2004 Audited Financial Statements
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CITY OF ALBERTVILLE
Wright County, Minnesota
TABLE OF CONTENTS
ELECTED OFFICIALS AND ADMINISTRATION ......................................................
INDEPENDENT AUDITORS' REPORT ...... ............ .......... .............................................
MANAGEMENT'S DISCUSSION AND ANALYSIS .....................................................
BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
Statement of Net Assets.................. ......................................... ........................................
Statement of Activities..................... ...............................................................................
Fund Financial Statements:
Balance Sheet - Governmental Funds ..... ....... ................ ........ .........................................
Reconciliation of the Balance Sheet of the Statement of Net Assets-
Governmental Funds........................ .............................................. ...............................
Reconciliation of the Statement of Net Assets - Business-Type Activities ....................
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds.....................................................................................................
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances to the Statement of Activities - Governmental Funds .........................
Reconciliation of the Revenues, Expenses and Changes in Net Assets -
Business-Type Activities............. .................................................................................
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - General Fund... ..................... .................. ................ ......................... ........
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget
and Actual- Sewer Access Fund .................................................................................
Combining Statement of Net Assets - Proprietary Funds ...............................................
Statement of Revenues, Expenses and Changes in Net Assets - Proprietary
Funds....................................... ........................................................ .............................
Statement of Cash Flows - Proprietary Funds.................................................................
Statement of Fiduciary Net Assets...................................................................................
Notes to the Financial Statements. .......................... ............... ....... ................................. .......
SUPPLEMENTARY INFORMATION:
Combining Balance Sheet - Nonmajor Governmental Funds...............................................
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
N onmajor Governmental Funds........... ..............................................................................
AUDITORS' REPORT ON LEGAL COMPLIANCE ....................................................
SCHEDULE OF FINDINGS ON LEGAL COMPLIANCE ..........................................
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CITY OF ALBERTVILLE
Wright County, Minnesota
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 2004
Elected Officials Position Term Expires
Don Peterson Mayor December 31, 2004
Tom Fay Council Member December 31, 2006
Ron Klecker Council Member December 31,2004
LeRoy Berning Council Member December 31, 2004
Dorothy Rich Council Member December 31, 2004
Administration
Larry Kruse
City Administrator
Appointed
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KDV
KERN. DEWENTER.VIERE
INDEPENDENT AUDITORS' REPORT
February 18,2005
Honorable Mayor and City Council
City of Albertville
Albertville, Minnesota
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund and the aggregate remaining fund information of the
City of Albertville, Minnesota, as of and for the year ended December 31, 2004, which
collectively comprise the City's basic financial statements as listed in the Table of Contents.
These basic financial statements are the responsibility of the City's management. Our
responsibility is to express an opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
We did not audit the City's governmental-type land values due to lack of accurate records. We
were unable to satisfy ourselves as to the historical costs of the City's land values by other audit
procedures.
In our opinion, except for the effect of such adjustments, if any, as might have been determined
to be necessary had we been able to examine evidence regarding the historical cost value of the
City's land assets, the basic financial statements referred to above present fairly, in all material
respects, the financial position of the governmental activities, the business-type activities, each
major fund and the aggregate remaining fund information of the City of Albertville, Minnesota,
as of December 31, 2004, and the results of its operations and cash flows, where applicable,
thereof and the budgetary comparison for the General Fund for the year then ended in conformity
with U.S. generally accepted accounting principles.
As described in Note l.D.9., the City has implemented a new financial reporting model, as required
by the provisions of GASH Statement No. 34, Basic Financial Statements - and Management's
Discussion and Analysis - for State and Local Governments as amended and interpreted, as of
December 31,2004.
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KERN. DEWENTER.VIERE
The Management's Discussion and Analysis on pages 5 through 11 is not a required part of the
basic financial statements but is supplementary information required by the Governmental
Accounting Standards Board. We have applied certain limited procedures, which consisted
primarily of management inquiries regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on
it.
Our audit was performed for the purpose of forming an opinion on the financial statements that
collectively comprise the City's basic financial statements. The accompanying supplementary
information identified in the Table of Contents is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the City. Such additional
information has been subjected to the auditing procedures applied in our audit of the basic
financial statements and, in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
K./A n- I D~we.11--+Ql, V u.-u I f...,+d.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2004
As management ofthe City of Albertville, we offer readers of the City of Albertville's financial
statements this narrative overview and analysis of the financial activities of the City of
Albertville for the fiscal year ended December 31, 2004. Comparative information is omitted
this year because this is the first year the City of Albertville implemented GASB 34.
Financial Highlights
The assets of the City of Albertville exceeded its liabilities at the close of the most recent fiscal
year by $31,226,962 (net assets). Ofthis amount, $5,004,022 (unrestricted net assets) may be
used to meet the government's ongoing obligations to citizens and creditors.
As ofthe close ofthe current fiscal year, the City of Albertville's governmental funds reported
combined ending fund balances of$6,880,198.
At the end of the current fiscal year, unreserved fund balance for the general fund was
$1,222,944, or 61 % of total general funds' 2004 expenditures.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City of Albertville's
basic financial statements. The City of Albertville's basic financial statements comprise ofthree
components: 1) government-wide financial statements, 2) funds financial statements, and 3)
notes to the financials 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
designated to provide readers with a broad overview of the City of Albertville's finances, in a
manner similar to a private-sector business. There are two government-wide statements, the
Statement of Net Assets and Statement of Activities.
The statement of net assets presents information on all the City of Albertville'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 ofthe
City of Albertville is improving or deteriorating.
The statement of activities presents information showing how the government'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).
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2004
Both of the government-wide financial statements distinguish functions of the City of Albertville
that are principally supported by taxes and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs through
user fees and charges (business-type activities). The governmental activities of the City of
Albertville include general government, public safety, public works, culture and recreation and
economic development. The business-type activities of the City of Albertville include a Water,
Sanitary Sewer and Storm Sewer distribution and/or operation.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Albertville, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds ofthe City of
Albertville 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 inflow and outflows of spendable 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 financing 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 statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and the government-wide perspective.
The City of Albertville adopts an annual budget for its general fund. A budgetary comparison
statement has been provided for the general fund to demonstrate compliance with this budget.
Proprietary funds. The City of Albertville maintains three individual proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in
government-wide financial statements. The City of Albertville uses enterprise funds to account
for its Water, Sanitary Sewer and Storm Sewer distribution and operation.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statement because the resources of those funds are not available to support the City of
Albertville's own programs. The accounting used for fiduciary funds is much like that used for
proprietary funds.
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2004
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding ofthe data provided in the government-wide and fund financial statements.
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 of Albertville, assets exceeded liabilities by
$31,226,962 at the close of the most recent fiscal year.
By far the largest portion ofthe City of Albertville net assets (63 percent) reflects its investment
in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to
acquire those assets that is still outstanding. The City of Albertville uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending.
Although the City of Albertville'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 Albertville Statement of
Net Assets
Governmental Business-Type
Activities Activities Total
2004 2004 2004
Current Assets $4,780,686 $7,735,746 $12,516,432
Capital Assets $20,955,481 $7,909,981 $28,865,462
Total Assets $25,736,167 $15,645,727 $41,381,894
Current Liabilities $1,292,171 $511,043 $1,803,214
Non-current Liabilities $6,185,000 $2,166,718 $8,351,718
Total Liabilities $7,477,171 $2,677,761 $10,154,932
Net Assets:
Invested in Capital Assets $14,185,481 $5,500,764 $19,686,245
Net of Related Debt
Restricted Assets $2,189,395 $4,347,300 $6,536,695
Umestricted Assets $1,884,120 $3,119,902 $5,004,022
Total Net Assets $18,258,996 $12,967,966 $31,226,962
An additional portion ofthe City of Albertville's net assets (21 percent) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
umestricted net assets ($5,004,022) may be used to meet the government's ongoing obligations
to citizens and creditors.
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2004
Change in Net Assets
The increase in net assets occurs as a result of the City's revenues and transfers being more than
its expenses for the year ended December 31, 2004.
REVENUES
Program Revenues -
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
General Revenues -
Taxes
Aids and Payments from State
Other Sources
Governmental Business-type
Activities Activities
$ 932,579 2,140,346
64,227
576,846 110,877
1,692,979
29,192
97.067 94.637
Total Revenues
$ 3.391.934 $ 2.345.860
$ 1,690,979
720,984
827,220
37,013
142,382
450,777
184,438
2,486
267 .894
$3.686.472 $ 637.701
$ -294,538 $ 1,708,159
$ 525,000 $ 525,000
$ 230,462 $ 1,183,159
$18.028,534 $11.784.807
$18.258.996 $12.967.966
EXPENSES
General Government
Public Safety
Public Works
Culture & Recreation
Economic Development
Sanitary Sewer
Water
Storm Sewer
Interest on Long-Term Debt
Total Expenses
Change in Net Assets Before Transfers
Transfers
Change in Net Assets After Transfers
Net Assets - Beginning
Net Assets - Ending
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2004
The net cost of governmental activities is their total costs less program revenues applicable to
each category.
Total Cost Net Cost
of Services of Services
Business- Business-
Governmental type Governmental type
General Government 1,690,979 (1,031,458)
Public Safety 720,984 (595,196)
Public Works 827,220 (245,196)
Culture and Recreation 37,013 169,398
Economic Development 142,382 (142,382)
Interest on Long Term Debt 267,894 (267,894)
Sanitary Sewer 450,777 1,032,387
Water 184,438 487,533
Storm Sewer 2,486 93,602
Total Expense $3,686,472 $637,701 (2,112,820) 1,613,522
Financial Analysis of the Government's Funds
As noted earlier, the City of Albertville uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements.
