HomeMy WebLinkAbout2009 CAFRCOMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2009
MINNESOTA
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1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
.
Comprehensive Annual Financial Report
of the
City of Andover, Minnesota
For the Year Ended
December 31, 2009
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
I. INTRODUCTORY SECTION
Letter of Transmittal2
Organization10
Organizational Chart11
Certificate of Achievement12
II. FINANCIAL SECTION
Independent Auditor's Report14
Management's Discussion and Analysis16
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net AssetsStatement 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 1080
Schedule of Funding Progress - Other Post Employment Benefits PlanStatement 1182
Notes to Required Supplementary Information:
Budgets83
Modified Approach for City Streets and Trails Infrastructure Capital Assets83
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 1287
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental FundsStatement 1388
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1490
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue FundsStatement 1592
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 1696
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service FundsStatement 1798
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 18102
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project FundsStatement 19104
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
EDA GeneralStatement 20106
Community Development Block GrantStatement 21107
Community CenterStatement 22108
Drainage and MappingStatement 23109
LRRWMOStatement 24110
ForestryStatement 25111
Trail and TransportationStatement 26112
Right-of-Way Management/UtilityStatement 27113
Capital Equipment ReserveStatement 28114
Charitable GamblingStatement 29115
Construction Seal CoatingStatement 30116
Internal Service Funds:
Combining Statement of Net Assets - Internal Service FundsStatement 31118
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Internal Service FundsStatement 32119
Combining Statement of Cash Flows - Internal Service FundsStatement 33120
Agency Funds:
Combining Statement of Net Assets - Fiduciary FundsStatement 34122
Combining Statement of Changes in Assets and Liabilities - Fiduciary FundsStatement 35123
Supplementary Financial Information:
Combined Schedule of IndebtednessExhibit 1126
Schedule of Tax Capacity Rates and LeviesExhibit 2128
Schedule of Deferred Tax Levies - General Obligation BondsExhibit 3129
Schedule of Fund TransfersExhibit 4130
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
III. STATISTICAL SECTION
Net Assets by Component - Last Five Fiscal Years Table 1134
Changes in Net Assets - Last Five Fiscal Years Table 2135
Fund Balances - Governmental Funds - Last Five Fiscal Years Table 3137
Changes in Fund Balances - Governmental Funds - Last Five Fiscal Years Table 4138
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal YearsTable 5139
Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Years 2001 through 2010Table 6140
Property Tax Levies and Collections - Last Five Fiscal YearsTable 7141
Principal Taxpayers - Current Year and Ten Years AgoTable 8142
Estimated Market Values and New Construction - Last Ten Fiscal YearsTable 9143
Special Assessment Levies and Collections - Last Ten Fiscal YearsTable 10144
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Ten Fiscal YearsTable 11145
Computation of Direct and Overlapping DebtTable 12146
Computation of Legal Debt Margin - Last Five Fiscal YearsTable 13147
Pledged-Revenue Coverage - Last Five Fiscal YearsTable 14148
Outstanding Debt by Type - Last Five Fiscal YearsTable 15149
Demographic and Economic Statitistics - Last Five YearsTable 16150
Principal Employers - Current Year and Ten Years AgoTable 17151
Full Time Equivalent Employees - City Government Employees by Function / Program -
Last Five Fiscal YearsTable 18152
Operating Indicators by Function / Program - Last Five YearsTable 19153
Capital Asset Statistics by Function / Program - Last Five YearsTable 20154
I. INTRODUCTORY SECTION
1
1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.CI.ANDOVER.MN.US
May 7, 2010
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, 2009, the table of contents, the public
The
Financial Section
officials, organizational chart, and this Letter of Transmittal. The includes: (1) independent auditor's report;
(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
Statistical Section
supplemental information. 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 the 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 31,250. 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
y:
Public Safet
PoliceProtective inspectionAnimal control
Fire protectionCivil defense
Public Works:
Streets and highwaysStreet signsTraffic signals
Snow and ice removalCentral equipment maintenanceWater maintenance
Street lighting
Sanitation:
Storm sewersSanitary 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 10 and 11 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
3
To the Honorable Mayor and City Council
City of Andover, Minnesota
ECONOMIC CONDITION AND OUTLOOK
Moderate population growth is expected to continue in 2009 and 2010, with an estimated population of 33,000 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 2009.
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 86% of the total in 2009. They are general
property taxes at 78%, and charges for services at 8%. 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
$590,000 in aid to Andover, that loss in aid was originally intended to be for two years (2003 & 2004) but that loss was extended
to include years 2005 and 2006. The state allowed cities the ability to levy up to 60% of the lost 2003 aid in 2004. Again, in
2008 and 2009, the State of Minnesota significantly reduced MVHC to help deal with the state budget deficit.
LGA, HACA and MVHC for 1998 through 2009 are as follows:
YearLGAHACAMVHCTotal
1998122,651$ $ 378,975$ 501,62
6
$ -
1999111,145 462,796
- 573,941
2000119,752 490,237
- 609,989
2001119,758 489,991
- 609,749
2002119,827 683,581
-563,754
2003* -
- 65,632 65,632
2004* -57,934
- 57,934
2005*-
- 13,179 13,179
2006* -1,700
- 1,700
2007- 410,519
-410,519
2008* - 198,214
-198,214
2009*-
- 54,629 54,629
*Due to the State Legislative actions to deal with the state budget deficits,
the City will not be receiving any LGA and significantly reduced MVHC.
For 1998 through 2000, cities with populations over 2,500 were under levy limit restrictions imposed by the State. Levy limits
severely curb the ability of cities to generate additional tax revenue needed to respond to an increasing demand for services. For
1999 and 2000, the levy limit formula was modified to allow for increases based on commercial and industrial growth. This was
a favorable change for Andover, as the City experienced a surge in commercial growth during the past few years. Levy limits
were lifted for 2001 but were reinstated for 2002 - 2004. The 2004 levy limits were so severe that the State did not allow cities
the ability to capture residential and commercial market value growth. Levy limits were lifted from 2005 to 2008, but reinstated
for 2009, 2010 and 2011.
4
To the Honorable Mayor and City Council
City of Andover, Minnesota
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:
Class Rate
199819992000 & 20012002 & 2003
Residential Homestead:
Value to $75,0001.00%1.00%1.00%1.00%
$76,000 to $500,0001.85%1.701.65%1.00%
%
Over $500,0001.85%1.701.65%1.25%
%
Commercial / Industrial:
Value to $150,0002.70%2.45%2.40%1.50%
Value above $150,004.00%3.503.40%2.00%
0%
Tax Capacity
199819992000 & 20012002 & 2003
Taxable Market Value:
Residential Homestead:
100,000$ 1,175$ 1,163
$ $ 1 ,213$ 1,000
150,000
2 ,138 2,025 1,988 1,500
200,000
3 ,063 2,875 2,813 2,000
250,000
3 ,988 3,725 3,638 2,500
300,000
4 ,913 4,575 4,463 3,000
Commercial / Industrial:
$ 550,000$ 20,050$ 17,675$ 17,200
$ 10,250
750,000 24,675 24,000 14,250
28,050
1,000,000 33,425 32,50 19,250
0
38,050
2,500,000 85,925 83,500 49,250
98,050
The City’s General Fund receives a substantial amount of revenue from licenses and permits. The past ten 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)
2007475,893 (122,201)
2008525,339 49,446
2009291,903 (233,436)
The $131,747 decrease in revenue for 2002 is due to reclassification of plan check fees ($263,535), which were previously
recorded as license and permit fee and are now recorded as a charges for services revenue. Revenue from residential building
continued to modestly increase through 2002 but declined in 2003, as a reduced number of new residential lots were being added
to the overall lot inventory. License and permit fees increased substantially in 2004 as the number of residential lots available
and built on has increased and the value of new construction is on the rise. The decrease in 2006 and 2007 is largely due to a
slowing economy and home building market. A slight increase in 2008 is primarily due to the commercial activity taking place
but the decrease in 2009 is due to the continued downturn in the economy, especially the construction industry.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
The City’s General Fund also receives a considerable amount of revenue from charges for services. The past ten years are shown
below:
RevenuesChange
2000900,235$n/a
2001722,690 (177,545)
2002689,427
( 33,263)
2003647,813
( 41,614)
2004798,795 150,98
2
2005933,365 134,570
2006780,273 (153,092)
20071,121,642 341,369
2008772,430 (349,212)
2009701,289
( 71,141)
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from
charges for services totaled $1,121,642 in 2007 and this increase can be linked to the number of public improvement projects
being finalized and assessed in 2007. 2008 proved to be better than expected due to some residential plat activity taking place
but the decrease in 2009 was expected due to the struggling economy.
EMPLOYMENT
The City of Andover’s largest employers are government entities. The Anoka-Hennepin School District has a significant
presence in the community and Anoka County’s Parks and Highway Departments and Sheriffs Office headquarters are located in
Andover. The City of Andover is best classified as a bedroom community, since a majority of the residents commute outside of
Andover for employment opportunities. The City does anticipate with the development of the Andover Station Commercial Park
and other commercial developments that additional employment opportunities will be provided to residents in the near future.
Major employers in Andover are as follows:
Number of
FirmType of Business / ProductEmployees
ISD No 11 Anoka-HennepinElementary and secondary education574
Anoka County Parks and Highway DepartmentsCounty government and services378
Kottkes' Bus Service, Inc.Bus transportation200
TargeRetail167
t
Columbia Park Medical GroupMedical clinic107
Meadow Creek Christian SchoolPrivate education K-12100
Festival FoodsGrocery store97
Farmstead at AndoverSenior housing and assisted living facilities94
City of AndoveMunicipal government and services85
r
MAJOR INITIATIVES
FOR THE YEAR. The City has many accomplishments to report for 2009. The following list is a summary of some of the
major initiatives completed throughout the year.
1)Implementation of a single-family rental housing license program to provide property owners/landlords with
educational materials and checklists on how to inspect and maintain the exterior of the property, a list of potential
ordinance violations that may occur with a rental property, and an exterior inspection of the building and grounds with
city staff. This program was authorized by the Andover City Council in July 2009 and there were 185 rental licenses
issued before year end.
th
2)Two street reconstruction projects were completed in 2009. The first was 157 Avenue from Prairie Road to University
Avenue using MSA funds and special assessments. The second was a street reconstruction that took place in the north
half of the Woodland Meadows development. The project was funded by tax levy and special assessments. In both
6
To the Honorable Mayor and City Council
City of Andover, Minnesota
projects, the existing bituminous was reclaimed, concrete curb was added in the development, curb was replaced on
th
157 Avenue, storm sewer structures were replaced or added, and a new bituminous surface was laid.
3)The City Council, along with department heads, participated in strategic planning sessions to develop and prioritize
goals for the next two year cycle. The outcome of the sessions was a City slogan “Welcome Home” and the following
vision statement: Andover, a safe, growing community in which to live and work which enhances the quality of its
citizens’ lives through recreational opportunity, quiet neighborhoods, civic involvement, and fiscal and environmental
stewardship.
4)Water Treatment Plant expansion consists of plate settlers and a building expansion to house the equipment. The plate
settlers will improve the operations of the water treatment plant and make water more readily available for
consumption during peak usage times. The addition is projected to be completed and fully functional in early 2010.
5)The Sustainable Landscape Project consisted of beautifying a main corridor through Andover. This roadway has
residential properties backing up to it with various types of fencing materials, colors and heights. With the help of city
staff, middle school students and residents, self-sustainable shrubs were planted along this corridor to provide a
consistent backdrop as people traveled along this roadway through Andover.
6)The City, along with local legislators, authored and successfully made law a new speed limit bill allowing cities to post
speed limits in rural residential areas to 35 mph instead of the previous statutory speed limit of 55 mph.
7)The City of Andover was eligible for funding ($23,133) under the Edward Byrne Memorial Justice Assistance Grant
(JAG) Formula Program. The City utilized these funds to focus on “crime prevention” programs including expanding
our Crime Watch program, acquiring administrative software to help with city code enforcement and for equipment to
help with traffic control issues.
8)The City of Andover was designated a Governor’s Fit City by Governor Tim Pawlenty. The City earned the
recognition by making a commitment to support and encourage its residents to be more physically active and to
improve the overall health of the community.
9)In 2009, the City of Andover received The Most Prolific Recycling Program in 2008 award from the Anoka County
Board of Commissioners. Andover residents had the highest recycling rate per person (257.25 pounds) for all materials
of any Anoka County municipality.
10)As the City reaches the decertification dates of TIF District 1-1 and 1-2, City Administration did some basic
“housekeeping” to assure that the decertification and final close out reports for the TIF Districts will go smoothly. This
was done through a TIF Plan modification to primarily address that fact that a number of years ago, in the late 1980s
and throughout the 1990s, the budgets that were adopted for the TIF Districts were under the true “pooling” concept
where the budget was not allocated by district but by project. Subsequent to the adoption of those budgets, the Office
of the State Auditor (OSA) is requiring the allocation by district instead of by project. Since the new OSA requirement,
there has been some confusion as to the most correct way to allocate the budgets. As a result, the City undertook a
process for a formal adoption of a budget modification to allocate and confirm the budgets according to the new OSA
requirement.
11)The City staff completed various studies as part of a Comprehensive Plan Update including: a park dedication study,
sanitary sewer study, water system study and transportation system study. The City, as required, submitted these
documents to the Metropolitan Council after the completion of a public hearing and a six-month review by neighboring
cities. The Comprehensive Plan Update was approved by the Metropolitan Council in May of 2009.
12)The City Council has adopted a goal to make a concerted effort toward promoting the usage of solar and wind power,
including the identification of appropriate sites and installations. City staff is currently researching what could be done
with an ordinance to allow wind turbines in the City.
13)The successful hosting of the City’s Annual Business Appreciation Day to recognize and build awareness of the local
business community and strengthen relationships with this important element of the Andover community. This event
was coordinated through the Community Development Department.
14)The City Open Space Commission, appointed to assist in managing the successful $2,000,000 open space referendum
ballot in 2006, developed a detailed natural amenity inventory, held informational meetings with residents and made
recommendations to the City Council on land that should be purchased as permanent open space in the community.
The first purchase will take place in December 2009.
7
To the Honorable Mayor and City Council
City of Andover, Minnesota
15)The City's Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2008 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 seventh consecutive year receiving the award and it is anticipated that the City’s CAFR for the year ended
December 31, 2009 will also achieve this award.
16)For the eighth year in a row, the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2009 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.
17)The City continues to make significant progress after the implementation of new hardware and software to start the
process of digital imaging documents retained by the City. The imaging project has helped the City reduce staffing
through data storage retrieval efficiencies and eliminated the need for City Hall office expansion.
18)The City continues to utilize updates to our financial management software to improve reporting and operating
efficiencies. These updates continue to yield reduced personnel costs and more timely reports.
Residential Development
nd
New residential development was limited to Cardinal Ridge 2 Addition, a 14 single-family lot infill project, and a modification
of the nearby Woodland Crossings planned unit development to convert five single-family lots into six detached townhouse lots.
Plat review was initiated for a planned unit development containing a combination of 36 single-family and detached townhouse
lots. However, this application was withdrawn by the applicant during 2009. It is important to note that the City continues to
have a reasonable lot supply for a variety of housing options including single-family lots, townhomes and condominium units.
Commercial Industrial Development
New construction did actually occur in Andover in 2009 from some commercial projects. These projects included review and
approval of Kwik Trip convenience store/gas station and car wash, two automotive repair and sales facilities at two existing sites,
and the expansion of pipeline facilities for Northern Natural Gas. Completed in 2009 was the Anoka County Law Enforcement
Center and Regional Forensic Laboratory with 145,000 square feet and will employ 250 individuals. This facility should increase
the traffic flow to the surrounding restaurants and retail stores.
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.
RELEVANT FINANCIAL POLICIES
The City has a policy regarding General Fund reserve balances. The City plans for a designated fund balance in the General
Fund equivalent to 6-months of the current year’s budgeted expenditures to provide working capital between semi-annual
property tax settlements. Since the property tax settlements are received by the City in July and December, the City needs
sufficient cash reserves to avoid short-term borrowing to finance operations. The City also reserves fund balances for prepaid
items, inventories and other legal obligations. The City may also designate a portion of fund balance for special purposes.
The primary goal of the City’s investment policy is to ensure the safety of the principal invested. Cash temporarily idle during
the year is invested in certificates of deposit, commercial paper, and obligations of the U.S. Treasury and government agencies.
Cash balances from all City funds are pooled into an investment fund and investment income is distributed on a pro-rata basis at
the end of each quarter. Extended maturities are utilized to take advantage of higher yields but staggered in a way to meet
projected liquidity needs.
Capital financing for major improvements is provided through improvement bonds, general obligation bonds, tax increment
bonds, or revenue bonds. Depending on the project, special assessments may be levied upon properties to share in the cost of the
improvement project. The special assessments are collected over a period of time and are used to help satisfy the improvement
bond debt or reimburse the fund used to finance the project.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
The City Council has also adopted financial management policies in order to allow for the planning of adequate funding of
services desired by the public, to manage City finances wisely, and to carefully account for public funds. These policies are
reviewed each year when the annual budget is adopted. The financial management policies included: operating budget policies;
revenue policies; accounting, auditing and financial reporting policies; investment policies; debt policies; capital improvement
policies; and risk management policies.
The City Council has adopted a comprehensive set of internal control procedures. The City’s accounting system was developed
and is continually evaluated to assure the adequacy of internal accounting controls. Internal accounting controls are designed to
provide reasonable but not absolute assurance in the areas of: safeguarding assets against loss from unauthorized use or
disposition, 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 Council recognizes that the evaluation of cost
and benefits requires estimates and judgments by management, and the cost of a control should not exceed the benefits likely to
be derived. All internal controls are evaluated against the above criteria. It is our belief that the City’s internal accounting
controls adequately safeguard the City’s assets and also provide reasonable assurance of properly recording financial
transactions.
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, 2009. This is the
eighth 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, 2010 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 2008 Comprehensive Annual Financial Report. This is the seventh 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 2009
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 Knutson and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report.
I also want to express our appreciation to the Mayor and members of the City Council for their interest and support in planning
and conducting the financial operations of the City in a responsible and progressive manner.
Respectfully submitted,
James Dickinson
City Administrator
9
CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2009
OfficeNameTerm
MayorMichael GamacheJanuary 4, 2011
Council MemberDon JacobsonJanuary 4, 2011
Council MemberMichael KnightJanuary 2, 2013
Council MemberSheri BukkilaJanuary 2, 2013
Council MemberJulie TrudeJanuary 4, 2011
City Administrator / City ClerkJames DickinsonAppointed
Community Development DirectorWill NeumeisterAppointed
Director of Public Works / City EngineerDavid BerkowitzAppointed
Finance ManagerLee BrezinkaAppointed
Building OfficialDon OlsonAppointed
Fire ChiefDan WinkelAppointed
AttorneyHawkins & Baumgartner, P.A.Appointed
Fiscal ConsultantsEhlers & Associates, Inc.Appointed
10
CITY OF ANDOVER
Organizational Chart
11
12
II. FINANCIAL SECTION
13
14
15
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
As management of the City of Andover, we offer readers of the City’s financial statements this narrative overview and analysis of the
financial activities of the City for the fiscal year ended December 31, 2009. We encourage readers to consider the information presented here
in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 2 through 9 of this
report.
Financial Highlights
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $152,904,917 (Net assets). Of this amount,
$24,317,392 (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 $3,399,377, primarily due to the completion of a development project.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $40,488,075.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Reserved$ 49,012207,515$ $ 401,70120,305,482$ $20,963,710
Designated4,120,897 1,691,625 14,839,789-20,652,311
Undesignated - (458,423) (669,523)(1,127,946)
-
$ 4,328,412$ 1,282,214$20,305,482$14,571,967$40,488,075
The City’s total long-term liabilities decreased by $1,787,349 during the current fiscal year, primarily due to the scheduled debt service
payments made in 2009.
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental activities:
Bonds payable$ 52,370,000$ 1,340,000$ 49,845,000(3,865,000)$
Other post employment benefits 36,096 (12,701)
43,966 6 7,361
Compensated absences 504,893 (306,882)
343,595 5 41,606
Total governmental activities52,910,989 1,727,561(4,184,583)50,453,967
Business-type activities:
Bonds aable 14,680,000 1,025,000 375,00015,330,000
py()
Other post employment benefits6,370 (1,914)
8,374 1 2,830
Compensated absences 107,333 (45,611)
58,824 1 20,546
Total business-type activities14,793,703 1,092,198 (422,525)15,463,376
Total City long-term liabilities67,704,692$ $ 2,819,759$ (4,607,108)$65,917,343
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City’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’s finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City’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 is
improving or deteriorating.
16
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in
net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.
uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public
safety, public works, sanitation, parks and recreation, recycling and economic development. The business-type activities of the City 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, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
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 spendable 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 maintains eight 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, 2006 Economic Development Authority (EDA) Public Facility Lease Revenue Refunding Bonds Debt Service Fund, 2007 EDA Public
Facility Lease Revenue Refunding Bonds Debt Service Fund 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 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 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 City. Fiduciary funds are not
reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own
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.
17
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
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 78 of this report.
Other information.
The combining statements referred to earlier in connection with non-major governmental funds is presented
immediately following the required supplementary information on budgetary comparisons, and on the modified approach for streets and trails
infrastructure. Combining and individual fund statements and schedules can be found on pages 85 through 123 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City, assets
exceeded liabilities by $152,904,917 at the close of the most recent fiscal year.
The largest portion of the City’s net assets ($120,334,834 or 79 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. It does not include any refunding debt
that has not met the refunding date of the original issue. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to
liquidate these liabilities.
CITY OF ANDOVER’S NET ASSETS
Governmental ActivitiesBusiness-Type ActivitiesTotals
200820092008200920082009
Current and other assets47,312,524$$47,775,309$11,067,643$ 12,286,615$58,380,167$60,061,924
Capital assets115,149,769115,419,87245,716,052 45,699,962160,865,821161,119,834
Total assets162,462,293163,195,18156,783,695 57,986,577219,245,988221,181,758
Long-term liabilities
outstanding52,910,98950,453,96714,793,703 15,463,37667,704,69265,917,343
Other liabilities1,657,287 1,651,643378,469 707,8552,035,7562,359,498
Total liabilities54,568,27652,105,61015,172,172 16,171,23169,740,44868,276,841
Net assets:
Invested in capital assets,
net of related debt79,644,76983,394,87237,606,052 36,939,962117,250,821120,334,834
8,345,185 8,252,691 -8,345,1858,252,691
Restricted
-
19,442,00819,904,063 4,005,471 4,875,384 23,909,534 24,317,392
Unrestricted
Total net assets$107,894,017$111,089,571$41,611,523$ 41,815,346$149,505,540$152,904,917
A portion of the City's net assets represents resources that are subject to external restrictions on how they may be used. The remaining
balance of unrestricted net assets ($24,317,392) may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the City as a
whole, as well as for its separate governmental and business-type activities.
