2004
Transfe
Transferr
IOu
nt
General Fund
Capital Equipment Reserv$ -34,000$ General Fund Admin Allocatio
en
Road and Brid -90,000 General Fund Admin Allocatio
gen
Water Fun -135,000 General Fund Admin Allocatio
dn
Sewer Fun -40,000 General Fund Admin Allocatio
dn
Total General Fund299,000 -
Special Revenue Funds
Capital Equipment Reserv
e
Sewer Fun -20,000 Capital Equipment Reserv
de
General Fun 34,000- General Fund Admin Allocatio
dn
34,00020,000
Communit Cente
yr
Park Dedication Fun -500,000 Donation to Communit Cente
dyr
Total Special Revenue Funds520,000 34,000
Debt Service Funds
1994B G.O. Tax Increment Bond
s
Tax Increment Proects Fun 4,651- Close Fun
jdd
1994C G.O. Improvement Bon
d
Water Trunk Fun -130,894 Debt Service Allocatio
dn
Sewer Trunk Fun -130,894 Debt Service Allocatio
dn
1995A G.O. Improvement Bon -14,353 Close Fun
dd
-276,141
1995A G.O. Improvement Bon
d
Water Trunk Fun -332,360 Debt Service Allocatio
dn
Sewer Fun -332,360 Debt Service Allocatio
dn
Water Trunk Fun 7,850- Close Fun
dd
Sewer Trunk Fun 7,850- Close Fun
dd
1994C G.O. Improvement Bon 14,354- Close Fun
dd
30,054664,720
1995D G.O. Tax Increment Bond
s
Tax Increment Proects Fun -4,651 Close Fun
jdd
2000B PI
R
PIR Capital Proects Fun -2,790,826 Debt Service Allocatio
jdn
2001A PI
R
PIR Capital Proects Fun -1,090,000 Debt Service Allocatio
jdn
2003A PI
R
PIR Capital Proects Fun -110,000 Debt Service Allocatio
jdn
2001C G.O. Capital Not
e
Water Fun -13,000 Debt Service Allocatio
dn
Sewer Fun -7,000 Debt Service Allocatio
dn
-20,000
2004 G.O. Capital Not
e
Storm Sewer Fun -5,000 Debt Service Allocatio
dn
2004 EDA Public Facilit Lease Revenue Bond
ys
2004 Lease Revenue Bonds - Communit Cente$ -722,570$ Debt Service Reserv
yre
120
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2004(Continued
)
TransfeTransfe
rr
IOu
nt
2004A G.O. Capital Improvements Bon
d
2004A G.O. Cap. Improv. Bonds - Fire Station No. $ -44,743$ Set Up Debt Service Fun
3d
EDA Revenue Bond -20,110 Close Fun
sd
-64,853
EDA Revenue Bond
s
2004 G.O. Capital Improvements Bon 20,110- Close Fun
dd
20,110-
Total Debt Service Funds5,748,761 54,815
Capital Proects Funds
j
Water Trunk Fun
d
Water Fun -434,000 Replacement Reserv
de
1995A G.O. Improvement Bon -7,850 Close Fun
dd
1994C G.O. Improvement Bon 130,894- Debt Service Allocatio
dn
1995A G.O. Improvement Bon 332,360- Debt Service Allocatio
dn
Unfinanced Proect 98,212- #98-17 Bunker Lk Blvd Reimbursemen
jst
Water Fun 739,438- Debt Service Allocatio
dn
1,300,904441,850
Sewer Trunk Fun
d
Sewer Fun -400,000 Replacement Reserv
de
1995A G.O. Improvement Bon -7,850 Close Fun
dd
1994C G.O. Improvement Bon 130,894- Debt Service Allocatio
dn
1995A G.O. Improvement Bon 332,360- Debt Service Allocatio
dn
Unfinanced Proect 20,760- #98-17 Bunker Lk Blvd Reimbursemen
jst
484,014407,850
Unfinanced Proect
js
Water Trunk Fun -98,212 #98-17 Bunker Lk Blvd Reimbursemen
dt
Sewer Trunk Fun -20,760 #98-17 Bunker Lk Blvd Reimbursemen
dt
Road and Bride Fun -340,096 #98-17 Bunker Lk Blvd Reimbursemen
gdt
2004A G.O. Cap. Improv. Bonds - Fire Station No. -59,550 Expenditure Reimbursemen
3t
-518,618
Road and Bride Fun
gd
General Fun 90,000- General Fund Admin Allocatio
dn
Unfinanced Proect 340,096- Bunker Lk Blvd Reimbursemen
jst
430,096-
Park Dedication Fun
d
Communit Cente 500,000- Donation to Communit Cente
yryr
Buildin Fun
gd
2004 Lease Revenue Bonds - Communit Cente -593,886
yr
PIR Capital Proects Fun
jd
2000B PI 2,790,826- Debt Service Allocatio
Rn
2001A PI 1,090,000- Debt Service Allocatio
Rn
2003A PI 110,000- Debt Service Allocatio
Rn
3,990,826-
2004 Lease Revenue Bonds - Communit Cente
yr
2004 EDA Public Facilit Lease Revenue Bond 722,570- Debt Service Reserv
yse
Buildin Fun 593,886-
gd
1,316,456-
2004A G.O. Cap. Improv. Bonds - Fire Station No.