Governmental Activities.
The focus of the City of Albertville's governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing
the City of Albertville'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.
General Fund revenues increased 8 percent. The decreases in intergovernmental revenues (8%),
licenses and permits (17%) were offset by increases in property taxes (13%), charges for services
(159%) and miscellaneous revenue (125%).
The General Fund expenses increased roughly 1 percent which has been consistent and for the
most part, increases in expenses closely paralleled inflation and growth in the demand for
servIces.
As ofthe end ofthe current fiscal year, the City of Albertville's governmental funds reported
combined ending fund balances of$6,880,198. Approximately $-295,789 constitutes unreserved
undesignated fund balance. The remainder of the fund balance is reserved to indicate that it is
not available for new spending because it has already been committed for a variety of purposes
such as capital assets and debt service.
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Other
Financing
Sources (Uses)
(633,111)
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2004
The general fund is the chief operating fund of the City of Albertville.
Table A-6
Revenues and Expenditures - Governmental Funds
General
Revenue
2,320,678
Special Revenue Funds:
Sewer Access 947,749
Capital Project Funds:
Closed Capital Projects
CSAH 19 Widening
Public Works Facility
Prairie Run
(1,038)
143,888
(7,796)
(2,349)
Other Non-major funds 923,033
Totals
4.324.165
Expenditures
2,005,118
337,116
1,378
1,837,289
1,555,253
1,518,403
7.254.557
Fund Balance
Increase
(Decrease)
(317,551)
(1,652,709) (704,960)
(151,925) (490,079)
o 142,510
2,097,968 252,883
o (1,557,602)
1,312,068 716,698
972.291 0.958.101)
General Fund Budgetary Highlights
Differences between the original budget and the final budget were relatively minor and can
briefly summarized as follows:
General Government increase of$87,219 was to add the finance department to the budget,
scanning equipment, server and some miscellaneous items.
The increase in Public Safety of$25,000 was for services provided and not budgeted.
Of these increases they were to be funded out of building permit revenue, charges for services
and developer fees. During the year, however, revenues exceeded budgetary estimates and
expenditures were less than budgetary estimates thus resulting in a positive change in fund
balance.
Capital Assets and Debt Administration
The City of Albertville's investment capital assets for its governmental and business type
activities include land, buildings, systems, improvements, machinery, equipment, park facilities,
roads and some miscellaneous items.
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CITY OF ALBERTVILLE
Wright County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2004
Major Capital asset events during the current fiscal year included the following:
New Public Works Facility
During the current fiscal year, the government issued a general obligation bond to finance the
new public works facility.
At December 31, 2004 the City has $971,331 in commitments outstanding for capital
expenditures.
The City of Albertville maintains an "A3" rating.
Economic Factors and Next Year's Budgets and Rates
The City of Albertville expects to continue its residential and commercial growth at the same
rate experienced the past couple of years.
Capital Projects 2005-2006: Phase 3 of the Wastewater Treatment Facility
City Hall
Requests for Information
The financial report is designed to provide a general overview ofthe City of Albertville'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 Albertville, 5975 Main Ave NE, POBox 9, Albertville, MN 55301.
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BASIC FINANCIAL STATEMENTS
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CITY OF ALBERTVILLE I
Wri~ht County, Minnesota
STATEMENT OF NET ASSETS I
December 31, 2004
Governmental Business-Type
Activities Activities Total I
ASSETS:
Current Assets:
Cash and Investments (Including Cash Equivalents) $ 1,989,853 $ 7,200,048 $ 9,189,901
Cash in Trust 869,136 869,136 I
Restricted Cash in Trust 86,908 86,908
Property Taxes Receivable - Delinquent 39,626 39,626
Special Assessments Receivable - Deferred 1,109,575 128,316 1,237,891
Special Assessments - Delinquent 93,433 93,433 I
Accounts Receivable 481,008 273,183 754,191
Interest Receivable 18,271 18,271
Due from Other Governments 21,803 134,199 156,002
Notes Receivable 71,073 71,073 I
Total Current Assets 4,780,686 7,735,746 12,516,432
Noncurrent Assets:
Capital Assets: I
Land 190,269 190,269
Construction in Progress 4,255,978 1,177,394 5,433,372
Sewer Plant and Lines 7,418,792 7,418,792
Water Mains 436,894 436,894 I
Buildings 2,563,750 2,563,750
Infrastructure 19,316,608 19,316,608
Improvements Other than Buildings 450,000 450,000
Vehicles and Machinery 883,714 236,270 1,119,984 I
Other Equipment 10,500 10,500
Less Accumulated Depreciation (6,525,069) (1,549,638) (8,074,707)
Total Capital Assets, Net of Depreciation 20,955,481 7,909,981 28,865,462
Total Assets $ 25.736.167 $ 15.645.727 $ 41.381.894 I
LIABILITIES AND NET ASSETS:
Liabilities: I
Current Liabilities:
Accounts Payable $ 150,175 $ 22,249 $ 172,424
Contracts Payable 424,881 424,881
Accrued Salaries and Benefits Payable 6,744 2,696 9,440 I
Compensated Absences 22,173 22,173
Due to Other Governments 243,599 243,599
Accrued Interest Payable 100,671 100,671
Deferred Revenue 2,527 2,527 I
Current Bond Principal Payable 585,000 242,499 827,499
Total Current Liabilities 1,292,171 511,043 1,803,214
Noncurrent Liabilities: I
Bond Principal Payable 6,770,000 2,409,217 9,179,217
Less Amounts Due Within One Year (585,000) (242,499) (827,499)
Total Noncurrent Liabilities 6,185,000 2,166,718 8,351,718
Total Liabilities 7,477,171 2,677,761 10,154,932 I
Net Assets:
Invested in Capital Assets, Net of Related Debt 14,185,481 5,500,764 19,686,245 I
Restricted for:
Debt Service 1,233,351 1,233,351
Other Purposes 956,044 4,347,300 5,303,344
Unrestricted 1,884,120 3,119,902 5,004,022
Total Net Assets 18,258,996 12,967,966 31 ,226,962 I
Total Liabilities and Net Assets $ 25.736.167 $ 15.645.727 $ 41.381.894
The Notes to the Financial Statements are an integral part of this statement. 13 I
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14
I
CITY OF ALBERTVILLE I
Wright County, Minnesota
BALANCESHEET-GOVERNMENTALFUNDS I
December 31,2004
Special Revenue Capital Projects I
~ 101 I I 204 ~ I 400
Sewer Closed I
General Access Capital Projects
ASSETS:
Cash and Investments I
(Including Cash Equivalents) $ 1,437,496 $ 4,218,984 $
Cash in Trust 866,637
Restricted Cash in Trust I
Taxes Receivable - Delinquent 34,625
Special Assessments Receivable - Deferred 128,316 110,773
Special Assessments - Delinquent 90,904 I
Accounts Receivable, Net of Allowance 475,757
Interest Receivable 18,271
Due from Other Governments 20,669
Notes Receivable I
Total Assets $ 2.377.698 $ 4.347.300 $ 677,434
LIABILITIES AND FUND BALANCES: I
Liabilities:
Cash Overdraft $ $ $ 2,907,856
Accounts Payable 110,858 21,487 I
Contracts Payable
Accrued Salaries and Related Benefits 6,744
Deferred Revenue 37,152 128,316 201,677 I
Total Liabilities 154,754 128,316 3,131,020
Fund Balances: I
Reserved for Debt Service Funds
Unreserved: I
Designated:
General Fund 1,000,000
Special Revenue Funds 1,525,000 I
Debt Service Funds
Capital Project Funds
Undesignated:
General Fund 1,222,944 I
Special Revenue Funds 2,693,984
Debt Service Funds
Capital Project Funds (2,453,586) I
Total Fund Balances 2,222,944 4,218,984 (2,453,586)
Total Liabilities and
Fund Balances $ 2.377.698 $ 4.347.300 $ 677,434 I
The Notes to the Financial Statements are an integral part of this statement. 15 I
I
I
I
I Capital Projects
I 465 I , 466 I , 473 Other Total
I CSAH 19 Public Works Governmental Governmental
Widening Facility Prairie Run Funds Funds
I $ 1,760,587 $ 198,342 $ $ 3,670,237 $ 11,285,646
2,499 869,136
86,908 86,908
I 5,001 39,626
365,289 633,513 1,237,891
2,529 93,433
I 5,251 481,008
18,271
1,134 21,803
I 71,073 71,073
$ 2,125,876 $ 198,342 $ $ 4,478,145 $ 14,204,795
I
$ $ $ 1,165,647 $ 1,215,837 $ 5,289,340
I 5,953 20,784 159,082
7,543 391,955 25,383 424,881
6,744
I 365,289 712,116 1,444,550
365,289 13,496 1,557,602 1,974,120 7,324,597
I 1,334,022 1,334,022
I 1,000,000
1,238,442 2,763,442
I 79,636 79,636
1,760,587 184,846 53,454 1,998,887
I 1,222,944
1,028,238 3,722,222
(77,171) (77,171)
I (1,557,602) (1,152,596) (5,163,784)
1,760,587 184,846 (1,557,602) 2,504,025 6,880,198
I $ 2,125,876 $ 198,342 $ $ 4,478,145 $ 14,204,795
I 16
CITY OF ALBERTVILLE
Wright County, Minnesota
RECONCILIATION OF THE BALANCE SHEET TO
THE STATEMENT OF NET ASSETS - GOVERNMENTAL FUNDS
December 31, 2004
Total Fund Balances - Governmental Funds
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 as assets in governmental funds.
