HomeMy WebLinkAbout2006 CAFR1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
Comprehensive Annual Financial Report
of the
City of Andover, Minnesota
For the Year Ended
December 31, 2006
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 129
Statement of ActivitiesStatement 230
Fund Financial Statements:
Balance Sheet - Governmental FundsStatement 332
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental FundsStatement 434
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds Statement 537
Statement of Net Assets - Proprietary FundsStatement 638
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary FundsStatement 740
Statement of Cash Flows - Proprietary FundsStatement 842
Statement of Fiduciary Net Assets - Fiduciary FundsStatement 944
Notes to Financial Statements45
Required Supplementary Information:
Budgetary Comparison Schedule - General FundStatement 1078
Notes to Required Supplementary Information:
Legal Compliance - Budgets80
Modified Approach for City Streets and Trails Infrastructure Capital Assets80
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 1185
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental FundsStatement 1286
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1388
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue FundsStatement 1490
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 1594
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service FundsStatement 1696
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 17100
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project FundsStatement 18102
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
EDA GeneralStatement 19104
Community Development Block GrantStatement 20105
Community CenterStatement 21106
Drainage and MappingStatement 22107
LRRWMOStatement 23108
ForestryStatement 24109
Trail and TransportationStatement 25110
Right-of-Way Management/UtilityStatement 26111
Capital Equipment ReserveStatement 27112
Charitable GamblingStatement 28113
Construction Seal CoatingStatement 29114
Internal Service Funds:
Combining Statement of Net Assets - Internal Service FundsStatement 30116
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Internal Service FundsStatement 31117
Combining Statement of Cash Flows - Internal Service FundsStatement 32118
Agency Funds:
Combining Statement of Net Assets - Fiduciary FundsStatement 33120
Combining Statement of Changes in Assets and Liabilities - Fiduciary FundsStatement 34121
Supplementary Financial Information:
Combined Schedule of IndebtednessExhibit 1124
Schedule of Tax Capacity Rates and LeviesExhibit 2126
Schedule of Deferred Tax Levies - General Obligation BondsExhibit 3127
Schedule of Fund TransfersExhibit 4128
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
III. STATISTICAL SECTION
Net Assets by Component - Last Five Fiscal Years Table 1132
Changes in Net Assets - Last Five Fiscal Years Table 2133
Fund Balances - Governmental Funds - Last Five Fiscal Years Table 3135
Changes in Fund Balances - Governmental Funds - Last Five Fiscal Years Table 4136
Assessed and Estimated Actual Value of Taxable Property - Years 1997 through 2006Table 5137
Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Years 1998 through 2007Table 6138
Property Tax Levies and Collections - Last Eight Fiscal YearsTable 7139
Principal Taxpayers - Current Year and Nine Years AgoTable 8140
Estimated Market Values and New Construction - Last Ten Fiscal YearsTable 9141
Special Assessment Levies and CollectionsTable 10142
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Five Fiscal YearsTable 11143
Computation of Direct and Overlapping DebtTable 12144
Computation of Legal Debt Margin - Last Five Fiscal YearsTable 13145
Pledged-Revenue Coverage - Last Five Fiscal YearsTable 14146
Outstanding Debt by Type - Last Five Fiscal YearsTable 15147
Demographic and Economic Statitistics - Last Five YearsTable 16148
Principal Employers - Current Year and Nine Years AgoTable 17149
Full Time Equivalent Employees - City Government Employees by Function / Program -
Years 2002 through 2006Table 18150
Operating Indicators by Function / Program - Last Five YearsTable 19151
Capital Asset Statistics by Function / Program - Last Five YearsTable 20152
I. INTRODUCTORY SECTION
1
1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
April 26, 2007
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, 2006, 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 30,080. 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 2007 and 2008, 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
2006. 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 80% of the total in 2006. They are general
property taxes at 70%, and charges for services at 10%. 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 efficiencies and an increased tax levy, substantially increasing the local tax
rate in 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
$590,000 in aid to Andover, that loss in aid was originally intended to be for two years (2003 & 2004) but that loss has since
been extended to include years 2005 and 2006. The state allowed cities the ability to levy up to 60% of the lost 2003 aid in
2004.
LGA, HACA and MVHC for 1998 through 2006 are as follows:
YearLGAHACAMVHCTotal
1998122,651$ 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
*
2006 -- 1,700 1,700
*
*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 have since been lifted.
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 2006. The past seven years are
shown below:
RevenuesChange
2000623,662$ n/a
2001720,712 97,050$
2002588,965 (131,747)
2003551,385 (37,580)
2004674,008 122,623
2005724,436 50,428
2006598,094 (126,342)
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 in 2004 as the number of residential lots available
and built on has increased and the value of new construction is on the rise. The decrease in 2006 is largely due a slowing home
building market.
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from
charges for services totaled $933,365 in 2005 and $780,273 in 2006. This decrease can be linked to a slowing economy, primarily
due to the extremely slow housing market.
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
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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.
Major employers in Andover are as follows:
Number of
FirmType of Business / ProductEmployees
ISD No 11 Anoka-HennepinElementary and secondary education639
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 services92
Tanners Steakhouse & BarRestaurant83
Farmstead at AndoverSenior housing and assisted living facilities80
MAJOR INITIATIVES
FOR THE YEAR.
The City has many accomplishments to report for 2006. The following list is a summary of some of the
major initiatives completed throughout the year.
1) The response to significant storm damage. The Building Department has been very busy with various permits related
to September 2005 storm and tornado activity in the community that damaged s significant number of homes. As of
December 31, 2006, permits were issued for 2,574 roofs, 849 sidings, 55 significant home repairs, and 2 complete
demolitions and rebuilds.
2) The first full year of operations since the 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 fieldhouse, with running track and spectator
seating for a wide range of indoor sporting events.
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 2007 along with Northgate Liquors.Two 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, Pulte Homes is nearing the completion of the construction of 75 high-quality multi-family units
on an 8.65-acre site located just south of the Target Greatland.
4) The successful hosting of the City’s Fourth 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 2006. 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 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 has developed this commercial park and has seen building activity
throughout 2006 upon the completion of Jay Street in the development area. Bruggeman Homes has started the
construction of the first phase 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 view other options of 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's Comprehensive Annual Financial Report (CAFR) for the year ended December 31,2005 was awarded the
Government Finance Officers Association's "Excellence in Financial Reporting Award." The City completes this
document internally and recognized significant cost savings in the form of reduced financial consulting fees. This is
the fourth consecutive year receiving the award and it is anticipated that the City's CAFR for the year ended December
31,2006 will also achieve this award.
II) For the fifth year in a row, the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2006 Annual Budget. This award recognizes excellence in the
preparation of the City's budget document as a policy document, an operations guide, as a financial plan and as a
communications device.
12) The City has made significant progress after the implement of hardware and software to start the process of digital
imaging documents retained by the City. The imaging project will assist the City in staffing and data storage and
retrieval efficiencies.
13) 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.
Residential Development
The City continued to experience steady growth in both the urban and rural areas during 2006. New residential developments
reviewed during 2006 include Shaw's Glen, Cardinal Ridge, Woodland Crossing, Kensington Estates 7th Addition, Country Oaks
South, White Pine Wilderness and Hickory Meadows. These developments include a total of 195 new rural and urban single
family lots and townhouse units.
Commercial Industrial Development
Commercial development in the City also continued at a steady pace over 2006. Commercial site plans reviewed during the year
included Northpointe Plaza and Serendipity Cafe. These projects added a total of 10,700 square feet ofretail 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 did conduct 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. Interna] 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: (]) 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 Department performs the duties of risk management. The Finance
Department 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 1,2006. This is the
fifth 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 1,2007 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 2005 Comprehensive Annual Financial Report. This is the fourth 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 2006
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,
Melissa Rustman, 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.
Respectful~ submitted,
\ r~
. L \ .... .",.."-
(j
James Dickinson
City Administrator
8
CITY OF ANDOVER, MINNESOT
A
ORGANIZATION
December 31, 2006
OfficeNameTerm
MayorMichael GamacheJanuary 6, 2009
Council MemberDon JacobsonJanuary 2, 2011
Council MemberMichael KnightJanuary 6, 2009
Council MemberKen OrttelJanuary 6, 2009
Council MemberJulie TrudeJanuary 2, 2011
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
9
CITY OF ANDOVER
Organizational Chart
10
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II. FINANCIAL SECTION
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CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
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, 2006. 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 $140,462,766 (Net assets). Of this
amount, $23,259,509 (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 $7,884,427, 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 $31,041,415.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Reserved$ 46,849144,496$ 11,342,527$ 707,616$ 12,241,488$
Designated 1,569,7923,248,317 - 14,433,934 19,252,043
Undesignated (323,404)- - (128,712) (452,116)
$ 1,293,2373,392,813$ 11,342,527$ 15,012,838$ 31,041,415$
The City’s total long-term liabilities increased by $7,377,756 during the current fiscal year, primarily due to the issuance of the $10,000,000
EDA Public Facility Lease Revenue Refunding Bonds, Series 2006.
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental activities:
Bonds payable43,194,000$ 12,910,000$ (5,254,000)$ 50,850,000$
Compensated absences410,402 284,254 (235,357) 459,299
Total governmental activities43,604,402 13,194,254 (5,489,357) 51,309,299
Business-type activities:
Bonds payable9,150,000 - (335,000) 8,815,000
Compensated absences66,816 62,827 (54,968) 74,675
Total business-type activities9,216,816 62,827 (389,968) 8,889,675
Total City long-term liabilities52,821,218$ 13,257,081$ (5,879,325)$ 60,198,974$
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
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
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 29 through 31 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, Economic Development Authority (EDA) Public Facility Lease Revenue Refunding Bonds 2006 and the following capital
projects funds (CPF): Water Trunk, Sewer Trunk, Road and Bridge, Tax Increment Projects and Permanent Improvement Revolving.
Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this report.
The City of Andover adopts an annual appropriated budget for its general and special revenue funds.
A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 32 through 37 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 38 through 43 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 44 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 45 through 75 of this report.
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CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
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 83 through 121 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 $140,462,766 at the close of the most recent fiscal year.
The largest portion of the City of Andover’s net assets ($102,364,469 or 73 percent) reflects its investment in capital assets (e.g. land,
buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Andover uses
these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of
Andover's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
CITY OF ANDOVER’S NET ASSETS
Governmental ActivitiesBusiness-Type ActivitiesTotals
200520062005200620052006
Current and other assets29,057,662$ 36,787,210$ 3,208,692$ 3,623,126$ 32,266,354$ 40,410,336$
Capital assets111,605,598 115,708,759 44,911,727 47,234,302 156,517,325 162,943,061
Total assets140,663,260 152,495,969 48,120,419 50,857,428 188,783,679 203,353,397
Long-term liabilities
outstanding43,604,402 51,309,299 9,216,816 8,889,675 52,821,218 60,198,974
Other liabilities3,101,278 2,425,081 282,844 266,576 3,384,122 2,691,657
Total liabilities46,705,680 53,734,380 9,499,660 9,156,251 56,205,340 62,890,631
Net assets:
Invested in capital assets,
net of related debt67,652,236 64,114,553 35,588,013 38,249,916 103,240,249 102,364,469
Restricted6,565,168 14,838,788 - - 6,565,168 14,838,788
Unrestricted19,740,176 19,808,248 3,032,746 3,451,261 22,772,922 23,259,509
Total net assets93,957,580$ 98,761,589$ 38,620,759$ 41,701,177$ 132,578,339$ 140,462,766$
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 ($23,259,509) 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 $4,804,009 and business-type activities increased net assets by
$3,080,418. Key elements of the activities are as follows:
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CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
City of Andover's Changes in Net Assets
Governmental ActivitiesBusiness-Type ActivitiesTotal
200520062005200620052006
Revenues:
Program revenues:
Charges for services2,585,829$ 2,605,083$ 3,309,617$ 3,747,513$ 5,895,446$ 6,352,596$
Operating grants
and contributions2,535,140 959,286 - - 2,535,140 959,286
Capital grants
and contributions3,934,686 4,920,694 823,797 2,761,282 4,758,483 7,681,976
General revenues:
Property taxes7,066,852 8,084,559 - - 7,066,852 8,084,559
Tax increment1,285,195 1,562,131 - - 1,285,195 1,562,131
Grants and contributions
not restricted to
specific programs86,906 77,642 - - 86,906 77,642
Unrestricted investments
earnings690,648 1,019,304 47,620 87,376 738,268 1,106,680
Total revenues18,185,256 19,228,699 4,181,034 6,596,171 41,594,989 30,005,904
Expenses:
General government2,432,433 2,637,584 - - 2,432,433 2,637,584
Public safety 3,443,2853,353,798 - - 3,353,798 3,443,285
Public works3,937,423 3,031,459 - - 3,937,423 3,031,459
Parks and recreation1,575,582 2,442,305 - - 1,575,582 2,442,305
Recycling118,599 91,378 - - 118,599 91,378
Economic development459,635 626,103 - - 459,635 626,103
Interest on long-term debt1,797,469 1,668,444 - - 1,797,469 1,668,444
Water -- 2,160,502 2,232,144 2,160,502 2,232,144
Sewer -- 1,555,010 1,585,548 1,555,010 1,585,548
Storm sewer -- 400,114 408,003 400,114 408,003
Total expenses13,674,939 13,940,558 4,115,626 4,225,695 17,790,565 18,166,253
Increase (decrease) in net
assets before gain on the
sale of capital assets and
transfers4,510,317 5,288,141 65,408 2,370,476 4,575,725 7,658,617
Gain on the sale of
capital assets251,504 219,910 - 5,900 251,504 225,810
Transfers(438,426) (704,042) 438,426 704,042 - -
Increase in net assets4,323,395 4,804,009 503,834 3,080,418 4,827,229 7,884,427
Net assets - January 1
as previously reported89,030,948 93,957,580 38,308,831 38,620,759 127,339,779 132,578,339
Prior period adjustment603,237 - (191,906) - 411,331 -
Net assets - January 1
as restated89,634,185 93,957,580 38,116,925 38,620,759 127,751,110 132,578,339
Net assets - December 3193,$ 98,761,589957,580$ 38,620,759$ 41,701,177$ 132,578,339$ 140,462,766$
19
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
Governmental Activities
Following are specific graphs which provide comparisons of the governmental activities revenues and expenditures:
Governmental Activities - Revenues
Charges for services
Unrestricted investments
Grants and contributions
13.4%
earnings
not restricted for specific
5.2%
programs
0.4%
Tax increment
8.0%
Gain on the sale of capital
assets
1.1%
Capital grants and
contributions
26.4%
Property taxes
41.6%
Operating grants and
contributions
3.8%
Governmental Activities - Expenses
Interest on long-term
General government
debt
18.9%
Economic
12.0%
development
4.5%
Recycling
0.7%
Parks and recreation
17.5%
Public safety
24.7%
Public works
21.7%
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CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
Business-Type Activities
Business-type activities increased net assets by $3,080,418. Below are graphs showing the business-type activities revenue and expense
comparisons:
Business-Type Activities - Revenues
Unrestricted
investments
Gain on sale of
earnings
capital assets
1.3%
0.1%
Charges for
services
56.8%
Capital grants and
contributions
41.8%
Business-Type Activities - Expenses
Storm sewer
10%
Water
52%
Sewer
38%
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CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
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 $31,041,415.
Approximately 61 percent of this total amount ($18,799,927) constitutes unreserved fund balance. The remainder of the fund balance
($12,241,488) is reserved because it has already been committed 1) to provide for prepaid items ($85,657), 2) to provide for inventory
($68,993), 3) to provide for economic development ($36,695), 4) to pay debt service ($11,342,527) and 5) bond proceeds specified for a
project ($707,616).
Major Funds
The general fund increased by $190,336 in 2006, which was a $400,000 change from the final budget. The adopted budget had a decrease in
fund balance of $218,741, but the final budget showed a decrease of $208,741. The increase in fund balance is due to employee vacancies in
the finance department and various departments under-spending.
The Andover Economic Development Authority issued $10,000,000 EDA Public Facility Lease Revenue Refunding bonds, which added
$9,796,877 in fund balance to the debt service fund. This is a partial refunding of the EDA’s $19,580,000 Public Facility Lease Revenue
Bonds, Series 2004. Additional information can be found in Note 6 on this issuance.
The water and sewer trunk capital projects funds both increased largely due to minimal trunk infrastructure improvements and/or repairs.
The road and bridge capital projects fund increased by $254,082 primarily due to the advance of the 2007 State Aid Allotment for the
construction of Tulip Street NW, a state aid designated street, currently near completion.
The tax increment capital projects fund decreased by $503,996 due to calling of the outstanding debt of the 2000A TIF bonds.
The permanent improvement revolving capital projects fund decreased by $1,678,494 due to the transfer of monies to the debt service funds
and the planned usage of fund balance for improvement projects not fully bonded for.
Nonmajor Funds
The community center special revenue fund decreased by $290,818, primarily due to the transfer of monies to the debt service fund. Half of
the building is leased to the Greater Minneapolis YMCA and they will start making lease payments in 2008. Future YMCA lease payments
will significantly reduce the City’s obligation to finance annual debt service.
The park dedication capital projects fund increased by $573,483 due to increased plat activity and the sale of commercial property at
Andover Station North.
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 $3,461,410 (water $1,316,538, sewer $1,917,327 and
storm sewer $227,545) and internal service funds of $208,050. The enterprise funds had a net increase in net assets in 2006 of $3,099,470
(water $1,501,629, sewer $935,850 and storm sewer $661,991). The increase in the enterprise funds is primarily due to the capital
contributions of equipment and infrastructure. The internal service funds had a net decrease in net assets of $64,103.
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,
2006, amounts to $162,943,061 (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:
22
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up to-
date inventory; (b) perform condition assessments and summarize the results using a measurement scale; and (c) estimate annual
amount to maintain and preserve at the established condition assessment level.
2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and
disclosed condition assessment level.
The City’s policy is to achieve an average rating of good (56 – 70) for all streets and trails. In the fall of 2006, the City conducted a physical
condition assessment of the streets and trails constructed since 1974. This assessment will be completed every three years. As of December
31, 2006, the City’s street and trail system was rated at an Overall Condition Index (OCI) of 82, which is higher than the City’s policy level.
The City’s streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun’s ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water
damage from 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 $1,228,981 on
street and trail maintenance for the year ending December 31, 2006. These expenditures delayed deterioration; however, the overall
condition of the system declined slightly (83 OCI to an 82 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
$1,150,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
2003950,000$ 956,688$ 82
20041,000,000 1,847,066 82
20051,000,000 1,655,715 83
20061,150,000 1,228,981 82
Primary Government
BeginningEnding
BalanceAdditionsDeletionsBalance
Governmental activities:
Land and improvements6,983,866$ -$ (97,105)$ 6,886,761$
Streets and trails72,696,650 1,271,746 - 73,968,396
Construction in progress21,958,934 4,568,277 (19,830,509) 6,696,702
Buildings and improvements7,391,508 18,873,553 - 26,265,061
Furniture and equipment253,596 - - 253,596
Machinery and equipment5,614,776 288,133 (112,421) 5,790,488
Other park improvements3,238,808 201,890 (23,000) 3,417,698
Total capital assets 118,138,138 25,203,599 (20,063,035) 123,278,702
Less accumulated depreciation for:
Buildings and improvements2,108,237 570,195 - 2,678,432
Furniture and equipment77,995 166,206 (18,750) 225,451
Machinery and equipment3,473,708 405,633 (110,302) 3,769,039
Other park improvements872,600 24,421 - 897,021
Total accumulated depreciation6, 1,166,455532,540 (129,052) 7,569,943
Governmental activities
capital assets - net111,605,598$ 24,037,144$ (19,933,983)$115,708,759$
23
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
BeginningEnding
BalanceAdditionsDeletionsBalance
Business-type activities:
Land and improvements730,243$ -$ -$ 730,243$
Buildings and improvements13,883,620 927,363 - 14,810,983
Furniture and equipment52,115 - - 52,115
Machinery and equipment1,119,668 151,026 (161,311) 1,109,383
Collection and distribution44,178,480 2,774,997 - 46,953,477
Total capital assets
being depreciated59,964,126 3,853,386 (161,311) 63,656,201
Less accumulated depreciation for:
Buildings and improvements3,029,795 514,178 - 3,543,973
Furniture and equipment33,023 2,950 - 35,973
Machinery and equipment679,293 94,871 (161,311) 612,853
Collection and distribution11,310,288 918,812 - 12,229,100
Total accumulated depreciation15, 1,530,811052,399 (161,311) 16,421,899
Business-type activities
capital assets - net44,911,727 2,322,575 - 47,234,302
Total capital assets156,517,325$ 26,359,719$ (19,933,983)$ 162,943,061$
Additional information on the City of Andover’s capital assets can be found in Note 5.