3
2004A G.O. Capital Improvements Bon 44,742- Set Up Debt Service Fun
dd
Unfinanced Proect 59,550- Expenditure Reimbursemen
jst
$ 104,292-$
121
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2004(Continued
)
TransfeTransfe
rr
IOu
nt
Total Capital Proects Funds1,962,204$ 8,126,588$
j
Enterprise Funds
Water Fun
d
Water Trunk Fun -739,438 Debt Service Allocatio
dn
General Fund 135,000- General Fund Admin Allocation
2001C G.O. Capital Not 13,000- Debt Service Allocatio
en
Water Trunk Fun 434,000- Replacement Reserv
de
582,000739,438
Sewer Fun
d
General fun 40,000- General Fund Admin Allocatio
dn
Capital Equipment Reserv 20,000- Capital Equipment Reserv
ee
2001C G.O. Capital Not 7,000- Debt Service Allocatio
en
Sewer Trunk Fun 400,000- Replacement Reserv
de
467,000-
Storm Sewer Fun
d
2004 G.O. Capital Not 5,000- Debt Service Allocatio
en
Total Enterprise Funds739,438 1,054,000
Total All Funds9,269,403$ 9,269,403$
122
III. STATISTICAL SECTION (UNAUDITED)
123
CITY OF ANDOVER, MINNESOT
A
GOVERNMENT-WIDE EXPENSES BY FUNCTIONTable 1
Last Three Fiscal Years
(Unaudited)
Function200420032002
General government$ 2,431,2522,265,215$ 2,386,568$
Public safety 2,766,6943,138,069 2,474,284
Public works5,268,813 3,361,255 4,819,429
Sanitation26,843 160,548 264,671
Parks and recreation2,028,177 802,131 856,806
Recycling 115,016113,234 116,344
Economic development 470,172941,624 720,460
Interest on long-term debt1,708,303 1,255,888 1,667,943
Water 1,737,5961,956,995 1,526,526
Sewer 1,344,8571,351,506 1,206,865
Storm sewer 168,203389,290 -
Total19,188,069$ 14,613,612$ 16,039,896$
Government-wide expenses are not available for years prior to 2002.
2004 GOVERNMENT-WIDE EXPENSES BY FUNCTION
Storm sewer
Sewer
General government
2%
7%
12%
Water
10%
Public safety
16%
Interest
9%
Econ dev
5%
Recycling
1%
Public works
27%
Park & rec
11%
Sanitation
124
CITY OF ANDOVER, MINNESOT
A
GOVERNMENT-WIDE REVENUES BY SOURCETable 2
Last Three Fiscal Years
(Unaudited)
200420032002
Program Revenues:
Charges for services5,632,156$ 4,549,454$ 4,179,886$
Operating grants and contributions1,640,389 732,011 946,495
Capital grants and contributions7,225,746 5,350,283 6,223,233
General Revenues:
General property taxes6,260,772 5,682,498 5,076,374
Tax increment collections1,186,396 1,140,040 842,607
Grants and contributions not restricted
to specific programs141,870 158,694 763,049
Unrestricted investment earnings689,458 473,111 1,279,313
Gain on sale of capital assets1,824,792 591,063 1,316,054
Total24,601,579$ 18,677,154$ 20,627,011$
Government-wide revenues are not available for years prior to 2002.