Cost of Capital Assets
Less Accumulated Depreciation
Long-term liabilities, including bonds payable, are not due and payable in
the current period and therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of:
Bond Principal Payable
Compensated Absences Payable
Delinquent receivables will be collected this year, but are not
available soon enough to pay for the current period's expenditures and
therefore are deferred in the funds.
Delinquent Property Taxes
Delinquent Special Assessments
Deferred receivables are not available to pay for current expenditures
and therefore are deferred in the funds.
Deferred Special Assessments Receivable
Notes Receivable
Sewer Access Special Revenue Fund is proprietary in nature, and therefore reported
in the Business-Type Activities on the Statement of Net Assets.
The Wastewater Treatment Facility Capital Project Fund is proprietary in
nature and relates to the Sanitary Sewer Fund. Therefore, it is included as a
business-type activity.
Governmental funds do not report a liability for accrued interest until due
and payable.
Total Net Assets - Governmental Activities
The Notes to the Financial Statements are an integral part ofthis statement.
$ 6,880,198
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
27,480,550
(6,525,069)
(6,770,000)
(22,173)
39,626
93,433
1,109,575
71,073
(4,218,984)
221,438
(100,671)
$ 18.258.996
17
I
I
I
I
I Total Fund Net Assets - Business-Type Activities
I
I
I
I
I
I
I
I
I
I
I
I
I
I
CITY OF ALBERTVILLE
Wright County, Minnesota
RECONCILIATION OF THE STATEMENT
OF NET ASSETS - BUSINESS-TYPE ACTIVITIES
December 31, 2004
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
The Sewer Access Special Revenue Fund is proprietary in nature
and relates to the sewer access charges for the Sanitary Sewer Fund. Therefore,
it is included as a business-type activity.
The Sewer Access Special Revenue Fund recorded deferred special assessments
receivable. In the fund statements, deferred special assessments are not available
in the current period and therefore are deferred in the funds. This revenue
is recognized when earned as a business-type activity.
The Wastewater Treatment Facility Capital Project Fund is proprietary in
nature and relates to the Sanitary Sewer Fund. Therefore, it is included as a
business-type activity.
The Wastewater Treatment Facility Capital Project Fund expenditures are
construction in progress assets and are capitalized.
Total Net Assets - Business-Type Activities
The Notes to the Financial Statements are an integral part of this statement.
$ 8,620,666
4,218,984
128,316
(221,438)
221,438
$ 12.967.966
18
I
CITY OF ALBERTVILLE I
Wright County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES AND I
CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS
For the Year Ended December 31, 2004
Special Revenue Capital Project I
101 II 204 II 400 II 465 I
Sewer Closed Capital CSAH 19
General Access Projects Widening
REVENUES:
Taxes $ 1,409,832 $ $ $ I
Special Assessments 25,665 69,049
Licenses and Permits 572,230
Intergovernmental 89,689
Charges for Services 145,171 877,171 20,722 I
Fines and Forfeitures 2,500
Miscellaneous 101,256 70,578 (47,425) 74,839
Total Revenues 2,320,678 947,749 (1,038) 143,888
EXPENDITURES: I
Current:
General Government:
Current 611,495 I
Capital Outlay 70,779
Public Safety:
Current 669,509 I
Capital Outlay 7,278
Public Works:
Current 404,311
Capital Outlay 3,256 I
Culture and Recreation:
Current 120,081
Capital Outlay 38,059
Economic Development: I
Current 41,136
Capital Outlay 11,647
Debt Service 27,567
Capital Outlay 337,116 1,378 I
Total Expenditures 2,005,118 337,116 1,378
Excess (Deficiency) of Revenues Over
(Under) Expenditures 315,560 947,749 (338,154) 142,510 I
OTHER FINANCING SOURCES (USES):
Bond Proceeds
Transfers In I
Transfers Out (633,111) (1,652,709) (151,925)
Total Other Financing Sources (Uses) (633,111 ) (1,652,709) (151,925)
Excess (Deficiency) of Revenues Over (Under) I
Expenditures and Other Financing Sources (Uses) (317,551) (704,960) (490,079) 142,510
FUND BALANCE: I
Beginning of Year, As Previously Reported 2,540,495 4,923,944 (1,963,507) 1,618,077
Prior Period Adjustment
Beginning of Year, As Restated 2,540,495 4,923,944 (1,963,507) 1,618,077 I
Ending of Year $ 2,222.944 $ 4.218.984 $ (2,453,586) $ 1.760,587
The Notes to the Financial Statements are an integral part of this statement. 19 I
CITY OF ALBERTVILLE
WriKht County, Minnesota
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO
THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2004
Total Net Change in Fund Balances - Governmental Funds
$ (1,958,101)
Amounts reported for governmental activities in the Statement of Activities
are different because:
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.
Capital Outlays
Depreciation Expense
4,002,921
(894,885)
Principal payments on long-term debt are recognized as expenditures
in the governmental funds but as an increase in net assets on the Statement
of Activities.
273,829
Compensated absences are recognized as paid in the governmental funds but
recognized as the expense is incurred in the Statement of Activities.
(4,533)
Interest payments on long-term debt in the Statement of Activities differs from
the amount reported in the governmental funds because interest is recognized
as an expenditure in the funds when it is due, and thus requires the use of current
resources. In the Statement of Activities, however, interest expense is recognized
as the interest accrues, regardless of when it is due.
(30,685)
Proceeds from long-term debt are recognized as another financing source in
the governmental funds but as a decrease in net assets on the Statement of
Activities.
(2,100,000)
Delinquent receivables will be collected this year, but are not available soon
enough to pay for the current period's expenditures, and therefore are not revenues in the funds.
Delinquent Special Assessments
Delinquent Property Taxes
(4,271)
1,799
Certain revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds.
Deferred Special Assessments
Notes Receivab]e
3],7]5
(13,725)
704,960
22],438
$ 230,462
21
Sewer Access Special Revenue Fund is proprietary in nature and therefore is reported
with business-type activities.
Wastewater Facility Capital Project Fund is proprietary in nature and therefore is reported
with business-type activities.
Change in Net Assets - Governmental Activities
The Notes to the Financia] Statements are an integral part of this statement.
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
,I Total Net Income in Fund Net Assets - Business-Type Activities
I
,I
I
I
I
I
I
I
I
I
I
I'
I
I
CITY OF ALBERTVILLE
Wright County, Minnesota
RECONCILIATION OF THE REVENUES, EXPENSES AND
CHANGES IN NET ASSETS - BUSINESS-TYPE ACTIVITIES
For the Year Ended December 31, 2004
Amounts reported for governmental activities in the Statement of Activities
are different because:
Recognize current year activity from the Sewer Access Special Revenue Fund
with the business-type activities.
Deferred special assessments from the Sewer Access Special Revenue Fund are
not available in the current period and therefore are deferred in the Funds.
Change in Net Assets - Business-Type Activities
The Notes to the Financial Statements are an integral part of this statement.
$ 1,790,803
(704,960)
97,316
$ 1,183.159
22
I
CITY OF ALBERTVILLE I
Wright County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES AND I
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND I
For the Year Ended December 31, 2004
Variance with I,
Budgeted Amounts Final Budget - 'I
Actual Positive
Original Final Amounts (Negative)
REVENUES: I,
Taxes $ 1,440,922 $ 1,440,922 $ 1,409,832 $ (31,090)
Licenses and Permits 544,250 606,469 572,230 (34,239)
Intergovernmental Revenue 44,000 44,000 89,689 45,689 I
Charges for Services 53,500 103,500 145,171 41,671
Fines and Forfeitures 100 100 2,500 2,400
Miscellaneous 75,000 75,000 101,256 26,256 I
Total Revenues 2,157,772 2,269,991 2,320,678 50,687
EXPENDITURES: I
Current:
General Government 772,650 859,869 682,274 177,595
Public Safety 653,288 678,288 676,787 1,501 I
Public Works 495,861 495,861 407,567 88,294
Culture and Recreation 194,853 194,853 158,140 36,713 I
Economic Development 13,120 13,120 52,783 (39,663)
Debt Service 28,000 28,000 27,567 433
Total Expenditures 2,157,772 2,269,991 2,005,118 264,873 I
Excess of Revenues
Over Expenditures 315,560 315,560 I
OTHER FINANCING USE:
Transfers Out (633,111) (633,111) I
Deficiency of Revenues Under I
Expenditures and Other
Financing Use $ $ (317,551 ) $ (317,551)
FUND BALANCE: 'I
Beginning of Year 2,540,495
Ending of Year $ 2,222,944 I
The Notes to the Financial Statements are an integral part of this statement. 23 I
I
I
I
I
I
I
REVENUES:
I Charges for Services
. Miscellaneous
Total Revenues
I
I
I
I
I
I
I
I
I
I
I
I
CITY OF ALBERTVILLE
Wright County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES AND
IN FUND BALANCE -
BUDGET AND ACTUAL - SEWER ACCESS FUND
For the Year Ended December 31,2004
Budgeted Amounts
Original
Final
$
$
OTHER FINANCING USES:
Transfers Out
Total Other Financing Uses
Deficiency of Revenues
Under Other Financing Uses
$
$
FUND BALANCE:
Beginning of Year
End of Year
The Notes to the Financial Statements are an integral part of this statement.
