2007 Monticello Annual Financial Report
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CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
Annual Financial Report
Year Ended
December 3l, 2007
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CITY OF MONTICELLO
Table of Contents
Page
SECTION I -INTRODUCTORY SECTION
City Council and Administration i
SECTION II -FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 2-11
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets 12
Statement of Activities 13
Fund Financial Statements
Governmental Funds
Balance Sheet 14-1 S
Reconciliation of the Balance Sheet to the Statement of Net Assets 16
Statement of Revenue, Expenditures, and Changes in Fund Balances 17-18
Reconciliation of the Statement of Revenue, Expenditures, and
Changes in Fund Balances to the Statement of Activities 19
Proprietary Funds
Statement of Net Assets 20
Statement of Revenue, Expenses, and Changes in Fund Net Assets 21
Statement of Cash Flows 22
Notes to Basic Financial Statements 23-41
BUDGETARY COMPARISON SCHEDULES
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
General Fund 427
Community Center Fund 48
Capital Outlay Revolving Fund 49
Sanitary Sewer Access Fund SO
Notes to the Required Supplementary Information S 1
COMBINING NONMAJOR FUND STATEMENTS
Nonmajor Governmental Funds
Combining Balance Sheet S2-S3
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances S4-SS
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INTRODUCTORY SECTION
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Clint Herbst
Wayne Mayer
Tom Perrault
Brian Stumpf
Susie Wojchouski
Jeff O'Neill
Tom Kelly
CITY OF MONTICELLO
City Council and Administration
as of 12/31/2007
CITY COUNCIL
Term Expires
12/31 /2008
12/31 /2008
12/31 /2008
12/31 /2010
12/31 /2010
ADMINISTRATION
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Mayor
Councilmember
Councilmember
Councilmember
Councilmember
City Administrator
Finance Director
CITY OF MONTICELLO
Management's Discussion and Analysis
Year Ended December 31, 2007
As management of the City of Monticello, Minnesota (the City), we offer the readers of these financial
statements this narrative overview and analysis of the City's financial activities for the fiscal year ended
December 31, 2007.
FINANCIAL HIGHLIGHTS
The assets of the City exceeded its liabilities at year-end by $108,950,450 (net assets). Of this amount,
$30,984,971 (unrestricted net assets) may be used to meet the City's ongoing obligations to citizens and
creditors.
As of the close of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $39,558,564, an increase of $3,085,162 from the prior year. Reserved and designated uses of
fund balance totaled $33,238,606, leaving $6,319,958 available for spending at the City's discretion
(unreserved and undesignated fund balance).
At the end of the current fiscal year, unreserved and designated fund balance for the General Fund was
$189,358, or 2.6 percent of total General Fund expenditures for 2007. The City targets 45 percent as the
optimum fund balance level, providing a reserve for cash flow during the first five months of each
subsequent year until property tax receipts are released from the county treasurer's office and distributed
to the local levels of government. The amount that represents this 45 percent level is reported as
designated for working capital in the General Fund.
The City's total long-term liabilities increased by $2,618,933 (5.1 percent) during 2007. Principal
payments made on outstanding debt totaled $3,388,381. The City issued new debt of $6,045,000 in 2007,
which included refinancing of the 2000A Improvement Bonds which will be refunded on February 1,
2008 and the financing of street and utility projects within the City.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements, which are comprised of three components: 1) government-wide financial statements, 2) fund
financial statements, and 3) notes to basic financial statements.
The report also contains other required supplementary information, which can provide detailed
information on the City's financial activity.
Government-Wide Financial Statements -The government-wide financial statements are designed to
provide readers with a broad overview of the City's finances in a manner similar to a private sector
business. The Statement of Net Assets presents information on all of the City's assets and liabilities, with
the difference between the two reported as net assets. Over time, the changes in net assets may serve as a
useful indicator of the financial health of the City.
The Statement of Activities presents information showing how the City's net assets changed during the
year. All changes in net assets are reported as soon as the underlying event affecting the change occurs,
regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in this
statement for some items that will result in cash flows in future fiscal periods, such as uncollected taxes
and earned but unused vacation leave.
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Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenue (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 provided by the City include general government, public safety,
public works, culture and recreation, sanitation, and economic development. Business-type activities
include water, sewer, liquor, cemetery, and fiber optics activities.
Fund Financial Statements - A fund is a grouping of related accounts used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other units of
government, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the City's funds can be divided into 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 receipt '
and use of spendable resources, as well as on the balance of spendable resources available at the end of
the fiscal year. This information may be useful in evaluating a government's near-term financing
requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide statements. By doing so,
readers may better understand the long-term impact of the City's near-term financing decisions. Both the ,
governmental funds Balance Sheet and the governmental funds Statement of Revenue, Expenditures, and
Changes in Fund Balances provide a reconciliation to facilitate this comparison.
The City maintains several individual governmental funds. Information is presented separately in the
governmental funds Balance Sheet and in the governmental funds Statement of Revenue, Expenditures,
and Changes in Fund Balances for the General Fund, Community Center Special Revenue Fund, Capital
Outlay Revolving Special Revenue Fund, Economic Development Authority Special Revenue Fund,
Sanitary Sewer Access Special Revenue Fund, Debt Service Fund, and Capital Projects Fund, all of
which are considered to be major funds. Data from the remaining governmental funds are combined into
a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is
provided in the form of combining statements elsewhere in this report.
The City adopts an annual budget for its General Fund and several special revenue funds. A budgetary
comparison schedule has been provided for the General Fund and budgeted major special revenue funds
to demonstrate compliance with the adopted budgets.
Proprietary Funds -The City maintains five enterprise funds which are considered proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City uses enterprise funds to account for its water and sewer
service operations, liquor sales operation, cemetery maintenance, and fiber optics operation.
Proprietary funds provide the same type of information as the government-wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for each of the
enterprise operations.
Notes to Basic Financial Statements -The notes to basic financial statements provide additional
information that is essential to obtain a full understanding of the data provided in the government-wide
and fund financial statements.
Other Information -Additional information on nonmajor funds can be found in the combining
nonmajor fund statements section of this report.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
The City's assets exceeded its liabilities by $108,950,450 at the end of 2007.
The largest portion of the City's net assets (42 percent) reflects its investment in capital assets (e.g. land,
buildings, machinery and equipment, and infrastructure) less any related outstanding debt used to acquire
those assets. The City uses these capital assets to provide services to citizens; consequently, these assets
are not available for future spending. Although the City's investment in its capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from
other resources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of Monticello's Net Assets
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Governmental Activities Business-Type Activities Total
2007 2006 2007 2006 2007 2006
Current and other assets $ 61,404,850 $ 59,789,175 $ 7,037,454 $ 6,041,817 $ 68,442,304 $ 65,830,992
Capital assets 64,855,170 61,480,506 34,892,612 35,749,380 99,747,782 97,229,886
Total assets 126,260,020 121,269,681 41,930,066 41,791,197 168,190,086 163,060,878
Long-term liabilities 52,970,319 48,449,246 1,011,449 - 53,981,768 48,449,246
Other liabilities 4,751,872 8,861,064 505,996 603,950 5,257,868 9,465,014
Total liabilities 57,722,191 57,310,310 1,517,445 603,950 59,239,636 57,914,260
Net assets
Invested in capital assets,
net ofrelated debt 12,476,536 7,009,622 33,971,151 35,749,380 46,447,687 42,759,002
Restricted 31,517,792 - - - 31,517,792 -
Unrestricted 24,543,501 56,949,749 6,441,470 5,437,867 30,984,971 62,387,616
Total net assets $ 68,537,829 $ 63,959,371 $ 40,412,621 $ 41,187,247 $ 108,950,450 $105,146,618
At the end of 2007, the City was able to report positive balances in all three categories of net assets, both for
the government as a whole and for its separate governmental and business-type activities.
Governmental Activities -The net assets invested in capital assets, net of related debt in the City's
governmental activities increased from the previous year due to significant infrastructure improvements
and additions. A significant portion of the increase was related to the continuation of the City's
Reconstruction Program and the additional improvements to the City's infrastructure, including
reconstruction of portions of Cedar Street and Chelsea Road and the construction of Dundas Road.
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Business-Type Activities -The net assets of our business-type activities decreased during 2007 due to
transfers to other City funds. The utility funds continue to invest in capital assets to accommodate the
growth of the City in various new subdivisions and also to maintain an aging infrastructure system. Some
of the most significant improvements made this year include infrastructure replacements in conjunction
with the City's Reconstruction Program and utility improvements included in the construction and
reconstruction projects listed within the governmental activities.
City of Monticello's Changes in Net Assets
Governmental Activities Business-Ty pe Activities Total
2007 2006 2007 2006 2007 2006
Revenues
Program revenues
Charges for services $ 3,804,959 $ 4,455,657 $ 3,096,619 $ 2,765,926 $ 6,901,578 $ 7,221,583
Operating grants and
contributions 160,147 281,531 - - 160,147 281,531
Capital grants and
contributions 3,616,870 12,153,185 482,412 2,188,675 4,099,282 14,341,860
General revenues
Property taxes 7,242,838 7,253,560 - - 7,242,838 7,253,560
General grants and aids 288,940 130,000 - - 288,940 130,000
Investment earnings 2,170,025 2,093,877 326,356 334,623 2,496,381 2,428,500
Gain on sale of land - 3,437,959 - - - 3,437,959
Other 528,193 1,181,670 62,664 27,100 590,857 1,208,770
Total revenues 17,811,972 30,987,439 3,968,051 5,316,324 21,780,023 36,303,763
Expenses
General government 1,844,320 3,639,497 - - 1,844,320 3,639,497
Public safety 1,693,116 2,856,573 - - 1,693,116 2,856,573
Public works 4,559,460 5,318,865 - - 4,559,460 5,318,865
Sanitation 509,208 474,045 - - 509,208 474,045
Culture and recreation 2,661,915 2,694,970 - - 2,661,915 2,694,970
Economic development 769,584 2,061,331 - - 769,584 2,061,331
Interest 2,193,840 2,378,871 - - 2,193,840 2,378,871
Water - - 973,375 913,638 973,375 913,638
Sewer - - 2,000,610 2,095,124 2,000,610 2,095,124
Liquor - - 644,857 617,153 644,857 617,153
Cemetery - - 41,312 71,044 41,312 71,044
Fiber optic - - 84,594 - 84,594 -
Total expenses 14,231,443 19,424,152 3,744,748 3,696,959 17,976,191 23,121,111
Increase in net assets
before transfers 3,580,529 11,563,287 223,303 1,619,365 3,803,832 13,182,652
Transfers 997,929 250,000 (997,929) (250,000) - -
Change in net assets 4,578,458 11,813,287 (774,626) 1,369,365 3,803,832 13,182,652
Netassets-beginning 63,959,371 52,146,084 41,187,247 39,817,882 105,146,618 91,963,966
Net assets -ending $ 68,537,829 $ 63,959,371 $ 40,412,621 $ 41,187,247 $108,950,450 $105,146,618
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GOVERNMENTAL ACTIVITIES -REVENUES
Revenues by Source -Governmental Activities
Charges for
General Grants Services
and Aids 21%
Property Taxes
41%
rating Grants
contributions
1%
Other
15%
Revenues for the City's governmental activities decreased by $13.18 million, or 43 percent. The major
components of this decrease are explained as follows:
• Capital grants and contributions decreased by $8.5 million, or 70 percent. This decrease was due to
assessing new special assessments of $8 million in 2007 and recording revenue from Wright
County for the I-94 Interchange Project completed in 2006.
