Memo- June 2000 Finincial Report
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.
.
, j .
Memorntdm
Date:
To:
CC~
From ~
7/18/00
Steve Mielke
Mayor and Councilmembers
Lori K Yager
June 2000 Financial Report
RE:
$ch~d are financial reports for the period ending June 30, 2000 along with some
companitiV'e information. After brief analysis, some general comments can be made
in regards to the quarterly reports for the City.
GENERAL FUND REVENUES
. The number and amount of permits issued in 2000 is less than the number and
amount issued in 1999. Overall general fund revenues are on target at 49% of
budget. We have approximately $175,000 more revenues this year at this time
as compared to last year at this time. The additional revenues are from property
taxes and intergovernmental revenues.
GENERAL FUND EXPENDITURES
. There is a 3% increase in general fund expenditures over 1999. This is
associated with the new management information position, temporary help in
inspections to cover personnel shortage, partial implementation of 2000 salary
changes and earlier payment to the City of Minnetonka for share of 2000
recreation costs. General fund expenditures are at 46% of budget.
. Here is a breakdown of how our contingency budget has been allocated in 2000.
Upgrade of 911 equipment $ 8,304
Police and Fire space needs analysis 12,060
Visioning process 8,000
HMEA contract settlement 6,000
Loca149 contract settlement 7,000
Dispatchers contract settlement 8,000
Merit pay 7,500
Job evaluation study 18,000
Non union wage settlement 4.500
Total $79,364
GENERAL COMMENTS
.
. Total cash and investments is up about $4,000,000 compared to 1999. This is
attributed to the issuance of bonds in late 1999 and early 2000 and the receipt of
state aid funds in 1999. Governmental fund type funds are reflecting strong
reserves at this time.
. All utility funds show net income as of June 30, 2000. The Pavilion and Art
Center are experiencing net losses as of June 30, 2000. This is partially due to
depreciation and interest expense in the Art Center and depreciation in the
Pavilion. The Skate Park has done excellent in its first month of operations. It
currently has a operating income of$8,875. No depreciation of equipment has
been accrued.
. On the bottom of the proprietary fund report is a brief explanation of the changes
in cash for these funds. Finance will meet with Jay to discuss future revenue
generating plans for the Art Center fund. This is our most volatile fund at this
time.
. The Depot Coffee House is doing well. Some months the operating costs of the
coffee house are covered by coffee sales revenues. We are currently working on
possible grant revenues from the State for the continued teen center operations.
.
. The program expenditure listing gives you an idea of how individual progams
are doing. This is our first year with program budgeting so some of the
programs are under budget and some are over. We will be better able to budget
these costs in 2001.
. The graphs illustrate departmental expenditures for 2000 and 1999, and revenue
types for 2000 and 1999.
. Attached is a listing of the cities outstanding investments as of June 30, 2000.
.
12/10/97
CITY OF HOPKINS
2000 FINANCIAL REPORT - JUNE
. GENERAL FUND
Year To Date 6 Months 50% of Year
Percentage Percentage
Receivedl Received!
Expended Expended
2000 Budget Year to Date 2.QQ.Q .1.W9
Revenues
Property Taxes $ 4,364,756 $ 2,197,765 50.35% 49.72%
Intergovernmental Revenue 2,089,288 941,445 45.06% 43.15%
Licenses and Permits 357,400 270,491 75.68% 91.53%
Fines and Forfeitures 101,500 48,799 48.08% 44.71%
Interest Earnings 297,089 62,169 20.93% 11.08%
Charges for Services 132,618 83,708 63.12% 281.44%
Other Miscellaneous 45,486 49,193 108.15% 41.80%
Operating Transfer In 30,586 0 0.00% 0.00%
Total. $ 7,418,723 $ 3,653,570 49.25% 48.45%
Expenditures
. Mayor/Council $ 93,196 $ 47,185 50.63% 40.44%
Health & Welfare 6,850 1,483 21.65% 2.71%
Administrative Services 329,696 160,197 48.59% 52.18%
Finance 129,151 61,785 47.84% 56.65%
Legal 121,020 43,599 36.03% 37.31 %
Municipal Building 166,033 24,452 14.73% 14.89%
Activity Center 229,363 114,141 49.76% 46.35%
Community Services 712,819 329,780 46.26% 44.64%
Police 2,888,783 1,387,074 48.02% 50.02%
Fire 588,079 230,129 39.13% 38.47%
Emergency Preparedness 19,292 695
Public Works 1,660,091 693,490 41.77% 43.80%
Recreation 237,100 156,349 65.94% 54.76%
Planning & Economic Dev. 136,396 63,317 46.42% 60.69%
Unallocated 100,495 66,893 66.56% 10.21%
Transfers 11 ,359 0 0.00% .0.00%
Total $ 7,429,723 $ 3,380,569 45.50% 46.80%
Sources (Uses) of Fund
Balance ($11,000) $273,001
.