18
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
Government-wide Activities
Governmental activities increased the City's net assets by $3,195,554 and business-type activities increased net assets by $203,823. Key
elements of the activities are as follows:
City of Andover's Changes in Net Assets
Governmental ActivitiesBusiness-Type ActivitiesTotal
200820092008200920082009
Revenues:
Program revenues:
Charges for services3,080,182$$ 2,923,000$4,153,884$4,421,065$7,234,066$7,344,065
Operating grants
and contributions917,618 966,635- 917,618966,635
-
Capital grants
and contributions1,069,607 1,631,929142,133793,5891,211,7402,425,518
General revenues:
Property taxes9,752,701 10,175,519-9,752,70110,175,519
-
Tax increment1,783,270 1,930,669-1,783,2701,930,669
-
Grants and contributions
not restricted to
specific programs274,402 131,084- 274,402131,084
-
Unrestricted investments
earnings1,514,012 1,032,507372,510373,8931,886,5221,406,400
Total revenues18,391,792 18,791,3434,668,5275,588,54741,851,66229,048,417
Expenses:
General government2,505,105 2,413,916-2,505,1052,413,916
-
Public safety4,035,884 4,237,401-4,035,8844,237,401
-
Public works5,144,197 3,776,367-5,144,1973,776,367
-
Parks and recreation2,963,218 2,880,595-2,963,2182,880,595
-
Recycling85,397 86,949- 85,39786,949
-
Economic development540,285 481,632- 540,285481,632
-
Interest on long-term debt2,219,130 2,146,960-2,219,1302,146,960
-
Water - -2,563,7812,594,7132,563,7812,594,713
Sewer - -1,794,8911,831,5051,794,8911,831,505
Storm sewer - -521,975536,619 521,975536,619
Total expenses17,493,216 16,023,8204,880,6474,962,83722,373,86320,986,657
Increase (decrease) in net
assets before gain on the
sale of capital assets and
transfers898,576 2,767,523(212,120)625,710 686,4563,393,233
Gain on the sale of
capital assets234,070 6,144- 234,0706,144
-
Transfers416,874 421,887(416,874)(421,887)
- -
Increase in net assets1,549,520 3,195,554(628,994)203,823 920,5263,399,377
Net assets - beginning106,344,497107,894,01742,240,51741,611,523148,585,014149,505,540
Net assets - ending$ 111,089,571107,894,017$ 41,611,523$$41,815,346$ 152,904,917149,505,540$
19
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - Revenues
Grants and contributions
Unrestricted investments
Charges for services
not restricted for specific
earnings
15.5%
programs
5.5%
0.7%
Gain (loss) on the sale of
Tax increment
capital assets
10.3%
0.0%
Capital grants and
contributions
8.7%
Operating grants and
contributions
5.1%
Property taxes
54.2%
Governmental Activities - Expenses
General government
Interest on long-term
15.1%
debt
13.4%
Recycling
0.5%
Economic development
3.0%
Parks and recreation
Public safety
18.0%
26.4%
Public works
23.6%
20
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
Business-Type Activities
Business-type activities increased net assets by $203,823. Below are graphs showing the business-type activities revenue and expense
comparisons:
Business-Type Activities - Revenues
Unrestricted
investments earnings
6.7%
Capital grants and
contributions
14.2%
Charges for services
79.1%
Business-Type Activities - Expenses
Storm sewer
11%
Water
52%
Sewer
37%
21
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
Financial Analysis of the Government's Funds
Governmental Funds
. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, 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's governmental funds reported combined ending fund balances of $40,488,075. Approximately
48 percent of this total amount ($19,524,365) constitutes unreserved fund balance. The remainder of the fund balance ($20,963,710) is
reserved because it has already been committed 1) to provide for prepaid items ($112,054), 2) to provide for inventory ($109,329), 3) to
provide for economic development ($9,828), 4) to pay debt service ($20,305,482) and 5) bond proceeds specified for a project ($427,017).
Major Funds
The general fund increased by $153,377 in 2009, which was a $223,582 change from the final budget. The final budget showed a decrease
in fund balance of $70,205. The increase in fund balance is due to employee furloughs and various departments under-spending.
The water and sewer trunk capital projects funds fluctuate based on development activity and whether there is any cost sharing for pipe over-
sizing, extra depth, etc. In 2009, the water trunk fund expenditures are primarily for the refurbishing of a water tower. The sewer trunk fund
continues to receive funds from the sewer enterprise fund to be set aside for future replacements.
The road and bridge capital projects fund increased by $697,781 primarily due to the collection of state aid construction dollars for prior year
projects.
The tax increment capital projects fund increased by $769,297 due to the lack of any improvements taking place in the tax increment
districts.
The permanent improvement revolving capital projects fund decreased by $284,751 due to the transfer out for debt service payments
exceeding special assessment revenues.
Nonmajor Funds
The community center special revenue fund increased by $165,276 due to the first full year of lease payments. Half of the building is leased
to the Greater Minneapolis YMCA and they started making lease payments in 2008. The City received a partial lease payment in 2008 of
$235,686 and years 2009 through 2033 will be receiving scheduled lease payments between $626,020 and $635,000 annually with a final
lease payment in 2034 of $287,567. Future YMCA lease payments will significantly reduce the City’s obligation to finance annual debt
service.
The 2009A G.O. state aid refunding bonds debt service fund increased by $949,415 due to the issuance of bonds for the purpose of refunding
the 2001B state aid bonds on February 1, 2010.
The 2005A G.O. improvement bonds debt service fund decreased by $562,810 due to its annual debt service obligations.
The open space referendum bonds debt service fund decreased by $156,667 due to the transfer of funds to the open space referendum bonds
capital projects fund to offset the purchase of open space.
The fluctuation of fund balance for the equipment certificate capital projects funds depends on when the bonds are issued and when the
purchases are actually made.
The open space referendum bonds capital projects fund decreased by $600,693 due to the acquisition of open space purchased in December
2009 as bonds will not be issued until February 2010.
Proprietary funds
. The City’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 $4,874,224 (water $2,023,075, sewer $2,682,597 and
storm sewer $168,552) and internal service funds of $283,335. The enterprise funds had a net increase in net assets in 2009 of $172,651
(water $180,709, sewer $44,079 and storm sewer ($52,137)). Internal service funds had a net increase in net assets of $144,110.
22
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
Capital Asset and Debt Administration
Capital assets
. The City’s investment in capital assets for its governmental and business type activities as of December 31, 2009, amounts to
$161,119,834 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery and
equipment.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program, which includes streets and trails. Under GASB Statement No. 34, eligible infrastructure capital assets are not required
to be depreciated under the following requirements:
1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up-to-
date inventory; (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 2009, 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, 2009, the City’s street and trail system was rated at an Overall Condition Index (OCI) of 81, 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 $1,666,216 on
street and trail maintenance for the year ending December 31, 2009. These expenditures delayed deterioration; however, the overall
condition of the system increased slightly (80 OCI to an 81 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$ $ 956,68882
20041,000,000 1,847,06682
20051,000,000 1,655,71583
20061,150,000 1,228,98182
20071,150,000 1,256,43381
20081,150,000 2,244,71380
20091,150,000 1,666,21681
23
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
Primar Government
y
BeginningEnding
BalanceAdditionsDeletionsBalance
Governmental activities:
Land and improvements$ 8,041,308$ 955,763$ -$ 8,997,071
Streets and trails 79,153,416 394,276 79,547,692-
Construction in progress 309,414 (309,414) -
-
Buildings and improvements 26,381,584 275,875 26,657,459-
4 46,862 411,116
Furniture and equipment364,25
-
Machinery and equipment 6,418,351 426,863 (81,484) 6,763,730
Other park improvements 5,019,920 107,466 5,127,386
-
Total capital assets 125,688,247 2,207,105 (390,898) 127,504,454
Less accumulated depreciation for:
Buildings and improvements 4,453,300 893,836 5,347,136
-
quipment 149,055 54,453 203,508
Furniture and e
-
Machinery and equipment 4,488,134 419,433 (75,364) 4,832,203
Other park improvements 1,447,989 253,746 - 1,701,735
Total accumulated depreciation10,538,478 1,621,468 (75,364) 12,084,582
Governmental activitie
s
capital assets - net 115,149,769 585,637 (315,534)115,419,87
2
Business-type activities:
Land and improvements730,243 730,243
- -
Construction in progress - 776,911 776,911
-
Buildings and improvements 14,810,983 14,810,983-
-
Furniture and equipment 61,390 61,390
- -
Machinery and equipment 1,226,773 24,415 1,251,188
-
Collection and distribution 48,482,600 793,589 49,276,189-
Total capital assets
being depreciated 1,594,91565,311,989 - 66,906,90 4
Less accumulated depreciation for:
Buildings and improvements 4,596,132 522,319 5,118,451
-
Furniture and equipment 17,221 8,483 25,704
-
Machinery and equipment 817,193 95,125 912,318
-
Collection and distribution 14,165,391 985,078 15,150,469-
Total accumulated depreciation19,595,937 1,611,005 21,206,942-
Business-type activities
capital assets - net 45,716,052 (16,090) 45,699,962-
Total capital assets$160,865,821$ 569,547$ (315,534)$161,119,834
Additional information on the City’s capital assets can be found in Note 5.
Long-term debt
. At the end of the current fiscal year, the City had total long-term debt outstanding of $65,837,152, a decrease of
$1,825,074 from 2008. General obligation revenue bonds ($50,825,000) were used to finance the construction of the water treatment facility
and the community center, and the refunding of portions of the community center bonds and water treatment facility bonds. Special
assessment bonds ($2,450,000) financed improvement projects within the City and are assessed to the benefiting properties. Tax increment
bonds ($2,515,000) financed the City’s economic development plan within tax increment districts. Certificates of indebtedness ($1,420,000)
financed capital equipment purchases. Capital improvement bonds ($2,775,000) 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
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2009
revolving bonds ($2,635,000) financed improvement projects within the City and are assessed to the benefiting properties. State aid bonds
($2,555,000) were used to finance Municipal State Aid (MSA) eligible road projects and the refunding of portions of the state aid bonds.
Additional long-term debt in the amount of $662,152 is for compensated absences.
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
G.O. revenue bonds$ 15,330,00035,495,000$ 50,825,000$
Special assessment bonds -2,450,000 2,450,00 0
Tax increment bonds2,515,000 - 2,515,00
0
0
Certificates of indebtedness 1,420,000 -1,420,00
Capital improvement bonds2,775,000 - 2,775,00 0
Permanent improvement revolving bonds2,635,000 - 2,635,00 0
s -2,555,000 2,555,00 0
State aid bond
Total bonds payable49,845,00015,330,00065,175,000
Compensated absences 120,546541,606 662,152
Total50,386,606$ 15,450,546$ 65,837,152$
The City maintains an AA+ rating with a stable outlook from Standard and Poor’s.
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Taxable Market Value. The
current debt limitation for the City is $89,477,868. Only $21,716,412 of the City's outstanding debt is counted within the statutory limitation.
Additional information on the City’s long-term debt can be found in Note 6 and 7.
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.
25
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26
BASIC FINANCIAL STATEMENTS
27
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28
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET ASSETSStatement 1
December 31, 2009
Primary Government
GovernmentBusiness-TypeTotals
ActivitiesActivities20092008
Assets:
Cash and investments 22,203,836$$4,542,444$26,746,280$24,921,129
Cash and investments with escrow agent18,137,5756,492,26424,629,83923,687,343
Accrued interest373,773125,253 499,026738,135
Due from other governmental units33,3717,700 41,07177,448
Accounts receivable - net235,237990,651 1,225,8881,231,482
Prepaid items113,80421,500 135,304136,665
Property taxes receivable:
Unremitted139,326- 139,32693,071
Delinquent312,988- 312,988326,285
Special assessments receivable:
Unremitted1,0263,202 4,2282,662
Delinquent132,56870,431 202,999174,810
Deferred4,393,638- 4,393,6385,265,719
Notes receivable1,525,773- 1,525,7731,537,488
Inventories - at cost172,39433,170 205,564187,930
Capital assets - net
Nondepreciable88,544,7631,507,15490,051,91788,234,381
Depreciable26,875,10944,192,80871,067,91772,631,440
Total assets163,195,18157,986,577221,181,758219,245,988
Liabilities:
Interfund payable1,160(1,160) --
Accounts payable175,62847,466 223,094200,075
Contracts payable203,439333,586 537,025233,292
Developer advances20,000- 20,00010,000
Deposits payable51,7012,234 53,93559,639
Due to other governmental units103,14926,164 129,313108,041
Salaries payable144,78921,805 166,594133,796
Unearned revenue59,227- 59,22797,172
Accrued interest payable892,550277,760 1,170,3101,193,741
Other post employment benefits:
Due in more than one year67,36112,83080,19142,466
Compensated absences:
Due within one year54,16112,054 66,21561,222
Due in more than one year487,445108,492 595,937551,004
Bonds/notes payable:
Due within one year6,709,000455,000 7,164,0004,240,000
Due in more than one year43,136,00014,875,00058,011,00062,810,000
Total liabilities52,105,61016,171,23168,276,84169,740,448
Net assets:
Invested in capital assets, net of related debt83,394,87236,939,962120,334,834117,250,821
Restricted for:
Debt service2,078,837- 2,078,8372,860,501
Capital improvements427,017- 427,017485,494
Tax increment purposes5,746,837- 5,746,8374,999,190
Unrestricted19,442,0084,875,38424,317,39223,909,534
Total net assets$111,089,571$41,815,346$152,904,917$149,505,540
The accompanying notes are an integral part of these financial statements.
29
CITY OF ANDOVER, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2009
Program Revenues
ChargesOperatingCapital
ForGrants andGrants and
ExpensesServicesContributionsContributions
Functions/Programs
Primary government:
Government activities:
General government 2,413,916$ $483,639$9,783$-
Public safety 4,237,401412,113306,874-
Public works 3,776,367316,451593,511 1,529,786
Parks and recreation 2,880,5951,495,779 -102,143
Recycling86,94929,47956,467-
Economic development481,632185,539 --
Interest on long-term debt 2,146,960- --
Total government activities 16,023,8202,923,000966,635 1,631,929
Business-type activities:
Water 2,594,7132,127,676 -338,740
Sewer 1,831,5051,967,997 -280,801
Storm sewer536,619325,392 -174,048
Total business-type activities 4,962,8374,421,065 -793,589
Total primary government$ 20,986,657$7,344,065$966,635$ 2,425,518
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
ActivitiesActivities20092008
$(1,920,494)$-$(1,920,494)$(1,858,024)
(3,518,414)-(3,518,414)(2,964,200)
(1,336,619)-(1,336,619)(3,321,024)
(1,282,673)-(1,282,673)(1,733,379)
(1,003)- (1,003)(1,920)
(296,093)- (296,093)(328,132)
(2,146,960)-(2,146,960)(2,219,130)
(10,502,256)-(10,502,256)(12,425,809)
-(128,297) (128,297)(576,349)
-417,293 417,293216,569
-(37,179) (37,179)(224,850)
-251,817 251,817(584,630)
(10,502,256)251,817(10,250,439)(13,010,439)
General revenues:
General property taxes10,175,519-10,175,5199,752,701
Tax increment collections1,930,669-1,930,6691,783,270
Grants and contributions not
restricted to specific programs131,084- 131,084274,402
Unrestricted investment earnings1,032,507373,8931,406,4001,886,522
Gain on sale of capital assets6,144- 6,144234,070
Transfers421,887(421,887) --
Total general revenues, gain on sale of
capital assets and transfers13,697,810(47,994)13,649,81613,930,965
Change in net assets3,195,554203,8233,399,377920,526
Net assets - beginning107,894,01741,611,523149,505,540148,585,014
Net assets - ending$111,089,571$41,815,346$152,904,917$149,505,540
31
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2009
2006 EDA Public 2007 EDA Public
Facility Lease Facility Lease
Revenue Revenue
Refunding BondsRefunding BondsWater TrunkSewer Trunk
GeneralDSFDSFCPFCPF
Assets:
Cash and investments$3,586,725$583$583$ 2,746,377$2,514,380
Cash and investments with escrow agent-9,760,0926,705,279 --
Accrued interest10,155176,331121,224 10,57111,788
Due from other governmental units33,371-- --
Accounts receivable - net74,449-- --
Interfund receivable670,000-- 61,000615,000
Prepaid items103,804-- --
Property taxes receivable:
Unremitted68,275-- --
Delinquent183,242-- --
Special assessments receivable:
Unremitted446-- 40-
Delinquent17,013-- 13,611-
Deferred--- 329,41278,510
Notes receivable--- --
Inventories - at cost103,711-- --
Total assets4,851,1919,937,0066,827,086 3,161,0113,219,678
Liabilities and Fund Balances
Liabilities:
Interfund payable-5,0005,000 --
Accounts payable84,174----
Contracts payable20,165--138,104-
Developer advances--- --
Deposits payable11,892-- 5,7415,741
Due to other governmental units86,360-- 543543
Salaries payable119,934-- --
Deferred revenue200,254-- 343,02378,510
Total liabilities522,7795,0005,000 487,41184,794
Fund balances:
Reserved for:
Prepaid items103,804-- --
Inventory103,711-- --
Economic development--- --
Debt service-9,932,0066,822,086 --
Projects--- --
Unreserved reported in:
Designated:
General fund4,120,897-- --
Special revenue funds--- --
Capital projects funds--- 2,673,6003,134,884
Undesignated:
Special revenue funds-----
Capital projects funds-----
Total fund balances4,328,4129,932,0066,822,086 2,673,6003,134,884
Total liabilities and fund balances$4,851,191$9,937,006$6,827,086$ 3,161,011$3,219,678
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 and other post employment benefits, are not due and payable in the current period and,
therefore, are not reported in the funds.
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements.
32
Statement 3
TaxPermanent
tImprovementOtherIntraTotals
Road &Incremen
BridgeProjectsRevolvingGovernmentalActivityGovernmental Funds
CPFCPFCPFFundsEliminations20092008
$ 3,218,237$ 4,265,724$ 1,338,657$4,290,037$-$21,961,303$ 21,521,788
- --1,672,204-18,137,575 17,194,324
9,886 12,9034,58815,510- 372,956610,742
- ---- 33,37169,842
- --160,788- 235,237203,914
- ---(1,346,000) --
- --8,250- 112,054114,915
9,926 37,249-23,876- 139,32693,071
32,195 30,247-67,304- 312,988326,285
540 ---- 1,026272
6,288 - 62,66832,988- 132,568112,605
1,261,2931,032 2,329,456393,935-4,393,638 5,265,719
30,761 1,431,000-64,012-1,525,7731,537,488
- --5,618- 109,32993,836
4,569,126 5,778,155 3,735,3696,734,522(1,346,000)47,467,144 47,144,801
- --1,336,000(1,346,000) --
-3,513-72,275- 159,962160,575
41,742 --3,428- 203,439219,503
- 20,000--- 20,00010,000
- --28,327- 51,70155,955
1,6857,805-3,358- 100,29484,844
- --18,546- 138,480106,929
1,330,537 1,343,279 2,392,124617,466-6,305,193 7,220,269
1,373,964 1,374,597 2,392,1242,079,400(1,346,000)6,979,069 7,858,075
- --8,250- 112,054114,915
---5,618-109,32993,836
- --9,828- 9,8282,260
- --3,551,390-20,305,482 20,132,603
- --427,017- 427,017604,494
- ----4,120,897 3,981,230
- --1,691,625-1,691,625 1,540,720
3,195,162 4,403,558 1,343,24589,340-14,839,789 13,483,426
- --(458,423)-(458,423) (599,461)
- --(669,523)-(669,523)(67,297)
3,195,162 4,403,558 1,343,2454,655,122-40,488,075 39,286,726
$ 4,569,126$ 5,778,155$ 3,735,369$6,734,522$(1,346,000)$47,467,144$ 47,144,801
$40,488,075$ 39,286,726
115,419,872 115,149,769
6,245,966 7,123,097
282,175169,237
(51,346,517) (53,834,812)
$111,089,571$107,894,017
33
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2009
2006 EDA Public 2007 EDA Public
Facility Lease Facility Lease
Revenue Revenue
Refunding Bonds Refunding Bonds Water TrunSewer Trun
kk
GeneraDSFDSFCPFCPF
l
Revenues:
General property taxes$6,588,601$-$-$-$-
Tax increment collections--
- - -
Licenses and permits291,903-
- - -
Intergovernmental595,002-
- - -
Special assessments-39,16424,572
- -
Charges for services701,289-
- - -
Fines110,779-
- - -
Investment income76,772423,092290,83463,10683,072
Miscellaneous:
Park dedication fees--
- - -
Connection charges-18,0332,086
- -
Other130,523-2,996
- -
Total revenues8,494,869423,092290,834120,303112,726
Expenditures:
Current:
General government2,161,367-
- - -
Public safety4,005,406-
- - -
Public works1,428,549234,90960,972
- -
Parks and recreation835,636-
- - -
Recycling85,527---
-
Economic development--
- - -
Unallocated19,540-
- - -
Capital outlay:
General government--
- - -
Public safety--
- - -
Public works--
- - -
Parks and recreation2,397-
- - -
Economic development--
- - -
Debt service:
Principal retirement--
- - -
Interest-424,228291,983-
-
Paying agent fees-2,0002,000-
-
Professional services--
- - -
Total expenditures8,538,422426,228293,983234,90960,972
Revenues over (under) expenditures(43,553)(3,136)(3,149)(114,606)51,754
Other financing sources (uses):
Transfers in196,930-350,000
- -
Transfers out-(165,643)
- - -
Bonds issued----
-
Refunding bonds issued---
- -
Bond premium--
- - -
Proceeds from the sale of capital assets--
- - -
Total other financing sources (uses)196,930(165,643)350,000
- -
Net increase (decrease) in fund balance153,377(3,136)(3,149)(280,249)401,754
Fund balance - January 14,175,0359,935,1426,825,2352,953,8492,733,130
Fund balance - December 31$4,328,412$9,932,006$6,822,086$2,673,600$3,134,884
The accompanying notes are an integral part of these financial statements.
34
Statement
4
TaxPermanen
t
RoadIncremenImprovemenOtheIntraTotals
&ttr
Governmental Funds
BridgProjectsRevolvinGovernmentaActivit
egly
CPFCPFCPFFundsElimination20092008
s
$1,135,262$-$-$2,444,280$-$10,168,143$9,695,103
-1,951,343-1,951,3431,762,119
- -
---291,903525,339
- -
741,10566,362-252,1451,654,6141,175,205
-
359,4941,096937,75859,5071,421,5911,638,006
-
---878,3701,579,6591,724,052
-
---110,779104,930
- -
79,615(74,217)15,31572,0941,029,6831,508,265
-
---41,21641,216133,585
-
---20,119254,903
- -
13,553-20,678881,703(30,600)1,018,853800,857
2,329,0291,944,584973,7514,629,315(30,600)19,287,90319,322,364
---81,2952,242,6622,366,574
-
---10,004-4,015,4103,796,965
1,603,296-28,502188,904-3,545,1324,843,288
---1,055,4891,891,1251,953,822
-
---85,52786,631
- -
-355,287-122,361477,648538,293
-
---19,54017,999
- -
---35,64035,640368,094
-
---299,319299,319
- -
37,352--138,766176,118657,837
-
---1,006,4701,008,867355,053
-
---79,678
- - -
---3,865,0003,865,0003,460,000
-
--
-1,462,022-2,178,2332,253,223
---5,794-9,79411,645
---29,47129,4714,000
-
1,640,648355,28728,5028,300,53519,879,48620,793,102
-
688,3811,589,297945,249(3,671,220)(30,600)(591,583)(1,470,738)
9,400--2,750,141(2,718,941)587,530580,343
-(820,000)(1,230,000)(699,541)2,749,541(165,643)(163,469)
---385,000385,000630,000
-
---955,000955,000
- -
---18,78118,781
- -
---12,26412,264553,879
-
9,400(820,000)(1,230,000)3,421,64530,6001,792,9321,600,753
697,781769,297(284,751)(249,575)1,201,349130,015
-
2,497,3813,634,2611,627,9964,904,697-39,286,72639,156,711
$3,195,162$4,403,558$1,343,245$4,655,122$-$40,488,075$39,286,726
35
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36
CITY OF ANDOVER, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2009
20092008
Amounts reported for governmental activities in the
statement of activities (page 35) are different because:
Net changes in fund balances - total governmental funds (page 35) 1,201,349$ 130,015$
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. (101,524)(144,513)
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net assets (i.e., sales, trade-ins, and donations). 371,627(326,623)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds. (877,131)(936,319)
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. 2,525,0002,830,000
Vested post employment benefits are reported in the governmental funds when amounts are
paid. The statement of activities reports the benefits earned during the years. This amount (31,265)(36,096)
is the net effect of employee benefits earned and paid during the year.