• Charges for services decreased by $651,000, or 14.6 percent. This decrease was primarily due to a
reduction in sanitary sewer access fees collected of $346,000, a reduction in storm sewer access fees
of $107,000, and a reduction in water access fees of $70,000, due to a decrease in new
developments.
• In 2006, the City sold land for $3.4 million, whereas in 2007 no such land sale took place.
• Investment earnings increased by $76,000, primarily due to holding long-term investments at higher
rates than current short-term rates.
Expenses -City expenses for governmental activities decreased by $5.2 million, or 27 percent. The
decrease is primarily due to decreased engineering costs due to less construction projects for highways and
streets.
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Capital Grants and
Contributions
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GOVERNMENTAL ACTIVITIES -BUSINESS-TYPE ACTIVITIES
Revenues by Source -Business-Type Activities
Capital Grants and
Contributions
12%
Charges for
Services
78%
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Business-type activities decreased the City's net assets by $774,626. The rates for each of the City's utility
services operated as enterprise funds are reviewed annually and adjusted by the City Council to assure
operating revenues are independently sufficient to cover their own operating expenses and provide for their
own capital equipment replacement needs. Capital grants and contributions may be necessary for the future
replacement of facility needs as the current and projected future rates will not be sufficient for their ultimate
replacement.
The City's business-type charges for services increased by over $330,000, or 12 percent, primarily due to
increased sales from the liquor store operation of $52,000 and additional revenue from sewer and water
charges of $342,000.
Capital grants and contributions decreased by $1.7 million due to a decrease in capital asset contributions
from governmental funds.
Business-type expenses increased from the previous year by approximately $48,000 due to increased costs
of bank charges at the liquor store of $18,000, $58,000 additional personnel costs in the Water Fund, and
$84,500 in new costs associated with the City's new Fiber Optic Project.
The charges for services generated by governmental activities include basic services such as licenses and
permits, zoning and development fees, and recreation program fees.
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FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
1 As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
1 Governmental Funds -The focus of the City's governmental funds is to provide information on near-term
receipts, uses, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $39,558,564, an increase of $3,085,162 from the prior year. Approximately 16 percent of this
total amount ($6,319,958) constitutes unreserved and undesignated fund balance, which is available for
spending at the City's discretion. The remainder of fund balance is designated to indicate that, although it
is available for spending, it has been internally committed 1) to liquidate contracts and purchase orders of
the prior period, 2) to pay debt service, or 3) for a variety of other designated purposes.
The City's General Fund increased $141,574 during the current fiscal year. Increased licenses and
permits, charges for services, and interest earnings provided additional revenues in 2007. The City also
implemented two new revenue sources, rental housing inspection fees, which generated an additional
$28,745 and a franchise fee on electric use, which generated an additional $146,045 in General Fund
revenue in 2007. Each of the main activities of the General Fund were completed efficiently and
effectively as authorized within the adopted budget, without using reserve balances. This resulted in total
General Fund expenditures being under budget by $228,873 for the year.
Community Center Special Revenue Fund -The increase in the Community Center Special Revenue
1 Fund balance was the result of additional revenue generated through increases in memberships and an
increase in property tax revenues.
Sanitary Sewer Access Special Revenue Fund -The Sanitary Sewer Access Special Revenue Fund
decreased by $1.1 million due to reduced revenues because of less new development activity taking place
in the City and the transfer of funds for the Sanitary Sewer Access Fund's share of debt service payments.
1 Capital Projects Fund -The fund resources decreased in the current year primarily from previous
proceeds from the sale of bonds being used for completion of various public improvement projects.
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Proprietary Funds -The City's proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
Unrestricted net assets at the end of the year totaled $4,534,875 for the Water Fund and Sewer Fund,
$1,991,489 for the Liquor and Cemetery Funds, and ($84,894) for the Fiber Optic Fund. Capital assets,
net of related debt, account for approximately 84 percent of total enterprise fund net assets. The City is in
the process of installing a fiber optic network to every premise in the City to provide phone, high-speed
Internet, and cable television services. The City will pay for the cost of operation and maintenance of the
system from user fees. Since the City is in the very early stages of implementing this system, this
enterprise fund has no capital assets currently. The City also operates a municipal liquor operation with
some of the profits used to reduce the properly tax levies required to operate other City activities. Other ,
factors concerning the finances of these funds have been presented in the discussion of the business-type
activities.
The expenses exceeded revenues in the Water Fund and Sewer Fund during 2007 by $625,219. The r
Water Fund and Sewer Fund expended over $482,000 in infrastructure improvements in 2007 to
accompany the ongoing street improvement projects. These costs were not offset by the 2007 water rates
and revenue flow of the water utility. The debt service interest and depreciation amounts impact the net
income position of these funds.
The City's liquor operations ended the year with increases in net assets from operations, while the City's
cemetery operations saw a decrease in net assets. The Cemetery Fund sets its charges and fees at a level
to break even or have a slight increase. The City's Liquor Fund had operating net income of over
$460,000 and transferred $330,000 to other funds to reduce property taxes.
In 2007, the City started its Fiber Optic Project, which will run a fiber optic system to every premise in
the City to provide customers with phone, high-speed Internet, and cable television services as a
self-supporting system with competitive pricing which will act as an economic development tool for the
City.
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GENERAL FUND BUDGETARY HIGHLIGHTS
' General Fund revenues for 2007 exceeded budget by $351,318 in total. Licenses and permits collected
were $255,9491ower than anticipated due to decreased activity in building permits, both commercial and
residential, as well as the delay in several projects which will be undertaken in 2008.
General Fund expenditures for 2007 were $228,873 less than budgeted. The cost reductions included an
unfilled position in general government, lower than anticipated legal fees, and less funds spent on
consulting engineering due to fewer new development and construction projects.
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CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets -The City's investment in capital assets for its governmental and business-type activities
amounts to $99,747,782 as of December 31, 2007, net of accumulated depreciation. This investment in
capital assets includes fire and public works equipment, park and recreation facilities, buildings, roads,
sewer, water, and storm sewer utilities. This amount represents a net increase (including additions and
deductions) of $2,517,896 over last year.
City of Monticello's Capital Assets
Governmental Activities Business-Ty pe Activities Total
2007 2006 2007 2006 2007 2006
Land $ 7,162,826 $ 6,363,420 $ 1,217,845 $ 1,209,580 $ 8,380,671 $ 7,573,000
Construction in progress 24,927,847 20,523,835 6,191,218 5,845,433 31,119,065 26,369,268
Infrastructure 35,043,517 35,043,517 28,510,507 28,510,509 63,554,024 63,554,026
Buildings 13,135,936 13,018,486 5,156,471 5,156,471 18,292,407 18,174,957
Improvements other
than buildings 4,115,256 4,015,218 18,056,314 17,828,867 22,171,570 21,844,085
Machinery, equipment,
and vehicles 3,266,866 3,139,200 1,380,772 1,313,180 4,647,638 4,452,380
Less accumulated
depreciation (22,797,078) (20,623,170) (25,620,515) (24,114,660) (48,417,593) (44,737,830)
Net total $ 64,855,170 $ 61,480,506 $ 34,892,612 $ 35,749,380 $ 99,747,782 $ 97,229,886
Additional information on the City's capital assets is located in Note 3 of the notes to basic financial
statements.
Long-Term Debt - At the end of 2007, the City has total bonded debt outstanding in the amount of
$52,870,592, of which $28,415,000 are special assessment bonds outstanding. The City has pledged
revenue streams from general property taxes, redevelopment district tax increments, the Community
Center, Water and Sewer Utility, and Sanitary Sewer, Water, and Storm Sewer Access Funds for the
principal and interest payments due on these bonds.
The City issued $6,045,000 in new bonds in 2007. These bonds will finance the reconstruction of Cedar
Street and Chelsea Road, the Construction of Dundas Road, the 2007 Street Reconstruction Project,
refinance the 2000A Improvement Bonds, and finance improvements at the Waste Water Treatment Plant.
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City of Monticello's Outstanding Debt
Governmental Business-Type
Activities Activities Total
2007 2006 2007 2006 2007 2006
General obligation bonds $ 7,132,903 $ 2,210,000 $ 907,097 $ - $ 8,040,000 $ 2,210,000
Tax increment bonds 680,000 810,000 - - 680,000 810,000
Special assessment bonds 28,415,000 30,255,000 - - 28,415,000 30,255,000
General obligation notes 9,515,592 10,188,973 - - 9,515,592 10,188,973
Revenue bonds 6,220,000 6,650,000 - - 6,220,000 6,650,000
Contract for deed 664,293 764,293 - - 664,293 764,293
Total $ 52,627,788 $ 50,878,266 $ 907,097 $ - $ 53,534,885 $ 50,878,266
The City's total debt increased by $2,656,619, or approximately 5.2 percent, during 2007.
State statutes limit the amount of general obligation debt a governmental entity may issue to 2 percent of
its taxable market value. The current debt limit is $23,203,682, which is significantly in excess of the
City's outstanding net general obligation debt of $8,040,000, which is subject to the limitation.
Additional information on the City's debt is located in Note 4 of the notes to basic financial statements
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The City considered many factors when setting the fiscal year 2008 budget, rates, and fees that will be
charged in the business-type activities. With the City Council's decision to increase the previous year's
tax levy by $1,100,000, they used the electric utility franchise fee of 3 percent, which is expected to
generate $280,000 in revenue for street light improvements. Budgeted revenues for permits and charges
for services were reduced to reflect less new development activity taking place in 2008. Budgeted sewer
and water user fees were increased by 15 percent to be used to fund operational costs for their
departments that were previously covered by the General Fund. Finally, reserve funds of $751,105 from
the debt service funds and $171,619 from enterprise funds were included to balance the budget. The
City's property tax levy for 2008 will amount to $7.6 million, $1.1 million more than 2007.
REQUESTS FOR INFORMATION
The City's financial statements are designed to provide our citizens, customers, and creditors with a
general overview of the City's finances and to show the City's accountability for the money it receives. If
you have questions about this report or need additional financial information, contact the City of
Monticello, Finance Department at 505 Walnut Street, Suite No. 1, Monticello, Minnesota 55362.