CITY OF HOPKINS
. FOUR YEAR COMPARATIVE FINANCIAL REPORT
FOR THE PERIOD ENDING JUNE 30, 19XX
GENERAL FUND
2000 1999 1998 1997
Revenues
Property Taxes $2,197,765 $2,045,400 $1,708,980 $1,681,300
I ntergovernmental Revenue 941,445 900,184 932,607 915,537
Licenses and Permits 270,491 311,218 218,670 235,518
Fines and Forfeitures 48,799 40,687 46,510 37,239
Interest Earnings 62,169 44,039 52,623 62,920
Charges for Services 83,708 86,444 75,559 46,310
Other Miscellaneous 49,193 49,085 58,159 14,224
Operating Transfer In 0 0 0 0
Total $3,653,570 $3,477,057 $3,093,108 $2,993,048
Expenditures
Mayor/Council $47,185 $36,802 $38,648 $47,622
Health & Welfare 1,483 528 1,310 717
. Administrative Services 160,197 136,469 126,544 119,036
Finance 61,785 62,808 58,648 54,430
Legal 43,599 44,400 48,799 39,163
Municipal Building 24,452 11,204 42,240 62,416
Activity Center 114,141 102,551 95,544 91,465
Community Services 329,780 308,063 277,706 289,605
Police 1,387,074 1,389,865 1,202,912 1,133,840
Fire 230,129 221,256 177,952 155,166
Emergency Preparedness 695 0 0 0
Public Works 693,490 720,793 657,802 702,298
Recreation 156,349 152,103 198,395 51,991
Planning & Economic Dev. 63,317 86,249 66,161 62,326
U nallocated 66,893 16,335 65,595 7,674
Transfers 0 0 (1,715) 1,705
Total $3,380,569 $3,289,426 $3,056,541 $2,819,454
Sources (Uses) of Fund Balance $273,001 $187,631 $36,567 $173,594
.
CITY PROGRAM EXPENDITURE BUDGETS
. Amended 6/30/00 Percent
Budget Actual of
CATEGORY 2000 2000 Budget
PROGRAMS
Unallocated expenditures $ 111,854 $ 66,893 59.8%
City Council 93,196 47,185 50.6%
Health and Welfare 6,850 1,483 21.6%
Administration 134,437 65,688 48.9%
Legislation 15,807 5,897 37.3%
Agenda 50,339 21,772 43.3%
Personnel 27,283 16,827 61.7%
Capital Improvement Plan 25,985 12,164 46.8%
Wellness 4,217 2,169 51.4%
Information Services 71,628 35,680 49.8%
Benefit Administration 15,515 5,662 36.5%
Budget 17,697 5,788 32.7%
Cash Management 7,656 185 2.4%
Debt Management (388)
General Accounting 48,998 30,060 61.3%
Payroll 33,870 17,094 50.5%
Risk Management 5,415 1,837 .33.9%
T .I.F. Administration (386)
. Utility Billing 1,933
Legal 121,020 43,599 36.0%
City Hall Cleaning 6,198 . (529) -8.5%
City Hall Maintenance 159,835 24,981 15.6%
Activity Center Community Use 52,250 28,723 55.0%
Senior Activities 102,197 60,060 58.8%
Teen Programs 10,415 2,128 20.4%
Activity Center Maintenance 64,501 23,230 36.0%
Receptionist 44,775 22,079 49.3%
Assessing Infonnation 86,397 41,546 48.1%
Homestead Information 32,594 16,268 49.9%
Property Valuation 85,060 35,547 41.8%
Special Assessments 19,981 8,682 43.5%
Building Code Inspections 109,351 80,848 73.9%
Fire Inspections 34,221 12,079 35.3%
Heating and Plumbing Inspections 68,807 25,819 37.5%
Housing Inspections 45,738 . 15,243 33.3%
RestaurantIHotel Inspections 33,976 16,627 48.9%
Miscellaneous Inspections 74,221 27,167 36.6%
Charter & Council Administration 16,1 00 6,445 40.0%
Licensing 8,532 1,730 20.3%
Purchasing 9,440 9,293 98.4%
Records~anagemeDt 7,954 4,647 58.4%
Elections 35,672 5,760 16.1 %
. Police Administration 21,240
Property Room Management 46,542 23,804 51.1%
CITY PROGRAM EXPENDITURE BUDGETS
. Amended 6/30/00 Percent
Budget Actual of
CATEGORY 2000 2000 Budget
PROGRAMS
Chemical Assessment Team $ 55,000 $ 21,742 39.5%
Economic Project Development 90,860 47,205 52.0%
TIP Administration 7,898 -5,547 . -70.2%
Economic Development Loan Prog. 12,143 3,095 25.5%
Hopkins Business Park 733,847
Real Estate Purchases & Sales
CDBG Housing Loans 40,000 6,909 17.3%
CDBG Special Projects 15,000 19,108 127.4%
TIF 1-1 354,750 3,605 1.0%
Hopkins Art Facility Constr. 3,859
TIF 1-2 60,497 3,616 6.0%
Paratransit 74,159 43,610 58.8%
Housing Rehab Projects 49,775 24,734 49.7%
Housing Rehab Committee Liaison 23,094 11,177 48.4%
Housing Rehab Loans 351
Housing Programs 23,094 10,123 43.8%
Valley Park Condo 97,412 287 0.3%
Housing - Patio Homes Phase II 172,229 75,135 43.6%
. Parking Enforcement 52,925 19,853 37.5%
Parking Ramp 51,383 10,113 19.7%
Parking Operations 17,077 11,865 69.5%
Section 8 Housing 79,903 30,271 37.9%
Cable TV Projects 29,312 11,385 38.8%
Communications Liaison 18,262 12,325 67.5%
Newletter 39,827 21,850 54.9%
Web and Message 31,292 13,672 43.7%
Depot Coffee House 116,405 62,425 53.6%
Teen Center 61,555 30,671 49.8%
TIF 2.1 532,778 40,294 7.6%
TIF 2.6 1,000 838 83.8%
TIF 2.7 60,007 6,141 10.2%
TIF 2.8 45,448 944 2.1%
TIF 2.9 34,000 11,933 35.1%
.