Long-term debt
. At the end of the current fiscal year, the City of Andover had total long-term debt outstanding of $60,198,974, an increase
of $7,377,756 from 2005. General obligation revenue bonds ($38,210,000) were used to finance the construction of the water treatment
facility and the community center, and the refunding of a portion of the community center bonds. Special assessment bonds ($3,560,000)
financed improvement projects within the City and are assessed to the benefiting properties. Tax increment bonds ($4,715,000) financed the
City’s economic development plan within tax increment districts. Certificates of indebtedness ($580,000) financed capital equipment
purchases. Capital improvement bonds ($3,875,000) 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
($6,660,000) financed improvement projects within the City and are assessed to the benefiting properties. State aid bonds ($2,065,000) were
used to finance Municipal State Aid (MSA) eligible road projects.
Additional long-term debt in the amount of $533,974 is for compensated absences.
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
G.O. revenue bonds29,395,000$ 8,815,000$ 38,210,000$
Special assessment bonds3,560,000 - 3,560,000
Tax increment bonds4,715,000 - 4,715,000
Certificates of indebtedness580,000 - 580,000
Capital improvement bonds3,875,000 - 3,875,000
Permanent improvement revolving bonds6,660,000 - 6,660,000
State aid bonds2,065,000 - 2,065,000
Total bonds payable50,850,000 8,815,000 59,665,000
Compensated absences459,299 74,675 533,974
Total51,309,299$ 8,889,675$ 60,198,974$
The City of Andover maintains an AA- rating with a stable outlook from Standard and Poor’s.
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2006
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 $50,871,824. Only $23,110,490 of the City's outstanding debt is counted within the
statutory limitation.
Additional information on the City of Andover’s long-term debt can be found in Note 6.
Requests for information.
This financial report is designed to provide a general overview of the City of Andover’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to the City of Andover, Attn: Finance Manager, 1685 Crosstown Boulevard NW, Andover,
Minnesota 55304 or by calling 763-755-5100.
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BASIC FINANCIAL STATEMENTS
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28
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF NET ASSETSStatement 1
December 31, 2006
Primary Government
GovernmentBusiness-TypeTotals
ActivitiesActivities20062005
Assets:
Cash and investments21,563,210$ 2,659,993$ 24,223,203$ 25,314,093$
Cash and investments with escrow agent -10,523,065 10,523,065 1,089,665
Accrued interest 8,921124,163 133,084 138,256
Due from other governmental units96,888 10,345 107,233 95,950
Accounts receivable - net 868,583211,984 1,080,567 1,095,023
Prepaid items86,737 9,760 96,497 76,449
Property taxes receivable:
Unremitted -82,153 82,153 77,301
Delinquent181,048 - 181,048 138,344
Special assessments receivable:
Unremitted 6922,260 2,952 8,266
Delinquent31,662 20,059 51,721 22,217
Deferred -2,194,956 2,194,956 2,540,929
Notes receivable1,558,055 - 1,558,055 1,505,000
Inventories - at cost131,029 44,773 175,802 164,861
Capital assets - net
Nondepreciable87,551,859 730,243 88,282,102 102,369,693
Depreciable28,156,900 46,504,059 74,660,959 54,147,632
Total assets152,495,969 50,857,428 203,353,397 188,783,679
Liabilities:
Interfund payable(10,149) 10,149 - -
Accounts payable202,263 37,691 239,954 299,274
Contracts payable417,520 12,959 430,479 1,341,879
Developer advances119,210 - 119,210 -
Deposits payable28,028 2,234 30,262 26,004
Due to other governmental units534,287 22,784 557,071 192,731
Salaries payable66,941 11,373 78,314 73,427
Unearned revenue322,775 - 322,775 517,731
Accrued interest payable744,206 169,386 913,592 933,076
Compensated absences:
Due within one year 7,46745,930 53,397 47,722
Due in more than one year 67,208413,369 480,577 429,496
Bonds/notes payable:
Due within one year 345,0003,275,000 3,620,000 5,589,000
Due in more than one year 8,470,00047,575,000 56,045,000 46,755,000
Total liabilities53,734,380 9,156,251 62,890,631 56,205,340
Net assets:
Invested in capital assets, net of related debt64,114,553 38,249,916 102,364,469 103,240,249
Restricted for:
Debt service11,494,949 - 11,494,949 2,014,553
Capital improvements633,078 - 633,078 1,335,858
Tax increment purposes2,710,761 - 2,710,761 3,214,757
Unrestricted19,808,248 3,451,261 23,259,509 22,772,922
Total net assets98,761,589$ 41,701,177$ 140,462,766$ 132,578,339$
The accompanying notes are an integral part of these financial statements.
29
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2006
Program Revenues
ChargesOperatingCapital
ForGrants andGrants and
ExpensesServicesContributionsContributions
Functions/Programs
Primary government:
Government activities:
General government$ 471,5732,637,584$ 11,373$ -$
Public safety 804,4473,443,285 336,942 -
Public works3,031,459 325,672 564,372 4,156,187
Parks and recreation2,442,305 749,407 - 764,507
Recycling 35,37991,378 46,599 -
Economic development 218,605626,103 - -
Interest on long-term debt1,668,444 - - -
Total government activities13,940,558 2,605,083 959,286 4,920,694
Business-type activities:
Water 1,768,3882,232,144 - 1,478,698
Sewer 1,691,7281,585,548 - 740,107
Storm sewer 287,397408,003 - 542,477
Total business-type activities4,225,695 3,747,513 - 2,761,282
Total primary governmen$ 6,352,59618,166,253$ 959,286$ 7,681,976$
t
The accompanying notes are an integral part of these financial statements.
30
Statement 2
Net (Expense) Revenue and Changes in Net Assets
Primary Government
GovernmentalBusiness-TypeTotals
ActivitiesActivities20062005
$ -(2,154,638)$ (2,154,638)$ (1,712,195)$
-(2,301,896) (2,301,896) (1,934,015)
-2,014,772 2,014,772 1,749,579
-(928,391) (928,391) (429,272)
-(9,400) (9,400) (36,277)
-(407,498) (407,498) (459,635)
-(1,668,444) (1,668,444) (1,797,469)
-(5,455,495) (5,455,495) (4,619,284)
1,014,942- 1,014,942 (444,434)
846,287- 846,287 292,302
421,871- 421,871 169,920
2,283,100- 2,283,100 17,788
2,283,100(5,455,495) (3,172,395) (4,601,496)
General revenues:
General property taxes8,084,559 - 8,084,559 7,066,852
Tax increment collections1,562,131 - 1,562,131 1,285,195
Grants and contributions not
restricted to specific programs77,642 - 77,642 86,906
Unrestricted investment earnings1,019,304 87,376 1,106,680 738,268
Gain on sale of capital assets219,910 5,900 225,810 251,504
Transfers(704,042) 704,042 - -
Total general revenues, gain on sale of
capital assets and transfers10,259,504 797,318 11,056,822 9,428,725
Change in net assets4,804,009 3,080,418 7,884,427 4,827,229
Net assets - January 1 as previously reported 38,620,75993,957,580 132,578,339 127,339,779
Prior period adjustment- - - 411,331
Net assets - January 1 as restated 38,620,75993,957,580 132,578,339 127,751,110
Net assets - ending98,761,589$ 41,701,177$ 140,462,766$ 132,578,339$
31
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2006
EDA Public
Facility Lease
Revenue
Refunding BondsWater TrunSewer Trun
kk
General2006CPFCPF
Assets
Cash and investments3,297,863$ -$ 2,532,833$ 1,522,946$
Cash and investments with escrow agent- 9,782,756 - -
Accrued interest 10,288 14,121 11,252 6,744
Due from other governmental unit -27,374 - -
s
Accounts receivable - ne -65,284 - -
t
Interfund receivable- - - -
Prepaid items82,677 - - -
Property taxes receivable
:
Unremitted46,877 - - -
Delinquent120,714 - - -
Special assessments receivable:
Unremitted132 - 338 287
Delinquent2,199 - 1,326 1,042
Deferre -- 343,484 110,932
d
Notes receivable- - - -
Inventor -61,819 - -
y
Total assets3,715,227 9,796,877 2,889,233 1,641,951
Liabilities and Fund Balances
Liabilities:
-- - -
Interfund payabl
e
Accounts payabl -59,957 - -
e
Contracts payable16,284 - 14,306 -
Developer advances- - - -
Deposits payable12,078 - - -
Due to other governmental units55,203 - - -
Salaries payabl -55,979 - -
e
Deferred revenue122,913 - 344,810 111,974
Total liabilities322,414 - 359,116 111,974
Fund balances:
Reserved for:
Prepaid items82,677 - - -
Inventor -61,819 - -
y
Economic developmen -- - -
t
Debt service- 9,796,877 - -
Projects- - - -
Unreserved reported in:
Designated:
General fun -3,248,317 - -
d
Special revenue funds- - - -
Capital projects funds- - 2,530,117 1,529,977
Undesignated:
Special revenue funds- - - -
Capital projects funds- - - -
Total fund balances3,392,813 9,796,877 2,530,117 1,529,977
Total liabilities and fund balances3,715,227$ 9,796,877$ 2,889,233$ 1,641,951$
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 activitie
s
The accompanying notes are an integral part of these financial statements.
32
Statement 3
TaPermanent
x
Road &IncremenImprovemenOtheIntrTotals
ttra
Governmental Funds
BridgeProjectsRevolvinGovernmentaActivit
gly
CPFCPFCPFFundsEliminations20062005
$ 2,609,6623,565,242$ 3,084,655$ 4,787,804$ -$ 21,401,005$ 22,755,766$
-- - 740,309 - 10,523,065 1,089,665
11,84016,854 19,253 33,025 - 123,377 131,776
23,123- - 46,391 - 96,888 88,303
-1,905 - 144,795 - 211,984 282,086
-- 560,000 - (560,000) - -
-- - 2,980 - 85,657 65,565
956,520 - 28,661 - 82,153 77,301
-- - 60,334 - 181,048 138,344
-1,187 316 - - 2,260 8,266
-1,624 25,471 - - 31,662 7,882
3,794543,141 1,100,771 92,834 - 2,194,956 2,540,929
1,462,00047,470 - 48,585 - 1,558,055 1,505,000
-- - 7,174 - 68,993 68,592
4,110,5144,183,943 4,790,466 5,992,892 (560,000) 36,561,103 28,759,475
-- - 560,000 (560,000) - -
-1,786 - 126,754 - 188,497 212,666
6,82168,621 123,075 188,313 - 417,420 1,325,979
40,000- 79,210 - - 119,210 -
-- - 15,950 - 28,028 18,870
6,138469,107 2,028 1,194 - 533,670 171,296
-- - 7,388 - 63,367 60,437
1,346,794592,235 1,126,242 524,528 - 4,169,496 4,709,886
1,399,7531,131,749 1,330,555 1,424,127 (560,000) 5,519,688 6,499,134
-- - 2,980 - 85,657 65,565
-- - 7,174 - 68,993 68,592
-- - 36,695 - 36,695 50,733
-- - 1,545,650 - 11,342,527 1,872,599
-- - 707,616 - 707,616 1,335,858
-- - - - 3,248,317 3,076,157
-- - 1,569,792 - 1,569,792 1,262,882
2,710,7613,052,194 3,459,911 1,150,974 - 14,433,934 15,018,317
-- - (323,404) - (323,404) 1,487
-- - (128,712) - (128,712) (491,849)
2,710,7613,052,194 3,459,911 4,568,765 - 31,041,415 22,260,341
$ 4,110,5144,183,943$ 4,790,466$ 5,992,892$ (560,000)$ 36,561,103$ 28,759,475$
$ 22,260,34131,041,415$
111,605,598115,708,759
4,192,1553,846,721
263,250218,199
(44,363,764)(52,053,505)
$ 93,957,58098,761,589$
33
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2006
EDA Public
Facility Leas
e
Revenu
e
Refunding BondWater TrunSewer Trun
skk
Genera2006CPFCPF
l
Revenues
:
General property taxe$ -5,324,649$ -$ -$
s
Tax increment collection -- - -
s
-598,094 - -
Licenses and permits
Intergovernmenta -602,256 - -
l
-- 44,596 42,687
Special assessments
Charges for service -780,273 - -
s
Fines91,490 - - -
Investment incom 35,332125,539 109,258 72,424
e
Miscellaneous
Park dedication fees- - - -
-- 302,053 70,080
Connection charges
Othe -90,463 - -
r
Total revenue 35,3327,612,764 455,907 185,191
s
Expenditures:
Current:
General governmen -2,166,431 - -
t
-3,242,897 - -
Public safety
Public works1,304,706 - 3,412 14,626
-789,350 - -
Parks and recreation
Recyclin -90,590 - -
g
-- - -
Economic development
Unallocate -8,454 - -
d
Capital outlay:
General governmen -- - -
t
-- - -
Public safety
Public works- - - -
-- - -
Parks and recreation
Debt service
:
Principal retiremen -- - -
t
Interes -- - -
t
-- - -
Paying agent fees
Professional service 238,455- - -
s
Construction/acquisition cost -- 45,725 -
s
238,4557,602,428 49,137 14,626
Total expenditures
(203,123)10,336 406,770 170,565
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in180,000 - - 300,000
-- (167,424) -
Transfers out
Bonds issue -- - -
d
10,000,000- - -
Refunding bonds issued
Bond discoun -- - -
t
-- - -
Proceeds from the sale of capital assets
10,000,000180,000 (167,424) 300,000
Total other financing sources (uses)
9,796,877190,336 239,346 470,565
Net increase (decrease) in fund balance
Fund balance - January 13,202,477 - 2,290,771 1,059,412
Fund balance - December 313,392,813$ 9,796,877$ 2,530,117$ 1,529,977$
The accompanying notes are an integral part of these financial statements
34
Statement
4
TaxPermanen
t
RoadIncremenImprovemenOtheIntraTotals
&ttr
BridgProjectsRevolvinGovernmentaActivitGovernmental Funds
egly
CPFCPFCPFFundsElimination20062005
s
$ -729,830$ -$ 2,003,113$ -$ 8,057,592$ 7,033,613$
132,140- - 1,414,254 - 1,546,394 1,285,639
-- - - - 598,094 724,436
61,734,775 - 324,689 - 2,661,726 2,663,683
1,396382,966 518,435 299,510 - 1,289,590 2,045,969
-- - 989,883 - 1,770,156 1,692,316
-- - - - 91,490 90,530
122,479189,504 204,089 156,176 - 1,014,801 684,173
-- - 626,567 - 626,567 286,316
-- - - - 372,133 1,311,426
-15,106 - 317,220 (27,000) 395,789 578,389
256,0213,052,181 722,524 6,131,412 (27,000) 18,424,332 18,396,490
-- - 176,901 - 2,343,332 2,349,965
-- - 25,339 - 3,268,236 3,093,298
-1,190,534 119,645 184,552 - 2,817,475 3,650,351
-- - 810,535 - 1,599,885 1,309,987
-- - - - 90,590 116,506
526,629- - 99,474 - 626,103 426,708
-- - - - 8,454 9,798
-- - 144,689 - 144,689 110,689
-- - 34,091 - 34,091 111,091
-- - 486,936 - 486,936 1,030,198
-- - 321,359 - 321,359 364,731
-- - 5,254,000 - 5,254,000 8,487,000
-- - 1,683,599 - 1,683,599 2,042,003
- - 5,534 - 5,534 5,744
-
-- - 9,145 - 247,600 7,482
91,2151,607,565 2,780,010 55,395 - 4,579,910 11,146,387
617,8442,798,099 2,899,655 9,291,549 - 23,511,793 34,261,938
(361,823)254,082 (2,177,131) (3,160,137) (27,000) (5,087,461) (15,865,448)
-- - 3,047,322 (3,005,322) 522,000 224,000
(735,815)- (1,951,363) (345,144) 3,032,322 (167,424) -
-- 2,450,000 460,000 - 2,910,000 4,210,000
-- - - - 10,000,000 -
-- - - - - (28,961)
593,642- - 10,317 - 603,959 219,887
(142,173)- 498,637 3,172,495 27,000 13,868,535 4,624,926
(11,240,522)
(503,996)254,082 (1,678,494) 12,358 - 8,781,074
3,214,7572,798,112 5,138,405 4,556,407 - 22,260,341 33,500,863
$ 2,710,7613,052,194$ 3,459,911$ 4,568,765$ -$ 31,041,415$ 22,260,341$
35
- This page intentionally left blank -
36
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, 2006
20062005
Amounts reported for governmental activities in the
statement of activities (page 35) are different because:
Net changes in fund balances - total governmental funds (page 35)8,781,074$ (11,240,522)$
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. 11,928,0254,400,530
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net assets (i.e., sales, trade-ins, and donations).761,249 (968,846)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.(345,434) 788,754
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net assets. This amount is the net effect of these differences in the treatment of
long-term debt and related items. (7,656,000) 4,277,000
Transfer out of governmental capital assets contributed to Enterprise Funds. (1,058,618) (662,426)
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. 193,486(33,741)
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. 7,924(45,051)
Change in net assets of governmental activities (page 31)4,804,009$ 4,323,395$
The accompanying notes are an integral part of these financial statements.
37
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2006
WateSeweStorm Sewe
rrr
Assets
Current assets:
Cash and cash equivalents 1,075,454$ 1,426,693$ 157,846$
Accrued interest 2,856 5,414 651
Due from other governmental units - 10,345 -
Accounts receivable - net 288,172 494,459 85,952
Prepaid items 4,880 4,880 -
Special assessments receivable:
Unremitted 264 395 33
Delinquent 7,558 11,386 1,115
Inventories - at cost 44,773 - -
Total current assets 1,423,957 1,953,572 245,597
Noncurrent assets:
Capital assets:
Land 730,243 - -
Buildings and structures 14,810,983 - -
Machinery and equipment 316,757 440,857 403,884
Distribution and collection system 14,809,562 22,851,734 9,292,182
Total capital assets 30,667,545 23,292,591 9,696,066
Less: Allowance for depreciation (7,212,014) (6,732,896) (2,476,990)
Total noncurrent assets 23,455,531 16,559,695 7,219,076
Total assets 24,879,488 18,513,267 7,464,673
Liabilities
Current liabilities:
Accounts payable 34,145 2,577 969
Contracts payable 7,623 1,931 3,405
Deposits payable 2,234 - -
Interest payable 169,386 - -
Due to other governmental units 17,478 5,306 -
Salaries payable 5,308 4,501 1,564
-
Bonds payable - due within one year 345,000 -
Compensated absences payable - due within one year 4,063 2,193 1,211
Total current liabilities 585,237 16,508 7,149
Noncurrent liabilities:
Bonds payable - due in more than one year 8,470,000 - -
Compensated absences payable - due in more than one year 36,568 19,737 10,903
Total noncurrent liabilities 8,506,568 19,737 10,903
Total liabilities 9,091,805 36,245 18,052
Net assets
Invested in capital assets, net of related debt 14,471,145 16,559,695 7,219,076
Unrestricted 1,316,538 1,917,327 227,545
Total net assets 15,787,683$ 18,477,022$ 7,446,621$
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.