2004 GOVERNMENT-WIDE REVENUES BY SOURCE
Unrestricted investment
earnings
3%
Charges for services
23%
General property taxes
25%
Grants and contributions
not restricted to specific
programsOperating grants &
1%contributions
7%
Tax increment
collections
5%
Capital grants &
Gain on sale of capital
contributions
assets
29%
7%
125
CITY OF ANDOVER, MINNESOT
A
GENERAL FUNDTable 3
REVENUES BY SOURCE
Last Ten Fiscal Years
(Unaudited)
GeneralLicenseCharges
FiscalPropertyandInter-forInvestment
YearTaxesPermitsgovernmentalServicesFinesIncomeMiscellaneousTotal
19951,810,213$ 410,212$ 747,627$ 549,606$ 46,152$ 15,716$ 16,270$ 3,595,796$
19962,180,470 390,327 857,689 447,199 57,125 52,653 116,396 4,101,859
19972,383,965 456,413 988,814 578,221 48,800 71,224 186,863 4,714,300
19982,804,065 694,809 880,697 1,018,441 48,923 177,570 180,865 5,805,370
19993,125,776 609,344 864,985 754,629 78,396 62,041 205,924 5,701,095
20003,571,186 623,662 969,317 900,235 82,443 104,657 204,580 6,456,080
20013,982,174 720,712 1,095,727 722,690 73,699 128,701 201,221 6,924,924
20023,782,334 588,965 1,043,272 689,427 73,475 109,524 208,790 6,495,787
20034,286,838 551,385 508,054 647,813 68,686 (6,407) 226,868 6,283,237
20044,541,227 674,008 585,037 798,795 79,450 58,309 261,152 6,997,978
2004 GENERAL FUND REVENUES BY SOURCE
Investment Income
Miscellaneous
1%
4%
Charges for Services
11%
Intergovernmental
8%
License & Permits
10%
General Property Tax
65%
Fines
1%
126
CITY OF ANDOVER, MINNESOTA
GENERAL FUNTable 4
D
EXPENDITURES BY FUNCTIO
N
Last Ten Fiscal Year
s
(Unaudited)
FiscalGeneralPublicPublicParks andEconomic
YeaGovernmenSafetWorksSanitatioRecreatioRecyclinDevelopmenUnallocateTota
rtynngtdl
1995932,460$ 1,060,210$ 637,551$ 34,795$ 329,416$58,260$ 22$ 93,546$ 3,146,260$
19961,068,585 1,320,680 947,472 60,517 455,517 55,170 - 154,085 4,062,026
19971,252,047 1,409,087 1,044,183 95,632 383,059 62,281 - 212,503 4,458,792
19981,551,410 1,528,282 1,005,394 101,039 461,131 76,773 - 75,950 4,799,979
19991,700,086 1,820,436 1,363,875 119,957 579,916 88,307 - 97,032 5,769,609
20001,840,644 1,968,765 1,591,137 100,073 538,523 91,071 - 133,321 6,263,534
20011,750,574 2,087,924 1,284,491 135,189 584,647 108,390 - 145,068 6,096,283
20022,103,735 2,352,909 1,212,143 107,661 662,450 116,005 - 30,614 6,585,517
20031,915,314 2,631,991 1,126,292 80,901 599,004 114,784 - 25,865 6,494,151
20041,996,633 2,730,047 1,085,837 26,732 612,147 114,052 - 21,992 6,587,440
2004 GENERAL FUND EXPENDITURES BY FUNCTION
Recycling
2%
Park & rec
9%
Sanitation
0%
General government
31%
Public works
16%
Unallocated
0%
Public safety
42%
127
CITY OF ANDOVER, MINNESOT
A
PROPERTY TAX LEVIES AND COLLECTIONSTable 5
Last Ten Fiscal Years
(Unaudited)
TotalDelinquen
t
TotalCurrenPercentDelinquenTotalCollectionsOutstandingTaxes
tt
TaxTaxof LevyTaxTaxas a Percent ofDelinquentas a Percent of
LevCollectioCollecteCollectionsCollectionsCurrent LevTaxesCurrent Lev
Yearyndyy
19952,139,278$ 2,114,587$ 98.85%44,084$ 2,158,671$ 100.91%50,827$ 2.38%
19962,083,031 2,075,336 99.63%29,231 2,104,567 101.03%49,195 2.36%
19972,332,211 2,306,999 98.92%27,249 2,334,248 100.09%50,238 2.15%
19982,698,871 2,632,772 97.55%27,994 2,660,766 98.59%151,716 5.62%
19993,099,461 2,960,839 95.53%30,301 2,991,140 96.51%362,243 11.69%
20003,321,907 3,283,671 98.85%171,702 3,455,373 104.02%83,215 2.51%
20013,873,948 3,824,257 98.72%39,226 3,863,483 99.73%129,562 3.34%
