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Memo - 2010 Comprehensive Annual Financial ReportCITY OF HOPKINS MEMORANDUM Date: June 30, 2011 To: Mayor & City Council From: Christine Harkess, Finance Director FINANCE DEPARTMENT Subject: 2010 Comprehensive Annual Financial Report (CAFR) Staff has prepared a presentation of a consolidated version of the 2010 Comprehensive Annual Financial Report (CAFR). Craig Popenhagen, Principal of the audit firm LarsonAllen, LLC will be present to review the results of the 2010 audit to the City Council and public. Supportiniz Information Both these document come secured from the auditors so are NOT in the council packet but are included as separate attachments. Because they are secure we cannot merge them with other documents or the entire council packet. • 2010 Executive Audit Summary • 2010 Comprehensive Annual Financial Report CITY OF HOPKINS EXECUTIVE AUDIT SUMMARY (EAS) DECEMBER 31, 2010 CITY OF HOPKINS TABLE OF CONTENTS DECEMBER 31, 2010 AUDIT REPORT SUMMARY FINANCIAL RESULTS GOVERNMENT -WIDE FINANCIAL STATEMENTS GENERALFUND ENTERPRISE FUNDS APPENDIX A FORMAL REQUIRED COMMUNICATIONS 1 2 4 5 6 APPENDIX B REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 10 REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 12 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 15 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 16 APPENDIX C REPORT ON LEGAL COMPLIANCE 19 NEW ACCOUNTING AND REPORTING STANDARDS 20 LarsonAllen" LLP CPAs, Consultants & Advisors www.larsonallen.com Audit Report Summary We prepared this Executive Audit Summary and Management Report in conjunction with our audit of the City's financial records for the year ended December 31, 2010. The following is a summary of reports we have issued: Audit Opinion The financial statements are fairly stated in accordance with generally accepted accounting principles. We issued an "unqualified" audit opinion. Yellow Book Opinion Our report on internal control over financial reporting noted no material weaknesses. Single Audit Compliance A compliance audit over federal grant expenditures was required in 2010. We noted two significant deficiencies in internal control over compliance. Legal Compliance No compliance issues were reported with respect to Minnesota Statutes. Significant Reporting Changes from Prior Year There were no changes in accounting principles in 2010. (1) FINANCIAL RESULTS GOVERNMENT -WIDE FINANCIAL STATEMENTS Statement of Net Assets The Statement of Net Assets reflects what the City owns and owes at a given point in time, the last day of the fiscal year. Theoretically, net assets represent the resources the City has leftover to use for providing services after its debts are settled. However, those resources are not always in expendable form, or there may be restrictions on how some of those resources can be used. For instance, invested in capital assets -net of related debt is the largest classification and reflects the balance of infrastructure (streets, storm water, side walks, etc.) and other assets net of the debt incurred to finance them and therefore, not cash available for use. In order to address this, the statement divides the net assets into three components: net assets invested in capital assets -net of related debt, restricted net assets, and unrestricted net assets. The following is a condensed version of the Statement of Net Assets at December 31, 2010: Governmental Business -Type Activities Activities Assets: Current Assets $ 27,767,531 Capital Assets 45,9887219 Total Assets 73.755.750 Liabilities: Current Liabilities 3,397,992 Long -Term Liabilities 25,330,961 Total Liabilities 28,728,953 Net Assets: Invested in Capital Assets, Net of Related Debt 32,823,582 Restricted 8,613,114 Unrestricted 3,590,101 Total Net Assets $ 45,026,797 $ 2,393,028 20,515,860 22,908,888 263,368 5,293,163 5,556,531 16,279,028 1,073,329 $ 17,352,357 Total $ 30,160, 559 66,504,079 96.664,638 3,661,360 30,624,124 34,285,484 49,102,610 8,613,114 4,663,430 $ 62,379,154 A significant portion of the City's net assets translate into restricted net assets by virtue of external restrictions (statutory reserves) or by the nature of the fund they are in (e.g. equity in a debt service fund typically can only be spent on future repayment of debt). (2) Statement of Activities The Statement of Activities tracks the City's yearly revenues and expenses, as well as any other transactions that increase or reduce total net assets. These amounts represent the full cost of providing services. This statement provides a more comprehensive measure than just the amount of cash that changed hands, as reflected in the fund -based financial statements. This statement includes the cost of supplies used, depreciation of long-lived capital assets, and other accrual -based expenses. The following is a condensed version of the Statement of Activities for the year ended December 31, 2010: Functions/Programs Governmental Activities: General Government Public Safety Health and Welfare Highways and Streets Urban Redevelopment and Housing Culture and Recreation Interest on Long -Term Debt Total Governmental Activities Business -Type Activities: Water Sewer Storm Sewer Refuse Pavilion/Ice Arena Housing and Redevelopment Authority Total Business -Type Activities Total Governmental and Business -Type Activities General Revenues: Property Taxes Tax Increments Expenses Program Revenue $ 1,693,275 6,243,813 180,895 3,062, 507 1,914,779 1,505,513 895,873 15,496,655 404,630 925,106 175,320 537,309 548,226 662,802 3,253,393 1,196, 947 1,343,153 1,844,309 1,812,585 420,619 803,889 738,398 886,410 398,354 363,591 542,324 769,304 5,140,951 5,978,932 $ 20,637,606 $ 9,232,325 Grants and Contributions Not Restricted Unrestricted Investment Earnings Total General Revenues, Special Items, and Transfers Change in Net Assets (3) Difference $ (1,288,645) (5,318,707) (5,575) (2,525,198) (1,366,553) (842,711) (895,873) (12,243,262) 146,206 (31,724) 383,270 148,012 (34, 763) 226,980 837,981 (11,405,281) 9,827,813 2,147,517 306,215 130,367 12,411,912 $ 1,006,631 GENERALFUND The following table presents the City's General Fund revenue sources for each of the past three years. The most significant component is property taxes which amounted to $8,498,409 for 2010. It is important that the City operate governmental and enterprise funds effectively so that there is not a need to be subsidized by the general fund. General Fund Revenue by Source Years Ended December 31, $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2008 2009 2010 ❑ Taxes ® Intergovernmental ❑ Charges for Services ❑ License and Permits ■ Other The following table presents the City's General Fund expenditures for each of the past three years. The most significant component is public safety which amounted to $5,712,126 for 2010. General Fund Expenditures by Function Years Ended December 31, $6,000,000 177 $5,000,000 $4,000,000 �g $3,000,000 $2,000,000" $1,000,000 $0 2008 2009 2010 ❑ General Governmental ® Public Safety ❑ Health & Welfare ❑ Highways & Streets ■ Culture & Recreation ❑ Capital Outlay (4) GENERAL FUND (CONTINUED) Fund Balance — Total fund balance of the City's General Fund increased by $125,474 during fiscal 2010 from $4,127,786 to $4,253,260 at December 31, 2010. A City's fund balance in the General Fund is an important aspect in considering the City's financial well being since a healthy fund balance represents things such as cash flow, as a cushion against unanticipated expenditures, funding deficiencies and similar problems. At December 31, 2010, the unreserved fund balance as a percentage of annual expenditures is 41.1% or approximately 21 weeks of expenditures. This compares to 39.7% and approximately 21 weeks of expenditures as of December 31, 2009. In order to properly analyze fund balance levels you must review fund balance reservations and designations as well as growth indicators of the City. The percentage above is average for established communities such as the City of Hopkins. Budget to Actual — Total revenues in the General Fund were $38,829 (or 0.4%) less than the budgeted amount while total expenditures were $175,902 (or 1.7%) less than had been budgeted. After considering operating transfers, the net effect was an increase to total fund balance that was $125,474 more than had been reflected in the City's budget. As part of any budget update initiated for fiscal 2011, the Council will want to take this and other budget variances into consideration in order to limit future budget differences to every extent possible. ENTERPRISE FUNDS The enterprise funds (Water Utility, Sewer Utility, Storm Sewer Utility, Refuse Utility, Pavilion/Ice Arena and Housing Authority Funds) have a healthy combined net asset balance in the amount of $17,352,357 as of December 31, 2010. The largest portion of this being an investment in infrastructure and other capital assets net of related debt in the amount of $16,279,028. (5) Lars9nAllen" LLP CPAs, Consultants & Advisors www.lar$onallen.com APPENDIX A FORMAL REQUIRED COMMUNICATIONS Honorable Mayor and Members of the City Council City of Hopkins, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Hopkins, Minnesota (the City) for the year ended December 31, 2010, and have issued our report thereon dated June 23, 2011. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under U.S. Generally Accepted Auditing Standards and OMB Circular A-133 As stated in our engagement letter dated January 14, 2011, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting. We also considered internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit. Also in accordance with OMB Circular A-133, we examined, on a test basis, evidence about the City's compliance with the types of compliance requirements described in the "U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement" applicable to each of its major federal programs for the purpose of expressing an opinion on the City's compliance with those requirements. While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements. 1. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. z Honorable Mayor and Members of the City Council City of Hopkins Our Responsibility under U.S. Generally Accepted Auditing Standards and OMB Circular A-133 (Continued) 2. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. 3. We are also responsible for communicating matters regarding the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant Minnesota Statute 6.65. Other Information in Documents Containing Audited Financial Statements Our auditors' opinion, the audited financial statements, and the notes to financial statements should only be used in their entirety. Inclusion of the audited financial statements in a client prepared document, such as an annual report, should be done only with our prior approval and review of the document. Our responsibility for other information in documents containing the City's financial statements and our auditors' report does not extend beyond the financial information identified in our auditors' report. We have no responsibility for determining whether such other information is properly stated and do not have an obligation to perform any procedures to corroborate other information contained in such documents. We are required by professional standards to read the other information in order to identify material inconsistencies between the audited financial statements and other information because the credibility of the audited financial statements and our report may be undermined by material inconsistencies between the audited financial statements and other information. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our meeting about planning matters on February 1, 2011. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City of Hopkins are described in Note 1 to the financial statements. No new accounting policies were adopted during 2010. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. (7) Honorable Mayor and Members of the City Council City of Hopkins Qualitative Aspects of Accounting Practices (Continued) The most sensitive estimates affecting the financial statements were: Management's estimate of the useful lives of capital assets is based on authoritative guidance and past experience. Management's estimate of the investments at fair value is based on published market values at December 31, 2010. Estimated current portion of compensated absences payable — Management's estimate of the amount of the year-end compensated absences payable balance to be taken by employees within one year of December 31, 2010 is based on historical trends and anticipated leave time activity. We evaluated the key factors and assumptions used to develop the above estimates in determining that it is reasonable in relation to the financial statements taken as a whole. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. During our audit, we noted that interest expense was not capitalized as construction in progress in the Water and Sewer utility funds. As a result, capital assets are understated and interest expense is overstated by approximately $15,000. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated June 23, 2011. N Honorable Mayor and Members of the City Council City of Hopkins Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the Members of the City Council and management of the City of Hopkins, Minnesota and is not intended to be and should not be used by anyone other than these specified parties. Minneapolis, Minnesota June 23, 2011 BE t -t -P LarsonAllen LLP LarsonAllen" LLP CPKs, Consultants & Advisors www.larsonallen.com APPENDIX B REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of the City Council City of Hopkins, Minnesota We have audited the financial statements of the governmental activities, business -type activities, each major fund, and the aggregate remaining fund information of the City of Hopkins, Minnesota (the City) as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements and have issued our report thereon dated June 23, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses as defined above. (10) \n in,1,11,ndcnt A lnlern,rliomal 1111u\Nil''vv1 Honorable Mayor and Members of the City Council City of Hopkins Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our test disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the City in a separate letter dated June 23, 2011. This report is intended solely for the information and use of the City Council, management, the Office of the State Auditor, and state and federal awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. LarsonAllen LLP Minneapolis, Minnesota June 23, 2011 LarsonAllen" LLE' CPAs, Consultants & Advisors www.larsonallen.com INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Honorable Mayor and Members of the City Council City of Hopkins, Minnesota COMPLIANCE We have audited the City of Hopkins's (the City) compliance with the types of compliance requirements described (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended December 31, 2010. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to its major federal program is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City's compliance with those requirements. In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2010. INTERNAL CONTROL OVER COMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. (12) \n indchLndCnt mcmhcr 0I tiYvIU Intcmatianul I% I I N\% i I"\\ I Honorable Mayor and Members of the City Council City of Hopkins, Minnesota A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination or deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over compliance that we consider to be significant deficiencies as described in the accompanying schedule of findings and questioned costs as items 2010-1 and 2010-2. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2010, and have issued our report thereon dated June 23, 2011. Our audit was performed for the purpose of forming our opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the 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. The City's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the City's responses and, accordingly, we express no opinion on them. We noted certain matters that we reported to management of the City in a separate letter dated June 23, 2011. This report is intended solely for the information and use of the City Council, management, federal awarding agencies, state funding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Minneapolis, Minnesota June 23, 2011 (13) I— I—P LarsonAllen LLP CITY OF HOPKINS, MINNESOTA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED DECEMBER 31, 2010 (14) Federal Pass-through CFDA Federal Federal Grantor/ Grant Name Grantor Number Expenditures U.S. Department of Housing and Urban Development: Public and Indian Housing Operating Fund Direct 14.850 $ 153,816 CFP Cluster Programs: Public Housing Capital Fund Direct 14.872 83,506 Public Housing Capital Fund Stimulus - ARRA Direct 14.884 45,009 Public Housing Family Self -Sufficiency under Resident Opportunity and Supportive Services Direct 14.877 22,683 Community Development Block Grant - ARRA Hennepin County 14.253 183,831 U.S. Department of Justice: Bullet Proof Vest Partnership Program Direct 16.607 2,113 U.S. Department of Homeland Security Minnesota Department Homeland Security Grant Program of Public Safety 97.067 135,217 U.S. Department of Energy Energy Efficiency and Conservation Block Grant Program - Minnesota Department ARRA of Commerce 81.128 75,000 S 701,175 (14) CITY OF HOPKINS, MINNESOTA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED DECEMBER 31, 2010 NOTE A BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Hopkins, Minnesota (the City) and is prepared on the modified accrual basis of accounting. The information presented in this schedule is presented in accordance with the requirements of the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the City's financial statements. (15) CITY OF HOPKINS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2010 SUMMARY OF AUDIT RESULTS 1. The auditors' report expresses an unqualified opinion on the financial statements of the City of Hopkins. 2. No material weaknesses were disclosed during the audit of the financial statements of the City of Hopkins. 3. No instances of material noncompliance were disclosed during the audit of the financial statements of the City of Hopkins. 4. Two significant deficiencies were identified during the audit of the major federal award programs for the City of Hopkins. 5. The auditors' report on compliance for the major federal award program for the City of Hopkins expresses an unqualified opinion. 6. Our audit disclosed no findings relating to major programs that are required to be reported under section 510(a) of OMB Circular A-133. 7. The programs tested as major programs include: Program _ CFP Cluster Pro. -rams: Public Housing Capital Fund Public Housing Capital Fund Stimulus - ARRA Community Dei elopmew Block Grant - ARRA Homeland Security Grant ProLram CFDA # 14.87? 14.884 14?53 97.067 8. The threshold for distinguishing type A and B programs was $300,000. 9. The City of Hopkins does not qualify as a low-risk auditee. B. FINDINGS — FINANCIAL STATEMENTS AUDIT None CITY OF HOPKINS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2010 C. FINDINGS AND QUESTIONED COSTS — MAJOR FEDERAL AWARD PROGRAMS AUDIT CURRENT YEAR CAPITAL FUND GRANTS (CFDA 14.872 & 14.884) AND COMMUNITY DEVELOPMENT BLOCK GRANT (CFDA 14.253) 2010-1: REPORTING Condition: We noted that the City had no formal internal control procedures over reviewing or approving and tracking submission of required reports. Criteria: The Capital Fund and Community Development Block Grants require submission of various financial and performance reports. Context: We noted that while these reports were properly submitted, the City had no formal internal control procedures to ensure that these reports were prepared correctly or submitted in a timely manner. Effect: There was a weakness in the City's internal controls over compliance Cause: Segregation of duties in the HRA is limited due to staff size. Recommendation: We recommend that the City establish internal control procedures whereby all required reports are reviewed and approved to ensure proper preparation and submission in a timely manner. CORRECTIVE ACTION PLAN (CAP) Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. Actions Planned in Response to Finding: During fiscal year 2011, the City will implement procedures for review and submission of required reports. Official Responsible for Ensuring CAP: The Finance Director will ensure that internal controls over reporting are put into place. (17) CITY OF HOPKINS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2010 CAPITAL FUND GRANTS (CFDA 14.872) 2010-2: CASH MANAGEMENT Condition: We noted that the City had no formal internal control procedures for reviewing or approving capital fund grant draw requests. Criteria: Capital Fund Grant funds are drawn down as expenditures are incurred. Context: We noted that there is no review process over these reimbursement requests that would prevent errors. Effect: There was a weakness in the City's internal controls over compliance. Cause: Segregation of duties in the HRA is limited due to staff size. Recommendation: We recommend that the City establish internal control procedures whereby all draw requests can be reviewed and approved before submission. CORRECTIVE ACTION PLAN (CAP) Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. Actions Planned in Response to Finding: During fiscal year 2011, the City will implement procedures for review and approval of draw requests. Official Responsible for Ensuring CAP: The Finance Director will ensure that internal controls over reporting are put into place. PRIOR YEAR None. LarsonAllen" LLP CPAs, Consultants & Advisors www.larsonallen.com APPENDIX C AUDITOR'S REPORT ON LEGAL COMPLIANCE Honorable Mayor and Members of the City Council City of Hopkins, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Hopkins, Minnesota (the City) as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements and have issued our report thereon dated June 23, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant to Minn. Stat. §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 Political Subdivisions covers seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our study included all of the listed categories. The results of our tests indicate that for the items tested, the City complied with the material terms and conditions of applicable legal provisions. This report is intended solely for the information and use of the City Council, management, and the Office of the State Auditor and is not intended to be, and should not be, used by anyone other than those specified parties. Minneapolis, Minnesota June 23, 2011 1 NTERN A'I'IUN AL LarsonAllen LLP (19) An independent member of Nexia International NEW ACCOUNTING AND REPORTING STANDARDS Fund Balance Reporting Changes (GASB Statement No. 54) In March 2009, Governmental Accounting Standards Board issued GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The requirements of this Statement are effective for the City's fiscal year ending December 31, 2011. Governments that wish to implement earlier than that date are encouraged to do so. Statement 54 distinguishes between fund balance amounts that are considered non -spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative ability to be spent. Beginning with the most non -spendable classification, fund balances will be reported in the following classifications: • Restricted—amounts constrained by external parties, constitutional provision, or enabling legislation. • Committed—includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority • Assigned—amounts a government intends to use for a particular purpose. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. • Unassigned—amounts that are not constrained at all will be reported in the general fund or to report deficit balances in other governmental funds. The statement interprets certain terms within the definition of special revenue funds. The statement also specifies how economic stabilization or "rainy -day" amounts should be reported. For financial reporting purposes, stabilization should be regarded as a "restricted" or "committed" classification only if the government details the circumstances or conditions that signal the need for stabilization in sufficient detail. Otherwise, these amounts should be reported as "unassigned" in the general fund. The Financial Reporting Entity In November 2010, the GASB issued Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. Statement No. 61 is effective for financial reporting in fiscal year 2013 and modifies previous requirements for the assessment of potential component units (for example the City's Housing and Redevelopment Authority) in determining what should be included in the City's financial statements. The Statement also modifies the display and disclosure requirements for component units. As a result, the method for including component units in the City's financial statements will need to be re-evaluated and potentially changed in fiscal year 2013. In preparation for evaluating the inclusion of component units under the new guidance in GASB Statement No. 61, the City should revisit the formative documents of its component units including charters, resolutions, bylaws, articles of incorporation, etc. (20) NEW ACCOUNTING AND REPORTING STANDARDS (CONTINUED) GASB Codification In December 2010, the GASB issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre -November 30, 1989 FASB and AICPA Pronouncements. As discussed in the City's accounting policy disclosures in its financial statements, the City historically followed Financial Accounting Standards Board (FASB) guidance issued before November 30, 1989, for purposes of reporting financial activity of proprietary funds such as the Water, Sewer, Storm Sewer and Refuse Utility Fund; the Pavilion/Ice Arena Fund; the Housing Authority and Internal Service Funds, and GASB guidance issued on and after November 30, 1989, all of which is considered acceptable methods for financial reporting of proprietary funds. However, GASB has accumulated and codified pre -November 30, 1989 FASB guidance deemed applicable to proprietary funds into an all- inclusive Statement No. 62. Statement No. 62 is very thorough, detailed and extensive — over 300 pages in length — and thus will require thoughtful implementation in fiscal year 2012. (21) i i I COMPREHENSIVE ANNUAL FINANCIAL REPORT of the CITY OF HOPKINS. MN For The Year Ended December 31, 2010 Prepared by the Department of Finance cf City of Hopkin THE CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS jilik INTRODUCTORY SECTION Page Letter of Transmittal from the City Manager and Finance Directoi 3 Certificate of Achievement for Excellence in Financial Reporting 9 Administrative Organization Chart 10 City Officials 11 II FINANCIAL SECTION Independent Auditors' Report 1 ; Management's Discussion and Analysis (Unaudited) 15 A. Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 28 Statement of Activities 29 Fund Financial Statements: Balance Sheet - Governmental Funds 30 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 31 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 3 3 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 34 Statement of Net Assets - Proprietary Funds 40 Statement of Revenues, Expenses, and Changes in Net Assets - Proprietary Funds 42 Statement of Cash Flows - Proprietary Funds 43 Notes to Financial Statements 46 B. Required Supplementary Inforniation Schedule of Funding Progress - Other Postemployment Benefit Plan 70 THE CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 Page C. Combining and Individual Nonmajor Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds 73 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 81 Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Special Revenue Funds: State Chemical Assessment 89 Economic Development 90 Real Estate Purchases and Sales 91 Paratransit 92 Housing Rehab 93 Parking 94 Communications 95 Depot Coffee House 96 Art Center 97 Tax Increment 1.2 - Entertainment Center 98 Tax Increment 2.1 - R.L. Johnson Company 99 Tax Increment 2.6 - Sonoma Project 100 Tax Increment 2.9 - Oaks of Mainstreet 101 Tax Increment 2.11 - Super Valu 102 Tax Increment 1.3 - 5th Avenue Flats 103 Tax Increment 1.4 Marketplace & Main 104 Combining Statement of Net Assets - Nonmajor Enterprise Funds 106 Combining Statement of Revenues, Expenses and Changes in Net Assets - Nonmajor Enterprise Funds 107 Combining Statement of Cash Flows - Nonmajor Enterprise Funds 108 Combining Statement of Net Assets - Internal Service Funds 110 Combining Statement of Revenues, Expenses, and Changes in Net Assets - Internal Service Funds III Combining Statement of Cash Flows - Internal Service Funds 112 THE CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 III STATISTICAL SECTION A. Financial Trends Parc: Net Assets by Component 115 Changes in Net Assets 116 Fund Balances, Governmental Funds 118 Changes in Fund Balances, Governmental Funds 120 B. Revenue Capacity Assessed and Actual Value of Taxable Property 122 Direct and Overlapping Property Tax Rates 123 Principal Property Taxpayers 124 Property Tax Levies and Collections 125 C. Debt Capacity Ratios of Outstanding Debt by Type 126 Ratios of Net General Bonded Debt Outstanding 127 Direct and Overlapping Governmental Activities Debt 128 Legal Debt Margin Information 129 Pledged -Revenue Coverage 130 D. Demographic and Economic Information Demographic and Economic Statistics 131 Principal Employers 132 E. Operating Information Full-time Equivalent Employees by Type 133 Operating Indicators by Function/Program 134 Capital Asset Statistics by Function/Program 136 City of Hopkins CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2010 SECTION I INTRODUCTORY SECTION 1320 - City of Hopkins City of q1opk1ns 1010 First Street South • Hopkins, MN 55343-7573 • Phone: 952-935-8474 • FaX.. 952-935-1834 Web address: www.hopkinsmn.com June 29, 2011 To the Honorable Mayor, Members of the Hopkins City Council and the Citizens of the 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, 2010 is hereby submitted. This report was prepared in accordance with U.S. generally accepted accounting principles (GAAP) as established by the Governmental Accounting Standards Board (GASB) and meets the requirements of the State Auditor's Office. This report consists of management"s representations concerning the finances of the City of Hopkins. Consequently, management assumes full responsibility for both the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Hopkins has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable inforination for the preparation of the City of Hopkins financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Hopkins comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Hopkins financial statements have been audited by LarsonAllen LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Hopkins for the fiscal year ended December 31, 2010, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Hopkins financial statements for the fiscal year ended December 31, 2010, are fairly presented in conformity with GAAP. The independent auditors" report is presented as the first component of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found in the financial section of this report immediately following the report of the independent auditors. Partnering with the Community to Enhance the Quality of Life • Inspire • Educate • Involve • Communicate • 3 Profile of the Government 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. The report includes all funds of the City, including the City's Housing and Redevelopment Authority (HRA). The City provides a full range of services including general government, public safety, highways and streets, urban redevelopment and housing, culture and recreation, and health and welfare. In addition to general municipal activities, the City provides water, sewer, storm sewer and refuse services and operates an ice arena. 