HomeMy WebLinkAbout2005 CAFRCOMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2005
MINNESOTA
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1685 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, 2005
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
I. INTRODUCTORY SECTION
Letter of Transmittal2
Organization9
Organizational Chart10
Certificate of Achievement11
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:
EDA GeneralStatement 1998
Community Development Block GrantStatement 2099
Community CenterStatement 21100
Drainage and MappingStatement 22101
LRRWMOStatement 23102
ForestryStatement 24103
Trail and TransportationStatement 25104
Right-of-Way Management/UtilityStatement 26105
Capital Equipment ReserveStatement 27106
Charitable GamblingStatement 28107
Construction Seal CoatingStatement 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 Changes in Assets and Liabilities - Fiduciary 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 1996 through 2005Table 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 1997 through 2006Table 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 22, 2006
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, 2005, 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.
Generally Accepted Accounting Principles (GAAP) requires 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.
2
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 20,000, classifying it as a second 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. A list of public officials and organizational chart can be found
on page 9 and 10 respectively.
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 2006 and 2007, with an estimated population of 34,500 by 2010. The
rate of residential growth as compared to the growth in the 90’s has significantly declined as the availability of residentially
zoned property decreased. The City has experienced a significant amount of commercial growth from 2000 through current
2005. 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 77% of the total in 2005. They are general
property taxes at 64%, and charges for services at 13%. 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 $590,000 in aid
to Andover, that loss in aid was originally intended to be for two years (2003 & 2004) but that loss has since been extended to
include years 2005 and 2006. The state allowed cities the ability to levy up to 60% of the lost 2003 aid in 2004.
LGA, HACA and MVHC for 1998 through 2005 are as follows:
Year
LGAHACAMVHCTotal
1998122,651$ 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
*
2005 -- 13,179 13,179
*
*Due to the State Legislative actions to deal with the state budget deficits,
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 - 2004. The 2004 levy limits were so severe that the State did not allow cities
the ability to capture residential and commercial market value growth. Levy limits were lifted for 2005 and 2006.
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 2005. The past seven 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
2005724,436 50,428
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 were being added
to the overall lot inventory. License and permit fees increased substantially since 2003 as the number of residential lots available
has increased and the value of new construction is on the rise.
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from
charges for services totaled $798,795 in 2004 and $933,365 in 2005. This increase can be linked to the robust housing market as
mentioned above and the impact to a number of homes from a severe storm and tornado in September of 2005.
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 education622
Anoka County Parks and Highway DepartmentsCounty government and services350
Kottkes' Bus Service, Inc.Bus transportation200
TargetRetail182
Columbia Park Medical GroupMedical clinic115
Festival FoodsGrocery store102
Meadow Creek Christian SchoolPrivate education K-1292
City of AndoverMunicipal government and services90
Tanners Steakhouse & BarRestaurant83
Farmstead at AndoverSenior housing and assisted living facilities80
MAJOR INITIATIVES
FOR THE YEAR.
The City has many accomplishments to report for 2005. The following list is a summary of some of the
major initiatives completed throughout the year.
1) Completion 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 facility will provide for a growing service
population, improving service response rates, and its relocation to the east side of heavily used commercial railroad
tracks will provide added fire protection security for eastern Andover.
2) Completion 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 field house, with running track and spectator seating for a wide range of indoor
sporting events. 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 opened in August 2005, followed by a successful grand opening
ceremony in September.
3) Continued development of the Andover Station south commercial and residential center has led to completion of a new
146,000 sq. ft. Target Greatland, a Walgreen’s and a 10,000 square foot retail strip center. TCF Bank has committed to
constructing a bank in late 2006 or early 2007. Three remaining building pads exist in the area. The common area
includes 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.
4) The successful hosting of the City’s Third 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.
5) The City started planning for the future expansion of the City Center campus to the west of existing Public Works
facilities. Previous land negotiations with the property owner resulted in a three-phase acquisition schedule of
approximately 29 acres of land and the acquisition of two additional parcels of land along Crosstown Boulevard just
west of the Water Treatment Facility. These property acquisitions are anticipated to serve the ultimate expansion of the
Public Works facilities, potential expansion of the Community Center and additional recreational amenities. The
planning will continue to be part of the capital improvement planning process.
6) The second phase of development at the Prairie Knoll Park complex which included the addition of lighting of two ball
fields and a new playscape was completed in 2005. Phase one improvement in 2004 included: 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.
th
7) The successful negotiation with Anoka County to facilitate a signalized intersection at the Hanson Boulevard and 154
Avenue and other intersection improvements at Hanson Boulevard and Bluebird Street. This project was facilitated by
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To the Honorable Mayor and City Council
City of Andover, Minnesota
a partnership of Anoka County, the City of Andover, the Anoka-Hennepin School district and a local developer
(Fairbanks Properties) contributing matching funds and securing a State grant of $300,000. Also participating were
business owners through assessments along Bluebird Street including Clocktower Commons LLC., McDonalds,
Conoco, and HealthPartners Riverway Clinic.
8) The marketing of Andover Station North, a new commercial park within the City of Andover. The Andover Economic
Development Authority along with City staff have developed this commercial park with the expectation that building
activity will take place in the summer of 2006 following the completion 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.
9) A review of the City’s sewer staging plan was completed to review other options for where the urbanized growth of the
City can take place. The City utilizes this data to plan for infrastructure expansion, residential development, utility rate
analysis and City Department workload assessment.
10) The City implemented 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.
11) The City implemented new financial management software to improve reporting and operating efficiencies. The
implementation has already yielded reduced personnel costs and more timely reports.
12) The City Council initiated the planning of the "Designated Rural Reserve" area for future urbanized growth. The
Council and staff have worked with the residents and developers to appropriately plan for the 959 acres of land. It is
anticipated that the process of studying the feasibility of providing City utility services and determining future
transportation connections in this area will progress over the next few years.
13) 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 experience steady growth in both the urban and rural areas during 2005.New residential developments
nd
reviewed during 2005 include Birch Pointe Estates, Brook Crossing, Grey Oaks 2 Addition, Parkside at Andover Station, Silver
Meadows West, Sophie’s South, and Stack’s Woods. These developments include a total of 249 urban and rural lots and
townhouse units.
Commercial Industrial Development
Commercial development in the City also continued at a steady pace over 2005. Commercial site plans reviewed during the year
included Andover Bowling Center, the Ryan Companies retail strip center, and the McDonald’s restaurant and retail strip center
in Andover Clocktower Commons. These projects added a total of 67,407 square feet of retail space to the City.
FOR THE FUTURE.
The City continues to focus on quality of life improvements throughout the City. These efforts cover a
broad array of areas including, protecting and improving the environment, revitalization of parks and public areas, expanding
recreational opportunities, providing cost-effective city services, increased communication between city representatives and the
public and added commercial/retail opportunities.
The City utilizes many avenues to reach its residents, whether through community access television, the City newsletter or the
City’s webpage (www.ci.andover.mn.us) it is important to the City that our residents are informed and have the ability to
participate in the activities of their City. The City does plan on conducting a community survey in 2006, with the help of a
polling firm, to secure opinions and suggestions from the public.
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
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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 increase, the City has been able to keep insurance costs fairly flat over
the past five 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 its annual budget for the fiscal year beginning January 1, 2005. This is the
fourth 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, 2006 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 2004 Comprehensive Annual Financial Report. This is the third 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 2005
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.
ACKNOWLEDGMENTS.
The preparation of this report could not have been accomplished without the efficient services and
dedication of the Finance Department staff and the consultation of the City's auditing firm. Staff members: Lee Brezinka,
Deanna Connoy, 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, 2005
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
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II. FINANCIAL SECTION
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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, 2005. We encourage readers to consider the information
presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 2
through 8 of this report.
Financial Highlights
The assets of the City of Andover exceeded its liabilities at the close of the most recent fiscal year by $132,578,339 (Net assets). Of this
amount, $22,772,922 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors in
accordance with the City's fund designations and fiscal policies.
The City’s total net assets increased by $4,827,229, 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 $22,260,341.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Reserved126,320$ 58,570$ 1,872,599$ 1,335,858$ 3,393,347$
Designated3,076,157 1,262,882 - 15,018,317 19,357,356
Undesignated- 1,487 - (491,849) (490,362)
$ 1,322,9393,202,477$ 1,872,599$ 15,862,326$ 22,260,341$
The City’s total long-term liabilities decreased by $4,544,371 during the current fiscal year, from $57,365,589 to $52,821,218.
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental activities:
Bonds payable47,471,000$ 4,210,000$ (8,487,000)$ 43,194,000$
Compensated absences359,355 270,935 (219,888) 410,402
Total governmental activities47,830,355 4,480,935 (8,706,888) 43,604,402
Business-type activities:
Bonds payable9,470,000 - (320,000) 9,150,000
Compensated absences65,234 42,639 (41,057) 66,816
Total business-type activities9,535,234 42,639 (361,057) 9,216,816
Total City long-term liabilities57,365,589$ 4,523,574$ (9,067,945)$ 52,821,218$
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 and the following capital projects funds (CPF): Water Trunk, Road and Bridge, Community Center Project, Tax Increment
Projects, Permanent Improvement Revolving and the 2005A G.O. Improvement Bonds.
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 $132,578,339 at the close of the most recent fiscal year.
The largest portion of the City of Andover’s net assets ($103,240,249 or 78 percent) reflects its investment in capital assets (e.g. land,
buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Andover uses
these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of
Andover's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
CITY OF ANDOVER’S NET ASSETS
Governmental ActivitiesBusiness-Type ActivitiesTotals
200420052004200520042005
Current and other assets41,593,528$ 29,057,662$ 3,301,078$ 3,208,692$ 44,894,606$ 32,266,354$
Capital assets101,308,845 111,605,598 44,758,756 44,911,727 146,067,601 156,517,325
Total assets142,902,373 140,663,260 48,059,834 48,120,419 190,962,207 188,783,679
Long-term liabilities
outstanding47,830,355 43,604,402 9,535,234 9,216,816 57,365,589 52,821,218
Other liabilities5,437,833 3,101,278 215,769 282,844 5,653,602 3,384,122
Total liabilities53,268,188 46,705,680 9,751,003 9,499,660 63,019,191 56,205,340
Net assets:
Invested in capital assets,
net of related debt52,833,950 67,652,236 35,111,309 35,588,013 87,945,259 103,240,249
Restricted17,182,422 6,565,168 - - 17,182,422 6,565,168
Unrestricted19,617,813 19,740,176 3,197,522 3,032,746 22,815,335 22,772,922
Total net assets89,634,185$ 93,957,580$ 38,308,831$ 38,620,759$ 127,943,016$ 132,578,339$
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 ($22,772,922) 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 $4,323,395 and business-type activities increased net assets by
$503,834. Key elements of the activities are as follows:
18
Management’s Discussion and Analysis
City of Andover's Changes in Net Assets
Governmental ActivitiesBusiness-Type ActivitiesTotal
200420052004200520042005
Revenues:
Program revenues:
Charges for services2,305,159$ 2,585,829$ 3,326,997$ 3,309,617$ 5,632,156$ 5,895,446$
Operating grants
and contributions1,640,389 2,535,140 - - 1,640,389 2,535,140
Capital grants
and contributions7,010,826 3,934,686 214,920 823,797 7,225,746 4,758,483
General revenues:
Property taxes6,260,772 7,066,852 - - 6,260,772 7,066,852
Tax increment1,186,396 1,285,195 - - 1,186,396 1,285,195
Grants and contributions
not restricted to
specific programs141,870 86,906 - - 141,870 86,906
Unrestricted investments
earnings681,563 690,648 7,895 47,620 689,458 738,268
Total revenues19,226,975 18,185,256 3,549,812 4,181,034 40,962,043 25,916,102
Expenses:
General government2,265,215 2,432,433 - - 2,265,215 2,432,433
Public safety 3,353,7983,138,069 - - 3,138,069 3,353,798
Public works5,268,813 3,937,423 - - 5,268,813 3,937,423
Sanitation26,843 - - - 26,843 -
Parks and recreation2,028,177 1,575,582 - - 2,028,177 1,575,582
Recycling113,234 118,599 - - 113,234 118,599
Economic development941,624 459,635 - - 941,624 459,635
Interest on long-term debt1,708,303 1,797,469 - - 1,708,303 1,797,469
Water -- 1,956,995 2,160,502 1,956,995 2,160,502
Sewer -- 1,351,506 1,555,010 1,351,506 1,555,010
Storm sewer -- 389,290 400,114 389,290 400,114
Total expenses15,490,278 13,674,939 3,697,791 4,115,626 19,188,069 17,790,565
Increase (decrease) in net
assets before gain on the
sale of capital assets and
transfers3,736,697 4,510,317 (147,979) 65,408 3,588,718 4,575,725
Gain on the sale of
capital assets1,817,938 251,504 6,854 - 1,824,792 251,504
Transfers(1,735,251) (438,426) 1,735,251 438,426 - -
Increase in net assets3,819,384 4,323,395 1,594,126 503,834 5,413,510 4,827,229
Net assets - January 1
as previously reported85,211,564 89,030,948 36,714,705 38,308,831 121,926,269 127,339,779
Prior period adjustment- 603,237 - (191,906.00) - 411,331
Net assets - January 1
as restated85,211,564 89,634,185 36,714,705 38,116,925 121,926,269 127,751,110
Net assets - December 3189,$ 93,957,580030,948$ 38,308,831$ 38,620,759$ 127,339,779$ 132,578,339$
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
Charges for services
Unrestricted investments
14.0%
earnings
Grants and contributions
3.7%
not restricted for specific
programs
Tax increment
0.5%
7.0%
Gain on the sale of
capital assets
1.4%
Capital grants and
Property taxes
contributions
38.3%
21.3%
Operating grants and
contributions
13.8%
Governmental Activities - Expenses
Interest on long-term
debt
General government
13.1%
17.8%
Economic development
3.4%
Recycling
0.9%
Parks and recreation
11.5%
Public safety
24.5%
Public works
28.8%
20
Management’s Discussion and Analysis
Business-Type Activities
Business-type activities increased net assets by $503,834. Below are graphs showing the business-type activities revenue and expense
comparisons:
Business-Type Activities - Revenues
Unrestricted
investments earnings
1.1%
Capital grants and
contributions
19.7%
Charges for services
79.2%
Business-Type Activities - Expenses
Storm sewer
9.7%
Water
Sewer
52.5%
37.8%
21
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 $23,765,341.
Approximately 85 percent of this total amount ($18,867,354) constitutes unreserved fund balance. The remainder of the fund balance
($3,392,987) is reserved because it has already been committed 1) to provide for prepaid items ($65,565), 2) to provide for inventory
($68,592), 3) to provide for economic development ($50,733), 4) to pay debt service ($1,872,599) and 5) bond proceeds specified for a
project ($1,335,858).
The general fund decreased by $100,088 in 2005, which was $1,000 more than the final budget. The adopted budget had an increase in fund
balance of $7,676, but the final budget showed a decrease of $99,082. The decrease in fund balance is due to the storm and tornado that
swept through Andover in September 2005, which did a considerable amount of damage within the City. The cleanup consisted of moving
debris off roadways, picking up trees and brush that residents had moved out to the boulevards and then the grinding and disposing of the
trees and brush. All said and done, the storm cleanup cost the City well over $250,000.
The community center capital projects fund decreased by $7,094,685 due to the near completion of the community center.
The tax increment capital projects fund decreased by $569,204 due to calling of the outstanding debt of the 1999 TIF bonds.
The permanent improvement revolving capital projects fund decreased by $641,232 due to the transfer of monies to the debt service funds.
The G.O. TIF refunding bonds debt service fund decreased by $3,940,162 due to the crossover refunding of the 1995D tax increment bonds.
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 $3,023,843 (water $1,272,140, sewer $1,618,854 and
storm sewer $132,849) and internal service funds of $272,153. The enterprise funds had a net increase in net assets in 2005 of $509,856
(water $(426,614), sewer $514,161 and storm sewer $422,309). The decrease in the water fund was due to a reduction in revenues and no
assistance from the water trunk capital projects fund for the debt service payment for the water treatment plant. In the future, a portion of the
connection fee will be used to assist in the maintenance and debt service payment of the water treatment plant. The increase in the sewer
fund was due the replacement reserve transfer not taking place in 2005. The storm sewer fund increased primarily due to the capital
contributions of equipment and infrastructure. The internal service funds had a net increase in net assets of $1,902.
Budgetary Highlights
General Fund.
In 2005, the City purchased a new financial software package which consisted of restructuring the chart of accounts. To
facilitate the restructuring, there were some reallocations between charges for services and miscellaneous revenues. The total increase in the
revenue budget consisted of a $108,180 Homeland Security Grant for firefighter gear; $9,500 Pine Thinning & Oak Wilt grant; and an
increase in Fire Aid funds of $26,263. Expenditures were increased for the items mentioned above, in addition to the use of fund balance for
a portion of the storm cleanup of $100,000.
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,
2005, amounts to $156,517,325 (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.