CITY PROGRAM EXPENDITURE BUDGETS
. Amended 6/30/00 Percent
Budget Actual of
2000 2000 Budget
PROGRAMS
Lake Street Bridge $ $ 11,926
Signal System Main/17th 9,089
7th St. Landfill 26,724
County Rd #3 151,612
Street Improvements 178,067
Mill and Overlay 4,339
Equipment Replacement 882,330 548,456 62.2%
Water Pumps & Wells 295,779 127,044 43.0%
Water Distribution 352,740 178,432 50.6%
. Water - non operating 156,700 125,393 80.0%
Water - Radio read meters 377,314
Water Tower painting 34,347
Water Treatment Plant Rehab 27,550
Sewer Lift Stations 327,209 117,439 35.9%
Sewer Collection & Disposal 1,170,260 456,716 39.0%
Sewer - non operating 165,000 34,315 20.8%
Refuse Bulk Collection 53,471 21,607 40.4%
Yard WastelLeaf Collection 73,175 29,341 40.1%
. Recycling 136,910 52,326 38.2%
Brush Service 89,226 28,177 31.6%
Refuse Disposal 280,647 131,837 47.0%
Refuse - non operating 82,900 44,604 53.8%
Storm Sewer Maintenance 197,436 52,666 26.7%
Storm Sewer Cleaning 9,770 43 0.4%
Concrete Alleys 60,386 193 0.3%
Storm Sewer - non operating 270,780 137,546 50.8%
Miscellaneous Storm Sewer Proj. 2,514
Storm Sewer 5th-8th/9th 29,337
Hilltop Park Storm Sewer proj. 1,033
Thermotech Storm Sewer proj. 11,169
Pavillion Ice Rental 153,078 65,783 43.0%
Pavillion Soccer and Leagues 65,742 41,756 63.5%
Pavillion Dry Floor Rental 33,829 7,102 21.0%
Pavillion - non operating 60,900 33,003 54.2%
Art Center 505,878 228,278 45.1%
Debt Service 1,718,300 1,071,547 62.4%
.
CITY OF HOPKINS
.
2000 FINANCIAL REPORT - JUNE
STATUS OF RESERVES
Beginning
Balance Balance Balance
(Deficit) (Deficit) Dollar (Deficit)
E.und. 1l1.lO.Q 6/30/00 Difference 6/30/99
General Fund $ 2,877,512 $ 3,150,516 $ 273,004 $ 3,022,385
Economic Development Fund 3,711,150 3,698,498 (12,652) 3,736,095
Housing Rehab Fund 1,364,618 1,295,337 (69,281 ) 1,889,363
Parking Fund 347,268 347,925 657 369,262
Cable TV Fund 290,565 270,454 (20,111) 242,859
Depot Coffee House Fund 16,116 15,401 (715) 6,595
Tax Increment 1.1 Fund 1,186,171 1,812,065 625,894 1,491,976
. Tax Increment 1.2 Fund 333,474 361,605 28,131 268,287
Tax Increment 2.1 Fund . 229,784 444,872 215,088 365,987
Tax Increment 2.7 Fund 157,936 206,448 48,512 171,624
Tax Increment 2.8 Fund 21,470 37,321 15,851 21,027
Tax Increment 2.9 Fund 34,031 75,743 41,712 26,356
Park Improvement Fund 35,201 23,403 (11,798) 28,902
Municipal State Aid Construction Fund 2,160,989 2,247,287 86,298 2,147,188
P.I.R. Construction Fund 1,391,901 1,178,147 (213,754) 603,619
CASH AND INVESTMENTS - ALL FUNDS
6/30/00 6/30/99
Total City Investments $ 16,054,000 $ 12,093,000
. Total City Cash $ 223,849 $ 254,401
CITY OF HOPKINS
JUNE
PROPRIETARY FUNDS
Year to Date
2000 FINANCIAL REPORT
Skate
Park
Art
Center
Pavilion!
ce Arena
Storm
Sewer
Refuse/
Bulk
Equip.
Replc.
