Memo 1990 Financial Report
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CITY OF HOPKINS
MEMORANDUM
Date: May 30, 1991
To: The Honorable Mayor and City Councilmembers
From: John E. SChedler~l;!~
Subject: Presentation of 1990 Financial Report
The 1990 Annual Financial Report has been completed by the
Finance Department and audited by KPMG Peat Marwick who rendered
a clean opinion on the 1990 report.
A concerted effort was made to correct or add information for all
deficiencies noted in the GFOA certificate review of the 1989
report. The auditors and I are of the opinion that the 1990
report should qualify for the GFOA certificate as did the 1989
report.
The basic financial status of the entire City for 1990 is
contained in the Letter of Transmittal, General Purpose Financial
Statements and Notes to Financial Statements (pages 3 thru 45).
The balance of the report presents financial details by
individual funds and schedules and statistics of pertinent
information.
The Letter of Transmi ttal is a general narrative overview of.
fiscal 1990 highlighting economic conditions and outlook, major
initiatives - past and future, and financial information.
General Purpose Financial Statement combines balance sheets for
all funds (Exhibit A), revenues, expenditures and other financing
sources (uses) for governmental funds (Exhibit A-1) and for
proprietary funds (Exhibit A-3).
Notes to Financial Statements explain policies and basis for
accounting and operations of the City, also providing additional
information for various functions that would be cumbersome to
detail on financial statements.
A sound financial position is noted for all funds except the
Storm Sewer Fund. Most current projects have financing in place.
Diligence will be required to deal with ramifications of recent
legislative actions.
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Highlights of changes in certain funds that were significant:
General Fund
Actual revenues exceeded expenditures by $210,713. Use of Fund
Balance ($419,000) to complete the City Hall remodeling ended the
project. Temporary transfer of $1,500,000 to fund the landfill
remediation project greatly reduced the fund balance. RepaYment
to the General Fund will be made from the "super fund" and
hopefully from insurance recoveries.
Special Revenue Funds
All funds are well positioned to fund the projects in progress
and/or planned.
Debt
Debt reached its highest level in several years with $13,595,000
of outstanding bonds (represented by 8 issues). All but
$3,290,000 of these bonds (two issues - Park & Recreation and
P.I.R.) are funded by tax increments or enterprise fund revenues.
The first tax levy in many years for bonds was made in 1990. The
City has committed only 45% of its legal debt limit.
Enterprise Funds
Water, Refuse and HRA recorded profits in 1990.
The Sanitary Sewer Fund turned in a slight loss. A rate increase
for 1991 was authorized.
The storm Sewer Fund has virtually expended the initial $649,700
balance transferred in to establish this fund and the 1989 bond
proceeds for construction and maintenance projects. The 1991
rate increase will not sustain the projected operations and
construction projects.
Investments
Idle cash invested at year end was $15,300,900. Interest earned
for 1990 totaled $1,203,530 for an 8.0% return on the average
invested balance.
Attached is a copy of the auditor's report on legal compliance.
While this report is required by statute and the testing is
performed during the audit of the City's financial report, it
does not become a part of said report. A copy of this legal
compliance report is sent to the Minnesota State Auditor along
with the required state Auditor's five page report on City
finances.