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. (5,440)39,051
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. 112,938(5,995)
Change in net assets of governmental activities (page 31)$ 3,195,554$1,549,520
The accompanying notes are an integral part of these financial statements.
37
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2009
WaterSewerStorm Sewer
Assets:
Current assets:
Cash and cash equivalents$ 2,356,254$ 2,093,701$ 92,489
Restricted assets:
Cash and cash equivalents 6,492,264 - -
Accrued interest 118,144 6,873 236
Due from other governmental units - 7,700 -
Accounts receivable - net 306,387 586,978 97,286
Prepaid items 10,000 11,500 -
Special assessments receivable:
Unremitted 1,581 1,452 169
Delinquent 21,957 44,357 4,117
Inventories - at cost 33,170 - -
Total current assets 9,339,757 2,752,561 194,297
Noncurrent assets:
Capital assets:
Land 730,243 - -
Buildings and structures 14,810,983 - -
Machinery and equipment 322,939 517,798 471,841
Distribution and collection system 15,606,149 23,734,262 9,935,778
Construction in progress 776,911 - -
Total capital assets 32,247,225 24,252,060 10,407,619
Less: Allowance for depreciation (9,758,579) (8,250,455) (3,197,908)
Total noncurrent assets 22,488,646 16,001,605 7,209,711
Total assets 31,828,403 18,754,166 7,404,008
Liabilities:
Current liabilities:
Accounts payable 40,898 6,524 44
Contracts payable 324,733 4,362 4,491
Deposits payable 2,234 - -
Interest payable 277,760 --
Due to other governmental units19,2906,874 -
Salaries payable 10,616 8,712 2,477
Bonds payable - due within one year 455,000 - -
Compensated absences payable - due within one year 6,313 3,868 1,873
Total current liabilities 1,136,844 30,340 8,885
Noncurrent liabilities:
Other post employment benefits - due in more than one year 8,019 4,811 -
Bonds payable - due in more than one year 14,875,000 - -
Compensated absences payable - due in more than one year 56,819 34,813 16,860
Total noncurrent liabilities 14,939,838 39,624 16,860
Total liabilities 16,076,682 69,964 25,745
Net assets:
Invested in capital assets, net of related debt 13,728,646 16,001,605 7,209,711
Unrestricted 2,023,075 2,682,597 168,552
Total net assets$15,751,721$18,684,202$ 7,378,263
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
business-type activities.
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
2009200820092008
$ 3,299,9314,542,444$ 242,533$ 99,410$
6,493,0196,492,264 - -
125,253 126,280 817 1,113
7,700 7,606 - -
990,651 1,027,568 - -
21,500 20,000 1,750 1,750
3,202 2,390 - -
70,431 62,205 - -
33,170 28,644 63,065 65,450
12,286,615 11,067,643 308,165 167,723
730,243 730,243 - -
14,810,983 14,810,983 - -
1,312,578 1,288,163 - -
49,276,189 48,482,600 - -
776,911 - - -
66,906,904 65,311,989 - -
(21,206,942) (19,595,937) - -
45,699,962 45,716,052 - -
57,986,577 56,783,695 308,165 167,723
47,466 17,240 15,666 22,260
333,586 13,789 - -
2,234 3,684 - -
277,760 269,918 - -
26,16423,097 2,855 100
21,805 20,729 6,309 6,138
455,000 375,000 - -
12,054 10,733 - -
1,176,069 734,190 24,830 28,498
12,830 6,370 - -
14,875,000 14,305,000 - -
108,492 96,600 - -
14,996,322 14,407,970 - -
16,172,391 15,142,160 24,830 28,498
36,939,962 37,529,071 - -
4,874,224 4,112,464 283,335 139,225
$ 41,814,186$ 41,641,535$ 283,335$139,225
$ 41,814,186$ 41,641,535
1,160 (30,012)
$ 41,815,346$ 41,611,523
39
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 2009
WaterSewerStorm Sewer
Operating revenues:
User charges 2,095,070$$1,961,118$321,316
Meters11,058 --
Permit fees2,350 --
Penalties6,6056,8791,008
Other12,593 -3,068
Total operating revenues2,127,6761,967,997325,392
Operating expenses:
Personal services408,021310,157209,259
Supplies171,71817,97327,345
Other service charges534,409120,65962,602
Disposal charges-893,462-
Depreciation856,589510,071244,345
Total operating expenses1,970,7371,852,322543,551
Operating income (loss)156,939115,675(218,159)
Nonoperating revenues (expenses):
Investment income327,63644,2831,974
Bond premium1,975 --
Interest expense(659,974) --
Total nonoperating revenues (expenses)(330,363)44,2831,974
Income (loss) before contributions
and transfers(173,424)159,958(216,185)
Capital contributions338,740280,801174,048
Transfers:
Transfers in165,643 --
Transfers out(150,250)(396,680)(10,000)
Total transfers15,393(396,680)(10,000)
Change in net assets180,70944,079(52,137)
Net assets - January 115,571,01218,640,1237,430,400
Net assets - December 31$15,751,721$18,684,202$7,378,263
Net changes in net assets reported above
Amounts reported for business-type activities in the statement of activities are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business-type activities.
Change in net assets of business-type activities
The accompanying notes are an intregral part of these financial statements.
40
Statement 7
Totals
IntraGovernmental Activities -
ActivityTotalsInternal Service Funds
Eliminations2009200820092008
$ -$ 4,377,504$4,119,838$961,722$ 808,392
-11,05812,252- -
- 2,3502,650- -
- 14,49218,349- -
- 15,66179634,933 13,148
- 4,421,0654,153,885996,655 821,540
- 927,437860,314325,777 311,804
- 217,036241,087244,820 286,800
(30,600) 687,070660,282284,772 234,140
- 893,462862,827- -
- 1,611,0051,607,777- -
(30,600) 4,336,0104,232,287855,369 832,744
30,600 85,055(78,402)141,286 (11,204)
- 373,893372,5102,824 5,747
- 1,975-- -
- (659,974)(648,899)- -
- (284,106)(276,389)2,824 5,747
30,600 (199,051)(354,791)144,110 (5,457)
- 793,589142,133- -
- 165,643163,469- -
(30,600) (587,530)(580,343)- -
(30,600) (421,887)(416,874)- -
- 172,651(629,532)144,110 (5,457)
- 41,641,53542,271,067139,225 144,682
$ -$ 41,814,186$41,641,535$283,335$ 139,225
$ 172,651$(629,532)
31,172538
$ 203,823$(628,994)
41
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2009
WaterSewerStorm Sewer
Cash flows from operating activities:
Receipts from customers and users$2,193,431$1,936,536$318,883
Payment to suppliers(365,707)(1,026,200)(90,647)
Payment to employees(395,430)(303,710)(207,548)
Net cash flows from operating activities1,432,294606,62620,688
Cash flows from noncapital financing activities:
Receipt of advances from other funds-
- -
Payment of advances to other funds-
- -
Transfers in165,643-
-
Transfers out(150,250)(396,680)(10,000)
Net cash flows from noncapital financing activities15,393(396,680)(10,000)
Cash flows from capital and related financing activities:
Acquisition of capital assets(776,911)(7,322)(17,093)
Interest paid on debt(652,132)-
-
Receipt of bonds1,025,000-
-
Receipt of bond premium1,975-
-
Payment of bonds(375,000)-
-
Net cash flows from capital and related financing activities(777,068)(7,322)(17,093)
Cash flows from investing activities:
Investment income325,04547,7172,158
Net increase in cash and cash equivalents995,664250,341(4,247)
Cash and cash equivalents - January 17,852,8541,843,36096,736
Cash and cash equivalents - December 31$8,848,518$2,093,701$92,489
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)$156,939$115,675$(218,159)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation856,589510,071244,345
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units(94)-
-
Decrease (increase) in accounts receivable57,691(14,887)(5,887)
Decrease (increase) in prepaid items1,750(3,250)-
Decrease (increase) in special assessments (16,480)8,064 (622)
Decrease (increase) in inventory (4,526)-
-
Increase (decrease) in accounts payable25,9495,626(1,349)
Increase (decrease) in contracts payable317,0242,124649
Increase (decrease) in deposits payable(1,450)-
-
Increase (decrease) in due to other governmental units1,6731,394-
Increase (decrease) in salaries payable366285425
Increase (decrease) in other post employment benefits4,1972,263-
Increase (decrease) in compensated absences8,0283,8991,286
Total adjustments1,275,355490,951238,847
Net cash provided (used) by operating activities$1,432,294$606,626$20,688
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds$338,740$280,801$174,048
The accompanying notes are an integral part of these financial statements.
42
Statement 8
Totals
Governmental Activities -
TotalsInternal Service Funds
2009200820092008
$ 4,081,5144,448,850$ 996,655$ 821,540$
(1,822,376)(1,482,554) (531,046) (517,411)
(830,466)(906,688) (325,606) (310,304)
2,059,6081,428,672140,003(6,175)
--(60,000)(20,000)
--60,00020,000
165,643163,469
- -
(556,930)(551,194)
- -
(391,287)(387,725)
- -
(801,326)(131,066)
- -
(652,132)(654,374)
- -
1,025,000-
- -
1,975-
- -
(375,000)(360,000)
- -
(801,483)(1,145,440)
- -
374,920369,2413,1205,391
1,241,758264,748143,123(784)
9,792,9509,528,20299,410100,194
$11,034,708$9,792,950$242,533$99,410
$54,455$(107,551)$141,286$(11,204)
1,611,0051,607,777
- -
(94)(441)
- -
36,917(52,612)
- -
(1,500)(3,500)
- -
(9,038)(19,318)
- -
(4,526)(5,883)2,3851,425
30,226(17,978)(6,594)2,104
319,797(2,902)(100)
-
(1,450)1,450
- -
3,067(218)2,755100
1,0766,3731711,500
6,4606,370
- -
13,21317,105
- -
2,005,1531,536,223(1,283)5,029
$2,059,608$1,428,672$140,003$(6,175)
$793,589$142,133$-$-
43
CITY OF ANDOVER, MINNESOTA
STATEMENT OF FIDUCIARY NET ASSETS Statement 9
FIDUCIARY FUNDS
Agency Funds
December 31, 2009
20092008
Assets:
Cash and investments 249,921$ 488,385$
Liabilities:
Accounts payable13111,001
Deposits payable249,790 477,384
Total liabilities$249,921$ 488,385
The accompanying notes are an integral part of these financial statements.
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 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 (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. 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 City considers all revenues, except reimbursement grants, to be available if they are
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 City.
The City reports the following major governmental funds:
General Fund
Theis the City’s primary operating fund. It accounts for all financial resources of the general government,
except those required to be accounted for in another fund.
2006 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.
2007 EDA Public Facility Lease Revenue Refunding Bonds 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 City 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 City reports the following fund types:
Internal Service Funds (ISF)
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
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The
City has elected not to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements.
Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved
external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve
other funds of the City. 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 City’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
notautomatically 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.
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
7. The City Council made supplemental budget appropriations throughout the year. Individual amendments were not
material in relation to the original appropriations which were adjusted.
The following is a listing of General and Special Revenue Funds whose expenditures exceed budget appropriations:
FinalOver
BudgetActualBudget
Special Revenue Funds:
Capital Equipment Reserve$ 74,000$ 94,317$ 20,317
Construction Seal Coating 25,000 62,920 37,920
The expenditures over budget 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, 2009 are planned to be eliminated in 2010. 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
and I). 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.
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
H. PROPERTY TAX REVENUE RECOGNITION
The City levies its property tax for the subsequent year during the month of December and it is certified to Anoka County.
December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such
taxes become a lien on the following January 1. Anoka County is the collecting agency for the levy and remits the collections
to the City three times a year. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying the applicable tax rate to the tax capacity
of individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special assessments,
except for certain prepayments paid directly to the City.
The County Auditor submits a list of taxes to be collected on each parcel of property to the County Treasurer in January of
each year. The County Treasurer collects all taxes and is required to mail copies of all personal property tax statements by
April 15, and copies of all real estate tax statements by April 15, of each year. Property owners are required to pay one-half of
their real estate taxes due by May 15 and the balance by October 15.
If taxes due May 15 are not paid on time, a penalty of 3% is assessed on homesteaded property and 7% on nonhomesteaded
property. An additional 1% penalty is added each month the taxes remain unpaid, until October 15. If the taxes due May 15
are not paid by October 15, a 2% penalty per month is added to homesteaded property and 4% per month to nonhomesteaded
property until January 1.
If the taxes are not paid by January 1, further penalties are added. Penalties and interest apply to both taxes and special
assessments. There are some exceptions to the above penalties, but they are not material.
Within 30 days after the tax settlement date, the County Treasurer is required to pay 70% of the estimated collections of taxes
and special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60
days after settlement, provided that after 45 days interest accrues at the rate of 8% per annum.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not
material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the
current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January
are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the
following January) and taxes and credits not received at the year-end are classified as delinquent and due from County taxes
receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred revenue because
they are not available to finance current expenditures.
I. SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment
improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years
usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by
the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future
installments without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is
made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go
delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the
County’s costs of administering all tax forfeit properties. Pursuant to State Statutes, a property shall be subject to a tax forfeit
sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject
to such sale after five years.
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 City 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, 2009, no interest was capitalized in connection with construction in progress.
Property, plant and equipment of the primary government, as well as the component units, are 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
50
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 2007 of the condition of the streets and trails constructed
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. An 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 - 10Excellent
0
71 - 85Very good
56 - 70Good
41 - 55Fair
26 - 40Poo
r
11 - 25Very poo
r
0 - 10Substandard
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.
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
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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. RECLASSIFICATIONS
Certain amounts presented in prior year data have been reclassified in order to be consistent with the current year’s
presentation.
T. 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 and other post employment benefits, are not
due and payable in the current period and therefore are not reported in the funds.” The details of this ($51,346,517)
difference are as follows:
Bonds payable$(49,845,000)
Accrued interest payable (892,550)
Other post employment benefits (67,361)
Compensated absences (541,606)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net assets - governmental activities$(51,346,517)
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
$282,175 difference are as follows:
Internal Service Funds net assets$ 283,335
Net revenue attributable to business-type activities (1,160)
Net adjustment to increase fund balance - total governmental
funds to arrive at net assets - governmental activitie$ 282,175
s
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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
over their estimated useful lives and reported as depreciation expense.” The details of this ($101,524) difference are as
follows:
Capital outlay$ 1,519,944
Depreciation expense (1,621,468)
Net adjustment to decrease net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities$ (101,524)
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 $371,627 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.$ (6,120)
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. 377,747
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net assets of governmental activities.$ 371,627
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 ($877,131) difference are as follows:
General property taxes deferred revenue:
At December 31, 2008$ (275,364)
At December 31, 2009 282,740
Tax increment taxes deferred revenue:
At December 31, 2008 (50,921)
At December 31, 2009 30,247
Special assessments deferred revenue:
At December 31, 2008 (5,378,324)
At December 31, 2009 4,526,206
Notes receivable deferred revenue:
At December 31, 2008 (1,418,488)
At December 31, 2009 1,406,773
Net adustments to decrease net chanes in fund balances -
jg
total governmental funds to arrive at changes in net assets
of governmental activities$ (877,131)
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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
$2,525,000 difference is as follows:
Debt issued or incurred:
Issuance of certificates of indebtedness (385,000)
Issuance of state aid bonds (955,000)
Principal repayments:
Revenue bonds 390,000
Capital improvement bonds 380,00
0
Special assessment bonds 1,685,000
0
Tax increment bonds760,00
Certificates of indebtedness 490,000
State aid bonds 160,000
Net adjustment to increase net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activitie$ 2,525,00
s0
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 ($5,440) difference are as follows:
Compensated absences$ (36,713)
Accrued interest 31,273
Net adjustment to decrease net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities$ (5,440)
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 $112,938 difference are as follows:
Internal Service Funds change in net assets$ 144,110
Net revenue attributable to business-type activities (31,172)
Net adjustment to increase fund balance - total governmental
funds to arrive at net assets - governmental activities112,938$
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.
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Clerk/Treasurer or in a financial
institution other than 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;
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.
Custodial Credit Risk – Deposits: Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be
returned to it. State statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of
collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2009, the bank balance of
the City’s deposits was covered by federal depository insurance or covered by collateral pledged and held in the City’s name,
except for $70,158 was uncollateralized.
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.
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
As of December 31, 2009, the City had the following investments and maturities:
Investment Maturities (in Years)
CreditFairLess ThanMore Than
Investment TypeRatingValue11 - 56 - 1010
Money marketN/A6,409,669$ $6,409,669$ -
$ -$ -
Certificates of depositN/A5,749,351 2,822,992 2,926,359
- -
Local governmentsA/A1/A21,254,86 321,751 766,145 166,968
4
-
AA1/AA2/AA32,014,807 623,67 1,034,658
4
- 356,475
AAA1,913,209 347,592 864,349 197,776
503,492
U.S. agenciesAAA29,170,93 2,957,3516 880,47323,868,470 1,464,642
FNMA REMICN/A 358,754 53,577 88,302
- 216,875
N/A 172,109 172,109
- - -
Total investments 13,483,02947,043,699$$29,513,558$ 1,505,628$2,541,484
Deposits 4,582,341
Total cash and investment$51,626,04
s0
The following is a reconciliation of the City’s total cash and investment balances at December 31, 2009:
Government-wide statement of net assets:
Cash and investments$ 26,746,280
gent24,629,839
Cash and investments with escrow a
Fiduciary funds statement of net assets 249,921
Total$ 51,626,040
Custodial credit risk - investments – For investments in securities, custodial credit risk is the risk that in the event of a failure of the
counterparty, the City will not be able to recover the value of its investment securities that are in the possession of an outside party.
As of December 31, 2009, $250,000 of the City’s $47,043,699 investments was uninsured and unregistered, with securities held in
the City’s name.
- The City has a formal investment policy that states the City will minimize the risk that the market value of
Interest rate risk
securities in the portfolio will fall due to the changes in general interest rates, by:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
1)
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.
– The City invests in REMIC’s in accordance with State law and the City’s investment policy. These securities are
FNMA REMIC
based on cash flows from payments on underlying mortgages. Therefore, they are sensitive to prepayments by mortgages, which
may result from a decline in interest rates.
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:
Limiting investments to the safest types of securities.
1)
Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisers with which the City will do business.
2)
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be
maintained of approved security broker/dealers selected by creditworthiness. These may include “primary” dealers or
regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1.
All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply:
audited financial statements, proof of National Association of Securities Dealers (NASD) certification, proof of state
registration, completed broker/dealer questionnaire, and certification of having read and understood and agreeing to
comply with the City’s investment policy.
An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be
conducted by the City Administrator.
Concentration of Credit Risk - More than 63% of the City’s investments are in various holdings with U.S. agencies; Federal Home
Loan Bank (1.5%), Federal National Mortgage Association (4.5%), Federal Home Loan Mortgage Corporation (5.8%) and U.S.
Treasury (51.3%). 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.
2) Maximum Maturities - 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 statutes 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, 2009 are as follows:
DelinquentDelinquentSpecial
PropertyTaxAssessmentNote
TaxesIncrementReceivableReceivableTotal
Major Funds:
General Fund$ 75,129$ -$ 75,129
$ -$ -
Water Trunk CPF -293,91 293,910-
0
-
Sewer Trunk CPF -
- 63,283 - 63,283
Road and Bridge CPF 13,200 1,101,048- 22,951 1,137,199
Tax Increment Projects CPF - 1,437,049
6,049 -1,431,000
Permanent Improvement Revolving CPF - 2,065,923- 2,065,923-
Nonmajor Funds 27,595 55,189 452,097
- 369,313
$ $ 6,049$ 1,509,1403,893,477$ $5,524,590
Total115,92
4
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to
liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been
received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue reported in the
governmental funds were as follows:
UnavailableUnearned
Delinquent property taxes receivable:
General Fund$ 183,242$ -
Road & Bridge CPF 32,195
-
Nonmajor Funds 67,304
-
Delinquent tax increment collections:
Tax Increment Projects CPF 30,247
-
Special assessments not yet due:
17,013
General Fun
d
-
Water Trunk CPF 343,023
-
Sewer Trunk CPF 78,510
-
Road & Bridge CPF 1,267,581
-
Tax Increment Projects CPF 1,032
-
Permanent Improvement Revolving CPF 2,392,124
-
Nonmajor Funds 426,922
-
Notes receivable not yet due:
Road & Bridge CPF 30,761
-
Tax Increment Projects CPF 1,312,000
-
Nonmajor Funds 64,012
-
Unearned construction seal coat fees:
Nonmajor Funds - 59,227
Total$ 6,245,966$ 59,227
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, 2009, the remaining balance due of $30,761 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 promissory notes for
$1,624,000. The notes are for the purchase of land within Andover Station North. The notes beared an interest rate of 6% through
December 31, 2008 and then was amended to 4.5% until December 31, 2012, the payoff date. As of December 31, 2009, the remaining
balance due of $1,431,000 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, 2009, the remaining balance due of
$42,938 is offset by deferred revenue, as it is not available to finance current activities.
As part of a housing rehabilitation revolving loan program, the City entered into a loan agreement with a property owner in July 2007.
The loan is for the rehabilitation of a property located within the City. The loan bears an interest rate of 3.0 % and calls for 57 equal
monthly payments to be made to the City through August 2012. As of December 31, 2009, the remaining balance due of $4,391 is offset
by deferred revenue, as it is not available to finance current activities.
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
As part of a housing rehabilitation revolving loan program, the City entered into a loan agreement with a property owner in July 2008.
The loan is for the rehabilitation of a property located within the City. The loan bears an interest rate of 3.0 % and calls for 84 equal
monthly payments to be made to the City through September 2015. As of December 31, 2009, the remaining balance due of $16,683 is
offset by deferred revenue, as it is not available to finance current activities.