22
Management’s Discussion and Analysis
The City’s policy is to achieve an average rating of good (56 – 70) for all streets and trails. In the fall of 2005, 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, 2005, the City’s street and trail system was rated at an Overall Condition Index (OCI) of 83, which is higher than the City’s policy level.
The City’s streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun’s ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water
damage from 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 $1,655,715 on
street and trail maintenance for the year ending December 31, 2005. These expenditures delayed deterioration; however, the overall
condition of the system was slightly improved (82 OCI to an 83 OCI) 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
$1,000,000.
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Governmental activities:
Land and improvements7,542,304$ 90,787$ (649,225)$ 6,983,866$
Streets and trails71,537,403 1,159,247 - 72,696,650
Construction in progress13,595,227 11,146,386 (2,782,679) 21,958,934
Buildings and improvements5,844,834 1,546,674 - 7,391,508
Furniture and equipment154,090 110,689 (11,183) 253,596
Machinery and equipment5,381,535 261,800 (28,559) 5,614,776
Other park improvements2,977,842 279,530 (18,564) 3,238,808
Total capital assets 107,033,235 14,595,113 (3,490,210) 118,138,138
Less accumulated depreciation for:
Buildings and improvements1,880,230 228,007 - 2,108,237
Furniture and equipment64,234 24,943 (11,182) 77,995
Machinery and equipment3,037,999 438,565 (2,856) 3,473,708
Other park improvements741,927 143,556 (12,883) 872,600
Total accumulated depreciation5, 835,071724,390 (26,921) 6,532,540
Governmental activities
capital assets - net101,308,845 13,760,042 (3,463,289) 111,605,598
Business-type activities:
Land and improvements724,943 5,300 - 730,243
Buildings and improvements13,883,620 - - 13,883,620
Furniture and equipment38,635 13,480 - 52,115
Machinery and equipment994,901 124,765 - 1,119,666
Collection and distribution42,708,434 1,470,046 - 44,178,480
Total capital assets
being depreciated58,350,533 1,613,591 - 59,964,124
Less accumulated depreciation for:
Buildings and improvements2,532,388 497,407 - 3,029,795
Furniture and equipment30,747 2,276 - 33,023
Machinery and equipment594,715 84,578 - 679,293
Collection and distribution10,433,927 876,360 - 11,310,287
Total accumulated depreciation13, 1,460,621591,777 - 15,052,398
Business-type activities
capital assets - net44,758,756 152,970 - 44,911,726
Total capital assets146,067,601$ 13,913,012$ (3,463,289)$ 156,517,324$
Additional information on the City of Andover’s capital assets can be found in Note 5.
23
Management’s Discussion and Analysis
Long-term debt
. At the end of the current fiscal year, the City of Andover had total long-term debt outstanding of $52,821,218, a decrease
of $4,544,371 from 2004. General obligation revenue bonds ($28,730,000) were used to finance the water treatment facility and the
community center (currently being constructed). Special assessment bonds ($3,560,000) financed improvement projects within the City and
are assessed to the benefiting properties. Tax increment bonds ($7,065,000) financed the City’s economic development plan. Certificates of
indebtedness ($699,000) financed capital equipment purchases. Capital improvement bonds ($4,110,000) financed the construction of Fire
Station #3, the purchase of the Public Works building from the EDA and some improvements done at the Public Works building and City
Hall. Permanent improvement revolving bonds ($5,975,000) financed improvement projects within the City and are assessed to the
benefiting properties. State aid bonds ($2,205,000) were used to finance Municipal State Aid (MSA) eligible road projects.
Additional long-term debt in the amount of $477,218 is for compensated absences.
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
G.O. revenue bonds19,580,000$ 9,150,000$ 28,730,000$
Special assessment bonds3,560,000.00- 3,560,000
Tax increment bonds7,065,000 - 7,065,000
Certificates of indebtedness699,000 - 699,000
Capital improvement bonds4,110,000 - 4,110,000
Permanent improvement revolving bonds5,975,000 - 5,975,000
State aid bonds2,205,000 - 2,205,000
Total bonds payable43,194,000 9,150,000 52,344,000
Compensated absences410,402 66,816 477,218
Total43,604,402$ 9,216,816$ 52,821,218$
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 $46,866,484. Only $24,088,071 of the City's outstanding debt is counted within the
statutory limitation.
Additional information on the City of Andover’s long-term debt can be found in Note 6.
Requests for information.
This financial report is designed to provide a general overview of the City of Andover’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to the City of Andover, Attn: Finance Director, 1685 Crosstown Boulevard NW, Andover,
Minnesota 55304 or by calling 763-755-5100.
24
BASIC FINANCIAL STATEMENTS
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26
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF NET ASSETSStatement 1
December 31, 2005
Primary Government
GovernmentBusiness-TypeTotals
ActivitiesActivities20052004
Assets:
Cash and investments23,004,461$ 2,309,632$ 25,314,093$ 26,203,381$
Cash and investments with escrow agent -1,089,665 1,089,665 13,460,149
Accrued interest 5,513132,743 138,256 278,005
Due from other governmental units88,303 7,647 95,950 155,808
Accounts receivable - net 812,937282,086 1,095,023 1,052,261
Prepaid items68,061 8,388 76,449 60,184
Property taxes receivable:
Unremitted -77,301 77,301 101,356
Delinquent138,344 - 138,344 105,549
Special assessments receivable:
Unremitted -8,266 8,266 2,546
Delinquent7,882 14,335 22,217 15,157
Deferred -2,540,929 2,540,929 3,244,260
Notes receivable1,505,000 - 1,505,000 46,157
Inventories - at cost114,621 50,240 164,861 169,793
Capital assets - net
Nondepreciable101,639,450 730,243 102,369,693 92,796,640
Depreciable9,966,148 44,181,484 54,147,632 52,667,724
Total assets140,663,260 48,120,419 188,783,679 190,358,970
Liabilities:
Interfund payable8,903 (8,903) - -
Accounts payable235,268 64,006 299,274 206,867
Contracts payable1,326,079 15,800 1,341,879 3,473,646
Developer advances- - - 207,097
Deposits payable18,870 7,134 26,004 10,534
Due to other governmental units171,466 21,265 192,731 90,357
Salaries payable63,599 9,828 73,427 57,465
Unearned revenue517,731 - 517,731 426,294
Accrued interest payable759,362 173,714 933,076 1,181,342
Compensated absences:
Due within one year 6,68241,040 47,722 -
Due in more than one year 60,134369,362 429,496 424,589
Bonds/notes payable:
Due within one year 335,0005,254,000 5,589,000 8,807,000
Due in more than one year 8,815,00037,940,000 46,755,000 48,134,000
Total liabilities46,705,680 9,499,660 56,205,340 63,019,191
Net assets:
Invested in capital assets, net of related debt67,652,236 35,588,013 103,240,249 87,342,022
Restricted for:
Debt service2,014,553 - 2,014,553 6,104,771
Capital improvements1,335,858 - 1,335,858 7,293,690
Tax increment purposes3,214,757 - 3,214,757 3,783,961
Unrestricted19,740,176 3,032,746 22,772,922 22,815,335
Total net assets93,957,580$ 38,620,759$ 132,578,339$ 127,339,779$
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, 2005
Program Revenues
ChargesOperatingCapital
ForGrants andGrants and
ExpensesServicesContributionsContributions
Functions/Programs
Primary government:
Government activities:
General government$ 709,5382,432,433$ 10,700$ -$
Public safety 1,001,9123,353,798 417,871 -
Public works3,937,423 379,890 2,057,057 3,250,055
Sanitation- - - -
Parks and recreation1,575,582 461,679 - 684,631
Recycling 32,810118,599 49,512 -
Economic development -459,635 - -
Interest on long-term debt1,797,469 - - -
Total government activities13,674,939 2,585,829 2,535,140 3,934,686
Business-type activities:
Water 1,510,1192,160,502 - 205,949
Sewer 1,550,7451,555,010 - 296,567
Storm sewer 248,753400,114 - 321,281
Total business-type activities4,115,626 3,309,617 - 823,797
Total primary governmen$ 5,895,44617,790,565$ 2,535,140$ 4,758,483$
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)
ActivitiesActivities20052004
$ -(1,712,195)$ (1,712,195)$ (1,220,793)$
-(1,934,015) (1,934,015) (1,878,078)
-1,749,579 1,749,579 2,355,354
-- - (26,843)
-(429,272) (429,272) (1,131,062)
-(36,277) (36,277) (34,827)
-(459,635) (459,635) (941,624)
-(1,797,469) (1,797,469) (1,656,031)
-(4,619,284) (4,619,284) (4,533,904)
(444,434)- (444,434) (122,169)
292,302- 292,302 70,511
169,920- 169,920 (104,216)
17,788- 17,788 (155,874)
17,788(4,619,284) (4,601,496) (4,689,778)
General revenues:
General property taxes7,066,852 - 7,066,852 6,260,772
Tax increment collections1,285,195 - 1,285,195 1,186,396
Grants and contributions not
restricted to specific programs86,906 - 86,906 141,870
Unrestricted investment earnings690,648 47,620 738,268 689,458
Gain on sale of capital assets251,504 - 251,504 1,824,792
Transfers(438,426) 438,426 - -
Total general revenues, gain on sale of
capital assets and transfers8,942,679 486,046 9,428,725 10,103,288
Change in net assets4,323,395 503,834 4,827,229 5,413,510
Net assets - January 1 as previously reported 38,308,83189,030,948 127,339,779 121,926,269
Prior period adjustment603,237 (191,906) 411,331 -
Net assets - January 1 as restated 38,116,92589,634,185 127,751,110 121,926,269
Net assets - ending93,957,580$ 38,620,759$ 132,578,339$ 127,339,779$
29
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2005
Road &Community
Water TrunkBridgeCenter Project
GeneralCPFCPFCPF
Assets
Cash and investments3,228,953$ 2,336,687$ 2,863,396$ 199,296$
Cash and investments with escrow agent- - - 349,454
Accrued interest 7,842 8,014 8,267 -
Due from other governmental units18,725 - - -
Accounts receivable - net62,709 7,579 72,037 -
Interfund receivable -- - 110,000
Prepaid items63,069 - - -
Property taxes receivable:
Unremitted42,506 - 6,174 -
Delinquent100,061 - - -
Special assessments receivable:
Unremitted- 1,575 1,322 -
Delinquent2,708 3,672 359 -
Deferred- 360,113 438,308 -
Notes receivable- - - -
Inventory63,251 - - -
Total assets3,589,824 2,717,640 3,389,863 658,750
Liabilities and Fund Balances
Liabilities:
Interfund payable- - - -
Accounts payable69,411 9,214 - -
Contracts payable28,478 53,870 119,766 697,202
Developer advances -- - -
Deposits payable11,395 - - -
Due to other governmental units122,673 - 33,318 -
Salaries payable52,621 - - -
Deferred revenue102,769 363,785 438,667 -
Total liabilities387,347 426,869 591,751 697,202
Fund balances:
Reserved for:
Prepaid items63,069 - - -
Inventory63,251 - - -
Economic development- - - -
Debt service- - - -
Projects- - - 349,454
Unreserved reported in:
Designated:
d -3,076,157 - -
General fun
Special revenue funds- - - -
Capital projects funds- 2,290,771 2,798,112 -
Undesignated:
Special revenue funds- - - -
Capital projects funds- - - (387,906)
Total fund balances3,202,477 2,290,771 2,798,112 (38,452)
Total liabilities and fund balances3,589,824$ 2,717,640$ 3,389,863$ 658,750$
Fund balance reported above
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds.
Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds.
The assets and liabilities are included in the governmental activities statement of net assets along with a deduction of net
revenue attributable to business-type activities.
Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not
reported in the funds.
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements.
30
Statement 3
TaxPermanent2005A G.O.
IncrementImprovementImprovementOtherIntraTotals (Memorandum Only)
Governmental Funds
ProjectsRevolvingBondsGovernmentalActivity
CPFCPFCPFFundsEliminations20052004
$ 5,008,5433,140,043$ 996,680$ 4,982,168$ -$ 22,755,766$ 23,710,595$
-- - 740,211 - 1,089,665 13,460,149
15,46258,889 4,137 29,165 - 131,776 270,403
-23,123 - 46,455 - 88,303 146,324
-- - 139,761 - 282,086 131,913
120,000- - 3,000 (233,000) - -
-- - 2,496 - 65,565 3,239
-- - 28,621 - 77,301 101,356
-- - 38,283 - 138,344 105,549
685- - 4,684 - 8,266 2,486
-- - 1,143 - 7,882 7,435
1,448,4694,613 - 289,426 - 2,540,929 3,244,260
-1,505,000 - - - 1,505,000 46,157
-- - 5,341 - 68,592 82,347
6,593,1594,731,668 1,000,817 6,310,754 (233,000) 28,759,475 41,312,213
-- - 233,000 (233,000) - -
5,425- - 128,616 - 212,666 170,578
860165 281,832 143,806 - 1,325,979 3,471,933
-- - - - - 207,097
-- - 7,475 - 18,870 3,750
-7,133 7,102 1,070 - 171,296 82,999
-- - 7,816 - 60,437 45,298
1,448,4691,509,613 - 846,583 - 4,709,886 3,829,695
1,454,7541,516,911 288,934 1,368,366 (233,000) 6,499,134 7,811,350
-- - 2,496 - 65,565 3,239
-- - 5,341 - 68,592 82,347
-- - 50,733 - 50,733 35,783
-- - 1,872,599 - 1,872,599 5,934,346
-- 711,883 274,521 - 1,335,858 7,293,690
-- - - - 3,076,157 3,216,979
-- - 1,262,882 - 1,262,882 1,927,381
5,138,4053,214,757 1,576,272 - 15,018,317 15,213,110
-
-- - 1,487 - 1,487 24,148
-- - (103,943) - (491,849) (230,160)
5,138,4053,214,757 711,883 4,942,388 - 22,260,341 33,500,863
$ 6,593,1594,731,668$ 1,000,817$ 6,310,754$ (233,000)$ 28,759,475$ 41,312,213$
$ 33,500,86322,260,341$
100,705,608111,605,598
3,403,4014,192,155
255,326263,250
(48,834,250)(44,363,764)
$ 89,030,94893,957,580$
31
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2005
Road &Community
Water TrunkBridgeCenter Project
GeneralCPFCPFCPF
Revenues:
General property taxes$ -4,550,918$ 670,002$ -$
Tax increment collections- - - -
Licenses and permits724,436 - - -
Intergovernmental -653,455 1,350,228 157,039
Special assessments- 130,910 427,436 -
Charges for services -933,365 - -
Fines90,530 - - -
Investment income 79,89181,565 81,505 74,746
Miscellaneous
Park dedication fees- - - -
Connection charges- 961,261 - -
Other 2,210104,822 98,282 22,197
s 1,174,2727,139,091 2,627,453 253,982
Total revenue
Expenditures:
Current:
General government -2,070,872 - -
Public safety -3,067,204 - -
Public works1,470,785 48,065 1,432,382 -
Sanitation- - - -
Parks and recreation674,716 - - -
Recycling -116,506 - -
Economic development -- - -
Unallocated -9,798 - -
Capital outlay:
General government -- - -
Public safety -4,298 - -
Public works- 11,967 500,887 -
Parks and recreation- - - -
Debt service:
Principal retirement -- - -
Interest -- - -
Paying agent fees -- - -
Professional services -- - -
Construction/acquisition costs- 895,355 - 7,356,662
Total expenditures7,414,179 955,387 1,933,269 7,356,662
s 218,885(275,088) 694,184 (7,102,680)
Revenues over (under) expenditure
Other financing sources (uses):
Transfers in -175,000 - 12,211
Transfers out (21,460)- (4,769) (4,216)
Bonds issued- - - -
Refunding bonds issued- - - -
Payment to refunded bonds escrow agent -- - -
Bond premium- - - -
Bond discount- - - -
Proceeds from the sale of capital assets- - - -
Total other financing sources (uses)175,000 (21,460) (4,769) 7,995
Net increase (decrease) in fund balance(100,088) 197,425 689,415 (7,094,685)
Fund balance - January 13,302,565 2,093,346 2,108,697 7,056,233
Fund balance - December 313,202,477$ 2,290,771$ 2,798,112$ (38,452)$
The accompanying notes are an integral part of these financial statements.
32
Statement 4
xPermanent2005A G.O.