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BASIC FINANCIAL STATEMENTS
CITY OF MONTICELLO
Statement of Net Assets
as of December 31, 2007
Governmental Business-Type
Activities Activities Totals
Assets
Cash and investments $ 32,192,390 $ 5,649,162 $ 37,841,882
Receivables
Delinquent taxes 227,526 - 227,526
Delinquent special assessments 542,512 19,520 562,032
Deferred special assessments 15,998,891 166,770 16,165,661
Interest 238,630 39,827 278,457
Accounts 608,659 485,809 1,094,468
Notes 3,038,875 - 3,038,875
Due from other governmental units 836,977 - 836,977
Land held for resale 7,390,067 - 7,390,067
Inventory - 652,241 652,241
Prepaid items 131,757 24,125 155,882
Unamortized bond issuance costs 198,566 - 198,566
Capital assets, not being depreciated
Land 7,162,826 1,217,845 8,380,671
Construction in progress 24,927,847 6,191,216 31,119,063
Capital assets, being depreciated
Buildings 13,135,936 5,156,471 18,292,407
Furniture and equipment 301,991 93,663 395,654
Vehicles 1,879,68] 561,166 2,440,847
Machinery and equipment 1,085,194 725,943 1,811,137
Improvements other than buildings 4,l ] 5,256 18,056,314 22,171,570
Infrastructure 35,043,517 28,510,509 63,554,026
Less accumulated depreciation (22,797,078) (25,620,515) (48,417,593)
Total capital assets, net of depreciation 64,855,170 34,892,612 99,747,782
Total assets $ 126,260,020 $ 41,930,066 $ 168,190,086
Liabilities
Current liabilities
Accounts and contracts payable $ 963,037 $ 305,127 $ 1,268,164
Due to other governmental units 76,585 56,089 132,674
Other accrued liabilities 138,921 34,635 173,886
Accrued interest payable 894,307 - 894,307
Unamortized premium 629,412 14,364 643,776
Unearned revenues - 91,152 91,152
Escrow deposits 2,049,610 4,629 2,054,239
Long-term liabilities
Due within one year 4,966,951 14,382 4,981,333
Due within more than one year 48,003,368 997,067 49,000,435
Total long-term liabilities 52,970,319 1,011,449 53,981,768
Total liabilities 57,722,191 1,817,445 59,239,636
Net assets
Invested in capital assets, net of related debt 12,476,536 33,971,151 46,447,687
Restricted for debt service 31,517,792 - 31,517,792
Unrestricted 24,543,501 6,441,470 30,984,971
Total net assets 68,537,829 40,412,621 108,950,450
Total liabilities and net assets $ 126,260,020 $ 41,930,066 $ 168,190,086
See notes to basic fmancial statements
-12-
CITY OF MONTICELLO
Statement of Activities
Year Ended December 31, 2007
Program Revenues Net (Expense) Revenue and Changes in Net Assets
Operating Capital Business-
Charges for Grants and Grants and Governmental Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals
Governmental activities
General government $ 1,844,320 $ 695,117 $ - $ - $ (1,149,203) $ - $ (1,149,203)
Public safety 1,693,116 93,138 133,802 - (1,466,176) - (1,466,176)
Public works 4,559,460 1,994,067 14,318 3,486,230 935,155 - 935,155
Sanitation 509,208 - - - (509,208) - (509,208)
Culture and recreation 2,661,915 1,015,869 12,027 130,640 (1,503,379) - (1,503,379)
Economic development 769,584 6,768 - - (762,816) - (762,816)
Interest 2,193,840 - - - (2,193,840) - (2,193,840}
Total governmental
activities 14,231,443 3,804,959 160,147 3,616,870 (6,649,467) - (6,649,467)
Business-type activities
1 Water
Sewer
Liquor
Cemetery
Fiber optics
Total business-type
activities
973,375 867,873
2,000,610 1,196,983
644,857 1,002,933
41,312 28,830
84,594 -
3,744,748 3,096,619
- 303,284 - 197,782 197,782
- 179,128 - (624,499) (624,499)
- - - 358,076 358,076
- - - (12,482) (12,482)
_ - - (84,594) (84,594)
_ 482,412 - (165,717) (165,717)
Total govemmental
and business-type
activities $17,976,191 $ 6,901,578 $ 160,147 $ 4,099,282
General revenues
Property taxes
General aids and grants -unrestricted
Investment earnings
Gain on sale of assets
Other general revenues
Transfers
Total general revenues and transfers
Change in net assets
Net assets -beginning
Net assets -ending
See notes to basic financial statements
-13-
(6,649,467) (165,717) (6,815,184)
7,242,838 - 7,242,838
288,940 - 288,940
2,170,025 326,356 2,496,381
16,267 - 16,267
511,926 62,664 574,590
997,929 (997,929) -
11,227,925 (608,909) 10,619,016
4,578,458 (774,626) 3,803,832
63,959,371 41, 187,247 105,146,618
$ 68,537,829 $40,412,621 $108,950,450
1
CITY OF MONTICELLO
Balance Sheet
Governmental Funds
as of December 31, 2007
Special Revenue Funds
Economic
Community CapitalOutIay Development
General Center Revolving Authority
Assets
Cash and investments
Receivables
Delinquent taxes
Deferred special assessments
Delinquent special assessments
Accounts
Accrued interest
Due from other governmental units
Notes receivable
Due from other funds
Land held for resale
Prepaid items
Total assets
Liabilities and Fund Balances
Liabilities
Accounts and contracts payable
Other accrued liabilities
Due to other governmental units
Due to other funds
Deferred revenue
Escrow deposits
Total liabilities
Fund balances
Reserved
Notes receivable
Debt retirement
Prepaid items
Land held for resale
Ball Feld lighting
Unreserved -designated
Unreserved - undesignated reported in
General Fund
Special revenue funds
Capital Projects Fund
Total fund balances
Total liabilities and fund balances
See notes to basic financial statements
$ 7,098,830 $ 508,331 $ 907,123 $ 1,440,903
162,737 43,635 - -
4,811 - 572,592 -
1,033 - 9,832 -
283,676 11,936 355 307
55,664 388 12,594 12,482
300,111 - - 898,824
100,000 - 1,112,842 -
- - 6,528,123 505,407
108,183 23,250 - -
$ 8,115,045 $ 587,540 $ 9,143,461 $ 2,857,923
$ 164,509 $ 23,250
121,166 17,183
72,401 4,120
168,581 47,354
2,026,901 5,209
2,553,558 97,116
$ 90,217 $ 203,511
- 492
- 100,000
582,425 -
- 17,500
672,642 321,503
300,111 - - 898,824
- - - 664,293
108,183 23,250 - -
- - 6,528,123 505,407
22,000 - -
4,941,835 63,000 -
189,358 - -
- 404,174 1,942,696 467,896
5,561,487 490,424 8,470,819 2,536,420
$ 8,115,045 $ 587,540 $ 9,143,461 $ 2,857,923
-14-
'
Sanitary
Sewer Access Debt Service Capital Projects Nonmajor Funds Totals
$ 6,057,520 $ 11,543,704 $ _ $ 4,635,979 $ 32,192,390
21,154 227,526
1,089,538 12,489,005 - 1,842,945 15,998,891
' 67,095 198,993 265,559 542,512
4,139 285,249 = 22,997 608,659
54,084 78,798 (17,602) 42,222 238,630
= - 836,977 - 836,977
1 1,600,000 239,940 3,038,875
- - - - 1,212,842
= 356,537
75 = -
249 7,390,067
131,757
$ 7,272,376 $ 26,552,361 $ 819,375 $ 7,071,045 $ 62,419,126
$ 119,200 $ 1,119 $ 336,747 $ 24,484 $ 963,037
- - - 80 138,921
- - - 64 76,585
' - - 1,112,842 - 1,212,842
1, 156,633 14,334,914 2, 129,660 18,419,567
- - - - 2,049,610
1 1,275,833 14,336,033 1,449,589 2,154,288 22,860,562
- - - 239,940 1,438,875
5,996,543 11,859,716 - - 18,520,552
- 75 - 249 131,757
= 356,537 = = 7,390,067
22,000
- - - 730,520 5,735,355
- - - - 189,358
- - - 3,946,048 6,760,814
- - (630,214) - (630,214}
5,996,543 12,216,328 (630,214) 4,916,75? 39,558,564
$ 7,272,376 $ 26,552,361 $ 819,375 $ 7,071,045 $ 62,419,126
-15-
CITY OF MONTICELLO
Reconciliation of the Balance Sheet to the
Statement of Net Assets
Governmental Funds
as of December 31, 2007
Total fund balances -governmental funds $ 39,558,564
Amounts reported for governmental activities in the Statement ofNet Assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported as assets in governmental funds. These assets consist of:
Land 7,162,826
Construction in progress 24,927,847
Buildings 13,135,93b
Furniture and equipment 301 991
Vehicles 1,879,681
Machinery and equipment 1,085,194
Improvements other than buildings 4,115,256
Infrastructure 35,043,517
Less accumulated depreciation (22,797,078)
Same of the City's property taxes, special assessments, and notes receivable will be collected
after year-end, but are not available soon enough to pay for the current period's expenditures,
and, therefore, are reported as deferred revenue in the governmental funds. 18,419,567
Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an
expenditure when due. Accrued interest for general obligation bonds is included in the
Statement of Net Assets. (894,307)
Long-term liabilities that pertain to governmental funds, including bonds payable, are not due
and payable in the current period and, therefore, are not reported as fund liabilities. All
liabilities, both current and long-term, are reported in the Statement of Net Assets:
Bonds payable
Notes payable (42,447,903)
(9 515 592)
Contract for deed payable (664,293)
Deferred bond issuance costs 198,566
Unamortized bond premium (629,412)
Compensated absences (342 531)
' Total net assets -governmental activities $ 68,537,829
u
' See notes to basic financial statements
-I 6-
CTIY OF MONTICELLO
Statement of Revenue, Expenditures, and Changes in Fund Balances
Governmental Funds
Year Ended December 31, 2007
Revenue
Property taxes
Special assessments
Franchise fees
Licenses and permits
Intergovernmental
Chazges for services
Fines
Interest earnings (charges)
Miscellaneous
Total revenue
Expenditures
Current
General government
Public safety
Public works
Sanitation
Culture and recreation
Economic development
Capital outlay
General government
Public safety
Public works
Culture and recreation
Economic development
Debt service
Principal
Interest and fiscal chazges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses)
Transfer in
Transfer out
Proceeds from sale of assets
Loss on disposal of land held for resale
Proceeds from sate of bonds
Premium on bonds issued
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit)
Beginning of year
End of year
See notes to basic financial statements
Special Revenue Funds
Economic
Community Capital Outlay Development
General Center Revolving Authority
$ 4,433,359 $ 1,176,130 $ 146 $ 824,714
1,644 - 147,384 -
146,045 - - _
627,751 - _ _
436,588 48,207 - 19,490
1,210,751 1,011,147 - 6,368
5,027 - _ _
487,186 (2,614) 99,916 136,107
124,807 812 6,000 400
7,473,158 2,233,682 253,446 987,079
1,899,097 - _ _
1,603,331 - _ _
1,656,937 - _ _
504,208 - - _
694,658 1,470,359 - _
79,781 - - 693,071
12,230 - _ _
5,454 - _ _
719,686 - 476,274 -
90,785 - _ _
- - - 450,000
- - - 100,000
- - - 45,858
7,271,167 1,470,359 476,274 1,288,929
201,991 763,323 (222,828) (301,850}
80,939 250,000 79,215 110,735
(159,456) (857,750) (10,105) (137,900)
18,100 14,420 - _
- - - (103,084)
- - 725,714 -
- - 11,455 -
(60,417) (588,330) 806,279 (130,249)
141,574 174,993 583,451 (432,099)
5,419,913 315,431 7,887,368 2,968,519
$ 5,561,487 $ 490,424 $ 8,470,819 $ 2,536,420
-17-
1
' sanitary
Sewer Access Debt Service Capital Projects Nonmajor Funds Totals
$ - $ 8,953 $ $ 572,011 $ 7,015,313