Note 5 CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government-wide
statement of net assets. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting
for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A more
detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All other
capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and
depreciation expense have been recorded. Capital asset activity for the year ended December 31, 2009 was as follows:
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements$ 8,041,308$ 955,763$ -$ 8,997,071
Streets and trails 79,153,41 394,276
6
-79,547,692
Construction in progress 309,414 (309,414)
- -
Total capital assets not being depreciated 87,504,138 1,350,039 (309,414) 88,544,763
Capital assets being depreciated:
Buildings and improvements 26,381,584 275,875
-26,657,459
Furniture and equipment 364,254 46,862 411,116
-
Machinery and equipment 6,418,351 426,863 (81,484) 6,763,730
Other park improvements 5,019,920 107,466 5,127,386
-
Total capital assets being depreciated 38,184,109 857,066 (81,484) 38,959,691
Less accumulated depreciation for:
Buildings and improvements 4,453,30 893,836 5,347,136
0
-
Furniture and equipment 149,055 54,453 203,508
-
Machinery and equipment 4,488,134 419,433 (75,364) 4,832,203
Other park improvements 1,447,989 253,746 1,701,735
-
Total accumulated dereciation 10,538,478 1,621,468 75,364 12,084,582
p()
Total capital assets being depreciated - net 27,645,631 (764,402) (6,120) 26,875,109
Governmental activities capital assets - net115,149,769$ $ 585,637$ (315,534)$115,419,872
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
BegnnngEnng
iidi
Primar Government
BalanceAdditionsDeletionsBalance
y
Business-te activities:
yp
apta assets not eng eprecate:
Cilbidid
Land and improvements$ 730,243$ -$ 730,243
$ -
onstructon n progress -77, 77,
Cii69116911
-
Tota capta assets not eng eprecate 7,77, ,57,5
lilbidid3024369111014
-
ata assets enerecate:
Cpilbigdpid
Buildins and imrovements 14,810,983
gp
- -14,810,983
Furnture an equpment , ,
idi6139061390
- -
Macnery an equpment ,,77,5 ,5,
hidi122632441121188
-
oecton anstruton ,,7,5,7,
Clliddiibi4848260093894926189
-
818,00
Total capital assets being depreciated64,581,74
64
-65,399,750
Less accumulated depreciation for:
ngs anmprovements ,5,5, ,5
Bu
ildidi4961322231911841
-5,
Furniture and equipment 17,221 8,483 25,70
4
-
Macnery an equpment 7,5,5 ,
hidi81193912912318
-
Collection and distribution 14,165,391 985,078
-15,150,469
Total accumulated depreciation 19,595,937 1,611,005
-21,206,942
Total capital assets being depreciated - net 44,985,809 (793,001)
-44,192,808
Business-type activities capital assets - net$ 45,716,052$ (16,090)$ 45,699,962-$
Depreciation expense was charged to functions/programs of the primary government as follows:
overnmenta actvtes:
Gliii
General overnment$ 99,761
g
Puc saet 240,606
blify
c wor ,
Pu
bliks283410
Pars an recreaton 993,707
kdi
Economceveomen 3,984
idlpt
Total depreciation expense - governmental activities1,621,468$
Busness-type actvtes:
iiii
Wate 5,5
r$8689
Sewe 510,071
r
torm sewe 244,345
Sr
Total depreciation expense - business-type activities1,611,005$
CONSTRUCTION COMMITMENTS
At December 31, 2009, the City had construction project contracts in progress. The commitments related to the remaining contract
balances are summarized as follows;
ontractRemanng
Cii
Project #ProjectAmountCommitment
09-11Water Treatment Plant Expansion699,500$ $ 273,865
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.
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
IssueMaturityInterestOriginalPayable
DateDateRateIssue12/31/09
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
2004 EDA Pub Fac Lease Rev Bonds4/23/20042/1/20142.125-5.400%19,580,000$ 18,630,000$
2006 EDA Pub Fac Lease Rev Ref Bonds12/1/20062/1/20344.00-4.50%10,000,000 10,000,000
2007 EDA Pub Fac Lease Rev Ref Bonds1/1/20072/1/20344.00-4.50%6,865,000 6,865,000
Total general obligation revenue bonds 36,445,00035,495,000
Special Assessment Bonds:
2005A G.O. Improvement Bonds4/28/20052/1/20112.95-3.65%3,560,000 2,450,000
Tax Increment Bonds:
2003B G.O. Tax Increment Refunding Bonds6/1/20038/1/20102.00-3.00%1,530,000 250,000
2004B G.O. Tax Increment Refunding Bonds3/16/20042/1/20132.00-3.25%4,260,000 2,265,000
Total tax increment bonds5,790,000 2,515,000
Certificates of Indebtedness:
s5/10/20062/1/20103.60-3.65%460,000
2006B G.O. Equipment Certificate
160,000
2007A G.O. Equipment Certificates3/13/20072/1/20114.00%760,000
395,000
2008A G.O. Equipment Certificates9/23/20082/1/20123.50%630,000
480,000
2009A G.O. Equipment Certificates3/26/20092/1/20122.00-2.25%385,000
385,000
Total certificates of indebtedness 2,235,0001,420,000
Capital Improvement Bonds:
2004A G.O. Capital Improvement Bonds3/16/20042/1/20172.00-3.75%3,890,000 2,775,000
Permanent Improvement Revolving (PIR) Bonds:
2003A G.O. PIR Bond6/1/20032/1/20102.00-2.60%4,580,000 820,000
s
2006A G.O. PIR Bond5/10/20062/1/20143.60-3.85%2,450,000 1,815,000
s
Total permanent improvement revolving bonds 7,030,0002,635,000
State Aid Bonds:
s6/5/20012/1/20102.90-5.00%2,755,000 1,600,000
2001B G.O. State Aid Street Bond
2009A G.O. State Aid Street Refunding Bonds3/26/20092/1/20152.25-2.80%955,000
955,000
Total state aid street bonds 3,710,0002,555,000
Total - bonded indebtedness 62,660,00049,845,000
Compensated absences payable -
541,606
Total governmental activities indebtedness 50,386,60662,660,000
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2002 G.O. Water Revenue Bonds5/9/2008/1/20122.30-5.00%9,780,000 7,735,000
2
2007B G.O. Water Revenue Refunding Bonds3/13/20072/1/20234.00-4.25%6,570,000 6,570,000
2009A G.O. Water Revenue Bonds3/26/20092/1/20242.00-4.25%1,025,000 1,025,000
Total general obligation revenue bonds 17,375,000 15,330,000
Compensated absences payable -
120,546
Total business-type activities indebtedness 17,375,00015,450,546
Totaty netenes,5,5,7,5
lCiidbds$8003000$68312
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
G.O. Revenue BondsSpecial Assessment BondsTax Increment Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2010$ 1,646,89405,000$ 4$ 1,850,000$ 52,690$ 780,000$ 68,312
0 45,050
2011 415,000 1,631,101 600,000565,00
10,200
201 1,613,666435,000 580,00 27,875
20
- -
2013 450,000 1,594,744 590,000 9,588
- -
2014 16,925,000 1,150,583
- - - -
2015-20193,040,000 3,286,850
- - - -
2020-20243,700,000 2,607,541
- - - -
2025-20294,530,000 1,748,182
- - - -
2030-20345,595,000 649,756
- - - -
Tota$ 35,495,00$ 15,929,317$ 2,450,000$ 62,890$ 2,515,000$ 150,825
l0
Governmental Activities
Permanent Improvement
Certificates of IndebtednessCapital Improvement BondsRevolving Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2010$ 35,96639,000$ 2$ 280,000$ 88,417$ 1,155,000$ 72,686
2011 485,000 16,941 295,000 345,000 49,530
80,143
2012 4,368296,000 315,000 360,000 36,398
70,993
2013 - 380,00 22,428
0
- 330,000 60,905
4 - 395,000 7,604
201
- 355,000 49,596
2015-2017 - 1,200,000-
67,925 - -
Tota$ 57,2711,420,000$ $ 2,775,000$ 417,979$ 2,635,000$ 188,64
l6
Governmental ActivitiesBusiness-Type Activities
State Aid BondsG.O. Revenue Bonds
PrincialInterestPrincialInterest
pp
2010$ 61,0391,600,000$ $ 455,000$ 658,025
2011 215,000 21,009 475,000 640,036
16,115220,000 6,980,000 620,675
201
2
2013 230,000 10,765 545,000 285,166
2014 4,785230,000 565,000 263,806
2015-201960,00 0 840 3,190,000 963,454
2020-2024 - 3,120,000 274,856
-
Tota$ 114,5532,555,000$ $ 3,706,0115,330,00$
l08
It is not practical to determine the specific year for payment of long-term accrued compensated absences.
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2009, was as follows:
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
G.O. revenue bonds$ -35,885,000$ $ (390,000)$35,495,000$ 405,000
Special assessment bonds 3,015,000 (565,000) 2,450,000 1,850,000
-
Tax increment bonds 3,275,00 (760,000) 2,515,000 780,000
0
-
Certificates of indebtedness 1,525,000 385,000 (490,000) 1,420,000 639,000
Capital improvement bonds 3,155,000 (380,000) 2,775,000 280,000
-
Permanent improvement revolving bonds3,755,00 0 2,635,000 1,155,000
-(1,120,000)
State aid bonds 1,760,000 955,000 (160,000) 2,555,000 1,600,000
Total bonds payable52,370,000 1,340,000(3,865,000) 49,845,000 6,709,000
Compensated absences 504,893 343,595 (306,882) 541,606 54,161
Total governmental activities
long-term liabilities$ 1,683,59552,874,893$ $ 50,386,606(4,171,882)$$ 6,763,161
Business-type activities:
Bonds payable:
G.O. revenue bonds$ 1,025,00014,680,000$ $ (375,000)$15,330,000$ 455,000
Compensated absences 107,333 58,824 (45,611) 120,546 12,054
Total business-type activities
long-term liabilities$ 1,083,8214,787,333$ $ (420,611)$15,450,546$ 467,054
4
For the governmental activities, bonds payable can be summarized in the following categories:
TheG.O. revenue bonds 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 field house, and, if
necessary, a debt service tax levy. These bonds do constitute debt for the purpose of computing statutory debt limits.
Thespecial assessment bonds 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.
Thetax increment bonds 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 within 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.
Thecertificates of indebtedness 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.
Thecapital improvement bonds 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 bonds.
Thepermanent improvement revolving bonds 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
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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.
Thestate aid bonds 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.
For the governmental activities, compensated absences are generally liquidated through the General Fund.
For the business-type activities, the G.O. revenue bonds 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.
REVENUES PLEDGED
2004 EDA Public Facility Lease Revenue Bonds. The EDA has pledged future lease revenue, operating revenues (net of operating
expenses) and, if necessary, a debt service tax levy to repay the $19,580,000 bonds issued in April 2004. Proceeds from the bonds
provided financing for the construction of Andover YMCA Community Center. Lease revenues were projected to produce 100% of
the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $22,685,938,
payable through February 2014. For the current year, principal and interest paid and total net operating revenues, lease revenue and
tax levy were $1,334,806 and $1,459,808, respectively. A portion of the Series 2004 Bonds were refunded by the 2006 Series
Refunding Bonds of $10,000,000 and the 2007 Series Refunding Bonds of $6,865,000, both with a crossover date of February 1,
2014. At which time, future lease revenues, net operating revenues and, if necessary, debt service tax levy will be used to repay the
Series 2006 and Series 2007 Refunding Bonds through 2034.
2005A G.O. Improvement Bonds. The City has pledged future special assessment revenue to repay the $3,560,000 bonds issued in
April 2005. Proceeds from the bonds provided financing for the construction of Jay Street located in Andover Station North.
Special assessments were projected to produce 100% of the debt service requirements over the life of the bonds. Total principal and
interest remaining on the bonds is $2,512,890, payable through February 2011. For the current year, principal and interest paid and
total special assessment revenues were $658,768 and $55,945, respectively.
2003B G.O. Tax Increment Refunding Bonds. The City has pledged future tax increment revenue to repay the $1,530,000 bonds
issued in June 2003. Proceeds from the bonds refunded the Series 1996 Bonds. Incremental property taxes were projected to
produce 100% of the debt service requirements over the life of the bond issue. Total principal and interest remaining on the bonds
is $257,500, payable through August 2010. For the current year, principal and interest paid were $253,020. All tax increment
revenues are receipted in the Tax Increment Projects Capital Projects Fund and transferred over as needed to make the debt service
payments. In 2009, the debt service fund had sufficient funds to make its debt service payment.
2004B G.O. Tax Increment Refunding Bonds. The City has pledged future tax increment revenue to repay the $4,260,000 bonds
issued in March 2004. Proceeds from the bonds refunded the Series 1995D Bonds. Incremental property taxes were projected to
produce 100% of the debt service requirements over the life of the bond issue. Total principal and interest remaining on the bonds
is $2,408,325, payable through February 2013. For the current year, principal and interest paid were $594,600. All tax increment
revenues will now be receipted in the Tax Increment Projects Capital Projects Fund and transferred over as needed to make the debt
service payments. In 2009, the debt service fund had sufficient funds to make its debt service payment.
2006B G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $460,000 bonds issued in May
2006. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce
100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $162,920,
payable through February 2010. For the current year, principal and interest paid and total property tax revenues were $163,649 and
$164,083, respectively.
2007A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $760,000 bonds issued in March
2007. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce
100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $410,900,
payable through February 2011. For the current year, principal and interest paid and total property tax revenues were $204,500 and
$212,332, respectively.
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
2008A G.O. Equipment Certificates.
The City has pledged future property tax revenue to repay the $630,000 bonds issued in
September 2008. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected
to produce 100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is
$505,620, payable through February 2012. For the current year, principal and interest paid and total property tax revenues were
$166,240 and $172,457, respectively.
2009A G.O. Equipment Certificates.
The City has pledged future property tax revenue to repay the $385,000 bonds issued in March
2009. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce
100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $397,831,
payable through February 2012. For the current year, principal and interest paid and total property tax revenues were $2,895 and
$141,156, respectively.
2004A G.O. Capital Improvement Bonds.
The City has pledged future property tax revenue to repay the $3,890,000 bonds issued in
March 2004. Proceeds from the bonds were used to purchase the public works facility from the EDA and to finance the
construction of a new fire station. Property taxes were projected to produce 100% of the debt service requirements over the life of
the bonds. Total principal and interest remaining on the bonds is $3,192,979, payable through February 2017. For the current year,
principal and interest paid and total property tax revenues were $360,580 and $363,057, respectively.
2003A Permanent Improvement Revolving Bonds
. The City has pledged future special assessment revenue to repay the $4,580,000
bonds issued in June 2003. Proceeds from the bonds provided financing for the construction of public improvements in the
th
following developments: Foxborough Crossing, Shady Oak Cove, Woodland Estates 4 Addition, Constance Corner, Maple
Hollow, Woodland Creek Golf Course Villas and City View Farms. Special assessments were projected to produce 100% of the
debt service requirements over the life of the bonds. All revenues from the special assessments are paid into the Permanent
Improvement Revolving CPF and used to pay debt service as needed. Total principal and interest remaining on the bonds is
$830,660, payable through February 2010. For the current year, principal and interest paid and monies transferred from the
Permanent Improvement Revolving CPF were $825,463 and $830,000, respectively.
2006A Permanent Improvement Revolving Bonds
. The City has pledged future special assessment revenue to repay the $2,450,000
bonds issued in May 2006. Proceeds from the bonds provided financing for the construction of public improvements in the
following developments: Andover Station North Ballfields, Cardinal Ridge, Shaw’s Glen and Woodland Crossing. Special
assessments were projected to produce 100% of the debt service requirements over the life of the bonds. All revenues from the
special assessments are paid into the Permanent Improvement Revolving CPF and used to pay debt service as needed. Total
principal and interest remaining on the bonds is $1,992,985, payable through February 2014. For the current year, principal and
interest paid and monies transferred from the Permanent Improvement Revolving CPF were $399,031 and $400,000, respectively.
2001B State Aid Street Bonds
. The City has pledged future municipal state aid (MSA) allotments to repay the $2,755,000 bonds
issued in June 2001. Proceeds of the bonds provided financing for the construction of the Andover Boulevard Project. The bonds
are payable solely from MSA allotments through 2010. Total principal and interest remaining on the bonds is $1,637,611, payable
through February 2010. For the current year, principal and interest paid and MSA revenues were $238,583 and $220,898,
respectively. The Series 2001B Bonds were refunded by the 2009A Series Refunding Bonds of $955,000 with a crossover date of
February 1, 2010. At which time, future MSA allotments will be used to repay the Series 2009A Refunding Bonds through 2015.
2002 G.O. Water Revenue Bonds.
The City has pledged future water customer revenues, net of operating expenses, to repay the
$9,780,000 bonds issued in May 2002. Proceeds of the bonds provided financing for the construction of a water treatment plant.
The bonds are payable from water customer net revenues and are payable through 2012. The total principal and interest remaining
on the bonds is $8,761,169. The principal and interest paid for the current year and total customer net revenues were $743,424 and
$1,028,921, respectively. A portion of the Series 2002 Bonds were refunded by the 2007 Series Refunding Bonds of $6,570,000
with a crossover date of August 1, 2012. At which time, future water customer revenues, net of operating expenses, will be used to
repay the Series 2007 Refunding Bonds through 2023.
2009A G.O. Water Revenue Bonds.
The City has pledged future water customer revenues, net of operating expenses, to repay the
$1,025,000 bonds issued in March 2009. Proceeds of the bonds provided financing for the addition to the water treatment plant.
The bonds are payable from water customer net revenues and are payable through 2024. The total principal and interest remaining
on the bonds is $1,323,874. The principal and interest paid for the current year and total customer net revenues were $25,404 and
$1,028,921, respectively.
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 $9,760,092 at December 31, 2009.
On January 1, 2007, the City issued $6,865,000 in Public Facility Lease Revenue Refunding Bonds, Series 2007 with an average
interest rate of 4.31% to advance refund $6,700,000 of outstanding 2004 Series Bonds with an average interest rate of 5.17%. The
net proceeds of $6,710,306 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 $517,163 and to obtain an economic gain (difference between the present value of the debt
service payments on the old and new debt) of $250,417.
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 $6,705,279 at December 31, 2009.
RefundedDebt Service Commitment
PaymentBondsRefunding BondsEscrow Account
DateTotalSeries 2006Series 2007Series 2006Series 2007City
2010$ 424,2271,335,684$ 291,983$ $ 424,227$ 291,983$ 1,335,684
2011 1,329,891 424,227 291,983 424,227 291,983 1,329,891
2012 424,2271,332,456 291,983 424,227 291,983 1,332,456
4
2013 1,328,534 424,227 291,983 424,227 291,9831,328,53
2014 424,22717,359,373 291,983 9,967,114 6,845,992 1,262,477
2015 - 752,527 512,483 1,265,010
- -
2016 - 753,827 513,283 1,267,110
- -
2017 - 749,628 513,683 1,263,311
- -
2018 - 2022 - 3,748,675 2,568,704 - 6,317,379
-
2023 - 2027 - 3,729,195 2,563,655 - 6,292,850
-
2028 - 2032 - 3,693,314 2,565,020 - 6,258,334
-
2033 - 2034 - 1,474,126 1,019,212 - 2,493,338
-
$ 22,685,938$ 17,022,427$ 11,715,955$ 11,664,022$ 8,013,924$ 31,746,374
On March 13, 2007, the City issued $6,570,000 in General Obligation Water Revenue Refunding Bonds, Series 2007B with an
average interest rate of 4.07% to advance refund $6,490,000 of outstanding 2002 Series Bonds with an average interest rate of
4.90%. The net proceeds of $6,491,509 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 August 1, 2012.
The City advance refunded the 2002 General Obligation Water Revenue Bonds to reduce its total debt service payments over the
last ten years of the bond by $265,904 and to obtain an economic gain (difference between the present value of the debt service
payments on the old and new debt) of $164,664.
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 $6,492,264 at December 31, 2009.
RefundedRefundingDebt Service Commitment
PaymentBondsBondsEscrow
DateTotalTotalAccountCity
2010$ 754,221$ 266,146$ 266,146$ 754,221
2011 757,507 266,146 266,146 757,507
2012 7,249,440 266,146 6,756,146 759,440
2013 - 741,446 741,446
-
2014 - 741,646 741,646
-
2015 - 741,046 741,046
-
2016 - 744,546 744,546
-
2017 - 742,146 742,146
-
2018 - 2022 - 3,701,299 3,701,299
-
2023 - 740,406 740,406
-
$ 8,761,168$ 8,950,973$ 7,288,438$ 10,423,703
On March 26, 2009, the City issued $955,000 in General Obligation State Aid Streets Refunding Bonds, Series 2009A with an
average interest rate of 2.52% to advance refund $930,000 of outstanding 2001B Series Bonds with an average interest rate of
4.90%. The net proceeds of $944,954 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, 2010.
The City advance refunded the 2001B General Obligation State Aid Street Bonds to reduce its total debt service payments over the
last eight years of the bond by $156,795 and to obtain an economic gain (difference between the present value of the debt service
payments on the old and new debt) of $71,529.
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 $936,829 at December 31, 2009.
RefundedRefundingDebt Service Commitment
PaymentBondsBondsEscrow
DateTotalTotalAccountCity
2010$ 968,445$ 23,427$ 949,848$ 42,024
2011 - 236,009 236,009
-
2012 - 236,115 236,115
-
2013 - 240,765 240,765
-
2014 - 234,785 234,785
-
2015 - 60,840 60,840
-
$ 968,445$ 1,031,941$ 949,848$ 1,050,538
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's legal debt margin for 2009 and 2008 is computed as follows:
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
December 31,
20092008
Estimated taxable market value$ 2,969,639,3002,982,595,600$
Debt limit (3% of market value) 89,477,868 89,089,179
Amount of debt applicable to debt limit:
Total bonded debt$ 65,175,00$ 67,050,00
00
Less: Nonapplicable debt
G.O. water revenue bonds (15,330,000) (14,680,000)
Special assessment bonds (2,450,000) (3,015,000)
Tax increment bonds (2,515,000) (3,275,000)
Permanent improvement revolving bonds (2,635,000) (3,755,000)
State aid bonds (2,555,000) (1,760,000)
Less: Cash and investments in related
debt service funds (17,939,959)(17,973,588)
Total debt applicable to debt limit 21,716,41 22,625,041
2
Legal debt margin$ 67,761,456$ 66,464,138
Note 8 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A. PLAN DESCRIPTION
All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF)
and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans. These
Minnesota Statute
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 PERA’s Coordinated and Basic Plan members. The retiring member receives
the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the
annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for
each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10
years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan
members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is
3.0% for each year of service. For all PEPFF and PERF members hired prior to July 1, 1989 whose annuity is calculated using
Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members
and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social
Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also
available to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. A single-life annuity is a lifetime annuity that
ceases upon the death of the retiree – no survivor annuity is payable. There are also various types of joint and survivor annuity
options available which will be payable over joint lives. Members may also leave their contributions in the fund upon
termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available
at any time to members who leave public service, but before retirement benefits begin.
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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 internet at www.mnpera.org, by writing to PERA, 60 Empire Drive
#200, St. Paul, Minnesota, 55103-2088 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 were required to contribute 9.10% and 6.00%,
respectively, of their annual covered salary in 2009. PEPFF members are required to contribute 9.40% of their annual covered
salary in 2009. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan
PERF members, 6.75% for Coordinated Plan PERF members, and 14.1% for PEPFF members. Employee contributions for the
Coordinated Plan PERF members will increase to 7.00% effective January 1, 2010. The City’s contributions to the Public
Employees Retirement Fund for the years ending December 31, 2009, 2008 and 2007 were $231,302, $225,073 and $213,396,
respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2009,
2008 and 2007 were $24,464, $21,367 and $18,600, 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, Finance Manager 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 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.
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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
NW, 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 revenue and expenditure in the City’s financial statements. Contributions for the
last three years are as follows:
Year
EndingCityStateTotal
12/31/200750,00$ 0$ 143,666$ 193,666
12/31/200850,00 0 121,813 171,813
12/31/200950,00 0 103,492 153,492
Note 9 OTHER POST EMPLOYMENT BENEFITS (OPEB)
Accounting
In 2008, the City prospectively implemented the requirement of a new accounting pronouncement, GASB Statement No. 45,
and Financial Reporting by Employers for Post Employment Benefits Other than Pensions.
A.PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 8, the City provides post employment health care benefits (as
plan
defined in paragraph B) for retired employees through a single employer defined benefit plan. The term refers to the
City’s requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the
City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465.
The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended
by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not
accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The Plan does not issue a
separate report.
B.BENEFITS PROVIDED
Retirees
The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if the
individual terminates service with the City through service retirement or disability retirement. Employees who satisfy the rule
of 90 or attain age 55 and have completed 10 years of service at termination can immediately commence medical benefits.
Retirees may obtain dependent coverage while the participating retiree is under age 65. Covered spouses may continue
coverage after the retiree’s death. The surviving spouse of an active employee may continue coverage in the group health
insurance plan after the employee’s death.
All health care coverage is provided through the City’s group health insurance plan. The retiree is required to pay 100% of
their premium cost for the City-sponsored group health insurance plan. The premium is a blended rate determined by the
entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees,
the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active
employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer and the City’s plan becomes
secondary.