Ta
IncrementImprovementImprovementOtherIntraTotals (Memorandum Only)
ProjectsRevolvingBondsGovernmentalActivityGovernmental Funds
CPFCPFCPFFundsEliminations20052004
$ --$ -$ 1,812,693$ -$ 7,033,613$ 6,272,762$
-125,449 - 1,160,190 - 1,285,639 1,193,467
-- - - - 724,436 674,008
-- - 502,961 - 2,663,683 1,755,041
1,321,0191,096 - 165,508 - 2,045,969 4,243,328
-- - 758,951 - 1,692,316 1,389,245
-- - - - 90,530 79,450
82,05298,479 82,311 103,624 - 684,173 678,308
-- - 286,316 - 286,316 842,042
-- - 350,165 - 1,311,426 1,720,520
20,678- - 354,200 (24,000) 578,389 658,037
1,423,749225,024 82,311 5,494,608 (24,000) 18,396,490 19,506,208
-- - 279,093 - 2,349,965 2,171,248
-- - 26,094 - 3,093,298 2,915,958
120,069- - 579,050 - 3,650,351 4,944,489
-- - - - - 26,732
-- - 635,271 - 1,309,987 1,315,100
-- - - - 116,506 114,052
-274,295 - 152,413 - 426,708 918,451
-- - - - 9,798 21,992
-- - 110,689 - 110,689 193,408
-- - 106,793 - 111,091 95,803
47,912- - 469,432 - 1,030,198 500,050
-- - 364,731 - 364,731 631,126
-- - 8,487,000 - 8,487,000 6,839,000
-- - 2,042,003 - 2,042,003 1,063,363
-- - 5,744 - 5,744 4,187
-- - 7,482 - 7,482 90,682
-- 2,780,387 113,983 - 11,146,387 12,154,653
167,981274,295 2,780,387 13,379,778 - 34,261,938 34,000,294
1,255,768(49,271) (2,698,076) (7,885,170) (24,000) (15,865,448) (14,494,086)
-121,561 - 3,242,839 (3,327,611) 224,000 1,076,000
(1,897,000)(835,678) (123,875) (464,613) 3,351,611 - (739,438)
-- 3,560,000 650,000 - 4,210,000 21,280,000
-- - - - - 6,450,000
-- - - - - (2,145,864)
-- - - - - 23,438
-- (26,166) (2,795) - (28,961) (497,883)
-194,184 - 25,703 - 219,887 2,872,654
(1,897,000)(519,933) 3,409,959 3,451,134 24,000 4,624,926 28,318,907
(641,232)(569,204) 711,883 (4,434,036) - (11,240,522) 13,824,821
5,779,6373,783,961 - 9,376,424 - 33,500,863 19,676,042
$ 5,138,4053,214,757$ 711,883$ 4,942,388$ -$ 22,260,341$ 33,500,863$
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, 2005
20052004
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)(11,240,522)$ 13,824,821$
Governmental funds report capital outlays as expenditures. However, in the statement of
activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation expense. This is the amount by which capital outlays exceeded depreciation
in the current period. 12,805,77811,928,025
The net effect of various miscellaneous transactions involving capital assets is to decrease
net assets (i.e., sales, trade-ins, and donations).(968,846) (1,054,716)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.788,754 (276,488)
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net assets. This amount is the net effect of these differences in the treatment of
long-term debt and related items. 4,277,000 (18,846,000)
Transfer out of governmental capital assets contributed to Enterprise Funds. (662,426) (2,071,813)
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. (555,898)193,486
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. (6,300)7,924
Change in net assets of governmental activities (page 29)4,323,395$ 3,819,384$
The accompanying notes are an integral part of these financial statements.
35
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2005
SeweStorm Sewe
Waterrr
Assets
Current assets:
Cash and cash equivalents 1,046,900$ 1,189,624$ 73,108$
Accrued interest 2,262 3,125 126
Due from other governmental units - 7,647 -
Accounts receivable - net 298,754 440,757 73,426
Prepaid items 5,892 2,496 -
Special assessments receivable:
Unremitted - - -
Delinquent 5,038 8,678 619
Inventories - at cost 50,240 - -
Total current assets 1,409,086 1,652,327 147,279
Noncurrent assets:
Capital assets:
Land 730,243 - -
Buildings and structures 13,883,620 - -
Machinery and equipment 309,316 466,903 395,564
Distribution and collection system 13,824,194 21,730,525 8,623,761
Total capital assets 28,747,373 22,197,428 9,019,325
Less: Allowance for depreciation (6,409,745) (6,275,110) (2,367,544)
Total noncurrent assets 22,337,628 15,922,318 6,651,781
Total assets 23,746,714 17,574,645 6,799,060
Liabilities
Current liabilities:
Accounts payable 60,155 3,851 -
Contracts payable 10,559 1,883 3,358
Deposits payable 7,134 - -
Interest payable 173,714 - -
Due to other governmental units 15,764 5,501 -
Salaries payable 5,228 3,524 1,076
-
Bonds payable - due within one year 335,000 -
Compensated absences payable - due within one year 3,811 1,871 1,000
Total current liabilities 611,365 16,630 5,434
Noncurrent liabilities:
Bonds payable - due in more than one year 8,815,000 - -
Compensated absences payable - due in more than one year 34,295 16,843 8,996
Total noncurrent liabilities 8,849,295 16,843 8,996
Total liabilities 9,460,660 33,473 14,430
Net assets
Invested in capital assets, net of related debt 13,013,914 15,922,318 6,651,781
Unrestricted 1,272,140 1,618,854 132,849
Total net assets 14,286,054$ 17,541,172$ 6,784,630$
Net assets reported above
Amounts reported for business-type activities in the statement of net assets are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
usiness-type activities.
b
Net assets of business-type activities
The accompanying notes are an integral part of these financial statements.
36
Statement
6
Totals
Governmental Activities -
TotalsInternal Service Funds
2005200420052004
$ 2,306,6282,309,632$ 248,695$ 186,158$
6,7735,513 967 829
9,4847,647 - -
920,348812,937 - -
-8,388 2,496 56,945
60- - -
7,72214,335 - -
50,06350,240 46,029 37,383
3,301,0783,208,692 298,187 281,315
724,943730,243 - -
13,883,62013,883,620 - -
1,033,5361,171,783 - -
42,708,43444,178,480 - -
58,350,53359,964,126 - -
(13,591,777)(15,052,399) - -
44,758,75644,911,727 - -
48,059,83448,120,419 298,187 281,315
28,59964,006 22,602 7,690
1,71315,800 100 -
6,7847,134 - -
177,447173,714 - -
6,98321,265 170 375
9,1689,828 3,162 2,999
320,000335,000 - -
-6,682 - -
550,694633,429 26,034 11,064
9,150,0008,815,000 - -
65,23460,134 - -
9,215,2348,875,134 - -
9,765,9289,508,563 26,034 11,064
35,111,30935,588,013 - -
3,182,5973,023,843 272,153 270,251
$ 38,293,90638,611,856$ 272,153$ 270,251$
$ 38,293,90638,611,856$
14,9258,903
$ 38,308,83138,620,759$
37
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 200
5
WateSeweStorm Sewe
rrr
Operatin revenues:
g
User char
ges 1,425,123$ 1,523,475$ 244,264$
Meters 46,316 - -
Permit fees 11,350 - -
Penalties 21,638 19,646 2,927
Other 5,692 7,624 1,562
Total operatin revenues 1,510,119 1,550,745 248,753
g
Operatin expenses:
g
Personal services 347,857 210,044 86,097
Supplies 185,572 14,397 12,247
Other service chares 430,445 142,643 93,740
g
Disposal chares - 732,281 -
g
Depreciation 791,025 463,782 205,815
Total operatin expenses 1,754,899 1,563,147 397,899
g
Operatin income (loss) (244,780) (12,402) (149,146)
g
Nonoperatin revenues (expenses):
g
Investment income 12,466 33,601 1,553
Proceeds from the sale of capital assets - - -
Interest expense (417,659) - -
Total nonoperatin revenues (expenses) (405,193) 33,601 1,553
g
Income (loss) before contributions
and transfers (649,973) 21,199 (147,593)
Capital contributions 371,359 539,962 574,902
Transfers:
Transfers in - - -
Transfers out (148,000) (47,000) (5,000)
Total transfers (148,000) (47,000) (5,000)
Chane in net assets (426,614) 514,161 422,309
g
Net assets - Januar 1as previousl reported 14,904,574 17,027,011 6,362,321
yy
Prior period adustment (191,906) - -
j
Net assets - Januar 1 as restated 14,712,668 17,027,011 6,362,321
y
Net assets - December 31 14,286,054$ 17,541,172$ 6,784,630$
Net chanes in net assets reported above
g
Amounts reported for business-tpe activities in the statement of activities are different because:
y
Transfer in of capital assets from overnmental activities.
g
Contribution revenue reported above.
Internal service funds are used b manaement to chare the cost of equipment maintenance
ygg
and insurance to individual funds. This amount is the portion of net revenue attributable to
usiness-tpe activities.
by
Change in net assets of business-type activities
The accompanin notes are an intreral part of these financial statements.
ygg
38
Statement
7
Total
s
Governmental Activities -
Intr
a
TotalInternal Service Fund
Activitss
y
Elimination2005200420052004
s
$ 3,192,862-$ 3,099,456$ 682,673$ 646,785$
46,316- 48,816 - -
11,350- 13,350 - -
44,211- 36,716 - -
14,878- 128,659 39,710 26,020
3,309,617- 3,326,997 722,383 672,805
643,998- 632,415 264,044 254,409
212,216- 136,229 208,006 170,615
642,828(24,000) 595,765 254,906 262,280
732,281- 644,721 - -
1,460,622- 1,257,250 - -
3,691,945(24,000) 3,266,380 726,956 687,304
(382,328)24,000 60,617 (4,573) (14,499)
47,620- 7,895 6,475 3,255
-- 6,854 - -
(417,659)- (426,467) - -
(370,039)- (411,718) 6,475 3,255
(752,367)24,000 (351,101) 1,902 (11,244)
1,486,223- 2,286,733 - -
-- 739,438 - -
(224,000)(24,000) (1,076,000) - -
(224,000)(24,000) (336,562) - -
509,856- 1,599,070 1,902 (11,244)
38,293,906- 36,694,836 270,251 281,495
(191,906)- - - -
38,102,000- 36,694,836 270,251 281,495
$ 38,611,856-$ 38,293,906$ 272,153$ 270,251$
$ 1,599,070509,856$
2,286,733662,426
(2,286,733)(662,426)
(4,944)(6,022)
$ 1,594,126503,834$
39
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF CASH FLOW
S
PROPRIETARY FUNDS
For The Year Ended December 31, 2005
SeweStorm Sewe
Waterrr
Cash flows from operating activities:
Receipts from customers and users 1,474,928$ 1,498,263$ 247,215$
Payment to suppliers (555,675) (893,602) (106,487)
Payment to employees (345,077) (211,717) (84,962)
Net cash flows from operating activities 574,176 392,944 55,766
Cash flows from noncapital financing activities:
Receipt of advances from other funds - - -
Payment of advances to other funds - - -
Transfers in -- -
Transfers out (148,000) (47,000) (5,000)
Net cash flows from noncapital financing activities (148,000) (47,000) (5,000)
Cash flows from capital and related financing activities:
Acquisition of capital assets (66,196) (61,173) -
Interest paid on debt (421,392) - -
Payment of bonds (320,000) - -
Proceeds from the sale of capital assets - - -
Net cash flows from capital and related financing activities (807,588) (61,173) -
Cash flows from investing activities:
Investment income 14,174 33,192 1,513
Net increase in cash and cash equivalents (367,238) 317,963 52,279
Cash and cash equivalents - January 1 1,414,138 871,661 20,829
Cash and cash equivalents - December 31 1,046,900$ 1,189,624$ 73,108$
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) (244,780)$ (12,402)$ (149,146)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 791,025 463,782 205,815
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units - 1,337 500
Decrease (increase) in accounts receivable (32,632) (50,062) (1,801)
Decrease (increase) in prepaid items (5,892) (2,496) -
Decrease (increase) in special assessments (2,559) (3,757) (237)
Decrease (increase) in inventory (177) - -
Increase (decrease) in accounts payable 41,949 (2,797) (3,745)
Increase (decrease) in contracts payable 9,673 1,056 3,358
Increase (decrease) in deposits payable 350 - -
Increase (decrease) in due to other governmental units 14,439 (44) (113)
Increase (decrease) in salaries payable (12) 486 186
Increase (decrease) in compensated absences 2,792 (2,159) 949
Total adjustments 818,956 405,346 204,912
Net cash provided by operating activities 574,176$ 392,944$ 55,766$
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds 371,359$ 539,962$ 574,902$
The accompanying notes are an integral part of these financial statements.
40
Statement 8
Totals
Governmental Activities -
TotalsInternal Service Funds
2005200420052004
$ 3,127,6403,220,406$ 722,383$ 672,805$
(1,367,053)(1,555,764) (402,302) (430,068)
(637,961)(641,756) (263,881) (258,304)
1,122,6261,022,886 56,200 (15,567)
12,000- - -
(12,000)- - -
739,438- - -
(1,054,000)(200,000) - -
(314,562)(200,000) - -
(389,471)(127,369) - -
(429,438)(421,392) - -
(310,000)(320,000) - -
6,854- - -
(1,122,055)(868,761) - -
9,07548,879 6,337 3,098
(304,916)3,004 62,537 (12,469)
2,611,5442,306,628 186,158 198,627
$ 2,306,6282,309,632$ 248,695$ 186,158$
$ 38,617(406,328)$ (4,573)$ (14,499)$
1,257,2501,460,622 - -
(8,126)1,837 - -
(189,409)(84,495) - -
52,867(8,388) 54,449 (12,365)
(1,822)(6,553) - -
(13,171)(177) (8,646) 12,522
1,16735,407 14,912 3,294
(10,451)14,087 100 -
1,250350 - -
16814,282 (205) (624)
(11,981)660 163 (3,895)
6,2671,582 - -
1,084,0091,429,214 60,773 (1,068)
$ 1,122,6261,022,886$ 56,200$ (15,567)$
$ 2,286,7331,486,223$ -$ -$
41
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF FIDUCIARY NET ASSETSStatement 9
FIDUCIARY FUNDS
Agency Funds
December 31, 2005
20052004
Assets
Cash and investments535,715$ 308,560$
Liabilities
Accounts payable26 -
Contracts payable7,685 6,848
Due to other governments230 -
Deposits payable527,774 301,712
Total liabilities535,715$ 308,560$
The accompanying notes are an integral part of these financial statements.
42
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005
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.
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.
Tax Increment Projects CPF
The is used 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.
Permanent Improvement Revolving CPF
The serves as a long-term funding source for large capital improvement
expenditures.
2005A G.O. Improvement Bonds CPF
The is used to finance various improvements in Andover Station North, including
the construction of Jay Street.
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
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.
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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.
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.
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
The following is a listing of Special Revenue Funds whose expenditures exceed budget appropriations:
FinalOver
BudgetActualBudget
Special Revenue Funds:
EDA General137,800$ 143,753$ 5,953$
Community Development Block Grant- 8,660 8,660
Community Center 589,900400,218 189,682
Capital Equipment Reserve135,500 229,874 94,374
Construction Seal Coating128,508 223,333 94,825
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, 2005 are planned to be eliminated in 2006. Long-term interfund loans are classified as
“interfund loan receivable/payable.” Any residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as “internal balances.”
Interfund loan receivables, as reported in the fund financial statements, are offset by a fund balance reserve account in
applicable governmental funds to indicate that they are not available for appropriation and are not expendable available
financial resources.
Property taxes and special assessments receivable have been reported net of estimated uncollectible accounts. (See Note 1 H, I
and L) Because utility bills are considered liens on property, no estimated uncollectible amounts are established.
Uncollectible amounts are not material for other receivables and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City levies its property tax for the subsequent year during the month of December and it is certified to Anoka County.
December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005
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, 2005, 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 2005 of the condition of the streets and trails constructed
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005
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 ($44,363,764) difference are as follows:
Bonds payable(43,194,000)$
Accrued interest payable(759,362)
Compensated absences(410,402)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net assets - governmental activities(44,363,764)$
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
$263,250 difference are as follows:
Internal Service Funds net assets272,153$
Net revenue attributable to business-type activities(8,903)
Net adjustment to increase fund balance - total governmental
funds to arrive at net assets - governmental activities263,250$
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, 2005
over their estimated useful lives and reported as depreciation expense.” The details of this $11,928,025 difference are as
follows:
Capital outlay$1,616,709
Construction/acquisition costs11,146,387
Depreciation expense(835,071)
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities11,928,025$
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 ($968,846) difference are as
follows:
In the statement of activities, only the gain on the sale of capital
assets is reported. However, in the governmental funds, the
proceeds from the sale increase financial resources. Thus, the
change in net assets differs from the change in fund balance by
the cost of the capital assets sold.(1,473,383)$
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.504,537
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(968,846)$
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 $788,754 difference are as follows:
General property taxes deferred revenue:
At December 31, 2004(93,054)$
At December 31, 2005126,293
Tax increment taxes deferred revenue:
At December 31, 2004(12,495)
At December 31, 200512,051
Special assessments deferred revenue:
At December 31, 2004(3,251,695)
At December 31, 20052,548,811
Notes receivable deferred revenue:
At December 31, 2004(46,157)
At December 31, 20051,505,000
Net adjustments to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities788,754$
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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
$4,277,000 difference are as follows:
Debt issued or incurred:
Issuance of special assessment bonds(3,560,000)$
Issuance of capital improvement bonds(340,000)
Issuance of certificates of indebtedness(310,000)
Principal repayments:
Capital improvement bonds120,000
Special assessment bonds1,705,000
Tax increment bonds6,150,000
Certificates of indebtedness377,000
State aid bonds135,000
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities4,277,000$
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 $193,486 difference are as follows:
Compensated absences(51,048)$
Accrued interest244,534
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities193,486$
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 $7,924 difference are as follows:
Internal Service Funds change in net assets1,902$
Net revenue attributable to business-type activities6,022
Net adjustment to increase fund balance - total
governmental funds to arrive at net assets -
governmental activities7,924$
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
T. PRIOR PERIOD ADJUSTMENT
During 2005, corrections to the prior year financial statements were made to capitalize construction expenditures previously
reported as current expenditures and to correct an overstated utility bill. A summary of these changes is as follows:
Governmental
Activities
Net assets - January 1 as previously reported89,030,948$
Prior period adjustment
Construction in progress
Community center$479,134
Fire station #3124,103
Total construction in progress adjustment603,237
Net assets - January 1 as restated89,634,185$
Proprietary
Fund
Water
Net assets - January 1 as previously reported14,904,574$
Prior period adjustment
Accounts receivable adjustment(191,906)
Net assets - January 1 as restated14,712,668$
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;
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;
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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.