260,097 2,181,136 _ 522,113 3,112,374
- - - - 146,045
627,751
' - 400,000 836,977 23,371 1,764,633
448,583 - - 212,132 2,888,981
- - - - 5,027
467,103 823,921 (219,484) 377,890 2,170,025
' 91,806 2,632 226,457
1,175,783 3,414,010 709,299 1,710,149 17,956,606
- - - - 1,899,097
_
292,156 _ _ =
2,619 1,603,331
1,951,712
509,208
- - - 49,091 2,214,108
' - 772,852
- - - - 12,230
- - - - 5,454
67,329 = 3,914,062 693,246 5,870,547
90,785
- - - 1,355 451,355
= 3,288,382 3,388,382
2,210,453 = = 2,256,311
359,485 5,498,835 3,414,062 746,311 21,025,422
' 816,298 (2,084,825) (3,204,763) 963,838 (3,068,816)
4,038,149 632,908 10,105 5,202,051
=
(1,879,009) (1,500) (262) (1,158,140) (4,204,122)
- - - 37,520
- - - - (103,084)
= 725,786 3,686,403 5,137,903
' 11,383 60,872 = 83,710
(1,879,009) 4,773,818 4,379,92] (1,148,035) 6,153,978
' (1,062,711) 2,688,943 1,175,158 (184,197) 3,085,162
7,059,254 9,527,335 (1,805,372) 5,100,954 36,473,402
' $ 5
996
543 $ 12
216
328 $
630
214
,
, ,
, (
,
) $ 4,916,757 $ 39,558,564
-18-
CITY OF MONTICELLO
Reconciliation of the Statement of
Revenue, Expenditures, and Changes in Fund Balances
to the Statement of Activities
' Governmental Activities
Year Ended December 31, 2007
Total net change in fund balances - overnmental funds $ 3 085 162
g ,
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the Statement of
Activities, the cost of those assets is allocated over the estimated useful lives as depreciation
expense. This is the amount by which capital assets changed:
Capital outlays 5,733,217
Deletions of capital assets (21,253)
Depreciation expense (2,337,300)
The governmental funds report bond proceeds as financing sources, while repayment of bond
principal is reported as an expenditure. In the Statement of Net Assets, however, issuing debt
increases long-term liabilities and does not affect the Statement of Activities:
Proceeds from bonds issued (5,137,903)
Repayment of bond principal 2,6I5,000
Repayment of note principal 673,381
Repayment of contract for deed 100,000
Change in accrued interest payable 13,398
Amortization of bond issuance 28,238
Amortization of bond premium (62,874)
Change in compensated absences 50,293
Certain revenues (including delinquent taxes and special assessments) are included in the change in
net assets, but are excluded from the change in fund balances until they are available to liquidate
liabilities of the current period.
Change in deferred revenue (160,901)
Change in net assets -governmental activities
See notes to basic financial statements
$ 4,578,458
-19-
Assets
Current assets
Cash and investments
Receivables
Accounts
Accrued interest
Deferred special assessments
Delinquent special assessments
Due from other funds
Inventory
Prepaids
Total current assets
Capital assets
Land
Buildings
Furniture and equipment
Vehicles
Machinery and equipment
Improvements other than buildings
Infrastructure
Construction in progress
Less accumulated depreciation
Capital assets, net of depreciation
Total assets
Liabilities
Current liabilities
Accounts and contracts payable
Other accrued liabilities
Due to other governmental units
Due to other funds
Unamortized premiums
Unearned revenue
Escrow deposits
Total current liabilities
Long-term liabilities
Bonds payable
Compensated absences payable
Total long-term liabilities
Total liabilities
Net assets
Invested in capital assets, net of
related debt
Unrestricted
Total net assets
See notes to basic fmancial statements
CITY OF M
ONTICELLO
Statement of Net Assets
Proprietary Funds
as of December 31, 2007
Business-Type AcEivities -Enterprise Funds
Water Sewer Liquor Cemetery Fiber Optics Totals
$ 1,826,130 $ 2,272,417 $ 1,514,243 $ 36,372 $ - $ 5
649
162
,
,
159,079 318,486 7,364 880 - 485,809
14,446 12,935 12,104 342 - 39,827
166,770 - - - - 166,770
19,520 - - - - 19,520
27,697 - - - - 27,697
- - 652,241 - - 652,241
9,416 5,901 8,808 - - 24,125
2,223,058
2,609,739 2,194,760
37,594 -
7,065,151 ,
208,143 984,202 5,600 19,900 - 1,217,845
848,445 3,570,119 737,907 - - 5,156,471
15,695 41,019 36,949 - - 93,663
81,553 479,613 - - - 561,166
166,267 495,425 64,251 - - 725,943
279,399 17,609,984 81,040 85,891 - 18,056,314
13,917,828 14,592,681 - - - 28,510,509
3,568,017 2,623,199 - - - 6,191,216
19,085,347 40,396,242 925,747 105,791 - 60,513,127
(6,680,124)
12,405,223 (18,504,723)
21,891,519 (416,352)
509,395 (19,316)
86,475 - (25,620,515)
- 34,892,612
$ 14,628,281 $ 24,501,258 $ 2,704,155 $ 124,069 $ - $ 41,957,763
$ 23,746 $ 112,258 $ 111,926 $ - $ 57,197 $ 305,127
4,772 1,693 28,111 S9 - 34,635
19,124 134 36,831 - - 56,089
- - - - 27,697 27,697
- 14,364 - - 14,364
84,852 - 1,300 - - 91,152
1,630 875 515 1,609 - 4,629
139,124 129,324 178,683 1,668 84,894 533,693
- 907,097 - - - 907,097
43,838 - 60,514 - - 104,352
43,838 907,097 60,514 - - 1,011,449
182,962 1,036,421 239,197 1,668 84,894 I,545,142
12,405,223
2,040,096 20,970,058
2,494,779 509,395
],955,563 86,475
35,926 -
(84,894) 33,971,151
6,441,470
S 14,445,319 $ 23,464,837 $ 2,464,958 $ 122,401 $ (84,894) $ 40,412,621
-20-
1
Iiii
ILJ
1
1
1
1
1
Operating revenue
Sales
Cost of goods sold
Charges for services
Other revenue
Total operating revenue
Operating expenses
Personal services
Utilities
Supplies and maintenance
Repairs and maintenance
Depreciation
Insurance
Professional fees
Advertising
Miscellaneous
Total operating expenses
Operating income (loss)
Nonoperating revenues
Investment earnings (chazges)
Income (loss) before
contributions and transfers
Contributions and transfers
Capital contributions
Transfers in
Transfers (out)
Total contributions and transfers
Change in net assets
Net assets
' Beginning of yeaz
End of year
1
1
1
See notes to basic financial statements
CITY OF MONTICELLO
Statement of Revenue, Expenses, and Changes in Fund Net Assets
Proprietary Funds
Year Ended December 31, 2007
Business-Ty pe Activities -Enterprise Funds
Water Sewer Liquor Cemetery Fiber Optics Totals
$ - $ - $ 3,769,077 $ - $ - $ 3,769,077
- - (2,766,144) - - (2,766,144)
867,873 1,196,983 - 28,830 - 2,093,686
34,034 28,497 133 - - 62,664
901,907 1,225,480 1,003,066 28,830 - 3,159,283
241,557 153,599 421,531 16,945 - 833,632
106,921 13,388 27,824 - - 148,133
121,487 10,550 9,876 585 295 142,793
3,337 15,415 9,924 614 - 29,290
431,342 1,022,312 48,765 3,436 - 1,505,855
11,603 23,699 9,377 - - 44,679
16,142 742,469 12,544 19,669 52,395 843,219
- - 2,410 - - 2,410
40,986 19,178 102,606 63 31,904 194,737
973,375 2,000,610 644,857 41,312 84,594 3,744,748
(71,468) (775,130) 358,209 (12,482) (84,594) (585,465)
121,388 99,491 102,297 2,980 (300) 326,356
49,920 (675,139) 460,506 (9,502) (84,894) (259,109)
303,284 179,128 - - - 482,412
- 262 - - - 262
(267,000) (400,300} (330,891) - - (998,191)
36,284 (220,910) (330,891) - - (515,517)
86,204 (896,049) 129,615 (9,502) (84,894) (774,626)
14,359,115 24,360,886 2,335,343 131,903 - 41,187,247
$ 14,445,319 $ 23,464,837 $ 2,464,958 $ 122,401 $ (84,894) $ 40,412,621
-21-
CITY OF MONTICELLO
Cash flows from operating activities
Statement of Cash Flows
Proprietary Funds
Year Ended December 31, 2007
Business-Type Activities -Enterprise Funds
Water Sewer Liquor Cemetery Fiber Optics Totals
Cash received from customers $ 866,696 $1,178,134 $1,001,376 $ 28,400 $
Cash payments to suppliers (287,700) (948,943) (267,5]0) (20,922)
Cash payments to employees (231,018) (152,787) (417,004) (16,886) _
Net cash provided (used) by operating activities 347,978 76,404 316,862 (9,408)
Cash flows from noncapital fmancing activities
li
1
i
LI
- $ 3,074,606
(27,397) (1,552,472) '
(817,695)
(27,397) 704,439
Interfund borrowing (a/,6Y"/) - - - 27,697 -
Transfers in - 262 - - - 262
Transfers out (267,000) (400,300) (330,891) - - (998,191)
Net cash provided (used) by noncapital
financing activities (294,697) (400,038) (330,891) - 27,697 (997,929)
Cash flows from capital and related financing activities
Acquisition and construction of capital assets - (166,675) - - - (166,675)
Proceeds from sale of bonds - 92],461 - - - 921,461
Interest received on investments 106,942 87,056 90,193 2,638 (300) 286,529
Net cash provided (used) by capital and
related financing activities 106,942 841,842 90,193 2,638 (300) 1,041,315
Net increase (decrease) in cash and cash
equivalents 160,223 518,208 76,164 (6,770) - 747,825
Cash and cash equivalents
Beginning of year 1,665,907 1,754,209 1,438,079 43,142 - 4,901,337
End of year $ 1,826,130 $ 2,272,417 $1,514,243 $ 36,372 $ - $ 5,649,162
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities
Operating income (loss) $ (71,468) $ (775,130) $ 358,209 $ (12,482) $ (84,594) $ (585,465)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities
Depreciation 431,342 1,022,312 48,765 3,436 - 1,505,855
Changes in assets and liabilities
(Increase) decrease in accounts receivable 100,186 (47,346) (1,418) (430) 57,197 108,189
(Increase) decrease in special assessments
receivable (186,290) - - - - (186,290)
(Increase) decrease in inventory - - (70,267) - - (70,267)
(Increase) decrease in prepaid expenses (2,112) 114 (422) - - (2,420}
Increase (decrease) in accounts and contracts
payable 11,340 (124,963) (24,490) (1,600) - (139,713)
Increase (decrease)in accrued expenses 10,539 812 4,527 59 - 15,937
Increase (decrease) in due to other governments 1,918 (270) 2,244 - - 3,892
Increase (decrease) in defected revenue 50,893 - (272) - - 50,621
Increase (decrease) in escrow deposits 1,630 875 (14) 1,609 - 4,100
Net cash provided (used) by operating activities $ 347,978 $ 76,404 $ 316,862 $ (9,408) $ (27,397) $ 704,439
Noncash capital and related financing activities
Contributions of capital assets $ 303,284 $ 179,128 $ - $ - $ - $ 482,412
See notes to basic financial statements
-22-
1
L
1
CITY OF MONTICELLO
Notes to Basic Financial Statements
December 31, 2007
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING P LI
O CIES
A. Organization
The financial statements of the City of Monticello, Minnesota (the City) have been prepared in
conformity with accounting principles generally accepted in the United States of America as applied to
government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-
setting body for establishing governmental accounting and financial reporting principles. The significant
accounting policies of the City are described as follows:
B. Reporting Entity
The accompanying financial statements include all funds, departments, agencies, boards, commissions,
and other organizations that comprise the City, along with any component units.