20024,206,401 4,147,764 98.61%42,788 4,190,552 99.62%93,823 2.23%
20035,322,695 *4,770,427 89.62%59,884 4,830,311 90.75%105,044 1.97%
20045,774,633 *5,233,914 90.64%85,490 5,319,404 92.12%93,054 1.61%
* Included in the total tax levy is $470,001 of market value homestead credit (MVHC) that the City will not be receiving. Due to State
legislative actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City of Andover
CITY OF ANDOVER, MINNESOT
A
SPECIAL ASSESSMENT LEVIES AND COLLECTIONSTable 6
Last Ten Fiscal Years
(Unaudited)
TotalDelinquent
CollectionsTaxes
CurrentCurrentPercent ofDelinquentTotalas a Percent ofOutstandingas a Percent of
AssessmenCurrenDelinquenCurren
AssessmentsAssessmentsAssessmentsAssessmenttttt
YearDueCollectedCollectedCollectionsCollectionsAssessments DueAssessmentsAssessments Due
1995569,629$ 517,981$ 90.93%28,672$ 546,653$ 95.97%87,355$ 15.34%
1996573,477 531,081 92.61%28,594 559,675 97.59%55,781 9.73%
1997511,834 494,281 96.57%27,445 521,726 101.93%32,174 6.29%
1998540,783 458,655 84.81%19,787 478,442 88.47%72,342 13.38%
1999472,647 444,080 93.96%38,568 482,648 102.12%71,489 15.13%
2000433,242 424,854 98.06%36,374 461,228 106.46%15,871 3.66%
2001432,207 410,380 94.95%5,933 416,313 96.32%26,264 6.08%
2002328,831 307,051 93.38%5,694 312,745 95.11%37,404 11.37%
2003533,340 522,851 98.03%5,917 528,768 99.14%49,329 9.25%
2004192,373 189,279 98.39%7,921 197,200 102.51%15,157 7.88%
128
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYTable 7
Years 1995 throuh 200
g4
(Unaudited)
Ratio of Tax
Real PropertPersonal PropertTota
yylCapacit t
yo
TaxEstimateTaxEstimateTaxEstimateTotal Estimate
dddd
YeaCapacitActual ValuCapacitActual ValuCapacitActual ValuActual Valu
ryeyeyee
1995n/an/an/an/a10,271,906$ n/an/a
1996n/an/an/an/a12,019,964 n/an/a
1997n/an/an/an/a13,342,748 n/an/a
1998n/an/an/an/a13,887,786 n/an/a
1999n/an/an/an/a14,605,633 n/an/a
200015,690,055$ 1,146,868,600$ 615,830$ 18,139,600$ 16,305,885 1,165,008,200$ 1.40%
200118,348,662 1,312,767,000 620,797 18,285,500 18,969,459 1,331,052,500 1.43%
200215,336,075 1,479,078,600 359,540 17,999,800 15,695,615 1,497,078,400 1.05%
200317,549,064 1,699,227,100 402,840 20,202,300 17,951,904 1,719,429,400 1.04%
200420,142,088 1,945,523,200 414,016 20,761,100 20,556,104 1,966,284,300 1.05%
Source: Anoka Count Propert Tax Divisio
yyn
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBTTable 8
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Year
s
(Unaudited)
LessRatio of
GrosCash andNeNet BondeNet Bonde
stdd
Net TaBondeInvestmentBondeDebt toDeb
xdsdt
YeaPopulation (1CapacitDebt (2)On HandDebTax CapacitPer Capit
r)ytya
199520,497$ 10,877,389$ 2,207,000$ (39,677)$ 2,167,323$ 20%106$
199621,495 12,803,201 1,851,000 (57,068) 1,793,932 14%83
199722,369 14,112,304 3,835,000 (130,087) 3,704,913 26%166
199823,213 14,674,020 3,430,000 (161,907) 3,268,093 22%141
199924,358 15,439,015 4,005,000 (249,278) 3,755,722 24%154
200026,588 17,207,590 3,520,000 (13,984) 3,506,016 20%132
200127,446 20,188,387 4,210,000 (94,728) 4,115,272 20%150
200228,664 16,573,713 3,680,000 (112,848) 3,567,152 22%124
200328,939 18,759,163 3,710,000 (82,515) 3,627,485 19%125
2004*30,000 21,466,828 24,236,000 (815,322) 23,420,678 109%781
(1) Source: Metropolitan Counci
l
(2) Onl includes debt supported b tax lev
yyy
* 2004 includes the 2004 EDA Public Facilit Revenue Bonds of which approximatel half of the annual debt service paments will come fro
yyym
a lease with the YMCA.