38
Statement
6
Totals
Governmental Activities -
TotalsInternal Service Funds
2006200520062005
$ 2,309,6322,659,993$ 162,205$ 248,695$
5,5138,921 786 967
7,64710,345 - -
812,937868,583 - -
8,3889,760 1,080 2,496
-692 - -
14,33520,059 - -
50,24044,773 62,036 46,029
3,208,6923,623,126 226,107 298,187
730,243730,243 - -
13,883,62014,810,983 - -
1,171,7831,161,498 - -
44,178,48046,953,478 - -
59,964,12663,656,202 - -
(15,052,399)(16,421,900) - -
44,911,72747,234,302 - -
48,120,41950,857,428 226,107 298,187
64,00637,691 13,766 22,602
15,80012,959 100 100
7,1342,234 - -
173,714169,386 - -
21,26522,784 617 170
9,82811,373 3,574 3,162
335,000345,000 - -
6,6827,467 - -
633,429608,894 18,057 26,034
8,815,0008,470,000 - -
60,13467,208 - -
8,875,1348,537,208 - -
9,508,5639,146,102 18,057 26,034
35,588,01338,249,916 - -
3,023,8433,461,410 208,050 272,153
$ 38,611,85641,711,326$ 208,050$ 272,153$
$ 38,611,85641,711,326$
8,903(10,149)
$ 38,620,75941,701,177$
39
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 2006
WateSeweStorm Sewe
rrr
Operatin revenues:
g
User char
ges 1,711,288$ 1,664,366$ 283,045$
Meters 22,563 - -
Permit fees 3,100 - -
Penalties 30,129 27,362 4,352
Other 1,308 - -
Total operatin revenues 1,768,388 1,691,728 287,397
g
Operatin expenses:
g
Personal services 365,083 228,439 107,090
Supplies 222,482 21,252 15,583
Other service chares 414,837 90,060 62,815
g
Disposal chares - 767,798 -
g
Depreciation 828,315 483,832 218,664
Total operatin expenses 1,830,717 1,591,381 404,152
g
Operatin income (loss) (62,329) 100,347 (116,755)
g
Nonoperatin revenues (expenses):
g
Investment income 25,746 53,844 7,786
Gain on sale of capital assets 2,950 2,950 -
Interest expense (407,393) - -
Total nonoperatin revenues (expenses) (378,697) 56,794 7,786
g
Income (loss) before contributions
and transfers (441,026) 157,141 (108,969)
Capital contributions 1,912,731 1,121,209 785,960
Transfers:
Transfers in 167,424 - -
Transfers out (137,500) (342,500) (15,000)
Total transfers 29,924 (342,500) (15,000)
Chane in net assets 1,501,629 935,850 661,991
g
Net assets - Januar 1as previousl reported 14,286,054 17,541,172 6,784,630
yy
Prior period adustment - - -
j
Net assets - Januar 1 as restated 14,286,054 17,541,172 6,784,630
y
Net assets - December 31 15,787,683$ 18,477,022$ 7,446,621$
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
40
Statement
7
Total
s
Governmental Activities -
Intr
a
TotalInternal Service Funds
Activits
y
Elimination2006200520062005
s
$ 3,658,699-$ 3,192,862$ 711,485$ 682,673$
22,563- 46,316 - -
3,100- 11,350 - -
61,843- 44,211 - -
1,308- 14,878 23,314 39,710
3,747,513- 3,309,617 734,799 722,383
700,612- 643,998 281,431 264,044
259,317- 212,216 243,483 208,006
540,712(27,000) 642,828 278,491 254,906
767,798- 732,281 - -
1,530,811- 1,460,622 - -
3,799,250(27,000) 3,691,945 803,405 726,956
(51,737)27,000 (382,328) (68,606) (4,573)
87,376- 47,620 4,503 6,475
5,900- - - -
(407,393)- (417,659) - -
(314,117)- (370,039) 4,503 6,475
(365,854)27,000 (752,367) (64,103) 1,902
3,819,900- 1,486,223 - -
167,424- - - -
(522,000)(27,000) (224,000) - -
(354,576)(27,000) (224,000) - -
3,099,470- 509,856 (64,103) 1,902
38,611,856- 38,293,906 272,153 270,251
-- (191,906) - -
38,611,856- 38,102,000 272,153 270,251
$ 41,711,326-$ 38,611,856$ 208,050$ 272,153$
$ 509,8563,099,470$
662,4261,058,618
(662,426)(1,058,618)
(6,022)(19,052)
$ 503,8343,080,418$
41
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOW
S
PROPRIETARY FUNDS
For The Year Ended December 31, 2006
SeweStorm Sewe
Waterrr
Cash flows from operating activities:
Receipts from customers and users 1,776,186$ 1,632,225$ 274,342$
Payment to suppliers (662,972) (882,915) (77,382)
Payment to employees (362,478) (224,246) (104,484)
Net cash flows from operating activities 750,736 525,064 92,476
Cash flows from noncapital financing activities:
Transfers in -167,424 -
Transfers out (137,500) (342,500) (15,000)
Net cash flows from noncapital financing activities 29,924 (342,500) (15,000)
Cash flows from capital and related financing activities:
Acquisition of capital assets (33,487) - -
Interest paid on debt (411,721) - -
Payment of bonds (335,000) - -
Proceeds from the sale of capital assets 2,950 2,950 -
Net cash flows from capital and related financing activities (777,258) 2,950 -
Cash flows from investing activities:
Investment income 25,152 51,555 7,262
Net increase in cash and cash equivalents 28,554 237,069 84,738
Cash and cash equivalents - January 1 1,046,900 1,189,624 73,108
Cash and cash equivalents - December 31 1,075,454$ 1,426,693$ 157,846$
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) (62,329)$ 100,347$ (116,755)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 828,315 483,832 218,664
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units - (2,698) -
Decrease (increase) in accounts receivable 10,582 (53,702) (12,526)
Decrease (increase) in prepaid items 1,012 (2,384) -
Decrease (increase) in special assessments (2,784) (3,103) (529)
Decrease (increase) in inventory 5,467 - -
Increase (decrease) in accounts payable (26,010) (1,274) 969
Increase (decrease) in contracts payable (2,936) 48 47
Increase (decrease) in deposits payable (4,900) - -
Increase (decrease) in due to other governmental units 1,714 (195) -
Increase (decrease) in salaries payable 80 977 488
Increase (decrease) in compensated absences 2,525 3,216 2,118
Total adjustments 813,065 424,717 209,231
Net cash provided by operating activities 750,736$ 525,064$ 92,476$
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds 1,912,731$ 1,121,209$ 785,960$
The accompanying notes are an integral part of these financial statements.
42
Statement 8
Totals
Governmental Activities -
TotalsInternal Service Funds
2006200520062005
$ 3,220,4063,682,753$ 734,799$ 722,383$
(1,555,764)(1,623,269) (544,954) (402,302)
(641,756)(691,208) (281,019) (263,881)
1,022,8861,368,276 (91,174) 56,200
-167,424 - -
(200,000)(495,000) - -
(200,000)(327,576) - -
(127,369)(33,487) - -
(421,392)(411,721) - -
(320,000)(335,000) - -
-5,900 - -
(868,761)(774,308) - -
48,87983,969 4,684 6,337
3,004350,361 (86,490) 62,537
2,306,6282,309,632 248,695 186,158
$ 2,309,6322,659,993$ 162,205$ 248,695$
$ (406,328)(78,737)$ (68,606)$ (4,573)$
1,460,6221,530,811 - -
1,837(2,698) - -
(84,495)(55,646) - -
(8,388)(1,372) 1,416 54,449
(6,553)(6,416) - -
(177)5,467 (16,007) (8,646)
35,407(26,315) (8,836) 14,912
14,087(2,841) - 100
350(4,900) - -
14,2821,519 447 (205)
6601,545 412 163
1,5827,859 - -
1,429,2141,447,013 (22,568) 60,773
$ 1,022,8861,368,276$ (91,174)$ 56,200$
$ 1,486,2233,819,900$ -$ -$
43
CITY OF ANDOVER, MINNESOT
A
STATEMENT OF FIDUCIARY NET ASSETSStatement 9
FIDUCIARY FUNDS
Agency Funds
December 31, 2006
20062005
Assets
Cash and investments495,684$ 308,560$
Liabilities
Accounts payable53 -
Contracts payable- 6,848
Due to other governments184 -
Deposits payable495,447 301,712
Total liabilities495,684$ 308,560$
The accompanying notes are an integral part of these financial statements.
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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.
EDA Public Facility Lease Revenue Refunding Bonds Debt Service Fund (DSF)
The was established to refund portions of
debt associated with the construction of the Andover YMCA Community Center.
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.
Sewer Trunk CPF
The is used to account for sewer access fees and sanitary sewer improvements.
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.
Tax Increment Projects CPF
The is used to account for activities in TIF districts 1-1, 1-2, 1-3, 1-4 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.
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.
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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.
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
The following is a listing of Special Revenue Funds whose expenditures exceed budget appropriations:
FinalOver
BudgetActualBudget
Special Revenue Funds:
Community Development Block Grant10,000$ 16,657$ 6,657$
Community Center 748,146616,519 131,627
Forestry 36,32311,424 24,899
Trail and Transportation60,000 116,540 56,540
Charitable Gambling6,000 10,802 4,802
Construction Seal Coating34,726 38,447 3,721
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, 2006 are planned to be eliminated in 2007. 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
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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.
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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, 2006, 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 2006 of the condition of the streets and trails constructed
50
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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.
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 ($52,053,505) difference are as follows:
Bonds payable(50,850,000)$
Accrued interest payable(744,206)
Compensated absences(459,299)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net assets - governmental activities(52,053,505)$
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
$218,199 difference are as follows:
Internal Service Funds net assets208,050$
Net revenue attributable to business-type activities10,149
Net adjustment to increase fund balance - total governmental
funds to arrive at net assets - governmental activities218,199$
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
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
over their estimated useful lives and reported as depreciation expense.” The details of this $4,400,530 difference are as
follows:
Capital outlay$987,075
Construction/acquisition costs4,579,910
Depreciation expense(1,166,455)
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities4,400,530$
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 increase (decrease) net assets.” The details of this $761,249 difference
are as follows:
In the statement of activities, only the gain on the sale of capital
assets is reported. However, in the governmental funds, the
proceeds from the sale increase financial resources. Thus, the
change in net assets differs from the change in fund balance by
the cost of the capital assets sold.(222,049)$
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.983,298
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities761,249$
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 ($345,434) difference are as follows:
General property taxes deferred revenue:
At December 31, 2005(126,293)$
At December 31, 2006153,260
Tax increment taxes deferred revenue:
At December 31, 2005(12,051)
At December 31, 200627,788
Special assessments deferred revenue:
At December 31, 2005(2,548,811)
At December 31, 20062,226,618
Notes receivable deferred revenue:
At December 31, 2005(1,505,000)
At December 31, 20061,439,055
Net adjustments to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(345,434)$
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Another element of that reconciliation states “the issuance of long-term debt (e.g., bonds, leases) provides current
financial resources to governmental funds, while the repayment of the long-term debt consumes the current financial
resources of governmental funds.” Neither transaction, however, has any effect on net assets. The details of this
($7,656,000) difference are as follows:
Debt issued or incurred:
Issuance of revenue bonds(10,000,000)$
Issuance of special assessment bonds(2,450,000)
Issuance of certificates of indebtedness(460,000)
Principal repayments:
Revenue bonds185,000
Capital improvement bonds235,000
Special assessment bonds1,765,000
Tax increment bonds2,350,000
Certificates of indebtedness579,000
State aid bonds140,000
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(7,656,000)$
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 ($33,741) difference are as follows:
Compensated absences(48,896)$
Accrued interest15,155
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities(33,741)$
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 ($45,051) difference are as follows:
Internal Service Funds change in net assets(64,103)$
Net revenue attributable to business-type activities19,052
Net adjustment to increase fund balance - total
governmental funds to arrive at net assets -
governmental activities(45,051)$
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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;
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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, 2006, the carrying amount of the City’s deposits with financial institutions was $3,190,699 (bank amount of
$2,544,406).
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 $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York;
certain Minnesota securities broker-dealers; or, a bank qualified as a depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178,
subdivision 5; or 475.61, subdivision 6.
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
As of December 31, 2006, the City had the following investments and maturities:
Investment Maturities (in Years)
CreditFairLess ThanMore Than
Investment TypeRatingValue11 - 56 - 1010
Money marketN/A2,852,080$ 2,852,080$ -$ -$ -$
Commercial paperA1/A23,991,280 3,991,280 - - -
AAA740,309 - - - 740,309
Certificates of depositFDIC666,354 195,716 470,638 - -
AA332,419 - - - 32,419
Local governmentsA1/A2338,000 49,907 288,093 - -
AA1/AA2/AA31,076,346 512,667 445,785 15,131 102,763
AAA1,509,369 630,078 652,191 94,136 132,964
U.S. agenciesAAA20,052,036 3,600,295 2,768,552 12,301,293 1,381,896
N/A793,060 - 9,373 85,594 698,093
Total investments32,051,253 11,832,023$4,634,632$ 12,496,154$ 3,088,444$
Deposits3,190,699
Total cash and investments35,241,952$
Following is a reconciliation of the City’s total cash and investment balances at December 31, 2006:
Government-wide statement of net assets:
Cash and investments24,223,203$
Cash and investments with escrow agent10,523,065
Fiduciary funds statement of net assets495,684
Total35,241,952$
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 has a formal investment policy that states the City will minimize the 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
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 City Administrator.
Concentration of Credit Risk - More than 60% of the City’s investments are in various holdings with U.S. agencies; Federal Home
Loan Bank (12.18%), Federal National Mortgage Association (10.18%), Federal Home Loan Mortgage Corporation (11.21%) and
U.S. Treasury (31.05%). 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, 2006 are as follows:
Due FromDelinquentDelinquentSpecial
OtherPropertyTaxAssessment
GovernmentsTaxesIncrementReceivableTotal
Major Funds:
General Fund-$ 31,386$ -$ -$ 31,386$
Water Trunk CPF- - - 325,730 325,730
Sewer Trunk CPF- - - 103,207 103,207
Road and Bridge CPF- - - 493,791 493,791
Tax Increment Projects CPF23,123 - - 2,927 26,050
Permanent Improvement Revolving CPF- - - 1,077,058 1,077,058
Nonmajor Funds- 8,462 5,836 80,674 94,972
Total23,123$ 39,848$ 5,836$ 2,083,387$ 2,152,194$
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 Fund120,714$ -$
Nonmajor Funds32,546 -
Delinquent tax increment collections
Nonmajor Funds27,788 -
Special assessments not yet due:
General Fund2,199 -
Water Trunk CPF344,810 -
Sewer Trunk CPF111,974 -
Road & Bridge CPF544,765 -
Tax Increment Projects CPF3,794 -
Permanent Improvement Revolving CPF1,126,242 -
Nonmajor Funds92,834 -
Notes receivable not yet due:
Road & Bridge CPF47,470 -
Tax Increment Projects CPF1,343,000 -
Nonmajor Funds48,585 -
Unearned miscellaneous fees:
Nonmajor funds- 9,689
Unearned construction seal coating fees:
Nonmajor funds- 313,086
Total3,846,721$ 322,775$
Note 4 LOANS RECEIVABLE
As part of a development agreement entered into with a private developer in June 2006, the City received a promissory note for $50,000.
The note is for intersection improvements on Hanson Blvd. The note bears an interest rate of 5.5% and calls for 16 semi-annual
payments to be made to the City through July 2014. As of December 31, 2006, the remaining balance due of $47,470 is offset by
deferred revenue as it is not available to finance current activities.
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 the
note to be paid off by May 2010. As of December 31, 2006, the remaining balance due of $1,343,000 is offset by deferred revenue as it
is not available to finance current activities.
As part of a rental rehabilitation revolving loan program, the City entered into a loan agreement with a property owner in October 2006.
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 November 2021. As of December 31, 2006, the remaining balance due of
$48,585 is offset by deferred revenue as it is not available to finance current activities.