Sewer
Water
10.263
$
109,764
$
112.369
$
334,314
$
278,899
$
676.894
$
350,813
$
253.073
$
Revenue
388
1
165.504
114.641
52.902
263,288
155
574
305,4 76
0,279
Expense
8,875
(55,740)
(2,272)
281,412
15,611
102,739
45,337
242,794
Operating Income(Loss)
Non-Operating
Revenue (Expense)
o
111 )
(59
(25,729)
(121.186)
5,582
28,856
2.010,713
(113,413)
8,875
$
(114.851)
$
(28,001)
$
160.226
$
21 . 193
$
595
131
$
$ 2.056.050
129.381
$
(Loss)
ncome
Net
o
o
(4,503)
(44.271 )
154)
(26
(13,291)
(449,353)
177)
(388
Capital Outlay
143
8
$
117.276
$
59.586
$
047
821
$
553.789
$
394
591
1
$
189.852
$ 2
142
088
1
$
Cash Balance 6/30/00
o
$
249,419
$
62.854
$
(36,955)
$
366
711
$
828,145
$
470.036
$
225.007
$
Cash Balance 6/30/99
8,143
Operating
gains from
initial
members
(132,143)
Operating
losses and
payment of
debt
(3,268)
Operating
losses
858,002
Storm Sewer
Revenue
Bond
Proceeds
(157,577)
Purchase
of truck
763,249
Payoff from
Storm Sewer
Fund and
operating
gains
1,719,816
Water
Revenue
Bond
Proceeds
(136,865)
equipment
purchases
Capital
Cash Variance
Explanation of Cash
Variances
General Fund Expenditure Comparison for Period Ending June 30,2000 and 1999
[32000
1.1lD1999
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1!lI1999
General Fund Revenue Comparison for Period Endmg June 30, 2000 and 1999
$2,400,000 .~~m'N=...''''mNN__M'^",''''''~____'N''~NN_'___'__''''''''''''~___'_N_'__'_''_''_,,_,_~,~___,____,_ ,-'" """'''''''''''__'_~''''~_''''''''~'''''''~~.vNW,''~,f~Mff'_'=~=__''''''_ -,-,~
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$600,000
$400,000
$200,000
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. Accrued
Interest Interest Estimated
Broker Description Purchase Maturity Through Received YIeld
Date Date Cost PAR Last Period YTD (365 dav)
NISI GE 12-01-99 7-1~ 963,840.00 1,000,000.00 33,920.00 6.05910%
Dain Special purpose 6-7-00 7-21-00 248,001.67 250,000.00 1,044.58 6.68425%
Smith Barney Sidney Capital 6-7-00 7-28-00 247,673.13 250,000.00 1,049.37 6.72382%
Dain Ness 3-16-00 7-31~ 537,211.43 550,000.00 9,894.81 6.34233%
Piper Sweetwater 6-7-00 ~ 247,357.78 250,000.00 1,047.78 6.72215%
Piper Moat 3-~ 8-11-00 292,211.25 300,000.00 5,678.25 6.27671 %
Smith Barney Sweetwater Cap. 3-6-00 8-17-00 243,086.94 250,000.00 4,889.73 6.32933%
Smith Barney Bavarian 3-1-00 8-24-00 776,437.65 800,000.00 16,199.12 6.29350%
Morgan Keegan Federal Farm Cr. 6-1-00 9-1~ 250,000.00 250,000.00 1,310.12 6.59579%
NISI CD - 1st bank of at; 03-6-98 9-5-00 86,692.54 100,000.00 12,331.97 6.12999%
Dain Ness 3-16-00 9-14-00 387,563.33 400,000.00 7,243.34 6.43551 %
Piper General Elec 3-31-00 9-28-00 299,616.36 309,000.00 4,769.58 6.31568%
Smith Barney Como Loco 4-3-00 . 1 0-6-00 241,940.00 250,000.00 3,813.33 6.53743%
aiper GE Capital 4-14-00 10--1NJD 249,918.65 258,000.00 3,437.92 6.52078%
Dain Ness 6-19-00 10--20-00 244,379.58 250,000.00 502.64 . 6.82483%
Dain Tenn. Valley Auth. 06-3-99 11-01-00 1,016,125.00 1,100,000.00 63,757.98 5.82757%
Piper CD - EL Bank 12-27-95 12-27-00 95,884.50 97,000.00 987.28 2,740.25 6.02649%
Smith Barney Bavaria 6-21-00 12/21/00 1,932,086.67 2,000,000.00 3,340.00 7.01084%
Piper Silver Tower 4-11-00 12-29-00 1,908,663.89 2,000,000.00 27,888.89 6.66660%
NISI Federal Home Loan 10/12199 4/12/01 300,000.00 300,000.00 3,908.76 9,000.00 5.99453%
Piper Federal Home Loan 07-22-98 07-16-01 999,037.50 1,000,000.00 28,712.60 29,325.00 5.96261 %
Piper Federal Home Loan 1~7-99 01-7-02 1,000,000.00 1,000,000.00 27,520.07 27,750.00 5.61154%
Dain Fannie Mae 12-28-99 06-30-02 500,000.00 500,000.00 2,871.02 14,313.33 6.78085%
Smith Barney Home Loan 8-5-98 08-5-02 1,000,000.00 1,000,000.00 24,168.38 30,000.00 5.99589%
Dain Federal Home Loan 04-30-99 11-05-02 518,995.65 500,000.00 8,910.51 15,962.50 6.60849%
Piper Federal Home Loan 12-21~98 08-21-03 1,101,063.50 1,090,000.00 23,403.61 32,645.50 5.92628%
.orwest Public Entities Fund - #10422582- Norwest Public Entities Fund
322,601.63 431 ,550.15
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CityofJ[opfjns
1010 Pirst Street Soutli · Jfopfjns, 'M.:N55343-7573 · CJ>fione: 612-935-8474 · P~ 612-935-1834
June 7, 2000
To the Honorable Mayor, members ofthe Hopkins City Council and the Citizens ofthe
City of Hopkins, Minnesota :
The Comprehensive Annual Financial Report (CAFR) of the City of Hopkins, Minnesota (the City)
for the fiscal year ended December 31, 1999 is hereby submitted. This report was prepared by the
City~s Finance Department. Responsibility for both the accuracy of the presented data and the
completeness and fairness of the presentation, including all disclosures, supporting schedules,
statistical tables, etc., rests With the City. We believe the data, as presented, is accurate in all
material respects; that it is presented in a manner designed to fairly set forth the financial position
and results of operations of the City as measured by the financial activity of its various funds; and
'that all disclosures necessary to enable the reader to gain the maximum understanding of the City's
financial affairs have been included.