Actual
Amounts
$ 877,171
70,578
947,749
(1,652,709)
(1,652,709)
(704,960)
4,923,944
$ 4,218,984
Variance with
Final Budget -
Positive
(Negative)
$ 877,171
70,578
947,749
(1,652,709)
(1,652,709)
$ (704,960)
24
I
CITY OF ALBERTVILLE I
Wri~ht County, Minnesota
COMBINING STATEMENT OF NET ASSETS- I
PROPRIETARY FUNDS
December 31, 2004 I
I 601 ~ I 602 ~ I 603 I
Sanitary Storm
Sewer Water Sewer Total
ASSETS: I
Current Assets:
Cash and Investments (Including
Cash Equivalents) $ 585,454 $ 2,087,120 $ 521,021 $ 3,193,595 I
Accounts Receivable 119,211 142,575 11,397 273,183
Due from Other Governments 23,131 26,176 84,892 134,199
Total Current Assets 727,796 2,255,871 617,310 3,600,977
I
Noncurrent Assets:
Capital Assets: I
Land 190,269 190,269
Sewer Plant and Lines 7,418,792 7,418,792
Water Main 436,894 436,894
Machinery and Equipment 193,560 42,710 236,270 I
Construction in Progress 424,533 315,867 215,556 955,956
Total Capital Assets 8,227,154 795,471 215,556 9,238,181
Less Accumulated Depreciation (1,485,912) (63,726) ( 1,549,638) I
Net Capital Assets 6,741,242 731,745 215,556 7,688,543
Total Assets $ 7,469,038 $ 2,987,616 $ 832,866 $ 11,289.520 I
LIABILITIES AND FUND EQUITY:
Current Liabilities: I
Accounts Payable $ 4,982 $ 7,286 $ 1,074 $ 13,342
Due to Other Governments 243,599 243,599
Accrued Salaries and Related Benefits 1,348 1,348 2,696 I
Bonds Payable 242,499 242,499
Total Current Liabilities 248,829 252,233 1,074 502,136
Noncurrent Liabilities: I
Bonds Payable 2,166,718 2,166,718
Total Liabilities 2,415,547 252,233 1,074 2,668,854 I
Net Assets:
Invested in Capital Assets, I
Net of Related Debt 4,332,025 731,745 215,556 5,279,326
Unrestricted 721,466 2,003,638 616,236 3,341,340
Total Net Assets 5,053,491 2,735,383 831,792 8,620,666 I
Total Liabilities and Net Assets $ 7.469,038 $ 2,987 ,616 $ 832,866 $ 11,289.520
The Notes to the Financial Statements are an integral part of this statement. 25 I
I
I CITY OF ALBERTVILLE
Wright County, Minnesota
I STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET ASSETS -
PROPRIETARY FUNDS
I For the Year Ended December 31,2004
, 601 , I 602 II 603
I Sanitary Storm
Sewer Water Sewer Totals
OPERATING REVENUES:
I Charges for Services $ 488,416 $ 133,106 $ 86,719 $ 708,241
Penalties and Interest 7,229 24,298 9,369 40,896
Trunk Charges 92,622 92,622
Availability Charges 387,063 387,063
I Total Operating Revenues 495,645 637,089 96,088 1,228,822
OPERATING EXPENSES:
I Wages, Salaries and Compensation 67,859 62,473 130,332
Materials and Supplies 36,049 7,389 43,438
Utilities 36,600 36,600
Repairs and Maintenance 9,723 28,421 1,073 39,217
I Insurance 9,000 750 9,750
Depreciation 165,633 15,932 181,565
Equipment 9,808 9,808
I Professional Services 640 1,413 2,053
Miscellaneous 1,125 1,405 2,530
Total Operating Expenses 335,797 117,010 2,486 455,293
I Operating Income 159,848 520,079 93,602 773,529
NONOPERATING REVENUES (EXPENSE):
I Bond Interest and Fiscal Charges (114,980) (114,980)
Meter Sales 33,100 33,100
Meter Purchases (67,428) (67,428)
I Special Assessments 12,970 12,970
Investment Income (Expense) (9,305) 26,506 6,858 24,059
Miscellaneous 62 1,782 1,844
Total Nonoperating Revenues (Expense) (111 ,253) (6,040) 6,858 (110,435)
I Net Income Before Transfers 48,595 514,039 100,460 663,094
I OTHER FINANCING SOURCES:
Transfers In 1,127,709 1,127,709
Net Income Plus Other Financing Sources 1,176,304 514,039 100,460 1,790,803
I Net Assets - January 1, As Previously Reported 6,268,423 2,221,344 731,332 9,221,099
I Prior Period Adjustment (2,391,236) (2,391,236)
Net Assets, January 1, As Restated 3,877,187 2,221,344 731,332 6,829,863
I Net Assets - December 31 $ 5,053,491 $ 2,735,383 $ 831,792 $ 8,620,666
I The Notes to the Financial Statements are an integral part of this statement. 26
I
CITY OF ALBERTVILLE I
Wri~ht County, Minnesota
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS I
For the Year Ended December 31, 2004
~ 601 II 602 l I 603 I
Sanitary Storm
Sewer Water Water Totals I
CASH FLOWS - OPERATING ACTIVITIES:
Receipts from Customers and Users $ 496,689 $ 436,482 $ 100,715 $ 1,033,886
Payments to Suppliers (102,489) 210,757 (1,412) 106,856
Payments to Employees (66,511) (61,125) (127,636) I
Net Cash Flows - Operating Activities 327,689 586,114 99,303 1,013,106
CASH FLOWS - NONCAPITAL FINANCING ACTIVITIES: I
Transfer from Other Funds 1,127,709 1,127,709
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES: I
Bond Principal Payments (435,151) (435,151)
Bond Interest and Fiscal Agent Fees (114,980) (114,980)
Purchases of Water Meters 33,100 33,100 I
Sales of Water Meters (67,428) (67,428)
Special Assessments 12,970 12,970
Other Miscellaneous Receipts 62 1,782 1,844 I
Net Cash Flows - Capital and Related Financing Activities (537,099) (32,546) (569,645)
CASH FLOWS - NONOPERATING ACTIVITIES:
Interest and Dividends (9,305) 26,506 6,858 24,059 I
Net Change in Cash and Cash Equivalents 908,994 580,074 106,161 1,595,229
Cash and Cash Equivalents, January 1, As Previously Reported 137,696 1,507,046 414,860 2,059,602 I
Prior Period Adjustment (461,236) (461,236)
Cash and Cash Equivalents, January 1, As Restated (323,540) 1,507,046 414,860 1 ,598,366 I
Cash and Cash Equivalents, December 31 $ 585.454 $ 2.087.120 $ 521.021 $ 3.193.595 I
RECONCILIATION OF OPERATING INCOME
TO NET CASH FLOWS - OPERATING ACTIVITIES:
Operating Income $ 159,848 $ 520,079 $ 93,602 $ 773,529 I
Adjustments to Reconcile Operating Income to
Net Cash Flows - Operating Activities:
Depreciation Expense 165,633 15,932 181,565 I
Change in Accounts Receivable 606 (20,375) 4,053 (15,716)
Change in Due from Other Governments 438 9,218 574 10,230
Change in Accounts Payable (184) 5,763 1,074 6,653
Change in Due to Other Governments 54,149 54,149 I
Change in Accrued Salaries and Related Benefits 1,348 1,348 2,696
Total Adjustments 167,841 66,035 5,701 239,577
Net Cash Flows - Operating Activities $ 327.689 $ 586.1 14 $ 99.303 $ 1.013.106 I
The Notes to the Financial Statements are an integral part of this statement. 27 I
I
I
I
I
I ASSETS:
Cash and Investments:
Landscaping Escrow
I
LIABILITIES:
I Accounts Payable:
Landscaping Escrow
I
I
I
I
I
I
I
I
I
I
I
I
CITY OF ALBERTVILLE
Wright County, Minnesota
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2004
Agency Fund
$
124,417
$
124,417
The Notes to the Financial Statements are an integral part of this statement.
28
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Albertville is a statutory city governed by an elected mayor and four council
members. The accompanying financial statements present the government entities for which the
government is considered to be financially accountable.
The financial statements present the City and its component units. The City includes all funds,
account groups, organizations, institutions, agencies, departments and offices that are not legally
separate from such. Component units are legally separate organizations for which the elected
officials of the City are financially accountable and are included within the basic financial
statements of the City because of the significance of their operational or financial relationships
with the City.
The City is considered financially accountable for a component unit if it appoints a voting
majority of the organization's governing body and it is able to impose its will on the organization
by significantly influencing the programs, projects, activities or level of services performed or
provided by the organization, or there is a potential for the organization to provide specific
financial benefits to or impose specific financial burdens on, the City.
As a result of applying the component unit definition criteria above, certain organizations have
been defined in accordance with GASB Statement No. 14 and are presented in this report as
follows:
Blended Component Units - Reported as if they were part ofthe City.
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the
entity is disclosed.
For each of the categories above, the specific entities are identified as follows:
1. Joint Ventures and Jointly Governed Organizations:
Joint Powers Board Water Fund
In 1977, the City of Albertville entered into an agreement with the Cities of St. Michael and
Hanover and Frankfort Township to construct a water system under a grantbond arrangement
with the United States Economic Development Administration (EDA). Water Revenue
Bonds were issued in the name of the City of Albertville and purchased by EDA. The Joint
Powers Board remits the annual bond and interest payment to the City of Albertville which,
in turn, remits the payment to EDA.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31; 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
1. Joint Ventures and Jointly Governed Organizations: (Continued)
Joint Powers Board Water Fund (Continued)
The Joint Powers Agreement states in the event the Joint Powers Board Water Fund does not
generate sufficient revenue to pay operating costs and principal and interest on bonds, the
participants agree to contribute from their General Fund an amount sufficient to pay for such
deficiency. At the time ofthe original Agreement, each City and Town was to contribute
25% of the required amount. In 1996, Frankfort Township was annexed into the Cities ofSt.
Michael, Albertville and Otsego and no longer exists as a township. Therefore, the City of
Albertville is now required to contribute one-third of any potential deficiencies of the Joint
Powers Board.