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government-wide
statement of net assets. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting
for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A more
detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All other
capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and
depreciation expense have been recorded.Adjustments due to restatement represent the changes due to an extensive inventory of all
capital assets, implementation of GASB Statement No. 34 and a policy change related to capitalization thresholds. Capital asset activity
for the year ended December 31, 2006 as previously reported was as follows:
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements6,983,866$ -$ (97,105)$ 6,886,761$
Streets and trails72,696,650 1,271,746 - 73,968,396
Construction in progress21,958,934 4,568,277 (19,830,509) 6,696,702
Total capital assets not being depreciated101,639,450 5,840,023 (19,927,614) 87,551,859
Capital assets being depreciated:
Buildings and improvements7,391,508 18,873,553 - 26,265,061
Furniture and equipment253,596 - - 253,596
Machinery and equipment5,614,776 288,133 (112,421) 5,790,488
Other park improvements3,238,808 201,890 (23,000) 3,417,698
Total capital assets being depreciated16,498,688 19,363,576 (135,421) 35,726,843
Less accumulated depreciation for:
Buildings and improvements2,108,237 570,195 - 2,678,432
Furniture and equipment77,995 166,206 (18,750) 225,451
Machinery and equipment3,473,708 405,633 (110,302) 3,769,039
Other park improvements872,600 24,421 - 897,021
Total accumulated depreciation6, 1,166,455532,540 (129,052) 7,569,943
Total capital assets being depreciated - net9,966,148 18,197,121 (6,369) 28,156,900
Governmental activities capital assets - net111,605,598$ 24,037,144$ (19,933,983)$ 115,708,759$
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Business-type activities:
Capital assets not being depreciated:
Land and improvements730,243$ -$ -$ 730,243$
Capital assets being depreciated:
Buildings and improvements13,883,620 927,363 - 14,810,983
Furniture and equipment52,115 - - 52,115
Machinery and equipment1,119,668 151,026 (161,311) 1,109,383
Collection and distribution44,178,480 2,774,997 - 46,953,477
Total capital assets being depreciated59,233,883 3,853,386 (161,311) 62,925,958
Less accumulated depreciation for:
Buildings and improvements3,029,795 514,178 - 3,543,973
Furniture and equipment33,023 2,950 - 35,973
Machinery and equipment679,293 94,871 (161,311) 612,853
Collection and distribution11,310,288 918,812 - 12,229,100
Total accumulated depreciation15, 1,530,811052,399 (161,311) 16,421,899
Total capital assets being depreciated - net44,181,484 2,322,575 - 46,504,059
Business-type activities capital assets - net44,911,727 2,322,575 - 47,234,302
$$$$
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government262,660$
Public safet147,854
y
Public works182,189
Parks and recreation573,752
Total depreciation expense - governmental activities1,166,455
$
Business-type activities
Wate$828,315
r
Sewe483,832
r
Storm sewe218,664
r
Total depreciation expense - business-type activities1,530,811
$
CONSTRUCTION COMMITMENTS
At December 31, 2006, the City had construction project contracts in progress. The commitments related to the remaining contract
balances are summarized as follows:
ContractRemaining
Project #ProjectAmountCommitment
02-33Andover Station North2,244,779$ 143,835$
05-11Tulip Street1,347,878 38,747
05-15Andover Station North Park Improvements695,344 13,287
05-20 / 05-32 / 05-24Cardinal Ridge / Woodland Crossing / Shaws Glen1,918,955 107,527
Total6,206,956$ 303,396$
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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
DateDateRateIssue12/31/06
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
2004 EDA Pub Fac Lease Rev Bonds4/23/20042/1/20342.125-5.400%19,580,000$ 19,395,000$
2006 EDA Pub Fac Lease Rev Ref Bonds12/1/20062/1/20344.00-4.50%10,000,000 10,000,000
Total general obligation revenue bonds29,580,000 29,395,000
Special Assessment Bonds
2005A G.O. Improvement Bonds4/28/20052/1/20132.95-3.65%3,560,000 3,560,000
Tax Increment Bonds:
2003B G.O. Tax Increment Refunding Bonds6/1/20038/1/20102.00-3.00%1,530,000 935,000
2004B G.O. Tax Increment Refunding Bonds3/16/20048/1/20102.00-3.25%4,260,000 3,780,000
Total tax increment bonds5,790,000 4,715,000
Certificates of Indebtedness:
2005B G.O. Equipment Certificates4/28/20052/1/20082.65-3.10%400,000 120,000
2006B G.O. Equipment Certificates5/10/20062/1/20103.60-3.65%460,000 460,000
Total certificates of indebtedness860,000 580,000
Capital Improvement Bonds
2004A G.O. Capital Improvement Bonds3/16/20042/1/20172.00-3.75%3,890,000 3,535,000
2005B G.O. Capital Improvement Bonds4/28/20052/1/20092.65-3.10%340,000 340,000
Total capital improvement bonds4,230,000 3,875,000
Permanent Improvement Revolving (PIR) Bonds:
2001A G.O. PIR Bonds6/5/20012/1/20073.20-4.00%4,975,000 1,075,000
2003A G.O. PIR Bonds6/1/20032/1/20102.00-2.60%4,580,000 3,135,000
2006A G.O. PIR Bonds5/10/20062/1/20143.60-3.85%2,450,000 2,450,000
Total permanent improvement revolving bonds12,005,000 6,660,000
State Aid Bonds:
2001B G.O. State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000 2,065,000
Total - bonded indebtedness58,780,000 50,850,000
Compensated absences payable- 459,299
Total governmental activities indebtedness58,780,000 51,309,299
BUSINESS-TYPE ACTIVITIES
General Obligation Revenue Bonds
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000 8,815,000
Compensated absences payable- 74,675
Total business-type activities indebtedness9,780,000 8,889,675
Total City indebtedness68,560,000$ 60,198,974$
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
G.O. Revenue BondsSpecial Assessment BondsTax Increment Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2007185,000$ 1,242,549$ -$ 118,573$ 705,000$ 120,545$
2008190,000 1,378,608 545,000 110,534 735,000 105,033
2009390,000 1,369,034 565,000 93,738 760,000 87,620
2010405,000 1,354,911 580,000 75,555 780,000 68,313
2011415,000 1,339,119 600,000 55,930 565,000 45,050
2012-201612,205,000 5,146,973 1,270,000 46,407 1,170,000 37,463
2017-20213,175,000 3,270,567 - - - -
2022-20263,945,000 2,473,640 - - - -
2027-20314,935,000 1,451,604 - - - -
2032-20343,550,000 260,205 - - - -
Total29,395,000$ 19,287,210$ 3,560,000$ 500,737$ 4,715,000$ 464,024$
Governmental Activities
Permanent Improvement
Certificates of IndebtednessRevolving BondsCapital Improvement Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
200760,000$ 23,086$ 350,000$ 116,250$ 1,825,000$ 195,580$
2008205,000 14,969 370,000 107,370 1,080,000 132,806
2009155,000 8,649 380,000 97,363 1,120,000 104,493
2010160,000 2,920 280,000 88,418 1,155,000 72,686
2011- - 295,000 80,143 345,000 49,530
2012-2016- - 1,780,000 241,544 1,135,000 66,429
2017-2021- - 420,000 7,875 - -
Total580,000$ 49,624$ 3,875,000$ 738,963$ 6,660,000$ 621,524$
Governmental ActivitiesBusiness-Type Activities
State Aid BondsG.O. Revenue Bonds
PrincipalInterestPrincipalInterest
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
2011175,000 64,063 415,000 342,508
2012-20161,020,000 187,009 2,390,000 1,412,549
2017-2021235,000 5,875 3,065,000 764,830
2022-2026- - 1,470,000 74,500
Total2,065,000$ 583,516$ 8,815,000$ 4,116,938$
It is not practical to determine the specific year for payment of long-term accrued compensated absences.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2006, was as follows:
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
G.O. revenue bonds19,580,000$ 10,000,000$ (185,000)$ 29,395,000$ 185,000$
Special assessment bonds3,560,000 - - 3,560,000 -
Tax increment bonds7,065,000 - (2,350,000) 4,715,000 705,000
Certificates of indebtedness699,000 460,000 (579,000) 580,000 60,000
Capital improvement bonds4,110,000 - (235,000) 3,875,000 350,000
Permanent improvement revolving bonds5,975,000 2,450,000 (1,765,000) 6,660,000 1,825,000
State aid bonds2,205,000 - (140,000) 2,065,000 150,000
Total bonds payable43,194,000 12,910,000 (5,254,000) 50,850,000 3,275,000
Compensated absences410,402 284,254 (235,357) 459,299 45,930
Total governmental activities
long-term liabilities43,604,402$ 13,194,254$ (5,489,357)$ 51,309,299$ 3,320,930$
Business-type activities:
Bonds payable:
G.O. revenue bonds9,150,000$ -$ (335,000)$ 8,815,000$ 345,000$
Compensated absences66,816 62,827 (54,968) 74,675 7,467
Total business-type activities
long-term liabilities9,216,816$ 62,827$ (389,968)$ 8,889,675$ 352,467$
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 districts. 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.
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 were used to finance the construction of a water treatment plant. The bonds
are payable from net revenues of the water system and are general obligations of the City for which its full faith, credit and taxing
powers are pledged.
ADVANCE CROSSOVER REFUNDING
On December 1, 2006, the City issued $10,000,000 in Public Facility Lease Revenue Refunding Bonds, Series 2006 with an
average interest rate of 4.29% to advance refund $9,755,000 of outstanding 2004 Series Bonds with an average interest rate of
5.17%. The net proceeds of $9,782,338 were used to purchase U.S. Government Securities. Those securities were deposited in an
irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called
principal on the refunded bonds on February 1, 2014.
The City advance refunded a portion of the 2004 Public Facilities Lease Revenue Bonds to reduce its total debt service payments
over the last twenty years of the bond by $755,979 and to obtain an economic gain (difference between the present value of the debt
service payments on the old and new debt) of $375,573.
The City is responsible for the debt service of the refunded bonds and the debt service of the refunding bonds after the crossover
date. The debt service of the refunding bonds before the crossover date is payable from the escrow account. Assets held with the
escrow agent total $9,782,756 at December 31, 2006.
RefundedRefundingDebt Service Commitment
PaymentBondsBondsEscrow
DateTotalTotalAccountCity
20071,144,731$ 282,818$ 282,818$ 1,144,731$
20081,144,381 424,227 424,227 1,144,381
20091,334,806 424,227 424,227 1,334,806
20101,335,684 424,227 424,227 1,335,684
20111,329,891 424,227 424,227 1,329,891
20121,332,456 424,227 424,227 1,332,456
20131,328,534 424,227 424,227 1,328,534
201410,831,938 424,227 10,179,227 1,076,938
2015540,129 752,527 - 1,292,656
2016539,879 753,827 - 1,293,706
2017 - 20212,696,247 3,749,318 - 6,445,565
2022 - 20262,682,692 3,735,945 - 6,418,637
2027 - 20312,689,360 3,697,243 - 6,386,603
2032 - 20341,597,780 2,212,425 - 3,810,205
$ 18,153,69230,528,508$ 13,007,407$ 35,674,793$
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 2006 and 2005 is computed as follows:
December 31,
20062005
Estimated taxable market value2,543,591,200$2,244,286,800$
Debt limit (2% of market value)50,871,824 44,885,736
Amount of debt applicable to debt limit:
Total bonded debt59,665,000$ 52,344,000$
Less: Nonapplicable debt
G.O. water revenue bonds(8,815,000) (9,150,000)
Special assessment bonds(3,560,000) (3,560,000)
Tax increment bonds(4,715,000) (7,065,000)
Permanent improvement revolving bonds(6,660,000) (5,975,000)
State aid bonds(2,065,000) (2,205,000)
Less: Cash and investments in related
debt service funds(10,739,510) (1,041,140)
Total debt applicable to debt limit23,110,490 23,347,860
Legal debt margin27,761,334$ 21,537,876$
Note 8 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A. PLAN DESCRIPTION
All full-time and certain part-time employees of the City of Andover are covered by defined benefit plans administered by the
Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund
(PERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans.
Minnesota Statute
These plans are established and administered in accordance with , Chapters 353 and 356.
PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social
Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers,
firefighters and peace officers who qualify for membership by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible
members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement
benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of
credit at termination of service.
Two methods are used to compute benefits for PERF’s Coordinated and Basic Plan members. The retiring member receives
the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the
annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for
each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10
years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan
members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is
3.0% for each year of service. For all PEPFF and PERF members hired prior to July 1, 1989 whose annuity is calculated using
Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members
and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social
Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also
available to eligible members seeking early retirement.
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 5.50%,
respectively, of their annual covered salary. PEPFF members are required to contribute 7.00% 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, 6.00% for Coordinated Plan PERF members, and 10.50% for PEPFF members. The City’s contributions to
the Public Employees Retirement Fund for the years ending December 31, 2006, 2005 and 2004 were $194,241, $167,142 and
$155,794, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December
31, 2006, 2005 and 2004 were $14,782, $12,351 and $11,848, 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.
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.
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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. The City receives the State aid contribution and is required by state statutes to pass this through as payment to the
Association. This transaction is recorded as a revenue and an expenditure in the City’s financial statements. Contributions for
the last three years are as follows:
Year
EndingCityStateTotal
12/31/200445,000$ 160,651$ 205,651$
12/31/200550,000 156,263 206,263
12/31/200650,000 165,915 215,915
Note 9 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2006 are as follows:
FundReceivablePayable
Governmental Funds:
Major Funds:
Permanent Improvement Revolving CPF560,000$ -$
Nonmajor Governmental Funds- 560,000
Total governmental funds560,000$ 560,000$
Interfund receivables and payables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the
fiscal year.
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Interfund transfers:
FundTransfer InTransfer Out
Governmental Funds:
Major Funds:
General Fund180,000$ -$
Water Trunk CPF- 167,424
Sewer Trunk CPF300,000 -
Tax Increment Projects CPF- 735,815
Permanent Improvement Revolving CPF- 1,951,363
Nonmajor Funds3,047,322 345,144
Total Governmental Funds3,527,322 3,199,746
Proprietary Funds:
Wate 137,500167,424
r
Sewe 342,500-
r
Storm Sewe 15,000-
r
Total Proprietary Funds167,424 495,000
Total3,694,746 3,694,746
$$
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 $42,603 to the
Permanent Improvement Revolving CPF from the Unfinanced CPF to close a fund no longer being used.
Additionally, computer service fees paid by the Water and Sewer Enterprise Funds to the General Fund have been reclassified as
transfers on the Government-Wide Statement of Activities as follows:
Transfer InTransfer Out
Governmental Activities27,000$ -$
Business-Type Activities- 27,000
Total27,000 27,000
$$
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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:230,156
Captured net tax capacity - retained by the Cit$225,614
y
2.Name of District:Andover Redevelopment District 1-2
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 2012
Original net tax capacity:126,160$
Current net tax capacity:1,609,232
Captured net tax capacity - retained by the Cit$1,483,072
y
Total District Bonds issued19,250,000$
Amount redeemed(14,535,000)
Bonds outstanding December 31, 20064,715,000$
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:155,680
Captured net tax capacity - retained by the Cit$148,366
y
4.Name of District:Tax Increment Financing District 1-4
Type of District:Redevelopment
Authorizing Law:M.S. Section 469
Established:2005
Duration of District:Through 2031
Original net tax capacity:67,467$
Current net tax capacity:71,688
Captured net tax capacity - retained by the Cit$4,221
y
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 11 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2006 as follows:
FundAmount
Special Revenue Funds:
Community Center$311,349
Forestry1,901
Capital Projects Funds:
Community Center Project CPF74,538
Storm Sewer Project54,174
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 $2,500 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.
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, 2006.
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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.
E. PAY-AS-YOU-GO TAX INCREMENT
The City has one tax increment pay-as-you-go agreement. The agreement is not a general obligation of the City and is payable
solely from tax increments. Accordingly, this agreement is not reflected in the financial statements of the City. Details of the
pay-as-you-go are as follows:
TIF District #1-3, Farmstead Project:
The pay-as-you-go agreement for TIF District #1-3 provides for the payment of 90% of all tax increment received and will be
completed February 1, 2015.
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
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, 2006. Future
scheduled tax levies for all bonds outstanding at December 31, 2006 totaled $29,627,801.
72
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 14 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
Fund equities are classified as follows to reflect limitations and restrictions of the respective funds:
20062005
Governmental Funds:
Major Funds:
General Fund
Reserved for prepaid items82,677$ 63,069$
Reserved for inventory 63,25161,819
Designated for legal defense- 150,000
Designated for snow emergency 50,00050,000
Designated for facility management50,000 50,000
Designated for economic development100,000 -
Designated for information technology 50,00050,000
Designated for working cash flow2,998,317 2,776,157
EDA Public Facility Lease Revenue Refunding Bonds DSF
Reserved for debt service9,796,877 -
Water Trunk CPF
Designated for projects2,530,117 2,290,771
Sewer Trunk CPF
Designated for projects1,529,977 1,059,412
Road & Bridge CPF
Designated for projects3,052,194 2,798,112
Tax Increment Projects CPF
Designated for projects2,710,761 3,214,757
Permanent Improvement Revolving CPF
Designated for projects3,459,911 5,138,405
Nonmajor Funds
Reserved for prepaid items2,980 2,496
Reserved for inventory 5,3417,174
Reserved for economic development36,695 50,733
Reserved for debt service1,545,650 1,872,599
Reserved for projects707,616 1,335,858
Designated for working cash flow334,717 197,696
Designated for projects1,741,963 1,067,316
Designated for equipment644,086 514,730
Total Governmental Funds31,493,531$ 22,750,703$
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.
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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, 2006, the following revenue bonds were outstanding:
Date ofOriginalOutstanding
ProjectIssueIssueRetired12/31/2006
Downtown Center7/15/19975,645,000$ (3,005,000)$ 2,640,000$
Downtown Center7/15/19971,250,000 (1,055,000) 195,000
Presbyterian Homes of Andover, Inc.12/1/1998720,000 (720,000) -
Presbyterian Homes of Andover, Inc.11/1/200313,145,000 (642,250) 12,502,750
Total20,760,000$ (5,422,250)$ 15,337,750$
Note 17 OPERATING LEASES
The City received revenue from two agreements for the lease of space for antennas placed on the water tower. The City also has a lease
with the Greater Minneapolis YMCA for building space at the Andover YMCA Community Center. Terms of each lease are as follows:
2006
LeaseAnnual LeaseExpirationRenewal
LocationLesseeAmountAdjustment FactorDateOptions
City Hall water towerSprint Nextel22,651$ Greater of CPI or 4%12/31/20073 - 5 year terms
City Hall water towerT-Mobile USA, Inc18,473 Greater of CPI or 4%12/31/20063 - 5 year terms
Andover YMCA Comm CtrGreater Minneapolis YMCA- None8/1/2035N/A
Future minimum lease payments are unavailable at this time due to changing variables: CPI and the completion of the capital campaign
for the community center.
Note 18 SUBSEQUENT EVENTS
The Andover Economic Development Authority (EDA) sold $6,865,000 of Public Facility Lease Revenue Refunding Bonds, Series 2007
on January 1, 2007 to provide moneys for the crossover refunding of a portion of the EDA’s $19,580,000 Public Facility Lease Revenue
Bonds, Series 2004 dated April 23, 2004. The rate of the bonds per year ranged from 4.00% - 4.50% with a true interest cost of 4.36%.
Principal payments are due in 2015 - 2034.
The City of Andover sold $760,000 of General Obligation Equipment Certificates, Series 2007A on March 13, 2007 to finance the
purchase of public safety and public works equipment. The rate of the bonds per year is 4.00% with a true interest cost of 3.81%.
Principal payments are due in 2008 - 2011.
The City of Andover also sold $6,570,000 of General Obligation Water Revenue Refunding Bonds, Series 2007B on March 13, 2007 to
provide moneys for the advance crossover refunding of the City’s $9,870,000 General Obligation Water Revenue Bonds, Series 2002
dated June 1, 2002. The rates of the bonds per year ranged from 4.00% - 4.25% with a true interest cost of 4.15%. Principal payments
are due in 2013 – 2023.
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 19 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. 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 $10 million). Early implementation is encouraged.
Statement No. 48Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfer of Assets and Future Revenues.
The provisions of this Statement are effective for financial statements for periods beginning after December 15, 2007.
Statement No. 49Accounting and Financial Reporting for Pollution Remediation Obligations.
The requirements of this Statement
are effective for financial statements for periods beginning after December 15, 2007, with measurement of pollution remediation
liabilities required at the beginning of that period so that beginning net assets can be restated.
The effect these standards may have on future financial statements is not determinable at this time.
75
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76
REQUIRED SUPPLEMENTARY INFORMATION
77
CITY OF ANDOVER, MINNESOT
A
REQUIRED SUPPLEMENTARY INFORMATIOStatement 10
N
BUDGETARY COMPARISON SCHEDULE - GENERAL FUN
D
For The Year Ended December 31, 200
6
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted Amounts
Positive2005
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes5,281,248$ 5,281,248$ 5,324,649$ 43,401$ 4,550,918$
Licenses and permits563,700 563,700 598,094 34,394 724,436
622,987585,973 602,256 (20,731) 653,455
Intergovernmental
Charges for service 829,650629,650 780,273 (49,377) 933,365
s
Fines87,500 87,500 91,490 3,990 90,530
Investment incom 75,00075,000 125,539 50,539 81,565
e
Miscellaneous285,100 85,100 90,463 5,363 104,822
7,545,1857,508,171 7,612,764 67,579 7,139,091
Total revenues
Expenditures:
Current:
General government:
Mayor and City council116,008 116,008 106,075 9,933 94,645
Administration157,275 157,275 140,370 16,905 148,689
24,00024,000 22,020 1,980 16,265
Newsletter
Human resources91,387 91,387 56,907 34,480 49,265
Legal159,370 159,370 162,134 (2,764) 155,429
City cler 137,113137,113 136,811 302 132,121
k
Elections53,061 53,061 38,457 14,604 6,032
Financial administration286,493 276,493 205,958 70,535 200,845
Assessing118,500 118,500 114,093 4,407 114,105
Information systems135,826 135,826 125,003 10,823 135,269
Planning and zoning349,615 349,615 340,859 8,756 304,730
Engineerin 392,845392,845 383,461 9,384 378,264
g
Facility managemen 355,018355,018 334,283 20,735 335,213
t
2,366,5112,376,511 2,166,431 200,080 2,070,872
Total general government
Public safety:
Police1,861,610 1,861,610 1,861,610 - 1,664,086
940,391940,391 903,347 37,044 969,492
Fire protection
Protective inspectio 459,230459,230 454,073 5,157 415,454
n
Civil defens 15,45315,453 12,056 3,397 9,708
e
Animal control9,465 9,465 11,811 (2,346) 8,464
Total public safety3,286,149 3,286,149 3,242,897 43,252 3,067,204
Public works:
Streets and highways553,860 553,860 521,255 32,605 661,464
450,433450,433 429,474 20,959 449,125
Snow and ice removal
Street signs143,651 143,651 153,364 (9,713) 157,801
Traffic signals23,000 23,000 19,268 3,732 14,264
Street lighting185,900 185,900 181,345 4,555 188,131
Total public works1,356,844$ 1,356,844$ 1,304,706$ 52,138$ 1,470,785$
(Continued)
78
CITY OF ANDOVER, MINNESOT
A
REQUIRED SUPPLEMENTARY INFORMATIOStatement 10
N
BUDGETARY COMPARISON SCHEDULE - GENERAL FUN(Continued)
D
For The Year Ended December 31, 200
6
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted Amounts
Positive2005
OriginalFinalActual(Negative)Actual
Expenditures:
Current: (continued)
Parks and recreation759,578$ 796,592$ 789,350$ 7,242$ 674,716$
104,830104,830 90,590 14,240 116,506
Recycling
23,00023,000 8,454 14,546 9,798
Unallocated
Total current7,906,912 7,933,926 7,602,428 331,498 7,409,881
Capital outlay
Public safety- - - - 4,298
Total expenditures7,906,912 7,933,926 7,602,428 331,498 7,414,179
(388,741)(398,741) 10,336 399,077 (275,088)
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in180,000 180,000 180,000 - 175,000
Net increase (decrease) in fund balance(218,741)$ (208,741)$ 190,336$ 399,077$ (100,088)$
Fund balance - January 13,202,477 3,302,565
Fund balance - December 313,392,813$ 3,202,477$
79
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2006
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:
Legal159,370$ 162,134$ 2,764$
Public safety:
Animal control9,465 11,811 2,346
Public works:
Street signs143,651 153,364 9,713
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 2006, the City conducted a physical condition assessment of the streets and trails constructed since 1974. This assessment will
be performed every three years. Each street and trail segment was assigned a physical condition based on potential defects. An Overall
Condition Index (OCI) was assigned to each street and trail and expressed in a continuous scale from 0 to 100, where 0 is assigned to the
least acceptable physical condition and 100 is assigned the physical characteristics of a new street or trail. The following conditions
were defined:
ConditionRating
Excellent86 - 100
Very Good71 - 85
Good56 - 70
Fair41 - 55
Poor26 - 40
Very Poor11 - 25
Substandard0 - 10
80
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2006
As of December 31, 2006, the City’s street and trail system was rated at an OCI index of 82 on the average with detail condition as
follows:
% of Street
Conditionand Trails
Excellent to Good91%
Fair6%
Poor to Substandard3%
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 $1,228,981 on street and trail maintenance for the year ending December 31, 2006. 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
$1,150,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
2003950,000$ 956,688$ 82
20041,000,000 1,847,066 82
20051,000,000 1,655,715 83
20061,150,000 1,228,981 82
The City has an on-going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve
the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part
of its Pavement Management Program.