At December 31, 2005, the carrying amount of the City’s deposits with financial institutions was $3,280,469 (bank amount of
$2,860,774).
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 $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York;
certain Minnesota securities broker-dealers; or, a bank qualified as a depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178,
subdivision 5; or 475.61, subdivision 6.
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
As of December 31, 2005, the City had the following investments and maturities:
Investment Maturities (in Years)
FairLess ThanMore Than
Investment TypeValue11 - 56 - 1010
Money market2,108,169$ 2,108,169$ -$ -$ -$
Commercial paper3,339,904 3,339,904 - - -
Negotiable certificates of deposit1,449,588 746,158 673,298 - 30,132
Local governments2,910,135 498,504 2,171,784 109,360 130,487
U.S. agencies13,851,208 6,719,398 3,636,882 1,050,558 2,444,370
Total investments23,659,004 13,412,133$6,481,964$ 1,159,918$ 2,604,989$
Deposits3,280,469
Total cash and investments26,939,473$
Following is a reconciliation of the City’s total cash and investment balances at December 31, 2005:
Government-wide statement of net assets:
Cash and investments25,314,093$
Cash and investments with escrow agent1,089,665
Fiduciary funds statement of net assets535,715
Total26,939,473$
Interest rate risk - The City has a formal investment policy that states the City will minimize the risk that the market value of
securities in the portfolio will fall due to the changes in general interest rates, by:
1) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market prior to maturity.
2) Investing operating funds primarily in shorter-term securities, money market mutual funds or similar investment pools.
Credit Risk - The City of Andover will minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by:
1) Limiting investments to the safest types of securities.
2) Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisers with which the City will do business.
A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be
maintained of approved security broker/dealers selected by creditworthiness. These may include “primary” dealers or
regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1.
All financial institutions and broker/dealers who desire to become qualified for investment transactions must
supply;audited financial statements, proof of National Association of Securities Dealers (NASD) certification , proof of
state registration, completed broker/dealer questionnaire, and certification of having read and understood and agreeing to
comply with the City’s investment policy.
An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be
conducted by the Finance Director.
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Concentration of Credit Risk - More than 5% of the City’s investments are in various holdings with U.S. agencies; Federal Home
Loan Bank (30.97%) and Federal National Mortgage Association (24.39%). The City’s policy on concentration of investments is as
follows:
1) Diversification - The investments shall be diversified by:
a) investments to avoid over concentration in securities from a specific issuer or business sector (excluding U.S.
Treasury securities),
b) limiting investment in securities that have higher credit risks,
c) investing in securities with varying maturities, and
d) continuously investing a portion of the portfolio in readily available funds such as local government investment
pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is
maintained in order to meet ongoing obligations.
s
2) Maximum Maturitie - To the extent possible, the City shall attempt to match its investments with anticipated cash flow
requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing, or having
average lifes, of more than five (5) years from the date of purchase or in accordance with state and local statues and
ordinances.
Reserve funds and other funds with longer-term investment horizons may be invested in securities exceeding five (5)
years if the maturity of such investments are made to coincide as nearly as practicable with the expected use of funds.
The intent to invest in securities with longer maturitues shall be disclosed in writing to the legislative body.
Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be
continuously invested in readily available funds such as local government investment pools, money market funds, or
overnight repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations.
Note 3 RECEIVABLES
Significant receivables balances not expected to be collected within one year of December 31, 2005 are as follows:
Due FromDelinquentDelinquentSpecial
OtherPropertyTaxAssessment
GovernmentsTaxesIncrementReceivableTotal
Major Funds:
General Fund-$ 28,017$ -$ -$ 28,017$
Water Trunk CPF- - - 332,726 332,726
Road and Bridge CPF- - - 390,754 390,754
Tax Increment Projects CPF23,123 - - 3,795 26,918
Permanent Improvement Revolving CPF- - - 1,275,545 1,275,545
Nonmajor Funds- 7,345 1,085 233,103 241,533
Total23,123$ 35,362$ 1,085$ 2,235,923$ 2,295,493$
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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 Fund100,061$ -$
Nonmajor Funds26,232 -
Delinquent tax increment collections
Nonmajor Funds12,051 -
Special assessments not yet due:
General Fund2,708 -
Water Trunk CPF363,785 -
Road & Bridge CPF438,667 -
Tax Increment Projects CPF4,613 -
Permanent Improvement Revolving CPF1,448,469 -
Nonmajor Funds290,569 -
Notes receivable not yet due:
Tax Increment Projects CPF1,505,000 -
Unearned miscellaneous fees:
Nonmajor funds- 212,535
Unearned construction seal coating fees:
Nonmajor funds- 305,196
Total4,192,155$ 517,731$
Note 4 LOANS RECEIVABLE
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. As of November 23, 2005, the loan was paid off with the sale of the
property.
As part of a development agreement entered into with a private developer in June 2005, the City received a promissory note for
$1,505,000. The note is for the purchase of land within Andover Station North. The note bears an interest rate of 6% and calls for a
principal payment of $327,000 no later than May 1, 2006. An interest payment is due on June 16, 2006 with the remaining unpaid
principal and accrued interest due on June 16, 2008.
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Note 5 CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government-wide
statement of net assets. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting
for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A more
detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All other
capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and
depreciation expense have been recorded.Adjustments due to restatement represent the changes due to an extensive inventory of all
capital assets, implementation of GASB Statement No. 34 and a policy change related to capitalization thresholds. Capital asset activity
for the year ended December 31, 2005 as previously reported was as follows:
Beginning Balance,
as restatedEnding
Primary Government
(see Note 1.T.)AdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements7,542,304$ 90,787$ (649,225)$ 6,983,866$
Streets and trails71,537,403 1,159,247 - 72,696,650
Construction in progress13,595,227 11,146,386 (2,782,679) 21,958,934
Total capital assets not being depreciated92,674,934 12,396,420 (3,431,904) 101,639,450
Capital assets being depreciated:
Buildings and improvements5,844,834 1,546,674 - 7,391,508
Furniture and equipment154,090 110,689 (11,183) 253,596
Machinery and equipment5,381,535 261,800 (28,559) 5,614,776
Other park improvements2,977,842 279,530 (18,564) 3,238,808
Total capital assets being depreciated14,358,301 2,198,693 (58,306) 16,498,688
Less accumulated depreciation for:
Buildings and improvements1,880,230 228,007 - 2,108,237
Furniture and equipment64,234 24,943 (11,182) 77,995
Machinery and equipment3,037,999 438,565 (2,856) 3,473,708
Other park improvements741,927 143,556 (12,883) 872,600
Total accumulated depreciation5,724,390 835,071 (26,921) 6,532,540
Total capital assets being depreciated - net8,633,911 1,363,622 (31,385) 9,966,148
Governmental activities capital assets - net101,308,845$ 13,760,042$ (3,463,289)$ 111,605,598$
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Business-type activities:
Capital assets not being depreciated:
Land and improvements724,943$ 5,300$ -$ 730,243$
Capital assets being depreciated:
Buildings and improvements13,883,620 - - 13,883,620
Furniture and equipment38,635 13,480 - 52,115
Machinery and equipment994,901 124,767 - 1,119,668
Collection and distribution42,708,434 1,470,046 - 44,178,480
Total capital assets being depreciated57,625,590 1,608,293 - 59,233,883
Less accumulated depreciation for:
Buildings and improvements2,532,388 497,407 - 3,029,795
Furniture and equipment30,747 2,276 - 33,023
Machinery and equipment594,715 84,578 - 679,293
Collection and distribution10,433,927 876,361 - 11,310,288
Total accumulated depreciation13, 1,460,622591,777 - 15,052,399
Total capital assets being depreciated - net44,033,813 147,671 - 44,181,484
Business-type activities capital assets - net44,758,756 152,971 - 44,911,727
$$$$
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government81,417$
Public safet243,185
y
Public works267,865
Parks and recreation242,604
Total depreciation expense - governmental activities835,071
$
Business-type activities
Wate$791,025
r
Sewe463,782
r
Storm sewe205,815
r
Total depreciation expense - business-type activities1,460,622
$
CONSTRUCTION COMMITMENTS
At December 31, 2005, 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$ 121,45217,970,323$
02-33Andover Station North2,013,883 188,261
04-52BWell #9 Pumping Unit457,842 36,918
Total20,442,048$ 346,631$
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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
DateDateRateIssue12/31/05
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$
Special Assessment Bonds
2005A G.O. Improvement Bonds4/28/20052/1/20132.95-3.65%3,560,000 3,560,000
Tax Increment Bonds:
2000A G.O. Tax Increment Bonds9/1/20002/1/20106.80-7.10%2,445,000 1,660,000
2003B G.O. Tax Increment Refunding Bonds6/1/20038/1/20102.00-3.00%1,530,000 1,145,000
2004B G.O. Tax Increment Refunding Bonds3/16/20048/1/20102.00-3.25%4,260,000 4,260,000
Total tax increment bonds8,235,000 7,065,000
Certificates of Indebtedness:
2001C G.O. Capital Notes6/5/20012/1/20062.90-3.80%1,210,000 265,000
2003C G.O. Equipment Certificates12/18/200312/1/20061.50%400,000 124,000
2005B G.O. Equipment Certificates4/28/20052/1/20082.65-3.10%310,000 310,000
Total certificates of indebtedness1,920,000 699,000
Capital Improvement Bonds
2004A G.O. Capital Improvement Bonds3/16/20042/1/20172.00-3.75%3,890,000 3,770,000
2005B G.O. Capital Improvement Bonds4/28/20052/1/20092.65-3.10%340,000 340,000
Total capital improvement bonds4,230,000 4,110,000
Permanent Improvement Revolving (PIR) Bonds:
2001A G.O. PIR Bonds6/5/20012/1/20073.20-4.00%4,975,000 2,110,000
2003A G.O. PIR Bonds6/1/20032/1/20102.00-2.60%4,580,000 3,865,000
Total permanent improvement revolving bonds9,555,000 5,975,000
State Aid Bonds:
2001B G.O. State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000 2,205,000
Total - bonded indebtedness49,835,000 43,194,000
Compensated absences payable- 410,402
Total governmental activities indebtedness49,835,000 43,604,402
BUSINESS-TYPE ACTIVITIES
General Obligation Revenue Bonds
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000 9,150,000
Compensated absences payable- 66,816
Total business-type activities indebtedness9,780,000 9,216,816
Total City indebtedness59,615,000$ 52,821,218$
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
G.O. Revenue BondsSpecial Assessment BondsTax Increment Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2006185,000$ 964,102$ -$ 149,204$ 2,350,000$ 193,045$
2007185,000 959,731 - 118,573 705,000 120,545
2008190,000 954,381 545,000 110,534 735,000 105,033
2009390,000 944,806 565,000 93,738 760,000 87,620
2010405,000 930,684 580,000 75,555 780,000 68,313
2011-20152,265,000 4,384,274 1,870,000 102,338 1,735,000 82,513
2016-20202,860,000 3,770,338 - - - -
2021-20253,660,000 2,944,761 - - - -
2026-20304,715,000 1,865,890 - - - -
2031-20344,725,000 506,610 - - - -
Total19,580,000$ 18,225,577$ 3,560,000$ 649,942$ 7,065,000$ 657,069$
Governmental Activities
Permanent Improvement
Certificates of IndebtednessRevolving BondsCapital Improvement Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2006579,000$ 15,156$ 235,000$ 125,190$ 1,765,000$ 139,970$
200760,000 2,655 350,000 116,250 1,825,000 84,005
200860,000 900 370,000 107,370 770,000 47,305
2009- - 380,000 97,363 795,000 30,463
2010- - 280,000 88,418 820,000 10,660
2011-2015- - 1,675,000 298,636 - -
2016-2020- - 820,000 30,925 - -
Total699,000$ 18,711$ 4,110,000$ 864,152$ 5,975,000$ 312,403$
Governmental ActivitiesBusiness-Type Activities
State Aid BondsG.O. Revenue Bonds
PrincipalInterestPrincipalInterest
2006140,000$ 96,958$ 335,000$ 411,720$
2007150,000 91,298 345,000 400,663
2008155,000 85,120 360,000 388,228
2009160,000 78,583 375,000 374,439
2010170,000 71,568 395,000 359,221
2011-2015970,000 233,696 2,280,000 1,517,548
2016-2020460,000 23,250 2,910,000 911,839
2021-2025- - 2,150,000 165,000
Total2,205,000$ 680,473$ 9,150,000$ 4,528,658$
It is not practical to determine the specific year for payment of long-term accrued compensated absences.
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2005, was as follows:
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
G.O. revenue bonds19,580,000$ -$ -$ 19,580,000$ 185,000$
Special assessment bonds- 3,560,000 - 3,560,000 -
Tax increment bonds13,215,000 - (6,150,000) 7,065,000 2,350,000
Certificates of indebtedness766,000 310,000 (377,000) 699,000 579,000
Capital improvement bonds3,890,000 340,000 (120,000) 4,110,000 235,000
Permanent improvement revolving bonds7,680,000 - (1,705,000) 5,975,000 1,765,000
State aid bonds2,340,000 - (135,000) 2,205,000 140,000
Total bonds payable47,471,000 4,210,000 (8,487,000) 43,194,000 5,254,000
Compensated absences359,355 270,935 (219,888) 410,402 41,040
Total governmental activities
long-term liabilities47,830,355$ 4,480,935$ (8,706,888)$ 43,604,402$ 5,295,040$
Business-type activities:
Bonds payable:
G.O. revenue bonds9,470,000$ -$ (320,000)$ 9,150,000$ 335,000$
Compensated absences65,234 42,639 (41,057) 66,816 6,682
Total business-type activities
long-term liabilities9,535,234$ 42,639$ (361,057)$ 9,216,816$ 341,682$
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.
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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.
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 2005 and 2004 is computed as follows:
December 31,
20052004
Estimated taxable market value2,343,324,200$2,080,708,500$
Debt limit (2% of market value)46,866,484 41,614,170
Amount of debt applicable to debt limit:
Total bonded debt52,344,000$ 56,941,000$
Less: Nonapplicable debt
G.O. water revenue bonds(9,150,000) (9,470,000)
Special assessment bonds(3,560,000) -
Tax increment bonds(7,065,000) (13,215,000)
Permanent improvement revolving bonds(5,975,000) (7,680,000)
State aid bonds(2,205,000) (2,340,000)
Less: Cash and investments in related
debt service funds(300,929) (815,322)
Total debt applicable to debt limit24,088,071 23,420,678
Legal debt margin22,778,413$ 18,193,492$
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.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005, 2004 and 2003 were $167,142, $155,794 and
$148,660, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December
31, 2005, 2004 and 2003 were $12,351, $11,848 and $10,137, respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by state statute.
C. DEFINED CONTRIBUTION LUMP SUM SERVICE PENSION PLAN – VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION
PLAN DESCRIPTION
Members of the City’s volunteer fire department are members of the Andover Firefighters’ Relief Association. The
Association is the administrator of a single-employer defined contribution plan available to firefighters that was established
Minnesota Statutes
October 9, 1979 and operates under the provisions of Section 424A. It is governed by a board of six
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.
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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
12/31/200342,500$ 122,867$ 165,367$
12/31/200445,000 160,651 205,651
12/31/200550,000 156,263 206,263
Note 9 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2005 are as follows:
FundReceivablePayable
Governmental Funds:
Major Funds:
Community Center CPF110,000$ -$
Permanent Improvement Revolving CPF120,000 -
Nonmajor Governmental Funds3,000 233,000
Total governmental funds233,000$ 233,000$
Interfund receivables and payables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the
fiscal year.
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Interfund transfers:
FundTransfer InTransfer Out
Governmental Funds:
Major Funds:
General Fund175,000$ -$
Water Trunk CPF- 21,460
Road & Bridge CPF- 4,769
Community Center Project CPF12,211 4,216
Tax Increment Projects CPF121,561 835,678
Permanent Improvement Revolving CPF- 1,897,000
2005A G.O. Improvement Bonds CPF- 123,875
Nonmajor Funds3,242,839 464,613
Total Governmental Funds3,551,611 3,351,611
Proprietary Funds:
Wate 148,000-
r
Sewe 47,000-
r
Storm Sewe 5,000-
r
Total Proprietary Funds- 200,000
Total3,551,611 3,551,611
$$
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 $47,689 to the
Unfinanced CPF from the Water Trunk CPF, Sewer Trunk CPF and Road and Bridge CPF (in total) for reimbursement of prior year
expenditures associated with the improvements on Round Lake Boulevard.