A summary of the financial information of the Joint Powers Board Water Fund for the year
ended December 31, 2004 is:
Total Assets
$ 16,163,108
$ 6,176,036
9,987,072
Total Liabilities
Total Net Assets
Total Liabilities and Net Assets
$ 16,163,108
$ 1,464,292
926,888
535,620
Operating Revenue
Operating Expense
Other Income and Expense
Change in Net Assets
$ 1,073,024
Financial statements for the Joint Powers Board Water Fund may be obtained at Albertville
City Hall.
St. Michael- Albertville Ice Arena (STMA Arena)
In 1996 and 1997, the City of Albertville entered into a Joint Powers Agreement with the
City of St. Michael and Independent School District No. 885, St. Michael-Albertville, for
construction and maintenance of a qualified ice arena. In addition, the City received notice in
1996 of being selected as a Mighty Ducks grant recipient to help fund the cost of the arena.
The arena was constructed with the Mighty Ducks grant funds, donations and contributions
by the Cities of St. Michael and Albertville and Independent School District No. 885.
30
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
1. Joint Ventures and Jointly Governed Organizations: (Continued)
St. Michael- Albertville Ice Arena (STMA Arena) (Continued)
The Joint Powers Agreement states the City of Albertville is to execute a revenue note in the
amount of$ 133,333, which will be paid back with funds available from the operation of the
ice arena. The total amount of the revenue note is to be $ 400,000, of which each participant
is one-third responsible. If funds are deficient, the City must pay one-third of the amount
necessary to make up the shortage. In addition, the City must allocate an amount sufficient to
pay one-third of any projected shortfall in annual revenues available for the operation and
maintenance of the ice arena.
During 1998, the City of Albertville contributed the required $ 133,333 toward the ice arena.
In addition, in 1998 the City's Storm Water Enterprise Fund provided the ice arena with a
short-term loan in the amount of $ 83,333. In 2004,2003 and 2002, the City did not make
any contributions nor receive any payments on the loan.
A summary of the financial information of the STMA Arena for the year ended June 30, 2003
IS:
Total Assets
$ 828,081
$ 681,688
146,393
$ 828,081
Total Liabilities
Total Net Assets
Total Liabilities and Equity
Total Revenues
Operating Expenses
Other Income (Expense)
$ 198,747
213,242
190
Change in Net Assets
$ (14,305)
Financial statements for the STMA Arena may be obtained at Albertville City Hall.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 City. The
fiduciary funds are only reported in the Statement of Fiduciary Net Assets at the fund financial
statement level. For the most part, the effect ofinterfund activity has been removed from these
Statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, 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 segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Interest on general long-term debt is considered
an indirect expense and is reported separately on the Statement of Activities. Program revenues
include 1) charges to customers or applicants who purchase, use or directly benefit from goods,
services or privileges provided by a given function or segment and 2) grants and contributions
that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governm~ntal funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.
The Agency Fund is presented in the fiduciary fund financial statements. Since, by definition,
these assets are being held for the benefit of a third party (other local governments, private
parties, etc.) and cannot be used to address activities or obligations ofthe City, these Funds are
not incorporated into the government-wide statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary
fund financial statements. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized
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.
32
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days 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, franchise taxes, licenses and interest associated with the current fiscal period are
all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. Only the portion of special assessments receivable due within the current
fiscal period is considered to be susceptible to accrual as revenue of the current period. All
other revenue items are considered to be measurable and available only when cash is received
by the government.
Description of Funds:
Major Governmental Funds:
General Fund - The General Fund is the government's primary operating fund. It accounts for
all financial resources of the general government, except those required to be accounted for in
another fund.
Sewer Access Special Revenue Fund - This Fund accounts for the resources accumulated
from sewer availability charges collected by the City.
Closed Capital Project Fund - This Fund accounts for costs associated with replacement of
the City's utility and road systems. It also covers minor costs for project funds closed and
completed.
CSAH 19 Widening Capital Project Fund - This Fund accounts for the resources
accumulated and payments made for the widening of CSAH 19.
Public Works Facility Capital Project Fund - This Fund accounts for the resources and
payments made for the construction of the public works facility.
Prairie Run Capital Project Fund - This Fund accounts for the resources and payments made
for construction of public improvements at the Prairie Run Development.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
Description of Funds: (Continued)
Major Proprietary Funds:
Sanitary Sewer Fund - This Fund accounts for the operations of the City's sanitary sewer utility.
Water Fund - The Water Fund accounts for the operations of the City's water utility.
Storm Sewer Fund - The Storm Sewer Fund accounts for the activities of the government's
storm drainage operations.
Fiduciary Fund:
Agency Fund - This Fund accounts for escrow deposits held by the City in a strictly custodial
capacity.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government-wide and proprietary fund financial statements to
the extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board. Governments also have the option of following subsequent
private-sector guidance for their business-type activities and enterprise funds, subject to this
same limitation. The government has elected not to follow subsequent private-sector guidance.
As a general rule, the effect ofinterfund activity has been eliminated from the government-
wide financial statements. Exceptions to this general rule are charges between the
government's sanitary sewer function and various other functions of the government.
Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
Amounts reported as program revenues include I) 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. Internally dedicated resources are reported as
general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 Sanitary Sewer Enterprise Fund and the Storm Drainage
Enterprise Fund 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.
34
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
When both restricted and unrestricted resources are available for use, it is the government's
policy to use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities and Net Assets or Equity
1. Deposits and Investments
The government's cash and cash equivalents are considered to be cash on hand, demand
deposits and short-term investments with original maturities of three months or less from the
date of acquisition.
Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies
and instrumentalities, shares of investment companies whose only investments are in the
aforementioned securities, obligations of the State of Minnesota or its municipalities,
bankers' acceptances, future contracts, repurchase and reverse repurchase agreements and
commercial paper of the highest quality with a maturity of no longer than 270 days and in the
Minnesota Municipal Investment Pool.
Investments for the government are reported at fair value. The Minnesota Municipal
Investment Pool operates in accordance with appropriate state laws and regulations. The
reported value of the pool is the same as the fair value of the pool shares.
2. Restricted Assets
A portion of the cash balances is classified as restricted assets since its use is limited.
3. Property Tax Receivables
All property tax receivables are shown at a gross amount since both are assessable to the
property taxes and are collectible upon the sale of the property.
The City levies its property tax for the subsequent year during the month of December.
December 28 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 January 1 and are recorded as
receivables by the City at that date. The property tax is recorded as revenue when it becomes
measurable and available. Wright County is the collecting agency for the levy and remits the
collections to the City three times a year. The tax levy notice is mailed in March with the
first half payment due on May 15 and the second half payment is due on October 15. Taxes
not collected as of December 31 each year are shown as delinquent taxes receivable.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
3. Property Tax Receivables (Continued)
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 the list of taxes and special assessments to be collected on each
parcel of property to the County Treasurer in January of each year.
4. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads,
sidewalks and similar items), are reported in the applicable governmental or business-type
activities columns in the government-wide financial statements. Capital assets are defined by
the government as assets with an estimated useful life greater than one year and with an
initial individual cost as follows:
Land
Land Improvements
Infrastructure
Buildings
Building Improvements
Vehicles
Other Equipment
$ 10,000
25,000
100,000
25,000
25,000
5,000
5,000
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 costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized.
36
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
4. Capital Assets (Continued)
Property, plant and equipment of the City are depreciated using the straight-line method over
the following estimated useful lives:
Assets
Years
Land Improvements
Infrastructure
Buildings
Vehicles
Other Equipment
5-30 Years
15-50 Years
15-40 Years
3-15 Years
3-20 Years
5. Vacation and Sick Leave
The City compensates employees who resign or retire with due notice for unused vacation
and compensatory time. Employees may carry over vacation time from one vacation year to
another vacation year as established by the employee's anniversary date. Compensatory time
is accumulated at 1-1/2 times for overtime hours worked. A maximum of 40 hours of
compensatory time may be accumulated.
Full-time employees are entitled to sick leave at the rate of one day per month to a maximum
of 45 days or 360 hours. Hours accumulated in excess of the maximum are applied to the
City's sick leave incentive program. An employee earns 1/4 day paid vacation or 1/4 days'
pay in lieu of excess sick leave at the employee's option. This option is only active and
available when the beginning sick leave balance for each month is 45 days. The cash in lieu
option is paid in December of each year.
Vacation pay and sick pay are considered expenditures in the year due in the governmental
fund types, while in the proprietary fund types, vacation and sick pay are charged to expense
when earned. All estimated vacation and compensatory time is recorded when incurred in the
government-wide and proprietary fund statements.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
6. 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.
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.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management
plans that are subject to change.
8. Net Assets
Net assets represent the difference between assets and liabilities in the government-wide
financial statements. Net Assets invested in capital assets, net of related debt consists of
capital assets, net of accumulation depreciation, reduced by the outstanding balance of any
long-term debt used to build or acquire the capital assets. Net assets are reported as restricted
in the government-wide financial statement when there are limitations on their use through
external restrictions imposed by creditors, grantors, or laws or regulations of other
governments.
9. Changes in Accounting Principles
F or the year ended December 31, 2004, the City has implemented GASB Statement No. 34,
Basic Financial Statements - and Management's Discussion and Analysis - for State Local
Governments. GASB Statement No. 34 creates new basic financial statements for reporting
on the City's financial activities. The financial statements now include government-wide
financial statements prepared on the accrual basis of accounting, and fund financial
statements which present information for individual major funds rather than by fund type
which had been the mode of presentation in previously issued financial statements.
Nonmajor funds are presented in total in one column in the fund financial statements.