C.PARTICIPANTS
As of the actuarial valuation dated January 2008, participants consisted of:
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Retirees and beneficiaries currently
purchasing health insurance through the City3
Active employees 52
Total 55
Participating employers 1
D.FUNDING POLICY
The additional cost of using a blended rate for actives and retirees is currently funded on a pay-as-you-go basis. The City
Council may change the funding policy at any time.
E.ANNUAL OPEB COSTS AND NET OPEB OBLIGATION
The City’s annual other post employment benefit (OPEB) cost is calculated based on the annual requirement contribution
(ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The
ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortized
any unfunded actuarial liabilities (or funding excess) over period not to exceed 30 years. The net OPEB obligation as of
December 31, 2009, was calculated as follows:
Annual required contribution (ARC)$53,096
Amortization of net OPEB obligation(2,455)
Interest on net OPEB obligation1,699
Annual OPEB cost52,340
Contributions made during the year(14,615)
Increase (decrease) in net OPEB obligation37,725
Net OPEB obligation - beginning of year42,466
Net OPEB obligation - end of year$80,191
The City first had an actuarial valuation performed for the plan as of January 1, 2008 to determine the funded status of the plan
as of that date as well as the employer’s annual required contribution (ARC) for the fiscal year ended December 31, 2008. The
City’s annual OPEB cost (expense) of $53,096 was equal to the ARC for the fiscal year, as the transition liability was set at
zero as of December 31, 2007. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and
the net OPEB obligation for 2008 and 2009 are as follows:
Percentage of
AnnualEmployerAnnual OPEBNet OPEB
Fiscal Year EndedOPEB CostContributionsCost ContributedObligation
December 31, 200853,096$ $10,63020.0%$42,466
December 31, 200952,340 14,61527.9%80,191
F.FUNDED STATUS AND FUNDING PROGRESS
The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the
actuarial value of assets is zero. The funded status of the plan was as follows:
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Unfunded
ActuarialUAAL as a
ActuarialActuarialAccruedPercentage of
ActuarialValue ofAccruedLiabilityFundCoveredCovered
Valuation DateAssetsLiability *( UAAL )RatioPayrollPayroll
( a )( b )( b-a )( a/b )( c )(( b-a ) / c )
January 1, 2008$ 324,387-$$324,3870.00%5,400,000$6.01%
*using the Projected Unit Credit actuarial method
Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to this date.
G.ACTUARIAL METHODS AND ASSUMPTIONS
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events for into the future. Examples include assumptions about future employment, mortality and
the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions
(ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress, presented as required supplementary information
following the notes of the financial statements, presents multi-year trend information that shows whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the
employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern
of sharing of benefit cost between the employer and plan members to that point. The actuarial methods and assumptions used
include techniques that are designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial
value of assets, consistent with the long-term perspective of the calculations.
In the January 1, 2008 actuarial valuation, the Projected Unit Credit Actuarial cost method was used. The actuarial
assumptions included a 4.0% investment rate of return (net of administrative expenses) and an initial annual health care cost
trend of 10.0% reduced by 0.5% each year to arrive at an ultimate health care cost trend of 5.0%. The actuarial value of assets
was $0. The plan’s unfunded actuarial accrued liability is being amortized as a level dollar amount over 30 years on a closed
basis. The remaining amortization period at December 31, 2009 was 28 years.
Note 10 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2009 are as follows:
FundReceivablePayable
Governmental Funds:
Major Funds:
General Fund$ 670,000$ -
2006 EDA Public Facility Lease Revenue Refunding Bonds DSF -
5 ,000
2007 EDA Public Facility Lease Revenue Refunding Bonds DSF -
5 ,000
Water Trunk CPF61,000 -
Sewer Trunk CPF615,000
Nonmajor Governmental Funds 1,336,000-
Tota governmentauns,,,,
llfd$1346000$1346000
Interfund receivables and payables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the
fiscal year.
72
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Interfund transfers:
FundTransfer InTransfer Out
Governmental Funds:
Major Funds:
General Fun$ 196,93$ -
d0
Water Trunk CPF - 165,643
Sewer Trunk CPF 350,00 -
0
Road & Bride CPF 9,400 -
g
Tax Increment Proects PF - ,
jC820000
Permanent Improvement Revovng PF -,,
liC1230000
Nonmajor Funds2,750,141 699,541
Total governmental funds3,306,4712,915,184
rietar Funds:
Pro
py
Enterprise Funds:
Wate 150,250165,643
r
Sewe 396,680-
r
Storm Sewe 10,000-
r
rorietar fund 556,930165,643
Total
ppys
,7,,7,
Tota
l$342114$342114
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 $326,276 to the Open
Space Referendum Bonds CPF from the Open Space Referendum Bonds DSF for the acquisition of land to be set aside as open space.
Additionally, computer service fees paid by the Water, Sewer and Storm Sewer Enterprise Funds to the General Fund have been
reclassified as transfers on the Government-Wide Statement of Activities as follows:
Transfer ITransfer Ou
nt
Governmental Activitie$ 30,600
s
$ -
Business-Type Activitie - 30,600
s
Tota , ,
l$30600$30600
Note 11 TAX INCREMENT DISTRICTS
The City is the administering authority for the following tax increment finance districts:
1.Name of District:Andover Redeveloment District 1-1
p
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 201
2
Original net tax capacity:$ 139,601
Current net tax caacit: 2,044,050
py
$ 1,904,449
Captured net tax capacity - retained by the Cit
y
Total District Bonds issue$19,250,000
d
d(16,735,000)
Amount redeeme
s outstanng Decemer,,55,
Bon
ddib312009$21000
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
2.Name of District:Andover Redevelopment District 1-
2
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 201
4
Original net tax capacity:$ 4,542
Current net tax capacity: 258,368
Captured net tax capacity - retained by the Cit$ 253,82
y6
3.Name of District:Tax Increment Financing District 1-3
(Farmstead Project)
Type of District:Redevelopmen
t
Authorizing Law:M.S. Section 469
Established:1997
Duration of District:Through 202
4
Original net tax capacity:$ 7,31
4
Current net tax capacity: 163,219
apture net tax capacty - retaney tet55,5
CdiidbhCiy$190
4.Name of District:Tax Increment Financing District 1-4
Type of District:Redevelopmen
t
Authorizing Law:M.S. Section 469
Established:2005
Duration of District:Through 2031
Original net tax capacity:$ 67,162
Current net tax capacity: 96,315
apture net tax capacty - retaney tet,5
CdiidbhCiy$2913
Note 12 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2009 as follows:
Amount
Fund
Special Revenue Funds:
Community Center$ 419,239
Capital Projects Funds:
Storm Sewer Project 59,977
s 609,546
Open Space Referrendum Bond
Note 13 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 2% 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
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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, 2009.
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 14 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.
75
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2009. Future
scheduled tax levies for all bonds outstanding at December 31, 2009 totaled $22,937,428.
Note 15 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
Fund equities are classified as follows to reflect limitations and restrictions of the respective funds:
20092008
Governmental Funds:
Major Funds:
General Fund
Reserved for prepaid items$ 103,804$ 108,415
Reserved for inventor 103,711 85,39
y0
Designated for snow emergency 65,000 70,000
Designated for public safety 65,000 70,000
Designated for facility management 65,000 70,000
0 70,000
Designated for information technology65,00
Designated for working cash flow 3,860,897 3,701,230
2006 EDA Public Facility Lease Revenue Refunding Bonds DSF
Reserved for debt service 9,932,006 9,935,142
2007 EDA Public Facility Lease Revenue Refunding Bonds DSF
6 6,825,235
Reserved for debt service6,822,08
Water Trunk CPF
Designated for projects 2,673,60 2,953,849
0
Sewer Trunk CPF
Designated for projects 3,134,884 2,733,130
Road & Bridge CPF
Designated for projects 3,195,162 2,497,381
Tax Increment Projects CPF
Reserved for notes receivable - 119,00
0
Designated for projects 4,403,558 3,515,261
Permanent Improvement Revolving CPF
Designated for projects 1,343,245 1,627,996
Nonmajor Funds
Reserved for prepaid items 8,250 6,500
Reserved for inventory 5,618 8,446
Reserved for economic development 9,828 2,260
Reserved for debt service 3,551,39 3,372,226
0
Reserved for projects 427,017 485,494
Designated for working cash flow 507,253 466,978
Designated for projects 538,840 600,422
Designated for equipment 734,872 629,129
Total Governmental Funds$ 41,616,021$ 39,953,484
76
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
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, 2009, the following revenue bonds were outstanding:
Date ofOriginalOutstanding
Project
IssueIssueRetired12/31/2009
r7/15/19975,645,000$ $ (4,400,000)$ 1,245,000
Downtown Cente
Downtown Center7/15/19971,250,000 (1,250,000)
-
Presbyterian Homes of Andover, Inc.12/1/1998720,000 (720,000)
-
Presbyterian Homes of Andover, Inc.11/1/200313,145,000 (1,403,827) 11,741,173
Total$ 20,760,000$ (7,773,827)$12,986,173
Note 17 OPERATING LEASES
The City received revenue from two agreements for the lease of space for antennas placed on the water tower. The City also has a lease
with the Greater Minneapolis YMCA for building space at the Andover YMCA Community Center. Terms of each lease are as follows:
2009
LeaseAnnual LeaseExpirationRenewal
rDateOptions
LocationLesseeAmountAdjustment Facto
City Hall water towerSprint Nextel$ Greater of CPI or 424,499%12/31/20123 - 5 year terms
City Hall water towerT-Mobile USA, Inc Greater of CPI or 419,981%12/31/20113 - 5 year terms
Emergency Siren PoleT-Mobile USA, Inc $1,000 annual increase6/17/20133 - 5 year terms3,000
Andover YMCA Comm CtrGreater Minneapolis YMCA635,000None8/1/2035N/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 City sold $1,660,000 of General Obligation Open Space Referendum Bonds, Series 2010A on February 18, 2010 to finance land
acquisitions within the City. The rates of the bonds per year ranged from 2.00% - 3.15% with a true interest cost of 2.64%. Principal
payments are due in 2012 – 2022.
The City sold $1,480,000 of General Obligation Permanent Improvement Revolving (PIR) Refunding Bonds, Series 2010A on February
18, 2010 to refund the General Obligation PIR Bonds, Series 2006A.The rates of the bonds per year are 2.00% with a true interest cost
of 1.24%. Principal payments are due in 2011 – 2014.
Note 19 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for
these financial statements:
Statement No. 51Accounting and Financial Reporting for Intangible Assets.The provisions of this Statement are effective for
financial statements for periods beginning after June 15, 2009.
77
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Statement No. 53
Accounting and Financial Reporting for Derivative Instruments.The provisions of this Statement are effective
for financial statements for periods beginning after June 15, 2009.
Statement No. 54
Fund Balance and Government Fund Type Definitions. The provisions of this Statement are effective for
financial statements for periods beginning after June 15, 2010.
The effect these standards may have on future financial statements is not determinable at this time.
78
REQUIRED SUPPLEMENTARY INFORMATION
79
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes$ 6,878,536$6,651,795$6,588,601$ (63,194)$6,249,011
Licenses and permits 442,580442,580291,903 (150,677)525,339
Intergovernmental 601,948828,689595,002 (233,687)709,251
Charges for services 620,022620,022701,289 81,267772,430
Fines 95,37595,375110,779 15,404104,930
Investment income 115,000115,00076,772 (38,228)137,966
Miscellaneous 83,55083,550130,523 46,973116,950
Total revenues 8,837,0118,837,0118,494,869 (342,142)8,615,877
Expenditures:
Current:
General government:
Mayor and City council 108,375108,375105,319 3,056103,067
Administration 152,701152,701128,532 24,169127,771
Newsletter 25,00025,00022,405 2,59519,667
Human resources 62,77362,77354,625 8,14859,006
Legal 178,500178,500172,900 5,600171,300
City clerk 101,121101,12196,621 4,500158,203
Elections6,3726,3726,139 23340,907
Financial administration 221,760221,760
210,20411,556212,761
152,500120,113 32,387119,090
Assessing152,500
Information systems 150,417140,417122,614 17,803137,286
Planning and zoning 362,970360,470323,681 36,789359,140
Engineering 436,405435,405388,285 47,120399,436
Facility management 509,328484,328409,929 74,399408,238
Total general government 2,468,2222,429,7222,161,367 268,3552,315,872
Public safety:
Police 2,545,6422,545,6422,545,6422,318,241
-
Fire protection 1,105,1021,105,102998,351 106,751991,636
Protective inspection 452,938452,938435,102 17,836455,526
Civil defense 16,90916,90914,935 1,97413,305
Animal control 10,75010,75011,376 (626)7,095
Total public safety 4,131,3414,131,3414,005,406 125,9353,785,803
Public works:
Streets and highways 628,378623,378567,090 56,288613,896
Snow and ice removal 526,036516,036462,849 53,187457,587
Street signs 185,913169,913159,213 10,700170,358
Traffic signals 34,00034,00026,090 7,91015,057
Street lighting193,400193,400213,307(19,907)188,213
Total public works$ 1,567,727$1,536,727$1,428,549$ 108,178$1,445,111
(Continued)
80
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND (Continued)
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Expenditures:
Current: (continued)
Parks and recreation$ 897,749$887,749$835,636$ 52,113$867,652
Recycling 98,60798,60785,527 13,08086,631
Unallocated 20,00020,00019,540 46017,999
Total current 9,183,6469,104,1468,536,025 568,1218,519,068
Capital outlay:
General governmen3,428
t
- - - -
Parks and recreation2,397 (2,397)
- - -
Total capital outlay2,397 (2,397)3,428
- -
Total expenditures 9,183,6469,104,1468,538,422 565,7248,522,496
Revenues over (under) expenditures (346,635)(267,135)(43,553) 223,58293,381
Other financing sources (uses):
Transfers in 196,930196,930196,930191,194
-
Net increase (decrease) in fund balance (149,705)$ $(70,205)$153,377$ 223,582$284,575
Fund balance - January 14,175,0353,890,460
Fund balance - December 31$4,328,412$4,175,035
81
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
SCHEDULE OF FUNDING PROGRESS -
OTHER POST EMPLOYMENT BENEFITS PLA
N
For The Year Ended December 31, 2009
Unfunded
ActuarialUAAL as a
ActuarialActuarialAccruePercentage o
df
ActuarialValue oAccrueLiabilityFunCovereCovere
fdddd
Valuation DateAssetsLiability( UAAL )RatioPayrollPayroll
( a )( b )( b-a )( a/b )( c )(( b-a ) / c )
January 1, 2008$ 324,387$324,3870.00%5,400,000$ 6.01%
$ -
The City implemented GASB Statement No. 45 for the year ended December 31, 2008. Information for prior years is not available
.
82
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2009
Note A 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:
Current:
Public safety:
Animal contro$ 11,37610,750$ 62$
l6
Public works:
Street lighting 193,400 213,307 19,907
Capital outlay:
Parks and recreation - 2,397 2,397
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 (1) 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 the fall of 2009, 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
Fai41 - 55
r
Poo26 - 40
r
Very Poo11 - 25
r
Substandard0 - 10
83
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2009
As of December 31, 2009, the City’s street and trail system was rated at an OCI index of 81 on the average with detail condition as
follows:
% of Street
Conditionand Trails
Excellent to Good92.9%
Fair5.4%
Poor to Substandard1.7%
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 $1,666,216 on street and trail maintenance for the year ending December 31, 2009. 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 1,847,06682
20051,000,000 1,655,71583
20061,150,000 1,228,98182
20071,150,000 1,256,43381
20081,150,000 2,244,71380
20091,150,000 1,666,21681
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.
84
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
85
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.
86
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEETStatement 12
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2009
With Comparative Totals For December 31, 2008
Totals
SpecialDebCapitalNonmajor Governmental Funds
t
RevenueServiceProjects20092008
Assets:
Cash and investments$1,806,828$1,985,909$497,300$ 4,290,037$4,978,035
Cash and investments with escrow agent25,316 1,672,204
1,646,888 - 726,874
Accrued interest6,4797,2611,770 15,51051,142
Due from other governmental units39,562
- - - -
Accounts receivable - net160,788 160,788
- - 139,683
Interfund receivable10,000
- - - -
Prepaid items8,250 8,2506,500
- -
Property taxes receivable:
Unremitted2,05621,332488 23,87619,263
Delinquent6,74058,9831,581 67,30466,056
Special assessments receivable:
Delinquent32,988 32,98810,392
- -
Deferred 393,935
- 393,935 - 448,508
Notes receivable64,012 64,01269,852
- -
Inventories - at cost5,618 5,6188,446
- -
Total assets2,086,087 6,734,522
4,147,296 501,139 6,574,313
Liabilities and Fund Balance
Liabilities:
Interfund payable550,000 1,336,000
110,000 676,000 840,000
Accounts payable70,2352,040 72,27584,985
-
Contracts payable3,428 3,428
- - -
Deposits payable28,327 28,32733,970
- -
Due to other governmental units3,358 3,3583,332
- -
Salaries payable18,546 18,54615,349
- -
Deferred revenue129,9791,581 617,466
485,906 691,980
Total liabilities803,873679,6212,079,400
595,906 1,669,616
Fund balance (deficit):
Reserved49,012 4,002,103
3,551,390 401,701 3,874,926
Unreserved:
Designated1,691,62589,340 1,780,965
- 1,696,529
Undesignated(458,423)(669,523) (1,127,946)(666,758)
-
Total fund balance1,282,214(178,482) 4,655,122
3,551,390 4,904,697
Total liabilities and fund balance$2,086,087$4,147,296$501,139$ 6,734,522$6,574,313
87
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 13
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2009
With Comparative Totals For The Year Ended December 31, 2008
Totals
Special DebCapitalNonmajor Governmental Funds
t
RevenuServiceProjects20092008
e
Revenues:
General property taxes$ 232,053$2,156,485$55,742$ 2,444,280$2,356,535
Intergovernmental3,194239,1859,766 252,145310,075
Special assessments59,507 59,50780,655
- -
Charges for services 878,370 878,370951,622
- -
Investment income 25,67638,9897,429 72,09449,848
Miscellaneous:
Park dedication fees41,216 41,216133,585
- -
Other 853,10828,595 881,703681,568
-
Total revenues 1,992,4012,494,166142,748 4,629,3154,563,888
Expenditures:
Current:
General government 59,11222,183 81,29550,702
-
Public safety10,004 10,00411,162
- -
Public works 187,8111,093 188,904822,370
-
Parks and recreation 924,104131,385 1,055,4891,086,170
-
Economic development 122,361 122,361129,372
- -
Capital outlay:
General government35,640 35,640368,094
- -
Public safety299,319 299,319
- - -
Public works138,766 138,766441,104
- -
Parks and recreation982,234 1,006,470351,625
24,236-
Debt service:
Principal retirement3,865,000 3,865,0003,460,000
- -
Interest1,462,022 1,462,0221,537,013
- -
Paying agent fees5,794 5,7947,421
- -
Professional service29,471 29,4714,000
- -
Total expenditures 1,317,6245,362,2871,620,624 8,300,5358,269,033
Revenues over (under) expenditures 674,777(2,868,121)(1,477,876) (3,671,220)(3,705,145)
Other financing sources (uses):
Transfers in2,413,892336,249 2,750,1411,475,826
-
Transfers out (363,292)(336,249) (699,541)(300,826)
-
Bonds issued385,000 385,000630,000
- -
Refunding bonds issued955,000 955,000
- - -
Bond premium14,6424,139 18,781
- -
Proceeds from sale of capital assets 12,264 12,2645,874
- -
Total other financing sources (uses) (351,028) 3,047,285725,388 3,421,6451,810,874
Net increase (decrease) in fund balance 323,749 179,164(752,488) (249,575)(1,894,271)
Fund balance - January 1 958,4653,372,226574,006 4,904,6976,798,968
Fund balance - December 31$ 1,282,214$3,551,390$(178,482)
$4,655,122$4,904,697
88
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 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 local non-
profit organizations. According to state statute, all expenditures from this fund must be for public services and
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.
89
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2009
With Comparative Totals For December 31, 2008
CommunityDrainage
EDADevelopmentCommunityand
GeneralBlock GrantCenterMappingLRRWMO
Assets:
Cash and investments$ 390,027$ 9,828$ 30,564$ 88,096$ 19,607
Cash and investments with escrow agent 25,316
- - - -
Accrued interest 1,533 307
- - -
Due from other governmental units
- - - - -
Accounts receivable 13,563 147,225
- - -
Prepaid items 8,250
- - - -
Property taxes receivable:
Unremitted 320
- - - -
Delinquent 1,107
- - - -
Notes receivable 64,012
- - - -
Inventories - at cost 5,618
- - - -
Total assets405,12373,840216,973 88,40321,034
Liabilities and Fund Balance
Liabilities:
Interfund payable 550,000
- - - -
Accounts payable 1,281 41,174
- - -
Contracts payable 857 857
- - -
Deposits payable 28,327
- - - -
3,358 -
Due to other governmental units -
-
-
Salaries payable 3,012 13,353 758
- -
Deferred revenue 64,012 1,107
- - -
Total liabilities4,293 64,012 636,212 857 2,722
Fund balance (deficit):
Reserved for:
Prepaid items 8,250
- - - -
Inventory 5,618
- - - -
Economic development 9,828
- - - -
Projects 25,316
- - - -
Unreserved:
Designated for working capital 400,830 13,500 18,312
- -
Designated for projects 74,046
- - - -
Designated for equipment
- - - - -
Undesignated (458,423)
- - - -
Total fund balance (deficit) 400,830 9,828 (419,239) 87,546 18,312
Total liabilities and fund balance$405,123$73,840$216,973$ 88,403$21,034
90
Statement 14
Right-of-WayCapitalTotals
Trail andManagement/EquipmentCharitableConstructionNonmajor Special Revenue Funds
ForestryTransportationUtilityReserveGamblingSeal Coating20092008
$ 5,830$ 65,928$ 91,060$ 1,032,281$ 5,601$ 68,006$ 1,806,828$ 1,645,670
25,316
- - - - - - -
248 354 3,635 402 6,479 12,547
- -
39,562
- - - - - - -
160,788 139,683
- - - - - -
8,250 6,500
- - - - - -
1,736 2,056 1,748
- - - - -
5,633 6,740 6,654
- - - - -
64,012 69,852
- - - - - -
5,618 8,446
- - - - - -
5,830 66,176 91,4141,043,2855,60168,408 2,086,0871,930,662
- 550,000 700,000
- - - - -
27,780 70,235 45,868
- - - - -
1,714 3,428
- - - - - -
28,327 33,970
- - - - - -
3,358 3,332
- - - - - -
1,423 18,546 15,349
- - - - -
5,633 59,227 129,979 173,678
- - - -
3,137 33,413 59,227 803,873 972,197
- - -
8,250 6,500
- - - - - -
5,618 8,446
- - - - - -
9,828 2,260
- - - - - -
- 25,316
- - - - - -
5,830 63,180 5,601 507,253 466,978
- - -
66,176 25,097 275,000 9,181 449,500 444,613
- -
734,872 734,872 629,129
- - - - -
(458,423) (599,461)
- - - - - -
5,830 66,176 88,277 1,009,872 5,601 9,181 1,282,214 958,465
$ 5,830$ 66,176$ 91,414$1,043,285$5,601$68,408$ 2,086,087$1,930,662
91
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2009
With Comparative Totals For The Year Ended December 31, 2008
Drainag
Communitye
EDADevelopmenCommunitand
ty
Block GranCenteMappinLRRWM
GeneraltrgO
Revenues:
General property taxes$33,421
$ -$ -$ -$ -
Intergovernmental170
- - - -
Charges for services181,416610,09912,226
- -
Investment income9,486243(11,595)2,102395
Miscellaneous2,4877,475824,110
- -
Total revenues193,3897,7181,422,61414,32833,986
Expenditures:
Current:
General government
- - - - -
Public works5,82733,627
- - -
Parks and recreation903,446
- - - -
Economic development122,211150
- - -
Capital outlay:
Public works
- - - - -
Parks and recreation
- - - - -
Total expenditures122,211150903,4465,82733,627
Revenues over (under) expenditures71,1787,568519,1688,501359
Other financing sources (uses):
Transfers out(353,892)
- - - -
Proceeds from sale of capital assets
- - - - -
Total financing sources (uses)(353,892)
- - - -
Net increase (decrease) in fund balance71,1787,568165,2768,501359
Fund balance (deficit) - January 1329,6522,260(584,515)79,04517,953
Fund balance (deficit) - December 31$400,830$9,828$(419,239)$87,546$18,312
92
Statement 15
Right-of-WaCapitaTotals
yl
Trail andManagementEquipmenCharitablConstructioNonmajor Special Revenue Funds
/ten
ForestrTransportatioUtilitReservGamblinSeal Coatin20092008
ynyegg
$198,632$232,053$231,103
$ -$ -$ -$ -$ -
2,0001,0243,19427,646
- - - -
9,51410,67854,437878,370951,622
- - -
2711,7981,98321,101236(344)25,67659,693
9,729399,268853,108511,763
- - -
12,00011,31212,661220,7969,50454,0931,992,4011,781,827
38,77220,34059,11241,764
- - - -
12,48862,29810,65162,920187,811350,765
- -
20,658924,104893,791
- - - - -
122,361129,372
- - - - - -
162,242
- - - - - - -
24,23624,236183,034
- - - - -
12,48862,29894,31720,34062,9201,317,6241,760,968
-
(488)11,312(49,637)126,479(10,836)(8,827)674,77720,859
(9,400)(363,292)(285,178)
- - - - -
12,26412,2645,874
- - - - -
(9,400)12,264(351,028)(279,304)
- - - -
(488)11,312(59,037)138,743(10,836)(8,827)323,749(258,445)
6,31854,864147,314871,12916,43718,008958,4651,216,910
$5,830$66,176$88,277$1,009,872$5,601$9,181$1,282,214$958,465
93
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94
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for eight 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
Open Space Referendum Bonds
Certificates of Indebtedness - (G.O. Equipment Certificates - 2006B, 2007A, 2008A and 2009A) 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
- (EDA Public Facility Lease Revenue Bonds 2004) are repaid from annual lease payments
G.O. Revenue Bonds
from the YMCA, Community Center operations and general property tax.