Additionally, computer service fees paid by the Water and Sewer Enterprise Funds to the General Fund have been reclassified as
transfers on the Government-Wide Statement of Activities as follows:
Transfer InTransfer Out
Governmental Activities24,000$ -$
Business-Type Activities- 24,000
Total24,000 24,000
$$
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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:4,542$
Current net tax capacity:217,210
Captured net tax capacity - retained by the Cit$212,668
y
2.Name of District:Andover Redevelopment District 1-2
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 2012
Original net tax capacity:136,949$
Current net tax capacity:1,298,087
Captured net tax capacity - retained by the Cit$1,161,138
y
Total District Bonds issued19,250,000$
Amount redeemed(12,185,000)
Bonds outstanding December 31, 20057,065,000$
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:147,789
Captured net tax capacity - retained by the Cit$140,475
y
Note 11 DEFICIT FUND BALANCES/RETAINED EARNINGS
The City has deficit fund balances at December 31, 2005 as follows:
FundAmount
Special Revenue Funds:
Community Center$20,431
LRRWMO2,537
Capital Projects Funds:
Community Center Project CPF38,452
Storm Sewer Project51,032
Unfinanced52,911
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005.
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
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005. Future
scheduled tax levies for all bonds outstanding at December 31, 2005 totaled $34,749,921.
Note 14 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
Fund equities are classified as follows to reflect limitations and restrictions of the respective funds:
20052004
Governmental Funds:
Major Funds:
General Fund
Reserved for prepaid items63,069$ 3,239$
Reserved for inventory 82,34763,251
Designated for legal defense150,000 150,000
Designated for snow emergency 50,00050,000
Designated for facility management50,000 50,000
Designated for economic development- 100,000
Designated for information technology 50,00050,000
Designated for working cash flow2,776,157 2,816,979
Water Trunk CPF
Designated for projects2,290,771 2,093,346
Road & Bridge CPF
Designated for projects2,798,112 2,108,697
Community Center Project CPF
Reserved for projects349,454 7,056,233
Tax Increment Projects CPF
Designated for projects3,214,757 3,783,961
Permanent Improvement Revolving CPF
Designated for projects5,138,405 5,779,637
2005A G.O. Improvement Bonds CPF
Reserved for projects711,883 -
Nonmajor Funds
Reserved for prepaid items2,496 -
Reserved for inventory -5,341
Reserved for economic development50,733 35,783
Reserved for debt service1,872,599 5,934,346
Reserved for projects274,521 237,457
Designated for working cash flow197,696 654,403
Designated for projects2,126,728 2,194,031
Designated for equipment514,730 526,416
Total Governmental Funds22,750,703$ 33,706,875$
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
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, 2005, the following revenue bonds were outstanding:
Date ofOriginalOutstanding
ProjectIssueIssueRetired12/31/2005
Downtown Center7/15/19975,645,000$ (2,600,000)$ 3,045,000$
Downtown Center7/15/19971,250,000 (880,000) 370,000
Presbyterian Homes of Andover, Inc.12/1/1998720,000 (576,000) 144,000
Presbyterian Homes of Andover, Inc.11/1/200313,145,000 (419,680) 12,725,320
Total20,760,000$ (4,475,680)$ 16,284,320$
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. 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 $10 million). Early implementation is encouraged.
The effect these standards may have on future financial statements is not determinable at this time.
70
REQUIRED SUPPLEMENTARY INFORMATION
71
CITY OF ANDOVER, MINNESOT
A
REQUIRED SUPPLEMENTARY INFORMATIOStatement 10
N
BUDGETARY COMPARISON SCHEDULE - GENERAL FUN
D
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 200
4
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes4,909,208$ 4,909,208$ 4,550,918$ (358,290)$ 4,541,227$
Licenses and permits593,350 593,600 724,436 130,836 674,008
732,522598,329 653,455 (79,067) 585,037
Intergovernmental
Charges for service 831,825633,825 933,365 101,540 798,795
s
Fines85,000 85,000 90,530 5,530 79,450
Investment incom 50,00050,000 81,565 31,565 58,309
e
Miscellaneous274,000 76,000 104,822 28,822 261,152
7,278,1557,143,712 7,139,091 (139,064) 6,997,978
Total revenues
Expenditures:
Current:
General government:
Mayor and City council97,043 97,043 94,645 2,398 90,304
Administration149,540 149,540 148,689 851 125,536
19,00019,000 16,265 2,735 16,484
Newsletter
Human resources86,196 71,868 49,265 22,603 52,624
Legal154,460 154,460 155,429 (969) 147,907
City cler 133,310131,526 132,121 1,189 124,781
k
Elections6,032 6,032 6,032 - 35,030
Financial administration268,024 268,024 200,845 67,179 250,251
Assessing114,000 114,000 114,105 (105) 110,890
Information systems135,378 137,205 135,269 1,936 128,191
Planning and zoning309,815 313,903 304,730 9,173 268,908
Engineerin 391,208380,115 378,264 12,944 343,697
g
Facility managemen 358,345361,345 335,213 23,132 302,030
t
2,213,9382,212,474 2,070,872 143,066 1,996,633
Total general government
Public safety:
Police1,664,085 1,664,085 1,664,086 (1) 1,500,424
1,002,223865,486 969,492 32,731 821,823
Fire protection
Protective inspectio 419,632419,632 415,454 4,178 389,772
n
Civil defens 15,59315,593 9,708 5,885 10,159
e
Animal control7,250 7,250 8,464 (1,214) 7,869
Total public safety2,972,046 3,108,783 3,067,204 41,579 2,730,047
Public works:
Streets and highways484,640 584,640 661,464 (76,824) 406,285
468,426468,426 449,125 19,301 372,297
Snow and ice removal
Street signs120,341 120,341 157,801 (37,460) 113,840
Traffic signals24,000 24,000 14,264 9,736 19,880
Street lighting185,400 185,400 188,131 (2,731) 173,535
Total public works1,282,807 1,382,807 1,470,785 (87,978) 1,085,837
Sanitation:
$ --$ -$ -$ 26,732$
Tree preservation and weed control
(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, 2005
With Comparative Actual Amounts For The Year Ended December 31, 200
4
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Expenditures:
Current: (continued)
Parks and recreation685,466$ 688,466$ 674,716$ 13,750$ 612,147$
125,243125,243 116,506 8,737 114,052
Recycling
33,00033,000 9,798 23,202 21,992
Unallocated
Total current7,311,036 7,552,237 7,409,881 142,356 6,587,440
Capital outlay
Public safety- - 4,298 (4,298) -
Total expenditures7,311,036 7,552,237 7,414,179 138,058 6,587,440
(274,082)(167,324) (275,088) (1,006) 410,538
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in175,000 175,000 175,000 - 299,000
Net increase (decrease) in fund balance7,676$ (99,082)$ (100,088)$ (1,006)$ 709,538$
Fund balance - January 13,302,565 2,593,027
Fund balance - December 313,202,477$ 3,302,565$
73
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2005
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:
Legal154,460$ 155,429$ 969$
Assessing114,000 114,105 105
Public safety:
Police1,664,085 1,664,086 1
Animal control7,250 8,464 1,214
Public works:
Streets and highways584,640 661,464 76,824
Street signs120,341 157,801 37,460
Street lighting185,400 188,131 2,731
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 2005, 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:
74
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2005
ConditionRating
Excellent86 - 100
Very Good71 - 85
Good56 - 70
Fair41 - 55
Poor26 - 40
Very Poor11 - 25
Substandard0 - 10
As of December 31, 2005, the City’s street and trail system was rated at an OCI index of 83 on the average with detail condition as
follows:
% of Street
Conditionand Trails
Excellent to Good94%
Fair4%
Poor to Substandard2%
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 $1,655,715 on street and trail maintenance for the year ending December 31, 2005. 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
$1,000,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
2003950,000$ 956,688$ 82
20041,000,000 1,847,066 82
20051,000,000 1,655,715 83
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.
75
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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, 2005
With Comparative Totals For December 31, 2004
Totals
CapitalNonmajor Governmental Funds
SpecialDebt
RevenuServiceProjects20052004
e
Assets
$ 1,095,1351,613,806$ 2,273,227$ 4,982,168$ 5,109,002$
Cash and investments
Cash and investments with escrow agent 740,211- - 740,211 4,912,094
Accrued interest 5,179 16,411 7,575 29,165 78,010
Due from other governmental units -44,955 1,500 46,455 41,616
-136,253 3,508 139,761 71,173
Accounts receivable - net
Interfund receivable -3,000 - 3,000 -
Prepaid items2,496 - - 2,496 -
Property taxes receivable:
26,4451,728 448 28,621 26,097
Unremitted
Delinquent 37,755528 - 38,283 25,841
Special assessments receivable:
Unremitted 4,397- 287 4,684 1,657
-- 1,143 1,143 145,814
Delinquent
Deferred 104,199- 185,227 289,426 229,981
Notes receivable- - - - 46,157
Inventory -5,341 - 5,341 -
Total assets1,813,286 2,024,553 2,472,915 6,310,754 10,687,442
Liabilities, equity and other credits
Liabilities:
Interfund payable103,000 10,000 120,000 233,000 270,000
Accounts payable52,754 - 75,862 128,616 23,844
Contracts payable7,420 - 136,386 143,806 141,462
Deposits payable7,475 - - 7,475 -
-1,070 - 1,070 1,267
Due to other governmental units
Salaries payable7,816 - - 7,816 4,680
141,954310,812 393,817 846,583 869,765
Deferred revenue
Total liabilities490,347 151,954 726,065 1,368,366 1,311,018
Equity and other credits:
Fund balance (deficit):
1,872,59958,570 274,521 2,205,690 6,207,586
Reserved
Unreserved:
-1,262,882 1,576,272 2,839,154 3,374,850
Designated
Undesignated -1,487 (103,943) (102,456) (206,012)
Total equity and other credits1,322,939 1,872,599 1,746,850 4,942,388 9,376,424
Total liabilities, equity and other credits1,813,286$ 2,024,553$ 2,472,915$ 6,310,754$ 10,687,442$
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, 2005
With Comparative Totals For The Year Ended December 31, 200
4
Totals
Special DebCapitalNonmajor Governmental Funds
t
RevenuServiceProjects20052004
e
Revenues:
General property taxes214,952$ 1,549,112$ 48,629$ 1,812,693$ 1,166,617$
Tax increment collections- 1,160,190 - 1,160,190 1,072,852
490,52412,437 - 502,961 197,285
Intergovernmental
Special assessments- 49,091 116,417 165,508 191,599
Charges for service -758,951 - 758,951 590,450
s
Investment incom 40,63116,645 46,348 103,624 228,628
e
Miscellaneous
Park dedication fees- - 286,316 286,316 842,042
Connection charge -- 350,165 350,165 385,173
s
Othe
r -187,584 166,616 354,200 304,934
3,289,5481,190,569 1,014,491 5,494,608 4,979,580
Total revenues
Expenditures:
Current:
-31,091 248,002 279,093 174,615
General government
Public safety1,422 - 24,672 26,094 185,911
Public works335,858 - 243,192 579,050 465,281
Parks and recreation611,609 - 23,662 635,271 142,974
Economic developmen -152,413 - 152,413 179,322
t
Capital outlay:
General governmen -104,299 6,390 110,689 193,408
t
Public safety3,301 - 103,492 106,793 95,803
Public works140,521 - 328,911 469,432 401,293
Parks and recreation70,038 - 294,693 364,731 540,739
Debt service:
Principal retirement- 8,487,000 - 8,487,000 6,839,000
Interest- 2,042,003 - 2,042,003 1,063,363
Paying agent fee 5,744- - 5,744 4,187
s
Professional service- 7,482 - 7,482 90,682
Construction/acquisition costs- - 113,983 113,983 1,265,839
Total expenditures1,450,552 10,542,229 1,386,997 13,379,778 11,642,417
(7,252,681)(259,983) (372,506) (7,885,170) (6,662,837)
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in4,216 3,190,934 47,689 3,242,839 7,789,115
-(434,309) (30,304) (464,613) (1,177,121)
Transfers out
Bonds issue -- 650,000 650,000 1,700,000
d
Refunding bonds issue -- - - 6,450,000
d
Payment to refunded bonds escrow agen -- - - (2,145,864)
t
Bond premiu -- - - 23,438
m
Bond discoun -- (2,795) (2,795) (19,554)
t
Proceeds from sale of capital assets25,703 - - 25,703 160,329
Total other financing sources (uses)(404,390) 3,190,934 664,590 3,451,134 12,780,343
Net increase (decrease) in fund balance(664,373) (4,061,747) 292,084 (4,434,036) 6,117,506
Fund balance - January 11,987,312 5,934,346 1,454,766 9,376,424 3,258,918
Fund balance - December 311,322,939$ 1,872,599$ 1,746,850$ 4,942,388$ 9,376,424$
80
NONMAJOR SPECIAL REVENUE FUNDS
The City of Andover had the following Special Revenue Funds during the year:
EDA General - This fund was established to account for activities designed to promote quality economic
development within in the community.
- This fund accounts for the financial operations of a federal grant for rental
Community Development Block Grant
housing rehabilitation.
Community Center - This fund is used to account for the operations of the Andover/YMCA 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.
Drainage and Mapping - This fund accounts for resources necessary to maintain existing maps and developing new
maps and mapping systems for the City.
LRRWMO - This fund is used to account for the City’s involvement with the Lower Rum River Watershed
Management Organization (LRRWMO).
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 contributions associated with land development to be
Trail and Transportation
used for constructing and upgrading the City’s trail system.
Right-of-Way Management/Utility - This fund is used to account for activity associated with the management of the
public right-of-ways.
Capital Equipment Reserve - This fund is used to account for the capital equipment/projects levy and the various
capital expenditures it will be used for.
Charitable Gambling - This fund accounts for the 10% of net profits received from gambling activities by the
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.
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.