38
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
9. Changes in Accounting Principles (Continued)
The implementation of GASB Statement No. 34 caused the opening fund balance at
December 31, 2003 restated in terms of "net assets" as follows:
Total Fund Balances - Governmental Funds at December 31, 2003,
As Restated
$ 8,838,299
Add Cost of Capital Assets
Less Accumulated Depreciation
Less Sewer Access - Special Revenue Fund Balance
Less Long-Term Debt:
Bond Principal
Capital Leases
Accrued Interest Payable
Compensated Absences
Add Deferred Revenues
23,477,629
(5,630,184)
(4,923,944)
(4,917,800)
(26,029)
(69,986)
(17,640)
1,298,189
Net Assets - Governmental-Type Activities at
December 31, 2003
$ 18.028,534
The implementation of GASB Statement No. 34 also caused the net asset amount to change
for the business-type funds:
Total Fund Net Assets - Business-Type Activities at December 31, 2003,
As Restated
$ 6,829,863
Add Sewer Access - Special Revenue Fund Balance
Add Deferred Special Assessments
4,923,944
31,000
Net Assets - Business-Type Activities at December 31, 2003
$ 11.784.807
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Fund Balance Deficits
The following funds had deficit fund balances at December 31, 2004:
Major Funds:
Closed Capital Projects Fund
Prairie Run Capital Projects Fund
Nonmajor Funds:
Debt Service Funds:
City Hall Bonds
1996A G.O. TIF Bonds
Capital Projects Funds:
TIF #8 - Vetsch Cabinets
TIF #10 - Mold-Tech
TIF # 11 - Land of Lakes Tile
TIF #7 - Cottages of Albertville
TIF #9 - Barthel Bus Garage
NW Commercial Park
CR 37 Traffic Light
CSAH 19 Ramps
Wright County Transportation
CSAH 37
School Pedestrian Bike Trail
Wright-Hennepin Substation
City Hall
50th Street Trail
Wastewater Treatment Facility Phase 2
$ 2,453,586
1,557,602
1,649
75,522
421
11,001
19,774
33,378
6,478
104,406
124,683
149,796
27,549
15,875
378,081
1,624
1,516
56,576
221,438
These deficits will be eliminated by future levies, collections of special assessments, operating
transfers and developer reimbursements.
B. Budgetary Information
1. In August of each year, City staff submits to the City Council a proposed operating
budget for the fiscal year commencing the following January 1. The operating budget
includes proposed expenditures and the means of financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comments.
40
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
B. Budgetary Information (Continued)
3. The budget is legally enacted through passage of a resolution after obtaining taxpayer
comments.
4. Budgets for the General and Special Revenue Funds are adopted on a basis consistent
with U.S. generally accepted accounting principles (GAAP).
5. Expenditures may not legally exceed budgeted appropriations at the department level. No
fund's budget can be increased without City Council approval. The City Council may
authorize transfer of budgeted amounts between departments within any fund.
Management may amend budgets within a department level, so long as the total
department budget is not changed.
6. Annual appropriated budgets are adopted during the year for the General and Special
Revenue Funds. Annual appropriated budgets are not adopted for Debt Service Funds
because effective budgetary control is alternatively achieved through bond indenture
provisions. Budgetary control for Capital Project Funds is accomplished through the use
of project controls and formal appropriated budgets are not adopted.
7. Budgeted amounts are as originally adopted or as amended by the City Council.
Individual amendments were not material in relation to the original amounts budgeted.
Budgeted expenditure appropriations lapse at year-end.
NOTE 3 - DEPOSITS AND INVESTMENTS
A. Deposits
In accordance with applicable Minnesota Statutes, the City maintains deposits at depository
banks authorized by the City's Council.
Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate
surety bond or collateral. The market value of collateral pledged must equal 110% of the
deposits not covered by federal deposit insurance or corporate surety bonds.
At year-end, the City's carrying amount of deposits was $ 2,287,039 and the bank balance was
$ 2,426,543. At December 31, 2004, all deposits for the City were insured or collateralized by
securities held by the City's agent in the City's name.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 3 - DEPOSITS AND INVESTMENTS
B. Investments
The City's investments are categorized in the following table to give an indication of the level of
risk assumed at year-end.
Category 1 - Includes investments that are insured or registered or for which the securities
are held by the City or its agent in the City's name.
Category 2 - Includes uninsured and unregistered investments for which the securities are
held by the counterparty's trust department or agent in the City's name.
Category 3 - Includes uninsured and unregistered investments for which the securities are
held by the counterparty or by its trust department or agent but not in the City's
name.
At year-end, the government's investment balances were as follows:
1
Category
2
Reported
Amount!
Fair Value
3
Municipal Bonds
U.S. Government Agency Securities
Negotiable Certificates of Deposit
Total
$ 384,215
855,926
1,758,722
$ 2,998,863
$
$
$ 384,215
855,926
1,758,722
2,998,863
$
$
Not Subject to Categorization:
Minnesota Municipal Investment Pool
Cash in Trust
Restricted Cash in Trust
Brokered Money Market
Deposits
Petty Cash
4,024,821
869,136
86,908
3,350
2,287,039
245
Total Deposits and Investments
$ 10,270,362
42
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 3 - DEPOSITS AND INVESTMENTS
B. Investments (Continued)
Deposits and investments are presented in the December 31, 2004 basic financial statements as
follows:
Statement of Net Assets:
Cash and Investments
Cash in Trust
Restricted Cash in Trust
$ 9,189,901
869,136
86,908
Statement of Fiduciary Net Assets:
Agency Fund
124,417
Total Deposits and Investments
$ 10,270,362
The Minnesota Municipal Investment Pool is an external investment pool not registered with the
Securities Exchange Commission (SEC) that follows the same regulatory rules of the SEC under
Rule 2.a.7. The fair value of the position in the pool is the same as the value ofthe pool shares.
NOTE 4 - ACCOUNTS RECEIVABLE
Accounts receivable as of year-end for the government's individual major funds and nonmajor
funds in the aggregate, including the applicable allowances for uncollectible accounts, are as
follows:
Closed Nonmajor
Capital Governmental
Projects Funds Total
Accounts Receivable $ 716,669 $ 5,251 $ 721,920
Less Allowance for
Uncollectibles (240,912) (240,912)
Net Accounts Receivable $ 475,757 $ 5,251 $ 481,008
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004
NOTE 5 - CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2004 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, not being
Depreciated:
Construction in Progress $ 2,984,497 $ 1,271,481 $ $ 4,255,978
Capital Assets, being Depreciated:
Buildings 862,750 1,701,000 2,563,750
Infrastructure 18,736,168 580,440 19,316,608
Improvements Other
than Buildings 450,000 450,000
Vehicles 883,714 883,714
Machinery and Equipment 10,500 10,500
Total Capital Assets,
being Depreciated 20,493,132 2,731,440 23,224,572
Less Accumulated Depreciation for:
Buildings 76,538 60,844 137,382
Infrastructure 5,166,312 743,158 5,909,470
Improvements Other
than Buildings 30,000 30,000
Vehicles 382,834 60,133 442,967
Machinery and Equipment 4,500 750 5,250
Total Accumulated
Depreciation 5,630,184 894,885 6,525,069
Total Capital Assets, being
Depreciated, Net 14,862,948 1,836,555 16,699,503
Governmental Activities Capital
Assets, Net $ 17.847,445 $ 3.108.036 $ $ 20.955,481
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The $ 221,438 construction in progress increase amount represents construction on the Wastewater I
Treatment Facility Capital Project Fund. This Fund is proprietary in nature.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 5 - CAPITAL ASSETS
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital Assets, not being
Depreciated:
Land $ 190,269 $ $ $ 190,269
Construction in Progress 955,956 221,438 1,177,394
Total Capital Assets,
not being Depreciated 1,146,225 221,438 1,367,663
Capital Assets, being Depreciated:
Sewer Plant and Lines 7,418,792 7,418,792
Water Main 436,894 436,894
Machinery and Equipment 236,270 236,270
Total Capital Assets,
being Depreciated 8,091,956 8,091,956
Less Accumulated Depreciation for:
Sewer Plant and Lines 1,211,782 152,416 1,364,198
Water Mains 36,953 10,923 47,876
Machinery and Equipment 119,338 18,226 137,564
Total Accumulated
Depreciation 1,368,073 181,565 1,549,638
Total Capital Assets, being
Depreciated, Net 6,723,883 (181,565) 6,542,318
Business-Type Activities
Capital Assets, Net $ 7,870,108 $ 39,873 $ $ 7,909,981
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 5 - CAPITAL ASSETS
Depreciation expense was charged to functions/programs of the government as follows:
Governmental Activities:
General Government
Public Safety
Public Works
Park and Recreation
Total Depreciation Expense - Governmental Activities
Business-Type Activities:
Water
Sewer
Total Depreciation Expense - Business-Type Activities
NOTE 6 - INTERFUND TRANSFERS
The composition of interfund transfers as of December 31, 2004 is as follows:
Transfers In:
$ 544
42,369
814,633
37,339
$ 894,885
$ 15,932
165,633
$ 181565
Nonmajor
Governmental
Funds
Transfer Out:
General Fund
Sewer Access
Closed Capital Projects
Nonmajor Governmental Funds
$ 633,111
525,000
151,925
51,234
Total
$ 1,361,270
Sanitary
Sewer
$
1,127,709
$ 1,127,709
Total
$ 633,111
1,652,709
151,925
51,234
$ 2,488,979
The purpose of the above transfers are to provide funding for capital improvement projects and capital
outlay, provide funding for operating purposes, maintain balances of unspent budget dollars and other
miscellaneous items.