Tax Increment Bonds - (Tax Increment Refunding Bonds of 2003B and 2004B) are repaid primarily from tax
increments.
Permanent Improvement Revolving (PIR) Bonds - (G.O. PIR Bonds of 2003A and 2006A) are used to finance
assessable improvements within the City and are repaid primarily from special assessments levied against benefited
properties.
State Aid Bonds - (2001B State Aid Bonds and 2009A State Aid Refunding Bonds) are used to finance MSA
eligible cost for road construction and improvements. These bonds are repaid from a portion of state aid allotments
received by the City.
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.
Open Space Referendum Bonds - are used to finance the purchase of land to remain as open space.
95
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2009
With Comparative Totals For December 31, 2008
EDA Public
G.O.G.O.G.O.G.O.G.O. CapitaFacility LeasG.O. TIF
le
EquipmenEquipmenEquipmenEquipmenImprovemenRevenuRefunding
ttttte
CertificateCertificateCertificateCertificateBondsBondsBonds
2006B200720082009200420042003B
AAAA
Assets:
Cash and investments
$ 233,920$ 235,568$ 169,720$ 139,145$ 10,247$ 4,568$ 12,631
Cash and investments with escrow agent - - - - - 710,059 -
Accrued interest
624 554 368 302 - - -
Due from other funds
- - - - - - -
Property taxes receivable:
Unremitted
1,633 2,114 1,717 1,406 3,614 9,364 -
Delinquent
- 6,445 5,239 4,289 11,023 28,563 -
Special assessments receivable:
Delinquent
- - - - - - -
Deferred
- - - - - - -
Total assets
236,177 244,681 177,044 145,142 24,884 752,554 12,631
Liabilities and Fund Balance
Liabilities:
Interfund payable
- - - - - 110,000 -
Deferred revenue
- 6,445 5,239 4,289 11,023 28,563 -
Total liabilities
- 6,445 5,239 4,289 11,023 138,563 -
Fund balance:
Reserved for debt service
236,177238,236
171,805 140,853 13,861 613,991 12,631
Total liabilities and fund balance $ 236,177$ 244,681$ 177,044$ 145,142$ 24,884$ 752,554$ 12,631
96
Statement 1
6
G.O. TIFG.O.G.O.StateG.O.
RefundingPIR FundPIR FundStateAid RefundinImprovemenOpen SpacTotals
gte
BondsBonds oBonds oAid BondBondsBondsReferenduNonmajor Debt Service Funds
ffsm
2004B200320062001B20092005Bonds20092008
AAAA
$908,502$3,824
$ 21,020$ 15,834$ 13,364$ 209,266$ 8,300$ 1,985,909$ 2,654,913
- - - - 936,829 - - 1,646,888 726,874
- - - 185 4,286 107 835 7,261 33,325
- - - - - - - - 10,000
- - - - - - 1,484 21,332 17,114
- - - - - - 3,424 58,983 57,821
- - - - - 32,988 - 32,988 10,392
14,594 - - - - 379,341 - 393,935 448,508
35,614 15,834 13,364 209,451 949,415 1,320,938 9,567 4,147,296 3,958,947
- - - - - - - 110,000 70,000
--
14,594 - - 412,329 3,424 485,906 516,721
14,594 - - - - 412,329 3,424 595,906 586,721
21,020 15,834 13,364 209,451 949,415 908,609 6,143 3,551,390 3,372,226
$1,320,938$9,567
$ 35,614$ 15,834$ 13,364$ 209,451$ 949,415$ 4,147,296$ 3,958,947
97
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2009
With Comparative Totals For The Year Ended December 31, 2008
EDA Public
G.O.G.O.G.O.G.O.G.O. CapitalG.O. CapitalFacility Lease
EquipmentEquipmentEquipmentEquipmentImprovementImprovementRevenue
CertificateCertificateCertificateCertificateBondsBondsBonds
2006B2007A2008A2009A2004A2005B2004
Revenues:
General property taxes
$ 1 64,083$ 2 12,332$ 1 72,457$ 1 41,156$ 3 63,057$ - $ 9 40,640
Intergovernmental
832 1,082 880 720 1,848 - 4,790
Special assessments
- - - - - - -
Investment income (4,862)
3,499 2,941 1,176 1,872 870 (23,705)
Total revenues
1 68,414 2 16,355 1 74,513 1 43,748 3 60,043 870 9 21,725
Expenditures:
Debt service:
Principal retirement
1 55,000 1 85,000 1 50,000 - 2 65,000 1 15,000 3 90,000
Interest
8,649 1 9,500 1 6,240 2,895 9 5,580 1,782 9 44,806
Paying agent fees
431 431 - - - - 2,000
Professional services
- - - - - - 2,750
Total expenditures1,339,556
1 64,080 2 04,931 1 66,240 2,895 3 60,580 1 16,782
Revenues over (under) expenditures (537) (115,912)
4,334 1 1,424 8,273 1 40,853 (417,831)
Other financing sources (uses):
Transfers in-
- - 3 53,892
1 0,000 - -
Transfers out (9,973)
- - - - - -
Refunding bonds issued
- - - - - - -
Bond premium
- - - - - - -
(9,973)
Total other financing sources (uses) 10,000 - - - - 3 53,892
(537) (125,885)
Net increase (decrease) in fund balance 14,334 11,424 8,273 1 40,853 (63,939)
Fund balance - January 1
2 21,843 2 26,812 1 63,532 - 14,398 1 25,885 6 77,930
Fund balance - December 31
$ 2 36,177$ 238,236$ 171,805$ 140,853$ 13,861$ - $ 613,991
98
Statement 17
G.O. TIFG.O. TIFG.O.G.O.StateG.O.
Totals
RefundingRefundingPIR FundPIR FundStateAid RefundingImprovementOpen Space
Nonmajor Debt Service Funds
BondsBondsBonds ofBonds ofAid BondsBondsBondsReferendum
2003B2004B2003A2006A2001B2009A2005ABonds20092008
$$2,156,485
$ - $ -$ - $ - $ - $ - $ -162,760$ 2 ,070,804
- - - - 2 20,898 8,135 - - 2 39,185 2 81,291
55,945
- 3,562 - - - - - 59,507 80,655
42,419 (13,848)
34 712 447 391 1,885 4,461 6,849 38,989
98,364
34 4,274 447 391 2 22,783 12,596 1 69,609 2 ,494,166 2 ,418,902
565,000
2 40,000 520,000 7 95,000 3 25,000 1 60,000 - - 3 ,865,000 3 ,460,000
93,738
13,020 74,600 30,463 74,031 78,583 8,135 - 1 ,462,022 1 ,537,013
403
431 805 431 431 431 - - 5,794 7,421
2,033
- - - - - 24,688 - 29,471 4,000
661,174
2 53,451 595,405 8 25,894 3 99,462 2 39,014 32,823 - 5 ,362,287 5 ,008,434
(16,231) (562,810)(2,868,121)(2,589,532)
(253,417) (591,131) (825,447) (399,071) (20,227) 1 69,609
2 20,000 600,000 8 30,000 4 00,000 - - - - 2 ,413,892 1 ,385,178
(336,249) (15,648)
- - - - - - - (326,276)
- - - - - 9 55,000 - - 9 55,000 -
- - - - - 1 4,642 - - 14,642 -
2 20,000 600,000 8 30,000 4 00,000 - 9 69,642 - (326,276) 3 ,047,285 1 ,369,530
(562,810)(1,220,002)
(33,417) 8,869 4,553 929 (16,231) 9 49,415 (156,667) 1 79,164
4 6,048 12,151 1 1,281 1 2,435 2 25,682 - 1,471,419 1 62,810 3 ,372,226 4 ,592,228
$908,609$3,551,390$3,372,226
$ 12,631$ 21,020$ 1 5,834$ 1 3,364$ 209,451$ 949,415$ 6,143
99
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100
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.
Equipment Certificates 2008A - This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
- This fund was established to account for the purchase of capital equipment that was
Equipment Certificates 2009A
financed through the issuance of capital notes.
Open Space Referendum Bonds - This fund was established to account for the purchase of various land acquisitions
for open space preservation within the City.
101
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2009
Comparative Totals For December 31, 2008
StorEquipmen
mt
SeweParkBuildinCertificates
rg
ProjecDedicatioFund2008
tn
Assets:
Cash and investments$1,023$12,498$77,809$9,584
Accrued interest292
- - -
Property taxes receivable:
Unremitted488-
- -
Delinquent1,581-
- -
Total assets1,02314,56778,1019,584
Liabilities and Fund Balance
Liabilities:
Interfund payables61,000-
- -
Accounts payable1,747
- - -
Deferred revenue1,581-
- -
Total liabilities61,0001,5811,747
-
Fund balance (deficit):
Reserved for projects-9,584
- -
Unreserved:
Designated for projects12,98676,354
- -
Undesignated(59,977)-
- -
Total fund balance (deficit)(59,977)12,98676,3549,584
Total liabilities and fund balance$1,023$14,567$78,101$9,584
102
Statement 18
Totals
EquipmenOpen Spac
te
CertificatesReferenduNonmajor Capital Projects Funds
m
2009Bonds20092008
A
$390,639$5,747$497,300$677,452
1,478-1,7705,270
--488401
--1,5811,581
392,1175,747501,139684,704
-615,000676,00070,000
-2932,04039,117
--1,5811,581
-615,293679,621110,698
392,117-401,701485,494
--89,340155,809
-(609,546)(669,523)(67,297)
392,117(609,546)(178,482)574,006
$392,117$5,747$501,139$684,704
103
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2009
With Comparative Totals For The Year Ended December 31, 2008
Equipmen
Stormt
SeweParBuildinCertificate
rkgs
ProecDedicatioFun2008
jtnd
Revenues:
taxes$55,742
General property
$ -$ -$ -
Interovernmental
g
- 290 - -
Investment income(1,533)(398)(2,020) (1,092)
Miscellaneous:
Park dedication fees
- 41,216 - -
Other
- 16,095 12,500 -
Total revenues(1,533) (1,092)
112,945 10,480
Expenditures:
Current:
Generalovernment
g
- - 21,188 -
Public safety
- - - -
Public works1,093
- - -
Parks and recreation
- 131,385 - -
Capital outla:
y
overnment 35,640
Generalg
- - -
Public safet 299,319
y
- - -
Public works 138,766
- - -
Parks and recreation
- 47,294 - -
Total expenditures 474,818
- 178,679 21,188
Revenues over (under) expenditures(1,533)(65,734)(10,708) (475,910)
Other financin sources (uses):
g
Transfers in
- - 9,973 -
Bonds issued
- - - -
Bond premium
- - - -
Total other financin sources (uses)
g
- - 9,973 -
Net increase (decrease) in fund balance(1,533)(65,734) (735) (475,910)
Fund balance (deficit) - Januar 1(58,444) 485,494
y
78,720 77,089
Fund balance (deficit) - December 31$(59,977)$12,986$76,354$9,584
104
Statement 1
9
Total
EquipmenOpen Spaces
t
Nonmajor Capital Projects Fund
CertificateReferendus
sm
2009ABonds20092008
$ 55,742$54,628
$ -$ -
9,476 9,766
- 1,138
12,982 (510) 7,429
4,003
41,216
- - 133,585
28,595
- - 169,805
12,982 8,966 142,748
363,159
995 22,183
- 8,938
10,004 10,004
- 11,162
1,093
- - 471,605
131,385
- - 192,379
35,640
- - 368,094
299,319
- - -
138,766
- - 278,862
934,940 982,234
- 168,591
10,004 935,935 1,620,624
1,499,631
2,978 (926,969) (1,477,876)(1,136,472)
326,276 336,249
- 90,648
385,000 385,000
- 630,000
4,139 4,139
- -
389,139 326,276 725,388
720,648
(600,693)(752,488)(415,824)
392,117
(8,853) 574,006
- 989,830
$ 392,117$ (609,546)$ (178,482)$574,006
105
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERAL Statement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services$ 160,000$160,000$181,416$ 21,416$173,096
Investment income 6,0006,0009,486 3,48613,387
Miscellaneous2,487 2,4871,693
- -
Total revenues 166,000166,000193,389 27,389188,176
Expenditures:
Current:
Economic development 141,401141,401122,211 19,190108,941
Net increase (decrease) in fund balance$ 24,599$24,59971,178$ 46,57979,235
Fund balance (deficit) - January 1329,652250,417
Fund balance (deficit) - December 31$400,830$329,652
106
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANT Statement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental$ 50,000$50,000$ (50,000)$12,313
$ -
Investment income300300243 (57)105
Miscellaneous 3,5003,5007,475 3,9756,012
Total revenues 53,80053,8007,718 (46,082)18,430
Expenditures:
Current:
Economic development 50,00050,000150 49,85020,431
Net increase (decrease) in fund balance$ 3,800$3,8007,568$ 3,768(2,001)
Fund balance (deficit) - January 12,2604,261
Fund balance (deficit) - December 31$9,828$2,260
107
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY CENTER Statement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services$ 613,000$613,000$610,099$ (2,901)$553,984
Investment income(11,595) (11,595)(28,156)
- -
Miscellaneous 849,400849,400824,110 (25,290)472,459
Total revenues 1,462,4001,462,4001,422,614 (39,786)998,287
Expenditures:
Current:
Parks and recreation 1,022,4291,022,429903,446 118,983886,276
Capital outlay:
Parks and recreation13,952
- - - -
Total expenditures 1,022,4291,022,429903,446 118,983900,228
Revenue over (under) expenditures 439,971439,971519,168 79,19798,059
Other financing sources (uses)
Transfers out (353,892)(353,892)(353,892)(210,178)
-
Net increase (decrease) in fund balance$ 86,079$86,079165,276$ 79,197(112,119)
Fund balance (deficit) - January 1(584,515)(472,396)
Fund balance (deficit) - December 31$(419,239)$(584,515)
108
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DRAINAGE AND MAPPING Statement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services$ 10,000$10,000$12,226$ 2,226$8,147
Investment income 1,0001,0002,102 1,1023,361
Miscellaneous281
- - - -
Total Revenues 11,00011,00014,328 3,32811,789
Expenditures:
Current:
Public works 13,50013,5005,827 7,6737,010
Net increase (decrease) in fund balance$ (2,500)$(2,500)8,501$ 11,0014,779
Fund balance (deficit) - January 179,04574,266
Fund balance (deficit) - December 31$87,546$79,045
109
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMOStatement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes$ 35,000$33,842$33,421$ (421)$33,546
Intergovernmental1,158170 (988)687
-
Investment income395 395324
- -
Total revenues 35,00035,00033,986 (1,014)34,557
Expenditures:
Current:
Public works 35,36535,36533,627 1,73828,438
Net increase (decrease) in fund balance$(365)$(365)359$ 7246,119
Fund balance (deficit) - January 117,95311,834
Fund balance (deficit) - December 31$18,312$17,953
110
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRYStatement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental$ 12,500$12,500$2,000$ (10,500)$10,527
Investment income271 27176
- -
Miscellaneous9,729 9,72911,586
- -
Total revenues 12,50012,50012,000 (500)22,189
Expenditures:
Current:
Public works 14,00014,00012,488 1,51222,389
Net increase (decrease) in fund balance$ (1,500)$(1,500)(488)$ 1,012(200)
Fund balance (deficit) - January 16,3186,518
Fund balance (deficit) - December 31$5,830$6,318
111
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - TRAIL AND TRANSPORTATION Statement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services$ 30,600$30,600$9,514$ (21,086)$21,434
Investment income 2,5002,5001,798 (702)889
Net increase (decrease) in fund balance$ 33,100$33,10011,312$ (21,788)22,323
Fund balance (deficit) - January 154,86432,541
Fund balance (deficit) - December 31$66,176$54,864
112
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY Statement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services$ 40,000$40,000$10,678$ (29,322)$14,503
Investment income 5,0005,0001,983 (3,017)7,047
Total revenues 45,00045,00012,661 (32,339)21,550
Expenditures:
Current:
Public works 73,71873,71862,298 11,42060,858
Revenue over (under) expenditures (28,718)(28,718)(49,637) (20,919)(39,308)
Other financing sources (uses):
Transfers out (9,400)(9,400)(9,400)
- -
Net increase (decrease) in fund balance$ (38,118)$(38,118)(59,037)$ (20,919)(39,308)
Fund balance (deficit) - January 1147,314186,622
Fund balance (deficit) - December 31$88,277$147,314
113
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CAPITAL EQUIPMENT RESERVE Statement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes$ 210,000$203,051$198,632$ (4,419)$197,557
Intergovernmental6,9491,024 (5,925)4,119
-
Investment income 15,00015,00021,101 6,10147,994
Miscellaneous39 395,163
- -
Total revenues 225,000225,000220,796 (4,204)254,833
Expenditures:
Current:
General government 29,00029,00038,772 (9,772)22,264
Public works10,651 (10,651)3,330
- -
Parks and recreation20,658 (20,658)7,515
- -
Capital outlay:
Public works162,242
- - - -
Parks and recreation 45,00045,00024,236 20,764169,082
Total expenditures 74,00074,00094,317 (20,317)364,433
Revenues over (under) expenditures 151,000151,000126,479 (24,521)(109,600)
Other financing sources (uses):
Transfers out(75,000)
- - - -
Proceeds from the sale of capital assets12,264 12,2645,874
- -
Total other finance sources (uses)12,264 12,264(69,126)
- -
Net increase (decrease) in fund balance 151,000$ $151,000138,743$ (12,257)(178,726)
Fund balance (deficit) - January 1871,1291,049,855
Fund balance (deficit) - December 31$1,009,872$871,129
114
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING Statement 29
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Investment income$750$750$236$ (514)$396
Miscellaneous 13,00013,0009,268 (3,732)14,569
Total revenues 13,75013,7509,504 (4,246)14,965
Expenditures:
Current:
General government 20,70020,70020,340 36019,500
Net increase (decrease) in fund balance$ (6,950)$(6,950)(10,836)$ (3,886)(4,535)
Fund balance (deficit) - January 116,43720,972
Fund balance (deficit) - December 31$5,601$16,437
115
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING Statement 30
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Actual Amounts For The Year Ended December 31, 2008
Variance with
Final Budget -
Budgeted AmountsPositive2008
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services$ 25,000$25,000$54,437$ 29,437$180,458
Investment income 12,50012,500(344) (12,844)14,270
Total revenues 37,50037,50054,093 16,593194,728
Expenditures:
Current:
Public works 25,00025,00062,920 (37,920)228,740
Net increase (decrease) in fund balance$ 12,500$12,500(8,827)$ (21,327)(34,012)
Fund balance (deficit) - January 118,00852,020
Fund balance (deficit) - December 31$9,181$18,008
116
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.
117
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET ASSETS Statement 31
INTERNAL SERVICE FUNDS
December 31, 2009
With Comparative Totals for December 31, 2008
Central
EquipmentRiskTotals
MaintenanceManagement20092008
Assets:
Current assets:
Cash and cash equivalents 41,296$ 201,237$$242,533$99,410
Accrued interest245572 8171,113
Prepaid items1,750 1,7501,750
-
Inventories - at cost63,06563,06565,450
-
Total assets106,356201,809308,165167,723
Liabilities:
Current liabilities:
Accounts payable14,5451,12115,66622,260
Due to other governmental units2,855 2,855100
-
Salaries payable5,904405 6,3096,138
Total liabilities20,4494,38124,83028,498
Net assets:
Unrestricted$85,907$197,428$283,335$139,225
118
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 32
CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2009
With Comparative Totals For The Year Ended December 31, 2008
Central
EquipmentRiskTotals
MaintenanceManagement20092008
Operating revenues:
User charges$646,879$314,843$961,722$808,392
Other45234,481 34,93313,148
Total operating revenues647,331349,324996,655821,540
Operating expenses:
Personal services219,339106,438325,777311,804
Supplies241,4663,354244,820286,800
Other service charges90,637194,135284,772234,140
Total operating expenses551,442303,927855,369832,744
Operating income (loss)95,88945,397141,286(11,204)
Nonoperating revenues (expenses):
Investment income1,1631,661 2,8245,747
Change in net assets97,05247,058144,110(5,457)
Net assets - January 1(11,145)150,370139,225144,682
Net assets - December 31$85,907$197,428$283,335$139,225
119
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWSStatement 33
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2009
With Comparative Totals For The Year Ended December 31, 2008
Centra
l
Totals
EquipmenRis
tk
MaintenancManagemen20092008
et
Cash flows from operating activities:
Receipts from customers and users$647,331$349,324$996,655$821,540
Payment to suppliers(336,365)(194,681)(531,046)(517,411)
Payment to employees(219,214)(106,392)(325,606)(310,304)
Net cash flows from operating activities91,75248,251140,003(6,175)
Cash flows from noncapital financing activities:
Receipt of advances from other funds(60,000)(60,000)(20,000)
-
Payment of advances to other funds60,00060,00020,000
-
Net cash flows from noncapital financing activities(60,000)60,000-
-
Cash flows from investing activities:
Investment income1,0832,0373,1205,391
Net increase in cash and cash equivalents32,835110,288143,123(784)
Cash and cash equivalents - January 18,46190,94999,410100,194
Cash and cash equivalents - December 31$41,296$201,237$242,533$99,410
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)$95,889$45,397$141,286$(11,204)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in inventory2,3852,3851,425
-
Increase (decrease) in accounts payable(6,647)53(6,594)2,104
Increase (decrease) in contracts payable-(100)
- -
Increase (decrease) in due to other governmental units 2,7552,755100
-
Increase (decrease) in salaries payable125461711,500
Total adjustments(4,137)2,854(1,283)5,029
Net cash provided by operating activities$91,752$48,251$140,003
$(6,175)
120
AGENCY FUNDS
Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,
private organizations and/or other governmental units. The City of Andover had the following Agency Funds
during the year:
General Escrow – This fund is used to account for distribution of funds for insurance premiums of retirees.