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. The annual budget serves as the foundation for the City of Hopkins financial planning and control. All departments of the City of Hopkins are required to submit requests for appropriation to the Finance Director by July of each year. The Finance Director uses these requests as the starting point for developing a proposed budget. The Finance Director then presents this proposed budget to the Council for review prior to September 15th. The Council is required to hold public hearings on the proposed budget and to adopt a final budget no later than December 31, the close of the City of Hopkins fiscal year. The appropriated budget is prepared by fund and department. Department heads may make transfers of appropriations within a department. Transfers of appropriations between funds require approval of the City Council. Budget to actual comparisons are provided in this report for each individual governmental fund for which an annual budget has been adopted. For the General Fund and the major Special Revenue Funds this comparison is presented on pages 34-38 as part of the basic financial statements for the governmental funds. For governmental funds, other than the General fund and major Special Revenue Funds, with annual budgets, this comparison is presented in the combining and individual fund statements and schedules subsection of this report on pages 89-104. Factors Affecting Financial Condition The City of Hopkins, consisting of 2,504 acres, is located in Hennepin County on the westerly fringe of the Minneapolis urban area. The City, as part of the Minneapolis -St. Paul metropolitan complex, is readily accessible by the many highways and railways leading into the area. This easy access prompted steady growth for the City of Hopkins during its formative years. In response to this growth the City developed goals of working towards a planned community, with its policies directed toward sound ratios of residential, commercial and industrial components, with the current tax base approximately 76% single family residential and apartments, and 24% commercial - 4 industrial. The city's population has stabilized due to the fact that the City is largely developed and the national trend toward the lowering of persons per household. The City Council and staff along with an organized group of concerned partners determined what the Vision and the Mission of the City of Hopkins should be. Participation in this project was very high and the resulting Vision and Mission are as follows: Community Vision Creating a Spirit of Unity — Hopkins will be a community where • People are treated with respect • People participate in building culture, character and common bonds • Business growth throughout the City is supported while maintaining a vibrant City center • People feel safe, support outstanding schools and celebrate cultural heritages • People enjoy quality public services, parks and housing City of Hopkins Mission Partnering with the Community to enhance the quality of life, — Inspire, Educate, Involve, Communicate Economic Condition and Outlook Hopkins continues to show strong economic and redevelopment activities within the city. The valuation of new non-residential construction in 2010 was $7.6 million dollars. This development activity has been the result of a good development market in the Hopkins area along with successful planning on the part of the city council and city staff. Significant projects completed or begun in 2010 include the following: Activity Valuation Commercial Additions/Alterations: Excelsior Crossing Phase III $40,000,000 Hopkins Health & Wellness Center Expansion $ 3,000,000 Efforts are being made for continued development and growth for 2011 and beyond. It is anticipated that approximately $191,000,000 of construction will also take place in the City of Hopkins during the next several years. Some anticipated projects for 2011-2014 include the following: Project Valuation Hopkins Cold Storage Site Redevelopment $62,000,000 Marketplace & Main Apartments/Townhomes $56,000,000 Fifth Avenue Flats $40,000,000 Ste Avenue Redevelopment $30,000,000 Mayon Plastics Site Redevelopment $ 3,000,000 5 Long-term financial planning 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 2012, projects to be constructed include the redevelopment of the Park Nicollet Clinic site into a retail/housing development of approximately 110 housing units, Phase I of Market Place & Main apartments and completion of phase III of the Excelsior Crossing project which is a major corporate campus comprising three office buildings each with seven stories and over 3,000 new employees. These developments will have major impacts on the community. Specialized planning is taking place to ensure that these developments occur so as to benefit the community and residential neighborhoods. Major improvements continue to be made along the Hopkins section of Excelsior Boulevard (County Road 3). The first phase of improvements occurred in 1998 - 2000 between Shady Oak Road and 9th Avenue South. The second phase occurred in 2002 — 2004 between Highway 169 and Blake Road. The third phase occurred in 2007 on the segment between Highway 169 and 8th Avenue. The final phase is the section from Blake Road to Meadowbrook Road — this project has provisional county funding and is tentatively scheduled for 2012 — 2013. Significant improvements are in the planning for Shady Oak Road (County Road 61). This project is a joint effort between Hennepin County and the Cities of Minnetonka and Hopkins. A number of neighborhood and town meetings have been held to gather input on this project that is projected to re -align the road and facilitate re -development of the area. The timing of the project is dependent on Hennepin County which has it placed in their road budget for 2014. Another project in the planning stages is the 14 -mile Southwest Corridor Light Rail Transit (LRT) line that will go from Eden Prairie to downtown Minneapolis passing through Hopkins and providing development potential at three transit stations that are planned for Hopkins. In downtown Minneapolis the Southwest LRT will connect with the Hiawatha and Central LRT lines. Construction of the light rail line is expected to begin in 2017 and will be funded with the Counties Transit Improvement Board's transit sales tax in the metro area (30%), and with Hennepin County Regional Railroad Authority (10%), Federal (50%), and State (10%) dollars. Relevant Financial Policies The State of Minnesota facing their own budget challenges unallotted city Market Value Homestead Credit (MVHC) aid for the third year. This resulted in a 2010 budget shortfall of $244,667 for the City of Hopkins. It is the city's policy to maintain a balanced budget, therefore budget adjustments to delay filling open positions, elimination of non-essential capital items, small cuts across all departments and use of 2009 budget reserves were implemented thus achieving a balanced budget for 2010. Major Initiatives For 2010, the staff, following specific directives of the council and the city manager, has been involved in a variety of projects throughout the year. These projects reflect the government's 3 commitment to ensuring that its citizens are able to live and work in a safe environment and that the needs for services are met. In 2010, we accomplished our annual street repair and improvements, at a cost of approximately $1,108,200. The projects included phase 2 of the Parkridge neighborhood street reconstruction and 5a' Street from 11 `" Ave to corporate limits reconstruction, replacing infrastructure, roadway surface, curb and gutters, parking lot surfaces and alley reconstruction. The water department completed the Moline and Well #1 improvements totaling $596,000, the sewer department completed upgrades to Life Station #1 at a cost of $324,300 and the storm sewer department started work on the Nine Mile Creek Bank Stabilization incurring project costs of $234,600. In 2010, the water, sewer and storm sewer departments also completed in conjunction with the street improvements, infrastructure reconstruction projects totaling $490,000. Other miscellaneous improvement projects in 2010 included City Hall boiler upgrade ($109,000), beginning work on the Emergency Vehicle Preemptive Signal Upgrade at the Highway 169 interchanges ($3,500) along with other smaller projects. Future projects A systematic citywide sidewalk rehab program was initiated in 1992. Each year one quadrant is inspected and necessary repairs made. A sidewalk/trail plan was developed and implemented in 2003, which guides future improvements and connections to regional trails. 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. 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 finance report for the fiscal year ended December 31, 2009. 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. This report must satisfy both U.S. 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 comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. 7 Acknowledgments 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 in a responsible and progressive manner. We also want to express our appreciation to the Finance Department staff for their work in preparing this report. Respectfully submitted, James A. Genellie Assistant City Manager Christine M. Harkess, CPA, CGFM Finance Director Certificate of Achievement for Excellence in Financial Reporting Presented to City of Hopkins Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2009 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. y�J XI��;�` 'A,; AN 1 vv'i%S cnvtic Io President A�A Executive Director Organizational Chart CITIZENS Boards & CITY Commissions COUNCIL City Attorney Administrative City Manager Center for the Services Arts Community Finance Fire Services • Assessing • City Clerk • Communications • Information Services • Inspections • Reception • Activity Center • Accounting • Payroll • Utility Billing • Fire & Medical Response • Prevention • Emergency Preparedness City of Minnetonka Recreation Depot Coffee House Planning & Economic Police Public Works Development • Economic 0 Patrol Building Maint. & Development 0 Investigation Equipment Services • Housing • Communication Engineering • Planning & . Crime • Parks & Forestry Zoning Prevention Street/Traffic/Refuse • Public Housing 0 Water & Sewer • Pavilion/Ice Arena 10 THE CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OFFICIALS December 31, 2010 CITY COUNCIL FINANCE DIRECTOR Christine M. Harkess Appointed Term Expires Eugene Maxwell Mayor 12-31-11 Kristi Halverson Councilmember 12-31-13 Rick Brausen Councilmember 12-31-11 Bruce Rowan Councilmember 12-31-11 Cheryl Youakim Councilmember 12-31-13 CITY MANAGER Richard B. Getschow Resigned March 2011 James A. Genellie, Acting/Assistant Appointed FINANCE DIRECTOR Christine M. Harkess Appointed CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2010 SECTION II FINANCIAL SECTION 12 LarsonAllen' LLP CPAs, Consultants & Advisors www.larsonallen.com INDEPENDENT AUDITORS' REPORT Honorable Mayor and Members of the City Council City of Hopkins, 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 Hopkins, Minnesota (the City) as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governruent Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perforin 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. In our opinion, the 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 Hopkins, Minnesota as of December 31, 2010, and the respective changes in financial position and cash flows, where applicable, thereof and the budgetary comparison for the general fund for the year then ended in conforinity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated June 23, 2011, on our consideration of the City of Hopkins. Minnesota's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Governruent Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and schedule of funding progress as listed in the table of contents is not a required part of the basic financial statements but is supplemental information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 13 An indcpcndent member of'Ncxia International ISTERN A1 ]ON AL Honorable Mayor and Members of the City Council Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Hopkins' basic financial statements. The introductory section, combining and individual fund statements and schedules and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the audit procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. Minneapolis, Minnesota June 23, 2011 14 LarsonAllen LLP CITY OF HOPKINS, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) This section of the City's comprehensive annual financial report presents a discussion and analysis of the City's financial activities during the fiscal year ended December 31, 2010. This discussion and analysis should be read in conjunction with the letter of transmittal in the introductory section of this report. Financial Highlights • The assets of the City of Hopkins exceeded liabilities by approximately $62.4 million. Of this amount, (unrestricted net assets), approximately $4.7 million may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net assets increased by approximately $1.0 million. • As of the close of the current fiscal year, the City of Hopkins governmental funds reported combined ending fund balances of approximately $16.1 million, an increase of approximately $1.2 million in comparison with the prior year. The increase was due to conservative spending, the sale of improvement bonds and refunding bonds on storm sewer bonds. Approximately $5.54 million of fund balance is available for spending at the City's discretion (unreserved, undesignated fund balance). • As of December 31, 2010, unreserved fund balance for the General Fund was approximately $4.07 million, or 41 % of total general fund expenditures. • The City of Hopkins total debt decreased by approximately $1.27 million during the current fiscal year due to bond refunding payments and bond maturities. The city also sold refunding bonds allowing for two bond issues totaling $1.235 million to be refunded on February 1, 2011. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Hopkins basic financial statements. The City of Hopkins basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City of Hopkins finances, in a manner similar to a private -sector business. The statement of net assets presents information on all of the City of Hopkins assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Hopkins is improving or deteriorating. The statement of activities presents information showing how the City 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 IL' expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of Hopkins 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 Hopkins include general, public safety, highways, streets, culture, recreation, urban redevelopment, housing, health and welfare. The business -type activities of the City of Hopkins include water, sewer, refuse, storm sewer utilities, an ice arena, and a housing and redevelopment authority. The government -wide financial statements include the City of Hopkins itself, but also a legally separate Hopkins Housing and Redevelopment Authority. Although the Hopkins Housing and Redevelopment Authority is legally separate, it functions for all practical purposes as a department of the City of Hopkins, and therefore has been included as an integral part of the primary government. The government -wide financial statements can be found on pages 28-29 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Hopkins, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of Hopkins can be divided in two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near- term inflows 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 City'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 City's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Hopkins maintains forty-two individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, 2005-B Taxable Tax Increment Bonds of 1997 Refunding Bonds, 2009-B Housing Improvement Bonds of 1999A Refunding Bonds, 2009-B Housing Improvement Bonds of 1999B Refunding Bonds, Municipal State Aid Construction fund, and Permanent Improvement Revolving fund all of which are considered to be major funds. Data from the other thirty-six funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. 16 The City of Hopkins adopts an annual appropriated budget for its general fund and all of its special revenue funds except for the Community Development Block Grant and Section 8 funds. A budgetary comparison statement has been provided for the General fund and schedules are provided for other funds to demonstrate compliance with the budget. The basic governmental fund financial statements can be found on pages 30-38 of this report. Proprietary funds. The City of Hopkins maintains two types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government - wide financial statements. The City of Hopkins uses enterprise funds to account for its water, sewer, refuse, storm sewer utilities, the pavilion ice arena, and the housing and redevelopment authority. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Hopkins various functions. The City of Hopkins uses internal service funds to account for replacement of equipment, insurance deductibles and compensated absences. Because all of these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. Proprietary funds provide the same type of infonnation as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sewer, stone sewer and pavilion/ice arena operations, all of which are considered to be major funds of the City of Hopkins. Data from the other two enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major proprietary funds is provided in the form of combining statements elsewhere in this report. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is also provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 40-44 of this report. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 46-68 of this report. Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary iii1brmation. Required supplementary information can be found on page 70 of this report. The combining statements referred to earlier in connection with non -major governmental funds, non -major proprietary funds and internal service funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 73-104 of this report. 17 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 Hopkins, assets exceeded liabilities by $62,379,154 at the close of the most recent fiscal year. Approximately three quarters (77%) of the City of Hopkins net assets are reflected in its investment in capital assets (e.g., land, buildings, machinery and equipment); less any related debt used to acquire those assets that are still outstanding. The City of Hopkins uses these capital assets to provide services to citizens. The net capital assets are not available for future spending. Although the City of Hopkins 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. City of Hopkins Net Assets December 31 Liabilities Other liabilities 6,388,967 8,975,396 1,617,594 2,373,766 8,006,561 11,349,162 Long-term liabilities outstanding 22,339,986 20,185,544 3,938,937 4,310,219 26,278,923 24,495,763 Total 28,728,953 29,160,940 5,556,531 6,683,985 34,285,484 35,844,925 Net Assets Invested in capital assets, net of related debt 32,823,582 31,700,690 16,279,028 13,484,942 49,102,610 45,185,632 Restricted 8,613,114 11,952,783 - - 8,613,114 11,952,783 Unrestricted 3,590,101 1,068,812 1,073,329 3,165,296 4,663,430 4,234,108 Total net $ 45,026,797 $ 44,722285$L7 352,357 $ 16,650238$ 62379154$ 61,372,523 A portion of the City of Hopkins net assets represent resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($4,663,430) may be used to meet the government's ongoing obligations to citizens and editors. At the end of the current fiscal year, the City of Hopkins is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its governmental and business -type activities. The City's net assets increased by $1,006,631 during the current fiscal year. Governmental and business -type activities. Governmental activities increased the City of Hopkins net assets by $304,512 and business -type activities increased net assets by $702,119. Key elements of the increases are as follows: 18 Governmental Activities Business -Type Activities Total 2010 2009 2010 2009 2010 2009 Assets Current and other $ 27,767,531 $ 27,868,693 $ 2,393,028 $ 3,586,315 $ 30,160,559 $ 31,455,008 assets Capital assets 45,988,219 46,014,532 20,515,860 19,747,908 66,504,079 65,762,440 Total assets 73,755,750 73,883,225 22,908,888 23,334,223 96,664,638 97,217,448 Liabilities Other liabilities 6,388,967 8,975,396 1,617,594 2,373,766 8,006,561 11,349,162 Long-term liabilities outstanding 22,339,986 20,185,544 3,938,937 4,310,219 26,278,923 24,495,763 Total 28,728,953 29,160,940 5,556,531 6,683,985 34,285,484 35,844,925 Net Assets Invested in capital assets, net of related debt 32,823,582 31,700,690 16,279,028 13,484,942 49,102,610 45,185,632 Restricted 8,613,114 11,952,783 - - 8,613,114 11,952,783 Unrestricted 3,590,101 1,068,812 1,073,329 3,165,296 4,663,430 4,234,108 Total net $ 45,026,797 $ 44,722285$L7 352,357 $ 16,650238$ 62379154$ 61,372,523 A portion of the City of Hopkins net assets represent resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($4,663,430) may be used to meet the government's ongoing obligations to citizens and editors. At the end of the current fiscal year, the City of Hopkins is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its governmental and business -type activities. The City's net assets increased by $1,006,631 during the current fiscal year. Governmental and business -type activities. Governmental activities increased the City of Hopkins net assets by $304,512 and business -type activities increased net assets by $702,119. Key elements of the increases are as follows: 18 City of Hopkins Changes in Net Assets For the Year Ended December 31 Governmental Activities Business -Type Activities 2010 2009 2010 2009 Total 2010 2009 Revenues: Program revenues: Charges for services $ 791,246 $ 875,470 $ 5,433,821 $ 5,208,666 $ 6,225,067 $ 6,084,136 Operating grants and contributions 1,894,777 2,441,622 216,596 150,814 2,111,373 2,592,436 Capital grants and contributions 567,370 745,505 328,515 142,691 895,885 888,196 General revenues: Property taxes 9,827,814 9,353,966 - - 9,827,814 9,353,966 Tax increments 2,147,517 1,636,609 2,147,517 1,636,609 Grants and contributions not restricted 306,215 309,609 - 306,215 309,609 Investment earnings 121,229 170,960 9,138 12,841 130,367 183,801 Gain on sale of capital assets - 9.796 - 1,367 - 11,163 Total revenues 15,656,168 15,543,537 5,988,070 5,516,379 21,644,238 21,059,916 Expenses: General government 1,693,275 1,679,040 - - 1,693,275 1,679,040 Public safety 6,243,813 6.249,519 6,243,813 6,249,519 Health and welfare 180.895 278,002 180,895 278,002 Highways and streets 3,054,311 3,069,078 31054,311 3,069,078 Urban redevelopment and housing 1,914,779 1,690,861 1,914,779 1,690,861 Culture and recreation 1,505,513 1,482,349 1,505,513 1,482,349 Interest on long-term debt 895,874 1,025,771 895,874 1,025,771 Water - - 1,196,607 1,221,556 1,196,607 1,221,556 Sewer 1,844,309 1,741.115 1,844,309 1,741,115 Storm sewer 420,619 403,231 420,619 403,231 Refuse 738,398 786,522 738,398 786,522 Pavilion/icearena 398,354 401,598 398,354 401,598 Housing and redevelopment authority - 542,324 528,542 542,324 528,542 Loss on sale of capital assets 8,196 - 340 - 8,536 - Total expenses 15,496,656 15,474,620 5.140,951 5,082,564 20,637,607 20,557,184 Increase in net assets before transfers 159,512 68,917 847,119 433,815 1,006,631 502,732 Transfers 145,000 145,000 (145,000) (145,000) - - Increase in net assets 304,512 213,917 702,119 288,815 1,006,631 502,732 Net assets - January 1 44,722,285 44.508,368 16,650,238 16,361,423 61,372,523 60,869,791 Net assets - December 31 $ 45,026,797 $ 44.722,285 $ 17,352,357 $ 16,650,238 $ 62,379,154 $ 61,372,523 19 Governmental activities: Property taxes increased in 2010 as a result of debt service levies and increased operating costs. The City also received a number of program grants for specific programs in addition to state municipal aid for a major street improvement project. Net assets increased primarily due to conservative spending and two bond issues, one for street improvements and one for refunding three bond issues. Revenues by Source - Governmental Activities Grants and Investment earnings contributions not 1% restricted Charges for services 2% 5% Operating grants and Tax increments contributions 14% 12% Capital grants and contributions 4% Property taxes 62% Expenses and Program Revenues - Governmental Activities $7,000,000 $6,000,000 O Program revenues $5,000,000 ■ Expenses $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 General Government Public Safety Highways and Streets Urban Redevelopment Culture and recreation Health and welfare Interest on long-term and Housing debt 20 Business -type activities. Business -type activities had an increase in net assets due to an ongoing effort to ensure that rates are adequate to fund all expenditures. A utility master plan was developed in 2007 with scheduled rate increases that are designed to cover operations, debt and capital needs over the next 15 years. As a result the utility funds are in a stronger financial position than they were a couple years ago. $2,000,000 $1,750,000 $1,500,000 $1,250,000 $1,000,000 $750,000 $500,000 $250,000 $0 Revenues by Source - Business -type Activities Capital grants and contributions 5% <__I� Operating grants and contributions 4% Charges for 91% Expenses and Program Revenues - Business -type Activities Water Sewer Storm Sewer Refuse 21 0P rogram revenues ■ Expenses Financial Analysis of the City's Funds As noted earlier, the City of Hopkins uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the City of Hopkins 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 Hopkins financing requirements. In particular, unreserved fund balance may serve as a useful measure of a City's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Hopkins governmental funds reported combined ending fund balances of $16,110,603, an increase of $1,193,092 in comparison with the prior year. The key factor of the increase is refunding bonds sold for two Housing Improvement Areas and improvement bonds sold for street improvements along with conservative spending in the General Fund. Fund balance was also used for development projects, payment of long-term debt and use of previous years grant revenue for current years expenditures. Approximately 34% of fund balance ($5,540,033) constitutes unreserved, undesignated fund balance, which is available for spending at the City's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to pay debt service, 2) to pay for tax increment projects and debt, 3) to provide for future rehabilitation loans, 4) for inventory, 5) for prepaid expenses, 6) for construction projects and 7) to provide for long-term receivables that are not available or spendable resources. The general fund is the chief operating fund of the City of Hopkins. At the end of the current fiscal year, unreserved fund balance of the general fund was $4,071,049. This represents 95.7% of the general fund's total fund balance. As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents approximately 41.1% of total general fund expenditures while total fund balance represents approximately 43.0% of that same amount. The fund balance of the City of Hopkins general fund increased by $125,474 during the current fiscal year. Expenditures exceeded revenues by $137,073 before transfers. This increase was a result of conservative spending in the wake of the governor's unallotment of state aids, by leaving several vacant positions open and reducing public works maintenance projects we were able to maintain a balanced budget. The 2009B Housing Improvement refunding bonds of 1999A bond fund has a total fund balance of $229,858 all of which is reserved for the payment of debt service. The fund balance decreased by $903,498 as funds were transferred to the 1999A Housing bond fund for the call of those bonds. The 2009B Housing Improvement refunding bonds of 1999B bond fund has a total fund balance of $445,319, all of which is reserved for the payment of debt service. The fund balance decreased by $1,343,532 as funds were transferred to the 1999B Housing bond fund for the call of those bonds. The 2005B Refunding Taxable Tax Increment Bonds of 1997 bond fund has a total fund balance of $360,724, all of which is reserved for the payment of debt service. The fund balance increased by $32,336 as tax revenues exceeded current debt payment requirements. 