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CITY OF ALBERTVILLE
Wright County, Minnesota I
NOTES TO THE FINANCIAL STATEMENTS
December 31,2004 I
NOTE 7 - LONG-TERM DEBT
A. Components of Long-Term Liabilities I
Issue Interest Original Final Principal Due Within I
Date Rate Issue Maturity Outstanding One Year
Governmental Activities:
Revenue Bonds:
Public Facility Authority I
Lease Revenue Bonds,
Series 1999 07/20/99 5.00-5.60% $ 860,000 02/01119 $ 755,000 $ 35,000
Public Project Lease I
Revenue Bonds, Series 2004 09/09/04 3.75-4.90% 2,100,000 02/01125 2,100,000
Total Revenue Bonds 2,855,000 35,000
General Obligation Special I
Assessment Bonds:
General Obligation Improvement
Bonds, Series 1999A 07/29/99 4.10-5.20% 1,760,000 02/01115 535,000 95,000
General Obligation Improvement I
Refunding Bonds,
Series 1993A 08/01193 3.40-5.75% 675,000 02/01106 40,000 20,000
General Obligation Improvement
Bonds, Series 2003A 08115/03 2.00-4.15% 3,235,000 02/01119 3,235,000 410,000 I
Total General Obligation
Special Assessment Bonds 3,810,000 525,000
General Obligation Tax Increment I
Bond:
General Obligation Tax
Increment Bond,
Series 1996A 11122/96 4.25-5.40% 400,000 02/01108 105,000 25,000 I
Total Long-Term Liabilities,
Governmental Activities 6,770,000 585,000
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Business-Type Activities:
Lease Revenue Bonds:
Public Facility Authority I
Lease-Revenue Note 10119/03 3.32% 1,454,514 08/20/14 844,217 72,499
General Obligation Lease
Revenue Bonds,
Series 2oo0A 11120/00 4.50-5.25% 2,550,000 02/01116 1,565,000 170,000 I
Total Business-Type
Activities 2,409,217 242,499
Total All Long-Term I
Liabilities $ 9,179,217 $ 827.499
Long-term bonded indebtedness listed above were issued to finance acquisition and construction
of capital facilities or to refinance (refund) previous bond issues. I
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 7 - LONG-TERM DEBT
B. Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2004, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
Revenue Bonds $ 790,000 $ 2,100,000 $ 35,000 $ 2,855,000 $ 35,000
General Obligation Special
Assessment Bonds 3,992,800 182,800 3,810,000 525,000
General Obligation Tax
Increment Bond 135,000 30,000 105,000 25,000
Total Governmental
Activities 4,917,800 2,100,000 247,800 6,770,000 585,000
Business-Type Activities:
Lease Revenue Bonds 2,844,368 435,151 2,409 ,217 242,499
Total Business-Type
Activities 2,844,368 435,151 2,409,217 242,499
Total $ 7.762.168 $ 2.100.000 $ 682,951 $ 9.179.217 $ 827,499
C. Long-Term Debt
The annual requirements to amortize all bonded debt outstanding as of December 31, 2004 are:
Year Ending Revenue Bonds
December 31, Principal Interest
2005 $ 277,499 $ 223,921
2006 329,926 218,389
2007 397,434 202,784
2008 420,027 185,225
2009 257,706 170,934
2010-2014 1,496,625 680,185
2015-2019 1,230,000 336,489
2020-2024 695,000 127,368
2025 160,000 3,920
Total $5,264,217 $2,149,215
General Obligation
Special Assessment Bonds
Principal Interest
General Obligation
Tax Increment Bond
Principal Interest
$
$ 25,000
25,000
25,000
30,000
4,995
3,645
2,295
810
$ 525,000
510,000
495,000
510,000
520,000
670,000
580,000
$ 116,437
103,578
90,915
76,248
60,047
194,024
57,647
$ 11,745
$ 698.896
$ 105.000
$3.810.000
48
CITY OF ALBERTVILLE
Wright County, Minnesota
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NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 8 - FUND BALANCES
A. Designated Fund Balance
Designated fund balance is comprised of the following components:
Special Capital Projects
Revenue Public Nonmajor Nonmajor Nonmajor
Sewer CSAH 19 Works Debt Capital Special
General Access Widening Facility Service Projects Revenue Total
Unreserved:
Designated for
Working Capital $1,000,000 $ $ $ $ $ $ $ 1,000,000
Designated for
Capital
Expenditures 1,525,000 1,760,587 184,846 53,454 1,238,442 4,762,329
Designated for
Debt Service 79,636 79,636
Total $1,000,000 $1,525,000 $ 1,760,587 $ 184,846 $ 79,636 $ 53,454 $ 1,238,442 $ 5,841,965
NOTE 9 - RISK MANAGEMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities
Insurance Trust with other cities in the state, which is a public entity risk pool currently operating
as a common risk management and insurance program. The City pays an annual premium to the
League for its insurance coverage. The League of Minnesota Cities Insurance Trust is self-
sustaining through commercial companies for excess claims. The City is covered through the pool
for any claims incurred but unreported, but retains risk for the deductible portion of its insurance
policies. The amount of these deductibles is considered immaterial to the financial statements.
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.
The City's workers' compensation insurance policy is retrospectively rated. With this type of
policy, final premiums are determined after loss experience is known. The amount of premium
adjustment for 2004 is estimated to be immaterial based on workers' compensation rates and
salaries for the year.
At December 31, 2004, there are no other claims liabilities reported in the Fund based on the
requirements of Governmental Accounting Standards Board Statement No. 10, which requires
that a liability for claims be reported if information prior to the issuance of the financial
statements indicates that it is probable that a liability has been incurred at the date of the financial
statements and the amount of the loss can be reasonably estimated.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 10 - DEFINED BENEFIT PENSION PLANS - STATEWIDE
Public Employees' Retirement Association
A. Plan Description
All full-time and certain part-time employees of the City of Albertville are covered by defined
benefit plans administered by the Public Employees Retirement Association of Minnesota
(PERA). PERA administers the Public Employees Retirement Fund (PERF), which is a cost-
sharing, multiple-employer retirement plan. This Plan is established and administered in
accordance with Minnesota Statutes 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.
PERA provides retirement benefits as well as disability benefits to members, and benefits to
survivors upon death of eligible members. Benefits are established by state statute, and vest after
three years of credited service. The defined retirement benefits are based on a member's highest
average salary for any five successive years of allowable service, age and years of credit at
termination of service.
Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members.
The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a
level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan
member is 2.2% of average salary for each of the first 10 years of service and 2.7% for each
remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average
salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the
annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated
Plan members for each year of service. For all 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 65 for Basic and Coordinated Plan members hired prior to
July 1, 1989. Normal retirement age is the age for unreduced social security benefits capped at
66 for Coordinated Plan 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.
50
CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 10 - DEFINED BENEFIT PENSION PLANS - STATEWIDE
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
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. That report may be obtained on the web at
www.mnpera.org.bywritingtoPERAat60EmpireDrive.Suite200.St.Paul.MN 55103-2088
or by calling (651) 296-7460 or (800) 652-9026.
B. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These
statutes are established and amended by the state legislature. The City makes annual
contributions to the pension plans equal to the amount required by state statutes. PERF Basic
Plan members and Coordinated Plan members are required to contribute 9.1 % and 5.1 %,
respectively, of their annual covered salary. The City of Albertville is required to contribute the
following percentages of annual covered payroll: 11.78% for Basic Plan PERF members and
5.53% for Coordinated Plan PERF members. The City's contributions to the Public Employees
Retirement Fund for the years ending December 31, 2004, 2003 and 2002 were $ 24,493,
$ 20,923 and $ 27,328, respectively. The City's contributions were equal to the contractually
required contributions for each year as set by state statute.
NOTE 11 - COMMITMENTS
The City has entered into several public improvement projects contracts. The remaining
commitments under these contracts at December 31, 2004 is $ 971,331.
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CITY OF ALBERTVILLE
Wright County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2004
NOTE 12 - CONDUIT DEBT OBLIGATIONS
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 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
obligations for such debt beyond the resources provided by related leases or loans. Accordingly,
the Bonds are not reported as liabilities in the financial statements of the City.
As of December 31, 2004, the following issues were outstanding:
Name
Cottages of Albertville:
Multi Family Housing Revenue Bonds,
Series 1999 A
Subordinated Multi-Family Housing Revenue
Bonds, Series 1999C
Date
of Issue
Original
Amount
Principal
Due 12/31/04
$ 3,230,000
$ 3,220,000
12/23/99
09/30/99
425,000
425,000
NOTE 13 - PRIOR PERIOD ADJUSTMENTS
Prior period adjustments are shown in the Sanitary Sewer Enterprise Fund and the 2000 G.O.
Sewer Debt Service Fund. The effects are for transferring the fund balance from a debt service
fund and the related debt to the related Sanitary Sewer Fund.