The organization, form and contents of this report were prepared in accordance \\lith standards
prescribed by the Governmental Accounting Standards Board (GASB), the Government Finance
Officers Association of the United States and Canada, the American Institute of Certified Public
Accountants, the State Auditor's Office - State of Minnesota and the City Charter.
. .
. .
The CAFR is presented in three sections: introductory, financial and statistical. The introductory
section includes a list of principal officials, the organizational chart, the City Manager's letter and
this transmittal letter. The financial section includes the independent auditors' report on the
financial statements and schedules, the general-purpose financial statements and the combining and
individual funds and account group financial statements and schedules. The statistical section
contains selected financial and demographic information pertinent to the City and is generally
presented on a multiyear basis.
Reporting Entity Components
The report includes all funds and account groups of the City, including the city's Housing and
Redevelopment Authority (BRA). The City provides a full range of services including general
government, public safety, public works, community development and parks and recreation. In
addition to' general municipal activities, the City provides water, sewer and refuse services. Low
income rental housing is a function of the HRA. The Hopkins Fire Relief Association has not met
the established criteria for inclusion in the reporting entity, and accordingly is excluded from this
report.
5
)fn 'EquaC Opp<lrt~m:ty 'Empfcyer
~
.
.
Governmental Structure
Background
Hopkins was first settled in 1853 and was incorporated as the Village of West Minneapolis in 1893.
The name was changed in 1928 to Hopkins after one of the early residents. The original territory of
incorporation was three square miles, but successive annexation since 1946 has enlarged this area
by one-third. In 1947, the residents of the area adopted a City Charter with a Council/Manager form
of government. The governing council is responsible, among other things, for passing ordinances,
adopting the budget, appointing committees and hiring the government's manager and the .
government's attorney. The government's manager is responsible for carrying out the policies and
ordinances of the government, for overseeing day-to-day operations of the government and for
appointing the heads of the government's departments.
With a strong economy in place, the p~~t few years. ~have Sh~Wll increased: ecorioffij~. and
redevelopment within the City of Hopkins. The valuation of new construction in 1999 was $42.8
million dollars. This economic development increase has been the result of a good development
market in the Hopkins area along with successful redevelopment activities by the City.
Significant projects completed or begun in 1999 include the following:
Activity
Commercial Additionsl Alterations:
Valuation
Walgreens
Chapel View
SuperValu addition
SuperValu Distribution Facility
1,000,000
750,000
3,700,000
40,000,000
Efforts are being made for continued development and growth for 2000 and beyond. Itis
anticipated that approximately $36,000,000 of construction will also take place in the City of
Hopkins during 2000/2001. .
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Some anticipated projects during this period include the following:
Project
o Nine Mile Cove
o SuperValu - North Annex
o Stiele and Bakken Office Space
o Stiele and Bakken Warehouse
o Excelsior Boulevard Reconstruction
o Parkside Residential Project
Valuation
$10,000,000
$ 5,000,000
$ 2,000,000
$ 3,200,000
$ 9,000,000
$ 8,000,000
The City of Hopkins has developed a strategic plan for economic development. As a part of this
plan, the City of Hopkins intends to pursue various. development and redevelopment efforts
throughout the City. Several projects are anticipated.
In 2000, projects to be constructed include the redevelopment of the Hopkins House Hotel, the new
.. office and warehouse complex on Excelsior Boulevard and the 58 single-family residential project,
Parkside. These developments will have major impacts on the community and its development.
Specialized planning is taking place to ensure that these developments occur so as to benefit the
community and residential neighborhoods.
Over the course. of about five years, major improvements will continue to be made to County Road
3 along its entire length in Hopkins. The first phase of improvements occurred in 1998 between
Shady Oak Road and 11th avenue south. The second phase occurred in 1999 between Highway 169
to 11 th Avenue South. The third phase will occur in the year 2000 and 2001 between Highway 169
and Blake Road. The final phase runs from Blake Road to Meadowbroke Road and should occur in
2002 and 2003.
Major Initiatives
For the Year
For 1999, the staff, following specific directives of the council and the manager, has been involved
in a variety of projects throughout the year. These projects reflect the government's commitment to .
ensuring that its citizens are able to live and work in a safe environment and that the needs for
. services are met. .
Street repair and improvements occurred in 1999 at a cost of approximately $1,087,000. The
projects included replacing infrastructure, roadway. surface, curb and gutters and alley
reconstruction. The sump pump inspection program was continued into 1999 at a cost of
approximately $75,000. Storm Sewer reconstruction projects totaling $530,000 were started in
1999.
F or the Future
A systematic citywide sidewalk rehab program was initiated in 1992. Each year one quadrant is
inspected and necessary repairs made.
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Hennepin County has included in its five year CIP an improvement project relating to County Road
3 extending through the entire City of Hopkins. Improvements include street surface, widening,
lighting, landscaping, sidewalks, and trails. These improvements will take place during 1998-2003.
The City has established a street reconstruction and storm sewer program based on a street condition
survey and storm water management program. The streets found in poor condition and future
problem streets will be systematically included for repairs in the five-year Capital Improvement
Plan.