' Component units are legally separate entities for which the City (primary government) is financially
accountable, or for which the exclusion of the component unit would render the financial statements of
the primary government misleading. The criteria used to determine if the primary government is
financially accountable for a component unit includes whether or not the primary government appoints
' the voting majority of the potential component unit's governing body, is able to impose its wilt on the
potential component unit, is in a relationship of financial benefit or burden with the potential component
unit, or is fiscally depended upon by the potential component unit.
' The Monticello Economic Development Authority (EDA) is fiscally dependent upon the City, and its
governing body consists of City Council members. Therefore, the EDA is included as a component unit
of the City. The EDA's financial data has been blended with that to of the City (i.e., reported as though
' its funds were funds of the City) and reported as a special revenue fund.
C. Government-Wide Financial Statement Presentation
The government-wide financial statements (Statement of Net Assets and Statement of Activities) display
information about the reporting government as a whole. These statements include all of the financial
activities of the City. 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 City's net assets are reported in three parts: (1)
invested in capital assets, net of related debt; (2} restricted net assets; and (3) unrestricted net assets.
The Statement of Activities demonstrates the degree to which the direct expenses of given functions or
segments are 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, 2) operating grants and contributions, and 3) capital grants and contributions, including special
assessments that are restricted to meeting the operational or capital requirements of a particular function
or segment. Taxes and other internally directed revenues are reported as general revenues.
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when
a Liability is incurred, regardless of the timing of related cash flows. Property taxes and special
assessments are recognized as revenues in the fiscal year for which they are levied. Grants and similar
items are recognized as revenue when all eligibility requirements imposed by the provider have been met.
-23-
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Generally, the effect of interfund activity has been removed from the government-wide financial
statements. However, charges between functions for certain interfund services provided are not
eliminated, as that would distort the direct costs and program revenues reported in those functions. The
City applies restricted resources first when an expense is incurred for which both restricted and
unrestricted resources are available. Depreciation expense is included in the direct expenses of each
function. Interest on long-term debt is considered an indirect expense and is reported separately on the
Statement of Activities.
D. Fund Financial Statement Presentation
Separate fund financial statements are provided for governmental and proprietary funds. Major individual
governmental and enterprise funds are reported as separate columns in the fund financial statements.
Aggregated information for the remaining nonmajor funds are reported in single columns in the respective
fund financial statements.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of
the City's enterprise funds are charges to customers for sales and services. The operating expenses for the
enterprise funds include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Under this basis of accounting transactions are
recorded in the following manner:
1. Revenue Recognition -Revenue is recognized when it becomes measurable and available.
"Measurable" means the amount of the transaction can be determined and "available" means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the
current period. For this purpose, the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal year. Grants and similar items are recognized when
all eligibility requirements imposed by the provider have been met.
Major revenue that is susceptible to accrual includes property taxes, intergovernmental revenue,
charges for services, and interest earned on investments. Only the portion of special assessments
receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. Major revenue that is not susceptible to accrual includes licenses
and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received
because it is not measurable until collected.
2. Recording of Expenditures -Expenditures are generally recorded when a liability is incurred,
except for principal and interest on long-term debt and compensated absences, which are
recognized as expenditures to the extent they have matured. Capital asset acquisitions are
reported as capital outlay expenditures in the governmental funds. Proceeds of long-term debt are
reported as other financing sources.
Proprietary fund financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting as described earlier in these notes.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989, are
generally followed in both the government-wide and proprietary fund financial statements to the extent
those standards do not conflict with or contradict guidance of GASB. Governments have the option of
following subsequent private sector guidance for their business-type activities and enterprise funds,
subject to this same limitation. The City has elected not to follow subsequent private sector guidance.
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NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Description of Funds
Each fund is accounted for as an independent entity. A description of the funds included in this report is
as follows:
Major Governmental Funds
General Fund -The General Fund is used to account for all financial resources except those required
to be accounted for in another fund.
Community Center Fund -The Community Center Fund accounts for the revenues and
expenditures related to the community center.
Capital Outlay Revolving Fund -The Capital Outlay Revolving Fund is used to account for the
revenues and expenditures related to capital outlay.
Economic Development Authority (EDA) Fund -The EDA Fund is used to account for revenues
and expenditures related to the blended component unit.
Sanitary Sewer Access Fund -The Sanitary Sewer Access Fund is used to account for revenues and
expenditures related to sanitary sewer connections.
Debt Service Fund -Debt service funds are used to account for the accumulation of resources for
and the payment of, long-term debt principal, interest, and related costs.
Capital Projects Fund -
used for the acquisition
proprietary funds).
Major Proprietary Funds
~~
The Capital Projects Fund is used to account for financial resources to be
~r construction of major capital facilities (other than those financed by
Water Fund -The Water Utility Fund is used to account for all activities necessary to provide water
services to the residents and businesses of the City.
Sewer Fund -The Sewer Utility Fund is used to account for all activities necessary to provide sewer
services to the residents and businesses of the City.
Liquor Fund -The Liquor Fund is used to account for the operations of the City's liquor store.
Cemetery Fund -The Cemetery Fund is used to account for the operation of City's cemetery.
Fiber Optics Fund -The Fiber Optics Fund is used to account for all activities necessary to provide
fiber optic services to the residents and businesses of the City.
E. Cash and Investments
Cash and investments include balances from all funds that are combined and invested to the extent
available in savings accounts, certificates of deposit, U.S. government obligations, and other securities
authorized by state statutes. Earnings from investments are allocated to the respective funds on the basis
of applicable participation by each fund. Short-term highly liquid debt instruments (including
commercial paper, banker's acceptances and U.S. treasury and agency obligations) purchased with a
remaining maturity of one year or less are reported at amortized cost. Other investments are reported at
fair value.
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NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
F. Receivables and Payables
Any outstanding balances between funds that are not lending or borrowing arrangements are reported as
"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."
When necessary, the City utilizes an allowance for uncollectible accounts to value its receivables.
However, the City considers all of its current receivables to be collectible.
G. Notes Receivable
Notes receivable consist primarily of loans made by the City to area businesses for development or
redevelopment purposes. The terms and interest rates of the individual loans vary. The notes receivable
in the governmental funds are not offset by deferred revenue.
The City has one note receivable totaling $1,600,000 with another local government. This note has an
interest rate of 3.95 percent and will mature at various dates through January 2016. This note receivable
in the governmental fund is offset by deferred revenue.
H. Property Taxes
Property tax levies are set by the City Council each year, and are certified to Wright County for collection
in the following year. In Minnesota, counties act as collection agents for all property taxes.
A portion of the property taxes levied is paid by the state of Minnesota through various tax credits, which
is included in intergovernmental revenue in the financial statements.
Wright County spreads all levies over taxable property. Such taxes become a lien on January 1 and are
recorded as receivables by the City on that date. Property taxes may be paid by taxpayers in two equal r
installments on May 15 and October 15. Wright County provides tax settlements to cities and other
taxing districts several times throughout the year. Taxes, which remain unpaid at December 31, are
classified as delinquent taxes receivable and offset by deferred revenue in the governmental funds
financial statements.
Within the governmental fund financial statements, the City recognizes property tax revenue when it
becomes both measurable and available to finance expenditures of the current period. The portion of
delinquent taxes not collected by the City in January is fully offset by deferred revenue because it is not
available to finance current expenditures. Deferred revenue in governmental activities is susceptible to
full accrual on the government-wide statements.
I. Special Assessments
Special assessments represent the financing for public improvements paid for by benefiting property
owners. These assessments are recorded as delinquent (levied, but unremitted) and deferred (certified,
but not yet levied) special assessments receivable, and are offset by deferred revenue in the governmental
fund financial statements.
J. Inventories
The inventories of the proprietary funds are stated at cost on the first-in, first-out basis.
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NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
K. Prepaid Items
Payments to vendors for services that will benefit future accounting periods are recorded as prepaid.
Prepaid items are accounted for using the consumption method.
L. Land Held for Resale
Land held for resale is recorded in the governmental fund which purchased it at the lower of cost or
_ market. Fund balance is reserved in an amount equal to the land's carrying value as the related funds are
not available for appropriation.
M. Capital Assets
~I Capital assets, which include property, plant, equipment, and infrastructure assets (roads, bridges,
sidewalks, and similar items) are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Such assets .are capitalized at historical cost, or
estimated historical cost for assets where actual historical cost is not available. Donated assets are
recorded as capital assets at their estimated fair market value at the date of donation. The City maintains
a threshold level of $5,000 or more for capitalizing capital assets. The cost of normal maintenance and
repairs that does not add to the value of the asset or materially extend asset lives is not capitalized. The
City has elected to retroactively capitalize the infrastructure capital assets of its governmental activities.
Capital assets are recorded in the government-wide and proprietary fund financial statements, but are not
reported in the governmental fund financial statements. Interest incurred during the construction phase of
capital assets for business-type activities is included as part of the capitalized value of the assets
constructed.
Capital assets are depreciated using the straight-line method over their estimated useful lives. Since
surplus assets are generally sold for an immaterial amount when declared as no longer needed for city
purposes, no salvage value is taken into consideration for depreciation purposes. Useful Iives vary from
10 to 40 years for infrastructure, 5 to 20 years for vehicles, machinery, and furniture and equipment, 12 to
40 years for buildings, and 10 to 20 years for improvements other than buildings. Capital assets not being
depreciated include land and construction in progress.