81
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2005
With Comparative Totals For December 31, 2004
CommunityDrainage
EDADevelopmentCommunityand
GeneralBlock GrantCenterMappingLRRWMO
Assets
Cash and investments71,519$ 50,629$ 9,139$ 42,034$ 770$
Accrued interest290 104 - 141 -
Due from other governmental units- - 42,018 - -
e -20,272 88,703 - -
Accounts receivabl
Interfund receivable -- - - -
Prepaid items- - 2,496 - -
Property taxes receivable:
Unremitted- - - - -
Delinquent- - - - 528
Notes receivable- - - - -
Inventory- - 5,341 - -
Total assets92,081 50,733 147,697 42,175 1,298
Liabilities and Fund Balance
Liabilities:
Interfund payable- - 100,000 - 3,000
Accounts payable1,975 - 49,569 352 -
Contracts payable- - - - -
Deposits payable- - 7,475 - -
Due to other governmental units- - 1,070 - -
Salaries payable1,511 - 4,926 - 307
Deferred revenue- - 5,088 - 528
Total liabilities3,486 - 168,128 352 3,835
Fund balance (deficit):
Reserved for:
Prepaid items- - 2,496 - -
Inventory- - 5,341 - -
Economic development- 50,733 - - -
Unreserved:
Designated for working capital88,595 - - 20,500 -
Designated for projects- - - - -
Designated for equipment- - - - -
Undesignated- - (28,268) 21,323 (2,537)
Total fund balance (deficit)88,595 50,733 (20,431) 41,823 (2,537)
Total liabilities and fund balance92,081$ 50,733$ 147,697$ 42,175$ 1,298$
82
Statement 13
Right-of-WayCapitalTotals
Trail andManagement/EquipmentCharitableConstructionNonmajor Special Revenue Funds
ForestryTransportationUtilityReserveGamblingSeal Coating20052004
$ 111,5564,107$ 220,805$ 755,702$ 16,969$ 330,576$ 1,613,806$ 2,358,219$
424- 670 2,195 - 1,355 5,179 9,740
-2,937 - - - - 44,955 21,500
-- 27,278 - - - 136,253 71,173
-- 3,000 - - - 3,000 -
-- - - - - 2,496 -
-- - 1,728 - - 1,728 3,150
-- - - - - 528 350
-- - - - - - 46,157
-- - - - - 5,341 -
111,9807,044 251,753 759,625 16,969 331,931 1,813,286 2,510,289
-- - - - - 103,000 25,000
-858 - - - - 52,754 23,163
4,525- - 2,895 - - 7,420 389
-- - - - - 7,475 -
-- - - - - 1,070 1,267
-78 994 - - - 7,816 4,680
-- - - - 305,196 310,812 468,478
4,525936 994 2,895 - 305,196 490,347 522,977
-- - - - - 2,496 -
-- - - - - 5,341 -
-- - - - - 50,733 35,783
-6,108 76,493 - 6,000 - 197,696 654,403
107,455- 174,266 242,000 - 26,735 550,456 746,562
-- - 514,730 - - 514,730 526,416
-- - - 10,969 - 1,487 24,148
107,4556,108 250,759 756,730 16,969 26,735 1,322,939 1,987,312
$ 111,9807,044$ 251,753$ 759,625$ 16,969$ 331,931$ 1,813,286$ 2,510,289$
83
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2005
With Comparative Totals For The Year Ended December 31, 2004
CommunityDrainage
EDADevelopmentCommunityand
GeneralBlock GrantCenterMappingLRRWMO
Revenues:
General property taxes-$ -$ -$ -$ 27,460$
Intergovernmental- - - - -
Charges for services127,507 - 397,570 4,647 -
Investment income 2363,058 (12,343) 1,258 (378)
Miscellaneous13,595 23,374 137,612 - -
s 23,610144,160 522,839 5,905 27,082
Total revenue
Expenditures:
Current:
General government- - - - -
Public safety- - - - -
Public works- - - 8,396 24,590
Parks and recreation- - 589,900 - -
Economic development143,753 8,660 - - -
Capital outlay:
General government- - - - -
Public safety- - - - -
Public works- - - - -
Parks and recreation- - - - -
Total expenditures143,753 8,660 589,900 8,396 24,590
Revenues over (under) expenditures407 14,950 (67,061) (2,491) 2,492
Other financing sources (uses):
Transfers in- - 4,216 - -
Transfers out- - (434,309) - -
Proceeds from sale of capital assets- - - - -
Total financing sources (uses)- - (430,093) - -
14,950 (497,154) (2,491) 2,492
Net increase (decrease) in fund balance407
Fund balance (deficit) - January 188,188 35,783 476,723 44,314 (5,029)
Fund balance (deficit) - December 3188,595$ 50,733$ (20,431)$ 41,823$ (2,537)$
84
Statement 14
Totals
Right-of-WayCapital
Nonmajor Special Revenue Funds
Trail andManagement/EquipmentCharitableConstruction
ForestryTransportationUtilityReserveGamblingSeal Coating20052004
$ --$ -$ 187,492$ -$ -$ 214,952$ 212,608$
-12,437 - - - - 12,437 62,322
71,7042,340 54,683 - - 100,500 758,951 590,450
643118 5,807 12,083 665 5,498 16,645 73,153
-1,803 - 500 10,700 - 187,584 13,767
72,34716,698 60,490 200,075 11,365 105,998 1,190,569 952,300
-- - 29,105 1,986 - 31,091 38,458
-- - 1,422 - - 1,422 -
70717,358 61,474 - - 223,333 335,858 278,137
-- - 21,709 - - 611,609 73,213
179,322
-- - - - - 152,413
-- - 104,299 - - 104,299 -
-- - 3,301 - - 3,301 12,995
140,521- - - - - 140,521 185,334
-- - 70,038 - - 70,038 50,888
141,22817,358 61,474 229,874 1,986 223,333 1,450,552 818,347
(68,881)(660) (984) (29,799) 9,379 (117,335) (259,983) 133,953
-- - - - - 4,216 520,000
-- - - - - (434,309) (34,000)
-- - 25,703 - - 25,703 141,733
-- - 25,703 - - (404,390) 627,733
(68,881)(660) (984) (4,096) 9,379 (117,335) (664,373) 761,686
176,3366,768 251,743 760,826 7,590 144,070 1,987,312 1,225,626
$ 107,4556,108$ 250,759$ 756,730$ 16,969$ 26,735$ 1,322,939$ 1,987,312$
85
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86
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for six types of bonded indebtedness:
Certificates of Indebtedness
Capital Improvement Bonds
G.O. Revenue Bonds
Tax Increment Bonds
Permanent Improvement Revolving Bonds
State Aid Bonds
Special Assessment Bonds
Certificates of Indebtedness - (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 and 2005B) are repaid primarily from
general property taxes
G.O. Revenue Bonds - (EDA Public Facility Lease Revenue Bonds 2004) are repaid from annual lease payments
from the YMCA, Community Center operations and general property tax.
Tax Increment Bonds - (Tax Increment Bonds of 1995D, 1999 and 2000A and Refunding Bonds of 2003B and
2004B) are repaid primarily from tax increments.
- (G.O. PIR Bonds of 2001A and 2003A) are used to finance
Permanent Improvement Revolving (PIR) Bonds
assessable improvements within the City and are repaid primarily from special assessments levied against benefited
properties.
- (2001B State Aid Bonds) are used to finance MSA eligible cost for road construction and
State Aid Bonds
improvements. These bonds are repaid from a portion of state aid allotments received by the City.
Special Assessment Bonds - (G.O. Improvement Bonds 2005A) are used to finance assessable improvements within
the City and are repaid primarily from special assessments levied against benefited properties.
87
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2005
With Comparative Totals For December 31, 200
4
EDA Public
G.O.G.O.G.O. Capita
lG.O. CapitalFacility Lease
Capital Capital Capital ImprovemenImprovemenRevenu
tte
NotesNotesNotesBondsBondsBonds
2001C2003C2005B2004A2005B2004
Assets
Cash and investments 71,895$ 12,268$ 189,507$ 12,869$ 7,912$ 6,478$
Cash and investments with escrow agent - - - - - 740,211
Accrued interest - 224 357 - - 14,864
Due from other governmental units - - - - - -
Property taxes receivable:
Unremitted 2,435 1,136 1,720 2,131 - 6,937
Delinquent 4,370 2,056 3,084 3,856 - 12,338
Special assessments receivable:
Unremitted - - - - - -
Deferred - - - - - -
Total assets 78,700 15,684 194,668 18,856 7,912 780,828
Liabilities and Fund Balance
Liabilities:
Interfund payable - - - - - 10,000
Deferred revenue 4,370 2,056 3,084 3,856 - 12,338
Total liabilities 4,370 2,056 3,084 3,856 - 22,338
Fund balance:
Reserved for debt service 74,330 13,628 191,584 15,000 7,912 758,490
Total liabilities and fund balance 78,700$ 15,684$ 194,668$ 18,856$ 7,912$ 780,828$
88
Statement 15
G.O. TIFG.O. TIFG.O.G.O.G.O.
Totals
TIFRefundinRefundinPIR FunPIR FunStateImprovemen
ggddt
Nonmajor Debt Service Funds
BondsBondsBondsBonds oBonds oAid BondsBonds
ff
of 2000A2003B2004B2001A2003A2001B2005A20052004
$ 73,872153,668$ 277,892$ 33,319$ 44,592$ 208,548$ 2,315$ 1,095,135$ 922,537$
-- - - - - - 740,211 4,912,094
-- 587 104 141 134 - 16,411 58,818
-- - - - - - - 18,616
2,4744,263 5,349 - - - - 26,445 22,282
2,5885,117 4,346 - - - - 37,755 25,491
-- 4,397 - - - - 4,397 -
-- 104,199 - - - - 104,199 144,934
78,934163,048 396,770 33,423 44,733 208,682 2,315 2,024,553 6,104,772
-- - - - - - 10,000 -
2,5885,117 108,545 - - - - 141,954 170,426
2,5885,117 108,545 - - - - 151,954 170,426
76,346157,931 288,225 33,423 44,733 208,682 2,315 1,872,599 5,934,346
$ 78,934163,048$ 396,770$ 33,423$ 44,733$ 208,682$ 2,315$ 2,024,553$ 6,104,772$
89
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2005
With Comparative Totals For The Year Ended December 31, 2004
EDA Public
G.O.G.O.G.O. CapitalG.O. CapitalFacility LeaseTIF
tEquipmentImprovementImprovementRevenueCommercial
Capital Equipmen
NotesCertificateCertificateBondsBondsBondsRevitalization
2001C2003C2005B2004A2005B20041995D
Revenues:
General property taxes 262,729$ 122,535$ 185,584$ 229,888$ -$ 748,376$ -$
Tax increment collections - - - - - - 139,623
Intergovernmental - - - - - - -
Special assessments - - - - - - 44,695
Investment income (2,595) 1,921 4,973 (3,655) 335 33,352 (7,740)
Miscellaneous - - - - - - -
Total revenues 260,134 124,456 190,557 226,233 335 781,728 176,578
Expenditures:
Debt service:
Principal retirement 255,000 122,000 - 120,000 - - 350,000
Interest 14,724 3,690 - 115,968 - 1,194,167 118,175
Paying agent fees 522 120 120 120 120 120 350
Professional services - - - 2,159 - - 2,740
Total expenditures 270,246 125,810 120 238,247 120 1,194,287 471,265
Revenues over (under) expenditures (10,112) (1,354) 190,437 (12,014) 215 (412,559) (294,687)
Other financing sources (uses):
Transfers in 20,000 5,000 1,147 - 7,697 422,098 -
Transfers out - - - - - - -
Refunding bonds issued - - - - - - -
Payment to refunded bonds escrow agent - - - - - - -
Bond premium - - - - - - -
Bond discount - - - - - - -
Total other financing sources (uses) 20,000 5,000 1,147 - 7,697 422,098 -
Net increase (decrease) in fund balance 9,888 3,646 191,584 (12,014) 7,912 9,539 (294,687)
Fund balance - January 1 64,442 9,982 - 27,014 - 748,951 294,687
Fund balance - December 31 74,330$ 13,628$ 191,584$ 15,000$ 7,912$ 758,490$ -$
90
Statement 16
G.O. TIFG.O. TIFG.O.G.O.G.O.
dPIR FundStateImprovementTotals
TIFTIFRefundingRefundingPIR Fun
BondsBondsBondsBondsBonds ofBonds ofAid BondsBondsNonmajor Debt Service Funds
of 1999of 2000A2003B2004B2001A2003A2001B2005A20052004
$ --$ -$ -$ -$ -$ -$ -$ 1,549,112$ 907,722$
355,582183,148 179,831 302,006 - - - - 1,160,190 1,072,852
22,908- 12,727 27,999 - - 426,890 - 490,524 134,529
-- - 4,396 - - - - 49,091 152,462
(627)(7,524) 2,032 15,162 1,288 1,620 1,973 116 40,631 52,822
-- - - - - - - - 50,523
377,863175,624 194,590 349,563 1,288 1,620 428,863 116 3,289,548 2,370,910
305,0001,120,000 200,000 4,175,000 990,000 715,000 135,000 - 8,487,000 6,839,000
133,47524,325 30,120 113,125 100,398 91,755 102,081 - 2,042,003 1,063,363
465350 523 1,250 523 523 523 115 5,744 4,187
3501,533 350 350 - - - - 7,482 90,682
439,2901,146,208 230,993 4,289,725 1,090,921 807,278 237,604 115 10,542,229 7,997,232
(61,427)(970,584) (36,403) (3,940,162) (1,089,633)(805,658) 191,259 1 (7,252,681) (5,626,322)
-835,678 - - 1,090,000 807,000 - 2,314 3,190,934 5,748,761
-- - - - - - - - (54,815)
-- - - - - - - - 6,450,000
-- - - - - - - - (2,145,864)
-- - - - - - - - 15,936
- - - - (11,009)
-- - - -
-835,678 - - 1,090,000 807,000 - 2,314 3,190,934 10,003,009
(61,427)(134,906) (36,403) (3,940,162) 367 1,342 191,259 2,315 (4,061,747) 4,376,687
219,358134,906 112,749 4,228,387 33,056 43,391 17,423 - 5,934,346 1,557,659
$ 157,931-$ 76,346$ 288,225$ 33,423$ 44,733$ 208,682$ 2,315$ 1,872,599$ 5,934,346$
91
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92
NONMAJOR CAPITAL PROJECT FUNDS
The City of Andover had the following Capital Projects Funds during the year:
Sewer Trunk - This fund was established to account for access fees and sanitary sewer improvements.
Storm Sewer Project - This fund was established to account for storm sewer fees and improvements as part of
development and ongoing maintenance.
Park Dedication - This fund was established to account for contributions associated with land development to be
used for constructing and upgrading the City’s park system.
Building Fund - This fund was established to account for miscellaneous building improvements for all facilities.
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.
Capital Notes 2003C - This fund was established to account for the purchase of capital equipment that was financed
through the issuance of capital notes.
Capital Notes 2005B - 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
Capital Improvement Bonds 2004A
the use of bond proceeds.
Capital Improvement Bonds 2005B - This fund was established to account for improvements to the Public Works
building and City Hall with the use of bond proceeds.