52
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SUPPLEMENTARY INFORMATION
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CITY OF ALBERTVILLE I
Wright County, Minnesota
COMBINING BALANCE SHEET - I
NONMAJOR GOVERNMENTAL FUNDS
December 31,2004
Special Revenue Debt Service I
102 II 201 203 II 300 II 322
Capital Park Revolving Closed Bond I 992A G.O. I
Outlay Reserve Fund Loan Issues Improvement
ASSETS:
Cash and Investments I
(Including Cash Equivalents) $ 888,442 $ 1,304,487 $ 100,691 $ 79,625 $ 13,834
Cash in Trust
Restricted Cash in Trust
Taxes Receivable - Delinquent 209 86 I
Special Assessments Receivable - Deferred 7,658
Special Assessments - Delinquent 377
Accounts Receivable
Due from Other Governments 11 48 I
Notes Receivable 71,073
Total Assets $ 888.442 $ 1.304.487 $ 171.764 $ 87.503 $ 14.345
LIABILITIES: I
Cash Overdraft $ $ $ $ $
Accounts Payable 1,557
Contracts Payable 25,383 I
Deferred Revenue 71,073 7,867 463
Total Liabilities 26,940 71,073 7,867 463
FUND BALANCES: I
Reserved 13,882
Unreserved:
Designated 888,442 350,000 79,636
Undesignated 927,547 100,691 I
Total Fund Balances 888,442 1,277,547 100,691 79,636 13,882
Total Liabilities and
Fund Balances $ 888.442 $ 1.304.487 $ 171.764 $ 87.503 $ 14.345 I
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ASSETS:
Cash and Investments
(Including Cash Equivalents)
Cash in Trust
Restricted Cash in Trust
Taxes Receivable - Delinquent
Special Assessments Receivable - Deferred
Special Assessments - Delinquent
Accounts Receivable
Due from Other Governments
Notes Receivable
Total Assets
LIABILmES:
Cash Overdraft
Accounts Payable
Contracts Payable
Deferred Revenue
Total Liabilities
FUND BALANCES:
Reserved
Unreserved:
Designated
Undesignated
Total Fund Balances
Total Liabilities and
Fund Balances
(THIS PAGE LEFT BLANK INTENTION ALL Y.)
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Reserved
Unreserved:
Designated
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Total Fund Balances
Total Liabilities and
Fund Balances
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CITY OF ALBERTVILLE
Wright County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2004
Capital Projects
476 II 481 I I 482 I I 491 I
Wastewater Total
School Treatment Nonmajor
Pedestrian Wright-Hennepin Facility Governmental
Bike Trail Substation City Hall Phase 3 Funds
$ $ $ $ $ 3,670,237
2,499
86,908
5,001
633,513
2,529
5,251
1,134
71,073
$ $ $ $ $ 4.478.145
$ 426,188 $ 1,624 $ 1,516 $ 212,531 $ 1,215,837
8,469 8,907 20,784
25,383
712,116
434,657 1,624 1,516 221,438 1,974,120
1,334,022
1,371,532
(434,657) (1,624) (1,516) (221,438) (201,529)
(434,657) (1,624) (1,516) (221 ,438) 2,504,025
$ $ $ $ $ 4.478.145
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ASSETS:
Cash and Investments
I (Including Cash Equivalents)
Cash in Trust
Restricted Cash in Trust
Taxes Receivable - Delinquent
I Special Assessments Receivable - Deferred
Special Assessments - Delinquent
Accounts Receivable
I Due from Other Governments
Notes Receivable
Total Assets
I: LIABILITIES:
Cash Overdraft
Accounts Payable
I Contracts Payable
Deferred Revenue
Total Liabilities
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CITY OF ALBERTVILLE I
Wright County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- I
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2004
Special Revenue Debt Service I
102 I I 201 I ~ 203 \ I 300 \ I 322
Capital Park Revolving Closed Bond 1992A G.O. I
Outlay Reserve Fund Loan Issues Improvement
REVENUES:
Taxes $ $ $ $ 3,150 $ 4,726 I
Special Assessments 3,916 11,027
Intergovernmental 150
Charges for Services 207,461
Miscellaneous 3,681 14,437 18,453 1,066 548 I
Total Revenues 3,681 221,898 18,453 8,132 16,451
EXPENDITURES: I
Current:
Economic Development:
Current
Capital Outlay I
Capital Outlay
Debt Service:
Principal 43,600
Interest and Fiscal Charges 2,518 I
Total Expenditures 46,118
Excess (Deficiency) of Revenues
Over (Under) Expenditures 3,681 221,898 18,453 8,132 (29,667) I
OTHER FINANCING SOURCES (USES):
Bond Proceeds I
Transfers In 633, III
Transfers Out
Total Other Financing Sources (Uses) 633,IlI
Excess (Deficiency) of Revenues I
Over (Under) Expenditures and
Other Financing Sources 636,792 221,898 18,453 8,132 (29,667)
Fund Balance - January 1 I
(As Previously Reported) 251,650 1,055,649 82,238 71,504 43,549
Prior Period Adjustment I
Fund Balance - January 1 (Restated) 251,650 1,055,649 82,238 71,504 43,549
Fund Balance - December 31 $ 888.442 $ 1,277,547 $ 100.691 $ 79.636 $ 13.882 I
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II Debt Service
324 l I 341 l I 353 I I 354 I ~ 355 I I 356 l I 357
I 1993A G.O. 1999A G.O. 2000 G.O. 2003A G.O.
Improvement City 1996A G.O. 1999 Lease Improvement Sewer Improvement
Refunding Hall Bonds TIF Bonds Revenue Bonds Bonds Revenue Bonds Bonds
I $ $ 1,153 $ 5,396 $ 60,724 $ 41,220 $ $ 66,149
11,277 15,305 102,499 60,657
101 1,450 744 1,285
I 1,434 (25) (1,302) 661 3,371 2,994
12,711 1,128 19,500 62,835 147,834 131,085
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20,000 20,000 30,000 35,000 95,000
I 3,231 1,522 6,794 45,276 28,741 90,734
23,231 21,522 36,794 80,276 123,741 90,734
I (10,520) (20,394) (17,294) (17,441) 24,093 40,351
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(10,520) (20,394) (17,294) (17,441) 24,093 40,351
I 117,965 18,745 (58,228) 145,659 314,759 (461,236) 178,242
I 461,236
117,965 18,745 (58,228) 145,659 314,759 178,242
I $ 107.445 $ 0.649) $ (75.522) $ 128.218 $ 338,852 $ $ 218.593
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CITY OF ALBERTVILLE I
Wright County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- I
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2004
Capital Projects I
450 I ~ 453 l I 456 I I 462 I I 463
NW I
Albertville Kollville Towne Commercial
Villas Estates Lakes Coborn's Park
REVENUES:
Taxes $ $ $ $ $ I
Special Assessments 97,461
Intergovernmental
Charges for Services 4,739 34,422
Miscellaneous 4,021 I
Total Revenues 4,739 34,422 97,461 4,021
EXPENDITURES:
Current: I
Economic Development:
Current
Capital Outlay I
Capital Outlay 42,191 6,660 75,150 1,576 2,041
Debt Service:
Principal
Interest and Fiscal Charges I
Total Expenditures 42,191 6,660 75,150 1,576 2,041
Excess (Deficiency) of Revenues
Over (Under) Expenditures (42,191 ) (1,921) (40,728) 95,885 1,980 I
OTHER FINANCING SOURCES (USES):
Bond Proceeds
Transfers In 49,677 52,856 I
Transfers Out (7,051) (44,183)
Total Other Financing Sources (Uses) 49,677 (7,051) 52,856 (44,183)
Excess (Deficiency) of Revenues I
Over (Under) Expenditures and
Other Financing Sources 7,486 (8,972) 12,128 51,702 1,980
Fund Balance - January 1 I
(As Previously Reported) (7,486) 8,972 (12,128) (51,702) (106,386)
Prior Period Adjustment I
Fund Balance - January I (Restated) (7,486) 8,972 (12,128) (51,702) (106,386)
Fund Balance - December 31 $ $ $ $ $ (l04,406) I
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CITY OF ALBERTVILLE
Wright County, Minnesota
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COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2004
488
(221,438) 716,698
1,326,091
461,236
1,787,327
$ $ (221.438) $ 2.504.025
Ice Arena
Locker Rooms
REVENUES:
Taxes
Special Assessments
Intergovernmental
Charges for Services
Miscellaneous
Total Revenues
$
26,602
26,602
EXPENDITURES:
Current:
Economic Development:
Current
Capital Outlay
Capital Outlay
Debt Service:
Principal
Interest and Fiscal Charges
Total Expenditures
26,602
26,602
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES):
Bond Proceeds
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues
Over (Under) Expenditures and
Other Financing Sources
Fund Balance - January 1
(As Previously Reported)
Prior Period Adjustment
Fund Balance - January 1 (Restated)
Fund Balance - December 31
I ~ 491
Wastewater
Treatment Facility
Phase 3
$
221,438
221,438
(221,438)
I
I
Total
Other
Governmental
I
$
280,392
302,142
3,730
266,081
70,688
923,033
I
I
I
89,599
1,006,388
I
243,600
178,816
1,518,403
I
(595,370)
I
2,032
1,361,270
(51,234)
1,312,068
I
I
I
I
I
I
I
65
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
~DV
KERN. DEWENTER.YIERE
AUDITORS' REPORT ON LEGAL COMPLIANCE
February 18, 2005
Honorable Mayor and City Council
City of Albertville
Albertville, Minnesota
We have audited the financial statements of the City of Albertville, Minnesota, as of and for the
year ended December 31,2004, and have issued our report thereon dated February 18,2005.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated
by the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included
such tests of the accounting records and such other auditing procedures as we considered
necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers six main categories
of compliance to be tested: contracting and bidding, deposits and investments, conflicts of
interest, public indebtedness, claims and disbursements and miscellaneous provisions. Our study
included all of the listed categories.
The results of our tests indicate that for the items tested, the City of Albertville, Minnesota,
complied with the material terms and conditions of applicable legal provisions, except as
described in the Schedule of Findings on Legal Compliance.
This report is intended solely for the information and use of the City Council, City
Administration and the Office of the State Auditor, and is not intended to be, and should not be,
used by anyone other than these specified parties.
Kilt-IL, Ot--We"yz"t{/L;J Vu.u., Ud.
KERN, DEWENTER, VIERE, LTD.
S1. Cloud, Minnesota
66