N. Long-Term Liabilities
In the government-wide and proprietary fund financial statements, long-term debt and other long-term
obligations are reported as liabilities. Bond premiums and discounts, if material, are deferred and
~• amortized over the life of the bonds using the straight-line method. Bond issuance costs, if material, are
also reported as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
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NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. Compensated Absences Payable ~i
City employees earn vacation days based upon the number of completed years of service. The City
compensates employees for unused vacation upon termination of employment. Employees are entitled to
paid sick leave at various rates for each month of full-time service. Full-time employees who resign or
leave city employment voluntarily and in good standing, after giving proper notice, shall be compensated
for up to 50 days of unused sick leave under the following guidelines:
For union employees, one-fourth of the unused sick leave times the hourly rate at the time of giving
notice is paid. After five years of non-union employment, one-fourth of the unused sick leave times the
hourly rate at the time of giving notice is paid.
After 10 years of employment, all employees accrue one-half of the unused sick leave, times the hourly
rate at the time of giving notice.
Compensated absences payable are paid by the respective fund in which the employee is employed.
P. Budget
Budgets for the General Fund and certain special revenue funds are adopted on a basis consistent with
accounting principles generally accepted in the United States of America. Reported budget amounts are
as originally adopted or as amended by City Council-approved supplemental appropriations and budget
transfers. No supplemental budget amendments were adopted during the year. Budget appropriations
lapse at year-end.
Q. Risk Management
The City is exposed to various risks of Ioss related to torts: theft of, damage to, or destruction of assets; w
errors and omissions; injuries to employees; and natural disasters. The City manages these various risks
of loss as follows:
The City participates in the League of Minnesota Cities Insurance Trust (LMCIT) property and liability
insurance program, a joint self-insurance plan designed and administered by American Business Risk
Services and structured to operate through local insurance agents. Approximately 140 cities currently
participate in the program.
The City has the following coverage with LMCIT: a basic package of property, inland marine,
automotive physical damage and liability; comprehensive general liability; public officials errors and
omissions; umbrella liability; boiler and machinery; and workers' compensation.
The City pays an annual premium to LMCIT, which in turn pays the local agent's commission and a s .~
PY
an administrative fee to American Business Risk Services. The remaining premium is split between
LMCIT and its reinsurers'. The reinsurers' in turn reimburse LMCIT for a corresponding share of each
loss.
A profit-sharing agreement also provides for a return to LMCIT of a share of the reinsurers' portion of the
premium if the loss experience is favorable.
To protect against the possibility that LMCIT's share of the losses will exceed its share of the premium,
LMCIT also purchases aggregate reinsurance. The loss experience has been favorable the last three years ~~
and the City has received a return of part of the premiums paid.
Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the
past three calendar years. There were no reductions in coverage from the prior year.
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NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
R. Statement of Cash Flows
,~ For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an
original maturity from the time of purchase by the City of three months or less to be cash equivalents.
The proprietary fund's equity in the government-wide cash and investment management pool is
considered to be cash equivalents.
S. Net Assets and Fund Balance
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, or laws or regulations of other governments.
In the governmental fund financial statements, reservations of fund balance represent those portions of
fund balance not appropriable for expenditure or legally segregated for a specific future use. Designated
~ fund balances represent tentative plans for future use of financial resources.
NOTE 2 -CASH AND INVESTMENTS
A. Components of Cash and Investments
Cash and investments at year-end consist of the following:
Deposits $ (105,244)
Investments 37,937,871
Cash on hand 8,925
,~ Total cash and investments -Statement of Net Assets $ 37,841,552
B. Deposits
In accordance with applicable Minnesota Statutes, the City maintains deposits at depository hanks
authorized by the City Council, including checking accounts and non-negotiable certificates of deposit.
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NOTE 2 -CASH AND INVESTMENTS (CONTINUED)
The following is considered the most significant risk associated with deposits:
Custodial Credit Risk - In the case of deposits, this is the risk that in the event of a bank failure, the
City's deposits may be lost.
Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety
bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not
covered by federal deposit insurance or corporate surety bonds. Authorized collateral Includes
treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or
better; revenue obligations rated "AA" or better; irrevocable standard letters of credit issued by the
Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities
pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in
an account at a trust department of a commercial bank or other financial institution that is not owned
or controlled by the financial institution furnishing the collateral. The City has no additional deposit
policies addressing custodial credit risk.
At year-end, the carrying amount of the City's deposits was a deficit of ($105,244) while the balance
on the bank records was $79,491. At December 31, 2007, all deposits were fully covered by federal
depository insurance, surety bonds, or by collateral held by the City's agent in the City's name.
C. Investments
The City has the following investments at year-end:
Credit Risk Interest Risk - Maturi ri Duration in Years
Investment Type Rating AQency Less Than I 1 to 5 5 to 10 More Than 10 Total
U.S.agencysecurities AAA S&P $ - $ 9,288,138 $ 13,241,036 $ 2,349,047 $ 24,878,221
Negotiable certificates of deposit N/R N/R 479,833 1,727,076 188,690 - 2,395,597
Repurchase agreement N/R N/R 1,719,581 - - - 1,719,581
Money market funds N/R N/R 8,893,631 - - - 8,893,631
4M Fund N/R N/R 50,841 - - - 50,841
Total investments $ 11,143,884 $ 11,015,214 $ 13,429,726 $ 2
349
047 $ 37
937
871
N/R -Not Rated ,
, ,
,
Investments are subject to various risks, the following of which are considered the most significant:
Custodial Credit Risk -For investments, this is the risk that in the event of a failure of the ~
counterparty to an investment transaction (typically abroker-dealer) the City would not be able to
recover the value of its investments or collateral securities that are in the possession of an outside
party. The City does not have a formal investment policy addressing this risk, but typically limits its
exposure by purchasing insured or registered investments, or by the control of who holds the
securities.
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NOTE 2 -CASH AND INVESTMENTS (CONTINUED)
Credit Risk -This is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. Minnesota Statutes limit the City's investments to direct obligations or obligations
guaranteed by the United States or its agencies; shares of investment companies registered under the
Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the
two highest rating categories by a statistical rating agency, and all of the investments have a final
maturity of 13 months or less; general obligations rated "A" or better; revenue obligations rated "AA"
or better; general obligations of the Minnesota Housing Finance Agency rated "A" or better; bankers'
acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial
paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality
category by at least two nationally recognized rating agencies, and maturing in 270 days or less;
Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of
a foreign bank, or a United States insurance company, and with a credit quality in one of the top two
highest categories; repurchase or reverse purchase agreements and securities lending agreements with
financial institutions qualified as a "depository" by the government entity, with banks that are
members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a
primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or
certain Minnesota securities broker-dealers. The City does not have an investment policy that further
addresses credit risk.
Concentration Risk -This is the risk associated with investing a significant portion of the City's
investment (considered 5 percent or more) in the securities of a single issuer, excluding U.S.
guaranteed investments (such as treasuries), investment pools, and mutual funds. The City does not
have an investment policy that addresses the duration of investment limits on the amount that it may
be invested in any one issuer. More than 5 percent of the City's investments are in Federal Home
Loan Association, Federal National Mortgage Association, and Federal Farm Credit Bureau, and
Federal Home Loan Mortgage Corporation. These investments are 13 percent, 26 percent, 8 percent,
and 20 percent, respectively, of the City's total investments.
Interest Rate Risk -This is the risk of potential variability in the fair value of fixed rate investments
resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the
greater the risk). The City does not have an investment policy that addresses the duration of
investments.
The Minnesota Municipal Money Market Fund (4M Fund) is a common law trust organized in
accordance with the Minnesota Joint Powers Act, which invests only in investment instruments allowable
under Minnesota Statutes. Its investments are valued at amortized cost, which approximates fair value in
accordance with Rule 2a-7 of the Investment Company Act of 1940.
The 4M Fund does not have its own credit rating. MBIA, Inc. who administers the 4M Fund holds an
organization credit rating of Aa2.
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NOTE 3 -CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2007 was as follows:
A. Governmental Activities
Capital assets, not depreciated
Balance -
Beginning
of Year
Additions
Deletions
Balance -
End of Year
Land $ 6,363,420 $ 799,406 $ - $ 7,162,826
Construction in progress 20,523,835 4,404,012 - 24,927,847
Capital assets, depreciated
Buildings 13,018,486 117,450 - 13,135,936
Furniture and equipment 263,301 38,690 - 301,991
Vehicles 1,853,556 39,452 (13,327) 1,879,681
Machinery and equipment 1,022,343 164,133 (101,282) 1,085,194
Improvements other than
buildings 4,015,218 170,074 (70,036) 4,115,256
Infrastructure 35,043,517 - - 35,043,517
Total capital assets 82,103,676 5,733,217 (184,645) 87,652,248
Less accumulated depreciation on
Buildings (2,856,285) (336,739) - (3,193,024)
Vehicles (1,257,230) (145,866) 13,327 (1,389,769)
Machinery and equipment (630,017) (92,210) 98,511 (623,716)
Furniture and equipment (105,416) (25,214) - (130,630)
Infrastructure (13,847,339) (1,574,818) - (15,422,157)
Improvements other than
buildings (1,926,883) (162,453) 51,554 (2,037,782)
Total accumulated depreciation (20,623,170) (2,337,300) 163,392 (22,797,078)
Net capital assets $ 61,480,506 $ 3,395,917 $ (21,253) $ 64,855,170
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NOTE 3 -CAPITAL ASSETS (CONTINUED)
B. Business-Type Activities
Balance -
Beginning Balance -
ofYear Additions Deletions End of Year
Capital assets, not depreciated
Land $ 1,209,580 $ 8,265 $ - $ 1,217,845
Construction in progress 5,845,433 345,783 - 6,191,216
Capital assets, depreciated
Buildings 5,156,471 - - 5,156,471
Furniture and equipment 93,663 - - 93,663
Vehicles 561,166 - - 561,166
Machinery and equipment 658,351 67,592 - 725,943
Improvements other than
buildings 17,828,867 227,447 - 18,056,314
Infrastructure 28,510,509 - - 28,510,509
Total capital assets 59,864,040 649,087 - 60,513,127
Less accumulated depreciation on
Buildings (2,180,354) (153,227) - (2,333,581)
Vehicles (537,227) (12,166) - (549,393)
Machinery and equipment (531,076) (27,458) - (558,534)
Furniture and equipment (45,597) (15,042) - (60,639)
Infrastructure (11,379,271) (868,755) - (12,248,026)
Improvements other than
buildings (9,441,135) (429,207) - (9,870,342)
Total accumulated depreciation (24,114,660) (1,505,855) - (25,620,515)
Net capital assets $ 35,749,380 $ (856,768) $ - $ 34,892,612
C. Depreciation
Depreciation expense for the year ended December 31, 2007 was charged to the following functions:
Governmental activities
General government $ 10,579
Public safety 89,785
Public works 1,783,963
Culture and recreation 450,977
Economic development 1,996
Total depreciation expense -governmental activities $ 2,337,300
Business-type activities:
Water $ 431,342
Sewer 1,022,312
Liquor 48,765
Cemetery 3,436
Total depreciation expense- business-type activities $ 1,505,855
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NOTE 4 -LONG-TERM LIABILITIES
A. Description
The City has the following types of long-term liabilities outstanding at December 31, 2007: special
assessment improvement bonds with governmental commitment, tax increment bonds, general obligation
bonds and notes, revenue bonds, and contract for deed.