93
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING BALANCE SHEE
T
NONMAJOR CAPITAL PROJECTS FUND
S
December 31, 2005
Comparative Totals For December 31, 200
4
Stor
m
SeweSeweParkBuildin
rrg
TrunkProjecDedicatioFund
tn
Assets
Cash and investments 1,067,382$ 8,968$ 521,038$ 267,262$
Accrued interest 3,966 - 990 841
Due from other governmental units - - 1,500 -
Accounts receivable 3,508 - - -
Property taxes receivable:
Unremitted - - 448 -
Special assessments receivable:
Unremitted 287 - - -
Delinquent 1,143 - - -
Deferred 118,846 - - -
Total assets 1,195,132 8,968 523,976 268,103
Liabilities and Fund Balance
Liabilities:
Interfund payables - 60,000 - -
Accounts payable 2,749 - - -
Contracts payable 12,982 - 67,772 -
Deferred revenue 119,989 - 207,447 -
Total liabilities 135,720 60,000 275,219 -
Fund balance (deficit):
Reserved for projects - - - -
Unreserved:
Designated for projects 1,059,412 - 248,757 268,103
Undesignated - (51,032) - -
Total fund balance (deficit) 1,059,412 (51,032) 248,757 268,103
Total liabilities and fund balance 1,195,132$ 8,968$ 523,976$ 268,103$
94
Statement 17
Capita
Capitall
CapitaImprovemenImprovemenTotals
ltt
NoteBondsBondsNonmajor Capital Projects Funds
s
Unfinanced2005B20042005B20052004
A
$ 175,5467,089$ 119,130$ 106,812$ 2,273,227$ 1,828,246$
766- 469 543 7,575 9,452
-- - - 1,500 1,500
-- - - 3,508 -
-- - - 448 665
-- - - 287 1,657
-- - - 1,143 880
-66,381 - - 185,227 229,981
176,31273,470 119,599 107,355 2,472,915 2,072,381
-60,000 - - 120,000 245,000
73,113- - - 75,862 681
-- 41,171 14,461 136,386 141,073
-66,381 - - 393,817 230,861
73,113126,381 41,171 14,461 726,065 617,615
78,428 92,894 274,521 237,457
103,199-
-- - - 1,576,272 1,447,469
-(52,911) - - (103,943) (230,160)
103,199(52,911) 78,428 92,894 1,746,850 1,454,766
$ 176,31273,470$ 119,599$ 107,355$ 2,472,915$ 2,072,381$
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, 2005
With Comparative Totals For The Year Ended December 31, 2004
Storm
SewerSewerParkBuilding
TrunkProjectDedicationFund
Revenues:
General property taxes-$ -$ 48,629$ -$
Intergovernmental- - - -
Special assessments94,484 - - -
Investment income37,532 (1,917) 6,311 9,848
Miscellaneous
Park dedication fees- - 286,316 -
Connection charges350,165 - - -
Other 62,18648,122 35,175 21,133
Total revenues530,303 60,269 376,431 30,981
Expenditures:
Current:
General government -- - 621
Public safety -- - -
Public works237,507 - - -
Parks and recreation- - 21,045 -
Capital outlay:
General government -- - -
Public safety -- - -
Public works196,050 - - -
Parks and recreation- - 218,246 -
Construction/acquisition costs- - 113,983 -
Total expenditures433,557 - 353,274 621
Revenues over (under) expenditures96,746 60,269 23,157 30,360
Other financing sources (uses):
Transfers in - - - -
Transfers out -(21,460) - -
Bonds issued- - - -
Bond premium- - - -
Bond discount- - - -
Proceeds from sale of capital assets- - - -
Total other financing sources (uses)(21,460) - - -
Net increase (decrease) in fund balance75,286 60,269 23,157 30,360
Fund balance - January 1984,126 (111,301) 225,600 237,743
Fund balance - December 311,059,412$ (51,032)$ 248,757$ 268,103$
96
Statement 18
CapitalCapital
CapitalCapitalImprovementImprovementTotals
NotesNotesBondsBondsNonmajor Capital Projects Funds
Unfinanced2003C2005B2004A2005B20052004
$ --$ -$ -$ -$ 48,629$ 46,287$
-- - - - - 434
-21,933 - - - 116,417 39,137
(2,916)(3,614) 12,780 (21,110) 9,434 46,348 102,653
-- - - - 286,316 842,042
-- - - - 350,165 385,173
-- - - - 166,616 240,644
(2,916)18,319 12,780 (21,110) 9,434 1,014,491 1,656,370
-- - - 247,381 248,002 136,157
23,672- - 1,000 - 24,672 185,911
-60 5,625 - - 243,192 187,144
2,617- - - - 23,662 69,761
6,390- - - - 6,390 193,408
14,125- 2,168 87,199 - 103,492 82,808
-- 132,861 - - 328,911 215,959
-- 76,447 - - 294,693 489,851
-- - - - 113,983 1,265,839
46,80460 217,101 88,199 247,381 1,386,997 2,826,838
(49,720)18,259 (204,321) (109,309) (237,947) (372,506) (1,170,468)
-47,689 - - - 47,689 1,520,354
-- (1,147) - (7,697) (30,304) (1,088,306)
-- 310,000 - 340,000 650,000 1,700,000
-- - - - - 7,502
-- (1,333) - (1,462) (2,795) (8,545)
-- - - - - 18,596
-47,689 307,520 - 330,841 664,590 2,149,601
(49,720)65,948 103,199 (109,309) 92,894 292,084 979,133
49,720(118,859) - 187,737 - 1,454,766 475,633
$ -(52,911)$ 103,199$ 78,428$ 92,894$ 1,746,850$ 1,454,766$
97
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - EDA GENERALStatement 19
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services-$ -$ 127,507$ 127,507$ 126,551$
Investment income- - 3,058 3,058 1,425
Miscellaneous130,000 130,000 13,595 (116,405) 2,954
Total revenues130,000 130,000 144,160 14,160 130,930
Expenditures:
Current:
Economic development 137,800137,800 143,753 (5,953) 165,126
Revenues over (under) expenditures(7,800) (7,800) 407 20,113 (34,196)
Other financing sources (uses):
Proceeds from sale of capital assets- - - - 101,440
Net increase (decrease) in fund balance(7,800)$ (7,800)$ 407 20,113$ 67,244
Fund balance (deficit) - January 188,188 20,944
Fund balance (deficit) - December 3188,595$ 88,188$
98
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANTStatement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental-$ -$ -$ -$ 46,989$
Investment income- - 236 236 1,692
Miscellaneous3,888 3,888 23,374 19,486 1,298
Total revenues3,888 3,888 23,610 19,722 49,979
Expenditures:
Current:
Economic Development -- 8,660 (8,660) 14,196
Net increase (decrease) in fund balance3,888$ 3,888$ 14,950 28,382$ 35,783
Fund balance (deficit) - January 135,783 -
Fund balance (deficit) - December 3150,733$ 35,783$
99
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - COMMUNITY CENTERStatement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services466,500$ 441,500$ 397,570$ (43,930)$ 29,683$
Investment income- - (12,343) (12,343) 20,253
Miscellaneous- 25,000 137,612 112,612 -
Total revenues466,500 466,500 522,839 56,339 49,936
Expenditures:
Current:
Parks and recreation400,218 400,218 589,900 (189,682) 73,213
Revenue over (under) expenditures66,282 66,282 (67,061) (133,343) (23,277)
Other financing sources (uses)
Transfers in 125,000125,000 4,216 (120,784) 500,000
Transfers out (422,098)- (434,309) (12,211) -
Total financing sources (uses)125,000 (297,098) (430,093) (132,995) 500,000
Net increase (decrease) in fund balance191,282$ (230,816)$ (497,154) (266,338)$ 476,723
Fund balance (deficit) - January 1476,723 -
Fund balance (deficit) - December 31(20,431)$ 476,723$
100
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - DRAINAGE AND MAPPINGStatement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services10,500$ 10,000$ 4,647$ (5,353)$ 22,968$
Investment income- 500 1,258 758 1,177
Total Revenues10,500 10,500 5,905 (4,595) 24,145
Expenditures:
Current:
Public works15,137 15,137 8,396 6,741 7,333
Net increase (decrease) in fund balance(4,637)$ (4,637)$ (2,491) (11,336)$ 16,812
Fund balance (deficit) - January 144,314 27,502
Fund balance (deficit) - December 3141,823$ 44,314$
101
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - LRRWMOStatement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes30,000$ 30,000$ 27,460$ (2,540)$ 27,458$
Intergovernmental- - - - 255
Investment income200 200 (378) (578) (480)
Total revenues30,200 30,200 27,082 (3,118) 27,233
Expenditures:
Current:
Public works25,055 25,055 24,590 465 30,424
Net increase (decrease) in fund balance5,145$ 5,145$ 2,492 (3,583)$ (3,191)
Fund balance (deficit) - January 1(5,029) (1,838)
Fund balance (deficit) - December 31(2,537)$ (5,029)$
102
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - FORESTRStatement 24
Y
SCHEDULE OF REVENUES, EXPENDITURES AN
D
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 200
4
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
$ 9,500-$ 12,437$ 2,937$ 13,341$
Intergovernmental
Charges for service 5,5005,500 2,340 (3,160) 3,510
s
Investment incom 100100 118 18 (532)
e
Miscellaneous- - 1,803 1,803 -
15,1005,600 16,698 1,598 16,319
Total revenues
Expenditures:
Current:
Public works10,490 19,990 17,358 2,632 23,160
Net increase (decrease) in fund balance(4,890)$ (4,890)$ (660) (1,034)$ (6,841)
Fund balance (deficit) - January 16,768 13,609
Fund balance (deficit) - December 316,108$ 6,768$
103
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - TRAIL AND TRANSPORTATIONStatement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services78,450$ 78,450$ 71,704$ (6,746)$ 177,789$
Investment income1,500 1,500 643 (857) 8,958
Total revenues79,950 79,950 72,347 (7,603) 186,747
Expenditures:
Current:
Public works- - 707 (707) 21,491
Capital outlay:
Public works150,000 150,000 140,521 9,479 79,056
Total expenditures150,000 150,000 141,228 8,772 100,547
Net increase (decrease) in fund balance(70,050)$ (70,050)$ (68,881) 1,169$ 86,200
Fund balance (deficit) - January 1176,336 90,136
Fund balance (deficit) - December 31107,455$ 176,336$
104
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITYStatement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services20,000$ 20,000$ 54,683$ 34,683$ 94,856$
Investment income3,500 3,500 5,807 2,307 5,330
Total revenues23,500 23,500 60,490 36,990 100,186
Expenditures:
Current:
Public works67,587 67,587 61,474 6,113 56,032
Net increase (decrease) in fund balance(44,087)$ (44,087)$ (984) 30,877$ 44,154
Fund balance (deficit) - January 1251,743 207,589
Fund balance (deficit) - December 31250,759$ 251,743$
105
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CAPITAL EQUIPMENT RESERVEStatement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes203,200$ 203,200$ 187,492$ (15,708)$ 185,150$
Intergovernmental- - - - 1,737
Investment income15,000 15,000 12,083 (2,917) 22,534
Miscellaneous- - 500 500 925
Total revenues218,200 218,200 200,075 (18,125) 210,346
Expenditures:
Current:
General government 28,00028,000 29,105 (1,105) 37,458
Public safet
y -- 1,422 (1,422) -
Parks and recreation40,000 40,000 21,709 18,291 -
Capital outlay:
General government 60,00060,000 104,299 (44,299) -
Public safety 7,5007,500 3,301 4,199 12,995
Public works- - - - 106,278
Parks and recreation- - 70,038 (70,038) 50,888
Total expenditures135,500 135,500 229,874 (94,374) 207,619
Revenues over (under) expenditures82,700 82,700 (29,799) (112,499) 2,727
Other financing sources (uses):
Transfers in -- - - 20,000
Transfers out -- - - (34,000)
Proceeds from the sale of capital assets- - 25,703 25,703 40,293
Total financing sources (uses)- - 25,703 25,703 26,293
Net increase (decrease) in fund balance82,700$ 82,700$ (4,096) (86,796)$ 29,020
Fund balance (deficit) - January 1760,826 731,806
Fund balance (deficit) - December 31756,730$ 760,826$
106
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CHARITABLE GAMBLINGStatement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Investment income30$ 30$ 665$ 635$ -$
Miscellaneous4,000 4,000 10,700 6,700 8,590
Total revenues4,030 4,030 11,365 7,335 8,590
Expenditures:
Current:
General government 5,0005,000 1,986 3,014 1,000
Net increase (decrease) in fund balance(970)$ (970)$ 9,379 4,321$ 7,590
Fund balance (deficit) - January 17,590 -
Fund balance (deficit) - December 3116,969$ 7,590$
107
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATINGStatement 29
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUA
L
For The Year Ended December 31, 2005
With Comparative Actual Amounts For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted AmountsPositive2004
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services128,508$ 128,508$ 100,500$ (28,008)$ 135,093$
Investment income10,000 10,000 5,498 (4,502) 12,796
Total revenues138,508 138,508 105,998 (32,510) 147,889
Expenditures:
Current:
Public works128,508 128,508 223,333 (94,825) 139,697
Net increase (decrease) in fund balance10,000$ 10,000$ (117,335) (127,335)$ 8,192
Fund balance (deficit) - January 1144,070 135,878
Fund balance (deficit) - December 3126,735$ 144,070$
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, 2005
With Comparative Totals for December 31, 2004
Central
EquipmentRiskTotals
MaintenanceManagement20052004
Assets
Current assets:
Cash and cash equivalents94,464$ 154,231$ 248,695$ 186,158$
Accrued interest 409558 967 829
Prepaid items2,496 - 2,496 56,945
Inventories - at cost46,029 - 46,029 37,383
Total assets143,547 154,640 298,187 281,315
Liabilities
Current liabilities:
Accounts payable13,145 9,457 22,602 7,690
Contracts payable- 100 100 -
Due to other governmental units- 170 170 375
Salaries payable3,085 77 3,162 2,999
Total liabilities16,230 9,804 26,034 11,064
Net assets
Unrestricted127,317$ 144,836$ 272,153$ 270,251$
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, 2005
With Comparative Totals For The Year Ended December 31, 2004
Central
EquipmentRiskTotals
MaintenanceManagement20052004
Operating revenues:
User charges444,434$ 238,239$ 682,673$ 646,785$
Other 36,6433,067 39,710 26,020
Total operating revenues447,501 274,882 722,383 672,805
Operating expenses:
Personal services189,568 74,476 264,044 254,409
Supplies207,888 118 208,006 170,615
Other service charges80,603 174,303 254,906 262,280
Total operating expenses478,059 248,897 726,956 687,304
Operating income (loss)(30,558) 25,985 (4,573) (14,499)
Nonoperating revenues (expenses):
Investment income3,466 3,009 6,475 3,255
Change in net assets(27,092) 28,994 1,902 (11,244)
Net assets - January 1154,409 115,842 270,251 281,495
Net assets - December 31127,317$ 144,836$ 272,153$ 270,251$
111
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF CASH FLOWSStatement 3
2
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2005
With Comparative Totals For The Year Ended December 31, 2004
Central
EquipmenRisTotals
tk
MaintenancManagemen20052004
et
Cash flows from operating activities:
Receipts from customers and users 447,501$ 274,882$ 722,383$ 672,805$
Payment to suppliers (294,035) (108,267) (402,302) (430,068)
Payment to employees (189,278) (74,603) (263,881) (258,304)
Net cash flows from operating activities (35,812) 92,012 56,200 (15,567)
Cash flows from investing activities:
Investment income 3,539 2,798 6,337 3,098
Net increase in cash and cash equivalents (32,273) 94,810 62,537 (12,469)
Cash and cash equivalents - January 1 126,737 59,421 186,158 198,627
Cash and cash equivalents - December 31 94,464$ 154,231$ 248,695$ 186,158$
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) (30,558)$ 25,985$ (4,573)$ (14,499)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in prepaid items (2,496) 56,945 54,449 (12,365)
Decrease (increase) in inventory (8,646) - (8,646) 12,522
Increase (decrease) in accounts payable 5,955 8,957 14,912 3,294
Increase (decrease) in contracts payable - 100 100 -
Increase (decrease) in due to other governmental units (357) 152 (205) (624)
Increase (decrease) in salaries payable 290 (127) 163 (3,895)
Total adjustments (5,254) 66,027 60,773 (1,068)
Net cash provided by operating activities (35,812)$ 92,012$ 56,200$ (15,567)$
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 CHANGES IN ASSETS AND LIABILITIES Statement 33
FIDUCIARY FUNDS
For The Year Ended December 31, 2005
BalanceBalance
January 1,December 31,
2005AdditionsDeletions2005
General Escrow Fund
Assets
Cash and investments27,989$ 16,604$ (16,518)$ 28,075$
Liabilities
Accounts payable- 4,356 (4,330) 26
Deposits payable27,989 12,248 (12,188) 28,049
Total liabilities27,989$ 16,604$ (16,518)$ 28,075$
General Agency Fund
Assets
Cash and investments280,571$ 1,477,067$ (1,249,998)$ 507,640$
Liabilities
Accounts payable- 504,399 (504,399) -
Contracts payable6,848 7,685 (6,848) 7,685
Due to other governments- 230 - 230
Deposits payable273,723 964,753 (738,751) 499,725
Total liabilities280,571$ 1,477,067$ (1,249,998)$ 507,640$
Total Fiduciary Funds
Assets
Cash and investments308,560$ 1,493,671$ (1,266,516)$ 535,715$
Liabilities
Accounts payable- 508,755 (508,729) 26
Contracts payable6,848 7,685 (6,848) 7,685
Due to other governments- 230 - 230
Deposits payable301,712 977,001 (750,939) 527,774
Total liabilities308,560$ 1,493,671$ (1,266,516)$ 535,715$
114
SUPPLEMENTARY FINANCIAL INFORMATION
115
CITY OF ANDOVER, MINNESOT
A
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2005
Authorized
IssueMaturityInterestand
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
2004 EDA Public Facility Lease Revenue Bonds4/23/20042/1/20342.215-5.400%19,580,000$
Special Assessment Bonds:
2005A G.O. Improvement Bonds4/28/20052/1/20132.95-3.65%3,560,000
Tax Increment Bonds:
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 bonds15,790,000
Certificates of Indebtedness:
2001C G.O. Capital Notes6/5/20012/1/20062.90-3.80%1,210,000
2003C G.O. Equipment Certificates12/18/200312/1/20061.50%400,000
2005B G.O. Equipment Certificates4/28/20052/1/20082.65-3.10%310,000
Total certificates of indebtedness1,920,000
Capital Improvement Bonds
2004A G.O. Capital Improvement Bonds3/16/20042/1/20172.00-3.75%3,890,000
2005B G.O. Capital Improvement Bonds4/28/20052/1/20092.65-3.10%340,000