The City has identified a need to repaint the water towers in l.:he city, reconstruct and repair a water
treatment plant and reconstruct a lift station. The city will continue to replace its' old water meters
with new radio read water meters. The city has identified a need for a skateboard park and will
build this park in June of2000.
The City of Hopkins is upgrading its' computer systems. In 1999, the Govern property
management system was implemented. This system combines separate departmental databases into
one and allows for the expansion of the City's informational capabilities. The other major computer
upgrade is in the police department. Weare upgrading our Mobile Data Transmission system to
stay abreast of technological advances in this area. This will enhance the speed and accuracy of the
public safety departments data retrieval and transmission.
Financial Information
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The City's accounting records are maintained on the accrual, or modified accrual basis, as
appropriate. Budgetary control is maihtainedby Department Managersand.aii encu.mbrance'system
whereby purchase orders are audited to ensure the adequacy of funds prior to their release to
vendors. The budget is adopted by, and can be amended by, the City Council. Theexpenditure
budget may not legally be exceeded at the level of control presented in Exhibit A-2. A contingency
appropriation is established for this purpose.
In developing and evaluating the City's accounting system, consideration is given to the adequacy
of internal accounting controls. These controls are designed to provide reasonable, but not absolute
assurance regarding (1) the safeguarding of assets against loss from unauthorized use or disposition;
and (2) the reliability of financial records for preparing financial statements and accountability for
assets. The concept of reasonable assurance recognizes that: (1) the cost of control should not
exceed the benefits likely to be derived, and (2) the evaluation of cost and benefits requires
estimates and judgments by management.
All internal control evaluations occur within the above framework. We believe that the City's
internal accounting controls adequately safeguard assets and provide reasonable assurance of proper
recording of financial transactions,
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Capital financing of the major City improvements is provided for the most part through the
Permanent Improvement Revolving (PIR) Fund financed by the issuance of improvement bonds.
Another source of capital financing is through general obligation bonds, tax increment bonds, or
revenue bonds.
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Time lags in revenue collections in some of the funds may make it necessary to arrange short-term
operating loans between funds from time to time. These loans are most often arrariged through the
General Fund, but at times may be arranged through other fund groups, such as Enterprise or
Capital Projects groups.
General Government Functions
General municipal services are accounted for in the City's General Fund. Exhibit A-2 indicates the
transactions for this fund compared to the budgeted amounts. Actual revenues for the general fund
were under budget by $48,901. This was a result of a change in accounting practice in the
allocation of interest revenues. This shortfall of interest revenues will continue to be eliminated
with the adjustment of budgeted interest revenues in the future.
The following chart presents a comparative analysis of general fund revenues and other financing
sources:
General Fund Revenues and Other Financing Sources, 1999 and 1998 Actual
Other
111996
lI!l1999
Interest
Charges for services
Fines and forfeitures
Intergovernmental
Licenses and perm its
Property taxes
o
500
1,000
1,500 2,000 2,500 3,000 3,500 4,000 4,500
(In thousands)
Total net tax capacity of the City for taxes collected in 1999 (including the fiscal disparities tax
capacity contribution and distribution) was $13,502,822. This 1999 tax base reflects a decrease of
$314,409 over 1998 due to a further compression of the tax classification rates implemented by the
state legislature. The total tax capacity value figure is also net of the tax capacity pledged to tax
increment projects, which amounted to $1,531,218 which is 10.3% of the gross tax capacity base.
Current property tax collections were 98.1 % of the tax levy in the year 1999.
General Fund expenditures and transfers totaled $7,104,618 in 1999, an overall increase of
approximately 2.1 % from the comparable figure for 1998. This slight increase over 1998 is
primarily from an increase salaries and benefits. Salaries and benefits represent 74% of general
fund expenditures. Total expenditures were below budgeted amounts by $142,975. The general
government budget within the general fund was increased by $33,000 for a management
information technician position. The public safety budget was increased by $38,000 to cover
additional fire calls and police overtime.
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The community development budget was increased by $37,000 to cover strategic planning costs and
implementation of new permit software. The recreation budget was increased by $55,000 to include
program costs at the Activity Center. These additional programs were paid for with program fees.
The following chart presents a comparative analysis of general fund expenditures and other uses:
General Fund Expenditures and Other Financing Uses M 1999 & 1998 Aclual
Oher
Recreation
Pc.IDlic Wcxf<s
Cmmunity Oe\.eIopment
Public Safety
GeneraJ Gc:1I.errmenl
o
500
1(00
1500 200J 2500
(In thousands)
300)
3500
400}
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LiCluidity
The following table shows previous year-end General Fund equities, as compared to the adopted
appropriations for the following year:
Original Fund Equity
General Fund Beginning of Year %of
Budget Amount Budget
1995 6,400,000 2,906,149 45.4
1996 6,592,000 2,870,206 43.5
1997 6,791,100 3,013,865 44.4
1998 6,969,680 2,940,139 42.2
1999 7,158,664 2,834,758" 39.6
The City's financial position remained strong during 1999. Cash and investment balances at year
end totaled $16,512,797 which provides the liquidity necessary to avoid short term borrowing.
.
The unreserved General Fund balance is available to provide funding for working capital until tax
settlements and state aids are received in June and December of each year, to provide funds for
unknown events and emergencies, which could have an adverse effect on the fund. A strong fund
balance should be at least 50% of the "gross" General Fund property tax levy (before netting of
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l1li1999
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HACA and fiscal disparities distribution) for the following year. Through sound financial
management, the City has achieved this goal in 1999.