22 The Municipal State Aid Construction fund has a total fund balance of $1,303,108 which is unreserved and designated for construction projects. The fund balance increased by $489,291 as a result of state aid revenues received for specific projects and a reimbursement from another governmental unit for previous years project costs. Revenues in this fund are derived from the State of Minnesota municipal state aid fund annual allotments. Funds remain in our account until an eligible project occurs at which time funding is drawn down from Hopkins" account. The Permanent Improvement Revolving fund has a total fund balance of $1,814,430 which is unreserved and designated for construction projects. The fund balance increased by $1,846,247 as a result of the sale of bonds for scheduled projects. Revenues in this fund are derived from special assessments and taxes. Proprietary funds. The City of Hopkins proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Unrestricted net assets of the Water fund at the end of the year amounted to ($255,028). The unrestricted net assets are used to pay for infrastructure improvements. The increase in net assets amounted to $101,206 and is due to operating revenues exceeding operating expenses. A utility master plan was prepared in 2007 to address the funding shortage and prepare a rate structure that will sustain the water fund in addition to providing for future capital expenditures. The new rate structure which calls for modest annual increases in water rates was implemented in 2008 and along with conservative spending we are seeing the results of the study impacting the water funds financial status. Unrestricted net assets of the Sewer fund at the end of the year amounted to $91,418. The unrestricted net assets are used to pay for infrastructure improvements. The decline in net assets amounted to $79,468 and is due to total costs exceeding total revenues. A utility master plan was prepared in 2007 to address the funding shortage and prepare a rate structure that will sustain the sewer fund in addition to providing for future capital expenditures. The new rate structure which calls for modest annual increases in sewer rates was implemented in 2008 however it will take several years for the rates to "catch up" with the expenditures. Unrestricted net assets of the Storm Sewer Utility fund at the end of the year amounted to $206,893. The unrestricted net assets are used to pay for infrastructure improvements. The growth in net assets amounted to $359,632 and is due to operating revenues exceeding operating costs. Unrestricted net assets of the Pavilion/Ice Arena fund at the end of the year amounted to ($123,360). The unrestricted net assets are used to pay for operating costs of the Pavilion. Infrastructure costs are currently funded by the Capital Improvement Fund due to lack of available funds. Net assets decreased by $32,708, however the Pavilion continues to work towards eliminating this negative position. User rates have been adjusted and rentals for the facility are actively being sought to increase revenues during the non -ice season. Expenditures are closely monitored and energy saving features have been added to decrease energy costs. 23 General Fund Budgetary Highlights The difference between the general fund original budget and the final amended budget resulted in departmental budget changes but did not increase the total expenditure budget. The reason for the amendments was a transfer between expenditure categories to match actual expenditures. The budget changes can be summarized as follows: • Several departments had small budget modifications, however when departments were combined for reporting purposes the budget changes balanced out and no change was noted. During the year revenues were under budgetary estimates by $38,829 primarily due to a decrease in license and permit revenue, fines and decreased interest income. This was offset by higher than expected police charges for services, donations to police, fire and activity center, and sale of assets. Expenditures were under the budget by $175,902 and was due conservative spending, delayed hiring of open positions, reduced maintenance costs, and energy conservation measures. The net effect of these budget impacts was a net budgetary increase in fund balance of $125,474 after transfers. Capital Asset and Debt Administration Capital assets. The City of Hopkins investment in capital assets for its governmental and business type activities as of December 31, 2010, amounts to $66,504,079 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, vehicles, machinery and equipment, park facilities, roads, highways, bridges, distribution systems and construction in progress. Major capital asset events during the current fiscal year included the following: • Construction in progress additions totaled $2,815,854 for infrastructure projects. • $1,311,088 of assets was transferred from construction in progress to other improvements as infrastructure projects were completed and put into service. • Vehicle and equipment purchases totaled $334,951. Major purchases included public works equipment, public safety vehicles and equipment. • Vehicle and equipment deletions totaled $606,161. Deletions were a result of scheduled replacements of public works, public safety vehicles and equipment. 24 City of Hopkins Capital Assets (net of depreciation) December 31 2010 $ 5,973,500 18,755,005 8,977,443 22,719,006 2,098,610 1,643,618 6,336,897 $ 66,504,079 Total 2009 19,361,301 8,718,764 22,996,797 2,081,810 1,798,120 4,832,148 $ 65,762,440 Additional information on the City of Hopkins capital assets can be found in note 5 on pages 56-57 of this report. Long-term debt. At the end of the current fiscal year, the City of Hopkins had total bonded debt outstanding of $29,235,000. Of this amount, $2,315,000 comprises housing and redevelopment authority lease revenue debt, $4,400,000 comprises tax increment redevelopment debt, and $13,510,000 comprises general obligation and special assessment debt, all of which is backed by the full faith and credit of the government. In February 2011 due to refunded bonds issued $405,000 of tax increment redevelopment debt and $325,000 of special assessment debt will be called. Another $3,930,000 is special fees debt for which the government is liable in the event of default by the property owners subject to the fees. The remainder of the City of Hopkins debt, $5,080,000, represents bonds secured solely by specified revenue sources (i.e., revenue bonds). Of that amount $910,000 was refunded and will be called February 2011. City of Hopkins Outstanding Debt General Obligation and Revenue Bonds December 31 Governmental Activities Business -Type Activities 2010 2009 2010 2009 Land $ 5,805,711 $ 5.805,711 $ 167,789 $ 167,789 Buildings 15,525,959 15.999,077 3,229,046 3,362,224 Infrastructure - - 8,977,443 8,718,764 Improvements 17,974,036 18,126,547 4,744,970 4,870,250 Vehicles 1,802,204 1.735,739 296,406 346,071 Equipment 1,456,676 1,588,657 186,942 209,463 Construction in progress 3,423,633 2,758.801 2,913,264 2,073,347 6,200,000 $ 45,988,219 $ 46,014,532 $ 20,515,860 $ 19,747,908 2010 $ 5,973,500 18,755,005 8,977,443 22,719,006 2,098,610 1,643,618 6,336,897 $ 66,504,079 Total 2009 19,361,301 8,718,764 22,996,797 2,081,810 1,798,120 4,832,148 $ 65,762,440 Additional information on the City of Hopkins capital assets can be found in note 5 on pages 56-57 of this report. Long-term debt. At the end of the current fiscal year, the City of Hopkins had total bonded debt outstanding of $29,235,000. Of this amount, $2,315,000 comprises housing and redevelopment authority lease revenue debt, $4,400,000 comprises tax increment redevelopment debt, and $13,510,000 comprises general obligation and special assessment debt, all of which is backed by the full faith and credit of the government. In February 2011 due to refunded bonds issued $405,000 of tax increment redevelopment debt and $325,000 of special assessment debt will be called. Another $3,930,000 is special fees debt for which the government is liable in the event of default by the property owners subject to the fees. The remainder of the City of Hopkins debt, $5,080,000, represents bonds secured solely by specified revenue sources (i.e., revenue bonds). Of that amount $910,000 was refunded and will be called February 2011. City of Hopkins Outstanding Debt General Obligation and Revenue Bonds December 31 $ 24,155,000 $ 24,305,000 $ 51080,000 $ 6,200,000 $ 29,235,000 $ 30,505,000 The City of Hopkins total bonded debt decreased by $1,270,000 or 4.2% during the current fiscal year. The decrease is due the net effect of scheduled bond maturities, bond called and bonds issued in 2010. 25 Governmental Activities Business -Type Activities Total 2010 2009 2010 2009 2010 2009 HRA lease revenue bonds $ 2,315,000 $ 2,440,000 $ - $ $ 2,315,000 $ 2,440,000 G.O. Tax increment bonds 4,400,000 3,200,000 4,400,000 3,200,000 G.O. Housing fee bonds 3,930,000 7,090,000 - 3,930,000 7,090,000 G.O. Redevelopment bonds 110,000 245,000 110,000 245,000 G.O. Capital improvement bonds 8,515,000 9,000,000 8,515,000 9,000,000 G.O. Special assessment bonds 4.885,000 2,330.000 4,885,000 2,330,000 Revenue bonds - - 5,080,000 6,200.000 5,080,000 6,200,000 $ 24,155,000 $ 24,305,000 $ 51080,000 $ 6,200,000 $ 29,235,000 $ 30,505,000 The City of Hopkins total bonded debt decreased by $1,270,000 or 4.2% during the current fiscal year. The decrease is due the net effect of scheduled bond maturities, bond called and bonds issued in 2010. 25 General Obligation Bonds are backed by the full faith, credit and taxing power of the City, and are serviced by General and Tax Increment levies and also by fees assessed against benefited properties. Revenue Bonds are backed by the full faith, credit and taxing power of the City, and are serviced by the Water and Storm Sewer Utility Funds current revenues. City Special Assessment Bonds are backed by the full faith, credit and taxing power of the City, and repayment monies are generated by the collection of special assessments and general levies. Housing and Redevelopment Authority bonds are backed by the full faith, credit and taxing power of the HRA, and repayment monies are generated by annual lease appropriations from the City. The City is subject to a statutory limit of bonded indebtedness equaling 3.0 percent of taxable market value. At December 31, 2010, the debt limit for the City is $47,120,694. Of the total debt, $10,144,055 of general obligation and revenue bonds is applicable to the limit. The legal debt margin is $36,976,639. The City of Hopkins was upgraded to a "AA" rating from Standard & Poor's in December 2009 and maintains an "A1" rating from Moody's. Additional information on the City of Hopkins long-term debt can be found in note 9 on pages 59- 63 of this report. Economic Factors and Next Year's Budgets and Rates A number of factors were taken into consideration when preparing the City of Hopkins 2011 budget. Utility charges were reviewed and as a result of the utility master plan, rates for the water and sewer will be increased by modest amounts annually at least through 2017. The tax capacity rate increased as a result of economic conditions. The State of Minnesota's budget challenges resulted in the unallotment of state aids for the third year. The City's population would remain constant. As a result of these factors the City prepared a budget for 2011 that included a modest increase of 2.25% in expenditures that included small wage increases for most employees, delayed hiring of vacant positions, non-essential capital items eliminated and small increases across all departments. During the current fiscal year, unreserved fund balance in the general fund increased to $4,071,049 or 41 % of general fund expenditures. The Office of the State Auditor recommends unreserved fund balances no less than five months of operating expenditures. The City is within 2% of the recommendation for the general fund. The unreserved fund balance is used to pay for the City's general fund obligations until it receives its property tax levy revenues in June. Requests for Information This financial report is designed to provide a general overview of the City of Hopkins 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 Finance Director, City of Hopkins, 1010 First Street South, Hopkins, MN 55343. 26 BASIC FINANCIAL STATEMENTS '17 City of Hopkins Statement of Net Assets December 31, 2010 Net Assets Invested in capital assets, net of related debt 32,823,582 16,279,028 49,102,610 Restricted for: Economic development 925,064 - 925,064 Debt service 7,688,050 - 7,688,050 . Unrestricted 3,590,101 1,073,329 4,663,430 Total net assets $ 45,026,797 $ 17,352,357 $ 62,379,154 The notes to the financial statements are an integral part of this statement. 28 Primary Government Governmental Business -type Activities Activities Total Assets Cash and investments $ 16,809,349 $ 2,260,730 $ 19,070,079 Taxes receivable 327,873 - 327,873 Special assessments receivable 5,811,406 - 5,811,406 Accounts receivable 457,942 415,185 873,127 Intergovernmental receivable 2,415,731 60,115 2,475,846 Interest receivable 33,541 3,986 37,527 Internal balances 542,313 (542,313) - Inventories 114,557 29,743 144,300 Prepaid items 68,014 18,691 86,705 Deferred charges 374,707 37,891 412,598 Long-term receivables 90,000 109,000 199,000 Land held for resale 722,098 - 722,098 Capital assets, non depreciable 9,229,344 3,081,053 12,310,397 Capital assets, net of accumulated depreciation 36,758,875 17,434,807 54,193,682 Total assets 73,755,750 22,908,888 96,664,638 Liabilities Accounts payable 590,254 150,665 740,919 Salaries payable 335,248 29,671 364,919 Due to other governments 4,335 26,237 30,572 Accrued interest payable 337,871 53,595 391,466 Unearned revenue 2,130,284 3,200 2,133,484 Non current liabilities: Compensated absences due within one year 673,660 79,226 752,886 Compensated absences due in more than one year 192,793 60,298 253,091 Net OPEB liability 108,169 19,685 127,854 Capital lease due within one year 37,315 - 37,315 Capital lease due in more than one year 318,241 - 318,241 Bonds due within one year 2,280,000 1,275,000 3,555,000 Bonds due in more than one year 21,720,783 3,858,954 25,579,737 Total liabilities 28,728,953 5,556,531 34,285,484 Net Assets Invested in capital assets, net of related debt 32,823,582 16,279,028 49,102,610 Restricted for: Economic development 925,064 - 925,064 Debt service 7,688,050 - 7,688,050 . Unrestricted 3,590,101 1,073,329 4,663,430 Total net assets $ 45,026,797 $ 17,352,357 $ 62,379,154 The notes to the financial statements are an integral part of this statement. 28 Citv of Hopkins Statement of Activities For the Year Ended December 31, 2010 The notes to the financial statements are an integral part of this statement. Net(Expense) Revenue and Proeram Revenues Chances in Net Assets Operating Capital Grants Charges for Grants and and Governmental Business -type Funetions/Pro2rams Expenses Services Contributions Contributions Activities Activities Total Governmental Activities: General Government $ 1.693.275 $ 17.169 S 306.917 $ 80,544 $ (L288,645) S S (1.288.645) Public Salcty 6.243,813 124.338 780.017 20.751 (5.3 18.707) (5,318.707) health and R'clfarc 180.895 32,135 143.185 - (5.575) - (5,575) I1ig mays and Streets 3.062.507 56.902 15.332 465.075 (2,525.198) - (2.525.198) irban Rcdcvclopment and l lousing 1.914,779 - 548.226 1366,5 53) (1.366,553) Culture and Recreation 1.505,513 560,702 101.100 1.000 (842.711) (842.711) Interest on Tong -term debt 895.873 - - - (895.873) - (895.873) Total Govcrnrnental activities 15.496.655 791.246 1.894,777 567.370 (12,243.262) (12.243.262) Busincss-l\pe Activities: \\rater 1.196.947 1.343.153 - - 146.206 146 206 Sewer 1.844.309 1.812.585 - (31,724) (31.74) Storm Scwcr 420.619 803.889 - - 383.270 383.270 Refuse 738.398 852,215 34.195 - - 148.012 148,012 Pavilion/Ice Arena 398.354 363,591 - - - (34.763) (34.763) I lousing and Redevelopment Authority 542.324 258.388 182.401 328.515 - 226.980 226,980 Total Business -type activities 5.140,951 5,433,821 216.596 328.515 837.981 837.981 Total government $ 20.637.606 _$ 6.225.067 $ 2.1 1 1.373 S 895,885 (12,243.262) 837.981 (1 1,405,281) General revenues: Property taxes 9,827,813 - 9.827,813 Tax increments 2,147,517 2,147,517 Grants & contributions not restricted 306,215 - 306,215 1 Jnrestricted investment earnings 121.229 9,138 130,367 Transfers 145,000 (145.000) - Total general revenues 12.547.774 (135.862) 12.41 1.912 Change in net assets 304,512 702,119 1,006,631 Net assets - beginning 44.722.285 16.650.238 61372.523 Net assets - ending $ 45.026,797 S 17.352.357 $ 62.379,154 The notes to the financial statements are an integral part of this statement. U, 0 City of Hopkins Balance Sheet Governmental Funds December 31, 2010 The notes to the financial statements are an integral part of this statement. Housing Housing Taxable Tax Improvement Bonds Improvement Bonds Increment Bonds of Permanent Non -major Total of 1999A Refunding of 1999B Refunding 1997 Refunding Municipal State Improvement Governmental Governmental General Fund Bondsof2009B Bonds of 2009B Bondsof200513 Aid Construction Revolving Fund Funds Funds Assets Cash and investments $ 2,894,438 $ 228,439 $ 442,220 $ 357,890 $ 1,301,616 $ 1,750,283 $ 7,744,562 $ 14,719,448 Taxes receivable 286,180 - - - 41,693 327,873 Special assessments receivable - 1,309,821 2,314,360 1,229,262 855,943_ 102,020 5,811,406 Accounts and rehabilitative loans receivable 131,390 - - - - 325,078 456,468 Due from other governments 47,159 - - - 2,087,784 169,093 111,695 2,415,731 Interest receivable 8,987 483 936 757 2,754 2,616 12,628 29,161 Due from other funds 1,471,015 - - - - 1,038,703 2,509,718 Inventories 114,557 - 114,557 Prepaid items 67,654 360 68,014 Long-term receivable - 90,000 90,000 Property held for resale - 722,098 722,098 Total assets $ 5,021,380 $ 1,538,743 $ 2,757,516 $ 1,587,909 $ 3,392,154 $ 2,777,935 $ 10,188,837 $ 27,264,474 Liabilities and fund balances Liabilities: Accounts payable $ 197,521 $ 575 $ 1,037 $ 268 $ 1,262 $ 116,649 $ 217,616 $ 534,928 Salaries payable 310,884 - - - - - 24,364 335,248 Accrued interest payable - 449 449 Due to other funds - 2,035,511 2,035,511 Due to other governments 3,987 - - - - - 348 4,335 Deferred revenue 255,728 1,308,310 2,311,160 1,226,917 2,087,784 846,856 206,645 8,243,400 Total liabilities 768,120 1,308,885 2,312,197 1,227,185 2,089,046 963,505 2,484,933 11,153,871 Fund balances: Reserved for: Inventory 114,557 - - - - - - 114,557 Prepaid expenses 67,654 360 68,014 Rehab loans receivable - 66,988 66,988 Long term loans receivable 90,000 90,000 Tax increment districts 1,016,752 1,016,752 Property held for resale - - - 722,098 722,098 Debt service 229,858 445,319 360,724 3,814,258 4,850,159 Unreserved, designated for, Economic development - - - - 85,000 85,000 Construction projects - 1,303,108 1,814,430 439,464 3,557,002 Unreserved, undesignated, reported in: General fund 4,071,049 - - - 4,071,049 Special revenue funds - - - 1,468,984 1,468,984 Total fund balances 4,253,260 229,858 445,319 360,724 1,303,108 1,814,430 7,703,904 16,110.603 Total liabilities and fund balances $ 5.021,380 $ 1.538,743 $ 2,757,516 $ 1,587,909 $ 3.392,154 $ 2,777,935 $ 10,188,837 $ 27.264 ,474 The notes to the financial statements are an integral part of this statement. C.) City of Hopkins Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Assets December 31, 2010 Fund balances of governmental funds $ 16,110,603 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, not reported in the governmental funds. Capital assets 61,696,284 Less accumulated depreciation (18,575,641) Other long-term assets not available to pay current period expenditures and, therefore, are deferred in the governmental funds. 6,113,116 Internal service funds are used by the City to charge the costs of certain activities, such as replacement of City vehicles and equipment. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net assets. 3,750,848 Long-term liabilities, including bonds payable and accrued interest payable, are not due and payable in the current period and, therefore, are not reported in the governmental funds. Long-term liabilities (24,443,120) Less deferred charges 374,707 Net assets of governmental activities $ 45,026,797 The notes to the financial statements arc an integral part of this statement. w N Revenues Property taxes Tax increments Special assessments Intergovernmental Fees, licenses and permits Charges for services Fines Interest Other miscellaneous revenues Total revenues EXPENDITURES Current: General government Public safety Health and welfare Highways and streets Urban redevelopment and housing Culture and recreation Debt service: Principal retirement Interest and fiscal fees Bond issuance costs Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses) Transfer in Transfer out Refunding bonds issued Improvement bonds issued Discount on refunding debt Total other financing sources (uses ) Net change in fund balances Fund balances -- beginning 4,127,786 1,013,472 1,798,851 328,388 813,817 (31,817) 6,867,014 14,917,511 Fund balances -- ending $ 4,253,260 $ 229,858 $ 445,319 $ 360,724 $ 1,303,108 $ 1,814,430 $ 7,703,904 $ 16,110,603 The notes to the financial statements are an integral part of this statement. City of Hopkins Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2010 Housing Housing Taxable Tax Improvement Improvement Increment Bonds Permanent Bonds of 1999A Bonds of 1999B of 1997 Municipal State Improvement Non -major Total Refunding Bonds Refunding Bonds Refunding Bonds Aid Revolving Governmental Governmental General Fund of 2009B of 2009B of 2005B Construction Fund Funds Fnnris $ 8,498,409 $ $ $ $ - $ $ 1,296,909 $ 9,795,318 - 2,147,517 2,147,517 - 138,905 258,586 176,036 - 455,681 99,259 1,128,467 436,282 - - - 483,125 - 295,756 1,215,163 422,753 - - 200,739 623,492 225,800 - - 574,315 800,115 119,119 - - - - - 19,775 138,894 17,571 3,593 6,559 1,908 10,925 1,242 64,330 106,128 314,440 - - - - 70,623 204,541 589,604 10,034,374 142,498 265,145 177,944 494,050 527,546 4,903,141 16,544,698 1,483,958 575 1,037 700 - 90,406 1,576,676 5,712,126 - - - - - 169,507 5,881,633 160,213 - - 17,519 177,732 2,035,300 - 21,444 21,750 2,078,494 - _ _ _ 1,806,610 1,806,610 503,535 - - - 836,160 1,339,695 _ - - 95,000 - - 4,570,000 4,665,000 - 22,039 39,145 49,908 - - 842,140 953,232 _ _ _ _ _ - 49,233 49,233 2,169 - - 4,759 1,183,169 248,054 1,438,151 9,897,301 22,614 40,182 145,608 4,759 1,204,613 8,651,379 19,966,456 137,073 119,884 224,963 32,336 489,291 (677,067) (3,748,238) (3,421,758) _ _ _ _ - 2,653,433 5,154,635 7,808,068 (11,599) (903,498) (1,578,495) - (130,119) (5,039,357) (7,663,068) 1,805,000 1,805,000 2,710,000 2,710,000 _ (45,150) (45,150) (11,599) (903,498) (1,578,495) - - 2,523,314 4,585,128 4,614,850 125,474 (783,614) (1,353,532) 32,336 489,291 1,846,247 836,890 1,193,092 Fund balances -- beginning 4,127,786 1,013,472 1,798,851 328,388 813,817 (31,817) 6,867,014 14,917,511 Fund balances -- ending $ 4,253,260 $ 229,858 $ 445,319 $ 360,724 $ 1,303,108 $ 1,814,430 $ 7,703,904 $ 16,110,603 The notes to the financial statements are an integral part of this statement. w w Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended December 31, 2010 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount h_c which capital outlays exceeded depreciation in the current period. The net effect of various IniscclICnCOUS transactions invoh ing capital assets (i e- sales, trade-ins. and donations) is a decrease to net assets Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds ['he issuance of long -teen debt provides current financial resources to governmental funds. Nchilc the repayment of the principal of long -teen debt uses the current financial resources of goycrnmcntal funds Nerthet transaction, however, has any effect on net assets Also. governmental funds report the effect of issuance costs. premiums_ discounts_ and similar items when debt is first issued, whereas these amounts arc defened and amortized in the statement of activities. This amount is the net effect ofthese differences in the treatment of long-term debt related items I�\tcrnul revenues and expencbtuues of -the internal sen ice funds reported in the statement of activities are not reported as revenues and expenditures in governmental funds. Change in net assets of governmental activities The notes to the financial statements are an integral part of this statement. $ 1,193,092 (28,877) (3.045) (903.629) 284,196 (232225) $ 304,E 12 City of Hopkins Intergovernmental Market value aid credit - - 1 of 5 2,690 Statement of Revenues, Expenditures and Changes in Fund Balance 178,010 178,010 191,269 Budget and Actual Insurance premium - police 177,715 177,715 General Fund (5,637) Insurance premium - fire 85,000 For the Year Ended December 31, 2010 68,132 (16,868) Federal grants - - Variance with 2,113 Total Intergovernmental 440,725 final budget 436,282 Budget positive Fines and forfeitures Original Final Actual (negative) Revenues Court fines 141,000 141,000 Taxes (21,881) (6,985) Miscellaneous General property taxes $ 7,267,516 $ 7,267,516 $ 7,330,960 $ 63,444 Fiscal disparities 1,202,502 1,202,502 1,167,449 (35,053) Total Taxes 8,470,018 8,470,018 8,498,409 28,391 10,073,203 Licenses and permits (38,829) Business 146,815 146,815 128,441 (18,374) Non -business 310,095 310,095 294,312 (15,783) Total Licenses and permits 456,910 456,910 422,753 (34,157) Intergovernmental Market value aid credit - - 2,690 2,690 State grants 178,010 178,010 191,269 13,259 Insurance premium - police 177,715 177,715 172,078 (5,637) Insurance premium - fire 85,000 85,000 68,132 (16,868) Federal grants - - 2,113 2,113 Total Intergovernmental 440,725 440,725 436,282 (4,443) Fines and forfeitures Investment earnings 75,000 75,000 17,571 Court fines 141,000 141,000 119,119 (21,881) Charges for services General government 10,750 10,750 13,469 2,719 Public safety 116,150 116,150 156,474 40,324 Public works 2,250 2,250 3,703 1,453 Recreation 54,500 54,500 52,154 (2,346) Total Charges for services 183,650 183,650 225,800 42,150 Other Investment earnings 75,000 75,000 17,571 (57,429) Franchise fees 290,000 290,000 283,015 (6,985) Miscellaneous 15,900 15,900 31,425 15,525 Total Other 380,900 380,900 332,011 (48,889) Total Revenues 10,073,203 10,073,203 10,034,374 (38,829) Expenditures General Government: Mayor and council Salaries and employee benefits 26,497 26,497 26,751 (254) Materials, supplies and services 46,650 46,650 35,604 11,046 Total 73,147 73,147 62,355 10,792 34 City of Hopkins Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Year Ended December 31, 2010 Expenditures, (continued) General Government, (continued): Administrative services Salaries and employee benefits Materials, supplies and services Total Less expenditures charged to other activities Net Budget Original Final Actual 2 of 5 Variance with final budget positive (negative) $ 481,987 $ 481,987 $ 477,038 $ 4,949 55,327 55,327 39,770 15,557 537,314 537,314 516,808 20,506 (104,000) (104,000) (104,000) Total 433,314 433,314 412,808 20,506 Finance Salaries and employee benefits 341,212 341,212 344,078 (2,866) Materials, supplies and services 67,068 67,068 75,898 (8,830) Total 408,280 408,280 419,976 (11,696) Less expenditures charged to other activities (218,241) (218,241) (223,486) 5,245 Net 190.1139 191 x.039 196,490 (6,451) Legal Services Materials, supplies and services 135,000 135,000 126,233 8,767 Municipal Building Salaries and employee benefits 127,281 127,281 126,224 1,057 Materials, supplies and services 219,003 219,003 173,664 45,339 Total 346,284 346,284 299,888 46,396 Less expenditures charged to other activities (40,000) (40,000) (40,000) Net 306,284 306,284 259,888 46,396 Elections Salaries and employee benefits 32,356 32,356 34,717 (2,361) Materials, supplies and services 27,249 27,249 24,228 3,021 Total 59,605 59,605 58,945 660 City Clerk and Reception Salaries and employee benefits 112,351 112,351 106,968 5,383 Materials, supplies and services 19,578 19,578 17,248 2,330 Total 131,929 131,929 124,216 7,713 Less expenditures charged to other activities (37,000) (37,000) (37,000) _ Net 94,929 94,929 87,216 7,713 Assessing Salaries and employee benefits 82,336 82,336 82,493 (157) Materials, supplies and services 109,729 109,729 100,652 9,077 Total 192,065 192,065 183,145 8,920 Less expenditures charged to other activities (24,000) (24,000) (24,000) _ Net 168,065 168,065 159,145 8,920 35 City of Hopkins Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Year Ended December 31, 2010 Expenditures, (continued) General Government, (continued): Planning and economic development Salaries and employee benefits Materials, supplies and services Total Less expenditures charged to other activities Net Total General Government Public Safety: Police Police Administration Salaries and employee benefits Materials, supplies and services Net Police Patrol and Investigation Salaries and employee benefits Materials, supplies and services Total Police Services Salaries and employee benefits Materials, supplies and services Total Total Police Fire Salaries and employee benefits Materials, supplies and services Total Inspections Salaries and employee benefits Materials, supplies and services Total Total Public safety Budget 1,5 82,070 1,474,050 Original Final Actual $ 124,757 $ 124,757 $ 123,365 16,930 16,930 7,605 141,687 141,687 130,970 (20,000) (20,000) (20,000) 121,687 121,687 110,970 3 of 5 Variance with final budget positive (negative) $ 1,392 9,325 10,717 10,717 1,5 82,070 1,5 82,070 1,474,050 108,020 383,528 383,528 374,701 8,827 96,728 90,164 83,800 6,364 480,256 473,692 458,501 15,191 2,436,248 2,436,248 2,482,771 (46,523) 346,628 344,092 302,591 41,501 2,782,876 2,780,340 2,785,362 (5,022) 918,265 918,265 909,705 8,560 184,781 193,881 155,653 38,228 1,103,046 1,112,146 1,065,358 46,788 4,366,178 4,366,178 4,309,221 56,957 504,965 504,965 667,955 (162,990) 289,552 289,552 295,434 (5,882) 794,517 794,517 963,389 (168,872) 378,222 378,222 377,191 1,031 73,684 72,884 62,325 10,559 451,906 451,106 439,516 11,590 5,612,601 5,611,801 5,712,126 (100,325) 36 City of Hopkins 37 4 of 5 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Year Ended December 31, 2010 Variance with final budget Budget positive Original Final Actual (negative) Expenditures, (continued) Health and Welfare: Inspections Salaries and employee benefits S 122,325 $ 122,325 $ 132,897 $ (10,572) Materials, supplies and services 25,474 26,274 27,316 (1,042) Total 147,799 148,599 160,213 (11,614) Total Health and welfare 147,799 148,599 160,213 (11,614) Highways and Streets: Public works buildings and equipment services Salaries and employee benefits 235,349 235,349 233,430 1,919 Materials, supplies and services 92,145 92,145 71,856 20,289 Total 327,494 327,494 305,286 22,208 Less expenditures charged to other activities (213,000) (213,000) (213,060) 60 Net 114,494 114,494 92,226 22,268 Public Works Administration and Engineering Salaries and employee benefits 330,1 11 330,1 1 1 330,978 (867) Materials, supplies and services 44.019 44,019 37,431 6,588 Total 374,130 374,130 368,409 5,721 Less expenditures charged to other activities (213,000) (213,000) (203,432) (9,568) Net 161,130 161,130 164,977 (3,847) Streets and Alleys Salaries and employee benefits 363,960 363,960 399,525 (35,565) Materials, supplies and services 585,442 585,442 522,886 62,556 Total 949,402 949,402 922,411 26,991 Less expenditures charged to other activities (112,000) (112,000) (112,000) Net 837,402 837,402 810,411 26,991 Snow and Ice Removal Salaries and employee benefits 114,754 114,754 161,186 (46,432) Materials, supplies and services 90,506 90,506 67,093 23,413 Capital outlay 2,169 (2,169) Total 205,260 205,260 230,448 (25,188) Municipal parks and tree service: Salaries and employee benefits 534,502 534,502 489,548 44,954 Materials, supplies and services 293,687 293,687 249,859 43,828 Total 828,189 828,189 739,407 88,782 Total Highways and Streets 2,146,475 1146,475 2,037,469 109,006 37 Other Financing (Uses): Transfers out: - - (11,599) (11,599) Net change in fund balance - - 125,474 125,474 Fund Balance - January 1 City of Hopkins 4,127,786 4,127,786 - Fund Balance - December 31 $ 4,127,786 $ 4,127,786 $ 4,253,260 $ 125,474 5 of 5 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Year Ended December 31, 2010 Variance with final budget Budget positive Original Final Actual (negative) Expenditures, (continued) Culture and Recreation: Activity center Salaries and employee benefits $ 224,821 $ 224,821 $ 224,140 $ 681 Materials, supplies and services 101,597 101,597 86,490 15,107 Total 326,418 326,418 310,630 15,788 Park and Recreation Salaries and employee benefits 49,734 49,734 39,696 10,038 Materials, supplies and services 147,906 147,906 153,209 (5,303) Total 197,640 197,640 192,905 4,735 Total Culture and Recreation 524,058 524,058 503,535 20,523 Unallocated Materials, supplies and services 60,200 60,200 9,908 50,292 Total Expenditures 10,073,203 10,073,203 9,897,301 175,902 Other Financing (Uses): Transfers out: - - (11,599) (11,599) Net change in fund balance - - 125,474 125,474 Fund Balance - January 1 4,127,786 4,127,786 4,127,786 - Fund Balance - December 31 $ 4,127,786 $ 4,127,786 $ 4,253,260 $ 125,474 The notes to the financial statements are an integral part of this statement. 