81
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82
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
83
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.
84
CITY OF ANDOVER, MINNESOT
A
COMBINING BALANCE SHEETStatement 11
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2006
With Comparative Totals For December 31, 2005
Totals
CapitalNonmajor Governmental Funds
SpecialDebt
RevenuServiceProjects20062005
e
Assets
$ 832,8841,913,922$ 2,040,998$ 4,787,804$ 5,110,762$
Cash and investments
Cash and investments with escrow agent 740,309- - 740,309 1,089,665
Accrued interest 8,159 16,243 8,623 33,025 29,336
Due from other governmental units -46,391 - 46,391 46,455
-144,795 - 144,795 136,253
Accounts receivable - net
Interfund receivable -- - - 113,000
Prepaid items2,980 - - 2,980 2,496
Property taxes receivable:
26,2141,996 451 28,661 28,621
Unremitted
Delinquent 59,588746 - 60,334 38,283
Special assessments receivable:
Unremitted -- - - 4,397
92,834- - 92,834 170,580
Deferred
Notes receivable48,585 - - 48,585 -
-7,174 - 7,174 5,341
Inventory
Total assets2,174,748 1,768,072 2,050,072 5,992,892 6,775,189
Liabilities and Fund Balance
Liabilities:
Interfund payable430,000 70,000 60,000 560,000 233,000
Accounts payable35,109 - 91,645 126,754 125,867
Contracts payable19,764 - 168,549 188,313 1,109,858
Deposits payable15,950 - - 15,950 7,475
Due to other governmental units -1,194 - 1,194 8,172
Salaries payable7,388 - - 7,388 7,816
Deferred revenue 152,422372,106 - 524,528 726,594
Total liabilities881,511 222,422 320,194 1,424,127 2,218,782
Fund balance (deficit):
1,545,65046,849 707,616 2,300,115 3,267,027
Reserved
Unreserved:
-1,569,792 1,150,974 2,720,766 1,779,742
Designated
Undesignated -(323,404) (128,712) (452,116) (490,362)
Total fund balance1,293,237 1,545,650 1,729,878 4,568,765 4,556,407
Total liabilities and fund balance2,174,748$ 1,768,072$ 2,050,072$ 5,992,892$ 6,775,189$
85
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 12
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2006
With Comparative Totals For The Year Ended December 31, 2005
Totals
CapitalNonmajor Governmental Funds
Special Debt
RevenuServiceProjects20062005
e
Revenues:
General property taxes226,945$ 1,725,641$ 50,527$ 2,003,113$ 1,812,693$
Tax increment collections- 1,414,254 - 1,414,254 1,160,190
310,14114,548 - 324,689 660,000
Intergovernmental
Special assessments- 287,348 12,162 299,510 71,024
Charges for service -989,883 - 989,883 758,951
s
Investment incom 88865,270 90,018 156,176 223,149
e
Miscellaneous
Park dedication fees- - 626,567 626,567 286,316
Othe -223,678 93,542 317,220 328,275
r
3,738,2721,520,324 872,816 6,131,412 5,300,598
Total revenue
s
Expenditures:
Current:
-85,433 91,468 176,901 279,093
General government
Public safety- - 25,339 25,339 26,094
Public works184,552 - - 184,552 341,543
Parks and recreation748,146 - 62,389 810,535 635,271
Economic developmen -99,474 - 99,474 152,413
t
Capital outlay:
General governmen -48,038 96,651 144,689 110,689
t
Public safety- - 34,091 34,091 106,793
Public works110,687 - 376,249 486,936 273,382
Parks and recreation- - 321,359 321,359 364,731
Debt service:
Principal retirement- 5,254,000 - 5,254,000 8,487,000
Interest- 1,683,599 - 1,683,599 2,042,003
Paying agent fee 5,534- - 5,534 5,744
s
Professional service- 9,145 - 9,145 7,482
Construction/acquisition costs- - 55,395 55,395 10,251,032
Total expenditures1,276,330 6,952,278 1,062,941 9,291,549 23,083,270
(3,214,006)243,994 (190,125) (3,160,137) (17,782,672)
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in- 2,945,888 101,434 3,047,322 3,255,050
(58,831)(284,013) (2,300) (345,144) (571,244)
Transfers out
Bonds issue -- 460,000 460,000 4,210,000
d
Bond discoun -- - - (28,961)
t
Proceeds from sale of capital assets10,317 - - 10,317 25,703
Total other financing sources (uses)(273,696) 2,887,057 559,134 3,172,495 6,890,548
Net increase (decrease) in fund balance(29,702) (326,949) 369,009 12,358 (10,892,124)
Fund balance - January 11,322,939 1,872,599 1,360,869 4,556,407 15,448,531
Fund balance - December 311,293,237$ 1,545,650$ 1,729,878$ 4,568,765$ 4,556,407$
86
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.
87
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2006
With Comparative Totals For December 31, 2005
CommunityDrainage
EDADevelopmentCommunityand
GeneralBlock GrantCenterMappingLRRWMO
Assets
Cash and investments158,798$ 36,489$ 11,221$ 37,550$ 3,434$
Accrued interest669 206 - 179 -
Due from other governmental units- - 31,843 - -
e -23,198 102,711 - -
Accounts receivabl
Interfund receivable -- - - -
Prepaid items- - 2,980 - -
Property taxes receivable:
Unremitted- - - - 252
Delinquent- - - - 746
Notes receivable- 48,585 - - -
Inventory- - 7,174 - -
Total assets182,665 85,280 155,929 37,729 4,432
Liabilities and Fund Balance
Liabilities:
Interfund payable- - 410,000 - -
Accounts payable745 - 31,781 44 -
Contracts payable- - - - -
Deposits payable- - 9,440 - -
Due to other governmental units- - 1,194 - -
Salaries payable861 - 5,174 - 324
Deferred revenue- 48,585 9,689 - 746
Total liabilities1,606 48,585 467,278 44 1,070
Fund balance (deficit):
Reserved for:
Prepaid items- - 2,980 - -
Inventory- - 7,174 - -
Economic development- 36,695 - - -
Unreserved:
Designated for working capital181,059 - - 15,800 3,362
Designated for projects- - - 21,885 -
Designated for equipment- - - - -
Undesignated- - (321,503) - -
Total fund balance (deficit)181,059 36,695 (311,349) 37,685 3,362
Total liabilities and fund balance182,665$ 85,280$ 155,929$ 37,729$ 4,432$
88
Statement 13
Right-of-WayCapitalTotals
Trail andManagement/EquipmentCharitableConstructionNonmajor Special Revenue Funds
ForestryTransportationUtilityReserveGamblingSeal Coating20062005
$ 179,8426,090$ 236,286$ 880,646$ 18,709$ 344,857$ 1,913,922$ 1,613,806$
838- 940 3,696 - 1,631 8,159 5,179
-14,548 - - - - 46,391 44,955
-- 18,886 - - - 144,795 136,253
-- - - - - - 3,000
-- - - - - 2,980 2,496
-- - 1,744 - - 1,996 1,728
-- - - - - 746 528
-- - - - - 48,585 -
-- - - - - 7,174 5,341
180,68020,638 256,112 886,086 18,709 346,488 2,174,748 1,813,286
-20,000 - - - - 430,000 103,000
-2,539 - - - - 35,109 52,754
19,764- - - - - 19,764 7,420
6,510- - - - - 15,950 7,475
-- - - - - 1,194 1,070
-- 1,029 - - - 7,388 7,816
-- - - - 313,086 372,106 310,812
26,27422,539 1,029 - - 313,086 881,511 490,347
-- - - - - 2,980 2,496
-- - - - - 7,174 5,341
-- - - - - 36,695 50,733
-- 115,787 - 18,709 - 334,717 197,696
154,406- 139,296 242,000 - 33,402 590,989 550,456
-- - 644,086 - - 644,086 514,730
-(1,901) - - - - (323,404) 1,487
154,406(1,901) 255,083 886,086 18,709 33,402 1,293,237 1,322,939
$ 180,68020,638$ 256,112$ 886,086$ 18,709$ 346,488$ 2,174,748$ 1,813,286$
89
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2006
With Comparative Totals For The Year Ended December 31, 2005
CommunityDrainage
EDADevelopmentCommunityand
GeneralBlock GrantCenterMappingLRRWMO
Revenues:
General property taxes-$ -$ -$ -$ 31,700$
Intergovernmental- - - - -
Charges for services155,250 - 584,239 3,735 -
Investment income 2,2825,261 (20,584) 1,775 (510)
Miscellaneous14,770 337 177,586 - -
s 2,619175,281 741,241 5,510 31,190
Total revenue
Expenditures:
Current:
General government- - - - -
Public safety- - - - -
Public works- - - 9,648 25,291
Parks and recreation- - 748,146 - -
Economic development82,817 16,657 - - -
Capital outlay:
General government- - - - -
Public safety- - - - -
Public works- - - - -
Parks and recreation- - - - -
Total expenditures82,817 16,657 748,146 9,648 25,291
Revenues over (under) expenditures92,464 (14,038) (6,905) (4,138) 5,899
Other financing sources (uses):
Transfers in- - - - -
Transfers out- - (284,013) - -
Proceeds from sale of capital assets- - - - -
Total financing sources (uses)- - (284,013) - -
(14,038) (290,918) (4,138) 5,899
Net increase (decrease) in fund balance92,464
Fund balance (deficit) - January 188,595 50,733 (20,431) 41,823 (2,537)
Fund balance (deficit) - December 31181,059$ 36,695$ (311,349)$ 37,685$ 3,362$
90
Statement 14
Totals
Right-of-WayCapital
Nonmajor Special Revenue Funds
Trail andManagement/EquipmentCharitableConstruction
ForestryTransportationUtilityReserveGamblingSeal Coating20062005
$ --$ -$ 195,245$ -$ -$ 226,945$ 214,952$
-14,548 - - - - 14,548 12,437
153,829260 62,554 - - 30,016 989,883 758,951
9,662(108) 10,760 40,758 876 15,098 65,270 16,645
-13,614 - 5,705 11,666 - 223,678 187,584
163,49128,314 73,314 241,708 12,542 45,114 1,520,324 1,190,569
-- - 74,631 10,802 - 85,433 31,091
-- - - - - - 1,422
5,85336,323 68,990 - - 38,447 184,552 335,858
-- - - - - 748,146 611,609
-- - - - - 99,474 152,413
-- - 48,038 - - 48,038 104,299
-- - - - - - 3,301
110,687- - - - - 110,687 140,521
-- - - - - - 70,038
116,54036,323 68,990 122,669 10,802 38,447 1,276,330 1,450,552
46,951(8,009) 4,324 119,039 1,740 6,667 243,994 (259,983)
-- - - - - - 4,216
-- - - - - (284,013) (434,309)
-- - 10,317 - - 10,317 25,703
-- - 10,317 - - (273,696) (404,390)
46,951(8,009) 4,324 129,356 1,740 6,667 (29,702) (664,373)
107,4556,108 250,759 756,730 16,969 26,735 1,322,939 1,987,312
$ 154,406(1,901)$ 255,083$ 886,086$ 18,709$ 33,402$ 1,293,237$ 1,322,939$
91
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92
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 2003C, G.O. Equipment
Certificate 2005B and G.O. Equipment Certificate 2006B) 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 2000A and Refunding Bonds of 2003B and 2004B) are repaid
primarily from tax increments.
- (G.O. PIR Bonds of 2001A, 2003A and 2006A) are used to
Permanent Improvement Revolving (PIR) Bonds
finance 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.
93
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2006
With Comparative Totals For December 31, 2005
EDA Public
G.O.G.O.G.O. CapitalG.O. CapitalFacility LeaseG.O. TIF
EquipmentEquipmentImprovementImprovementRevenueRefunding
CertificateCertificateBondsBondsBondsBonds
2005B2006B2004A2005B20042003B
Assets
Cash and investments 73,602$ 12,412$ 6,804$ 115,107$ 8,520$ 112,075$
Cash and investments with escrow agent - - - - 740,309 -
Accrued interest 138 - - 319 14,783 -
Property taxes receivable:
Unremitted 707 - 3,919 1,482 9,106 5,500
Delinquent 1,479 - 8,192 3,097 19,032 13,894
Special assessments receivable:
Unremitted - - - - - -
Deferred - - - - - -
Total assets 75,926 12,412 18,915 120,005 791,750 131,469
Liabilities and Fund Balance
Liabilities:
Interfund payable - - - - 70,000 -
Deferred revenue 1,479 - 8,192 3,097 19,032 13,894
Total liabilities 1,479 - 8,192 3,097 89,032 13,894
Fund balance:
Reserved for debt service 74,447 12,412 10,723 116,908 702,718 117,575
Total liabilities and fund balance 75,926$ 12,412$ 18,915$ 120,005$ 791,750$ 131,469$
94
Statement 15
G.O. TIFG.O.G.O.G.O.G.O.
RefundingPIR FundPIR FundPIR FundStateImprovementTotals
BondsBonds ofBonds ofBonds ofAid BondsBondsNonmajor Debt Service Funds
2004B2001A2003A2006A2001B2005A20062005
$ 24,65585,201$ 47,045$ 12,245$ 216,331$ 118,887$ 832,884$ 1,095,135$
-- - - - - 740,309 740,211
-- 322 - 196 485 16,243 16,411
-5,500 - - - - 26,214 26,445
-13,894 - - - - 59,588 37,755
-- - - - - - 4,397
-92,834 - - - - 92,834 104,199
24,655197,429 47,367 12,245 216,527 119,372 1,768,072 2,024,553
-- - - - - 70,000 10,000
-106,728 - - - - 152,422 141,954
-106,728 - - - - 222,422 151,954
24,65590,701 47,367 12,245 216,527 119,372 1,545,650 1,872,599
$ 24,655197,429$ 47,367$ 12,245$ 216,527$ 119,372$ 1,768,072$ 2,024,553$
95
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2006
With Comparative Totals For The Year Ended December 31, 2005
EDA Public
G.O.G.O.G.O.G.O. CapitalG.O. CapitalFacility Lease
Capital EquipmentEquipmentEquipmentImprovementImprovementRevenue
NotesCertificateCertificateCertificateBondsBondsBonds
2001C2003C2005B2006B2004A2005B2004
Revenues:
General property taxes 244,774$ 123,493$ 82,112$ -$ 355,636$ 119,277$ 800,349$
Tax increment collections - - - - - - -
Intergovernmental - - - - - - -
Special assessments - - - - - - -
Investment income (5,595) 893 (813) 112 (12,496) 2,693 10,968
Total revenues 239,179 124,386 81,299 112 343,140 121,970 811,317
Expenditures:
Debt service:
Principal retirement 265,000 124,000 190,000 - 235,000 - 185,000
Interest 5,035 1,860 8,235 - 112,417 12,773 964,102
Paying agent fees - - 201 - - 201 2,000
Professional services 1,797 - - - - - -
Total expenditures 271,832 125,860 198,436 - 347,417 12,974 1,151,102
Revenues over (under) expenditures (32,653) (1,474) (117,137) 112 (4,277) 108,996 (339,785)
Other financing sources (uses):
Transfers in - 5,000 - 12,300 - - 284,013
Transfers out (41,677) (17,154) - - - - -
Total other financing sources (uses) (41,677) (12,154) - 12,300 - - 284,013
Net increase (decrease) in fund balance (74,330) (13,628) (117,137) 12,412 (4,277) 108,996 (55,772)
Fund balance - January 1 74,330 13,628 191,584 - 15,000 7,912 758,490
Fund balance - December 31 -$ -$ 74,447$ 12,412$ 10,723$ 116,908$ 702,718$
96
Statement 16
G.O. TIFG.O. TIFG.O.G.O.G.O.G.O.
dPIR FundPIR FundStateImprovementTotals
TIFRefundingRefundingPIR Fun
BondsBondsBondsBonds ofBonds ofBonds ofAid BondsBondsNonmajor Debt Service Funds
of 2000A2003B2004B2001A2003A2006A2001B2005A20062005
$ --$ -$ -$ -$ -$ -$ -$ 1,725,641$ 1,549,112$
277,780825,054 311,420 - - - - - 1,414,254 1,160,190
-- 65,843 - - - 244,298 - 310,141 490,524
-- 18,865 - - - - 268,483 287,348 49,091
-- (4,522) 1,426 3,370 485 2,294 2,073 888 40,631
277,780825,054 391,606 1,426 3,370 485 246,592 270,556 3,738,272 3,289,548
210,0001,660,000 480,000 1,035,000 730,000 - 140,000 - 5,254,000 8,487,000
26,12058,600 108,325 62,666 77,305 - 96,958 149,203 1,683,599 2,042,003
431200 805 431 431 - 431 403 5,534 5,744
-- - 2,097 - - 1,358 3,893 9,145 7,482
236,5511,718,800 589,130 1,100,194 807,736 - 238,747 153,499 6,952,278 10,542,229
41,229(893,746) (197,524) (1,098,768) (804,366) 485 7,845 117,057 (3,214,006) (7,252,681)
-735,815 - 1,090,000 807,000 11,760 - - 2,945,888 3,190,934
-- - - - - - - (58,831) -
-735,815 - 1,090,000 807,000 11,760 - - 2,887,057 3,190,934
41,229(157,931) (197,524) (8,768) 2,634 12,245 7,845 117,057 (326,949) (4,061,747)
76,346157,931 288,225 33,423 44,733 - 208,682 2,315 1,872,599 5,934,346
$ 117,575-$ 90,701$ 24,655$ 47,367$ 12,245$ 216,527$ 119,372$ 1,545,650$ 1,872,599$
97
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98
NONMAJOR CAPITAL PROJECT FUNDS
The City of Andover had the following Capital Projects Funds during the year:
Storm Sewer Project - This fund was established to account for storm sewer fees and improvements as part of
development and ongoing maintenance.
- This fund was established to account for contributions associated with land development to be
Park Dedication
used for constructing and upgrading the City’s park system.
Building Fund - This fund was established to account for miscellaneous building improvements for all facilities.