In addition to the City's strong financial position in the General Fund, the other city fund groups
remained strong as well. The Special Revenue Fund groups have a fund balance of $7,310,611,
which is 89% of the expenditures incurred in 1999. The capital project funds currently have
$3,523,091 in fund balance, which is to be spent in 2000 primarily on the County Road 3 project.
The Enterprise Funds have a working capital balance in excess of $2,400,000, which will provide
funds for the upcoming storm sewer projects. The new Equipment Replacement - Internal Service
Fund has a working capital balance in excess of $1,400,000, which will provide funds for future
capital purchases.
Special Revenue Funds
State Chemical Assessment Fund
This fund is established to record the activity of the Chemical AsseSsment Team. The source of
revenue for this fund is a State Chemical Assessment Grant which fully reimburses the City for its'
expenditures relating to chemical assessment team expense.
Economic Development
The development of the City is enhanced through this fund. Revenues received are designated for
development projects that are in line with strategic plans of the council and the community. for the
. City of Hopkins. The fund balance is currently $3,711,150.
Community Development Block Grant
This revenue source continues to provide financial support and facilities for lower income areas and
individuals through housing rehabilitation grants and loans. Grant revenues to the City were
$33,609.
Tax Increment Funds
The City has established several tax increment financing districts which have assisted with the
redevelopment of its City. The positive impact of these districts can be seen in a variety of projects
such as the Oaks of Mainstreet development and the Entertainment Center downtown. The
revenues generated in these funds are designated to pay for debt that was issued to help pay for the
projects or to finance the projects themselves. The total fund balance of all tax increment districts is
currently $1,468,644 and is designated for debt service payments or for specific projects within each
district.
Para- Transit
This fund accounts for revenues received from the Metropolitan Council and from user fees to
provide for low cost transportation in Hopkins. This fund is partially funded through the general
fund if necessary.
Housing Rehab
This fund receives money primarily from the Community Development Block. Grant program,
housing fees and loan interest. This fund accounts for housing rehabilitation activities in the City of
Hopkins. The fund balance is currently $1,528,619 with $502,000 reserved for housing projects.
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Parking
This fund records and accounts for parking fees and operations, assessments charged to users and
maintenance of the parking facilities. The fund balance is currently $347,268.
Cable TV
This fund records and accounts for franchise fee revenue from a five-city joint venture cable TV
franchise administered under the Southwest Suburban Cable. Commission. The fund balance is
currently $290,565.
Depot Coffee House
The Depot Coffee House is a student-run gathering place for students. Here'the City records the
expense and revenue of retailing coffee and miscellaneous food products. The teen center is funded
by a grant from the State of Minnesota for youth crime prevention and intervention.
Debt Administration
.
Net bonded debt per capita and percentages of net debt to market value are useful indicators of a
city's debt position to municipal management, citizens, and investors. Total outstanding bonded
debt as of December 31, 1999, totaled $21,533,543 of which $7,523,543 are redevelopment issues-
the last bond matures August 1,2016; $1,780,000 are park and recreational bonds - due August I,
2011; $3,620,000 are sewer revenue bonds - due August 1,2015; $2,155,000 are special assessment
bonds - due February 1, 2010 and $6,455,000 are housing improvement bonds - due February I,
. 2021. Repayment plans for bonds and interest are well on course and no tax levy is anticipated for
any bonds except the park and recreation and the special assessm~nt issues.
. :~, . , ". _ ',:' _, , ' .. _, _, _' . _'" ~ -.,'" _' ,~ ";:~.;;.::,/,. c, :" '. _j" ., . ,", .' _ .' .
The City has maintained its Al rating rrorrf Moody's Investors serVice on all issues for several
years. In 1999 the city received an A+ rating from Standard and Poors and in the year 2000 the
rating from Standard and Poors was upgraded to a AA.. The upgrade in rating is attributed to
continued development of commercial and residential properties, strong growth in market values,
above average and increasing wealth levels, balanced operations and solid fund balances and
moderate debt levels. At December 31, 1999, only $1,780,000 of general obligation debt was
applicable to the legal debt limit of$15,749,300.
. Capital Project Funds
The proceeds of general obligation bond issues, federal, state and local grants, and special
assessments for capital projects are accounted for in Capital Project Funds until the particular
projects are completed.
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The City utilizes a five-year Capital Improvement Plan, outlining projected costs and probable
sources of funding for proposed various capital improvement projects. Any unreserved fund
balances are used as proposed in the Capital Improvement Plan, when projects are ordered by the
city council. The designated fund balance is $3,487,890, which is for the County Road 3-
construction project and miscellaneous road projects.
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Enterprise Funds
Water Utility Fund ~- The City maintains a complete water delivery system from wells through
filtration plants to the tap. The net working capital position for the water utility fund is currently
$505,889. This fund experienced a net loss this year of $(39,097), which includes a transfer to the
PIR fund for infrastructure repair and replacement.
Sewer Utility Fund -- The City maintains a sewer collection system only, with the treatment
operation being performed by the Metropolitan Waste Control Commission. The City then pays a
treatment fee based on sewage flow, which had continued to increase each of the last several years
until 1992. Working capital balance has remained very strong in this fund over the last seven years
prompting a rate decrease in 1999. The current working capital balance for this fund is $1,452,941,
an increase of $ 100,000 over 1998. Net income this year is $109,464.