Special assessment bonds are payable primarily from special assessments. Tax increment bonds are
payable primarily from tax increments. General obligation bonds, notes and contract for deed are payable
solely from general property taxes. Revenue bonds are payable from enterprise fund revenue. Any
deficiency in funding for the repayment of special assessment or tax increment bonds would be provided
for by general property taxes.
Long-term liabilities at year-end are summarized as follows:
Final
Interest Maturity Balance -
OriAinal Issue Rate Issue Date Date End of Year
Governmental activities
General obligation bonds
2003A Improvement Bonds
2007 Improvement Bonds
Tax increment bonds
2004A Tax Increment Bonds
Special assessments bonds
1999 General Obligation Improvement Bonds
2000A Improvement Bonds
2000B Improvement Bonds
2002 Improvement Bonds
2005 General Obligation improvement Bonds
General obligation notes
Project 93-14C Wastewater Treatment Note
Revenue bonds
2000A Public Project Revenue Bonds
Contract for deed
Total governmental activity
long-term liabilities
Business-type activities
General obligation bonds
2007 Improvement Bonds
$ 2,420,000 2.00-4.00% 09/01/03 02/01/15 $ 1,995,000
$ 5,137,903 4.00% 12/27/07 02/01/18 5,137,903
$ 945,000 3.00-5.60% 06/30/04 02/01/13 680,000
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S 3,000,000 3.70-X3.10% 01/01/99 02/01/10 945,000
$ 2,015,000 4.40-5.80% 03/01 /00 02/01 /16 1,150,000
$ 1,645,000 4.50-5.00% 03/01/00 02/01/11 580,000
$ 2,420,000 1.70-4.00% 12/30/02 02/01/14 1,600,000
$ 25,]50,000 4.00-4.75% 08/17/05 02/01/23 24,140,000
$ 14,700,000 4.08% 02/06/97 08!20/18 9,515,592
$ 7,555,000 4.35-6.25% 03/01/00 02/01/15 6,220,000
$ 2,185,222 6.00% 12/22/04 12/01/09 664,293
$ 52,627,788
$ 907,097 4.00%
12/27/07 02/01/18 $ 907,097
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NOTE 4 -LONG-TERM LIABILITIES (CONTINUED)
B. Minimum Debt Payments
Minimum annual principal and interest payments to maturity for bonds payable are as follows:
Governmental Activities:
Year Ending
December 31, Principal Interest
2008 $ 4,881,136 $ 2,204,179
2009 5,525,301 2,030,942
2010 5,215,089 1,767,425
2011 5,363,416 1, 523,270
2012 5,323,540 1,274,107
2013-2017 21,871,790 2,961,444
2018-2022 3,987,516 371,071
2023 460,000 9,775
$ 52,627,788 $12,142,213
Business-Type Activities:
Year Ending
December 31, Principal Interest
2008 $ - $ 21,569
2009 69,026 34,903
2010 90,034 31,722
2011 93,036 28,061
2012 85,533 24,484
2012-2017 471,931 67,331
2018 97,537 1,951
$ 907,097 $ 210,026
C. Current Refunding
In 2007, the City issued $6,045,000 of General Obligation Improvement Bonds, Series 2007. A portion
of these bonds were issued to refund in advance of their stated maturities the General Obligation
Improvement Bonds, Series 2000A totaling $1,000,000. On February 1, 2008, the proceeds of this issue
will be used to refund this issue. The refunding was undertaken to reduce the net present value on debt
service payments by $336,817.
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NOTE 4 -LONG-TERM LIABILITIES (CONTINUED)
D. Changes in Long-Term Liabilities
December 31, December 31, Due Within
2006 Additions Retirements 2007 One Year
Governmental activities
Generatobligationbonds $ 2,210,000 $ 5,137,903 $ 215,000 $ 7,132,903 $ 225,000
Tax increment bonds 810,000 - 130,000 680,000 105,000
Special assessment bonds 30,255,000 - 1,84Q000 28,415,000 3,270,000
General obligation notes 10,188,973 - 673,381 9,515,592 701,136
Revenue bonds 6,650,000 - 430,000 6,220,000 480,000
Contract for deed 764,293 - 100,000 664,293 100,000
Compensated absences 392,824 257,053 307,346 342,531 85,815
Total $ 51,271,090 $ 5,394,956 $ 3,695,727 $ 52,970,319 $ 4,966,951
Business-type activities
General obligation bonds $ - $ 907,097 $ - $ 907,097 $ -
Compensated absences 91,745 12,607 - 104,352 14,382
Total $ 91,745 $ 919,704 $ - $ 1,011,449 $ 14,382
E. Conduit Debt
The City has issued Senior Housing Refunding Revenue Bonds to provide financial assistance to private
sector entities for the acquisition and construction of senior housing facilities deemed to be in the public
interest. The bonds are secured by the property financed and are payable solely from payments received
on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities
transfers to the private sector entity served by the bond issuance. The City is not obligated in any manner
for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying
financial statements. As of December 31, 2007, there was one series of Senior Housing Refunding
Revenue Bonds outstanding. The original issue amounts totaled $3,000,000 with an interest rate of
4.75 percent maturing on October 1, 2012. This balance has been reduced through annual payments and
partial call prepayments. The outstanding balance as of December 31, 2007 is undetermined.
NOTE 5 -DEFINED BENEFIT PENSION PLANS -STATE-WIDE
A. Plan Description
All full-time and certain part-time employees of the City are covered by defined benefit plans
administered by the Public Employees' Retirement Association of Minnesota (PERA). PERA
administers the Public Employees' Retirement Fund (PEKE) and the Public Employees' Police and Fire
Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans. These plans are established
and administered in accordance with Minnesota Statutes, Chapters 353 and 356.
PERF members belong to either the Coordinated or Basic Plan. Coordinated Plan members are covered
by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan. All police officers, firefighters, and peace officers who qualify for membership by
statute are covered by PEPFF.
PERA provides retirement benefits as well as disabili benefits to members and benefits to survivors
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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.
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NOTE 5 -DEFINED BENEFIT PENSION PLANS -STATE-WIDE (CONTINUED)
Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The
retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual
formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 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 of service 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 percent for each year of service. For all PEPFF
members and for PERF members hired prior to July 1, 1989 whose annuity is calculated using Method 1,
a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for
PEPFF members and 65 for Basic and Coordinated Plan members hired prior to July 1, 1989. Normal
retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated Plan
members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible
members seeking early retirement.
There are different types of annuities available to members upon retirement. A single-life annuity is a
lifetime annuity that ceases upon the death of the retiree-no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to
i active plan participants. Vested, terminated employees who are entitled to benefits, but are not receiving
them yet are bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for PERF and PEPFF. That report may be obtained on the web at mnpera.org;
by writing to PERA at Public Employees' Retirement Association of Minnesota, Retirement Systems of
Minnesota Building, 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103-2088; or by calling (651)
296-7460 or (800) 652-9026.
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B. Funding Policy
Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. These statutes
are established and amended by the State Legislature. The City makes annual contributions to the
pension plans equal to the amount required by state statutes. PERF Basic and Coordinated Plan members
were required to contribute 9.10 percent and 5.75 percent, respectively, of their annual covered salary in
2007. The Coordinated Plan contribution increases to 6.0 percent in 2008. The City was required to
contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan PERF
members and 6.25 percent for Coordinated Plan PERF members. Employer contribution rates for the
Coordinated Plan increases to 6.5 percent for 2008. The City's contributions, which were equal to the
contractually required contributions for each year as set by statutes to PERF for the years ended
December 31, 2007, 2006, and 2005 were $178,303, $161,068, and $135,313, respectively. The City's
contributions were equal to the contractually required contributions for each year as set by state statutes.
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NOTE 6 -CITY OF MONTICELLO FIRE RELIEF ASSOCIATION
A. Plan Description
The City contributes to the City of Monticello Fire Relief Association (the Association), a single
employer retirement system that acts as a common investment manager and administrator for the City's
firefighters. All active members of the fire department are members of the Association. The Association
issues a publicly available financial report that includes financial statements and required supplementary
information. A copy of the report may be obtained at Monticello City Hall.
Upon approval by the Board of Trustees, lump sum retirement benefits are either paid or deferred as
follows:
1. Benefits accrue and vest to members based on $3,275 per year of active service in the fire
department and Association with 100 percent vesting at 20 years.
2. Members retiring with less than 10 years of service forfeit their accrued benefits.
3. Members who separate from service and have at least 10 years of active service and membership,
but aze less than 50 years of age, are entitled to a deferred service .pension payable upon reaching
the age of 50.
4. The Association also provides death benefits, whereby upon approval of application, the
beneficiaries of each deceased active member would receive $3,275 per year of service.
B. Funding Policy
Minnesota Statutes § 69.772 sets the minimum contribution requirement for the City on an annual basis,
including state aid passed through the City. These statutes are established and amended by the State
Legislature. The Association is comprised of volunteers, and no member contribution is required.
C. Annual Pension Cost and Net Pension Obligation
The City's annual pension cost and net pension obligation to the Association for the year ended
December 31, 2007 is as follows:
Annual required contribution $ 86,740
Interest on net pension obligation _
Adjustment to annual required contribution
Annual pension cost 86,740
Less contribution made (86,740)
Increase (decrease) in net pension obligation -
Net pension obligation -beginning of year -
Net pension obligation -end of year $ -
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NOTE 6 -CITY OF MONTICELLO FIRE RELIEF ASSOCIATION (CONTINUED)
The annual required contribution for the current year was determined as part of the December 31, 2006,
actuarial valuation using the entry age actuarial cost method. The actuarial assumptions included
(a) S percent investment rate of return and (b) age and service retirement was assumed to occur at the age
of S0. The assumptions did not include post retirement benefit increases, which are funded by state
statute when granted. Three-year trend information for the pension plan is as follows:
Three-Year Trend Information
Annual pension cost (APC)
Contribution made
City
State aid -pass through aid
Net pension obligation
NOTE 7 -DESIGNATED FUND BALANCE
2007 2006 2005
$ 86,740 $ 98,518 $ 94,839
86,740 98,518 94,839
Designated fund balances at December 31, 2007 were as follows:
General Fund
Designated for
Economic development department $ 12,400
Streets equipment 271,250
Snow removal equipment
Fire department equipment 60,600
I SS,000
Building department equipment 6,000
Data processing equipment 12,421
Parks department equipment 30,000
Parks department buildings 79,700
Parks department improvements 52,990
Building improvements 160,600
Street light improvements 100,000
Working capital 3,334,062
Contingencies 666,812
4,941,83 S
Community Center
Designated for
Community center improvements
63,000
Nonmajor Fund
City streets reconstruction
Designated for
Future Edmundson Street 187,991
Future 8Sth Street 135,637
Elk Street 10,300
Fenning Avenue 202,077
Fallon Avenue 72,01 S
' Haug and 9Sth Avenue 122,500
730,520
$ 5,73S,3SS
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NOTE 8 - INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
A. Due To/From Other Fund
Receivable Fund Payable Fund Amount
Major governmental funds
General Economic Development Authority $ 100,000
Capital outlay revolving Capital Project 1,112,842
Enterprise funds
Water Fiber optics 27,697
$ 1,240,539
These interfund loans were made to provide adequate cash flow.