Total capital improvement bonds4,230,000
Permanent Improvement Revolving Bonds:
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 bonds9,555,000
State Aid Bonds:
2001B State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000
Total Bonded Indebtedness57,390,000
Compensated absences410,402
Total governmental activities indebtedness57,800,402
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000
Compensated absences66,816
Total business-type activities indebtedness9,846,816
Total City indebtedness$67,647,218
116
Exhibit 1
Principal Payments
PriorCurrentOutstanding2006 Payment
YearsYear12/31/05PrincipalInterestTotal
$ --$ 19,580,000$ 185,000$ 964,102$ 1,149,102$
-- 3,560,000 - 149,204 149,204
4,525,0001,530,000 - - - -
1,120,000380,000 - - - -
305,000480,000 1,660,000 1,660,000 58,600 1,718,600
200,000185,000 1,145,000 210,000 26,120 236,120
-- 4,260,000 480,000 108,325 588,325
6,150,0002,575,000 7,065,000 2,350,000 193,045 2,543,045
255,000690,000 265,000 265,000 5,035 270,035
122,000154,000 124,000 124,000 1,886 125,886
-- 310,000 190,000 8,235 198,235
377,000844,000 699,000 579,000 15,156 594,156
120,000- 3,770,000 235,000 112,417 347,417
-- 340,000 - 12,772 12,772
4,110,000 235,000 125,189 360,189
120,000-
990,0001,875,000 2,110,000 1,035,000 62,665 1,097,665
715,000- 3,865,000 730,000 77,305 807,305
1,705,0001,875,000 5,975,000 1,765,000 139,970 1,904,970
135,000415,000 2,205,000 140,000 96,957 236,957
8,487,0005,709,000 43,194,000 5,254,000 1,683,623 6,937,623
-- 410,402 - - -
8,487,0005,709,000 43,604,402 5,254,000 1,683,623 6,937,623
320,000310,000 9,150,000 335,000 411,720 746,720
-- 66,816 - - -
320,000310,000 9,216,816 335,000 411,720 746,720
$ 8,807,0006,019,000$ 52,821,218$ 5,589,000$ 2,095,343$ 7,684,343$
117
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF TAX CAPACITY RATES AND LEVIESExhibit 2
Taxes Payable
20062005
Tax capacity values$ 23,461,04426,644,835$
Captured tax increment value(1,855,565) (1,514,281)
Fiscal disparities - contribution(777,290) (695,012)
Local taxable value24,011,980 21,251,751
Fiscal disparities - distribution3,033,078 2,956,709
Adjusted tax capacit$ 24,208,46027,045,058$
y
20062005
dTax CapacityCertifiedTax Capacity
Certifie
LevyRateLevyRate
General Revenue Levy:
General Fund5,586,180$ 4,831,158$
Fire Relief 43,75054,032
Capital Equipment/Projects209,296 203,200
Parks Projects54,384 52,800
Road and Bridge734,686 679,899
Pedestrian Trail Maintenance47,380 46,000
Total General Revenue Levy 24.790%5,856,8076,685,958 24.181%
Debt Service Levy:
2001C G.O. Capital Note283,537 283,210
2003C G.O. Equipment Certificate132,180 132,030
2004A G.O. Capital Improvement Bonds364,788 247,766
2004 EDA Public Facility Revenue Bonds847,350 807,000
2005B G.O. Capital Improvement Bonds137,922 -
2005B G.O. Equipment Certificate65,788 200,000
Total Debt Service Levy 6.757%1,670,0061,831,565 6.895%
Lower Rum River Watershed 0.347%30,00033,396 0.338%
Total8,550,919$ 31.894%7,556,813$ 31.414%
118
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF DEFERRED TAX LEVIESExhibit 3
GENERAL OBLIGATION BONDS
December 31, 2005
TaxesTax Increment BondsCapital Improvement Bonds
Payable2000A2003B2004BTotal2004A2005BTotal
20061,718,600$ 236,120$ 588,325$ 2,543,045$ 347,418$ 12,772$ 360,190$
2007- 236,920 588,625 825,545 347,668 118,583 466,251
2008- 247,620 592,413 840,033 357,080 120,290 477,370
2009- 253,020 594,600 847,620 360,580 116,783 477,363
2010- 257,500 590,812 848,312 368,418 - 368,418
2011- - 610,050 610,050 375,143 - 375,143
2012- - 607,875 607,875 385,993 - 385,993
2013- - 599,588 599,588 390,905 - 390,905
2014- - - - 404,596 - 404,596
2015- - - - 417,000 - 417,000
2016- - - - 423,050 - 423,050
2017- - - - 427,875 - 427,875
$ 4,772,288$ 7,722,068$ 4,605,726$ 368,428$ 4,974,154$
$ 1,231,1801,718,600
EDA Public
Facility LeaseTotal
Certificates of Indebtedness
TaxesRevenue BondsDeferred Tax
Payable2001C2003C2005BTotalof 2004Levies
2006270,035$ 125,886$ 198,235$ 594,156$ 1,149,102$ 4,646,493$
2007- - 62,655 62,655 1,144,731 2,499,182
2008- - 60,900 60,900 908,695 2,286,998
2009- - - - 699,806 2,024,789
2010- - - - 700,684 1,917,414
2011- - - - 694,891 1,680,084
2012- - - - 697,456 1,691,324
2013- - - - 693,534 1,684,027
2014- - - - 693,171 1,097,767
2015- - - - 695,221 1,112,221
2016- - - - 694,846 1,117,896
2017- - - - 689,947 1,117,822
2018- - - - 690,822 690,822
2019- - - - 691,346 691,346
- - 690,203 690,203
2020- -
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
886,587
2034- - - - 886,587
$ 125,886270,035$ 321,790$ 717,711$ 21,335,988$ 34,749,921$
119
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2005
Transfe
Transferr
InOut
General Fund (GF)
Water Fund EF 135,000$ -$ General Fund Admin Allocatio
n
Sewer Fund EF 40,000 - General Fund Admin Allocatio
n
Total General Fund175,000 -
Special Revenue Funds (SRF)
Community Center SRF
2004 Lease Revenue Bonds - Community Center CPF 4,216 - Allocate Prior Year Contribution
s
2004 EDA Public Facility Lease Revenue Bonds DSF - 422,098 Debt Service Allocatio
n
2004 Lease Revenue Bonds - Community Center CPF - 12,211 Reimbursement for Prior Year Expenditure
s
Total Special Revenue Funds4,216 434,309
Debt Service Funds (DSF)
1999 G.O. Tax Increment Bonds DSF
Tax Increment Projects CPF 835,678 - Call Bonds & Close Bond Fun
d
2001A PIR DSF
PIR Capital Projects Fund CPF 1,090,000 - Debt Service Allocatio
n
2003A PIR DSF
PIR Capital Projects Fund CPF 807,000 - Debt Service Allocatio
n
2001C G.O. Capital Note DSF
Water Fund EF 13,000 - Debt Service Allocatio
n
Sewer Fund EF 7,000 - Debt Service Allocatio
n
-20,000
2003C G.O. Capital Note DSF
Storm Sewer Fund EF 5,000 - Debt Service Allocatio
n
2004 EDA Public Facility Lease Revenue Bonds DSF
Community Center SRF 422,098 - Debt Service Allocatio
n
2005A G.O. Improvement Bonds DSF
2005A G.O. Improvement Bonds CPF 2,314 - Unused Discoun
t
2005B G.O. Capital Improvement Bonds DSF
2005B G.O. Capital Improvement Bonds CPF 7,697 - Capitalized Interest & Unused Discoun
t
2005B G.O. Capital Note DSF
2005B G.O. Capital Note CPF 1,147 - Capitalized Interest & Unused Discoun
t
Total Debt Service Funds3,190,934 -
Capital Projects Funds (CPF)
Water Trunk Fund CPF
Unfinanced CPF - 21,460 99-14 Round Lake Blvd Reimbursemen
t
Sewer Trunk Fund CPF
Unfinanced CPF - 21,460 99-14 Round Lake Blvd Reimbursemen
t
Road and Bridge CPF
Unfinanced CPF - 4,769 99-14 Round Lake Blvd Reimbursemen
t
Tax Increment Projects CPF
2005A G.O. Improvement Bonds CPF 121,561 - Reimbursement for Prior Year Expenditure
s
1999 G.O. Tax Increment Bonds DSF - 835,678 Call Bonds & Close Bond Fun
d
$ 835,678121,561$
120
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2005(Continued)
Transfe
Transferr
InOut
Capital Projects Funds (CPF) - Continued
PIR Capital Projects Fund CPF
2001A PIR DSF -$ 1,090,000$ Debt Service Allocatio
n
2003A PIR DSF - 807,000 Debt Service Allocatio
n
1,897,000-
Unfinanced CPF
Water Trunk Fund CPF 21,460 - 99-14 Round Lake Blvd Reimbursemen
t
Sewer Trunk Fund CPF 21,460 - 99-14 Round Lake Blvd Reimbursemen
t
Road and Bridge CPF 4,769 - 99-14 Round Lake Blvd Reimbursemen
t
-47,689
2004 Lease Revenue Bonds - Community Center CPF
Community Center SRF 12,211 - Reimbursement for Prior Year Expenditure
s
Community Center SRF - 4,216 Allocate Prior Year Contribution
s
4,21612,211
2005A G.O. Improvement Bonds CPF
2005A G.O. Improvement Bonds DSF - 2,314 Unused Discoun
t
Tax Increment Projects CPF - 121,561 Reimbursement for Prior Year Expenditures
123,875-
2005B G.O. Capital Improvement Bonds CPF
2005B G.O. Capital Improvement Bonds DSF - 7,697 Capitalized Interest & Unused Discoun
t
2005B G.O. Capital Note CPF
2005B G.O. Capital Note DSF - 1,147 Capitalized Interest & Unused Discoun
t
Total Capital Projects Funds181,461 2,917,302
Enterprise Funds (EF)
Water Fund EF
General Fund GF - 135,000 General Fund Admin Allocatio
n
2001C G.O. Capital Note DSF - 13,000 Debt Service Allocatio
n
148,000-
Sewer Fund EF
General Fund GF - 40,000 General Fund Admin Allocatio
n
2001C G.O. Capital Note DSF - 7,000 Debt Service Allocatio
n
47,000-
Storm Sewer Fund EF
2003C G.O. Capital Note DSF - 5,000 Debt Service Allocatio
n
Total Enterprise Funds- 200,000
Total All Funds3,551,611$ 3,551,611$
121
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122
III. STATISTICAL SECTION (UNAUDITED)
123
CITY OF ANDOVER, MINNESOT
A
GOVERNMENT-WIDE EXPENSES BY FUNCTIONTable 1
Last Three Fiscal Years
(Unaudited)
Function2005200420032002
General government$ 2,265,2152,432,433$ 2,431,252$ 2,386,568$
Public safety 3,138,0693,353,798 2,766,694 2,474,284
Public works4,152,142 5,268,813 3,361,255 4,819,429
Sanitation- 26,843 160,548 264,671
Parks and recreation1,575,582 2,028,177 802,131 856,806
Recycling 113,234118,599 115,016 116,344
Economic development 941,624459,635 470,172 720,460
Interest on long-term debt1,797,469 1,708,303 1,255,888 1,667,943
Water 1,956,9952,160,502 1,737,596 1,526,526
Sewer 1,351,5061,555,010 1,344,857 1,206,865
Storm sewer 389,290400,114 168,203 -
Total18,005,284$ 19,188,069$ 14,613,612$ 16,039,896$
Government-wide expenses are not available for years prior to 2002.
2005 GOVERNMENT-WIDE EXPENSES BY FUNCTION
Storm sewer
SewerGeneral government
2%
9%14%
Water
12%
Public safety
18%
Interest
10%
Econ dev
3%
Recycling
1%
Public works
22%
Park & rec
9%
Sanitation
124
CITY OF ANDOVER, MINNESOT
A
GOVERNMENT-WIDE REVENUES BY SOURCETable 2
Last Three Fiscal Years
(Unaudited)
2005200420032002
Program Revenues:
Charges for services5,703,540$ 5,632,156$ 4,549,454$ 4,179,886$
Operating grants and contributions2,535,140 1,640,389 732,011 946,495
Capital grants and contributions4,972,157 7,225,746 5,350,283 6,223,233
General Revenues:
General property taxes7,066,852 6,260,772 5,682,498 5,076,374
Tax increment collections1,285,195 1,186,396 1,140,040 842,607
Grants and contributions not restricted
to specific programs86,906 141,870 158,694 763,049
Unrestricted investment earnings738,268 689,458 473,111 1,279,313
Gain on sale of capital assets252,549 1,824,792 591,063 1,316,054
Total22,640,607$ 24,601,579$ 18,677,154$ 20,627,011$
Government-wide revenues are not available for years prior to 2002.
2005 GOVERNMENT-WIDE REVENUES BY SOURCE
Unrestricted investment
earnings
3%
Charges for services
25%
General property taxes
32%
Grants and contributions not
Operating grants &
restricted to specific
contributions
programs
11%
0%
Tax increment collections
Capital grants &
6%
contributions
Gain on sale of capital assets
22%
1%
125
CITY OF ANDOVER, MINNESOT
A
GENERAL FUNDTable 3
REVENUES BY SOURCE
Last Ten Fiscal Years
(Unaudited)
GeneralLicenseCharges
FiscalPropertyandInter-forInvestment
YearTaxesPermitsgovernmentalServicesFinesIncomeMiscellaneousTotal
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
20054,550,918 724,436 653,455 933,365 90,530 81,565 104,822 7,139,091
2005 GENERAL FUND REVENUES BY SOURCE
Investment Income
Miscellaneous
1%
1%
Charges for Services
13%
Intergovernmental
9%
License & Permits
10%
General Property Tax
65%
Fines
1%
126
CITY OF ANDOVER, MINNESOT
A
GENERAL FUNDTable 4
EXPENDITURES BY FUNCTION
Last Ten Fiscal Years
(Unaudited)
FiscalGeneralPublicPublicParks and
YearGovernmentSafetyWorksSanitationRecreationRecyclingUnallocatedTotal
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
20052,070,872 3,071,502 1,470,785 - 674,716 116,506 9,798 7,414,179
2005 GENERAL FUND EXPENDITURES BY FUNCTION
Recycling
Park & rec
2%
9%
General government
28%
Public works
20%
Unallocated
0%
Public safety
41%
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
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%
20056,622,189 *6,063,397 91.56%60,224 6,123,621 92.47%126,293 1.91%
* Included in the total tax levy is $470,001 of market value homestead credit (MVHC) that the City will not be receiving. Due to State
legislative actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City of Andover
CITY OF ANDOVER, MINNESOT
A
SPECIAL ASSESSMENT LEVIES AND COLLECTIONSTable 6
Last Ten Fiscal Years
(Unaudited)
TotalDelinquent
CollectionsTaxes
CurrentCurrentPercent ofDelinquentTotalas a Percent ofOutstandingas a Percent of
AssessmenCurrenDelinquenCurren
AssessmentsAssessmentsAssessmentsAssessmenttttt
YearDueCollectedCollectedCollectionsCollectionsAssessments DueAssessmentsAssessments Due
1996573,477$ 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%
2005178,434 175,471 98.34%4,002 179,473 100.58%22,217 12.45%
128
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYTable 7
Years 1996 throuh 2005
g
(Unaudited)
Ratio of Ta
x
Real PropertPersonal PropertTota
yylCapacit t
yo
TaxEstimateTaxEstimateTaxEstimateTotal Estimate
dddd
YeaCapacitActual ValuCapacitActual ValuCapacitActual ValuActual Valu
ryeyeyee
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%
200523,027,376 2,321,605,300 433,669 21,718,900 23,461,045 2,343,324,200 1.00%
Source: Anoka Count Propert Tax Division
yy
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBTTable 8
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
(Unaudited)
LessRatio o
f
GrosCash andNeNet BondeNet Bonde
stdd
Net TaBondeInvestmentBondeDebt toDeb
xdsdt
YeaPopulation (1CapacitDebt (2)On HandDebTax CapacitPer Capit
r)ytya
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*29,262 21,466,828 24,236,000 (815,322) 23,420,678 109%800
200530,000 24,208,460 24,389,000 (300,929) 24,088,071 100%803
(1) Source: Metropolitan Council
(2) Onl includes debt supported b tax lev.
yyy
* 2004 is the start of 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 EXPENDITURES
Last Ten Fiscal Years
(Unaudited)
Ratio of
TotalDebt Service
InterestTotalGeneralto General
Debtand FiscalDebtGovernmentalGovernmental
YearPrincipalChargesServiceExpenditures (1)Expenditures
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%
20058,487,000 2,055,229 10,542,229 34,261,938 31%
(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 1997 through 2006
(Unaudited)
Taxes
PayableCity (1)SchoolCountyOtherTotal
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
200531.414 21.492 33.080 4.021 90.007
200632.153 21.250 32.045 3.170 88.618
(1) Includes the Lower Rum River Watershed
Source: Anoka County Property Tax Division
130
CITY OF ANDOVER, MINNESOT
A
COMPUTATION OF DIRECT AND OVERLAPPING DEBTTable 11
INCLUDING DEBT RATIO
S
December 31, 2005
(Unaudited)
BondedPercentageCity
Gross DebtApplicable toShare of
OutstandingCityDebt
Overlapping Debt:
Anoka County$ 9.2229%7,103,93977,025,000$
School Districts:
ISD No. 11 Anoka-Hennepin192,010,000 12.9548%24,874,511
ISD No. 15 St. Francis35,060,000 7.4867%2,624,837
Metro Council163,620,000 0.9016%1,475,198
Total Overlapping Debt467,715,000 36,078,485
Direct Debt:
City of Andover 100.0000%52,344,00052,344,000
Total Overlapping and Direct Debt520,059,000$ 88,422,485$
Debt Ratios:
Ratio of debt per capita (30,000 population)$2,947
Ratio of debt to estimated taxable market value of $2,343,324,2003.77%
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 12
December 31, 2005
(Unaudited)
EstimatedNet
PropertyMarketTax
TaxpayersClassificationValueCapacity
Anoka Electric / ConnexusUtility$ 203,31010,165,800$
Andover LTD PartnershipMall7,299,600 145,242
Presbyterian Homes of AndoverApartment 139,82411,161,700
116 LLCC/I7,004,800 139,346
Minnegasco, Inc.Utility 120,3586,055,400
Andover Station LLCC/I5,138,700 102,024
United Power AssociationUtility 83,7424,299,600
Columbia Park PropertiesMedical Clinic2,923,200 57,714
William RademacherC/I2,554,200 49,584
Health PartnersMedical Clinic1,499,100 29,232
131
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)
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 9,065
2005226 34,309,393 20 6,571,671 2,473 48,817,503 9,200
(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
199020002004*1990 - 2000
Population15,216 26,588 29,262 74.74%
Households4,519 8,107 9,065 79.40%
Household Size (Population/Household)3.37 3.28 3.23 -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
133
CITY OF ANDOVER, MINNESOT
A
MISCELLANEOUS STATISTICAL DATATable 15
December 31, 2005
(Unaudited)
Date incorporated1974
Form of governmentPlan A
Miles of streets
City182
County43
Storm sewer (miles)47
Watermain (miles)84
Sanitary sewer (miles)87
Parks:
Number58
Developed acreage541
Trails (miles)27
Acreage:
Developed13,600
Undeveloped9,440
Population:
2004 Estimate29,262
2000 U.S. Census26,588
1990 U.S. Census15,216
Housing units:
2004 Estimate9,065
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 education622
Anoka County Parks and Highway DepartmentsCounty government and services350
Kottkes' Bus Service, Inc.Bus transportation200
TargetRetail182
Columbia Park Medical GroupMedical clinic115
Festival FoodsGrocery store102
Meadow Creek Christian SchoolPrivate education K-1292
City of AndoverMunicipal government and services90
Tanners Steakhouse & BarRestaurant83
Farmstead at AndoverSenior housing and assisted living facilities80
134