General Agency – This fund is used to account for the collection and distribution of funds relating to building and
land development activities.
121
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET ASSETS Statement 34
FIDUCIARY FUNDS
December 31, 2009
GeneralGeneral
EscrowAgencyTotal
Assets:
Cash and investments 16,498$ 233,423$$ 249,921
Liabilities:
Accounts payable 131 -131
Deposits payable16,367233,423 249,790
Total liabilities$16,498$233,423$ 249,921
122
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 35
FIDUCIARY FUNDS
For The Year Ended December 31, 2009
BalanceBalance
January 1,December 31,
2009AdditionsDeletions2009
General Escrow Fund
Assets:
Cash and investments 36,088$ 45,680$$(65,270)$16,498
Liabilities:
Accounts payable2732,577(32,473)131
Deposits payable36,06113,103(32,797)16,367
Total liabilities$36,088$45,680$(65,270)$16,498
General Agency Fund
Assets:
Cash and investments 452,297$ 526,413$$(745,287)$233,423
Liabilities:
Accounts payable10,974307,905(318,879)-
Deposits payable441,323218,508(426,408)233,423
Total liabilities$452,297$526,413$(745,287)$233,423
Total Fiduciary Funds
Assets:
Cash and investments 488,385$ 572,093$$(810,557)$249,921
Liabilities:
Accounts payable11,001340,482(351,352)131
Deposits payable477,384231,611(459,205)249,790
Total liabilities$488,385$572,093$(810,557)$249,921
123
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124
SUPPLEMENTARY FINANCIAL INFORMATION
125
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2009
Authorized
IssueMaturityInterestand
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
General Obligation Revenue Bonds:
2004 EDA Pub Fac Lease Revenue Bonds4/23/20042/1/20142.215-5.400%19,580,000$
2006 EDA Pub Fac Lease Revenue Refunding Bonds 12/1/20062/1/20344.00-4.50%10,000,000
2007 EDA Pub Fac Lease Revenue Refunding Bonds 1/1/20072/1/20344.00-4.50%6,865,000
Total general obligation revenue bonds36,445,000
Special Assessment Bonds:
2005A G.O. Improvement Bonds4/28/20052/1/20112.95-3.65%3,560,000
Tax Increment Bonds:
2003B G.O. Tax Increment Refunding Bonds6/1/20038/1/20102.00-3.00%1,530,000
2004B G.O. Tax Increment Refunding Bonds3/16/20042/1/20132.00-3.25%4,260,000
Total tax increment bonds5,790,000
Certificates of Indebtedness:
2006B G.O. Equipment Certificates5/10/20062/1/20103.60-3.65%460,000
2007A G.O. Equipment Certificates3/13/20072/1/20114.00%760,000
2008A G.O. Equipment Certificates9/23/20082/1/20123.50%630,000
2009A G.O. Equipment Certificates3/26/20092/1/20122.00-2.25%385,000
Total certificates of indebtedness2,235,000
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:
2003A Permanent Improvement Revolving Bonds 6/1/20032/1/20102.00-2.60%4,580,000
2006A Permanent Improvement Revolving Bonds 5/10/20062/1/20143.60-3.85%2,450,000
Total permanent improvement revolving bonds7,030,000
State Aid Bonds:
2001B State Aid Street Bonds6/5/20012/1/20102.90-5.00%2,755,000
2009A State Aid Street Refunding Bonds3/26/20092/1/20152.25-2.80%955,000
Total state aid bonds:3,710,000
Total bonded indebtedness63,000,000
Compensated absences payable
-
Total governmental activities indebtedness63,000,000
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2002 G.O. Water Revenue Bonds5/9/20028/1/20122.30-5.00%9,780,000
2007B G.O. Water Revenue Refunding Bonds3/13/20072/1/20234.00-4.25%6,570,000
2009A G.O. Water Revenue Bonds3/26/20092/1/20242.00-4.251,025,000
Total general obligation revenue bonds17,375,000
Compensated absences payable
-
Total business-type activities indebtedness17,375,000
Total City indebtedness$80,375,000
126
Exhibit 1
Principal Payments
PriorCurrentOutstanding2010 Payment
YearsYear12/31/09PrincipalInterestTotal
$ 560,000$ 390,000$18,630,000$405,000$930,684$ 1,335,684
10,000,000424,227 424,227
- - -
6,865,000291,982 291,982
- - -
560,000 390,000 35,495,000405,0001,646,893 2,051,893
545,000 565,000 2,450,0001,850,00052,690 1,902,690
1,040,000 240,000 250,000250,0007,500 257,500
1,475,000 520,000 2,265,000530,00060,812 590,812
2,515,000 760,000 2,515,000780,00068,312 848,312
145,000 155,000 160,000160,0002,920 162,920
180,000 185,000 395,000195,00011,900 206,900
150,000 480,000154,00014,105 168,105
-
385,000130,0007,037 137,037
- -
325,000 490,000 1,420,000639,00035,962 674,962
850,000 265,000 2,775,000280,00088,417 368,417
225,000 115,000-
- - -
1,075,000 380,000 2,775,000280,00088,417 368,417
2,965,000 795,000 820,000820,00010,660 830,660
310,000 325,000 1,815,000335,00062,026 397,026
3,275,000 1,120,000 2,635,0001,155,00072,686 1,227,686
995,000 160,000 1,600,0001,600,00037,612 1,637,612
955,00023,427 23,427
- - -
995,000 160,000 2,555,0001,600,00061,039 1,661,039
9,290,000 3,865,000 49,845,0006,709,0002,025,999 8,734,999
541,606
- - - - -
9,290,000 3,865,000 50,386,6066,709,0002,025,999 8,734,999
1,670,000 375,000 7,735,000395,000359,221 754,221
6,570,000266,146 266,146
- - -
1,025,00060,00032,657 92,657
- -
1,670,000 375,000 15,330,000455,000658,024 1,113,024
120,546
- - - - -
1,670,000 375,000 15,450,546455,000658,024 1,113,024
$10,960,000$ 4,240,000$65,837,152$7,164,000$2,684,023$ 9,848,023
127
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF TAX CAPACITY RATES AND LEVIESExhibit 2
Taxes Payable
20102009
Tax capacity values$28,743,240$31,446,280
Captured tax increment value(2,284,466)(2,343,333)
Fiscal disparities - contribution(1,179,036)(1,070,166)
Local taxable value25,279,73828,032,781
Fiscal disparities - distribution4,713,020 4,395,187
Adjusted tax capacit$29,992,758$32,427,968
y
20102009
dTax CapacityCertifiedTax Capacity
Certifie
LevyRateLevyRate
General Revenue Levy:
General Fund7,596,494$ 6,844,236$
Capital Equipment/Projects210,000 210,000
Parks Projects59,410 59,410
Road and Bridge1,003,056 1,151,136
Pedestrian Trail Maintenance51,773 51,773
Total General Revenue Levy8,920,73330.263% 8,316,55525.755%
Debt Service Levy:
2004A G.O. Capital Improvement Bonds368,418 378,609
2004 EDA Public Facility Revenue Bonds934,203 980,914
2006B G.O. Equipment Certificate 171,066
-
2007A G.O. Equipment Certificate208,000 221,340
2008A G.O. Equipment Certificate171,410 179,895
2009A G.O. Equipment Certificate130,738 147,241
Total Debt Service Levy1,812,7696.117% 2,079,0656.426%
Lower Rum River Watershed 0.329%35,00035,000 0.303%
Total10,768,50236.709%10,430,62032.484%
Voter-Approved Open Space Referendum - MV87,7970.00606% 162,9000.00551%
$10,856,299$10,593,520
128
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIESExhibit 3
GENERAL OBLIGATION BONDS
December 31, 2009
TaxesTax Increment BondsCertificates of Indebtedness
Payable2003B2004BTotal2007A2008A2009ATotal
$168,610$501,941
2010$ 2 57,500$ 5 90,812$ 848,312$ 204,000$ 1 29,331
2011300,368
- 6 10,050 610,050 - 168,905 1 31,463
2012
- 6 07,875 607,875 - - - -
2013
- 5 99,588 599,588 - - - -
$2,408,325$204,000$337,515$802,309
$ 2 57,500$ 2 ,665,825$ 2 60,794
CapitalEDA Public Facility Lease
ImprovementRevenueRefundingRefundingTotal
TaxesBondsBondsBondsBondsDeferred Tax
Payable2004Aof 2004of 2006of 2007TotalLevies
$700,684$2,419,354
2010$ 3 68,417$ 7 00,684$ -$ -
$1,980,452
2011 3 75,143 6 94,891 - - 694,891
$1,691,324
2012 3 85,993 6 97,456 - - 697,456
$1,684,027
2013 3 90,905 6 93,534 - - 693,534
$1,032,074
2014 4 04,596 2 69,373 212,114 145,991 627,478
$1,047,011
2015 4 17,000 - 371,528 258,483 630,011
$1,055,161
2016 4 23,050 - 372,828 259,283 632,111
$1,057,787
2017 4 27,875 - 369,589 260,323 629,912
2018$628,837
- - 369,064 259,773 628,837
2019$632,811
- - 368,628 264,183 632,811
2020$630,739
- - 372,525 258,214 630,739
2021$628,577
- - 366,328 262,249 628,577
2022$626,066
- - 369,921 256,145 626,066
2023$623,254
- - 370,234 253,020 623,254
2024$629,630
- - 365,207 264,423 629,630
2025 -$625,273
- 367,812 257,461 625,273
2026$625,793
- - 364,346 261,447 625,793
2027$625,333
- - 363,444 261,889 625,333
2028$623,897
- - 359,127 264,770 623,897
2029$622,158
- - 362,690 259,468 622,158
2030$625,221
- - 363,030 262,191 625,221
2031$621,665
- - 359,379 262,286 621,665
2032$621,233
- - 362,592 258,641 621,233
2033$624,980
- - 362,313 262,667 624,980
2034$954,771
- - 563,660 391,111 954,771
$3,192,979$ 16,276,3155,484,018$$22,937,428
$ 3 ,055,938$ 7 ,736,359
129
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2009
TransfeTransfe
rr
InOu
t
General Fund
Water EF$150,250
n
$ -General Fund Admin Allocatio
Sewer EF46,680
n
-General Fund Admin Allocatio
Total General Fund196,930
-
Special Revenue Funds (SRF)
Community Center SR
F
2004 EDA Public Facility Lease Revenue Bond DSF353,892Debt Service Allocatio
n
-
Right of Way Management SR
F
Road and Bridge CPF9,400Degredation of Roadways Allocatio
n
-
Total Special Revenue Funds363,292
-
Debt Service Funds (DSF)
2003A PIR DSF
PIR CPF830,000
n
-Debt Service Allocatio
2003B G.O. TIF Refunding Bonds DSF
TIF Projects CPF220,000
n
-Debt Service Allocatio
2004 EDA Public Facility Lease Revenue Bonds DSF
Community Center SR353,892
Fn
-Debt Service Allocatio
2004B G.O. TIF Refunding Bonds DSF
TIF Projects CPF600,000
n
-Debt Service Allocatio
2005B G.O. Capital Improvement Bonds DSF
Building CPF9,973Close Debt Service Fun
d
-
2006A PIR DSF
PIR CPF400,000
n
-Debt Service Allocatio
2006B G.O. Capital Note DSF
Storm Sewer EF10,000
n
-Debt Service Allocatio
Open Space Referendum Bonds DS
F
Open Space Referendum Bonds CP326,276Open Space Land Purchase
F
-
Total Debt Service Funds2,413,892336,249
Capital Projects Funds (CPF)
Water Trunk CPF
Water EF Debt Service Allocatio165,643
n
-
Sewer Trunk CPF
Sewer EF350,000
e
-Replacement Reserv
Road and Bridge CPF
Right of Way Management SR9,400
Fn
-Degredation of Roadways Allocatio
Building CPF
2005B G.O. Capital Improvement Bonds DSF$9,973
d
$ -Close Debt Service Fun
130
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2009(Continued)
Capital Projects Funds (CPF) (continued)
TIF Projects CPF
2003B G.O. TIF Refunding Bonds DSF$ Debt Service Allocatio220,000
n
$ -
2004B G.O. TIF Refunding Bonds DSF Debt Service Allocatio600,000
n
-
820,000
-
PIR CPF
2003A PIR DSF830,000Debt Service Allocatio
n
-
2006A PIR DSF400,000Debt Service Allocatio
n
-
1,230,000
-
Open Space Referendum Bonds CP
F
Open Space Referendum Bonds DS326,276
F
-Open Space Land Purchase
Total Capital Projects Funds695,6492,215,643
Enterprise Funds
Water Fun
d
Water Trunk Fund165,643
n
-Debt Service Allocatio
General Fun150,250General Fund Admin Allocatio
dn
-
165,643150,250
Sewer Fun
d
General Fun46,680General Fund Admin Allocatio
dn
-
Sewer Trunk Fun350,000Replacement Reserv
de
-
396,680
-
Storm Sewer Fun
d
2006B G.O. Capital Note10,000Debt Service Allocatio
n
-
Total Enterprise Funds165,643556,930
Total All Funds$3,472,114$3,472,114
131
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132
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 overall financial health.
Contents
Page
Financial Trends 134
These tables contain trend information to help the reader understand how the City’s financial performance
and well-being have changed over time.
Revenue Capacity139
These tables contain information to help the reader assess the City’s most significant local revenue
source, the property tax.
Debt Capacity145
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.
150
Demographic and Economic Information
These tables offer demographic and economic indicators to help the reader understand the environment
within which the City of Andover’s financial activities take place.
Operating Information152
These tables contain service and infrastructure data to help the reader understand how the information in
the City’s financial report relates to the services the City provides and the activities it performs.
133
CITY OF ANDOVER, MINNESOTA
NET ASSETS BY COMPONENTTable 1
Last Five Fiscal Years
(accrual basis of accounting)
20052006200720082009
Governmental Activities
Invested in capital assets, net of related debt68,411,598$ $ 74,858,759$ 77,285,905$ 79,644,769$ 83,394,872
Restricted 7,315,419 5,441,376 7,763,716 8,345,185 8,252,691
Unrestricted 18,230,563 18,461,454 21,294,876 19,904,063 19,442,008
Total governmental activities net assets 93,957,580 98,761,589 106,344,497 107,894,017 111,089,571
Business-Type Activities
Invested in capital assets, net of related debt35,588,013 38,419,302 38,580,630 37,606,052 36,939,962
Unrestricted 3,032,746 3,281,875 3,659,887 4,005,471 4,875,384
Total business-type activities net assets 38,620,759 41,701,177 42,240,517 41,611,523 41,815,346
Primary Government
Invested in capital assets, net of related debt103,999,611 113,278,061 115,866,535 117,250,821 120,334,834
Restricted 7,315,419 5,441,376 7,763,716 8,345,185 8,252,691
Unrestricted 21,263,309 21,743,329 24,954,763 23,909,534 24,317,392
Total primary government net assets$ 132,578,339$ 140,462,766$ 148,585,014$ 149,505,540$ 152,904,917
Note:
The City began to report accrual information when it implemented GASB 34 in 2002.
134
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET ASSETSTable 2
Last Five Fiscal Years
(accrual basis of accounting)
20052006200720082009
Expenses
Governmental activities:
General government$ 2,432,433$ 2,637,584$ 2,509,011$ 2,505,105$ 2,413,916
Public safety 3,353,798 3,443,285 3,851,086 4,035,884 4,237,401
Public works 3,937,423 3,031,459 3,783,509 5,144,197 3,776,367
Parks and recreation 1,575,582 2,442,305 2,954,753 2,963,218 2,880,595
Recycling 118,599 91,378 94,929 85,397 86,949
Economic development 459,635 626,103 2,265,605 540,285 481,632
Interest on long-term debt 1,797,469 1,668,444 2,303,567 2,219,130 2,146,960
Total governmental activities expenses 13,674,939 13,940,558 17,762,460 17,493,216 16,023,820
Business-type activities:
Water 2,160,502 2,232,144 2,587,847 2,563,781 2,594,713
Sewer 1,555,010 1,585,548 1,631,224 1,794,891 1,831,505
Storm sewer 400,114 408,003 537,151 521,975 536,619
Total business-type activities expenses 4,115,626 4,225,695 4,756,222 4,880,647 4,962,837
Total primary government expenses 17,790,565 18,166,253 22,518,682 22,373,863 20,986,657
Program Revenues
Governmental activities:
Charges for services:
General government 709,538 471,573 785,600 647,081 483,639
Public safety 1,001,912 804,447 662,299 721,289 412,113
427,043 316,451
Public works379,890325,672408,656
Parks and recreation 461,679 749,407 859,531 1,049,032 1,495,779
Recycling 32,810 35,379 33,158 35,897 29,479
Economic development 218,605 182,535 199,840 185,539
-
Operating grants and contributions 2,535,140 959,286 1,129,099 917,618 966,635
Capital grants and contributions 3,934,686 4,920,694 8,794,164 1,069,607 1,631,929
Total governmental activities program revenue9,055,655 8,485,063 12,855,042 5,067,407 5,521,564
Business-type activities:
Charges for services:
Water 1,510,119 1,768,388 2,025,452 1,987,432 2,127,676
Sewer 1,550,745 1,691,728 1,771,670 1,869,327 1,967,997
Storm sewer 248,753 287,397 288,372 297,125 325,392
Capital grants and contributions 823,797 2,761,282 158,113 142,133 793,589
Total business-type activities program revenue4,133,414 6,508,795 4,243,607 4,296,017 5,214,654
Total primary government program revenues 13,189,069 14,993,858 17,098,649 9,363,424 10,736,218
Net (Expense)/Revenue
Governmental activities (4,619,284) (5,455,495) (4,907,418) (12,425,809) (10,502,256)
Business-type activities 17,788 2,283,100 (512,615) (584,630) 251,817
Total primary government net expense$ (4,601,496)$ (3,172,395)$ (5,420,033)$ (13,010,439)$ (10,250,439)
135
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET ASSETSTable 2
Last Five Fiscal Years(Continued)
(accrual basis of accounting)
20052006200720082009
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes
General property taxes7,066,852$ 8,084,559$ 8,897,755$ 9,752,701$ 10,175,519$
Tax increment collections 1,285,195 1,562,131 1,661,204 1,930,6691,783,270
Unrestricted grants and contributions 86,906 77,642 486,626 274,402 131,084
Unrestricted investment earnings 690,648 1,019,304 1,967,583 1,514,012 1,032,507
Gain on sale of capital assets 251,504 219,910 191,735 234,070 6,144
Transfers (438,426) (704,042) (714,577) 416,874 421,887
Total governmental activities 8,942,679 10,259,504 12,490,326 13,975,329 13,697,810
Business-type activities:
Unrestricted investment earnings 47,620 87,376 337,378 372,510 373,893
Gain on sale of capital assets 5,900
- - - -
Transfers 438,426 704,042 714,577 (416,874) (421,887)
Total business-type activities 486,046 797,318 1,051,955 (44,364) (47,994)
Total primary government 9,428,725 11,056,822 13,542,281 13,930,965 13,649,816
Change in Net Assets
Governmental activities 4,323,395 4,804,009 7,582,908 1,549,520 3,195,554
Business-type activities 503,834 3,080,418 539,340 (628,994) 203,823
Total primary government$ 4,827,229$ 7,884,427$ 8,122,248$ 920,526$ 3,399,377
Note:
The City began to report accrual information when it implemented GASB 34 in 2002.
136
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDSTable 3
Last Five Fiscal Years
(modified accrual basis of accounting)
20052006200720082009
General Fund
Reserved$126,320$144,496$208,216$193,805$207,515
Unreserved3,076,1573,248,3173,682,2443,981,2304,120,897
Total general fund3,202,4773,392,8133,890,4604,175,0354,328,412
All Other Governmental Funds
Reserved for:
Special revenue funds58,57046,84912,45717,20623,696
(1)(2)
21,359,06220,132,60320,305,482
Debt service funds1,872,59911,342,527
Capital project funds1,335,858633,078735,141604,494427,017
Unreserved reported in:
Designated:
Special revenue funds1,262,8821,569,7921,685,0451,540,7201,691,625
Capital project funds15,018,31714,433,93412,011,08313,483,42614,839,789
Undesignated:
Special revenue funds1,487(323,404)(480,592)(599,461)(458,423)
Capital project funds(491,849)(54,174)(55,945)(67,297)(669,523)
Total all other governmental funds19,057,86427,648,60235,266,25135,111,69136,159,663
Total governmental funds$22,260,341$31,041,415$39,156,711$39,286,726$40,488,075
(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.
(2)
In 2007, the EDA issued $6,865,000 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.