129
CITY OF ANDOVER, MINNESOT
A
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FORTable 9
GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURE
S
Last Ten Fiscal Years
(Unaudited)
Ratio of
TotalDebt Service
InterestTotalGeneralto General
Debtand FiscalDebtGovernmentalGovernmental
YearPrincipalChargesServiceExpenditures (1)Expenditures
19957,843,000$ 1,283,040$ 9,126,040$ 20,191,979$ 45%
19963,551,000 1,399,242 4,950,242 16,491,201 30%
19977,621,000 1,632,963 9,253,963 26,041,864 36%
19984,585,000 1,537,591 6,122,591 18,409,966 33%
19993,775,000 1,377,209 5,152,209 19,937,023 26%
20004,580,000 1,392,315 5,972,315 21,766,365 27%
20014,845,000 1,753,981 6,598,981 20,273,057 33%
20027,070,000 1,796,774 8,866,774 22,388,569 40%
20036,124,000 1,302,306 7,426,306 22,810,167 33%
20046,839,000 1,158,232 7,997,232 34,000,294 24%
(1) Includes all governmental fund types: The General Fund, Special Revenue Funds, Debt Service Funds and
Capital Projects Funds.
CITY OF ANDOVER, MINNESOT
A
PROPERTY TAX RATES - Table 10
DIRECT AND OVERLAPPING GOVERNMENTS
Years 1996 through 2005
(Unaudited)
Taxes
PayableCity (1)SchoolCountyOtherTotal
199619.597 66.948 31.036 1.760 119.341
199719.804 57.911 30.910 1.780 110.405
199821.824 54.497 30.618 2.407 109.346
199923.508 57.095 32.265 2.472 115.340
200022.735 55.589 30.861 3.134 112.319
200122.736 50.230 28.859 2.850 104.675
200233.511 29.070 37.976 3.745 104.302
200333.376 27.802 37.714 3.755 102.647
200431.584 21.218 35.340 3.482 91.624
200531.415 21.469 33.070 4.026 89.980
(1) Includes the Lower Rum River Watershed
Source: Anoka County Property Tax Division
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CITY OF ANDOVER, MINNESOT
A
COMPUTATION OF DIRECT AND OVERLAPPING DEBTTable 11
INCLUDING DEBT RATIO
S
December 31, 2004
(Unaudited)
BondedPercentageCity
Gross DebtApplicable toShare of
OutstandingCityDebt
Overlapping Debt:
Anoka County$ 9.0659%6,273,59169,200,000$
School Districts:
ISD No. 11 Anoka-Hennepin171,873,637 12.7111%21,847,088
ISD No. 15 St. Francis37,105,000 7.6764%2,848,328
Metro Council152,520,000 0.8687%1,324,985
Total Overlapping Debt430,698,637 32,293,992
Direct Debt:
City of Andover 100.0000%59,941,00059,941,000
Total Overlapping and Direct Debt490,639,637$ 92,234,992$
Debt Ratios:
Ratio of debt per capita (30,000 population)$3,074
Ratio of debt to estimated taxable market value of $1,967,091,5004.69%
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 12
December 31, 2004
(Unaudited)
EstimatedNet
PropertyMarketTax
TaxpayersClassificationValueCapacity
Anoka Electric / ConnexusUtility$ 187,73410,198,200$
Presbyterian Homes of AndoverApartment 150,54410,036,200
Andover LTD PartnershipMall7,301,300 145,276
116 LLCC/I5,752,700 114,304
Minnegasco, Inc.Utility 108,1145,443,200
United Power AssociationUtility 68,0543,541,500
Columbia Park PropertiesMedical Clinic2,640,700 52,064
William RademacherC/I2,554,200 49,584