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.
- This fund was established to account for the purchase of capital equipment that was financed
Capital Notes 2005B
through the issuance of capital notes.
Equipment Certificates 2006B - This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
Capital Improvement Bonds 2004A - This fund was established to account for the construction of a fire station with
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.
- This fund was established to account for the bond proceeds associated with the
Community Center Project
construction of a community center consisting of an ice arena, field house and aquatics center.
Improvement Bonds 2005A - This fund was established to account for the various improvement projects at Andover
Station North, including the construction of Jay Street.
99
CITY OF ANDOVER, MINNESOT
A
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2006
Comparative Totals For December 31, 2005
StorEquipmen
mt
SeweParkBuildinCertificates
rg
ProjecDedicatioFund2006B
tn
Assets
Cash and investments 5,826$ 818,369$ 327,475$ 182,526$
Cash and investments with escrow agent - - - -
Accrued interest - 3,420 1,259 1,088
Due from other governmental units - - - -
Interfund receivable - - - -
Property taxes receivable:
Unremitted - 451 - -
Special assessments receivable:
Deferred - - - -
Total assets 5,826 822,240 328,734 183,614
Liabilities and Fund Balance
Liabilities:
Interfund payables 60,000 - - -
Accounts payable - - - 91,640
Contracts payable - - - -
Due to other government units - - - -
Deferred revenue - - - -
Total liabilities 60,000 - - 91,640
Fund balance (deficit):
Reserved for projects - - - 91,974
Unreserved:
Designated for projects - 822,240 328,734 -
Undesignated (54,174) - - -
Total fund balance (deficit) (54,174) 822,240 328,734 91,974
Total liabilities and fund balance 5,826$ 822,240$ 328,734$ 183,614$
100
Statement 17
Capita
Capitall
ImprovemenImprovemenCommunitImprovemenTotals
ttyt
BondsBondsCenteBondsNonmajor Capital Projects Funds
r
20042005BProjec200520062005
AtA
$ 14,9258,126$ 51,992$ 631,759$ 2,040,998$ 2,401,821$
-- - - - 349,454
-- - 2,856 8,623 7,746
-- - - - 1,500
-- - - - 110,000
-- - - 451 448
-- - - - 66,381
14,9258,126 51,992 634,615 2,050,072 2,937,350
-- - - 60,000 120,000
5- - - 91,645 73,113
-- 126,530 42,019 168,549 1,102,438
-- - - - 7,102
-- - - - 273,828
5- 126,530 42,019 320,194 1,576,481
14,9208,126 - 592,596 707,616 1,335,858
-- - - 1,150,974 516,860
-- (74,538) - (128,712) (491,849)
14,9208,126 (74,538) 592,596 1,729,878 1,360,869
$ 14,9258,126$ 51,992$ 634,615$ 2,050,072$ 2,937,350$
101
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2006
With Comparative Totals For The Year Ended December 31, 2005
StorCapita
ml
SeweParBuildinNotes
rkg
ProecDedicatioFunUnfinance2005B
jtndd
Revenues:
General propert
y taxes$ 50,527-$ -$ -$ -$
Interovernmenta -- - - -
gl
Special assessment -- - 12,162 -
s
Investment incom 39,984(3,142) 11,826 (1,854) (5,082)
e
Miscellaneou
s
Park dedication fee 626,567- - - -
s
Othe 53,068- - - -
r
Total revenue 770,146(3,142) 11,826 10,308 (5,082)
s
Expenditures:
Current:
Generalovernmen -- 10,026 - -
gt
Public safet -- - - 25,339
y
Public work -- - - -
s
Parks and recreatio 57,868- - - -
n
Capital outla
y:
Generalovernmen -- - - 13,048
gt
Public safet -- - - -
y
Public work -- - - 48,596
s
Parks and recreatio 138,795- - - 11,134
n
Construction/acquisition cost -- - - -
s
Total expenditure 196,663- 10,026 - 98,117
s
Revenues over (under) expenditure 573,483(3,142) 1,800 10,308 (103,199)
s
Other financin sources (uses)
g:
Transfers in - - 58,831 42,603 -
Transfers ou -- - - -
t
Bonds issue -- - - -
d
Bond discoun -- - - -
t
Total other financin sources (uses -- 58,831 42,603 -
g)
Net increase (decrease) in fund balanc 573,483(3,142) 60,631 52,911 (103,199)
e
Fund balance (deficit) - Januar 1(51,032) 248,757 268,103 (52,911) 103,199
y
Fund balance (deficit) - December 31(54,174)$ 822,240$ 328,734$ -$ -$
102
Statement 18
CapitaCapita
ll
EquipmenImprovemenImprovemenCommunitImprovemenTotals
tttyt
Nonmajor Capital Projects Fund
CertificateBondsBondsCenteBondss
sr
2006B2004A2005BProec2005A20062005
jt
$ --$ -$ -$ -$ 50,527$ 48,629$
-- - - - - 157,039
-- - - - 12,162 21,933
54813,599 (1,513) 17,661 17,991 90,018 165,873
-- - - - 626,567 286,316
-- - 40,474 - 93,542 140,691
54813,599 (1,513) 58,135 17,991 872,816 820,481
27,63412,341 41,467 - - 91,468 248,002
-- - - - 25,339 24,672
-- - - - - 5,685
-- - 4,521 - 62,389 23,662
43,2165,393 34,994 - - 96,651 6,390
-34,091 - - - 34,091 103,492
-245,770 - - 81,883 376,249 132,861
-81,730 - 89,700 - 321,359 294,693
-- - - 55,395 55,395 10,251,032
70,850379,325 76,461 94,221 137,278 1,062,941 11,090,489
(70,302)(365,726) (77,974) (36,086) (119,287) (190,125) (10,270,008)
-- - - - 101,434 59,900
-(2,300) - - - (2,300) (136,935)
-460,000 - - - 460,000 4,210,000
-- - - - - (28,961)
-457,700 - - - 559,134 4,104,004
(70,302)91,974 (77,974) (36,086) (119,287) 369,009 (6,166,004)
78,428- 92,894 (38,452) 711,883 1,360,869 7,526,873
$ 8,12691,974$ 14,920$ (74,538)$ 592,596$ 1,729,878$ 1,360,869$
103
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, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services130,000$ 130,000$ 155,250$ 25,250$ 127,507$
Investment income- - 5,261 5,261 3,058
Miscellaneous- - 14,770 14,770 13,595
Total revenues130,000 130,000 175,281 45,281 144,160
Expenditures:
Current:
Economic development 106,300106,300 82,817 23,483 143,753
Net increase (decrease) in fund balance23,700$ 23,700$ 92,464 68,764$ 407
Fund balance (deficit) - January 188,595 88,188
Fund balance (deficit) - December 31181,059$ 88,595$
104
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, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Investment income300$ 300$ 2,282$ 1,982$ 236$
Miscellaneous3,500 3,500 337 (3,163) 23,374
Total revenues3,800 3,800 2,619 (1,181) 23,610
Expenditures:
Current:
Economic Development 10,00010,000 16,657 (6,657) 8,660
Net increase (decrease) in fund balance(6,200)$ (6,200)$ (14,038) (7,838)$ 14,950
Fund balance (deficit) - January 150,733 35,783
Fund balance (deficit) - December 3136,695$ 50,733$
105
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, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services544,400$ 544,400$ 584,239$ 39,839$ 397,570$
Investment income2,000 2,000 (20,584) (22,584) (12,343)
Miscellaneous- - 177,586 177,586 137,612
Total revenues546,400 546,400 741,241 194,841 522,839
Expenditures:
Current:
Parks and recreation616,519 616,519 748,146 (131,627) 589,900
Revenue over (under) expenditures(70,119) (70,119) (6,905) 63,214 (67,061)
Other financing sources (uses)
Transfers in -- - - 4,216
Transfers out (284,013)(284,013) (284,013) - (434,309)
Total financing sources (uses)(284,013) (284,013) (284,013) - (430,093)
Net increase (decrease) in fund balance(354,132)$ (354,132)$ (290,918) 63,214$ (497,154)
Fund balance (deficit) - January 1(20,431) 476,723
Fund balance (deficit) - December 31(311,349)$ (20,431)$
106
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, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services10,500$ 10,500$ 3,735$ (6,765)$ 4,647$
Investment income- - 1,775 1,775 1,258
Total Revenues10,500 10,500 5,510 (4,990) 5,905
Expenditures:
Current:
Public works15,500 15,500 9,648 5,852 8,396
Capital outlay:
Public works5,000 5,000 - 5,000 -
Total expenditures20,500 20,500 9,648 10,852 8,396
Net increase (decrease) in fund balance(10,000)$ (10,000)$ (4,138) 5,862$ (2,491)
Fund balance (deficit) - January 141,823 44,314
Fund balance (deficit) - December 3137,685$ 41,823$
107
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - LRRWMOStatement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes33,396$ 33,396$ 31,700$ (1,696)$ 27,460$
Investment income200 200 (510) (710) (378)
Total revenues33,596 33,596 31,190 (2,406) 27,082
Expenditures:
Current:
Public works26,110 26,110 25,291 819 24,590
Net increase (decrease) in fund balance7,486$ 7,486$ 5,899 (1,587)$ 2,492
Fund balance (deficit) - January 1(2,537) (5,029)
Fund balance (deficit) - December 313,362$ (2,537)$
108
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - FORESTRYStatement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted Amounts
Positive2005
OriginalFinalActual(Negative)Actual
Revenues:
$ 5,0005,000$ 14,548$ 9,548$ 12,437$
Intergovernmental
Charges for service 5,5005,500 260 (5,240) 2,340
s
Investment incom 100100 (108) (208) 118
e
Miscellaneous- - 13,614 13,614 1,803
10,60010,600 28,314 17,714 16,698
Total revenues
Expenditures:
Current:
Public works11,424 11,424 36,323 (24,899) 17,358
Net increase (decrease) in fund balance(824)$ (824)$ (8,009) (7,185)$ (660)
Fund balance (deficit) - January 16,108 6,768
Fund balance (deficit) - December 31(1,901)$ 6,108$
109
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - TRAIL AND TRANSPORTATION Statement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services84,750$ 84,750$ 153,829$ 69,079$ 71,704$
Investment income1,500 1,500 9,662 8,162 643
Total revenues86,250 86,250 163,491 77,241 72,347
Expenditures:
Current:
Public works- - 5,853 (5,853) 707
Capital outlay:
Public works60,000 60,000 110,687 (50,687) 140,521
Total expenditures60,000 60,000 116,540 (56,540) 141,228
Net increase (decrease) in fund balance26,250$ 26,250$ 46,951 20,701$ (68,881)
Fund balance (deficit) - January 1107,455 176,336
Fund balance (deficit) - December 31154,406$ 107,455$
110
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY Statement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services20,000$ 20,000$ 62,554$ 42,554$ 54,683$
Investment income3,500 3,500 10,760 7,260 5,807
Total revenues23,500 23,500 73,314 49,814 60,490
Expenditures:
Current:
Public works71,493 71,493 68,990 2,503 61,474
Capital outlay:
Public works5,000 5,000 - 5,000 -
Total expenditures76,493 76,493 68,990 7,503 61,474
Net increase (decrease) in fund balance(52,993)$ (52,993)$ 4,324 57,317$ (984)
Fund balance (deficit) - January 1250,759 251,743
Fund balance (deficit) - December 31255,083$ 250,759$
111
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CAPITAL EQUIPMENT RESERVE Statement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes209,296$ 209,296$ 195,245$ (14,051)$ 187,492$
Investment income15,000 15,000 40,758 25,758 12,083
Miscellaneous- - 5,705 5,705 500
Total revenues224,296 224,296 241,708 17,412 200,075
Expenditures:
Current:
General government 69,00069,000 74,631 (5,631) 29,105
Public safety -- - - 1,422
Parks and recreation- - - - 21,709
Capital outlay:
General government 115,000115,000 48,038 66,962 104,299
Public safety -- - - 3,301
Parks and recreation- - - - 70,038
Total expenditures184,000 184,000 122,669 61,331 229,874
Revenues over (under) expenditures40,296 40,296 119,039 78,743 (29,799)
Other financing sources (uses):
Proceeds from the sale of capital assets- - 10,317 10,317 25,703
Net increase (decrease) in fund balance40,296$ 40,296$ 129,356 89,060$ (4,096)
Fund balance (deficit) - January 1756,730 760,826
Fund balance (deficit) - December 31886,086$ 756,730$
112
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CHARITABLE GAMBLING Statement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Investment income30$ 30$ 876$ 846$ 665$
Miscellaneous13,000 13,000 11,666 (1,334) 10,700
Total revenues13,030 13,030 12,542 (488) 11,365
Expenditures:
Current:
General government 6,0006,000 10,802 (4,802) 1,986
Net increase (decrease) in fund balance7,030$ 7,030$ 1,740 (5,290)$ 9,379
Fund balance (deficit) - January 116,969 7,590
Fund balance (deficit) - December 3118,709$ 16,969$
113
CITY OF ANDOVER, MINNESOT
A
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING Statement 29
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2006
With Comparative Actual Amounts For The Year Ended December 31, 2005
Variance with
Final Budget -
Budgeted AmountsPositive2005
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services34,726$ 34,726$ 30,016$ (4,710)$ 100,500$
Investment income10,000 10,000 15,098 5,098 5,498
Total revenues44,726 44,726 45,114 388 105,998
Expenditures:
Current:
Public works34,726 34,726 38,447 (3,721) 223,333
Net increase (decrease) in fund balance10,000$ 10,000$ 6,667 (3,333)$ (117,335)
Fund balance (deficit) - January 126,735 144,070
Fund balance (deficit) - December 3133,402$ 26,735$
114
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.
115
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF NET ASSETSStatement 30
INTERNAL SERVICE FUNDS
December 31, 2006
With Comparative Totals for December 31, 2005
Central
EquipmentRiskTotals
MaintenanceManagement20062005
Assets
Current assets:
Cash and cash equivalents6,111$ 156,094$ 162,205$ 248,695$
Accrued interest 555231 786 967
Prepaid items1,080 - 1,080 2,496
Inventories - at cost62,036 - 62,036 46,029
Total assets69,458 156,649 226,107 298,187
Liabilities
Current liabilities:
Accounts payable13,488 278 13,766 22,602
Contracts payable- 100 100 100
Due to other governmental units- 617 617 170
Salaries payable3,384 190 3,574 3,162
Total liabilities16,872 1,185 18,057 26,034
Net assets
Unrestricted52,586$ 155,464$ 208,050$ 272,153$
116
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, 2006
With Comparative Totals For The Year Ended December 31, 2005
Central
EquipmentRiskTotals
MaintenanceManagement20062005
Operating revenues:
User charges457,768$ 253,717$ 711,485$ 682,673$
Other 23,095219 23,314 39,710
Total operating revenues457,987 276,812 734,799 722,383
Operating expenses:
Personal services198,808 82,623 281,431 264,044
Supplies239,464 4,019 243,483 208,006
Other service charges95,018 183,473 278,491 254,906
Total operating expenses533,290 270,115 803,405 726,956
Operating income (loss)(75,303) 6,697 (68,606) (4,573)
Nonoperating revenues (expenses):
Investment income572 3,931 4,503 6,475
Change in net assets(74,731) 10,628 (64,103) 1,902
Net assets - January 1127,317 144,836 272,153 270,251
Net assets - December 3152,586$ 155,464$ 208,050$ 272,153$
117
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF CASH FLOWSStatement 3
2
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2006
With Comparative Totals For The Year Ended December 31, 2005
Central
EquipmenRisTotals
tk
MaintenancManagemen20062005
et
Cash flows from operating activities:
Receipts from customers and users 457,987$ 276,812$ 734,799$ 722,383$
Payment to suppliers (348,730) (196,224) (544,954) (402,302)
Payment to employees (198,509) (82,510) (281,019) (263,881)
Net cash flows from operating activities (89,252) (1,922) (91,174) 56,200
Cash flows from investing activities:
Investment income 899 3,785 4,684 6,337
Net increase in cash and cash equivalents (88,353) 1,863 (86,490) 62,537
Cash and cash equivalents - January 1 94,464 154,231 248,695 186,158
Cash and cash equivalents - December 31 6,111$ 156,094$ 162,205$ 248,695$
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) (75,303)$ 6,697$ (68,606)$ (4,573)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in prepaid items 1,416 - 1,416 54,449
Decrease (increase) in inventory (16,007) - (16,007) (8,646)
Increase (decrease) in accounts payable 343 (9,179) (8,836) 14,912
Increase (decrease) in contracts payable - - - 100
Increase (decrease) in due to other governmental units - 447 447 (205)
Increase (decrease) in salaries payable 299 113 412 163
Total adjustments (13,949) (8,619) (22,568) 60,773
Net cash provided by operating activities (89,252)$ (1,922)$ (91,174)$ 56,200$
118
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.