38 -44ca City of Hopkins 39 ASSETS Current assets Cash and investments Accounts receivable Accrued interest receivable Due from other governments Advances to other funds Loan receivable Inventory Prepaid expenses Total current assets Noncurrent assets Deferred charges Capital Assets, non depreciable Land Construction in progress Capital Assets, depreciable Buildings and structures Distribution system Machinery and equipment Less accumulated depreciation Total noncurrent assets Total Assets LIABILITIES Current Liabilities: Accounts payable Salaries payable Due to other funds Due to other governments Compensated absences Unearned revenue Accrued interest payable Capital lease - current Revenue bonds - current Total Current Liabilities City of Hopkins Statement of Net Assets Proprietary Funds December 31, 2010 Business -type Activities -Enterprise Funds Governmental Nonmajor Activities Water Sewer Storm Sewer Pavilion/ Proprietary Internal Utility Utility Utility Ice Arena Funds Totals Service Funds $ - $ 7,407 $ 1,106,812 $ 600 $ 1,145,911 $ 2,260,730 $ 2,089,901 116,578 188,494 15,948 45,220 48,945 415,185 1,474 - 228 2,737 - 1,021 3,986 4,380 - - - - 60,115 60,115 - - - - - - - 68,106 - - - 109,000 - 109,000 - 13,178 12,412 195 3,958 29,743 - - 700 - 268 17,723 18,691 - 129,756 209,241 1,125,692 155,088 1,277,673 2,897,450 2,163,861 13,789 9,106 14,996 - - 37,891 - 16,447 5,150 26,800 - 119,392 167,789 - 532,795 805,497 1,089,410 - 485,562 2,913,264 - 44,486 - - 3,366,770 3,653,543 7,064,799 - 9,815,292 6,193,551 9,000,809 - 2,584 25,012,236 - 371,774 361,846 11,264 81,935 656,954 1,483,773 6,666,121 (5,340,816) (3,622,703) (2,901,733) (1,122,719) (3,138,030) (16,126,001) (3,798,545) 5,453,767 3,752,447 7,241,546 2,325,986 1,780,005 20,553,751 2,867,576 5,583,523 3,961,688 8,367,238 2,481,074 3,057,678 23,451,201 5,031,437 25,077 46,496 10,192 22,030 46,870 150,665 55,326 10,619 5,220 940 7,660 5,232 29,671 - 278,870 - - 167,509 27,828 474,207 - 1,176 19,199 - 392 5,470 26,237 - 24,799 14,525 2,380 12,751 24,771 79,226 673,660 3,200 - - - - 3,200 - 19,754 14,240 19,601 - - 53,595 3,254 - - - - - 37,315 200,000 50,000 1,025,000 - - 1,275,000 - 563,495 149,680 1,058,113 210,342 110,171 2,091,801 769,555 The notes to the financial statements arc an integral part of this statement. City of Hopkins Statement of Net Assets Proprietary Funds December 31, 2010 Business -type Activities -Enterprise Funds Governmental Nonmajor Activities Water Sewer Storm Sewer Pavilion/ Proprietary Internal Utility Utility Utility Ice Arena Funds Totals Service Funds Noncurrent Liabilities: Compensated absences $ 29.898 $ 22.069 $ 3.560 $ $ 4.771 $ 60.298 $ 192,793 Net OP1i13 habilit) 5.180 5.180 9.325 19.685 Advance from other hinds 68.106 68.106 Capital ]case pay able 318.241 Revenue bonds payable (net of unamortized discounts and premium) 1.506207 981.016 1.371.731 3.858954 Total noncurrent liabilities 1.541.285 1,008265 1,375,291 68.106 14.(196 4.007.043 511,034 Total Liabilities 2.104.780 1.157.945 2433.404 278.448 124.267 6.098.844 1280.589 NET ,kSSETS Imestcd in capital assets. net of related debt 3.733,771 2.712.325 5.726.941 2325.986 1.790 005 16.279.(128 2.512.020 l Inrestrictcd (255.028) 91.418 206.893 (123.360) L 153 406 1.073329 1.238.828 Total net assets $ 3.478.743 $ 2.803.743 $ 5933.834 $ 2.202.626 $ 2.93 3.41 1 $ 17.352.357 $ 3,750,848 The notes to the financial statements arc an integral part of this statement. Operating revenues: Charges for services Other Total Operating Revenues Operating expenses: Cost of sales and service Administration Depreciation Total Operating Expenses Operating income (loss) Nonoperating revenues (expenses): Miscellaneous revenue Investment earnings Interest/fiscal agent expense Intergovernmental grants Loss on disposal of assets Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers (out) Change in net assets Total net assets - beginning Total net assets - ending The notes to the financial statements are an integral part of this statement. City of Hopkins Statement of Revenues, Expenses, and Changes in Net Assets Proprietary Funds For the Year Ended December 31, 2010 Business -type Activities -Enterprise Funds Governmental Non -major Activities Water Sewer Storm Sewer Pavilion/ Proprietary Internal Utility Utility Utility Ice Arena Funds Totals Service Funds $ 1,245,063 $ 1,795,043 $ 796,644 $ 356,763 $ 1,074,917 $ 5,268,430 $ 338,624 97,010 17,542 7,245 6,828 35,686 164,311 - 1,342,073 1,812,585 803,889 363,591 1,110,603 5,432,741 338,624 708,582 1,493,128 92,431 316,448 852,355 3,462,944 95,495 200,228 169,709 75,534 13,968 233,732 693,171 - 228,634 145,096 198,860 67,938 194,635 835,163 471,971 1,137,444 1,807,933 366,825 398,354 1,280,722 4,991,278 567,466 204,629 4,652 437,064 (34,763) (170,119) 441,463 (228,842) 1,080 - - - - 1,080 - - 2,256 1,362 2,055 3,465 9,138 15,101 (59,163) (36,376) (53,794) - - (149,333) (18,333) - - - - 216,596 216,596 - (340) - - - - (340) (5,151) (58,423) (34,120) (52,432) 2,055 220,061 77,141 (8,383) 146,206 (29,468) 384,632 (32,708) 49,942 518,604 (237,225) - - - - 328,515 328,515 - (45,000) (50,000) (25,000) - (25,000) (145,000) - 101,206 (79,468) 359,632 (32,708) 353,457 702,119 (237,225) 3,377,537 2,883,211 5,574,202 2,235,334 2,579,954 16,650,238 3,988,073 $ 3,478,743 $ 2,803,743 $ 5,933,834 $ 2,202,626 $ 2,933,411 $ 17,352,357 $ 31,750,848 The notes to the financial statements are an integral part of this statement. Cash Flows from Operating Activities Receipts from customers and users Receipts from interfund services provided Internal activity -payments 10 other funds Internal activity -payments from other Binds Pavmcnts to suppliers Pavmcnts to employees Pavmcnts for interfund sen ices used Pavmcnts for interfund sen ices used MISCCIlanl'Otis revenues Net cash provided (used) by operating activities Cash I-lo%ys from Noncapital Financing Activities Intergovernmental grants lYansfers in (out) Net cash provided by (used in) noncapital financing activities Cash Flows from Capital and Related I-inancing Activities_ ProCCCLIS from capital Licht Purchases of capital assets Construction of capital assets Proceeds from sales of capital assets Interest and other payments Capital lease pavments Bond payments Net cash provided by (used in) capital and related f financing activities Cash Flows From Imesting Actiyitics Interest received Net increase (decrease) in cash and imcstments Cash and Investments - Januan I Cash and Investments - December 31 City of Hopkins Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2010 Business -type Activities -Enterprise Funds Governmental Nonmajor Activities Water Sewer Storm Sewer Pavilion/ Proprietary Internal Utility Utility Utility Ice Arena Funds Totals Service Funds $ 1331106 $ 1,777,250 $ 804,197 $ 391.321 $ 1,078,020 $ 5.382,894 $ 51,346 - 315,960 (74.124) (74.124) 278.870 - 7.380 286 250 (384206) ( 12211 16) (51.514) (98.772) (660.370) (2.417 078) (42,903) (366.141) (232.140) (45,730) (206.512) (279.696) (1.130219) (200228) ( 169.709) (75.534) (13968) ( 149 034) (608.473) (10,798) 19 966 1.080 1.080 661,481 153.185 631.419 (2,055) (3,700) 1440330 333.571 545,11 1 545,1 1 1 (45.000) (50,000) (25.000) (25.000) 145000) (45,000) (50.000) (251)01)) 520111 400.111 866250 866_150 (304.014) (304014) (496.491) (712.130) (397.360) (189,951) (1.299 1415 - 13 760 (59.510) (21.517) (76,073) ( 157.100) 18.333) - - - - - - (35,559) I Lo0000o) (995,000) (1'9951000) (1.771 640) (418,877) 304.774) - (304.014) (2,889.305) (536,623) 2.961 3,077 945 2,055 3.154 12,192 15,625 (1.152.198) (312615) 212.590 - 215,551 (1,036,672) (187,427) 1.152,198 320,022 894,222 600 930,360 3,297,402 2,277,328 $ $ 7,407 $ 1,106,812 $ 600 $ 1.145,911 $ 2,260,730 $ 2,089,901 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss)to net cash provided by (used in) operating activities: Depreciation expense Miscellaneous income (Increase) decrease in: Accounts receivable Due from other funds Inventory Prepaid expense Increase (decrease) in: Accounts, compensated absences and accrued interest payable Due to other funds Due to other governments Unearned revenue Net cash provided (used) by operating activities Noncash investing, capital, and financing activities: Capital asset (loss) City of Hopkins Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2010 Business -type Activities -Enterprise Funds Governmental Nonmajor Activities Water Sewer Storm Sewer Pavilion/ Proprietary Internal Utility Utility Utility Ice Arena Funds Totals Service Funds $ 204,629 $ 4,652 $ 437,064 $ (34,763) $ (170,119) $ 441,463 $ (228,842) 228,634 145,096 198,860 67,938 194,635 835,163 471,971 1,080 1,080 (13,167) (35,335) 308 30,163 (32,583) (50,614) 5,539 - - - - - - 23,143 219 680 975 - (1,927) (53) (700) (128) (619) (1,447) (42,134) 36,818 (5,788) 11,815 (467) 244 61,760 278,870 - (74,124) 7,380 212,126 150 1,974 (523) - 1,601 3,200 - - (2,433) - 767 $ 661,481 $ 153,185 $ 631,419 $ (2,055) $ (3,700) $ 1,440,330 $ 333,571 $ (340) $ - $ $ - $ - $ (340) $ (5,151) The notes to the financial statements are an integral part of this statement. NOTES TO THE FINANCIAL STATEMENTS City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS December 31, 2010 I SUMMARY OF SIGNIFICANT ACCOUNT POLICIES The City of Hopkins, Minnesota (the City) is a charter City, which was approved December 2, 1947. The City operates pursuant to applicable Minnesota laws and statutes. The governing body of the City is a Council - Manager form of government. The financial statements of the City have been prepared in conformity with U.S. generally accepted accounting principles as applied to governmental units by the Government Accounting Standards Board (GASB). The more significant accounting policies of the City are described below. A. REPORTING ENTITY In accordance with GASB pronouncements, the City's financial statements include all funds and departments of the City and its component units, for which the City is considered to be financially accountable. A blended component unit, although legally separate entity is, in substance, part of the City's operations and so data from this unit is combined with data of the primary government. The City's blended component unit has a March 31 year-end, however when blended with the City it is shown with a December 31 year-end. Blended Component Unit Housing and Redevelopment Authority in and for the City of Hopkins (HRA) The HRA was created by the City to carry out certain redevelopment projects and low-income rental housing. Individuals on the City Council represent the governing board of the HRA. The housing activity is supported in part by federal subsidies. There is an extensive trust agreement between the HRA and HUD regarding the facility. The HRA is included in the City's enterprise funds. Separate financials are not prepared. B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS The government -wide financial statements (i.e., statement of net assets and the statement of changes in net assets) report information on all activities of the primary government and its component units. The interfund services provided and used are not eliminated in the process of consolidation. 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. 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 governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 revenue as soon as all eligibility requirements have been met. Unbilled utility service receivables are recorded at year end. Governmental funds are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting. Their revenues are recognized when susceptible to accrual (i.e., when they become measurable and available). "Measurable'" means the amount of the transaction can be detennined and `'available" means collectible within the current period or within sixty days thereafter to be used to pay liabilities of the current period. Major revenues that are susceptible to accrual include property taxes, special assessments, intergovernmental revenues, charges for services, and investment earnings. Major revenues that are not susceptible to accrual include fees and miscellaneous revenues; such revenues are recorded only as received because they are not measurable until collected. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long -tern debt and compensated absences that are recognized when due and payable. The City reports the following major governmental funds: The general fund is the primary operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The 2009B taxable housing improvement bonds of' 1999A refmding bond fund accounts for resources accumulated and payments made for principal and interest on long -tern debt issued to pay for Valley View Home improvements. The owners of these town homes pay an annual fee, which in turn pays for the bond issue. The 2009B taxable housing improvement bonds of 1999E refunding bondfilind accounts for resources accumulated and payments made for principal and interest on long -tern debt issued to pay for Westbrook Patio Home improvements. The owners of these town homes pay an annual fee, which in turn pays for the bond issue. The 2005B taxable tax increment bonds o0997 refimding bond fimd accounts for resources accumulated and payments made for principal and interest on long -tern debt issued to pay for Westbrook Patio Home improvements. The owners of these town homes pay an annual fee, which in turn pays for the bond issue. The municipal state aid construction.fimd accounts for resources accumulated and payments made for street improvements funded with State of Minnesota funding through the state aid construction program. The permanent improvement revolving And accounts for resources and accumulated payments for street improvements funded with bonds and special assessments levied on benefited property. The City reports the following major proprietary funds: The water utility fimd accounts for the operations of the City -owned water distribution system. The water bonds of 2000 and 2009A are included as part of this fund since revenues of the water fund are pledged to pay principal and interest on this bond. The sewer utility.find accounts for the operations of the City -owned sewer lift stations and disposal system. The sewer bonds of 2009A are included as part of this fund since revenues of the sewer fund are pledged to pay principal and interest on this bond. 47 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 The storm sewer utilityfund accounts for the operations and improvements of the storm water drainage system. The storm water bond issues of 1999C, 2001, 2003A and 2009A are included as part of this fund since revenues of the storm sewer fund are pledged to pay principal and interest on these bonds. The Pavilion/Ice Arena fund accounts for the operations and improvements of the city -owned Pavilion/Ice Arena. Additionally, the City reports the following fund types: Governmental Funds Special Revenue Funds - Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Debt Service Funds - Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Project Funds - Capital project funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities and infrastructure, other than those financed by proprietary funds or special revenue funds. Proprietary Funds Enterprise Funds - Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis, be financed or recovered primarily through user charges. Internal Service Funds — Internal service funds are used to account for the financing of goods and services provided by one department to other departments of the City on a cost -reimbursement basis. Internal service funds are used for equipment replacement, insurance deductions and employee benefits. 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 GASB. 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 of interfund activity has been eliminated from the government -wide financial statements, however interfund services provided and used are not eliminated in the process of consolidation. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. 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 non-operating 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 City enterprise funds and internal service funds are charges to customers for sales and service. Operating expenses for enterprise funds and internal service 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 non-operating revenues and expenses. 48 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 When both restricted and unrestricted resources are available for use. it is the City's policy to use restricted resources first, and then use unrestricted resources as they are needed. D. CASH AND INVESTMENTS Cash balances from all funds are combined and invested to the extent available in authorized investments pursuant to Minnesota Statutes (see note 4). Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments in certificates of deposit and commercial paper with a maturity date of less than one year at the date of purchase are reported at cost or amortized cost, which approximates fair value. Investments other than commercial paper held longer than one year are reported at fair value, based on quoted market prices. The City accounts for its cash, cash equivalents and investments in an entity -wide cash management pool, which is used essentially as a demand deposit account. For purposes of the statement of cash flows, the proprietary funds consider all investments to be cash equivalents. Restricted cash and investments are reported separately on the financial statement. E. INTERFUND RECEIVABLES/PAYABLES Activity between funds that is representative of lending/borrowing arrangements and transactions between funds that are outstanding at the end of the fiscal year are referred to "due to/from other funds"' Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances."" The non-current portion of due to/from other funds is offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. F. INVENTORIES AND PREPAID ITEMS All inventories are accounted for using the consumption method and are valued at cost using the first-in/first-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. G. CAPITAL ASSETS Capital assets, which include land, buildings, equipment and infrastructure assets (e.g., roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and the proprietary fund financial statements. The City defines capital assets as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of three years. Such assets are recorded at historical cost. Donated capital assets are recorded at estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Assets not being depreciated include land and construction in progress. Buildings, equipment, and infrastructure of the City and the HRA are depreciated using the straight-line method over the estimated useful lives as follows: Buildings 30 - 40 years Mains and Lines 40 - 50 years 49 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Streets Improvements Vehicles Equipment H. COMPENSATED ABSENCES 20 - 25 years 10 - 20 years 3 - 30 years 3 - 20 years The City compensates all employees upon termination for unused vacation or flex leave. Employees hired prior to August 1, 1998 may opt to have sick leave, at the rate of 8 hours for each calendar month of full-time service, instead of flex leave. Employees hired prior to August 1, 1998, that have not opted for flex leave, shall be entitled to severance pay, after completion of five years of continuous City employment. Severance pay is calculated by multiplying the total number of continuous years in the City employ and/or accumulated sick leave by the daily wage rate prevailing at date of severance, at one day per year of such employment, to a maximum of 20 days. Such severance money shall be paid in case of separation caused by death, eligible retirements, or medically attested disability preventing an employee from performing the major duties of the position or separation for non - disciplinary reasons. Accumulated vacation, flex and vested severance pay is reported as an expense and an accrued liability as the benefits accrue to employees in the government -wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only if benefits have matured as a result of employee resignations and retirements. The employee benefits internal service fund reports the governmental funds' liability for compensated absences on the accrual basis. I. LONG-TERM OBLIGATIONS In the government -wide financial statements, and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the governmental fund financial statements bond premiums and discounts, as well as bond issuance costs are recognized 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. J. NET ASSETS/FUND EQUITY 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 accumulated 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 statements when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. 50 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 K. INTERFUND TRANSACTIONS Inter -fund services provided and used are accounted for as revenues and expenditures. Transactions that constitute reimbursements to a fund for expenditures initially made from it that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. All other interfund transactions are reported as transfers. L. PROPERTY TAXES Property tax levies are set by the City Council in December of each year, and are certified to Hennepin County (the County) for collection in the following year. In the State of Minnesota, counties act as collection agents for all property taxes. The County spreads all levies over assessable property. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable by taxpayers in two equal installments, on May 15 and October 15. Personal property taxes are also payable by taxpayers in two equal installments, on February 28 and June 30. The County provides tax settlements to cities and other local governments three times a year, on or before January 25, July 5 and December 1. In the governmental fund financial statements property taxes are accrued and recognized as revenue for collections within 60 days of year-end. Taxes that remain unpaid at the County on December 31 are classified as delinquent taxes receivable, and are fully offset by deferred revenues because they are not available to finance current expenditures. No allowance for uncollectible taxes has been provided because such amounts are not expected to be material. M. CONDUIT DEBT OBLIGATIONS From time to time, the City has issued Commercial Development Revenue Notes/Bonds in accordance with the Minnesota Municipal Industrial Development Act. These obligations are issued to provide financial assistance to private -sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The obligations are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the obligations, ownership of the acquired facilities transfers from the bond holder to the private -sector entity served by the debt issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the obligations. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2010, there were 8 notesibond issues outstanding, with an aggregate principal amount payable of approximately $34 million. N. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 51 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 2. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net assets — governmental activities as reported in the government -wide statement of net assets. One element of that reconciliation explains that long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Details of this difference are as follows: Bonds payable $ 24,000,783 Accrued interest payable 334,168 Net OPEB obligation 108,169 Net adjustment to reduce fund balance — total governmental funds to arrive at net assets — governmental activities S 24.443.12 B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE AND THE GOVERNMENT - WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and change in net assets of governmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains, "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this difference are as follows: Capital outlay $ 1,358,792 Depreciation expense (1,387,669) Net adjustment to increase net changes in fund balances — total governmental funds to arrive at changes in net assets of governmental activities ( 28.8771 Another element of that reconciliation states that "The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net assets." The details of this $3,045 difference is as follows: In the statement of activities, only the gain on the sale of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balance by the cost of the capital assets sold. $ (3,045) Another element of that reconciliation explains that, "the issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt uses financial resources of the governmental funds. Neither of these transactions has any effect on the net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of net changes." The details of these differences are as follows: 52 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Issuance of general obligation bonds 54,515,000 Less discounts (45,150) Less deferred costs (49,233) Principal repayments (4,665,000) OPEB expense (4,814) Amortization of net deferred issuance costs 31,101 Amortization of bond premium and discount 9,592 Prior year interest expense (409,860) Accrue interest expense for current year 334.168 Net adjustment to decrease net changes in fund balances total governmental funds to arrive at changes in net assets of governmental activities ( 284.1961 3 STEWARDSHIP, COMPLIANCE AND ACCOUNTIBILITY A. BUDGETS AND BUDGETARY ACCOUNTING Annual budgets are adopted on a basis consistent with U.S. generally accepted accounting principles for all governmental funds except the Section 8 and Hennepin County CDBG special revenue funds, the debt service funds and the capital projects funds, which are not budgeted. A capital improvement plan is reviewed annually by the City Council for the capital projects funds and utility funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. All annual appropriations lapse at fiscal year end. The City follows these procedures in establishing the budgetary data reflected in the financial statements and set forth in Section 7.04 of the City Charter. 1. The City Manager shall, at the first regular council meeting in September, submit to the Council a proposed budget and an explanatory budget message in a form and manner as prescribed by the City Charter. 2. The Council shall determine the plan and time of the public hearings on the budget to obtain taxpayer comments. 3. The Council shall adopt the tax levy by resolution no later than a December date, which is annually established by law for the county auditor to levy taxes. The budget shall set forth the total for each budgeted fund with such segregation as to objects and purposes of expenditures as the Council deems necessary for purposes of budget control. 4. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council and are limited to the amount revenues exceed the budgets or authorize the transfer of sums from unexpended balances to other purposes. Budgeted expenditure appropriations lapse at year-end. The level of legal control is at the fund level. 5. The Council made no supplemental budgetary appropriations throughout the year. 53 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 B. EXCESS OF EXPENDITURES OVER APPROPRIATIONS For the year ended December 31, 2010, actual expenditures exceeded the budgeted amounts in the following funds: State Chemical Assessment Team $ 81,004 Economic Development 9,712 Para -Transit 3,137 Communications 594 Tax Increment 1-2 Entertainment District 23,106 Tax Increment 2-6 Sonoma Project District 10 Tax Increment 2-9 Oaks of Mainstreet District 72 Tax Increment 2-11 Super Valu District 1,032,363 Tax Increment 1-3 50' Avenue Flats District 166,326 Tax Increment 1-4 Market Place & Main District 7,546 These over expenditures were funded by greater than anticipated revenues of the State Chemical Assessment Team, Economic Development, and Tax Increment 2-11 Super Valu District funds, by available fund balances in the Communication fund, by a transfer of revenues to the Paratransit fund and by future revenues in the Tax Increment 1-2, 2-6, 2-9, 1-3 and 1-4 funds. Budgets are adopted for some special revenue fund types but not all. Excluded from the budget adoption process are funds that are completely reimbursable from the federal government and a federal housing contracted program that ended December 31, 2010. The Section 8 and Community Development Block Grant are non -budgeted funds. C. FUND BALANCE DEFICITS At December 31, 2010, the following funds had deficit fund balances or net assets. These deficits will be funded through future tax levies, contributions, grants, charges for services or developer payments: State Chemical Assessment Team $ 55,464 Art Center 971,324 Tax Increment 1.2 Entertainment District 158,676 Tax Increment 2.6 Sonoma District 289,788 Tax Increment District 1.3 5`" Avenue Flats 208,084 Tax Increment District 1.4 Marketplace & Main 2,149 D. NET ASSETS RESTRICTED BY ENABLING LEGISLATION The government -wide statement of net assets reports $925,064 in restricted net assets for economic development, of which $858,076 is restricted by enabling legislation. 