Northern States PowerUtility 29,0861,454,300
Health PartnersMedical Clinic1,480,300 28,856
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CITY OF ANDOVER, MINNESOT
A
BUILDING PERMITS, PROPERTY VALUES AND HOUSEHOLDSTable 13
Last Ten Fiscal Years
(Unaudited)
New Single Family HomesNew Commercial / IndustrialAll Permits (1)
YearPermitsValuationPermitsValuationPermitsValuationHouseholds (2)
1995305 32,202,776 12 25,133,796 837 60,590,423 6,300
1996272 28,776,000 5 3,166,051 815 34,703,380 6,610
1997282 30,844,000 5 7,133,275 910 42,938,726 6,881
1998448 53,742,133 10 12,625,960 1,057 69,529,349 7,152
1999411 47,763,200 5 1,404,084 1,107 55,075,089 7,568
2000342 46,322,000 14 12,672,448 1,135 65,293,614 8,107
2001285 43,378,128 8 21,086,481 1,228 79,926,973 8,439
2002218 31,848,000 19 10,616,851 997 50,401,159 8,724
2003182 28,973,300 13 4,764,046 1,140 43,191,068 8,879
2004251 36,224,546 16 19,926,817 1,162 65,856,104 8,900
(1) Includes additions and remodelings.
(2) Source: Metropolitan Council
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CITY OF ANDOVER, MINNESOT
A
DEMOGRAPHICSTable 14
(Unaudited)
Percent
U.S. Censusof Change
199020002003*1990 - 2000
Population15,216 26,588 30,000 74.74%
Households4,519 8,107 8,900 79.40%
Household Size (Population/Household)3.37 3.28 3.37 -2.60%
POPULATION DEMOGRAPHICS (2000 U.S. CENSUS)
Populaton by Age (2000 U.S. Census):PersonsPercent
4 and under2,442 9.2%
5 - 9 10.6%2,822
10 - 14 10.4%2,763
15 - 19 7.6%2,024
20 - 24 3.7%985
25 - 34 14.5%3,849
35 - 44 22.0%5,832
45 - 54 13.1%3,489
55 - 59 4.1%1,082
60 - 64 2.0%541
65 - 74 1.7%459
75 - 84 0.8%214
85 and over86 0.3%
Total population26,588 100.0%
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 income26,317$ 23,297$ 23,198$
1999 median household income76,241 57,754 47,111
1999 median family income 64,26178,785 56,874
2000 median gross rent772 649 566
2000 median value owner occupied housing158,400 131,300 122,400
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CITY OF ANDOVER, MINNESOT
A
MISCELLANEOUS STATISTICAL DATATable 15
December 31, 2004
(Unaudited)
Date incorporated1974
Form of governmentPlan A
Miles of streets
City176
County43
Storm sewer (miles)41
Watermain (miles)76
Sanitary sewer (miles)79
Parks:
Number59
Developed acreage541
Trails (miles)23
Acreage:
Developed13,360
Undeveloped9,680
Population:
2003 Estimate30,000
2000 U.S. Census26,588
1990 U.S. Census15,216
Housing units:
2003 Estimate8,900
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 education591
Anoka County Parks and Highway DepartmentsCounty government and services189
Kottkes' Bus Service, Inc.Bus transportation175
Festival FoodsGrocery store95
Columbia Park Medical GroupMedical clinic90
Meadow Creek Christian SchoolPrivate education K-1288
Farmstead at AndoverSenior housing and assisted living facilities84
Ed Fields & Sons, Inc.Vegetable farming70
City of AndoverMunicipal government and services68
McDonald'sRestaurant60
134