119
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF NET ASSETSStatement 33
FIDUCIARY FUNDS
For The Year Ended December 31, 2006
GeneralGeneral
EscrowAgencyTotal
Assets
Cash and investments22,611$ 473,073$ 495,684$
Liabilities
Accounts payable53 - 53
Due to other governments- 184 184
Deposits payable22,558 472,889 495,447
Total liabilities22,611 473,073 495,684
Net Assets-$ -$ -$
120
CITY OF ANDOVER, MINNESOT
A
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 34
FIDUCIARY FUNDS
For The Year Ended December 31, 2006
BalanceBalance
January 1,December 31,
2006AdditionsDeletions2006
General Escrow Fund
Assets
Cash and investments28,075$ 13,433$ (18,897)$ 22,611$
Liabilities
Accounts payable26 9,360 (9,333) 53
Deposits payable28,049 4,073 (9,564) 22,558
Total liabilities28,075$ 13,433$ (18,897)$ 22,611$
General Agency Fund
Assets
Cash and investments507,640$ 703,341$ (737,908)$ 473,073$
Liabilities
Contracts payable7,685 - (7,685) -
Due to other governments230 184 (230) 184
Deposits payable499,725 703,157 (729,993) 472,889
Total liabilities507,640$ 703,341$ (737,908)$ 473,073$
Total Fiduciary Funds
Assets
Cash and investments535,715$ 716,774$ (756,805)$ 495,684$
Liabilities
Accounts payable26 9,360 (9,333) 53
Contracts payable7,685 - (7,685) -
Due to other governments230 184 (230) 184
Deposits payable527,774 707,230 (739,557) 495,447
Total liabilities535,715$ 716,774$ (756,805)$ 495,684$
121
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122
SUPPLEMENTARY FINANCIAL INFORMATION
123
CITY OF ANDOVER, MINNESOT
A
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2006
Authorized
IssueMaturityInterestand
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
2004 EDA Pub Fac Lease Revenue Bonds4/23/20042/1/20342.215-5.400%19,580,000$
2006 EDA Pub Fac Lease Revenue Refunding Bonds12/1/20062/1/20344.00-4.50%10,000,000
Total general obligation revenue bonds29,580,000
Special Assessment Bonds:
2005A G.O. Improvement Bonds4/28/20052/1/20132.95-3.65%3,560,000
Tax Increment Bonds:
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 bonds8,235,000
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
2006B G.O. Equipment Certificates5/10/20062/1/20103.60-3.65%460,000
Total certificates of indebtedness2,380,000
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
2006A Permanent Improvement Revolving Bonds5/10/20062/1/20143.60-3.85%2,450,000
Total permanent improvement revolving bonds12,005,000
State Aid Bonds:
2001B State Aid Street Bonds6/5/20012/1/20172.90-5.00%2,755,000
Total Bonded Indebtedness62,745,000
Compensated absences459,299
Total governmental activities indebtedness63,204,299
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2002 G.O. Water Revenue Bonds5/9/20022/1/20232.30-5.00%9,780,000
Compensated absences74,676
Total business-type activities indebtedness9,854,676
Total City indebtedness$73,058,975
124
Exhibit 1
Principal Payments
PriorCurrentOutstanding2007 Payment
YearsYear12/31/06PrincipalInterestTotal
$ 185,000-$ 19,395,000$ 185,000$ 959,731$ 1,144,731$
-- 10,000,000 - 282,818 282,818
185,000- 29,395,000 185,000 1,242,549 1,427,549
-- 3,560,000 - 118,572 118,572
1,660,000785,000 - - - -
210,000385,000 935,000 215,000 21,920 236,920
480,000- 3,780,000 490,000 98,625 588,625
2,350,0001,170,000 4,715,000 705,000 120,545 825,545
265,000945,000 - - - -
124,000276,000 - - - -
190,000- 120,000 60,000 2,655 62,655
-- 460,000 - 20,431 20,431
579,0001,221,000 580,000 60,000 23,086 83,086
235,000120,000 3,535,000 240,000 107,667 347,667
340,000 110,000 8,582 118,582
--
235,000120,000 3,875,000 350,000 116,249 466,249
1,035,0002,865,000 1,075,000 1,075,000 21,500 1,096,500
730,000715,000 3,135,000 750,000 62,505 812,505
-- 2,450,000 - 111,575 111,575
1,765,0003,580,000 6,660,000 1,825,000 195,580 2,020,580
140,000550,000 2,065,000 150,000 91,297 241,297
5,254,0006,641,000 50,850,000 3,275,000 1,907,878 5,182,878
-- 459,299 - - -
5,254,0006,641,000 51,309,299 3,275,000 1,907,878 5,182,878
335,000630,000 8,815,000 345,000 400,662 745,662
-- 74,676 - - -
335,000630,000 8,889,676 345,000 400,662 745,662
$ 5,589,0007,271,000$ 60,198,975$ 3,620,000$ 2,308,540$ 5,928,540$
125
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF TAX CAPACITY RATES AND LEVIES Exhibit 2
Taxes Payable
20072006
Tax capacity values$ 26,643,63629,752,017$
Captured tax increment value(2,462,828) (1,861,273)
Fiscal disparities - contribution(914,427) (777,290)
Local taxable value26,374,762 24,005,073
Fiscal disparities - distribution3,500,744 3,033,078
Adjusted tax capacit$ 27,038,15129,875,506$
y
20072006
dTax CapacityCertifiedTax Capacity
Certifie
LevyRateLevyRate
General Revenue Levy:
General Fund6,080,179$ 5,640,212$
Capital Equipment/Projects210,000 209,296
Parks Projects56,000 54,384
Road and Bridge1,052,953 734,686
Pedestrian Trail Maintenance48,801 47,380
Total General Revenue Levy 24.948%6,685,9587,447,933 24.790%
Debt Service Levy:
2001C G.O. Capital Note- 283,537
2003C G.O. Equipment Certificate- 132,180
2004A G.O. Capital Improvement Bonds365,051 364,788
2004 EDA Public Facility Revenue Bonds889,718 847,350
2005B G.O. Capital Improvement Bonds126,305 137,922
2005B G.O. Equipment Certificate63,945 65,788
2006B G.O. Equipment Certificate188,475 -
2007 G.O. Equipment Certificate200,000 -
Total Debt Service Levy 6.055%1,831,5651,833,494 6.757%
Lower Rum River Watershed 0.324%33,39635,000 0.347%
Total9,316,427$ 31.327%8,550,919$ 31.894%
126
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF DEFERRED TAX LEVIESExhibit 3
GENERAL OBLIGATION BONDS
December 31, 2006
Tax Increment BondsCapital Improvement Bonds
Taxes
Payable2003B2004BTotal2004A2005BTotal
2007236,920 588,625 825,545 347,668 118,583 466,251
2008247,620 592,413 840,033 357,080 120,290 477,370
2009253,020 594,600 847,620 360,580 116,783 477,363
2010257,500 590,812 848,312 368,418 - 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
$ 4,183,963995,060$ 5,179,023$ 4,258,308$ 355,656$ 4,613,964$
EDA Public Facility Lease
Total
Certificates of IndebtednessRefunding BondDeferred Ta
TaxesRevenue Bondssx
Payable2005B2006BTotalof 2004of 2006TotalLevies
200762,655 179,500 242,155 1,144,731 - 1,144,731 2,678,682
200860,900 163,649 224,549 908,695 - 908,695 2,450,647
2009- 162,920 162,920 699,806 - 699,806 2,187,709
2010- - - 700,684 - 700,684 1,917,414
2011- - - 694,891 - 694,891 1,680,084
2012- - - 697,456 - 697,456 1,691,324
2013- - - 693,534 - 693,534 1,684,027
2014- - - 441,938 - 441,938 846,534
2015- - - 222,629 435,028 657,657 1,074,657
2016- - - 222,379 436,328 658,707 1,081,757
2017- - - 222,430 432,929 655,359 1,083,234
2018- - - 220,492 432,541 653,033 653,033
2019- - - 223,504 432,128 655,632 655,632
2020- - - 220,844 436,025 656,869 656,869
2021- - - 222,987 429,709 652,696 652,696
2022- - - 219,914 433,098 653,012 653,012
2023- - - 219,148 433,617 652,765 652,765
2024- - - 222,998 428,694 651,692 651,692
2025- - - 218,980 430,798 649,778 649,778
2026- - - 219,655 427,713 647,368 647,368
2027- - - 222,375 426,575 648,950 648,950
2028- - - 227,010 422,405 649,415 649,415
2029- - - 218,820 425,498 644,318 644,318
2030- - - 222,805 425,751 648,556 648,556
2031- - - 223,705 422,370 646,075 646,075
- - 221,650 425,210 646,860 646,860
2032-
2033- - - 221,640 424,915 646,555 646,555
2034- - - 320,174 527,984 848,158 848,158
$ 506,069123,555$ 629,624$ 10,515,874$ 8,689,316$ 19,205,190$ 29,627,801$
127
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2006
Transfe
Transferr
InOu
t
General Fund
Water Fun$ -137,500$ General Fund Admin Allocatio
dn
Sewer Fun -42,500 General Fund Admin Allocatio
dn
Total General Fund180,000 -
Special Revenue Funds (SRF)
Community Center SR
F
284,013-
2004 EDA Public Facility Lease Revenue DSFDebt Service Allocatio
n
Debt Service Funds (DSF)
2000A G.O. Tax Increment Bonds DSF
Tax Increment Projects CPF735,815 - Calling Bonds & Closing Fun
d
2001A PIR DSF
PIR CPF1,090,000 - Debt Service Allocatio
n
2001C G.O. Capital Notes DSF
Building Fund CPF- 41,677 Close Fund
2003A PIR DSF
PIR CPF807,000 - Debt Service Allocatio
n
2003C G.O. Capital Note DSF
Storm Sewer Fund ES5,000 - Debt Service Allocatio
n
Building Fund CPF- 17,154 Close Fun
d
17,1545,000
2004 EDA Public Facility Lease Revenue DSF
-284,013 Debt Service Allocatio
Community Center SRFn
2006A PIR DSF
PIR CPF11,760 - Unused Discoun
t
2006B G.O. Capital Note DSF
2006B G.O Capital Notes CPF2,300 - Unused Discoun
t
Storm Sewer Fund ES10,000 - Debt Service Allocatio
n
-12,300
Total Debt Service Funds2,945,888 58,831
Capital Projects Funds (CPF)
Water Trunk Fund CPF
Water Fund ES- 167,424 Debt Service Allocatio
n
Sewer Trunk Fund CPF
Sewer Fund ES300,000 - Replacement Reserv
e
Building Fund CPF
2001C G.O. Capital Notes DSF41,677 - Close Fun
d
2003C G.O. Capital Note DSF17,154 - Close Fun
d
$ -58,831$
128
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2006(Continued)
Transfe
Transferr
InOu
t
Capital Projects Funds (CPF) - Continued
Unfinanced Fund CPF
PIR CPF42,603$ -$ Close Fun
d
Tax Increment Projects CPF
2000A G.O. Tax Increment Bonds DSF- 735,815 Calling Bonds & Closing Fun
d
2006B G.O Capital Notes CPF
2006B G.O. Capital Note DSF- 2,300 Unused Discoun
t
PIR CPF
2001A PIR- 1,090,000 Debt Service Allocatio
n
2003A PIR- 807,000 Debt Service Allocatio
n
2006A PIR- 11,760 Unused Discount
Unfinanced Fun 42,603- Close Fun
dd
1,951,363-
Total Capital Projects Funds401,434 2,856,902
Enterprise Funds (ES)
Water Fund ES
Water Trunk Fund167,424 - Debt Service Allocatio
n
General Fun 137,500- General Fund Admin Allocatio
dn
137,500167,424
Sewer Fund ES
42,500- General Fund Admin Allocatio
General Fundn
Sewer Trunk Fund CPF- 300,000 Replacement Reserv
e
342,500-
Storm Sewer Fund ES
2003C G.O. Capital Note DSF- 5,000 Debt Service Allocation
2006B G.O. Capital Note DSF- 10,000 Debt Service Allocatio
n
15,000-
Total Enterprise Funds167,424 495,000
Total All Funds3,694,746$ 3,694,746$
129
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130
III. STATISTICAL SECTION
This part of the City of Andover’s comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information
says about the City’s overal financial health.
Contents
Page
Financial Trends
132
These tables contain trend information to help the reader understand how the City’s financial performance
and well-being have changed over time.
Revenue Capacity
137
These tables contain information to help the reader assess the City’s most significant local revenue
source, the property tax.
Debt Capacity
143
These tables present information to help the reader assess the affordability of the City’s current levels of
outstanding debt and the City’s ability to issue additional debt in the future.
Operating Information148
These tables contain service and infrastructure data to help the reader understand how the information is
the City’s financial report relates to the services the City provides and the activities it performs.
131
CITY OF ANDOVER, MINNESOTA
NET ASSETS BY COMPONENTTable 1
Last Five Fiscal Years
(accrual basis of accounting)
20022003200420052006
Governmental Activities
Invested in capital assets, net of related debt64,911,479$ 61,941,541$ 52,230,713$ 67,652,236$ 64,114,553$
Restricted5,882,451 4,277,835 17,182,422 6,565,168 14,838,788
Unrestricted16,262,706 18,992,188 19,617,813 19,740,176 19,808,248
Total governmental activities net assets87,056,636 85,211,564 89,030,948 93,957,580 98,761,589
Business-Type Activities
Invested in capital assets, net of related debt23,170,434 33,379,384 35,111,309 35,588,013 38,249,916
Restricted4,337,170 437,077 - - -
Unrestricted3,298,487 2,898,244 3,197,522 3,032,746 3,451,261
Total business-type activities net assets30,806,091 36,714,705 38,308,831 38,620,759 41,701,177
Primary Government
Invested in capital assets, net of related debt88,081,913 95,320,925 87,342,022 103,240,249 102,468,182
Restricted10,219,621 4,714,912 17,182,422 6,565,168 14,838,788
Unrestricted19,561,193 21,890,432 22,815,335 22,772,922 23,259,509
Total primary government net assets117,862,727$ 121,926,269$ 127,339,779$ 132,578,339$ 140,566,479$
Note:
The City began to report accrual information when it implemented GASB 34 in 2002.
132
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET ASSETSTable 2
Last Five Fiscal Years
(accrual basis of accounting)
20022003200420052006
Expenses
Governmental activities:
General government2,355,954$ 2,431,252$ 2,265,215$ 2,432,433$ 2,637,584$
Public safety2,474,284 2,766,694 3,138,069 3,353,798 3,443,285
Public works4,819,429 3,361,255 5,268,813 3,937,423 3,031,459
Sanitation264,671 160,548 26,843 - -
Parks and recreation856,806 802,131 2,028,177 1,575,582 2,442,305
Recycling116,344 115,016 113,234 118,599 91,378
Economic development720,460 470,172 941,624 459,635 626,103
Unallocated30,614 - - - -
Interest on long-term debt1,667,943 1,255,888 1,708,303 1,797,469 1,668,444
Total governmental activities expenses13,306,505 11,362,956 15,490,278 13,674,939 13,940,558
Business-type activities:
Water1,526,526 1,737,596 1,956,995 2,160,502 2,232,144
Sewer1,206,865 1,344,857 1,351,506 1,555,010 1,585,548
Storm sewer- 168,203 389,290 400,114 408,003
Total business-type activities expenses2,733,391 3,250,656 3,697,791 4,115,626 4,225,695
Total primary government expenses16,039,896 14,613,612 19,188,069 17,790,565 18,166,253
Program Revenues
Governmental activities:
Charges for services:
General government536,000 593,568 814,518 709,538 471,573
Public Safety876,631 793,306 936,061 1,001,912 804,447
Public works358,194 312,110 495,835 379,890 325,672
Parks and recreation- - 29,683 461,679 749,407
Recycling30,947 22,450 29,062 32,810 35,379
Economic development- - - - 218,605
Operating grants and contributions946,495 732,011 1,640,389 2,535,140 959,286
Capital grants and contributions5,849,683 5,350,283 7,010,826 3,934,686 4,920,694
Total governmental activities program revenue8,597,950 7,803,728 10,956,374 9,055,655 8,485,063
Business-type activities:
Charges for services:
Water1,128,182 1,399,798 1,723,068 1,510,119 1,768,388
Sewer1,249,932 1,309,584 1,361,839 1,550,745 1,691,728
Storm sewer- 118,638 242,090 248,753 287,397
Capital grants and contributions373,550 - 214,920 823,797 2,761,282
Total business-type activities program revenue2,751,664 2,828,020 3,541,917 4,133,414 6,508,795
Total primary government program revenues11,349,614 10,631,748 14,498,291 13,189,069 14,993,858
Net (Expense)/Revenue
Governmental activities(4,708,555) (3,559,228) (4,533,904) (4,619,284) (5,455,495)
(155,874) 17,788 2,283,100
Business-type activities18,273 (422,636)
Total primary government net expense(4,690,282)$ (3,981,864)$ (4,689,778)$ (4,601,496)$ (3,172,395)$
133
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET ASSETSTable 2
Last Five Fiscal Years(Continued)
(accrual basis of accounting)
20022003200420052006
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes
General property taxes5,076,374$ 5,682,498$ 6,260,772$ 7,066,852$ 8,084,559$
Tax increment collections842,607 1,140,040 1,186,396 1,285,195 1,562,131
Unrestricted grants and contributions763,049 158,694 141,870 86,906 77,642
Unrestricted investment earnings821,002 568,042 681,563 690,648 1,019,304
Gain on sale of capital assets1,316,054 591,063 1,817,938 251,504 219,910
Transfers770,062 (6,426,181) (1,735,251) (438,426) (704,042)
Total governmental activities9,589,148 1,714,156 8,353,288 8,942,679 10,259,504
Business-type activities:
Unrestricted investment earnings458,311 (94,931) 7,895 47,620 87,376
Gain on sale of capital assets- - 6,854 - 5,900
Transfers(770,062) 6,426,181 1,735,251 438,426 704,042
Total business-type activities(311,751) 6,331,250 1,750,000 486,046 797,318
Total primary government9,277,397 8,045,406 10,103,288 9,428,725 11,056,822
Change in Net Assets
Governmental activities4,880,593 (1,845,072) 3,819,384 4,323,395 4,804,009
Business-type activities(293,478) 5,908,614 1,594,126 503,834 3,080,418
Total primary government4,587,115$ 4,063,542$ 5,413,510$ 4,827,229$ 7,884,427$
Note:
The City began to report accrual information when it implemented GASB 34 in 2002.
134
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDSTable 3
Last Five Fiscal Years
(modified accrual basis of accounting)
20022003200420052006
General Fund
Reserved72,327$ 87,766$ 85,586$ 126,320$ 144,496$
Unreserved2,742,645 2,505,261 3,216,979 3,076,157 3,248,317
Total general fund2,814,972 2,593,027 3,302,565 3,202,477 3,392,813
All Other Governmental Funds
Reserved for:
Special revenue funds- - 35,783 58,570 46,849
(1)
Debt service funds1,665,451 1,567,365 5,934,346 1,872,599 11,342,527
Capital project funds899,238 609,339 7,293,690 1,335,858 633,078
Unreserved reported in:
Designated:
Special revenue funds1,083,966 1,207,537 1,927,381 1,262,882 1,569,792
Capital project funds11,565,955 14,698,495 15,213,110 15,018,317 14,433,934
Undesignated:
Special revenue funds(1,804) 18,089 24,148 1,487 (323,404)
Debt service funds- (9,706) - - -
Capital project funds(796,101) (1,008,104) (230,160) (491,849) (54,174)
Total all other governmental funds14,416,705 17,083,015 30,198,298 19,057,864 27,648,602
Total governmental funds17,231,677$ 19,676,042$ 33,500,863$ 22,260,341$ 31,041,415$
(1)
Note:
In 2006, the EDA issued $10,000,000 of Public Facility Lease Revenue Refunding Bonds to refund a portion of the 2004 EDA's
$19,580,000 Public Facility Lease Revenue Bonds, Series 2004.