Refuse Utility Fund -- City employees and equipment provides a fully automated refuse service and
a recycling operation. The City assumed the refuse pickup function from a contractor in 1986. The
refuse and recycling rates have remained stable since 1991 and no rate increase is planned for the
near future. This fund realized a net income of $8,906. The working capital balance for this fund is
$580,259, a decrease of$100,OOO over 1998 because of the purchase ofa new refuse truck.
Storm Sewer Utility Fund -- This fund was created in 1989 to consolidate infrastructure replacement
activities. A storm sewer fee was added to all properties, based on acreage contribution of runoff.
The initial fee was inadequate and has been increased in 1991, 1992, 1993, 1998 and most recently
in 1999. The city issued bonds in 1999 to pay for storm sewer projects in 1999 and 2000. The fund
had also been dealing with a negative working capital balance. To resolve this, a substantial rate.
change was implemented in 1999. The Storm Sewer fund incurs many capital project costs and
therefore was cash poor. The increased rates and the revenue bond issue have brought the working
capital balance to a positive amount of $420,585. The net income in the Storm Sewer fund is
$312,508.
Pavilion/Ice Arena Fund -- This fund was established in 1991 to record operating revenues and
expenditures for the pavilion. Small operating profits have been generated each year since 1992.
The fund realizes net losses do to depreciation of the building and equipment. This year the net loss.
is $(51,285). The Pavilion received a Mighty Ducks grant of $16,000 in 1999 which helped boost
its' net income. The working capital balance for this fund is currently $50,507, a small increase
over 1998 of $1 ,678.
. Art Center - This fund was established in 1997 to record operating revenues and expenditures for
the newly constructed art center facility. It has been in operation for two full years. The working
capital balance for the fund is at $63,293. This is a substantial decrease over the 1998 working
capital balance. A force behind the decreased working capital is the beginning of the loan payback.
The Art Center operation is still very new and it is difficult to discern the monetary success at this
early stage. Socially, the Art Center is a success in many aspects and the city is very happy to have
constructed such a structure in its' downtown area.
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Housing Authority -- The authority manages low-income rental units acquired through HUD. The
asset ownership remains with HUD until the bonds are retired, then the assets convert to City
ownership.
Cash Management
Cash temporarily available for short-term investment during the year was invested as authorized by
Minnesota Statutes Chapter 475 and the City's Investment Policy.
The City of Hopkins subscribes to the "pooled cash" concept of investing which means that all
funds with cash balances participate in an investment pool. This permits some funds to be
overdrawn and others to show cash balances when, in fact, the City has a cash balance. This pooled
cash concept provides for investing greater amounts of money at more favorable rates. Interest
earnings are then allocated on a monthly basis to the participating funds.
The City's primary iqvestnient policy goal is to minimize investment market risks while realizing 'a
competitive yield on its portfolio. The classification of the category of credit risk is shown in Note
2 to the financial statements. The City has the ability and intent to hold its investments to maturity
and therefore intends to recover the full value of its investment portfolio upon maturity. The portion
of the City's investments which mature in less than one year is' 68%. During 1999, the City of
Hopkins earned $725,216 as compared to 1998 earnings of $767,963. The lower earnings are
attributed to the interest earned on the Oaks of Mainstreet project in 1998, with all interest earnings
derived from the project either paying for the project construction or to retire debt.
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At year-end, the City's cash and investment resources (including restricted cash) were held as
follows: . Ci . .
~, . .~ ".~ ': -c. "", (":; :."
Cash
Commercial Paper
U.S. Government Agency Securities
Cost
$ 232,260
10,335,522
6559.015
$ 17,126,797
1.4%
60.3%
38.3%
Total Investments and Deposits
Risk Management
The City continues to maintain insurance coverage at state required levels for various types of
exposure - general and auto liability, worker's compensation, boiler, and employee bonds.
General Fixed Assets
.
The general fixed assets of the City are those fixed assets used in the performance of general
governmental functions and exclude the fixed assets of the enterprise funds. As of December 31,
1999, the general fixed assets of the City amounted to $24,866,285 based on original or estimated
historical cost and is considerably less than the replacement value. Depreciation on general fixed
assets is not recognized in the City's accounting system or in these financial statements.
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Independent Audit
Section 7.13 of the City Charter requires that the City Manager report to the City Council
concerning the entire financial operations of the City. The City's entire financial operations are
audited each year (Charter Section 2.08) by independent auditors. The firm of KPMG LLP has been
retained for that purpose and their report has been included in the financial section of this report.
Certificate of Achievement For
Excellence in Financial Reporting
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial reporting to the City of Hopkins for its
comprehensive annual fmance report for the fiscal year ended December 31, 1998.
In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a
governmental unit must publish an easily readable and efficiently organized comprehensive. annual .
financial report, whose contents conform to program standards. Such reports must satisfy both
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current report
meets the requirements of the Certificate of Achievement for Excellence in Financial Reporting
program, and we are submitting it to the Government Finance Officer's Association to determine its
eligibility for another certificate.
Ackriowledgments
We wish to express our appreciation to the Mayor and City Council for their continued interest and
support in planning and conducting the financial operations of the City ina responsible and
progressive manner. We also want to express our appreciation to Deborah Dahlheimer, Lee
Goodman and Pat Weigel of the Finance Department staff for their work in preparing this report.
Respectfully submitted,
:-
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Steven C. Mielke
City Manager
Lori K. Yager
Finance Director
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