137
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDSTable 4
Last Five Fiscal Years
(modified accrual basis of accounting)
20052006200720082009
Revenues
General property taxes$ 7,033,613$ 8,057,592$ 8,833,249$ 9,695,103$ 10,168,143
Tax increment collections 1,285,639 1,546,394 1,659,222 1,762,119 1,951,343
Licenses and permits 724,436 598,094 475,893 525,339 291,903
Intergovernmental 2,663,683 2,661,726 1,644,914 1,175,205 1,654,614
Special assessments 2,045,969 1,289,590 3,342,039 1,638,006 1,421,591
Charges for services 1,692,316 1,770,156 2,035,735 1,724,052 1,579,659
Fines 90,530 91,490 101,445 104,930 110,779
Investment income 684,173 1,014,801 1,962,379 1,508,265 1,029,683
Miscellaneous:
Park dedication fees 286,316 626,567 113,013 133,585 41,216
Connection charges 1,311,426 372,133 829,624 254,903 20,119
Other 578,389 395,789 621,798 800,857 1,018,853
Total revenues 18,396,490 18,424,332 21,619,311 19,322,364 19,287,903
Expenditures
General government 2,349,965 2,343,332 2,399,297 2,366,574 2,242,662
Public safety 3,093,298 3,268,236 3,580,240 3,796,965 4,015,410
Public works 3,650,351 2,817,475 3,491,353 4,843,288 3,545,132
Parks and recreation 1,309,987 1,599,885 1,825,7061,953,8221,891,125
Recycling116,506 90,590 94,669 86,631 85,527
Economic development 426,708 626,103 2,265,605 538,293 477,648
Unallocated 9,798 8,454 6,915 17,999 19,540
Capital outlay 1,616,709 987,075 2,803,485 1,460,662 1,519,944
Debt service:
Principal 8,487,000 5,254,000 3,275,000 3,460,000 3,865,000
Interest 2,042,003 1,683,599 2,089,857 2,253,223 2,178,233
Other 13,226 253,134 167,187 15,645 39,265
Construction/acquisition costs 11,146,387 4,579,910 360,742 - -
Total expenditures 34,261,938 23,511,793 22,360,056 20,793,102 19,879,486
Revenues over (under) expenditures (15,865,448) (5,087,461) (740,745) (1,470,738) (591,583)
Other Financing Sources (Uses)
Transfers in 224,000 522,000 578,925 580,343 587,530
Transfers out - (167,424) (57,671) (163,469) (165,643)
Bonds issued 4,210,000 2,910,000 760,000 630,000 385,000
Refunding bonds issued - 10,000,000 6,865,000 - 955,000
Bond premium - - 3,401 - 18,781
Bond discount (28,961) - - - -
Proceeds from the sale of capital assets219,887603,959706,386 553,879 12,264
Total other financing sources (uses) 4,624,926 13,868,535 8,856,041 1,600,753 1,792,932
Net increase (decrease) in fund balances$(11,240,522)$ 8,781,074$ 8,115,296$ 130,015$ 1,201,349
Debt service as a percentage of
noncapital expenditures49.04%40.07%28.82%29.63%33.13%
138
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYTable 5
Last Ten Fiscal Years
Real PropertyPersonal PropertyTotalTotalNet Tax Capacity
TaxableNet TaxTaxableNet TaxTaxableNet TaxDirectas a Percentage
YearMarket ValueCapacityMarket ValueCapacityMarket ValueCapacityTax Rateof Market Value
20001,171,553,600$$15,690,055$18,139,600$ 615,830$1,189,693,200$16,305,88522.735%1.37%
20011,354,146,000 18,348,662 18,285,500 1,372,431,500 18,969,45922.736%1.38%
620,797
20021,539,835,500 15,336,075 17,999,800 1,557,835,300 15,695,61533.511%1.01%
359,540
20031,886,169,900 17,549,064 20,202,300 1,906,372,200 17,951,90433.376%0.94%
402,840
20042,059,947,400 20,142,088 20,761,100 2,080,708,500 20,556,10431.584%0.99%
414,016
20052,321,605,300 23,027,376 21,718,900 2,343,324,200 23,461,04531.414%1.00%
433,669
20062,603,704,500 26,204,279 22,003,500 2,625,708,000 26,643,63531.556%1.01%
439,356
20072,800,462,600 28,897,916 21,998,500 2,875,150,800 29,337,16231.003%1.02%
439,246
20082,969,639,300 30,749,076 20,837,800 3,046,838,900 31,165,07631.276%1.02%
416,000
20092,982,595,600 31,023,349 21,185,200 3,055,274,000 31,446,28032.181%1.03%
422,931
Source
: Anoka County Property Tax Division
139
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE Table 6
DIRECT AND OVERLAPPING GOVERNMENTS
Years 2001 through 2010
TaxesDirectOverlapping Governments
PayableCity (1)SchoolCountyOtherTotalTotal
200122.736%50.230%28.859%2.850%81.939%104.675%
200233.511%29.070%37.976%3.745%70.791%104.302%
200333.376%27.802%37.714%3.755%69.271%102.647%
200431.584%21.218%35.340%3.482%60.040%91.624%
200531.414%21.492%33.080%4.021%58.593%90.007%
200631.556%20.046%32.096%3.755%55.897%87.453%
200731.003%19.337%30.675%3.671%53.683%84.686%
200831.414%16.962%31.041%4.604%52.607%84.021%
200932.049%18.247%32.051%3.251%53.549%85.598%
201036.381%20.236%35.273%3.436%58.945%95.326%
Source
: Anoka County Property Tax Division
Note
: (1) Includes the Lower Rum River Watershed
140
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONSTable 7
Last Five Fiscal Years
Collected Within the Fiscal Year of Levy
TotalMarket ValueCollections InTotal Collections to Date
TaxTaxHomesteadTotalPercentageSubsequentPercentage
YearLevyLevyCreditCollectedof LevyYearsAmountof Levy
20057,556,813$ $ 6,973,305$ *6,986,48413,179$ 92.45%79,400$ $ 7,065,88493.50%
20068,550,919 7,977,278 *7,978,9781,700 93.31%79,450 8,058,42894.24%
20079,316,427 8,738,606 410,519 9,149,12598.20%110,593 9,259,71899.39%
200810,153,718 9,554,131 *9,752,345198,214 96.05%137,071 9,889,41697.40%
200910,593,520 9,992,240 *10,046,86954,629 94.84%Not Available
* Included in the total tax levy is approximately $400,000 of market value homestead credit (MVHC) that the City will not be receiving. Due to State legislative
actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City.
141
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 8
Current Year and Ten Years Ago
20092000
NetPercentage ofNetPercentage of
TaxTotal CityTaxTotal City
TaxpayersCapacityRankTax CapacityCapacityRankTax Capacity
Connexus Energy$226,48810.72%$336,6201.96%
1
Target Corporation221,65620.70%
-
Andover Limited Partnership169,70630.54%242,7361.41%
2
Presbyterian Homes of Andover164,89940.52%
-
116 LLC141,96650.45%
-
Minnegasco, Inc.137,88660.44%129,9070.75%
3
Andover Station LLC109,68070.35%
-
BDT Holdings LLC109,41680.35%
-
Grey Oaks Inc.100,79890.32%
-
Great River Energy98,944100.31%
-
Individual - Commercial/Industrial-80,5240.47%
4
Columbia Park Properties-63,2260.37%
5
Minnesota Pipe Line Company-42,4330.25%
7
Health Partners-42,0130.24%
8
Povlitzki Properties-35,2130.20%
9
MN Interstate Pipeline-39,1470.23%
1 0
Northern States Power-53,1560.31%
6
Total$1,481,4394.71%$1,064,9756.19%
Net Tax Capacity$31,446,280$16,305,885
Source: Anoka County Property Tax Division
142
CITY OF ANDOVER, MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION Table 9
Last Ten Fiscal Years
Estimated Market ValuesNew Construction
Commercial / IndustrialResidential
Commercial
/
YeaIndustrial (1)ResidentiaTotaPermitsValuPermitsValu
rllee
2000$82,616,300$1,107,076,900$ 141,189,693,200 12,672,448$$46,322,000
3 42
200195,215,2001,277,216,3001,372,431,50043,378,128
821,086,481 2 85
2002107,671,6001,450,163,7001,557,835,30031,848,000
1910,616,851 2 18
2003127,728,4001,778,643,8001,906,372,2004,764,04628,973,300
13 1 82
2004144,629,1001,936,079,4002,080,708,50036,224,546
1619,926,817 2 51
2005168,684,2002,174,640,0002,343,324,2006,571,67134,309,393
20 2 26
2006191,931,8002,433,776,2002,625,708,00025,236,120
81,791,896 1 53
2007211,760,9002,663,389,9002,875,150,800
92,403,831 9 118,347,873
2008233,801,7002,813,037,2003,046,838,900
1116,878,603 4 911,116,400
2009248,129,5002,807,144,5003,055,274,000767,4309,246,347
11 4 7
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
143
CITY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONSTable 10
Last Ten Fiscal Years
TotalDelinquent
CollectionsAssessments
CurrentCurrentPercent ofDelinquentTotalas a Percent ofOutstandingas a Percent of
AssessmentsAssessmentsAssessmentsAssessmentAssessmentCurrentDelinquentCurrent
YearDue (1)CollectedCollectedCollectionsCollectionsAssessments DueAssessmentsAssessments Due
98.06%$ 36,374106.46%$ 15,8713.66%
2000$ 433,242$ 4 24,854$ 4 61,228
94.95% 5,93396.32% 26,2646.08%
2001 432,207 4 10,380 4 16,313
93.38% 5,69495.11% 37,40411.37%
2002 328,831 3 07,051 3 12,745
98.03% 5,91799.14% 49,3299.25%
2003 533,340 5 22,851 5 28,768
98.39% 7,921102.51% 15,1577.88%
2004 192,373 1 89,279 1 97,200
98.34% 4,002100.58% 22,21712.45%
2005 178,434 1 75,471 1 79,473
85.41% 4,79087.53% 51,72122.95%
2006 225,365 1 92,477 1 97,267
87.14% 12,46094.75% 76,42046.65%
2007 163,817 1 42,750 1 55,210
90.20% 1,47990.60% 174,81047.74%
2008 366,203 3 30,304 3 31,783
104.16%36,693 115.65% 202,99963.55%
2009 319,448 3 32,739 3 69,432
Note
: (1) Only includes assessments certified to Anoka County.
144
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBTTable 11
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
General Bonded Debt Outstanding (2)
GrossLess DebtNetPercentageNet Bonded
FiscalTaxableBondedServiceBondedof EstimatedDebt
YearPopulation (1)Market ValueDebtFundDebtMarket ValuePer Capita
2000 26,588$ 1,189,693,200$ 3,280,000$ (48,001)$ 3,231,9990.27%
$ 1 21.56
2001 27,446 1,372,431,500 4,210,000 (94,728) 4,115,2720.30%
1 49.94
2002 28,664 1,557,835,300 3,680,000 (112,848) 3,567,1520.23%
1 24.45
2003 28,939 1,906,372,200 3,710,000 (88,875) 3,621,1250.19%
1 25.13
2004 29,262 2,080,708,500 24,236,000 (815,322) 23,420,678*1.13%
8 00.38
2005 30,080 2,343,324,500 24,389,000 (1,041,140) 23,347,8601.00%
7 76.19
2006 30,222 2,625,708,000 33,850,000 (10,739,510) 23,110,4900.88%
7 64.69
2007 30,263 2,875,150,800 40,880,000 (17,822,418) 23,057,5820.80%
761.91
2008 31,023 3,046,838,900 40,565,000 (17,939,959) 22,625,0410.74%
729.30
2009 31,250 3,055,274,000 39,690,000 (17,973,588) 21,716,4120.71%
694.93
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.
145
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 12
December 31, 2009
Gross General
ObligationPercentageNet Amount
Bonded DebtApplicableApplicable
Outstandingto Cityto City
Direct:
City of Andover$ 39,690,000(1)100.0000%39,690,000$
Overlapping:
Anoka County 136,775,000(2)8.9805%12,283,147
ISD No. 11 Anoka-Hennepin 124,306,689(2)12.8285%15,946,682
ISD No. 15 St. Francis 43,265,000(2)6.9699%3,015,507
Metropolitan Council 157,950,000(2)0.8867%1,400,471
Total Overlapping Debt 32,645,807
Total Overlapping and Direct Debt$ 72,335,807
Notes:
(1) Only includes debt supported by tax levy.
(2) Information obtained from Anoka County.
146
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGINTable 13
Last Five Fiscal Years
20052006200720082009
Estimated Taxable Market Value2,244,286,800$ $ 2,543,591,200$ 2,800,462,600$ 2,969,639,300$ 2,982,595,600
Debt limitation:
Debt limit percent2%2%2%3%3%
Debt limit in dollars 44,885,736 50,871,824 56,009,252 89,089,179 89,477,868
Debt applicable to limit:
Total bonded debt 52,344,000 59,665,000 70,240,000 67,050,000 65,175,000
Less: Nonapplicable debt
G.O. water revenue bonds (9,150,000) (8,815,000) (15,040,000) (14,680,000) (15,330,000)
Special assessment bonds (3,560,000) (3,560,000) (3,560,000) (3,015,000) (2,450,000)
Tax increment bonds (7,065,000) (4,715,000) (4,010,000) (3,275,000) (2,515,000)
Permanent improvement
revolving bonds (5,975,000) (6,660,000) (4,835,000) (3,755,000) (2,635,000)
State aid bonds (2,205,000) (2,065,000) (1,915,000) (1,760,000) (2,555,000)
Less: Cash and investments in
related debt service funds (1,041,140) (10,739,510) (17,822,418) (17,939,959) (17,973,588)
Total debt applicable to limitation 23,347,860 23,110,490 23,057,582 22,625,041 21,716,412
Legal debt margin$ 21,537,876$ 27,761,334$ 32,951,670$ 66,464,138$ 67,761,456
Total debt applicable to the limit as
a percentage of debt limit52.02%45.43%41.17%25.40%24.27%
147
CITY OF ANDOVER, MINNESOTA
PLEDGED-REVENUE COVERAGETable 14
Last Five Fiscal Years
Water Revenue Bonds
Water Enterprise Fund
Less:Net
FiscalOperatingOperatingTransfersAvailableDebt Service
YearRevenuesExpenses (1)In (2)RevenuePrincipalInterestCoverage
2005$ 1,510,119$ 1,111,874$ 398,245$ 320,000$ 421,393
$ - 0.54
2006 1,768,388 1,139,500 167,474 796,362 335,000 411,720
1.07
2007 2,025,452 1,264,370 57,671 818,753 345,000 395,775
1.11
2008 1,987,432 1,218,444 163,469 932,457 360,000 382,753
1.26
2009 2,127,676 1,264,398 165,643 1,028,921 375,000 393,828
1.34
2004 EDA Public Facility Lease Revenue Bonds (3)
Debt Service
Community Center Special Revenue Fund
Less:NetGeneral
FiscalOperatingOperatingAvailableProperty TaxDebt Service
YearRevenueExpensesRevenueRevenuePrincipalInterestCoverage
2005$ 522,839$ 589,900$ (67,061)$ 748,376$ -$ 1,194,167
0.57
2006 741,241 748,146 (6,905) 800,349 185,000 964,102
0.69
2007 876,136 799,909 76,227 844,123 185,000 959,731
0.80
2008 998,287 900,228 98,059 890,709 190,000 954,381
0.86
2009 1,422,614 903,446 519,168 940,640 390,000 944,806
1.09
Special Assessment and Permanent Improvement Revolving Bonds
Special
FiscalAssessmentDebt Service
YearRevenuePrincipalInterestCoverage
2005$ 1,321,019$ 1,705,000$ 192,153 0.70
2006 786,918 1,765,000 289,174 0.38
2007 2,966,380 1,825,000 314,152 1.39
2008 1,184,928 1,625,000 243,340 0.63
2009 993,703 1,685,000 198,232 0.53
Tax Increment Financing Bonds
Tax
FiscalIncrementDebt Service
YearRevenuePrincipal (4)InterestCoverage
2005$ 1,160,190$ 1,975,000$ 419,220 0.48
2006 1,414,254 2,350,000 193,045 0.56
2007 1,474,219 705,000 120,545 1.79
2008 1,614,651 735,000(5) 105,033 1.92
2009 1,790,279 760,000 87,620 2.11
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) 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.
(2) The transfer in is included because a portion of the trunk connection charge associated with adding additional users to the water
system is designated to compensate prior years capital investment in water utility infrastructure and the treatment plant.
(3) Half of the facility financed by these bonds is leased to the Greater Minneapolis YMCA, their lease payments started
in 2008. Future YMCA lease payments will significantly reduce the City's obligation on debt service payments.
(4) Net of crossover refundings.
(5) Starting in 2008, all tax increment revenues will now be receipted in the Tax Increment Projects Capital Projects Fund and
transferred over as needed to make the debt service payments. In 2009, the debt service fund had sufficient funds to make
its debt service payment.
148
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPETable 15
Last Five Fiscal Years
20052006200720082009
City of Andover's Outstanding Debt
Governmental activities
G.O. revenue bonds$ 19,580,000$29,395,000$ 36,075,000$ 35,885,000$ 35,495,000
Special assessment bonds 3,560,000 3,560,000 3,560,000 3,015,000 2,450,000
Tax increment bonds 7,065,000 4,715,000 4,010,000 3,275,000 2,515,000
Certificates of indebtedness 699,000 580,000 1,280,000 1,525,000 1,420,000
Capital improvement bonds 4,110,000 3,875,000 3,525,000 3,155,000 2,775,000
Permanent improvement
revolving bonds 5,975,000 6,660,000 4,835,000 3,755,000 2,635,000
State aid bonds 2,205,000 2,065,000 1,915,000 1,760,000 2,555,000
Compensated absences 410,402 459,299 509,851 504,893 541,606
Total governmental activities 43,604,402 51,309,299 55,709,851 52,874,893 50,386,606
Business-type activities
G.O. revenue bonds 9,150,000 8,815,000 15,040,000 14,680,000 15,330,000
Compensated absences 66,816 74,675 90,228 107,333 120,546
Total business-type activities 9,216,816 8,889,675 15,130,228 14,787,333 15,450,546
Total outstanding debt$ 52,821,218$60,198,974$ 70,840,079$ 67,662,226$ 65,837,152
Total outstanding debt as a
percentage of personal income6.41%7.06%8.05%7.69%7.19%
Total outstanding debt per capita$ 1,756$ 1,992$ 2,341$ 2,181$ 2,107
149
CITY OF ANDOVER, MINNESOT
A
DEMOGRAPHIC AND ECONOMIC STATISTICSTable 16
Last Five Years
City of AndoverAnoka County
PersonalPersonalPer CapitaUnemployment
YearPopulationIncome (2)Population (3)Income (2)Income (3)Percentage
$ 824,041,600$8,788,398,1853.8%
2005 3 0,080 320,803$ 2 7,395
852,769,6419,227,051,0343.9%
2006 3 0,222 327,005 2 8,217
879,544,3279,481,977,8594.5%
2007 3 0,263 326,252 2 9,063
880,029,4419,278,562,0306.9%
2008 3 1,023 327,090 2 8,367
915,968,7509,753,264,5616.9%
(1)
2009 3 1,250 332,751 2 9,311
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
150
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERSTable 17
Current Year and Ten Years Ago
20092000
PercentagePercentage
of Total Cityof Total City
TaxpayerEmployeesRankEmploymentEmployeesRankEmployment
Anoka Hennepin I.S.D. No. 1157431.9%26.2%
1 3 08 1
Bunker Hills Regional Park/Activity Center 23713.2%
2 - - -
11.1%14.4%
Kottkes' Bus Service, Inc. 200(1)
3 1 70 3
Target 1679.3%
4 - - -
Anoka County Highway Department 1417.8%8.5%
5 1 00 4
Columbia Park Medical Group - Andover 1075.9%
6 - - -
Meadow Creek Christian School 1005.5%6.9%
7 8 1 6
Festival Foods 975.4%15.3%
8 1 80 2
Farmstead at Andover 945.2%
9 - - -
City of Andover 854.7%4.9%
1 0 5 8 8
McDonald's6.8%
- - - 8 0 7
Ace Solid Waste, Inc.4.2%
- - - 5 0 9
Ed Fields & Sons, Inc.8.5%
- - - 1 00 4
Riccar Heating & Air Conditioning4.2%
- - - 5 0 9
Total 1,802100.0%100.0%
1 ,177
Source
: Minnesota Department of Employment and Economic Development
(1) Number of employees as of March, 2006
151
CITY OF ANDOVER, MINNESOTA
FULL TIME EQUIVALENT EMPLOYEESTable 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Five Fiscal Years
Function/Program20052006200720082009
Governmental:
Administration 1 .47 1 .30 1 .45 1 .15 1 .15
Human resources
0 .06 0 .07 0 .02 0 .01 0 .02
City clerk
1 .84 1 .84 1 .91 1 .43 1 .29
Elections
0 .10 0 .10 0 .10 0 .08 0 .10
Financial administration
2 .99 2 .85 2 .35 1 .97 1 .85
Information systems
0 .91 0 .91 0 .91 0 .91 0 .91
Planning and zoning
4 .57 4 .75 4 .75 4 .25 3 .70
Engineering
4 .67 4 .57 4 .78 4 .41 4 .28
Facility Management
- - - - 0 .33
EDA general
1 .21 0 .70 0 .70 0 .85 0 .90
LRRWMO
0 .21 0 .21 0 .21 0 .21 0 .20
Risk management
0 .13 0 .10 0 .10 0 .10 0 .10
Public Safety:
Fire
3 .25 3 .10 3 .10 3 .10 3 .10
Protective inspection
5 .58 6 .03 6 .08 5 .78 3 .93
Civil defense
0 .05 0 .05 0 .05 0 .05 0 .05
Public Works:
Streets and highways 5.05
5 .35 6 .12 6 .20 6 .00
Snow and ice3.92
3 .27 3 .49 3 .21 2 .45
Street signs
1 .20 1 .35 1 .44 1 .41 1 .31
Forestry
0 .10 0 .10 - - -
ROW management / utility
0 .85 0 .85 0 .60 0 .65 0 .50
Water
5 .04 5 .57 4 .78 4 .84 4 .63
Sewer
3 .15 2 .97 3 .18 3 .24 3 .38
Storm sewer
1 .60 2 .01 1 .95 2 .20 2 .55
Central equipment
2 .91 2 .92 2 .96 2 .96 2 .87
Park & Recreation:
Park and recreation
6 .85 7 .33 7 .05 6 .85 6 .66
Community center
2 .10 2 .12 2 .12 2 .23 2 .96
Recycling
1 .26 0 .93 0 .88 0 .86 1 .23
6 1.37 6 2.12 6 1.16 5 8.75 5 5.50
Source:
City Finance Department
Note
: Employees are allocated to various departments based on the functions that they perform.
152
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAMTable 19
Last Five Years
Function/Program20052006200720082009
General government:
n/a
Registered votersn/a 16,813n/a 1 7,830
Voters registering election dayn/a
n/a 2,200n/a 2 ,727
Number of precinctsn/an/an/a
10 1 0
Public safety:
Police:
Number of calls for services
12,861 11,516 12,150 11,617 11,075
Number of traffic citations
1,795 1,673 1,710 2,475 2,848
Number of patrol hours
30,856 30,856 30,240 30,240 30,240
Fire:
Fire responses
325 443 366 326 305
Emergency medical responses
594 645 736 797 754
Protective inspections:
Inspections
6,536 8,128 5,456 5,020 3,716
Residential permits
226 153 91 49 42
Other permits
2,473 2,481 2,095 1,862 1,543
Public works:
Streets and highways:
Asphalt streets maintained (miles)
178 187 189 189 189
Gravel roads maintained (miles)
8 8 8 8 8
Cul-de-sacs and dead ends maintained
320 329 330 336 338
Parks and recreation:
Number of City parks
58 63 65 66 66
Total acreage mowed
265 200 297 297 293
Ballfields maintained28
25 24 27 28
Number of playgrounds
33 35 37 37 37
Soccer fields maintained 20 16 16 19 19
Trail maintained (miles)
26 23 35 35 35
Community center bookings (hrs):
Fieldhouse
1,405 7,450 8,514 8,282 9,718
Ice arena
2,002 2,405 2,497 2,393 2,640
Water:
New connections
247 197 63 33 145
Total customers
5,657 5,854 5,917 5,950 6,095
Annual consumption
(thousands of gallons)
856,671 1,014,251 1,046,789 993,626 1,000,971
Sanitary Sewer:
New connections
229 129 120 23 183
Total customers
6,528 6,657 6,777 6,800 6,983
Storm Sewer:
Total customers
9,516 9,744 9,785 9,800 9,950
Storm sewer lines maintained (miles)
43 51 65 66 69
Source: Various City Departments
153
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMTable 20
Last Five Years
Function/Program20052006200720082009
Public Safety:
Fire:
Stations 3 3 3 3 3
Fire vehicles
18 1 8 20 2 0 21
Protective inspections:
Vehicles
3 3 3 3 3
Public Works:
Streets and Highways:
Streets (miles)
186 1 87 189 1 89 189
Street lights
1 ,105 1,187 1 ,204 1,212 1 ,215
Traffic signals
20 2 2 22 2 3 23
Parks and Recreation:
Parks
58 6 3 65 6 6 66
Ball fields
25 2 4 27 2 8 28
Soccer fields
16 1 6 16 1 9 19
Playgrounds
33 3 5 37 3 7 37
Trails (miles)
26 2 3 35 3 5 35
Community centers
1 1 1 1 1
Water:
Water treatment plants
1 1 1 1 1
Storage facilities
3 3 3 3 3
Water main (miles)
79 1 07 108 1 08 108
Connections 5,450
5,854 5,917 5,950 6 ,095
Sanitary sewer:
Sewer main (miles)
82 9 0 91 9 1 91
Connections
6 ,250 6,657 6 ,777 6,800 6 ,983
Number of lift stations
8 9 9 9 9
Storm sewer:
Storm sewer lines (miles)
43 5 1 65 6 6 69
154