135
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDSTable 4
Last Five Fiscal Years
(modified accrual basis of accounting)
20022003200420052006
Revenues
General property taxes5,060,053$ 5,671,277$ 6,272,762$ 7,033,613$ 8,057,592$
Tax increment collections878,567 1,136,574 1,193,467 1,285,639 1,546,394
Licences and permits588,965 551,385 674,008 724,436 598,094
Intergovernmental1,764,078 890,705 1,755,041 2,663,683 2,661,726
Special assessments4,183,796 5,121,636 4,243,328 2,045,969 1,289,590
Charges for services870,941 863,794 1,389,245 1,692,316 1,770,156
Fines73,475 68,686 79,450 90,530 91,490
Investment income812,896 563,824 678,308 684,173 1,014,801
Miscellaneous
Park dedication fees280,312 357,483 842,042 286,316 626,567
Connection charges1,281,670 1,044,752 1,720,520 1,311,426 372,133
Other338,905 392,752 658,037 578,389 395,789
Total Revenues16,133,658 16,662,868 19,506,208 18,396,490 18,424,332
Expenditures
General government2,173,992 2,181,354 2,171,248 2,349,965 2,343,332
Public safety2,352,909 2,631,991 2,915,958 3,093,298 3,268,236
Public works4,603,715 3,136,081 4,944,489 3,650,351 2,817,475
Sanitation110,213 80,901 26,732 - -
Parks and recreation689,161 613,078 1,315,100 1,309,987 1,599,885
Recycling116,005 114,784 114,052 116,506 90,590
Economic development720,960 471,172 918,451 426,708 626,103
Unallocated30,614 25,865 21,992 9,798 8,454
Capital outlay1,965,273 2,610,333 1,420,387 1,616,709 987,075
Debt service
Principal7,070,000 6,124,000 6,839,000 8,487,000 5,254,000
Interest1,768,509 1,276,057 1,063,363 2,042,003 1,683,599
Other28,265 31,436 94,869 13,226 253,134
Construction/acquisition costs758,953 3,513,115 12,154,653 11,146,387 4,579,910
Total expenditures22,388,569 22,810,167 34,000,294 34,261,938 23,511,793
Excess (deficiency) of revenues over expenses(6,254,911) (6,147,299) (14,494,086) (15,865,448) (5,087,461)
Other Financing Sources (Uses)
Transfers in754,062 1,328,909 1,076,000 224,000 522,000
Transfers out- (485,170) (739,438) - (167,424)
Bonds issued- 6,904,000 21,280,000 4,210,000 2,910,000
Refunding bonds issued- - 6,450,000 - 10,000,000
Payment to refunded bonds escrow agent- - (2,145,864) - -
Bond premium- 5,188 23,438 - -
Bond discount- (3,169) (497,883) (28,961) -
Proceeds from the sale of capital assets2,139,961 841,906 2,872,654 219,887 603,959
Total other financing sources (uses)2,894,023 8,591,664 28,318,907 4,624,926 13,868,535
Net change in fund balances(3,360,888)$ 2,444,365$ 13,824,821$ (11,240,522)$ 8,781,074$
Debt service as a percentage of
noncapital expenditures45.09%44.54%39.15%49.04%40.07%
136
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYTable 5
Years 1997 through 2006
Real PropertyPersonal PropertyTotalNet Tax Capacity
EstimatedNet TaxEstimatedNet TaxEstimatedNet Taxas a Percentage
YearMarket ValueCapacityMarket ValueCapacityMarket ValueCapacityof Market Value
1997836,403,500$ n/a15,626,900$ n/a852,030,400$ 13,342,748$ n/a
1998947,942,300 n/a16,095,000 n/a964,037,300 13,887,786 n/a
19991,051,879,200 n/a17,547,300 n/a1,069,426,500 14,605,633 n/a
20001,171,553,600 15,690,055$ 18,139,600 615,830$ 1,189,693,200 16,305,885 1.37%
20011,354,146,000 18,348,662 18,285,500 620,797 1,372,431,500 18,969,459 1.38%
20021,539,835,500 15,336,075 17,999,800 359,540 1,557,835,300 15,695,615 1.01%
20031,886,169,900 17,549,064 20,202,300 402,840 1,906,372,200 17,951,904 0.94%
20042,059,947,400 20,142,088 20,761,100 414,016 2,080,708,500 20,556,104 0.99%
20052,321,605,300 23,027,376 21,718,900 433,669 2,343,324,200 23,461,045 1.00%
20062,603,704,500 26,204,279 22,003,500 439,356 2,625,708,000 26,643,635 1.01%
Source
: Anoka County Property Tax Division
137
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUETable 6
DIRECT AND OVERLAPPING GOVERNMENTS
Years 1998 through 2007
TaxesDirectOverlapping Governments
PayableCity (1)SchoolCountyOtherTotalTotal
199821.824 54.497 30.618 2.407 87.522 109.346
199923.508 57.095 32.265 2.472 91.832 115.340
200022.735 55.589 30.861 3.134 89.584 112.319
200122.736 50.230 28.859 2.850 81.939 104.675
200233.511 29.070 37.976 3.745 70.791 104.302
200333.376 27.802 37.714 3.755 69.271 102.647
200431.584 21.218 35.340 3.482 60.040 91.624
200531.414 21.492 33.080 4.021 58.593 90.007
200631.556 20.046 32.096 3.755 55.897 87.453
200731.003 19.337 30.675 3.671 53.683 84.686
Source
: Anoka County Property Tax Division
Note
: (1) Includes the Lower Rum River Watershed
138
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS Table 7
Last Eight Fiscal Years
CertifiedTotal CollectedCollectedPercent
Tax YearLevyFollowing YearTo DateCollected
19993,640,714$ 3,500,303$ 3,637,714$ 99.92%
20003,920,083 3,881,501 3,918,401 99.96%
20014,548,641 4,493,924 4,534,996 99.70%
20025,626,477 5,567,624 5,625,122 99.98%
20036,223,525 6,130,551 6,220,014 99.94%
20046,781,700 6,707,678 6,771,151 99.84%
20057,556,813 7,456,703 7,519,295 99.50%
20068,550,919 7,978,467 7,978,467 93.31%
139
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 8
Current Year and Nine Years Ago
20061997
NetPercentage ofNetPercentage of
TaxTotal CityTaxTotal City
TaxpayersCapacityRankTax CapacityCapacityRankTax Capacity
Anoka Electric / Connexus222,128$ 10.83%364,462$ 1 2.03%
Target Corporation212,312 20.80%- - -
Andover Limited Partnership158,554 30.60%228,823 2 1.27%
Presbyterian Homes of Andover155,680 40.58%- - -
Minnegasco, Inc.138,040 50.52%137,038 3 0.76%
116 LLC128,338 60.48%- - -
Andover Station LLC99,624 70.37%- - -
United Power Association84,760 80.32%57,740 7 0.32%
Grey Oaks Inc.73,692 90.28%- - -
Rademacher Family Ltd Partnership64,440 100.24%- - -
Individual - Residential- - 76,481 4 0.43%
Xcel Energy- - 75,468 5 0.42%
Minnesota Pipe Line Company- - 63,616 6 0.35%
Individual - Restaurant- - 49,289 8 0.27%
MN Interstate Pipeline- - 46,097 9 0.26%
Kottke Bus Service, Inc.- - 41,499 10 0.23%
Total1,337,568$ 5.02%1,140,513$ 6.35%
Net Tax Capacity26,643,636$ 17,951,904$
Source: Anoka County Property Tax Division
140
CITY OF ANDOVER, MINNESOT
A
ESTIMATED MARKET VALUES AND NEW CONSTRUCTIONTable 9
Last Ten Fiscal Years
Estimated Market ValuesNew Construction
Commercial/Commercial / IndustrialResidential
YearIndustrial (1)ResidentialTotalPermitsValuePermitsValue
199755,918,100$ 796,112,300$ 852,030,400$ 5 7,133,275$ 282 30,844,000$
199868,591,800 895,445,500 964,037,300 10 12,625,960 448 53,742,133
199973,940,400 995,486,100 1,069,426,5005 1,404,084 411 47,763,200
200082,616,300 1,107,076,900 1,189,693,20014 12,672,448 342 46,322,000
200195,215,200 1,277,246,300 1,372,461,5008 21,086,481 285 43,378,128
2002107,671,600 1,450,163,700 1,557,835,30019 10,616,851 218 31,848,000
2003127,728,400 1,778,643,800 1,906,372,20013 4,764,046 182 28,973,300
2004144,629,100 1,936,079,400 2,080,708,50016 19,926,817 251 36,224,546
2005168,684,200 2,174,640,000 2,343,324,20020 6,571,671 226 34,309,393
2006191,931,800 2,433,776,200 2,625,708,0008 1,791,896 153 25,236,120
Note
: (1) also includes agricultural, public utility, railroad operating property, and personal property
141
CITY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONSTable 10
Last Ten Fiscal Years
TotalDelinquent
CollectionsTaxes
CurrentCurrentPercent ofDelinquentTotalas a Percent ofOutstandingas a Percent of
AssessmentsAssessmentsAssessmentsAssessmentAssessmentCurrentDelinquentCurrent
YearDue (1)CollectedCollectedCollectionsCollectionsAssessments DueAssessmentsAssessments Due
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%
2006225,365 192,477 85.41%4,790 197,267 87.53%51,721 22.95%
Note
: (1) Only includes assessments certified to Anoka County.
142
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBTTable 11
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Five Fiscal Years
Net General Bonded Debt Outstanding
GrossLess DebtNetPercentageNet Bonded
FiscalEstimatedBondedServiceBondedof EstimatedDebt
YearPopulation (1)Market ValueDebt (2)FundDebtMarket ValuePer Capita
200228,664 1,497,078,400$ 3,680,000$ (1,636,158)$ 2,043,842$ 0.14%71.30$
200328,939 1,719,429,400 3,710,000 (1,075,621) 2,634,379 0.15%91.03
200429,262 2,080,708,500 24,236,000 (1,705,959) 22,530,041 *1.08%769.94
200530,080 2,343,324,500 24,389,000 (1,041,140) 23,347,860 1.00%776.19
200630,300 2,625,708,000 33,850,000 (10,739,510) 23,110,490 0.88%762.72
Notes:
(1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
* 2004 is the start of the 2004 EDA Public Facility Revenue Bonds of which approximately half of the annual debt service payments
will come from a lease with the YMCA.
143
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBTTable 12
December 31, 2006
Gross General
ObligationPercentageNet Amount
Bonded DebtApplicableApplicable
Outstandingto Cityto City
Direct:
City of Andover33,850,000$ (1)100.0000%33,850,000$
Overlapping:
Anoka County76,490,000$ (2)9.1299%6,983,423
ISD No. 11 Anoka-Hennepin154,980,485 (2)12.8671%19,941,473
ISD No. 15 St. Francis39,685,000 (2)7.0504%2,797,939
Metropolitan Council135,230,000 (2)0.9008%1,218,158
Total Overlapping Debt 30,940,993
Total Overlapping and Direct Debt$ 64,790,993
Notes:
(1) Only includes debt supported by tax levy.
(2) Information obtained from Anoka County.
144
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGINTable 13
Last Five Fiscal Years
20022003200420052006
Estimated Market Value1,497,078,400$ 1,719,429,400$ 2,080,708,500$ 2,343,324,200$ 2,625,708,000$
Debt limitation
(2% of estimated market value)29,941,568 34,388,588 41,614,170 46,866,484 52,514,160
Debt applicable to limit:
Total bonded debt37,625,000 38,405,000 56,941,000 52,344,000 59,665,000
Less: Nonapplicable debt
G.O. water revenue bonds(9,780,000) (9,780,000) (9,470,000) (9,150,000) (8,815,000)
Special assessment bonds(2,795,000) (1,255,000) - (3,560,000) (3,560,000)
Tax increment bonds(10,450,000) (9,815,000) (13,215,000) (7,065,000) (4,715,000)
Permanent improvement
revolving bonds(8,325,000) (11,375,000) (7,680,000) (5,975,000) (6,660,000)
State aid bonds(2,595,000) (2,470,000) (2,340,000) (2,205,000) (2,065,000)
Less: Cash and investments in
related debt service funds(112,848) (82,515) (815,322) (1,041,140) (10,739,510)
Total debt applicable to limitation3,567,152 3,627,485 23,420,678 23,347,860 23,110,490
Legal debt margin26,374,416$ 30,761,103$ 18,193,492$ 23,518,624$ 29,403,670$
Total debt applicable to the limit as
a percentage of debt limit11.91%10.55%56.28%49.82%44.01%
145
CITY OF ANDOVER, MINNESOTA
PLEDGED-REVENUE COVERAGETable 14
Last Five Fiscal Years
2002 G.O. Water Revenue Bonds
Water Enterprise Fund
Less:Net
FiscalOperatingOperatingAvailableDebt Service
YearRevenues (1)Expenses (2)RevenuePrincipalInterestCoverage
20031,904,968$ 1,339,225$ 565,743$ -$ 216,501$ 2.61
20042,462,506 1,492,307 970,199 310,000 429,438 1.31
20051,510,119 1,111,874 398,245 320,000 421,393 0.54
20061,935,812 1,139,500 796,312 335,000 411,720 1.07
2004 EDA Public Facility Lease Revenue Bonds (3)
Community Center Special Revenue Fund
Less:Net
FiscalOperatingOperatingAvailableDebt Service
YearRevenueExpensesRevenuePrincipalInterestCoverage
2005522,839$ 589,900$ (67,061)$ -$ 1,194,167$ (0.06)
2006741,241 748,146 (6,905) 185,000 964,102 (0.01)
Special Assessment and Permanent Improvement Revolving Bonds
Special
FiscalAssessmentDebt Service
YearCollectionsPrincipalInterestCoverage
20024,183,796$ 3,697,500$ 830,264$ 0.92
20035,121,636 3,070,000 426,375 1.46
20044,243,328 2,210,000 283,657 1.70
20052,045,969 1,705,000 192,153 1.08
20061,289,590 1,765,000 289,174 0.63
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Operating revenues include transfers in; a portion of the trunk connection charge associated with adding
additional users to the water system is designed to compensate prior years capital investment in water
utility infrastructure and treatment plant.
(2) Operating expenses includes transfers out because the administrative allocation and replacement reserve transfer
is built into the user fees. Operating expenses does not include interest and depreciation.
(3) Half of the facility financed by these bonds is leased to the Greater Minneapolis YMCA, their lease payments start
in 2008. Future YMCA lease payments will significantly reduce the City's obligation on debt service payments.
146
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPETable 15
Last Five Fiscal Years
20022003200420052006
City of Andover's Outstanding Debt
Governmental activities
G.O. revenue bonds2,115,000$ 2,045,000$ 19,580,000$ 19,580,000$ 29,395,000$
Special assessment bonds2,795,000 1,255,000 - 3,560,000 3,560,000
Tax increment bonds10,450,000 9,815,000 13,215,000 7,065,000 4,715,000
Certificates of indebtedness1,565,000 1,665,000 766,000 699,000 580,000
Capital improvement bonds- 3,890,000 4,110,000 3,875,000
Permanent improvement
revolving bonds8,325,000 11,375,000 7,680,000 5,975,000 6,660,000
State aid bonds2,595,000 2,470,000 2,340,000 2,205,000 2,065,000
Compensated absences314,213 347,534 359,355 410,402 459,299
Total governmental activties28,159,213 28,972,534 47,830,355 43,604,402 51,309,299
Business-type activities
G.O. revenue bonds9,780,000 9,780,000 9,470,000 9,150,000 8,815,000
Compensated absences48,630 58,967 65,234 66,816 74,675
Total business-type activities9,828,630 9,838,967 9,535,234 9,216,816 8,889,675
Total outstanding debt37,987,843$ 38,811,501$ 57,365,589$ 52,821,218$ 60,198,974$
Total outstanding debt as a
percentage of personal income5.31%5.34%7.74%6.41%7.04%
Total outstanding debt per capita1,325$ 1,341$ 1,960$ 1,756$ 1,987$
147
CITY OF ANDOVER, MINNESOT
A
DEMOGRAPHIC AND ECONOMIC STATISTICSTable 16
Last Five Years
City of AndoverAnoka County
PersonalPersonalPer CapitaUnemployment
YearPopulation (1)Income (2)Population (3)Income (2)Income (3)Percentage
200228,664 714,994,816$ 306,723 7,650,898,512$ 24,944$ 4.5%
200328,939 726,687,229 310,959 7,808,491,449 25,111 4.8%
200429,262 741,235,722 316,778 8,024,303,518 25,331 4.5%
200530,080 824,041,600 320,803 8,788,398,185 27,395 3.8%
200630,300 854,970,555 324,973 9,169,726,782 28,217 4.5%
Notes:
(1) Estimates from Metropolitan Council
(2) The personal income is calculated by taking the per capita income of Anoka County and multiplying it
by the population for both the City and County.
(3) Information from U.S. Census Bureau
148
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERSTable 17
Current Year and Nine Years Ago
20061997
PercentagePercentage
of Total Cityof Total City
TaxpayerEmployeesRankEmploymentEmployeesRankEmployment
Anoka Hennepin I.S.D. No. 11639 1 33.0%266 1 26.8%
Anoka County Highway & Parks Department350 2 18.1%110 4 11.1%
Kottkes' Bus Service, Inc.200 3 10.3%190 2 19.2%
Target182 4 9.4%- - -
Columbia Park Medical Group - Andover115 5 5.9%- - -
Festival Foods102 6 5.3%120 3 12.1%
City of Andover92 7 4.8%- - -
Meadow Creek Christian School92 8 4.8%75 6 7.6%
Tanners Steakhouse & Bar83 9 4.3%- - -
Farmstead at Andover80 10 4.1%- - -
Merwin Drug Company- - - 86 5 8.7%
POV's Sports Bar & Grill- - - 55 7 5.5%
Ed Fields & Sons, Inc.- - - 50 8 5.0%
City of Andover- - - 40 9 4.0%
Total1,935 100.0%992 100.0%
Source
: Minnesota Department of Employment and Economic Development
149
CITY OF ANDOVER, MINNESOTA
FULL TIME EQUIVALENT EMPLOYEESTable 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Years 2002 through 2006
Function/Program20022003200420052006
Governmental
Administration1.40 1.40 1.34 1.47 1.30
Human resources0.01 0.06 0.06 0.06 0.07
City clerk1.91 1.91 1.84 1.84 1.84
Elections0.03 0.03 0.10 0.10 0.10
Financial administration3.95 3.80 3.72 2.99 3.95
Information systems1.01 1.01 1.01 0.91 0.91
Planning and zoning3.57 3.57 3.57 4.57 4.75
Engineering5.05 4.69 4.57 4.67 4.57
EDA general1.38 1.38 1.38 1.21 0.70
LRRWMO0.31 0.31 0.31 0.21 0.21
Risk management0.12 0.13 0.13 0.13 0.18
Public Safety
Fire3.16 3.16 3.31 3.25 3.10
Protective inspection6.43 6.56 5.91 5.58 6.03
Civil defense0.05 0.05 0.05 0.05 0.05
Public Works
Streets & Highways5.42 4.61 5.02 5.35 6.12
Snow and ice2.85 3.48 3.85 3.92 3.27
Street signs1.22 1.26 1.17 1.20 1.35
Tree preservation0.12 0.12 0.12 - -
Weed control0.17 0.17 0.17 - -
Forestry- - 0.10 0.10 0.10
ROW management / utility0.70 0.70 0.75 0.85 0.85
Water5.87 5.46 4.93 5.04 5.57
Sewer2.69 2.83 2.77 3.15 2.97
Storm sewer0.75 1.24 1.60 1.60 2.01
Central equipment2.94 2.90 2.90 2.91 2.92
Park & Recreation
Park & recreation5.90 6.00 6.66 6.85 7.33
Community center- - - 2.10 2.12
Recycling1.31 1.33 1.21 1.26 0.93
58.1658.32 58.55 61.37 63.30
Source:
City Finance Department
Note
: Employees are allocated to various departments based on the functions that they perform.
150
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAMTable 19
Last Five Years
Function/Program20022003200420052006
General government
Registered voters15,500 n/a16,094 n/a17,500
Voters registering election day2,035 n/a2,000 n/a2,200
Number of precincts10 n/a10 n/a10
Public safety
Police
Number of calls for services12,000 12,375 12,675 12,861 14,500
Number of traffic citations1,500 1,645 1,795 1,795 1,850
Number of patrol hours26,280 28,776 30,856 30,856 30,858
Fire
Fire responses425 410 420 325 460
Emergency medical responses550 590 580 594 690
Protective inspections
Inspections6,629 5,272 6,396 6,536 8,117
Residential permits218 182 251 226 153
Other permits1,234 1,140 1,162 2,473 3,128
Public works
Streets and highways
Asphalt streets maintained (miles)175 176 176 178 182
Gravel roads maintained (miles)7 8 8 8 7
Cul-de-sacs and dead ends maintained306 309 310 320 324
Parks and recreation
Number of City parks58 58 58 58 63
Total acreage mowed255 268 272 265 273
Ballfields maintained24 29 26 25 25
Number of playgrounds36 37 36 33 36
Soccer fields maintained18 22 22 20 19
Trail maintained (miles)20 23 24 26 29
Community center bookings (hrs)
Fieldhousen/an/an/a1,405 7,450
Ice arenan/an/an/a2,002 2,405
Water
New connections248 200 220 247 197
Total customers4,990 5,190 5,410 5,657 5,854
Annual consumption
(thousands of gallons)741,776 917,918 862,265 856,671 911,712
Sanitary Sewer
New connections253 139 198 229 186
Total customers5,895 6,017 6,291 6,528 6,717
Storm Sewer
Total customersn/a9,140 9,446 9,516 9,744
Storm sewer lines maintained (miles)30 32 39 43 47
Source
: Various City Departments
151
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMTable 20
Last Five Years
Function/Program20022003200420052006
Public Safety
Fire
Stations3 3 3 3 3
Fire vehicles19 19 18 18 18
Protective inspections
Vehicles4 4 4 3 3
Public Works
Streets and Highways
Streets (miles)182 184 184 186 189
Street lights6,795 6,959 7,505 7,551 8,101
Traffic signals15 16 18 20 20
Parks and Recreation
Parks58 58 58 58 63
Ball Fields31 35 35 25 28
Soccer Fields19 22 25 16 16
Playgrounds36 37 36 33 36
Trails (miles)20 23 24 26 29
Community centers- - - 1 1
Water
Water treatment plants- 1 1 1 1
Storage facilities2 3 3 3 3
Water main (miles)n/a1 1 79 84
Connections4,983 5,160 5,300 5,450 5,760
Sanitary sewer
Sewer main (miles)n/an/an/a82 87
Connections5,824 5,981 6,100 6,250 6,560
Number of lift stations4 7 7 8 9
Storm sewer
Storm sewer lines (miles)30 32 39 43 47
152