54 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 4. DEPOSITS AND INVESTMENTS As of December 31, 2010 the City had the following deposits and investments: Investment Type Fair Value Municipal obligations $ 1,406,853 Negotiable certificates of deposit 6,315,691 Money market 10,726,142 Deposits 621,393 Total fair value 19.070.079 Interest rate risk — Interest rate risk is the risk that the fair value of investments will be adversely affected by a change in interest rates. In accordance with its investment policy, the city manages its exposure to declines in fair values by holding long-term government investments to maturity and by investing in commercial paper with maturity dates of 270 days or less. At of December 31, 2010 the City had the following investment maturities: Investment Type: Muncipal obligations Negotiable certificates of deposit Money market accounts Demand deposits Credit risk — Credit risk is the risk that an issuer or other counter party to an investment will not fulfill its obligations. Credit risk is measured using credit quality ratings of investments in debt securities as described by nationally recognized rating agencies such as Standard & Poor's and Moody's. According to the City's investment policy commercial paper shall be restricted to issues, which mature in 270 days or less with a rating of A-1 (Moody's), P-1 (Standard & Poor's) or F-1 (Fitch) among at least two of the three rating agencies. The City is authorized by Minnesota Statutes to invest in the following: (a) Direct obligations or obligations guaranteed by the United States or its agencies. (b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. (c) General obligations in the State of Minnesota or any of its municipalities (d) Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System (e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturity in 270 days or less; and (f) Guaranteed investment contracts issued or guaranteed by United States commercial banks or domestic branches of foreign banks or United States insurance companies or their subsidiaries. (g) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. Government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. 55 Investment maturities (in years) Fair Less No Value than one 1_5 maturity $ 1,406,853 $ 670,569 $ 736,284 $ - 6,315,691 6,315,691 - 10,726,142 - - 10,726,142 621,393 - - 6211393 $ 19,070,079 $ 6.986.260 $ 736.284 $ 11,347,535 Credit risk — Credit risk is the risk that an issuer or other counter party to an investment will not fulfill its obligations. Credit risk is measured using credit quality ratings of investments in debt securities as described by nationally recognized rating agencies such as Standard & Poor's and Moody's. According to the City's investment policy commercial paper shall be restricted to issues, which mature in 270 days or less with a rating of A-1 (Moody's), P-1 (Standard & Poor's) or F-1 (Fitch) among at least two of the three rating agencies. The City is authorized by Minnesota Statutes to invest in the following: (a) Direct obligations or obligations guaranteed by the United States or its agencies. (b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. (c) General obligations in the State of Minnesota or any of its municipalities (d) Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System (e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturity in 270 days or less; and (f) Guaranteed investment contracts issued or guaranteed by United States commercial banks or domestic branches of foreign banks or United States insurance companies or their subsidiaries. (g) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. Government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. 55 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 The following table lists the credit quality ratings per Moody's and/or Standard and Poor's and/or Fitch of the City's investments at December 31, 2010. Fair Value Investment Type: Quality Ratings FDIC AAA AA3 AA2 AAI Insured Unrated Muncipal obligations $ 1,406,853 $ 401,085 $ 100,137 $ 252,528 $ 653,103 $ - $ - Negotiable certificates of deposit 6,315,691 - - - - 6,315,691 - Money market accounts 10,726,142 - - - - - 10,726,142 Demand deposits 621,393 - - - - - 621,393 $ 19,070,079 $ 401,085 $ 100,137 $ 252,528 $ 653,103 $ 6,315,691 $ 11,347,535 Custodial credit risk Deposits — For deposits, this is the risk that in the event of a bank failure, the City's deposits may not be returned to it. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Authorized collateral includes the legal investments described above, as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral. At December 31, 2010 the City had no deposits that were uninsured or uncollateralized. The deposits were insured or collateralized by securities held by the City's agent in the City's name. Investments — For an investment, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All investments held by the City are insured or registered or are held by the City or its agent in the City's name. The City has the ability and intent to hold its investments to maturity and therefore intends to recover the full carrying value of its investment portfolio upon maturity. Concentration of credit risk — This is the risk associated with investing a significant portion of the City's investments (considered 5 percent or more) in the securities of a single issuer, excluding U.S. explicitly guaranteed investments (Treasuries), investment pools, and mutual funds. As of December 31, 2010, the city had no investments exceeding 5 percent or more for a single issuer. (Remainder ofpage is left blank intentionally) 061 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 5. CAPITAL ASSETS Capital asset activities for the year ended December 31, 2010 were as follows: Governmental activities: Capital assets, not being depreciated Land Construction in Progress Total not being depreciated Capital assets, being depreciated Buildings Other Improvements Vehicles Machinery & Equipment Total being depreciated Less accumulated depreciation: Buildings Other Improvements Vehicles Machinery & Equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Beginning Balance $ 5,805,711 $ 2,758,801 8,564,512 Increases Decreases Transfers - $ - $ - $ 1,283,972 (619,140) 1,283,972 (619,140) Ending Balance 5,805,711 3,423,633 9,229,344 19,759,799 14,450 (7,332) - 19,766,917 30,029,479 7,000 619,140 30,655,619 3,935,721 334,951 (432,782) - 3,837,890 4,831,105 214,910 (173,379) - 4,872,636 58,556,104 571,311 (613,493) 619,140 59,133,062 (3,760.722) (484,523) 4,287 - (4,240,958) (11,902,932) (778,651) - - (12,681,583) (2,199,982) (242,434) 432,782 (26,052) (2,035,686) (3,242,448) (354,032) 154,468 26,052 (3,415,960) (21,106,084) (1,859.640) 591,537 - (22,374,187) 37,450,020 (1,288,329) (21,956) 619,140 36,758,875 $ 46,014,532 $ (4357) $ (21,956) $ $ 45,988,219 57 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Business -type activities: Water $ 228,634 Sewer 145,096 Storm Sewer 198,860 Refuse 45,972 Pavilion/Ice arena 67,938 Housing and Redevelopment Authority 148,663 Total depreciation expense — business -type activities 835,16a 58 Beginning Ending Balance Increases Decreases Transfers Balance Business -type Activities: Capital assets, not being depreciated Land $ 167,789 $ - $ - $ - $ 167,789 Construction in Progress 2,073,347 1,531,882 (17) (691,948) 2,913,264 Total not being depreciated 2,241,136 1,531,882 (17) (691,948) 3,081,053 Capital assets, being depreciated Buildings 6,900,454 - 81,155 6,981,609 Infrastructure 18,598,047 71,594 (6,696) 596,049 19,258,994 Other Improvements 5,836,434 - - - 5,836,434 Vehicles 729,552 - - - 729,552 Machinery & Equipment 802,687 - (63,211) 14,744 754,220 Total being depreciated 32,867,174 71,594 (69,907) 691,948 33,560,809 Less accumulated depreciation: Buildings (3,538,230) (214,333) - - (3,752,563) Infrastructure (9,879,283) (408,620) 6,352 - (10,281,551) Other Improvements (966,185) (125,279) - - (1,091,464) Vehicles (383,481) (49,665) - - (433,146) Machinery & Equipment (593,223) (37,266) 63,211 - (567,278) Total accumulated depreciation (15,360,402) (835,163) 69,563 - (16,126,002) Total capital assets, being depreciated, net 17,506,772 (763,569) (344) 691,948 17,434,807 Business -type activities capital assets, net $ 19,747,908 $ 768,313 $ (361) $ - $ 20,515,860 Depreciation expense was charged to City functions as follows: Governmental activities: General government $ 47,031 Public safety 256,293 Highways and streets 946,931 Urban redevelopment and housing 613 Culture and recreation 136,801 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 471,971 Total depreciation expense — governmental activities $1,859,640 Business -type activities: Water $ 228,634 Sewer 145,096 Storm Sewer 198,860 Refuse 45,972 Pavilion/Ice arena 67,938 Housing and Redevelopment Authority 148,663 Total depreciation expense — business -type activities 835,16a 58 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Construction commitments The City has active construction projects as of December 31, 2010. The projects include street improvements. The City's commitment with contractors related to these projects is $122.088. 6. INTERFUND RECEIVABLES AND PAYABLES The following funds had amounts receivable from other funds, and the respective funds had equal amounts payable to other funds at December 31, 2010: Due from other funds Advances from other funds Internal Service Total Advanced to other funds: Non -major proprietary $ 68,106 $ 68.106 Total advances to other funds $ 68,106 $ 68,106 The interfund receivables and payables are to eliminate negative cash between funds and to allow for development loans or to facilitate a project or operations of another fund. 7. INTERFUND TRANSFERS The following is a summary of transfers between funds as of December 31, 2010: Transfers in Permanent Improvement Non -major General Govermnental Total Due to other funds: Non -major goverrunental $ 996,808 $ 1,038,703 $ 2,035,511 Water 278,870 - 278,870 Pavilion 167,509 - 167,509 Non -major proprietary 27,828 - 27,828 Total due to other funds $ 1.471,015 $ l 038,703 $ 2,509,718 Advances from other funds Internal Service Total Advanced to other funds: Non -major proprietary $ 68,106 $ 68.106 Total advances to other funds $ 68,106 $ 68,106 The interfund receivables and payables are to eliminate negative cash between funds and to allow for development loans or to facilitate a project or operations of another fund. 7. INTERFUND TRANSFERS The following is a summary of transfers between funds as of December 31, 2010: Transfers in Permanent 59 Improvement Non -major Revolving Governmental Total Transfers out: General $ $ 11,599 $ 11,599 Housing Improvement Bonds of 1999A Refunding Bonds of 2009B 903,498 903.498 Housing Improvement Bonds of 1999B Refunding Bonds of 2009B 1,578,495 1,578,495 Permanent Improvement Revolving 130,119 130,119 Water 45,000 45,000 Sewer 50,000 50,000 Storm Sewer 25,000 25,000 Non -major governmental 2,653,433 2,385,924 5,039,357 Non -major business -type - 25,000 25,000 Total transfers out $ 2,653,433 $ 5,154,635 $ 7,808,068 59 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Interfund transfers allow the City to allocate financial resources to debt service funds that are paying the general obligation debt. Non -routine transfers include the following: 1) Annual transfers from water, sewer and storm sewer for lease payments on new public works facility. 2) An annual transfer, within non -major governmental funds, from the Economic Development and Communication funds to the Art Center Fund totaling $147,920 to pay the original debt for building the facility. 3) Annual transfers from Tax Increment Special Revenue funds to Debt Service funds for debt payments. 4) Transfers from Debt Service funds to Debt Service funds for bond refunding and to the Permanent Improvement Revolving fund for project bond proceeds. 8. LEASES The city has entered into a lease agreement as a lessee for financing the acquisition of an aerial lift fire truck with a down payment of $445,427. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of their future minimum lease payments as of the inception date. The asset acquired through the capital lease is as follows: Governmental Activities Asset: Machinery and equipment $870,427 Less: Accumulated depreciation (94,220) Total 7 2 The future minimum lease obligations and the net present value of these minimum lease payments as of December 31, 2010 are as follows: Governmental Activities Year Ending December 31. - 2011 $ 54,217 2012 54,217 2013 54,217 2014 54,217 2015 54,217 2016-2018 162,651 Total minimum lease payments 433,736 Less: amount representing interest (78,180) Present value of minimum lease payments $ 355,556 9. LONG-TERM DEBT The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for governmental activities. General Obligation Bonds are backed by the full faith, credit and taxing power of the City, and are serviced by General and Tax Increment levies and also by fees assessed against benefited properties. These bonds generally are issued as 20 -year serial bonds. .1 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Refunding On November 17, 2010 the City issued $1,585,000 General Obligation Refunding Bonds, Series 2010B for a crossover refunding of $1,490,000 General Obligation Tax Increment Bonds, Series 2002A. Future debt service payments will be reduced by $109,172 with a present value savings of $92,997. The refunded bonds will be called and paid on February 1, 2013. General obligation bonds currently outstanding are as follows: Purpose Interest Rates Original Amount Current Amount Governmental activities 2.00-6.60% $13,185,000 $10,430,000 Governmental activities refunding 0.50-5.15% 9.140,000 6,525,000 Annual debt service requirements to maturity for general obligation bonds are as follows: Year Ending Governmental Activities December 31 Principal Interest 2011 $ 1,650,000 $ 626.611 2012 1,060,000 586,714 2013 2,595,000 513,375 2014 1,170,000 438,832 2015 1,205,000 396,685 2016-2020 6,040,000 1,270.046 2021-2025 3,235,000 190,623 2026 $ 16,955.000 $ 4,022.886 The City also has special assessment bonds, which are backed by the full faith, credit and taxing power of the City, and repayment monies are generated by the collection of special assessments and general levies. On November 17, 2010 the City issued $2,710,000 General Obligation Permanent Improvement Bonds, Series 2010A for the purpose of street improvements and $220,000 General Obligation Refunding Bonds, Series 2010B to refund $215,000 General Obligation Improvement Bonds, Series 2002B. Future debt service payments will be reduced by $4,985 with a present value savings of $4,844. The refunded bonds were called and paid on February 1, 2011. General obligation bonds currently outstanding are as follows: Purpose Interest Rates Original Amount Current Amount Street Improvements 0.50-4.25% $ 5,625,000 $4,665,000 Street Improvements — refunding 0.50 — 0.700% 220,000 220,000 Annual debt service requirements to maturity for special assessment bonds are as follows: Year Ending Governmental Activities December 31 Principal Interest 2011 $ 500,000 $ 113,622 2012 440.000 116.840 2013 455,000 107.334 2014 365,000 97,227 2015 380,000 86,628 2016-2020 1,580,000 265,833 2021-2025 960,000 245,635 2026 205,000 3.280 $ 4,885,000 $ 1,036,399 32 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Revenue bonds The City also issues bonds where the government pledges income derived from the acquired or constructed assets to pay debt service. On November 17, 2010 the City issued $875,000 General Obligation Refunding Bonds, Series 2010B to refund $855,000 Storm Sewer Revenue Bonds, Series 2003A. Future debt service payments will be reduced by $71,336 with a present value savings of $62,061. The refunded bonds were called and paid on February 1, 2011. Revenue bonds outstanding at year-end are as follows: Purpose Storm sewer construction & replacement Storm sewer — refunding Water refunding Water construction & replacement Sanitary sewer construction & replacement Storm sewer — refunding Interest Rates Original Amount Current Amount 2.0-5.0% Principal $ 2,810,000 $ 910,000 2.0-4.0% $ 120,025 2,215,000 605,000 2.0-4.0% 2013 850,000 850,000 2.0-4.0% 475,000 820,000 820,000 2.0-4.0% 70,460 1,020,000 1,020,000 0.5-2.9% 2021-2025 875,000 875,000 Revenue bond debt service requirements to maturity are as follows: Year Ending December 31 Principal Interest 2011 $ 1,275,000 $ 120,025 2012 450,000 100,598 2013 470,000 92,285 2014 475,000 82,572 2015 485,000 70,460 2016-2020 965,000 253,788 2021-2025 960,000 84,082 $ 5,080,000 $ 803,810 Public Facility Lease Revenue Bonds The Housing and Redevelopment Authority in and for the City of Hopkins, a blended component unit of the City, has issued public facility lease revenue bonds for the construction of police station improvements. The Housing and Redevelopment Authority has entered into ground leases with the City for the lease of the facilities to the City. The leases will remain in effect until all principal and interest on the bonds have been paid. So long as the leases are in effect, the City will make semiannual lease payments on each February 1 and August 1, in amounts sufficient to pay all principal and interest on the bonds due on such payment date. The bonds are special obligations of the Housing and Redevelopment Authority. The bonds do not constitute a general obligation of the Housing and Redevelopment Authority or the City. It is the intent of the City to levy ad valorem taxes an amount sufficient to make rental payments required under the leases. In the event the annual appropriation is not made, the bond trustees are entitled to repossession and the right to re -lease the buildings and land. Public facility lease revenue bonds currently outstanding are as follows: purpose Interest Rates Original Amount Current Amount Police Station improvements 2.0-4.35% $ 3,050,000 $ 2,315,000 62 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Annual debt service requirements to maturity are as follows Year Ending December 31 Principal Interest 2011 $ 130,000 $ 86.391 2012 135,000 82,281 2013 140,000 77,811 2014 145,000 73,054 2015 145,000 68,070 2016-2020 830,000 251,826 2021-2025 790,000 69,550 $ 2,315,000 $ 708,983 The City is subject to a statutory limit of bonded indebtedness equaling 3.0 percent of taxable market value. At December 31, 2010, the debt limit for the City is $47,120,694. Of the total debt, $10,144,055 of general obligation and revenue bonds is applicable to the limit. The legal debt margin is $36,976,639. Advance Refunding On August 14, 2007 the City issued $9,920,000 in General Obligation Capital hnprovement Bonds, Series 2007A for the purpose of refunding the $10,760,000 HRA Lease Revenue Bonds, Series 2002A. Future debt service payments will be reduced by $120,340 with a present value savings of $89,973. As of December 31, 2010, $8,230,000 remained outstanding. Changes in long-term liabilities Long-term liability activity for the year ended December 31, 2010, was as follows: Beginning Balance .additions Deductions Governmental Activities: Bonds payable: G.O. tax increment bonds General obligation bonds Total general obligation bonds Special assessment bonds Public facility lease bonds Less deferred amounts For issuance discounts For issuance premiums On refunding Total bonds payable Compensated absences Net OPEB liability Capital lease payable Governmental act ivith long-term liabilities Business -type activities: Bonds payable: Revenue bonds Less deferred amounts For issuance diSCO LMIS For issuance premiums Compensated absences Net OPEB liability Business -type actin ity long-term liabilities Ending Due within Balance One Year S 10 290.000 S 1.585.000 S 3.545.000 S 8.330.000 S 1.030.000 9.245.000 - 6_10.000 8.625,000 620,000 19.535900 1.585.000 4.165,000 16.955.000 1,650.000 2.330.000 2.930.000 375.000 4.885.000 500.000 2.440.000 - 125.000 2.315.000 130900 (98.153) (27.100) 9.450 (115.803) 5 971 - (664) 5.307 - (26A77) (18.050) 806 (43.721) - _4.186.341 4.469.850 4.674.592 24.000.783 1280,000 846.487 693.626 673.660 866.453 673.660 112.983 168.964 173,778 108.169 - 391.115 - 35.559 355,556 37.315 S 25.536926 S 5.333.440 S 5.557.589 S 25330.961 S 2.990,975 S 6200.000 S 875.000 S 1.995.000 S 5.080.000 $ 1.275,000 - (8-750) 89 (8.661) 61966 - (351) 62.615 _ 1 14.484 111.629 86 589 139.524 79,226 18.864 30.757 29.936 19.685 - S 6.396.314 S 1.008036 S 2.111 263 S 5.293.163 S 1.354.226 63 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters and peace officers that qualify for membership by statute are covered by PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for GERF'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 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all PEPFF members and GERF members hired prior to Julyl, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that ceases upon the death of the retiree --no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. 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 GERF and PEPFF. That report may be obtained on the web at mnpera.org, by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651) 296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.1 % and 6.0%, respectively, of their annual covered salary in 2010. PEPFF members were required to contribute 9.4% of their annual covered salary in 2010. The City of Hopkins is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan GERF members, 7% for Coordinated Plan GERF members and 14.1% for PEPFF members. The City's contributions to the General Employees Retirement Fund for the years ending December 31, 2010, 2009 and 2008 were $328,513, $316,832, and $298,627, respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ending December 31, 2010, 2009 and 2008 were $299,165, $305,185, and $277,938, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. 64 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 2. Hopkins Fire Relief Association (HFRA) Plan Description The City contributes to the Hopkins Fire Relief Association (Association); a single employer defined benefit plan. The Association administers the plan and issues separate financial statements that can be obtained by contacting the Association. Volunteer firefighters of the City are members of the Association. The plan provides for pennanent and short tern disability benefits, death benefits and pensions with a set value for the annual withdrawal amount. Full vesting in the plan requires a member to have served for at least 5 years, to have reached the age of 50 years and to have been a member of the Association for at least 20 years. These benefit provisions and all other requirements are consistent with enabling statutes. Funding Policy and Annual Pension Information The governing board of the Association requests changes in benefit levels and contribution requirements that must be approved by the City Council. The funding policy provides that contributions from the City and from the State of Minnesota are in amounts sufficient to accumulate assets to pay benefits when due. The City passes through state aids allocated to the plan, in accordance with state statutes. The annual pension information is as follows: 2010 Contributions: Actuarial valuation date: Actuarial cost method: Assumed rate of return: Actuarial valuation period Amortization method Amortization period Inflation rate Projected salary increases Post retirement benefit increases Actuarial method for valuing assets City $ 189,825 State $ 68,132 12/31/08 Entry age nonnal actuarial cost method 5% Open Level dollar — open Ten years None Not applicable $0 per year of service Fair market value Annual Pension Benefit Cost for Past Three Years (the most recent available) Annual Pension % of Annual Pension Year Ended Cost (APC) 12/31/2009 $32,166 12/31/2008 $32,166 12/31/2007 $32,166 Cost Contributed 100% 100% 100`%, 65 Net Pension Obligation At Year Ended $0 $0 $0 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Schedule of Funding Progress (Required Supplemental Information) Actuarial Actuarial Accrued Excess (Under) Actuarial Value of Liability (AAL) Of Assets Funded Valuation Assets Entry Age Over AAL Ratio Date (a) (b) (a -b) (a/b) 12/31/2009 $1,816,577 $2,190,083 ($373,506) 83% 12/31/2008 $1,982,694 $2,485,423 ($502,729) 80% 12/31/2007 $3,217,931 $2,778,117 $439,814 116% The estimated accrued liability of 2,190,083 at December 31, 2009 was calculated using the State of Minnesota Schedule I form for lump sum pension plans. This results in excess (deficit) net assets available for benefits of ($373,506) as of December 31, 2009. The Hopkins Fire Department is a volunteer organization and therefore does not have payroll to disclose. 11. OTHER POST EMPLOYMENT BENEFIT PLAN At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City engaged an actuary to determine the City's liability for postemployment healthcare benefits other than pensions as of January 1, 2010. 1. Plan Description The City, a single -employer postemployment benefit plan, provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees, who were hired prior to July 1, 1993 and have been with the City for at least ten years and are either (1) age 60 years or older or (2) eligible for full PERA retirement benefits. Employees retiring by June 30, 2007 will receive full single health and life insurance coverage until age 65; employees retiring between July 1, 2007 and December 31, 2009 will receive $500 per month towards the cost of single health and life insurance until age 65; and employees retiring after December 31, 2009 will receive $15 per month times years of service (maximum of $500 per month) towards the cost of single health and life insurance until age 65. Currently 23 employees meet those eligibility requirements. As of December 31, 2010 there were approximately 90 active participants and 23 retired participants receiving benefits from the City's health plans. 2. Funding Policy The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2010, the City contributed $203,714 to the plan. 3. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any un -funded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually paid from the plan, and changes in the City's net OPEB obligation. City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 Annual Required Contribution $ 201,793 Interest on Net OPEB Obligation 5,933 Adjustment to Annual Required Contribution (8,005) Annual OPEB Cost (Expense) 199,721 Contributions Made (203,714) Increase in Net OPEB Obligation (3,993) Net OPEB Obligation- Beginning of Year 131,847 Net OPEB Obligation- End of Year $ 127,854 The City's annual OPEB cost. the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010: 4. Funded Status and Funding Progress As of January 1, 2010, the most recent actuarial valuation date, the City's unfunded actuarial accrued liability (UAAL) was $2,145,167. The annual payroll for active employees covered by the plan in the actuarial valuation was $6,244,081 for a ratio of UAAL to covered payroll of 34.36%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 5. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -tern volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2010 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.5% investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date. The initial healthcare trend rate was 9%, reduced by decrements to an ultimate rate of 5% after nine years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis over a period not to exceed 30 years. 67 Percentage Fiscal Annual of Annual Net Ycar OPEB OPEB Cost OPEB Ended Cost Constributed Obligation 12.312008 $ 236,804 65.0% $ 82,786 12/31 /2009 235,557 79.2% 131,847 12!31,2010 199,721 102.0% 127,854 4. Funded Status and Funding Progress As of January 1, 2010, the most recent actuarial valuation date, the City's unfunded actuarial accrued liability (UAAL) was $2,145,167. The annual payroll for active employees covered by the plan in the actuarial valuation was $6,244,081 for a ratio of UAAL to covered payroll of 34.36%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 5. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -tern volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2010 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.5% investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date. The initial healthcare trend rate was 9%, reduced by decrements to an ultimate rate of 5% after nine years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis over a period not to exceed 30 years. 67 City of Hopkins, Minnesota NOTES TO FINANCIAL STATEMENTS, (CONT.) December 31, 2010 12. REHABILITATION LOANS RECEIVABLE The City makes rehabilitation loans to residential and commercial entities within the City. Residential loans are made for 20 year periods at 3% interest. A mortgage against the property improved is required and City staff is responsible to follow-up any delinquent accounts. Loan repayments are made to Matrix Financial Services, a loan service bureau, which charges a fee of $5.95 per month per loan. Principal and interest are forwarded to the City monthly with loan collection and loan status reports. Rehabilitation loan activity is a function of the Economic Development Fund, the Hennepin County CDBG and the Housing Rehab Funds. Loans become due in full upon sale of property. Rehabilitation loans receivable amounted to $66,988 at December 31, 2010 and are recorded in the Economic Development and Hennepin County CDBG nonmajor special revenue funds. 13. CLAIMS AND LITIGATION The City had the usual and customary types of miscellaneous claims pending at year-end, which are of a minor nature and usually all covered by insurance carried for that purpose. The City carries a $1,000,000 Public Official Liability Insurance policy with public entity and employee endorsement. 14. RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City participates in a public entity risk pool to mitigate its exposure to these risks. Workers compensation and property and liability coverage are provided through a pooled self-insurance plan with other cities. Settled claims have not exceeded insurance coverage in any of the past three fiscal years and no significant reductions in coverage from the prior year. The City pays an annual premium based on prior claims history for its workers compensation coverage. The public entity risk pool is responsible for the payment of all associated claims. The City has a $20,000 deductible per occurrence with a maximum per year out of pocket of $40,000, for its property and liability coverage. The public entity risk pool is responsible for all losses in excess of $20,000 per occurrence and all losses occurring after the $40,000 maximum City out of pocket costs. REQUIRED SUPPLEMENTARY INFORMATION 69 City of Hopkins, Minnesota REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress December 31, 2010 OTHER POSTEMPLOYMENT BENEFITS PLAN 70 Actuarial UAAL as a Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (b -a) (a/b) (c) ((b-a)/c) 01/01/2007 $ - $ 2,297,909 $ 2,297,909 - $ 5,621,587 40.88% 01/01/2010 - 2,145,617 2,145,617 - 6,244,081 34.36% 70 CITY OF HOPKINS, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS STATEMENTS SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. Expenditures are restricted by law or administrative regulation for specified purposes. State Chemical Assessment Fund — This fund is entirely supported by state aid for the purpose of chemical assessment training and activity for the State of Minnesota. Economic Development Fund — This fund accounts for the development opportunities of the city. Sources of funds are derived from the administration of loans and an annual tax levy. Real Estate Purchases and Sales Fund - This fund records the acquisition and disposition of various properties with the proceeds used to improve city buildings. Hennepin County CDBG - This fund accounts for receipt for Community Development Block Grant funds and the issuance of loans and grants for housing rehabilitation. Tax Increment Funds - These funds were established to record the use of tax increment receipts and bond proceeds as applied in various Tax Increment Districts. Paratransit Fund - This fund was established to account for the receipt of grants and rider fees and expenditures for transit service. Housing Rehab Fund - This fund was established to account for funds received under the Community Development Block Grant funds and Section 8. Parking Fund - This fund acquired land, improves and maintains parking lots and a parking ramp and collects monthly maintenance fees from users. Section 8 Housing Fund — This fund administers the HUD Section 8 Rental Assistance Program. Communications Fund - This fund records the City's share of a five -city joint venture cable TV franchise administered under the Southwest Suburban Cable Commission. Depot Coffee House Fund — This fund accounts for the operations of the coffee house business and the teen center operations that are supported through grant funds. Art Center Fund — This fund accounts for the operations of the Hopkins Art Center which is supported through leases, state aids, contributions, sales and intergovernmental transfers. 71 DEBT SERVICE FUNDS Debt Service Funds are established to finance and account for the payment of interest and principal on all general obligation debt other than debt issued for and serviced by a governmental enterprise. Provisions are made in the City's general property tax levy for money sufficient to meet the general obligation debt. CAPITAL PROJECTS FUNDS Capital Projects Funds are established to account for the resources expended to acquire assets of a relatively permanent nature. (Special revenue and enterprise fund resources are not included in this category.) These funds evolve from the needs for special accounting for bond proceeds, grants and contributions for the acquisition of capital assets. Park Improvements Fund - This fund was established to record construction and improvement costs for park facilities. Capital Improvement Fund - This fund accounts for funds set aside for the construction and improvement of City facility and infrastructure. 72 ASSETS Cash and investments Taxes receivable Special Assessments receivable Accounts receivable Rehabilitation loans receivable Due from other governments Accrued interest receivable Due from other funds Prepaid expenses Long-term receivable Property held for resale Total Assets LIABILITIES AND FUND BALANCE Liabilities: Accounts payable Salaries payable Accrued interest payable Due to other funds Due to other governments Deferred revenue Total Liabilities Fund balances: Reserved for: Prepaid expenses Rehab loans receivable Long term receivable Tax Increment Districts Advances to other funds Property held for resale Debt service Unreserved, designated for: Economic development Construction projects Unreserved, undesignated: Total Fund Balances Total Liabilities and Fund Balance City of Hopkins 1 of 8 Combining Balance Sheet Nonmajor Governmental Funds December 31. 2010 Special Revenue Funds State Real Estate Hennepin Chemical Economic Purchases County Assessment Development & Sales CDBG Para -Transit S - S 908,044 S 106,917 S $ 3.610 1.602 - 26,211 - 40,777 65,168 1,250 1,923 226 1,038.703 722.098 S 65,168 S 2.703.441 S 107.143 S 40,777 S S 1,772 S 4,058 S S S 954 5.061 117.906 29.558 120.632 38,677 - 26,211 - 40,777 722.098 (55.464) 1.916.455 107.143 (55,464) 2,664.764 107.143 40,777 - S 65,168 S 2,703,441 S 107,143 S 40.777 S 73 City of Hopkins 2of8 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2010 Special Revenue Funds LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 676 $ 2,773 $ 94 $ 14,041 $ Depot Salaries payable Housing 1,585 Section 8 1,058 Coffee Accrued interest payable Rehab Parking Housing Communications House ASSETS - - - - - Cash and investments $ 586,165 $ 237,192 $ 91,906 $ 364,482 $ 20,555 Taxes receivable - - - - - Special Assessments receivable - 46,738 - 15,099 - Accounts receivable - 2,405 - 51,479 947 Rehabilitation loans receivable - - Due from other governments - 2,116 - 120 - Accrued interest receivable 1,251 502 194 771 43 Due from other funds - - - - - Prepaid expenses - - - 120 120 Long-term receivable - - - - - Property held for resale - - - - - Total Assets $ 587,416 $ 242,215 $ 92,100 $ 416,852 $ 21,665 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 676 $ 2,773 $ 94 $ 14,041 $ 2,233 Salaries payable 2,408 1,585 - 1,058 1,758 Accrued interest payable - - - - - Due to other funds - - - - - Due to other governments - - - - 11 Deferred revenue - 42,380 - - Total Liabilities 3,084 46,738 94 15,099 4,002 Fund balances: Reserved for: Prepaid expenses - - - 120 120 Rehab loans receivable - - - - - Long term receivable - - - - - Tax Increment Districts - - - - Advances to other funds - - - - - Property held for resale - - - - - Debt service - - - - - Unreserved, designated for: Economic development 85,000 - - - Construction projects - - - - Unreserved, undesignated: 499,332 195,477 92,006 401,633 17,543 Total Fund Balances 584,332 195,477 92,006 401,753 17,663 Total Liabilities and Fund Balance $ 587,416 $ 242,215 $ 92,100 $ 416,852 S 21,665 74 ASSETS Cash and investments Taxes receivable Special Assessments receivable Accounts receivable Rehabilitation loans receivable Due from other governments Accrued interest receivable Due from other funds Prepaid expenses Long-term receivable Property held for resale Total Assets LIABILITIES AND FUND BALANCE Liabilities: Accounts payable Salaries payable Accrued interest payable Due to other funds Due to other governments Deferred revenue Total Liabilities Fund balances: Reserved for: Prepaid expenses Rehab loans receivable Long term receivable Tax Increment Districts Advances to other funds Property held for resale Debt service Unreserved, designated for: Economic development Construction projects Unreserved, undesignated: Total Fund Balances Total Liabilities and Fund Balance City of Hopkins 3 of 8 Combining Balance Sheet Nonmajor Go\ ernmental Funds December 31. 2010 Special Re\enue Funds S 24,610 S 225 S 144 S II S 358 1 1, 540 3 966,967 441.704 298,515 337 - 1,003,574 441.929 144 298,529 358 120 75.000 206.469 369,524 (971,444) (233,676) (289,788) (971,324) (158,676) 206,469 (289,788) 369,524 S 32,250 S 283,253 S 206,613 S 8,741 S 369,882 75 Tax Tax Increment Tax Tax Increment District Increment Increment District Art Entertainment District District Oaks of Center District R.L. Johnson Sonoma Mainstreet S 100 S 207,813 S 206,177 S S 368,593 509 32.030 - 8,741 440 436 780 120 _ 75.000 S 31250 S 283.253 S 206,613 S 8,741 S 369,882 S 24,610 S 225 S 144 S II S 358 1 1, 540 3 966,967 441.704 298,515 337 - 1,003,574 441.929 144 298,529 358 120 75.000 206.469 369,524 (971,444) (233,676) (289,788) (971,324) (158,676) 206,469 (289,788) 369,524 S 32,250 S 283,253 S 206,613 S 8,741 S 369,882 75 City of Hopkins 4of8 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2010 Debt Service Special Revenue Funds Funds LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 393 $ 158,322 Tax 209,735 $ 79 Salaries payable Tax Tax Increment 24,364 - Accrued interest payable Increment Increment District 449 Housing Due to other funds District District Marketplace' 2,035,511 Bonds of Due to other governments Super Valu 5th Ave Flats & Main Total 1995 ASSETS - - 72,058 101,418 Cash and investments $ 439,016 $ $ - $ 3,536,960 $ 135,314 Taxes receivable - - 4,119 - Special Assessments receivable - - - 102,020 Accounts receivable 1,207 132,871 26,108 257,390 - Rehabilitation loans receivable - - - 66,988 - Due from other governments - - - 68,534 - Accrued interest receivable 929 - - 7,495 286 Due from other funds - - - 1,038,703 - Prepaid expenses - - - 360 - Long-term receivable - - - 75,000 - Property held for resale - - - 722,098 - Total Assets $ 441,152 $ 132,871 $ 26,108 $ 5,777,647 $ 237,620 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 393 $ 158,322 $ 25 $ 209,735 $ 79 Salaries payable - - - 24,364 - Accrued interest payable - 386 60 449 - Due to other funds - 182,247 28,172 2,035,511 - Due to other governments - - 348 - Deferred revenue - - 72,058 101,418 Total Liabilities 393 340,955 28,257 2,342,465 101,497 Fund balances: Reserved for: Prepaid expenses - - 360 - Rehab loans receivable - - 66,988 - Long term receivable - - 75,000 - Tax Increment Districts 440,759 - 1,016,752 - Advances to other funds - Property held for resale - - - 722,098 - Debt service - - - 136,123 Unreserved, designated for: Economic development - - 85,000 - Construction projects - Unreserved, undesignated: - (208,084) (2,149) 1,468,984 - Total Fund Balances 440,759 (208,084) (2,149) 3,435,182 136,123 Total Liabilities and Fund Balance ti 441 A 52 S 131871 S 26,108 $ 5,777,647 $ 237,620 76 Improvement Revolving Bonds of 1999 ASSETS Cash and investments S S Taxes receivable Special Assessments receivable Accounts receivable Rehabilitation loans receivable Due from other governments Accrued interest receivable Due from other funds Prepaid expenses Long-term receivable Property held for resale Total Assets S S LIABILITIES AND FUND BALANCE Liabilities: Accounts payable S S Salaries payable - Accrued interest payable Due to other funds Due to other governments Deferred revenue _ Total Liabilities Fund balances: Reserved for: Prepaid expenses Rehab loans receivable Long term receivable Tax Increment Districts Advances to other funds Property held for resale Debt service Unreserved, designated for: Economic development Construction projects Unreserved, undesignated: _ Total Fund Balances Total Liabilities and Fund Balance S S 77 S S 57 S 67 4.794 1,789- 4.851 1,856 114.884 340,029 _ 114.884 340,029 S S 119,735 S 341,885 City of Hopkins 5of8 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2010 Debt Sen'ice Funds Park and Recreational Taxable Taxable Refunding D Housing Housing Bonds of Improvement Improvement lmprovement 1993, Refunding Revolving Bonds of Bonds of Bonds of Bonds of 1999A 1999B 2001 2002 S S 114,324 S 339,173 5,170 1,994 241 718 S S 119,735 S 341,885 77 S S 57 S 67 4.794 1,789- 4.851 1,856 114.884 340,029 _ 114.884 340,029 S S 119,735 S 341,885 ASSETS Cash and investments Taxes receivable Special Assessments receivable Accounts receivable Rehabilitation loans receivable Due from other governments Accrued interest receivable Due from other funds Prepaid expenses Long-term receivable Property held for resale Total Assets LIABILITIES AND FUND BALANCE Liabilities: Accounts payable Salaries payable Accrued interest payable Due to other funds Due to other governments Deferred revenue Total Liabilities Fund balances: Reserved for: Prepaid expenses Rehab loans receivable Long term receivable Tax Increment Districts Advances to other funds Property held for resale Debt service Unreserved, designated for: Economic development Construction projects Unreserved, undesignated: Total Fund Balances Total Liabilities and Fund Balance City of Hopkins 6of8 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2010 Debt Service Funds $ 79 $ 63 $ 41 $ 356 $ 71 5,147 - - - 79 5,210 41 356 71 1,726,606 385,126 53,801 417,283 134,563 1,726,606 385,126 53,801 417,283 134,563 $ 1,726,685 $ 390,336 $ 53,842 $ 417,639 $ 134,634 78 Tax Tax Taxable Tax Increment Increment Increment Tax HRA Lease Bonds of 1996C Bonds of 1997 Bonds of 1996D Increment Revenue Refunding Refunding Refunding Bonds of Bonds of Bonds of Bonds of Bonds of 2002 2003 2005A 2005A 2005B $ 1,726,315 $ 384,167 $ 53,728 $ 416,757 $ 134,350 - 5,842 - - 370 327 114 882 284 $ 53,842 $ $ 134,634 417,639 $ 390,336 $ 1,726,685 $ 79 $ 63 $ 41 $ 356 $ 71 5,147 - - - 79 5,210 41 356 71 1,726,606 385,126 53,801 417,283 134,563 1,726,606 385,126 53,801 417,283 134,563 $ 1,726,685 $ 390,336 $ 53,842 $ 417,639 $ 134,634 78 City of Hopkins 7of8 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2010 Debt Semite Funds Tax Improvement Increment Capital Improvement Improvement Bonds of 2002 Bonds of 2002 Improvement Revolving Revolving Refunding Refunding Bonds of Bonds of Bonds of Bonds of Bonds of 2007A 2007B 2010A 201013 2010B ASSETS Cash and investments S 297,634 S 202.723 S S 314 S 474 Taxes receivable 19,808 4,548 - Special Assessments receivable Accounts receivable 700 Rehabilitation loans receivable Due from other governments Accrued interest receivable 630 429 1 1 Due from other funds Prepaid expenses Long-term receivable Property held for resale Total Assets S 318,072 S 207,700 S 700 S 315 S 475 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable S 125 S 67 S S S Salaries payable Accrued interest payable Due to other funds Due to other governments Deferred revenue 17,322 3.905 Total Liabilities 17,447 3.972 _ Fund balances: Reserved for: Prepaid expenses Rehab loans receivable Long term receivable Tax Increment Districts Advances to other funds Property held for resale Debt service 300.625 203.728 700 315 47, Unreserved, designated for: Economic development Construction projects Unreserved, undesignated: Total Fund Balances 300,625 203.728 700 315 475 Total Liabilities and Fund Balance S 318,072 S 207,700 S 700 S 315 S 475 79 City of Hopkins 8 of 8 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2010 Debt Service Funds Capital Project Funds LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 1,005 $ 2,256 $ 4,620 $ 6,876 $ Total Salaries payable - - Capital - Non -major Accrued interest payable - Park Improvement - Governmental Due to other funds Total Improvements Fund Total Funds ASSETS - - 348 Cash and investments $ 3,805,273 $ 219,421 $ 182,908 $ 402,329 $ 7,744,562 Taxes receivable 37,362 - 212 212 41,693 Special Assessments receivable 102,020 - - 102,020 Accounts receivable 700 - - - 258,090 Rehabilitation loans receivable - - - - 66,988 Due from other governments - - 43,161 43,161 111,695 Accrued interest receivable 4,283 463 387 850 12,628 Due from other funds - - - - 1,038,703 Prepaid expenses - - - - 360 Long-term receivable - 15,000 - 15,000 90,000 Property held for resale - - - - 722,098 Total Assets $ 3,949,638 $ 234,884 $ 226,668 $ 461,552 $ 10,188,837 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 1,005 $ 2,256 $ 4,620 $ 6,876 $ 217,616 Salaries payable - - - 24,364 Accrued interest payable - - - - 449 Due to other funds - - - - 2,035,511 Due to other governments - - 348 Deferred revenue 134,375 - 212 212 206,645 Total Liabilities 135,380 2,256 4,832 7,088 2,484,933 Fund balances: Reserved for: Prepaid expenses - - - - 360 Rehab loans receivable - - - - 66,988 Long term receivable. - 15,000 - 15,000 90,000 Tax Increment Districts - - - - 1,016,752 Advances to other funds - - - - - Property held for resale - - - - 722,098 Debt service 3,814,258 - - - 3,814,258 Unreserved, designated for: Economic development - - - - 85,000 Construction projects - 217,628 221,836 439,464 439,464 Unreserved, undesignated: - - - - 1,468,984 Total Fund Balances 3,814,258 232,628 221,836 454,464 7,703,904 Total Liabilities and Fund Balance $ 3,949,638 $ 234,884 $ 226,668 $ 461,552 $ 10,188,837 80 City of Hopkins I of 8 Combining Statement of Rexenues, Expenditures And Changes in Fund Balance Nonmajor Goy ernmental Funds For the Year Ended December 31, 2010 Special Rev enue Funds m State Real Estate Hennepin Chemical Economic Purchases County Assessment Development & Sales CDBG Para -Transit Revenues Property tax S S 72,244 S S S Tax increment Special assessments Intergovernmental revenue 177,356 6.792 5,450 16,920 Fees, licenses and permits Charges for services 127 3,700 Fines Investment earnings 36.587 925 Other 123 75.987 Total Revenues 177,479 191,737 4,625 5,450 16,920 Expenditures Current: General government Public safety 110.245 Health and welfare - 17,519 Highways and streets Urban redevelopment and housing 206.725 15.058 Recreation Capital outlay 20,751 - Debt Service: Principal retirement Interest and fiscal fees 60 Bond issuance costs Total Expenditures 130,996 206.725 - 15.118 17,519 Excess (deficiency) of revenues over expenditures 46.483 (14,988) 4,625 (9,668) (599) Other Financing Sources (Uses): Transfers in 3,492 11,599 Transfers out ( 61,000) - Refunding bonds issued Improvement bonds issued Discount on refunding debt Total Other Financing Sources (Uses) (61,000) 3,492 11,599 Net change in fund balances 46,483 (75,988) 4.625 (6,176) 11.000 Fund Balance (Deficit) - January 1 (101,947) 2,740.752 102,518 46,953 (11,000) Fund Balance (Deficit) - December 31 S (55.464) S ? 664,764 S 107,143 S 40,777 S m City of Hopkins 2of8 Combining Statement of Revenues, Expenditures And Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 31, 2010 Special Revenue Funds 82 Depot Housing Section 8 Coffee Rehab Parking Housing Communications House Revenues Property tax $ - $ - $ - $ $ - Tax increment - - - - Special assessments - - - Intergovernmental revenue - - - - 4,500 Fees, licenses and permits - - - 200,739 - Charges for services - 53,199 - - 60,501 Fines - 19,775 Investment earnings 4,452 1,721 681 2,946 44 Other - - - - 23,655 Total Revenues 4,452 74,695 681 203,685 88,700 Expenditures Current: General government - - - 88,711 - Public safety - 59,262 - Health and welfare - - - Highways and streets - 21,750 - - - Urban redevelopment and housing 98,339 94 - - Recreation - - 107,655 Capital outlay 14,450 - 25,395 - Debt Service: Principal retirement - - Interest and fiscal fees - - - - Bond issuance costs Total Expenditures 98,339 95,462 94 114,106 107,655 Excess (deficiency) of revenues over expenditures (93,887) (20,767) 587 89,579 (18,955) Other Financing Sources (Uses): Transfers in - - - - - Transfers out (3,492) - - (86,920) - Refunding bonds issued - - Improvement bonds issued - - - Discount on refunding debt Total Other Financing Sources (Uses) (3,492) - - (86,920) - Net change in fund balances (97,379) (20,767) 587 2,659 (18,955) Fund Balance (Deficit) - January 1 681,711 216,244 91,419 399,094 36,618 Fund Balance (Deficit) - December 31 $ 584,332 $ 195,477 $ 92,006 $ 401,753 $ 17,663 82 Revenues Property tax Tax increment Special assessments Intergovernmental revenue Fees, licenses and permits Charges for services Fines Investment earnings Other Total Revenues Expenditures Current: General government Public safety Health and welfare Highways and streets Urban redevelopment and housing Recreation Capital outlay Debt Service: Principal retirement Interest and fiscal fees Bond issuance costs Total Expenditures Excess (deficiency) of revenues over expenditures Other Financing Sources (Uses): Transfers in Transfers out Refunding bonds issued Improvement bonds issued Discount on refunding debt Total Other Financing Sources (Uses) Net change in fund balances Fund Balance (Deficit) - January I Fund Balance (Deficit) - December 31 City of Hopkins 3 of 8 Combining Statement of Revenues, Expenditures And Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 31. 2010 Special Revenue Funds Tax (41.205) 160,828 Tax Increment Tax Tax Increment District Increment Increment District Art Entertainment District District Oaks of Center District R.L. Johnson Sonoma Mainstreet S S S S S 58,259 318,497 10.320 153,726 9,738 448,047 8.741 1,642 1,500 22 2,658 2.840 13,169 1,910 6,268 728.505 75.000 23.266 728,505 101.106 13,169 1,910 6,268 (220.893) (41,205) 306,828 17,173 159,854 147,920 (146,000) (134,000) (72,973) (41.205) 160,828 17,173 25.854 (898.351) (117.471) 45.641 (306,961) 343,670 S (971,324) S (158.676) S 206.469 S (289,788) S 369,524 83 Revenues Property tax Tax increment Special assessments Intergovernmental revenue Fees, licenses and permits Charges for services Fines Investment earnings Other Total Revenues Expenditures Current: General government Public safety Health and welfare Highways and streets Urban redevelopment and housing Recreation Capital outlay Debt Service: Principal retirement Interest and fiscal fees Bond issuance costs Total Expenditures Excess (deficiency) of revenues over expenditures Other Financing Sources (Uses): Transfers in Transfers out Refunding bonds issued Improvement bonds issued Discount on refunding debt Total Other Financing Sources (Uses) Net change in fund balances Fund Balance (Deficit) - January 1 Fund Balance (Deficit) - December 31 City of Hopkins Combining Statement of Revenues, Expenditures And Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 31, 2010 Special Revenue Funds 4of8 Debt Service Funds Tax Tax Tax Increment Increment Increment Housing District 5th Avenue Marketplace Bonds of Super Valu Flats & Main Total 1995 $ $ 72,244 $ - 1,587,598 19,117 2,147,517 - _ 99,259 220,756 - _ 200,739 - _ _ 574,315 - _ 19,775 - 2,523 - - 55,701 469 1,630 10,929 26,108 197,997 - 1,591,751 30,046 26,108 3,489,044 99,728 - 88,711 79 - - 169,507 - - _ - 17,519 - _ - - 21,750 - 1,279,489 172,550 10,168 1,806,610 - _ - - 836,160 - _ _ - 135,596 - 85,000 - 1,626 228 25,180 11,400 1,279,489 174,176 10,396 3,101,033 96,479 312,262 (144,130) (188,000) - (188,000) - 124,262 (144,130) 15,712 388,011 163,011 (619,412) 3,249 15,712 (68,390) 3,249 316,497 (63,954) (17,861) 3,503,572 132,874 $ 440,759 $ (208,084) $ (2,149) $ 3,435,182 $ 136,123 84 City of Hopkins 5 of 8 Combining Statement of Revenues, Expenditures S S And Changes in Fund Balance 104,393 S 57,034 Nonmajor Governmental Funds For the Year Ended December 3 I, 2010 Debt Service Funds Park and Intergovernmental revenue Recreational Taxable Taxable Refunding D Improvement Housing Housing Bonds of Improvement Revolving Improvement Improvement 1993 Refunding Revolving Bonds of Bonds of Bonds of Bonds of Bonds of 1999 1999A 1999B 2001 2002 Revenues Property tax S S S S 104,393 S 57,034 Tax increment Special assessments Intergovernmental revenue Fees, licenses and permits Charges for services Fines Investment earnings 148 723 Other Total Revenues 104,541 57,757 Expenditures Current: General government 282 408 57 67 Public safety Health and welfare Highways and streets Urban redevelopment and housing Recreation Capital outlay Debt Service: Principal retirement 105,000 1,075.000 1,905,000 135,000 105,000 Interest and fiscal fees 3,012 41,870 77,172 6,702 14,425 Bond issuance costs - - Total Expenditures 108,012 1,1 17,152 1,982.580 141,759 119,492 Excess (deficiency) of revenues over expenditures 1198,(112) (L] 17,152) (1,982,580) (37,218) (61,735) Other Financing Sources (Uses): Transfers in - 903,498 1,578.495 273,219 Transfers out (631) - Refunding bonds issued - Improvement bonds issued Discount on refunding debt - Total Other Financing Sources (Uses) (631) 903,498 1,578,495 - 273,219 Net change in fund balances (108,643) (213.654) (404,085) (37,218) 21 1.484 Fund Balance (Deficit) - January 1 108,643 213,654 404,085 152,102 128.545 Fund Balance (Deficit) - December 31 S - S - S - S 114,884 S 340.029 85 Revenues Property tax Tax increment Special assessments Intergovernmental revenue Fees, licenses and permits Charges for services Fines Investment earnings Other Total Revenues Expenditures Current: General government Public safety Health and welfare Highways and streets Urban redevelopment and housing Recreation Capital outlay Debt Service: Principal retirement Interest and fiscal fees Bond issuance costs Total Expenditures Excess (deficiency) of revenues over expenditures Other Financing Sources (Uses): Transfers in Transfers out Refunding bonds issued Improvement bonds issued Discount on refunding debt Total Other Financing Sources (Uses) Net change in fund balances Fund Balance (Deficit) - January 1 Fund Balance (Deficit) - December 31 City of Hopkins 6of8 Combining Statement of Revenues, Expenditures And Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 31, 2010 Debt Sery ice Funds $ - $ 193,317 $ Tax Tax Taxable Tax 434 396 Increment Increment Increment Tax HRA Lease Bonds of 1996C Bonds of 1997 Bonds of 1996D Increment Revemue Refunding Refunding Refunding Bonds of Bonds of Bonds of Bonds of Bonds of 2002 2003 2005A 2005A 2005B $ - $ 193,317 $ 146,000 105,000 1,739,512 434 396 301 2,245 417 434 193,713 301 2,245 417 125,815 $ 1,726,606 $ 385,126 $ 53,801 $ 417,283 $ 134,563 79 63 41 356 71 100,000 125,000 5,000 190,000 90,000 84,084 91,669 18,376 17,471 6,598 184,163 216,732 23,417 207,827 96,669 (183,729) (23,019) (23,116) (205,582) (96,252) 1,739,512 29,000 146,000 105,000 1,739,512 - 29,000 146,000 105,000 1,555,783 (23,019) 5,884 (59,582) 8,748 170,823 408,145 47,917 476,865 125,815 $ 1,726,606 $ 385,126 $ 53,801 $ 417,283 $ 134,563 W City of Hopkins 7 of 8 Combining Statement of Revenues, Expenditures And Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 3 I, 2010 87 Debt Service Funds Tax Improvement Increment Improvement Improvement Bonds of 2002 Bonds of 2002 Capital Resolving Revolving Refunding Refunding Improvement Bonds of Bonds of Bonds of Bonds of Bondsof2007A 200713 2010A 2010B 20108 Revenues Property tax S 691.104 S 178,817 S S S Tax increment Special assessments Intergovernmental revenue Fees, licenses and permits Charges for services Fines Investment earnings 336 171 15 1 Other Total Revenues 691,104 179,153 171 15 1 Expenditures Current: General government 125 67 Public safety Health and welfare Highways and streets Urban redevelopment and housing Recreation Capital outlay Debt Service: Principal retirement 485.000 165.000 Interest and fiscal fees 370,973 73,208 Bond issuance costs 29,569 2,500 17,164 Total Expenditures 856.098 238,275 29,569 1500 17,164 Excess (deficiency) of revenues over expenditures (164,994) (59,122)29,398) (� (2,485) (17,163) Other Financing Sources (Uses): Transfers in 145.000 71.900 _ Transfers out - - (2,652,802 (215,000) (1.551,512) Refunding bonds issued - 220,000 1.585.000 Improvement bonds issued 2,710,000 _ Discount on refunding debt (27,100) (2,200 (15,850) Total Other Financing Sources (Uses) 145.000 71,900 30,098 2,800 17,638 Net change in fund balances (19.994) 12.778 700 315 475 Fund Balance (Deficit) - January 1 320,619 190.950 Fund Balance (Deficit) - December 31 S 300,625 S 203.728 S 700 S 315 S 475 87 City of Hopkins 8of8 Combining Statement of Revenues, Expenditures And Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended December 31, 2010 Revenues Property tax Tax increment Special assessments Intergovernmental revenue Fees, licenses and permits Charges for services Fines Investment earnings Other Total Revenues Expenditures Current: General government Public safety Health and welfare Highways and streets Urban redevelopment and housing Recreation Capital outlay Debt Service: Principal retirement Interest and fiscal fees Bond issuance costs Total Expenditures Excess (deficiency) of revenues over expenditures Other Financing Sources (Uses): Transfers in Transfers out Refunding bonds issued Improvement bonds issued Discount on refunding debt Total Other Financing Sources (Uses) Net change in fund balances Fund Balance (Deficit) - January I Fund Balance (Deficit) - December 31 Debt Service Funds Capital Projects Funds 1,695 - - - 90,406 169,507 17,519 21,750 1,806,610 836,160 16,414 96,044 112,458 248,054 4,570,000 - 4,570,000 816,960 - - 842,140 49,233 - 49,233 5,437,888 16,414 96,044 112,458 8,651,379 (4,108,308) (13,895) 4,991,624 (4,419,945) 1,805,000 2,710,000 - (45,150) - 5,041,529 933,221 (13,895) (14,046) (27,941) (3,748,238) - 5,154,635 - - (5,039,357) - - 1,805,000 - - 2,710,000 (45,150) - 4,585,128 (14,046) (27,941) 836,890 2,881,037 246,523 235,882 482,405 6,867,014 $ 3,814,258 $ 232,628 $ 221,836 $ 454,464 $ 7,703,904 M Total Capital Non -major Park Improvement Governmental Total Improvements Fund Total Funds $ 1,224,665 $ - $ - $ $ 1,296,909 2,147,517 99,259 - - - 99,259 _ - 75,000 75,000 295,756 - - 200,739 574,315 19,775 5,656 1,519 1,454 2,973 64,330 - 1,000 5,544 6,544 204,541 1,329,580 2,519 81,998 84,517 4,903,141 1,695 - - - 90,406 169,507 17,519 21,750 1,806,610 836,160 16,414 96,044 112,458 248,054 4,570,000 - 4,570,000 816,960 - - 842,140 49,233 - 49,233 5,437,888 16,414 96,044 112,458 8,651,379 (4,108,308) (13,895) 4,991,624 (4,419,945) 1,805,000 2,710,000 - (45,150) - 5,041,529 933,221 (13,895) (14,046) (27,941) (3,748,238) - 5,154,635 - - (5,039,357) - - 1,805,000 - - 2,710,000 (45,150) - 4,585,128 (14,046) (27,941) 836,890 2,881,037 246,523 235,882 482,405 6,867,014 $ 3,814,258 $ 232,628 $ 221,836 $ 454,464 $ 7,703,904 M City of Hopkins State Chemical Assessment Team Fund Special Revenue Fund Schedule of Revenues. Expenditures and Changes in Fund Balance - Budget and Actual Year Ended December 31, 2010 Variance with 89 Original and final budget final positive budget Actual (negative) Revenues: Intergovernmental revenue: State grant $ 45,000 $ 177,356 S 132,356 Other - 123 123 45.000 177,479 132,479 Expenditures: Salaries and employee benefits 37,200 48,049 (10,849) Materials, supplies and services 12.792 62,196 (49,404) Capital outlay - 20,751 (20,751) Total Expenditures 49,992 130,996 (81,004) Net change in fund balance (4,992) 46,483 51,475 Fund Balance - January 1 (101,947) (101,947) Fund Balance - December 31 (106,939) $ (55,464) $ 51,475 89 City of Hopkins Economic Development Special Revenue Fund Statement of Revenues, Expenditures , and Changes in Fund Balance - Budget and Actual Year Ended December 31, 2010 Revenues: General property taxes Intergovernmental revenue: County grant Charges for services Investment earnings Other Total Revenues Expenditures: Salaries and employee benefits Materials, supplies and services Total Less expenditures charged to other activities Net Other Financing Sources (Uses): Transfer to Art Center Fund Net change in fund balance Fund Balance - January 1 Variance with Original and final budget final positive budget Actual (negative) $ 75,000 $ 72,244 $ (2,756) - 6,792 6,792 - 127 127 14,000 36,587 22,587 12,000 75,987 63,987 101,000 191,737 90,737 167,889 161,712 6,177 69,124 85,013 (15,889) 237,013 246,725 (9,712) (40,000) (40,000) - 197,013 206,725 (9,712) (61,000) (61,000) - (157,013) (75,988) 81,025 2,740,752 2,740,752 - Fund Balance - December 31 $ 2,583,739 $ 2,664,764 $ 81,025 90 City of Hopkins Real Estate Purchases and Sales Special Revenue Fund Schedule of Revenues. Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Charges for services Investment earnings Total Revenues Expenditures: Materials, supplies and services Net change in fund balance Year Ended December 31, 2010 Variance with Original and - January 1 final budget final Fund Balance positive budget Actual (negative) $ 3.700 $ 3,700 $ - 2,100 925 (1,175) 5,800 4,625 (1,175) 5,800 4,625 (1,175) Fund Balance - January 1 1022.5 18 102.518 - Fund Balance - December 31 $ 108,318 $ 107,143 S (1,175) K City of Hopkins Para -Transit Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Intergovernmental: State grant (Para -Transit) Charges for services Total Revenues Expenditures: Salaries and employee benefits Materials, supplies and services Total Expenditures Other Financing Sources: Transfer from the General Fund Net change in fund balance Fund Balance - January 1 Fund Balance - December 31 Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 16,920 $ 16,920 $ 1,300 - (1,300) 18,220 16,920 (1,300) 5,632 924 4,708 8,750 16,595 (7,845) 14,382 17,519 (3,137) 4,420 11,599 7,179 8,258 11,000 2,742 (11,000) (11,000) $ (2,742) $ - $ 2,742 92 City of Hopkins Housing Rehab Special Revenue Fund Schedule of Revenues. Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Investment earnings Total Revenues Expenditures: Salaries and employee benefits Materials, supplies and services Total Expenditures Other Financing Uses: Transfer to CDBG Fund Year Ended December 31, 2010 Original and final budget Actual Variance with final budget positive (negative) $ 20,000 $ 4,452 $ (15,548) 20,000 4,452 (15,548) 74,401 79,710 (5,309) 24,457 18,629 5,828 98,858 98,339 519 (3,492) (3,492) Net change in fund balance (78,858) (97,379) (19,559) Fund Balance - January 1 681.711 681.711 - Fund Balance - December 31 $ 602.853 $ 584,332 $ (19,559) 93 City of Hopkins Parking Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Court fines Charges for services Investment earnings Total Revenues Expenditures: Salaries and employee benefits Materials, supplies and services Capital outlay Total Expenditures Net change in fund balance Fund Balance - January 1 Fund Balance - December 31 Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 20,000 $ 19,775 $ (225) 58,000 53,199 (4,801) 7,500 1,721 (5,779) 85,500 74,695 (10,805) 46,969 42,335 4,634 46,790 38,677 8,113 13,000 14,450 (1,450) 106,759 95,462 11,297 (21,259) (20,767) 492 216,244 216,244 - $ 194,985 $ 195,477 $ 492 94 City of Hopkins Communications Special Revenue Fund Schedule of Revenues. Expenditures and Changes in Fund Balance - Budget and Actual Year Ended December 31, 2010 95 Variance with Original and final budget final positive budget Actual (negative) Revenues: Franchise fees $ 200,000 $ 200,739 $ 739 Investment earnings 5,000 2.946 (2,054) Total Revenues 205.000 203,685 (1,315) Expenditures: Salaries and employee benefits 32,812 29,571 3,241 Materials, supplies and services 60,700 59,140 1,560 Capital outlay 20,000 25,395 (5,395) Total Expenditures 113,512 114,106 (594) Excess of revenues over expenditures 91.488 89,579 (1,909) Other Financing Uses: Transfer to Art Center Fund (86,920) (86,920) - Net change in fund balance 4,568 2,659 (1,909) Fund Balance - January 1 399.094 399,094 - Fund Balance - December 31 $ 403.662 $ 401,753 $ (1,909) 95 City of Hopkins Depot Coffee House Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Intergovernmental: State grant Charges for services Investment earnings Contributions Total Revenues Expenditures: Salaries and employee benefits Materials, supplies and services Capital outlay Total Expenditures Net change in fund balance Fund Balance - January 1 Fund Balance - December 31 Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 4,000 $ 4,500 $ 500 61,000 60,501 (499) 1,000 44 (956) 44,000 23,655 (20,345) 110,000 88,700 (21,300) 76,458 73,662 2,796 47,037 33,993 13,044 8,000 - 8,000 131,495 107,655 23,840 (21,495) (18,955) 2,540 36,618 36,618 - $ 15,123 $ 17,663 $ 2,540 96 City of Hopkins Art Center Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Charges for services Other Total Revenues Expenditures: Salaries and employee benefits Materials, supplies and services Total Expenditures Other Financing Sources Transfer from other funds Net change in fund balance Fund Balance - January 1 Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 638,106 $ 448,047 $ (190,059) 23.995 59,565 35,570 662.101 507,612 (154,489) 374,956 401,420 776,376 356,825 18,131 371.680 29,740 728,505 47,871 147,920 147,920 33.645 (71973) (106,618) (898,351) (898,351) Fund Balance - December 31 $ (864,706) $ (971.324) $ (106,618) 97 City of Hopkins Tax Increment 1.2 - Entertainment Center Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Revenues: Taxes: Tax increment Investment earnings Total Revenues Expenditures: Materials, supplies and services Capital outlay: Public improvements Debt Service: Interest and fiscal fees Total Expenditures Net change in fund balance Year Ended December 31, 2010 Original and final budget Actual Variance with final budget positive (negative) $ 55,000 $ 58,259 $ 3,259 1,500 1,642 142 56,500 59,901 3,401 3,000 2,840 160 75,000 75,000 - 23,266 (23,266) 78,000 101,106 (23,106) (21,500) (41,205) (19,705) Fund Balance - January 1 (117,471) (117,471) - Fund Balance - December 31 $ (1 38,971) $ (158,676) $ (19,705) 98 City of Hopkins Tax Increment 2.1 - R.L. Johnson Company Special Revenue Fund Schedule of Revenues. Expenditures and Changes in Fund Balance - Budget and Actual Year Ended December 31, 2010 Revenues: Taxes: Tax increment Investment earnings Total Revenues Expenditures: Materials, supplies and services Other Financing Uses Transfer to debt service, 1997 - HRA Net change in fund balance Fund Balance - January 1 Fund Balance - December 31 Original and final budget Actual Variance with final budget positive (negative) $ - S 318,497 $ 318,497 1.000 1,500 500 1,000 319,997 318,997 13,848 13,169 679 (212.000) (146,000) 66,000 (224,848) 160,828 385,676 45,641 45,641 - $ (179.207) $ 206,469 S 385,676 City of Hopkins Tax Increment 2.6 Sonoma Project Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended December 31, 2010 Revenues: Taxes: Tax increment Investment earnings Other Expenditures: Materials, supplies and services Net change in fund balance Fund Balance (Deficit) - January 1 Fund Balance (Deficit) - December 31 Original and final budget Actual Variance with final budget positive (negative) $ 10,400 $ 10,320 $ (80) 350 22 (328) 8,624 8,741 117 19,374 19,083 (291) 1,900 1,910 (10) 17,474 17,173 (301) (306,961) (306,961) - $ (289,487) $ (289,788) $ (301) 100 City of Hopkins Tax Increment 2.9 Oaks of Mainstreet Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Taxes Tax increment Intergovernmenal Market value aid credit Investment earnings Total Revenues Expenditures Materials, supplies and services Other Financing Uses: Transfer out for debt service Net change in fund balance Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 160,000 $ 153,726 $ (6,274) 10,500 9,738 (762) 4,000 2,658 (1,342) 174,500 166,122 (8,378) 6,196 6,268 (72) (134,000) (134,000) - 34,304 25,854 (8,450) Fund Balance - January 1 343,670 343,670 - Fund Balance - December 31 $ 377,974 $ 369,524 $ (8,450) tell City of Hopkins Tax Increment 2.11 Super Valu Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Taxes: Tax Increments Investment earnings Other Total Revenues Expenditures: Materials, supplies and services Capital outlay: Site Improvements Total Expenditures Other Financing Sources (Uses): Transfer out for debt service Net change in fund balance Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 600,000 $ 1,587,598 $ 987,598 5,000 2,523 (2,477) 1,630 1,630 605,000 1,591,751 986,751 35,526 42,605 (7,079) 211,600 1,236,884 (1,025,284) 247,126 1,279,489 (1,032,363) (188,000) (188,000) 169,874 124,262 (45,612) Fund Balance - January 1 316,497 316,497 - Fund Balance - December 31 $ 486,371 $ 440,759 $ (45,612) 102 City of Hopkins Tax Increment 1.3 - 5th Avenue Flats Special Revenue Fund Schedule of Revenues. Expenditures and Changes in Fund Balance - Budget and Actual Year Ended December 31, 2010 Variance with 103 Original and final budget final positive budget Actual (negative) Revenues: Tax increment $ 2,400 $ 19,117 $ 16,717 Other 5,000 10,929 5,929 Total Revenues 7,400 30,046 22,646 Expenditures: Materials, supplies and services 7,850 172,550 (164,700) Debt service: Interest - 1,626 (1,626) Total Expenditures 7.850 174,176 (166,326) Net change in fund balance (450) (144,130) (143,680) Fund Balance - January 1 (63,954) (63,954) - Fund Balance - December 31 $ (64,404) $ (208,084) $ (143,680) 103 City of Hopkins Tax Increment 1.4 - Marketplace & Main Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Revenues: Tax increment Other Total Revenues Expenditures: Materials, supplies and services Debt service: Interest Total Expenditures Net change in fund balance Year Ended December 31, 2010 Variance with Original and final budget final positive budget Actual (negative) $ 1,200 $ - $ (1,200) - 26,108 26,108 1,200 26,108 24,908 2,850 10,168 (7,318) 228 (228) 2,850 10,396 (7,546) (1,650) 15,712 17,362 Fund Balance - January 1 (17,861) (17,861) - Fund Balance - December 31 $ (1 9,511) $ (2,149) $ 17,362 104 CITY OF HOPKINS, MINNESOTA NONMAJOR PROPRIETARY FUNDS Enterprise Funds are established to account for the financing of self-supporting activities of governmental units, which render services to the general public on a user charge basis. Records are maintained on the accrual basis of accounting. The Authority for these types of funds is derived from Section 11.01 of the City Charter, which allows for utility or other public service enterprise funds. The City has six Enterprise Funds, two of which are considered to be nonmajor, they are: Refuse Utility Fund — This fund accounts operations of the city owned refuse service. Housing Authority Fund — This fund accounts for the operations of the city owned federally subsidized apartment building. 105 ASSETS Current assets Cash and investments Accounts receivable Accrued interest receivable Due from other governments Inventory Prepaid expenses Total current assets Noncurrent assets Capital Assets: Land Construction in progress Buildings and structures Distribution system Machinery and equipment Less accumulated depreciation Total noncurrent assets Total Assets LIABILITIES Current Liabilities: Accounts payable Salaries payable Due to other funds Due to other governments Compensated absences Total Current Liabilities Noncurrent Liabilities: Compensated absences Net OPEB liability Total Liabilities NET ASSETS Invested in capital assets Unrestricted Total net assets City of Hopkins Combining Statement of Net Assets Nonmajor Enterprise Funds December 31, 2010 Nonmajor Business -type Activities -Enterprise Funds Nonmajor Refuse Housing Proprietary Funds Utility Authority Total $ 481,095 $ 664,816 $ 1,145,911 47,255 1,690 48,945 1,021 - 1,021 - 60,115 60,115 3,958 - 3,958 - 17,723 17,723 533,329 744,344 1,277,673 4,144 5,181 9,325 - 119,392 119,392 - 485,562 485,562 302,727 3,350,816 3,653,543 2,584 - 2,584 604,038 52,916 656,954 (500,217) (2,637,813) (3,138,030) 409,132 1,370,873 1,780,005 942,461 2,115,217 3,057,678 22,207 24,663 46,870 5,232 - 5,232 - 27,828 27,828 5,470 - 5,470 10,518 14,253 24,771 43,427 66,744 110,171 4,771 - 4,771 4,144 5,181 9,325 8,915 5,181 14,096 52,342 71,925 409,132 1,370,873 480,987 672,419 $ 890,119 $ 2,043,292 IOlt 124,267 1,780,005 1,153,406 $ 2,933,411 City of Hopkins Combining Statement of Revenues, Expenses and Changes in Net Assets Nonmajor Enterprise Funds For the Year Ended December 31, 2010 Operating expenses Cost of sales and service Nonmajor Business -type Activities -Enterprise Funds 852,355 Administration 149,034 Nonmajor 233,732 Refuse Housing Proprietary Funds 194,635 Utility Authority Total Operating revenues: Total net assets - ending Operating income (loss) 1 13,817 Charges for services $ 840,214 $ 234,703 $ 1,074,917 Other 12,001 23,685 35,686 Total Operating Revenues 852,215 258,388 1,110,603 Operating expenses Cost of sales and service 543,392 308,963 852,355 Administration 149,034 84,698 233,732 Depreciation 45,972 148,663 194,635 Total Operating Expenses 738,398 542,324 1,280,722 Total net assets - ending Operating income (loss) 1 13,817 (283,936) (170,1 19) Nonoperating revenues (expenses): Investment earnings 3,465 3,465 Intergovernmental grants 34,195 182,401 216,596 Total nonoperating revenues (expenses) 37,660 182,401 220,061 Income (loss) before contributions and transfers 151,477 (101,535) 49,942 Capital contributions Building improvements 328,515 328,515 Transfers out (25,000) (25,000) Change in net assets 126,477 226,980 353,457 Total net assets - beginning 763,642 1,816,312 2,579,954 Total net assets - ending $ 890'] 19 S 2,043,292 $ 2,933,411 107 City of Hopkins Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended December 31, 2010 Cash Flows from Capital and Related Financing Activities: Purchases of capital assets Cash Flows From Investing Activities Interest received Net increase (decrease) in cash and investments Cash and Investments - January 1 Cash and Investments - December 31 Reconciliation of operating loss to net cash used by operating activities: Operating income (loss) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation expense (Increase) decrease in: Accounts receivable Inventory Prepaid expense Increase(decrease)in: Accounts, compensated absences and accrued interest payable Due to other funds Net Cash Used by Operating Activities 108 (304,014) (304,014) 3,154 3,154 157,922 57,629 215,551 323,173 607,187 930,360. $ 481,095 $ 664,816 $ 1,145,911 $ 113,817 $ (283,936) $ (170,119) 45,972 148,663 194,635 (5,866) (26,717) (32,583) (1,927) - (1,927) (619) (619) (6,423) 5,956 (467) - 7,380 7,380 $ 145,573 $ (149,273) $ (3,700) Nonmajor Business -type Activities -Enterprise Funds Nonmajor Refuse Housing Proprietary Funds Utility Authority Total Cash Flows from Operating Activities Receipts from customers and users $ 846,349 $ 231,671 $ 1,078,020 Internal activity -payments from other funds 7,380 7,380 Payments to suppliers (355,035) (305,335) (660,370) Payments to employees (196,707) (82,989) (279,696) Payments for interfund services used (149,034) (149,034) Net cash used by operating activities 145,573 (149,273) (3,700) Cash Flows from Noncapital Financing Activities Intergovernmental grants 34,195 510,916 545,111 Transfers (to) from other funds (25,000) (25,000) Net cash provided (used) by noncapital and related financing activities 9,195 510,916 520,111 Cash Flows from Capital and Related Financing Activities: Purchases of capital assets Cash Flows From Investing Activities Interest received Net increase (decrease) in cash and investments Cash and Investments - January 1 Cash and Investments - December 31 Reconciliation of operating loss to net cash used by operating activities: Operating income (loss) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation expense (Increase) decrease in: Accounts receivable Inventory Prepaid expense Increase(decrease)in: Accounts, compensated absences and accrued interest payable Due to other funds Net Cash Used by Operating Activities 108 (304,014) (304,014) 3,154 3,154 157,922 57,629 215,551 323,173 607,187 930,360. $ 481,095 $ 664,816 $ 1,145,911 $ 113,817 $ (283,936) $ (170,119) 45,972 148,663 194,635 (5,866) (26,717) (32,583) (1,927) - (1,927) (619) (619) (6,423) 5,956 (467) - 7,380 7,380 $ 145,573 $ (149,273) $ (3,700) CITY OF HOPKINS, MINNESOTA INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the government, on a cost reimbursement basis. Revenues and expenses are recognized on the accrual basis. Revenues are recognized in the accounting period in which they are earned and become objectively measurable; expenses are recognized in the period incurred, if objectively measurable. Equipment Replacement Fund — This fund accounts for the acquisition of machinery and equipment. User charges are billed to the various City departments. Insurance Risk Fund — This fund accounts for the dividends and deductibles relating to property and casualty insurance coverage. Deductibles are paid from past dividends. Users are charged only if the fund has a shortfall. Employee Benefits Fund — This fund accounts for accrued employee benefits within the governmental funds. User charges are billed to the various departments. 109 City of Hopkins Combining Statement of Net Assets Internal Service Funds December 31, 2010 Property and equipment Machinery and equipment 6,666,121 - - 6,666,121 Less accumulated depreciation (3,798,545) - - (3,798,545) Net property and equipment 2,867,576 - - 2,867,576 Total Assets 3,866,972 165,537 998,928 5,031,437 LIABILITIES Current Liabilities: Accounts payable 6,205 49,121 - 55,326 Accrued interest payable 3,254 - - 3,254 Compensated absences payable - - 673,660 673,660 Capital lease - current 37,315 - - 37,315 Total Current Liabilities 46,774 49,121 673,660 769,555 Noncurrent Liabilities Compensated absences payable - - 192,793 192,793 Capital lease payable 318,241 - - 318,241 Total Noncurrent Liabilities 318,241 - 192,793 511,034 Total Liabilities 365,015 49,121 866,453 1,280,589 NET ASSETS Invested in capital assets, net of related debt 2,512,020 - - 2,512,020 Unrestricted 989,937 116,416 132,475 1,238,828 Total Net Assets $ 3,501,957 $ 116,416 $ 132,475 $ 3,750,848 110 Internal Equipment Insurance Employee Service Replacement Risk Benefits Fund Total ASSETS Current assets: Cash and investments $ 929,273 $ 163,767 $ 996,861 $ 2,089,901 Accounts receivable 50 1,424 - 1,474 Advance to other funds 68,106 - - 68,106 Accrued interest receivable 1,967 346 2,067 4,380 Total current assets 999,396 165,537 998,928 2,163,861 Property and equipment Machinery and equipment 6,666,121 - - 6,666,121 Less accumulated depreciation (3,798,545) - - (3,798,545) Net property and equipment 2,867,576 - - 2,867,576 Total Assets 3,866,972 165,537 998,928 5,031,437 LIABILITIES Current Liabilities: Accounts payable 6,205 49,121 - 55,326 Accrued interest payable 3,254 - - 3,254 Compensated absences payable - - 673,660 673,660 Capital lease - current 37,315 - - 37,315 Total Current Liabilities 46,774 49,121 673,660 769,555 Noncurrent Liabilities Compensated absences payable - - 192,793 192,793 Capital lease payable 318,241 - - 318,241 Total Noncurrent Liabilities 318,241 - 192,793 511,034 Total Liabilities 365,015 49,121 866,453 1,280,589 NET ASSETS Invested in capital assets, net of related debt 2,512,020 - - 2,512,020 Unrestricted 989,937 116,416 132,475 1,238,828 Total Net Assets $ 3,501,957 $ 116,416 $ 132,475 $ 3,750,848 110 CITY OF HOPKINS. MINNESOTA Combining Statement of Revenues Expenses, and Changes in Net Assets Internal Service Funds Year Ended December 31, 2010 Equipment Insurance Employee Replacement Risk Benefits Total Operating revenues: Charges for services $ 292,867 $ 45.757 $ Operating expenses (excluding depreciation): Materials, supplies and services Operating income before depreciation Depreciation expense Operating loss Nonoperating revenues (expenses): Investment earnings Loss on sale of property and equipment Interest expense Total nonoperating revenues Change in net assets Fund Equity: Net assets - January 1 Net assets - December 31 - $ 338,624 25,288 70,207 - 95,495 267,579 (24,450) - 243,129 471,971 - - 471,971 (204.392) (24,450) - (228,842) 6.721 947 7.433 15,101 (5,151) - - (5,151) (18,333) - - (18,333) (16.763) 947 7,433 (8,383) (221,155) (23,503) 7,433 (237,225) 3.723,112 139,919 125,042 3,988,073 S 3,501,957 $ 116,416 $ 132,475 $ 3,750,848 City of Hopkins Combining Statement of Cash Flows Internal Service Funds For the Year Ended December 31, 2010 Cash Flows from Operating Activities Receipts from customers and users Receipts from interfund services provided Payments to suppliers Payments for interfund services used Payments for interfund services used Net cash provided (used) by operating activities Cash Flows from Capital and Related Financing Activities: Purchases of capital assets Proceeds from sales of capital assets Interest and other payments Capital lease payments Net cash used by capital and related financing activities Cash Flows From Investing Activities Net increase (decrease) in cash and cash equivalents Cash and Cash Equivalents - January 1 Cash and Cash Equivalents - December 31 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense (Increase) decrease in: Accounts receivable Due from other funds Increase (decrease)in: Accounts, compensated absences and accrued intereset payable Net Cash Provided (Used) by Operating Activities Noncash Investing, capital and financing activities Capital asset loss Equipment Insurance Employee Replacement Risk Benefits Totals $ - $ 51,346 $ - $ 51,346 315,960 - - 315,960 (19,029) (23,874) - (42,903) (10,798) - (10,798) _ - 19,966 19,966 286,133 27,472 19,966 333,571 (496,491) - - (496,491) 13,760 - - 13,760 (18,333) - - (18,333) (35,559) - - (35,559) (536,623) - - (536,623) 7,326 899 7,400 15,625 (243,164) 28,371 27,366 (187,427) 1,172,437 135,396 969,495 2,277,328 $ 929,273 $ 163,767 $ 996,861 $ 2,089,901 $ (204,392) $ (24,450) $ - $ (228,842) 471,971 - - 471,971 (50) 5,589 - 5,539 23,143 - - 23,143 (4,539) 46,333 19,966 61,760 $ 286,133 $ 27,472 $ 19,966 $ 333,571 $ (5,151) $ - $ - $ 112 CITY OF HOPKINS, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2009 SECTION III STATISTICAL SECTION 113 CITY OF HOPKINS, MINNESOTA STATISTICAL SECTION This part of the City of Hopkins' comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and the required supplementary information says about the city's overall financial health. Contents Page Financial Trends 115 These schedules contain trend information to help the reader understand how the city's financial performance and well-being have changed over time. Revenue Capacity 122 These schedules contain information to help the reader assess the factors affecting the city's ability to generate its property and sales taxes. Debt Capacity 126 These schedules present information to help the reader assess the affordability of the city's current levels of outstanding debt and the city's ability to issue additional debt in the future. Demographic and Economic Information 131 These schedules offer demographic and economic indicators to help the reader understand the environment within which the city's financial activities take place and to help make comparisons over time and with other governments. Operating Information 133 These schedules contain information about the city's operations and resources to help the reader understand how the city's financial information relates to the services the city provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented Statement 34 in 2003; schedules presenting government -wide information include information beginning in that year. 114 Schedule 1 CITY OF HOPKINS NET ASSETS BY COMPONENT, LAST EIGHT FISCAL YEARS (accrual basis of accounting) Primary Government Invested in capital assets, net of related debt $ 28,884,964 $ 26,330,734 $ 36,639,193 $ 39,927,084 $ 44,629,534 $ 46,851,131 $ 47,753,791 $ 49,102,610 Restricted 287,418 9,259,337 10,171,122 6,189,025 13,879,837 10,074,674 11,952,783 8,613.114 °i Unrestricted 25,612,430 21,967,611 10,521,766 12,766,656 2,739,716 3,943,986 1,665,949 4,663,430 Total primary government net assets $ 54,784,812 $ 57,557,682 $ 57,332,081 $ 58,882,765 $ 61.249,087 $ 60,869,791 $ 61,372,523 $ 62,379,154 Note: The City began to report accrual information when it implemented GASB 34 in fiscal year 2003. Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Governmental activities Invested in capital assets, net of related debt $ 15,459,174 $ 11,950,343 $ 22,318,027 $ 25,315,084 $ 28,941,120 $ 30,769,922 $ 32,759,480 $ 32,823,582 Restricted 287,418 9,009,337 9,921,122 6,189,025 13,879,837 10,074,674 11,952,783 8,613,114 Unrestricted 22.415,733 20,189,189 9,056.853 10,849,585 2,006,418 3,663,772 10,022 3,590,101 Total governmental activities net assets $ 38,162,325 $ 41,148,869 $ 41,296,002 $ 42,353,694 $ 44,827,375 $ 44,508,368 $ 44,722,285 $ 45,026,797 Business -type activities Invested in capital assets, net of related debt $ 13,425,790 $ 14,380,391 $ 14,321,166 $ 14,612,000 $ 15,688,414 $ 16,081,209 $ 14,994,311 $ 16,279,028 Restricted - 250,000 250,000 - - - - Unrestricted 3,196,697 1,778,422 1,464,913 1,917,071 733,298 280,214 1,655,927 1,073.329 Total business -type activities net assets $ 16,622,487 $ 16,408,813 $ 16,036,079 $ 16,529,071 $ 16,421,712 $ 16.361,423 $ 16,650,238 $ 17,352,357 Primary Government Invested in capital assets, net of related debt $ 28,884,964 $ 26,330,734 $ 36,639,193 $ 39,927,084 $ 44,629,534 $ 46,851,131 $ 47,753,791 $ 49,102,610 Restricted 287,418 9,259,337 10,171,122 6,189,025 13,879,837 10,074,674 11,952,783 8,613.114 °i Unrestricted 25,612,430 21,967,611 10,521,766 12,766,656 2,739,716 3,943,986 1,665,949 4,663,430 Total primary government net assets $ 54,784,812 $ 57,557,682 $ 57,332,081 $ 58,882,765 $ 61.249,087 $ 60,869,791 $ 61,372,523 $ 62,379,154 Note: The City began to report accrual information when it implemented GASB 34 in fiscal year 2003. rn CITY OF HOPKINS CHANGES IN NET ASSETS, LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Expenses Governmental activities: General Government $ 1,411,159 $ 1,150,064 $ 1,380,540 $ 1,402,448 $ 1,679,630 $ 1,721,624 $ 1,679,040 $ 1,693,275 Public Safety 4,477,224 4,750,296 4,883,279 5,039,235 5,665,419 6,171,249 6,249,519 6,243,813 Health and Welfare 185,893 180,314 176,590 176,275 188,483 236,858 278,002 180,895 Highways and Streets 2,229,671 2,114,601 2,334,756 2,380,252 2,870,426 3,154,762 3,069,078 3,062,507 Urban Development and Housing 1,596,395 939,846 913,645 1,022,476 1,903,295 1,037,927 1,690,861 1,914,779 Culture and Recreation 1,220,030 1,193,801 1,277,501 1,123,334 1,277,539 1,565,184 1,482,349 1,505,513 Interest on long-term debt 1,650,989 1,604,523 1,480,148 1,282,328 1,069,863 1,090,341 1,025,771 895,873 Total governmental activities expenses 12,771,361 11,933,445 12,446,459 12,426,348 14,654,655 14,977,945 15,474,620 15,496,655 Business -type activities: Water 1,075, 399 1,053,600 1,080,393 1,117, 037 1,240,760 1,356,448 1,209, 508 1,196,947 Sewer 1,459,743 1,410, 200 1,475, 587 1,608,116 1,784,001 1,756,489 1,741,115 1,844, 309 Storm Sewer 409,282 429,768 457,183 408,252 416,479 417,595 403,231 420,619 Refuse 654,721 686,883 739,490 714,389 732,239 771,107 786,522 738,398 Pavilion/Ice Arena 339,511 367,367 395,722 371,845 385,062 411,134 401,598 398,354 Skate Park 18,199 44,056 90,268 - - - - - Housing and Redevelopment Authority 448,669 425,024 501,731 525,588 483,944 573,070 528,542 542,324 Total business -type activities 4,405,524 4,416,898 4,740,374 4,745,227 5,042,485 5,285,843 5,070,516 5,140,951 Total primary government expenses $ 17,176,885 $ 16,350,343 $ 17,186,833 $ 17,171,575 $ 19,697,140 $ 20,263,788 $ 20,545,136 $ 20,637,606 Program Revenues Governmental activities: Charges for services: General Government $ 301,021 $ 28,792 $ 34,760 $ 19,727 $ 38,595 $ 19,239 $ 30,797 $ 17,169 Public Safety 1,179,448 65,692 70,597 70,604 219,121 262,194 284,160 124,338 Health and Welfare 18,497 14,183 13,560 15,817 13,866 16,560 9,265 32,135 Highways and Streets 720,524 51,233 225,523 60,698 59,791 59,803 42,150 56,902 Urban Development and Housing 293,634 200,000 200,054 90,727 30,363 - - - Culture and Recreation 351,011 482,549 557,973 401,860 397,992 514,592 509,098 560,702 Operating grants and contributions 1,394,761 2,110,441 1,471,449 1,422,575 2,123,438 1,949,375 2,441,622 1,894,777 Capital grants and contributions 764,138 1,466,971 58,871 687,552 1,677,841 170,393 745,505 567,370 Total governmental activities program revenues 5,023,034 4,419,861 2,632,787 2,769,560 4,561,007 2,992,156 4,062,597 3,253,393 Business -type activities: Charges for services: Water 942,795 826,129 987,913 1,063,361 1,133,248 1,188,610 1,339,390 1,343,153 Sewer 1,324,254 1,253,772 1,277,724 1,645,661 1,427,675 1,474,474 1,598,717 1,812, 585 Storm Sewer 666,524 717,691 666,848 735,183 724,778 725,029 800,843 803,889 Refuse 515,930 590,885 705,138 687,127 692,222 713,270 821,628 852,215 Pavilion/Ice Arena 275,488 361,297 347,343 672,739 459,003 358,645 368,228 363,591 Skate Park 5,655 - - - - - - - Housing and Redevelopment Authority 427,495 267,646 270,723 265,277 256,104 348,938 279,860 258,388 Operating grants and contributions 304,350 232,689 158,270 209,533 299,126 251,885 150,814 216,596 Capital grants and contributions 98,873 975 16,298 1,850 - 394,913 142,691 328,515 Total business -type activities program revenues 4,561,364 4,251,084 4,430,257 5,280,731 4,992,156 5,455,764 5,502,171 5,978,932 Total primary government program revenues $ 9,584,398 $ 8,670,945 $ 7,063,044 $ 8,050,291 $ 9,553,163 $ 8,447,920 $ 9,564,768 $ 9,232,325 CITY OF HOPKINS Note: The City began to report accrual information when it implemented GASB 34 in fiscal year 2003. CHANGES IN NET ASSETS, LAST EIGHT FISCAL YEARS (Continued) (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Net(Expense)/Revenue Governmental activities $ (7,748,327) $ (7,513,584) $ (9,813,672) $ (9,656,788) $ (10,093,648) $ (11,985,789) $ (11,412,023) $ (12,243,262) Business -type activities 155,840 (165,814) (310,117) 535,504 (50,329) 169,921 431,655 837,981 Total primary government net expense $ (7,592,487) $ (7,679,398) $ (10,123,789) =L2,121,2841 $ (10,143,977) $ (11,815,868) $ (10,980,368) $ (11,405,281) General Revenues and Other Changes in Net Assets Governmental activities: Property taxes $ 6,877,331 $ 7,289,973 $ 7,845.641 $ 8,200,725 $ 8,732,711 $ 9,497,650 $ 9,353.966 $ 9,827,813 Tax Increments 2,214,833 2,177,518 970,846 990.776 1.050,601 1,186,395 1,636,609 2,147,517 Unrestricted grants and contributions 691,438 566.514 603,307 579.440 564.396 434,163 309,609 306,215 Unrestricted investment earnings 327.959 339.883 389,548 790,079 754,338 387,424 170,960 121,229 Gain on sale of capital assets - - 43,955 8,460 9,456 16,150 9,796 - Transfers - 126.240 107,508 145,000 145,000 145,000 145,000 145,000 Total governmental activities 10,111,561 10,500,128 9,960.805 10,714,480 11,256.502 11,666.782 11,625,940 12,547,774 Business -type activities: Unrestricted investment earnings 88,767 78,380 44,891 102,488 84,670 21,714 12,841 9,138 Gain on sale of capital assets - - - - 3.300 - 1,367 - Loss on disposal of capital assets - - (106,924) (12,048) Transfers - (126,240) (107,508) (145,000) (145,000) (145,000) (145,000) (145,000) Total business -type activities 88,767 (47,860) (62,617) (42,512) (57,030) (230,210) (142,840) (135,862) Total primary government $ 10,200,328 $ 10.452,268 $ 9,898,188 $ 10.671,968 $ 11.199,472 $ 11,436,572 $ 11,483,100 $ 12,411,912 Change in Net Assets Governmental activities 2,363,234 2,986,544 147.133 1,057,692 1,162,854 (319,007) 213,917 304,512 Business -type activities 244,607 (213,674) (372,734) 492.992 (107,359) (60,289) 288.815 702.119 Total primary government $ 2,607,841 $ 2,772,870 $ (225,601) $ 1,550.684 $ 1,055,495 $ (379,296) $ 502.732 $ 1,006,631 Note: The City began to report accrual information when it implemented GASB 34 in fiscal year 2003. CITY OF HOPKINS FUND BALANCES, GOVERNMENTAL FUNDS, LAST TEN FISCAL YEARS (modified accrual basis of accounting) 118 Fiscal Year 2001 2002 2003 2004 General Fund Reserved $ 617,388 $ 580,462 $ 557,628 $ 97,740 Unreserved 2,581,317 2,795,941 3,230,283 3,973,556 Total general fund $ 3,198,705 $ 3,376,403 $ 3,787,911 $ 4,071,296 All other Governmental Funds Reserved reported in: Special Revenue Funds $ 4,816,824 $ 4,989,862 $ 5,813,114 $ 4,326,291 Capital Projects Funds - 10,107,076 6,500,016 1,526,732 Debt Service Funds 4,727,313 2,728,091 3,045,346 3,789,322 Unreserved reported in: Special Revenue Funds 2,585,542 3,096,445 1,705,798 2,901,921 Capital Projects Funds 3,484,848 4,106,501 3,993,924 3,993,720 Total all other governmental funds $ 15,614,527 $ 25,027,975 $ 21,058,198 $ 16,537,986 Total all funds $ 20,609,282 $ 24,846,109 $ 28,404,378 $ 18,813,232 118 2005 2006 2007 Fiscal Year 2008 2009 Schedule 3 2010 $ 943,474 $ 974,517 $ 1,157,142 $ 111,806 $ 196,790 $ 182,211 3,367,721 3,345,606 3,304,729 3,884,309 3,930,996 4,071,049 $ 4,311,195 $ 4,320,123 $ 4,461,871 $ 3,996,115 $ 4,127,786 $ 4,253,260 $ 6,010,974 $ 5,625,355 $ 3,137,313 $ 3,189,829 $ 3,528,529 $ 2,844,901 6,303,112 2,852,655 12,982,623 3,250,202 6,021,748 4,850,159 969,812 1,539,404 1,070,230 955,772 (24,957) 590,281 3,945,500 1,718,021 1,808,708 1,381,657 1,264,405 3,572,002 $ 17,229,398 $ 11,735,435 $ 18,998,874 $ 8,777,460 $ 10,789,725 $ 11,857,343 $ 21,540,593 $ 16,055,558 $ 23,460,745 $ 12,773,575 $ 14,917,511 $ 16,110,603 119 CITY OF HOPKINS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS, LAST TEN FISCAL YEARS (modified accrual basis of accounting) 120 Fiscal Year 2001 2002 2003 2004 Revenues Property Taxes $ 5,087,313 $ 6,215,194 $ 6,877,331 $ 7,283,712 Tax Increments 2,730,232 2,003,743 2,214,835 2,177,518 Special Assessments 1,253,592 1,363,167 1,460,464 1,441,885 Intergovernmental 3,096,853 2,830,806 2,850,337 1,758,573 Licenses and Permits 377,048 468,312 777,997 686,933 Charges for Services 471,515 898,896 797,233 792,280 Fines and Forfeits 167,252 148,112 181,893 197,337 Investment Earnings 627,909 584,238 327,959 339,883 Miscellaneous 338,543 460,422 224,320 700,012 Total revenues 14,150,257 14,972,890 15,712,369 15,378,133 Expenditures Current: General Government 1,043,394 1,061,960 1,259,121 1,094,526 Public Safety 3,398,981 3,690,368 4,433,499 4,695,803 Health and Welfare - - 185,893 180,314 Highways and Streets 1,693,361 1,652,143 1,674,836 1,681,484 Urban Redevelopment and Housing 1,141,409 1,157,960 1,595,927 937,849 Culture and Recreation 667,410 1,027,243 1,044,948 1,074,587 Other 34,290 93,508 - - Capital outlay 4,667,505 4,480,058 9,030,629 6,651,109 Debt Service Principal 995,847 3,991,502 1,407,647 1,644,908 Interest and fiscal charges 1,116,134 1,345,811 1,688,138 1,780,620 Bond Issuance Costs 25,156 - - - Total expenditures 14,783,487 18,500,553 22,320,638 19,741,200 Excess (deficiency) of revenues over expenditures (633,230) (3,527,663) (6,608,269) (4,363,067) Other Financing Sources (Uses) Sale of Property - - - - Proceeds from Issuance of Debt 2,125,000 14,170,000 3,050,000 - Discount on Debt - - - - Premium on Debt - - - - Transfer In 2,092,153 2,355,193 2,042,771 2,594,787 Transfer Out (2,090,379) (2,328,241) (2,602,175) (2,468,547) Total other financing sources (uses) 2,126,774 14,196,952 2,490,596 126,240 Net change in fund balances $ 1,493,544 $10,669,289 $ (4,117,673) $ (4,236,827) Debt service as a percentage of noncapital expenditures 21.1% 38.1% 23.3% 26.2% 120 Schedule 4 Fiscal Year 2005 2006 2007 2008 2009 2010 $ 7,788,557 $ 8,134,915 $ 8,473,516 $ 8,844,113 $ 9,377,127 $ 9,795,318 970,846 990,776 1,050,601 1,186,395 1,636,535 2,147,517 1,368,262 1,288,437 1,172,977 1,120,741 1,071,406 1,128,467 1,177,016 1,036,645 2,115,670 1,053,405 1,220,766 1,215,163 643,811 540,120 880,443 744,502 820,031 623,492 1,017,343 631,655 729,365 872,388 875,470 800,115 207,454 203,830 215,051 188,003 148,172 138,894 358,336 705,591 638,796 318,074 135,569 106,128 558,575 692,649 851,203 709,915 1,024,879 589,604 14,090,200 14,224,618 16,127,622 15,037, 536 16, 309,955 16,544,698 1,332,796 1,366,246 1,597,503 1,590,347 1,552,712 1,576,676 4,848,336 4,994,273 5,290,802 5,779,047 5,888,481 5,881,633 176,552 176,502 184,541 232,163 273,760 177,732 1,812,403 1,824,658 2,091,043 2,224,338 2,139,351 2,082,853 911,005 944,577 1,787,131 935,402 1,586,083 1,881,610 1,093,699 997,987 1,122,891 1,289,323 1,278,108 1,339,695 2,489,137 3,055,815 5,830,516 1,228,755 1,556,121 1,358,792 2,306,152 4,926,284 1,610,000 1,705,000 1,805,000 4,665,000 1,535,171 1,418,311 1,131,514 1,100,211 1,037,372 953,232 41,906 - 81,109 - 34,972 49,233 16,547,157 19,704,653 20,727,050 16,084,586 17,151,960 19,966,456 (2,456,957) (5,480,035) (4,599,428) (1,047,050) (842,005) (3,421,758) - - - - 341 - 3,385,000 - 11,875,000 - 2,865,000 4,515,000 (4,240) - (72,905) - (24,400) (45,150) - - 7,520 - - - 1,625,994 5,273,592 14,940,055 1,043,155 1,088,875 7,808,068 (1,618,486) (5,278,592) (14,745,055) (898,155) (943,875) (7,663,068) 3,388,268 (5,000) 12,004,615 145,000 2,985,941 4,614,850 $ 931,311 $ (5,485,035) $ 7,405,187 $ (902,050) $ 2,143,936 $ 1,193,092 27.6% 38.1% 18.9% 121 18.9% 18.4% 30.5% Schedule 5 CITY OF HOPKINS ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY, LAST TEN FISCAL YEARS (in thousands of dollars) Notes: (1) The direct tax rate is applied to the tax capacity of the property which is calculated by applying a statutory formula to the estimated market value of the property. The tax capacity is then multiplied by the direct tax rate to determine the city taxes payable on a specific parcel. (2) Tax exempt property is revalued on a six-year cycle. All other property is revalued on a three year cycle. 122 Less: Total Taxable Payable Residential Apartment Commercial Industrial Other Tax -Exempt Market Total Direct Year Property Property Property Property Property Property Value Tax Rate 2001 $ 515,292 $ 174,592 $ 158,422 $ 136,803 $ 147 $ 85,442 $ 899,667 31.040 2002 609,165 192,868 168,922 140,653 160 85,442 1,026,166 54.790 2003 690,469 234,684 178,305 148,739 215 85,442 1,166,755 56.100 2004 924,590 256,511 264,953 154,778 225 182,899 1,417,933 56.664 2005 1,000,569 256,942 277,231 163,616 243 182,899 1,515,459 48.944 2006 1,062,213 256,559 305,233 176,812 288 182,899 1,618,206 48.262 2007 1,080,591 257,658 329,601 188,941 306 182,899 1,674,198 45.862 2008 1,061,645 257,275 352,028 198,808 306 182,899 1,687,163 45.570 2009 1,017,790 266,458 395,842 192,138 1,815 182,899 1,691,144 47.574 2010 922,267 251,418 404,674 168,803 1,503 177,975 1,570,690 49.377 Notes: (1) The direct tax rate is applied to the tax capacity of the property which is calculated by applying a statutory formula to the estimated market value of the property. The tax capacity is then multiplied by the direct tax rate to determine the city taxes payable on a specific parcel. (2) Tax exempt property is revalued on a six-year cycle. All other property is revalued on a three year cycle. 122 Source: Hennepin County, Minnesota Taxpayer Services Department Notes: The City's basic rate is determined by the city's annual budget requirements as set by the City Council. Rates for debt service are based on each year's requirements. 123 Schedule 6 CITY OF HOPKINS Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) City Direct Rate Overlapping Rates General Total Direct Obligation and Debt Total School Hennepin Metro Total Overlapping Basic Rate Service Direct District County Council Other Overlapping Tax Rate Fiscal Year 2001 28.916 2.124 31.040 44.220 37.620 5.820 2.310 89.970 121.010 2002 51.950 2.840 54.790 15.030 50.490 3.530 5.160 74.210 129.000 2003 49.190 6.910 56.100 20.590 50.610 3.830 6.010 81.040 137.140 2004 49.028 7.636 56.664 22.200 47.320 3.500 5.260 78.280 134.944 2005 44.049 4.895 48.944 19.176 44.172 3.304 5.243 71.895 120.839 2006 41.300 6.962 48.262 21.565 41.016 2.924 5.180 70.685 118.947 2007 39.574 6.288 45.862 19.019 39.110 2.671 5.746 66.546 112.408 2008 39.237 6.333 45.570 19.218 38.571 2.562 5.984 66.335 111.905 2009 41.346 6.228 47.574 20.080 40.413 2.579 5.834 68.906 116.480 2010 43.121 6.256 49.377 22.944 42.561 2.612 6.825 74.942 124.319 Source: Hennepin County, Minnesota Taxpayer Services Department Notes: The City's basic rate is determined by the city's annual budget requirements as set by the City Council. Rates for debt service are based on each year's requirements. 123 CITY OF HOPKINS PRINCIPAL PROPERTY TAXPAYERS, CURRENT YEAR AND TEN YEARS AGO 2010 2001 Rank 1 7 3 2 4 5 6 8 9 10 Schedule 7 Percentage of Total City Tax Capacity Value 12.23 % 1.58 2.10 2.83 1.92 1.78 1.63 1.37 1.34 1.29 28.07 % Source: Hennepin County, Minnesota Assessor's Office Notes: Tax capacity is a percentage of total market value. For taxes payable in 2010 these class rates are 1.25% for apartments and 1.5% of first $150,000 with balance at 2.0% for commercial/industrial properties. 124 Percentage of Total City Tax Tax Tax Capacity Capacity Capacity Taxpayer Value Rank Value Value Super Valu $ 1,114,910 1 5.04 % $ 1,658,227 Excelsior Crossings, LLC 764,810 2 3.46 - RE Capital Partners 599,250 3 2.71 - Greenfield Apartments, LLP 302,800 4 1.37 214,800 Ramsgate Apartments LLC 242,000 5 1.09 284,903 Southwest Real Estate, Inc. 237,223 6 1.07 384,288 Duke Realty Ltd Partnership 233,250 7 1.05 260,810 Hopkins Real Estate, LLC 229,250 8 1.04 - Hines Reit Mpls Ind LLC 211,630 9 0.96 - City Center Ventures, LLC 199,250 10 0.90 - Glaser Financial Group, Inc - - - 241,320 Alliant Tech - - - 220,486 Ryan Hopkins, LLC - - - 185,816 Fleming Companies - - - 182,100 Auburn Limited Partnership - - - 174,648 Total $ 4,134,373 18.68 % $ 3,807,398 Total City 2010/2001 tax capacity $ 22,135,067 $ 13,562,000 2001 Rank 1 7 3 2 4 5 6 8 9 10 Schedule 7 Percentage of Total City Tax Capacity Value 12.23 % 1.58 2.10 2.83 1.92 1.78 1.63 1.37 1.34 1.29 28.07 % Source: Hennepin County, Minnesota Assessor's Office Notes: Tax capacity is a percentage of total market value. For taxes payable in 2010 these class rates are 1.25% for apartments and 1.5% of first $150,000 with balance at 2.0% for commercial/industrial properties. 124 Schedule 8 CITY OF HOPKINS PROPERTY TAX LEVIES AND COLLECTIONS. LAST TEN FISCAL YEARS (4) For the year 2009 State of MN unalloted $246,865 in Market Value Homestead Credit that is included in the total levy. Had the City received those funds, outstanding delinquent taxes would be reduced to $124,953 and the percentage of levy outstanding would be 1.3%. (5) For the year 2010 State of MN unalloted $241,193 in Market Value Homestead Credit that is included in the total levy. Had the City received those funds, outstanding delinquent taxes would be reduced to $197,631 and the percentage of levy outstanding would be 2.0%. (3) (4) (5) Collected within the Taxes Levied for the Fiscal Year Fiscal Year of Levy Total Collections to Date Percentage Collections in Percentage Outstanding Percentage Fiscal Operating Debt Total Tax of Subsequent of Delinquent of Levy Year Tax Levy Tax Levy Levy (1) Amount Levy Years Amount Levy (2) Taxes (2) Outstanding 2001 $ 4,670,361 $ 342,000 $ 5,012,361 $ 4,980,059 99.4% $ 83,221 $ 5,063,280 101.0% $ (50,919) -1.0% 2002 6,249,140 342,000 6,591,140 6,472,990 98.2% 59,657 6,532,647 99.1% 58,493 0.9% 2003 6,285,252 883,000 7,168,252 7,075,375 98.7% 81,210 7,156,585 99.8% 11,667 0.2% 2004 6,666,136 1,038,000 7,704,136 7,582,356 98.4% 72,387 7,654,743 99.4% 49,393 0.6% 2005 7,308,078 812,000 8,120,078 7,990,781 98.4% 95,602 8,086,383 99.6% 33,695 0.4% 2006 7,221,078 1,217,000 8,438,078 8,282,797 98.2% 120,689 8,403,486 99.6% 34,592 0.4% 2007 7,598,758 1,207,000 8,805,758 8,620,427 97.9% 138,186 8,758,613 99.5% 47,145 0.5% 2008 7,942,380 1,282,000 9,224,380 8,831,737 95.7% 140,900 8,972,637 97.3% 251,743 2.7% 2009 8,346,114 1,257,000 9,603,114 9,101,458 94.8% 129,838 9,231,296 96.1% 371,818 3.9% 2010 8,733,685 1,267,000 10,000,685 9,533,671 95.3% 28,190 9,561,861 95.6% 438,824 4.4% Notes: (1) Beginning with payable year 2002, Market Value Homestead Credit is included in the operating levy. (2) In some years due to abatements and adjustments done by the County in current and subsequent years, actual taxes disbursed by the County may equal more than 100% when delinquent taxes are collected in subsequent years. (3) In December 2008 the State of MN unalloted $126,391 in Market Value Homestead Credit that is included in the total levy. Had the City received those funds, outstanding delinquent taxes would be reduced to $125,352 and the percentage of levy outstanding would be 1.4%. (4) For the year 2009 State of MN unalloted $246,865 in Market Value Homestead Credit that is included in the total levy. Had the City received those funds, outstanding delinquent taxes would be reduced to $124,953 and the percentage of levy outstanding would be 1.3%. (5) For the year 2010 State of MN unalloted $241,193 in Market Value Homestead Credit that is included in the total levy. Had the City received those funds, outstanding delinquent taxes would be reduced to $197,631 and the percentage of levy outstanding would be 2.0%. (3) (4) (5) N rn CITY OF HOPKINS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Business -Type Governmental Activities Activities Total General HRA Tax Special Per Fiscal Obligation Lease Revenue Increment Assessments Revenue Year Bonds Bonds Bonds Bonds Bonds 2001 $ 2,760,000 $ - $ 13,017,696 $ 2,545,000 $ 6,740,000 2002 1,305,000 10,760,000 13,946,194 2,490,000 4,800,000 2003 1,145,000 13,810,000 12,633,056 2,275,000 5,710,000 2004 985,000 13,810,000 11,307,436 1,980,000 5,270,000 2005 830,000 13,290,000 13,366,284 1,675,000 4,830,000 2006 675,000 12,770,000 9,420,000 1,370,000 4,380,000 2007 10,450,000 12,235,000 8,805,000 3,010,000 3,905,000 2008 9,855,000 2,565,000 8,135,000 2,690,000 3,410,000 2009 9,245,000 2,440,000 10,290,000 2,330,000 6,200,000 2010 8,625,000 2,315,000 8,330,000 4,885,000 5,080,000 Total Percentage Primary of Personal Per Government Income Capita $ 25,062,696 222.0% 1,462 33,301,194 288.0% 1,931 35,573,056 297.0% 2,026 33,352,436 261.0% 1,890 33,991,284 255.0% 1,923 28,615,000 204.0% 1,658 38,405,000 193.0% 2,211 26,655,000 178.0% 1,521 30,505,000 178.0% 1,745 29,235,000 178.0% 1,691 Notes: Details regarding the District's outstanding debt can be found in note 8 of the notes to the financial statements. See the Demographic and Economic Statistics schedule on schedule 14 for personal income and population data. Schedule 9 CITY OF HOPKINS RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Bonded Debt Outstanding $ 2,760,000 Less: Amt Percentage of General Available in Total Actual Taxable Fiscal Obligation Debt Service Primary Value of Year Bonds Funds Government Property Schedule 10 Per Capita 2001 $ 2,760,000 $ 1,479,638 $ 1,280,362 0.142% 74.68 2002 12,065,000 301,342 11,763,658 1.146% 681.95 2003 14,955,000 498,383 14,456,617 1.239% 823.32 2004 14,795,000 979,296 13,815,704 0.974% 783.07 2005 14,120,000 716,119 13,403,881 0.884% 758.35 2006 13,445,000 950,596 12,494,404 0.772% 723.77 2007 13,135,000 1,080,940 12,054,060 0.720% 694.08 2008 12,420,000 1,000,521 11,419,479 0.677% 651.57 2009 11,685,000 880,866 10,804,134 0.688% 618.05 2010 10,940,000 795,945 10,144,055 0.646% 586.70 Notes: Details regarding the city's outstanding debt can be found in note 8 of the notes to the financial statements. See the Assessed and Actual Value of Taxable Property schedule 5 for taxable market value of property data See the Demographic and Economic Statistics schedule 14 for population data 127 CITY OF HOPKINS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT As of December 31, 2010 Estimated Net Debt Percentage Outstanding Applicable Overlapping: Schedule 11 Estimated Share of Overlapping Debt Hennepin County $ 683,934,500 1.20% $ 8,207,214 Hopkins ISD 270 158,041,582 16.98% 26,835,461 St. Louis Park ISD 283 47,481,739 0.37% 175,682 Hennepin Suburban Park District 67,630,065 1.61% 1,088,844 Hennepin Regional RR Authority 39,570,778 1.20% 474,849 Metropolitan Council 181,078,903 0.51% 923,502 Total Overlapping 37,705,552 City of Hopkins Direct Debt $ 9,975,562 100% 9,975,562 Total Direct and Overlapping Debt: $ 47,681,114 Source: Hennepin County, Minnesota Taxpayer Services - method of calculation is not availble from the County. Notes: (1) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule shows the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (2) Net Debt Outstanding excludes revenue and special assessment debt and takes into consideration any sinking funds obligated for the repayment of the bonds. 128 Debt limit N CO Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit Schedule 12 CITY OF HOPKINS LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (dollars in thousands) Legal Debt Margin Calculation for Fiscal Year 2010 Market value $ 1,570,690 Debt limit (3% of market value) 47,121 Debt applicable to limit: 2006 General Obligation Bonds 10,940 Less: Amount set aside for repayment of 2010 general obligation debt (796) Total net debt applicable to limit 10,144 Legal debt margin $ 36,977 Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $ 19,424 $ 19,424 $ 21,331 $ 25,601 $ 29,036 $ 31,603 $ 33,252 $ 50,615 $ 50,734 $ 47,121 1,258 1,132 988 810 649 495 9,768 9,263 8,772 10,144 $ 18,166 $ 18,292 $ 20,343 $ 24,791 $ 28,387 $ 31,108 $ 23,484 $ 41,352 $ 41,962 $ 36,977 6.48% 5.83% 4.63% 3.16% 2.24% 1.57% 29.38% 18.30% 17.29% 21.53% w 0 Schedule 13 CITY OF HOPKINS PLEDGED -REVENUE COVERAGE LAST TEN FISCAL YEARS Notes: Details regarding the City's outstanding debt can be found in Note 8 of the notes to the financial statements. Water Revenue Bonds Sewer Revenue Bonds Storm Sewer Revenue Bonds Fiscal Debt Service Debt Service Debt Service Year Revenue Principal Interest Coverage Revenue Principal Interest Coverage Revenue Principal Interest Coverage 2001 $1,053,414 $ 115,000 $181,049 3.56 $ - $ - $ - - $ 723,825 $ 230,000 $176,596 1.78 2002 894,543 100,000 96,668 4.55 - - - - 708,852 1,840,000 141,379 0.36 2003 967,389 105,000 84,079 5.12 - - - - 690,367 250,000 113,178 1.90 2004 844,017 110,000 42,912 5.52 - - - - 741,831 330,000 141,647 1.57 2005 998,129 115,000 79,532 5.13 - - - - 682,497 325,000 130,213 1.50 2006 1,083,675 120,000 75,733 5.54 - - - - 775,261 330,000 119,445 1.72 2007 1,133,248 125,000 69,699 5.82 - - - - 724,778 350,000 111,605 1.57 2008 1,188,610 130,000 69,699 5.95 - - - - 725,029 365,000 98,846 1.56 2009 1,339,390 140,000 53,440 6.92 - - - - 800,843 365,000 79,437 1.80 2010 1,342,073 1,000,000 56,211 1.27 1,812,585 - 36,373 49.83 803,889 995,000 53,794 0.77 Notes: Details regarding the City's outstanding debt can be found in Note 8 of the notes to the financial statements. 131 Schedule 14 CITY OF HOPKINS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS Personal Per Income (2) Capita Fiscal (thousands Personal School Unemployment Year Population (1) of dollars) Income (2) Enrollment (3) Rate (4) 2001 17,145 160,833 32,597 10,903 3.5 2002 17,250 166,167 33,348 10,948 4.4 2003 17,559 170,998 34,081 11,447 4.6 2004 17,643 178,147 35,292 11,416 4.3 2005 17,675 188,330 37,078 10,896 3.7 2006 17,263 193,990 37,988 10,828 3.9 2007 17,367 205,857 39,985 10,770 4.5 2008 17,526 216,678 41,739 10,760 6.4 2009 17,481 226,158 43,238 10,785 6.7 2010 17,290 220,438 41,859 10,693 6.5 Sources: (1) Metropolitan Council, except for 2000 which is per the U.S. Census. (2) U.S. Department of Commerce Bureau of Economic Analysis data for Minnesota (3) Minnesota Department of Education and is for public and non-public schools in Hopkins School District #270 (4) Minnesota Department of Employment and Economic Development, based on December rates 131 Schedule 15 CITY OF HOPKINS PRINCIPAL EMPLOYERS, CURRENT YEAR AND TEN YEARS AGO Source: Minnesota Department of Employment and Economic Development, Metropolitan Council and Minnesota State Business Directory Notes: (1) Includes total number of employees located in facilities throughout Independent School District 270, Hopkins. 132 2010 2001 Percentage Percentage of Total of Total Taxpayer Employees Rank Employment Employees Rank Employment Cargil 2,350 1 21.709 % - - - % ISD 270 Hopkins (1) 1,400 2 12.933 1,430 6 12.246 SuperValu 1,200 3 11.085 1,540 1 13.188 Augustana Chapel View Care Center 225 4 2.079 - - - Oak Ridge Country Club 204 5 1.885 180 9 1.541 Thermotech 190 6 1.755 325 4 2.783 Rudy Luther's Hopkins Honda 160 7 1.478 - - - City of Hopkins 140 8 1.293 177 10 1.516 Golden Living Center 134 9 1.238 - - - SunGard Financial Systems 105 10 0.970 - - - Alliant Techsystems - - 600 2 5.138 ADC Telecommunications - - 400 3 3.426 PGI Fulfillment, Inc. - - 301 5 2.578 Advance Circuits - - 207 7 1.773 Quality Assured Label, Inc. - - 185 8 1.584 Total $ 6,108 56.425 % $ 5,345 45.774 % Source: Minnesota Department of Employment and Economic Development, Metropolitan Council and Minnesota State Business Directory Notes: (1) Includes total number of employees located in facilities throughout Independent School District 270, Hopkins. 132 General Government Administrative Services Finance Municipal Building Community Services Public Safety Police Fire Public Works Recreation Activity Center Skate Park Planning & Zoning Total General Government Schedule 16 CITY OF HOPKINS FULL-TIME EQUIVALENT CITY EMPLOYEES BY TYPE, LAST TEN FISCAL YEARS Full -time -Equivalent Employees as of December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 4.53 5.11 5.11 3.53 5.55 5.55 5.15 5.05 4.95 4.80 4.00 4.00 4.00 4.30 4.60 4.60 4.60 4.60 4.60 4.60 2.00 1.50 1.50 0.85 1.40 1.45 1.45 1.45 1.45 1.45 10.30 10.30 10.30 9.74 8.90 8.90 9.48 9.85 9.95 9.95 37.50 40.25 40.25 39.00 37.50 38.50 39.40 39.45 40.00 39.00 0.80 0.90 0.90 0.90 1.20 1.20 1.20 1.20 1.20 1.20 22.67 23.05 23.05 20.00 19.50 18.60 18.59 18.60 18.70 17.77 3.65 3.66 3.66 2.55 4.10 4.10 4.00 3.30 3.30 3.30 - - - - - 0.05 0.05 0.05 0.05 0.05 1.85 1.28 1.28 1.20 1.20 1.20 1.20 1.15 1.15 1.35 87.30 90.05 90.05 82.07 83.95 84.15 85.12 84.70 85.35 83.47 Special Revenue Funds Economic Development 1.80 2.37 2.37 2.40 1.60 1.60 1.60 1.78 1.75 1.75 Paratransit 0.15 0.15 0.15 0.20 0.20 0.20 0.20 0.20 0.20 - Housing Rehabilitation 1.05 1.05 1.05 0.65 0.70 0.70 0.70 0.85 0.85 0.85 Parking 1.80 1.80 1.80 1.20 2.00 2.00 1.00 1.00 1.00 1.00 Section 8 1.20 1.20 1.20 1.40 1.40 1.40 1.35 - - - Communication 1.05 0.58 0.58 0.07 0.05 0.05 0.10 0.10 0.10 0.40 Depot Coffee House 0.67 0.73 0.73 1.08 1.93 - 0.05 1.00 1.00 1.00 Art Center - 3.92 3.72 4.22 4.05 4.05 4.05 4.05 4.05 Total Special Revenue Funds 7.72 7.88 11.80 10.72 12.10 10.00 9.05 8.98 8.95 9.05 Enterprise Funds Water 3.82 4.18 4.18 3.56 3.24 3.25 3.25 3.76 3.67 3.11 Sanitary Sewer 3.71 3.35 3.35 3.23 3.55 3.56 3.56 4.07 4.08 3.44 Refuse 3.68 3.68 3.68 3.89 4.15 4.08 4.08 4.09 4.12 3.40 Storm Sewer 0.82 0.62 0.62 0.47 0.47 0.46 0.46 0.46 0.46 0.42 Pavilion/Ice Arena 2.82 2.37 2.37 2.44 2.44 2.90 2.72 3.80 3.80 3.05 Art Center 3.78 3.92 - - - - - - - - Skate Park 0.35 0.38 0.38 - - - - - - - Housing and Redevelopment 1.90 1.90 1.90 1.90 1.90 2.40 2.45 2.05 2.05 2.05 Total General Government 2088. 20.40 16.48 15.49 15.75 16.65 16.52 18.23 18.18 15.47 Total 115.90 108.28 111.80 110.80 110.69 111.91 112.48 107.99 118.33 118.33 Source: City Finance Office 133 Function/Program General Government Elections Registered voters Number of votes cast Voter participation (registered) Public Safety Police Total Calls for Service Sworn Officers 911 Calls for Service Traffic Stops Parking Citations Fire Fires False Alarm Fire Runs Medical Runs Average Response Time (minutes) Inspections Building Permits Value of Building Permits Public Works Miles of seal coating Miles of crack sealing Sidewalk repairs in square feet Alley repairs in square yards Culture and Recreation Art Center Bookings Reserved Hours Customer Visits for Events/Activities Water Gallons of water pumped (in millions) Number of well house inspections Number of hydrants flushed Water Rate Sanitary Sewer Sanitary sewage flow (in millions of gallons) Miles of sewer lines jetted Number of manholes checked/cleaned Lift Station Maintenance checks Sewer Rate Refuse Number of refuse accounts Tons of refuse collected Tons of recycled material (residential) Refuse rate Recycling rate Pavilion/Ice Arena Ice time rental hours Turf use hours Mezzanine rental use CITY OF HOPKINS OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Years Fiscal 2001 2002 2003 2004 2005 1 2 1 2 1 9,101 9,138 8,830 11,518 9,708 2,390 6,629 909 8,880 2,601 26.3% 72.5% 10.3% 77.1% 26.8% 12,518 15,161 17,114 19,648 19,049 24 24 24 25 26 N/A 6,207 7,192 5,513 4,908 4,025 2,005 2,813 3,044 2,916 2,219 1,939 2,705 1,506 1,122 51 43 52 48 76 117 132 113 103 107 342 330 329 326 337 216 213 148 113 121 5.0 5.1 5.1 5.3 5.3 498 487 498 542 365 $17,070,262 $34,562,884 $40,363,863 $34,316,423 $32,333,498 N/A 4 4 4 4 N/A 3.25 3.25 3.25 3.25 N/A 2,875 2,875 2,875 2,875 N/A 173 173 157 143 N/A 2,928 3,551 5,598 5,598 N/A 15,369 22,335 36,950 36,950 N/A 156,400 174,100 182,800 182,800 907.9 774.6 780.2 732.4 743.6 2,488 2,488 2,488 2,488 2,488 100+ 100+ 100+ 100+ 100+ $ 1.20 $ 1.20 $ 1.20 $ 1.40 $ 1.40 717.8 678.4 634.3 653.2 647.3 n/a n/a n/a 14.7 15.0 292 222 262 292 222 4,374 4,374 4,374 4,374 4,374 $ 2.25 $ 2.25 $ 2.25 $ 2.25 $ 2.25 2,664 2,663 2,695 2,670 2,673 2,827 3,280 2,624 2,671 2,643 1,289 1,082 1,305 1,248 1,185 $11.00-14.45 $11.00-14.45 $11.00-14.45 $11.00-14.45 $12.50-15.90 $ 2.25 $ 2.75 $ 2.75 $ 2.75 $ 2.75 1,478 1,479 1,487 1,521 1,433 405 403 450 464 362 0 0 0 162 351 Source: Various City Departments Notes: (1) Information not available is labeled N/A.. (2) In 2009 the Sewer Department began checking manholes on a monthly basis. 134 Schedule 17 Year 2006 2007 2008 2009 2010 2 1 2 1 2 10,621 8,330 11,233 9,548 9,393 6,279 1,146 8,835 861 5,761 59.1% 13.8% 78.7% 9.0% 61.3% 18,567 19,137 19,440 19,238 19,141 26 26 26 26 26 4,547 4,588 4,658 4,519 4,937 3,321 4,287 3,042 2,698 2,597 841 747 647 925 914 59 70 45 38 58 101 70 101 107 98 297 350 291 220 370 68 59 67 56 66 5.3 4.3 4.3 4.2 4.0 494 377 897 381 422 $14,272,117 $50,544,210 $45,074,024 $54,688,290 $10,968,955 4 3.2 2.6 0.55 0.95 3.25 2.88 4.97 3.71 1.99 2,875 4,279 4,930 6,228 5.252 130 253 238 142 170 5,570 6,054 5,593 5,392 4,913 35,710 39,060 34,760 33,780 30,414 202,000 203,000 212,000 203,100 205,319 785.5 794.7 774.0 813.0 794.0 2,488 2,488 2,488 2,484 2,501 100+ 100+ 100+ 130 144 $ 1.40 $ 1.40 $ 1.65 $ 1.86 $ 1.90 638.2 641.3 626.2 580.2 567.8 14.6 17.3 14.6 14.2 15.4 262 441 344 1,290 1,301 (2) 4,374 4,374 3,855 4,312 4,310 $ 2.50 $ 2.50 $ 2.70 $ 3.10 $ 3.40 2,766 2,670 2,678 2,689 2,695 2,549 2,448 2,393 2,335 2,298 1,118 1,138 1,080 1,194 1,148 $12.50-15.90 $12.50-15.90 $13.20 - 17.25 $15.85 - 21.85 $15.85 - 21.85 $ 2.75 $ 2.75 $ 3.25 $ 3.50 $ 3.75 1,443 1,458 1,460 1,456 1,456 407 442 479 624 624 339 345 400 495 776 135 Schedule 18 CITY OF HOPKINS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Years Source: Various City Departments 136 Fiscal Year Function/Program 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol Units 10 10 10 10 10 11 11 11 11 11 Fire Stations 1 1 1 1 1 1 1 1 1 1 Public Works Highways (miles) 3.57 3.57 3.57 3.57 3.57 3.57 3.57 3.57 3.57 3.57 County Highways 5.69 5.69 5.32 5.32 5.32 5.32 5.32 5.32 5.32 5.32 City Streets (miles) 47.13 47.13 47.50 47.50 47.50 47.50 47.50 47.50 47.50 47.50 Alleys (miles) 9.52 9.52 9.52 9.52 9.52 9.52 9.52 9.52 9.52 9.52 Streetlights 350 350 360 360 398 398 398 398 398 398 Traffic Signals 44 44 44 44 44 44 44 44 44 44 Refuse collection trucks 3 3 3 3 3 3 3 3 3 3 Culture & Recreation Parks Parks 16 16 16 16 16 16 16 16 16 16 Park Trails 3 3 3 4 4 4 4 4 4 4 Park Acres 99 102 102 104 104 104 104 104 104 104 Park Shelters 10 10 10 10 10 10 11 11 11 11 Playgrounds 11 11 11 11 11 11 11 11 11 11 Skateboard Park/Inline Skating 1 1 1 1 1 1 1 1 1 1 Skating Rinks 7 7 7 7 7 7 7 7 7 7 Hockey Rinks 6 6 6 6 6 5 5 5 5 5 Basketball Courts 6 6 6 6 6 6 6 6 6 6 Softball Fields 4 4 4 4 4 4 4 4 4 4 Swimming Beach 1 1 1 1 1 1 1 1 1 1 Tennis Courts 12 12 12 8 8 8 8 8 8 8 Volleyball Courts 2 2 2 2 2 2 2 2 2 2 Watermains Distribution System (miles) 52.60 52.60 52.60 52.60 52.60 52.60 52.60 52.60 52.60 52.60 Fire Hydrants 560 560 560 560 560 560 560 560 560 560 Storage Capacity (gallons in thous) 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 Water Connections 3,126 3,144 3,157 3,163 3,163 3,168 3,168 3,168 3,168 3,168 Sanitary Sewer Collection System (miles) 45.46 45.46 45.46 45.46 45.46 45.46 45.46 45.46 45.46 45.46 Sewer Connections 3,050 3,064 3,077 3,081 3,081 3,086 3,086 3,086 3,086 3,086 Storm Sewer Pipe (miles) 21.40 21.40 21.40 21.40 21.40 21.40 21.40 21.40 21.40 21.40 Parking Parking Lots 7 7 7 7 7 7 7 7 7 7 Parking Ramp 1 1 1 1 1 1 1 1 1 1 Source: Various City Departments 136