B. Interfund Transfers
Interfund transfers for the year ended December 31, 2007 consisted of the following:
Transfers in
Capital
Outlay Nonmajor
Community Revolving Debt Service Capital Governmental Sewer
Transfers Out General Fund Center Fund Fund EDA Fund Funds Proiects Funds Funds Fuod Total
General Fund $ - $ - $ - $ 88,548 $ - $ 70,908 $ - S - $ 159,456
Community Center Fund - - - - 857,750 - - - 857,750
Capital Outlay Revolving Fund - - - - - - 10,105 - 10,105
EDA Fund - - - - 137,900 - - - 137,900
Sanitary Sewer Access Fund - - 77,206 - 1,801,803 - - - 1,879,009
Debt Service Funds - - - 1,500 - - - - 1,500
Capital Projects Fund - - - - - - - 262 262
Nonmajorgovemmentalfunds 48 - 2,009 20,687 573,396 562,000 - - 1,!58,140
Water Fund - - - - 267,000 - - - 267,000
Sewer Fund - - - - 400,300 - - - 400,300
Liquor Fund 80,891 250,000 - - - - 330,89{
$ 80,939 $ 250,000 $79,215 $ 110,735 $4,038,149 S 632,908 $ 10,105 S 262 $5,202,313
These transfers were made to finance general operations, capital projects, and debt service payments.
NOTE 9 -STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
Deficit Fund Balances
The City has deficit fund balances at December 31, 2007 as follows:
Capital Projects Fund $ (630,214)
Fiber Optics Fund $ (84,894)
The City intends to fund these deficits through future tax levies, special assessment levies, tax increments,
transfers from other funds, and various other sources.
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NOTE 10 -COMMITMENTS
A. Construction Contracts
During fiscal 2007, the City awarded contracts for various construction and remodeling projects. The
City's commitment for uncompleted work on these contracts at December 31, 2007 is approximately
$2,100,000.
B. Legal Claims
The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although
the lawsuits are not presently determinable, the City's management believes that the City will not incur
any material monetary loss resulting from these claims. No loss has been recorded on the City's financial
statements relating to these claims.
' C. Potential Arbitrage Payable
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The City has issued several bond issues that are subject to arbitrage regulations contained in the Tax
Reform Act of 1986. Typically, bond proceeds are invested until they are needed for construction
projects or cash flow. Arbitrage exists when interest earnings on these investments exceed the interest
cost of the related bonds. Any excess earnings must be paid to the Internal Revenue Service.
At December 31, 2007 the City did not perform calculations to determine if there is an arbitrage liability
on these issues. The City has not accrued an arbitrage rebate liability at December 31, 2007. The City
expects the liability, if any, to be immaterial.
NOTE 11-SUBSEQUENT EVENTS
In January 2008, the City issued $6,180,000 of Public Project Revenue Refunding Bonds. The bonds
bear an interest rate of 3.2 percent and mature in February 2015.
In March 2008, the City issued $9,270,000 of General Obligation Sewer Revenue Refunding Bonds. The
bonds bear an interest rate of 3.4 percent and mature in August 2018.
In May 2008, the City issued $26,445,000 of Telecommunications Revenue Bonds. The bonds bear
interest rates ranging from 6.5 to 6.75 percent and mature on various dates through June 1, 2031.
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BUDGETARY COMPARISON SCHEDULES
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2007
Over (Under)
Original Budget Final Budget Actual Budget
Revenue
Property taxes $ 4,661,600 $ 4,661,600 $ 4,433,359 $ (228,241)
Special assessments - - 1,644 1 644
Franchise fee 275,000 275,000 146,045 (128,955)
Licenses and permits 883,700 883,700 627,751 (255,949)
Intergovernmentalrevenue
Market value and other tax credits - - 191,131 191,131
Fire department aid 96,500 96,500 86,740 (9,760)
State police aid 46,000 46,000 47,063 1,063
State highway aid 77,450 77,450 78,568 1,118
County/regional grants 22,500 22,500 26,345 3,845
Other grants and aids 21,740 21,740 6,741 (14,999)
Total intergovernmental revenue 264,190 264,190 436,588 172,398
Charges for services
Animal impound fees - - 28,044 28,044
Deputy registrar fees 285,000 285,000 270,257 (14,743)
Engineering fees - - 441,683 441,683
Garbage charge 114,500 114,500 115,590 1,090
Development cost reimbursement - - 59,359 59,359
Inspection fees 90,000 90,000 134,804 44,804
Township contract 50,250 50,250 53,193 2,943
Parks 8,000 8,000 11,280 3,280
Other 136,700 136,700 96,541 (40,159)
Total charges for services 684,450 684,450 1,210,751 526,301
Fines 24,000 24,000 5,027 (18,973)
Miscellaneous revenue
Interest earnings 252,740 252,740 487,186 234,446
Rents 42,260 42,260 45,205 2,945
Other 33,900 33,900 79,602 45,702
Total miscellaneous revenue 328,900 328,900 611,993 283,093
Total revenue 7,121,840 7,121,840 7,473,158 351,318
(continued)
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CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2007
Over (Under)
Original Budget Final Budget Actual Budget
Expenditures
General government
Mayor and City Council
Personal services 26,060 26,060 26,180 120
Other services and charges 10,655 10,655 7,678 (2,977)
Total mayor and City Council 36,715 36,715 33,858 (2,857)
Administrative
Personal services 241,150 241,150 240,792 (358)
Other services and charges 29,860 29,860 41,901 12,041
Total administrative 271,010 271,010 282,693 11,683
Elections 1,000 1,000 140 (860)
Finance
Personal services 316,550 316,550 426,449 109,899
Other services and charges 24,975 24,975 27,999 3,024
Total finance 341,525 341,525 454,448 112,923
Audit 43,200 43,200 43,200 -
Assessing 56,125 56,125 52,744 (3,381)
Legal 76,915 76,915 96,701 19,786
Planning and zoning
Personal services 162,435 162,435 67,751 (94,684)
Other services and charges 1,200 1,200 34,771 33,571
Professional services 242,650 242,650 151,797 (90,853)
Total planning and zoning 406,285 406,285 254,319 (151,966)
Data processing 226,080 226,080 204,487 (21,593)
City hall
Personal services 8,630 8,630 3,012 (5,618)
Other services and charges 46,540 46,540 44,541 (1,999)
Professional services 86,800 86,800 82,620 (4,180)
Total city hall 141,970 141,970 130,173 (11,797)
(continued)
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CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2007
Over (Under)
Original Budget Final Budget Actual Budget
Expenditures (continued)
General government (continued)
Deputy registrar
Personal services 198,130 198,130 165,273 (32,857)
Other services and charges 19,175 19,175 15,947 (3,228)
Total deputy registrar 217,305 217,305 181,220 (36,085}
Insurance 182,470 182,470 165,114 (17,356)
Capital outlay 82,700 82,700 12,230 (70,470)
Total general government 2,083,300 2,083,300 1,911,327 (171,973)
Public safety
Law enforcement 996,205 996,205 917,659 (78,546)
Fire
Personal services 84,620 84,620 90,594 5,974
Supplies 42,100 42,100 60,699 18,599
Other services and charges 144,330 144,330 130,816 (13,514)
Repairs and maintenance 28,300 28,300 14,018 (14,282)
Total fire 299,350 299,350 296,127 (3,223)
Building inspections
Personal services 263,400 .263,400 274,797 11,397
Other services and charges 81,350 81,350 49,024 (32,326)
Total building inspections 344,750 344,750 323,821 (20,929)
Civil defense
Personal services 12,445 12,445 237 (12,208)
Other services and charges 4,300 4,300 7,786 3,486
Total civil defense 16,745 16,745 8,023 (8,722)
Animal control 45,500 45,500 45,057 (443)
National guard 23,870 23,870 12,644 (11,226)
Capital outlay 227,600 227,600 5,454 (222,146)
Total public safety 1,954,020 1,954,020 1,608,785 (345,235)
(continued)
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CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
' Year Ended December 31, 2007
Over (Under)
Original Budget Final Budget Actual Budget
' Expenditures (continued)
Public works
Administration
Personal services 191,500 191,500 198,703 7,203
Other services and charges 23,800 23,800 61,268 37,468
Total administration 215,300 215,300 259,971 44,671
Engineering
Personal services 103,640 103,640 92,294 (11,346)
Other services and charges 120,135 120,135 255,065 134,930
Total engineering 223,775 223,775 347,359 123,584
Inspections
Personal services
139,040
139,040
114,197
(24,843)
Other services and charges 17,600 17,600 10,166 (7,434)
I Total inspections 156,640 156,640 124,363 (32,277)
Streets
Personal services 357,030 357,030 368,067 i 1,037
Other services and charges 103,200 103,200 120,568 17,368
Total streets 460,230 460,230 488,635 28,405
Ice and snow
Personal services 47,565 47,565 83,147 35,582
Other services and charges 30,750 30,750 35,294 4,544
' Total ice and snow 78,31 S 78,31 S 118,441 40,126
Shop and garage
Personal services
Other services and charges 80,900
92,550 80,900
92,550 68,380
93,326 (12,520)
776
Total shop and garage 173,450 173,450 161,706 (11,744)
Parking lots 245,800 245,800 156,462 (89,338)
Capital outlay 267,145 267,145 719,686 452,541
I Total public works 1,820,655 1,820,655 2,376,623 555,968
Sanitation
Personal services 11,615 11,615 6,393 (5,222)
I Other services and charges 498,460 498,460 502,81 S 4,355
Total sanitation 510,075 510,075 509,208 (867)
(continued)
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CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2007
Over (Under)
Original Budget Final Budget Actual Budget
Expenditures (continued)
Culture and recreation
Parks
Personal services 360,805 360,805 304,779 (56,026)
Other services and charges 199,800 199,800 237,231 37,431
Total parks 560,605 560,605 542,010 (18,595)
Community celebrations 10,700 10,700 3,110 (7,590)
Museum
Personal services - - 53 53
Other services and charges - - 73 73
Total museum - - 126 126
Senior center
Personal services 1,715 1,715 4 (1,711)
Other services and charges 93,200 93,200 56,208 (36,992)
Total senior center 94,915 94,915 56,212 (38,703)
Community education 12,740 12,740 12,740 -
YMCA 5,460 5,460 5,460 -
Transit-River Rider 23,500 23,500 - (23,500)
Ice arena 75,000 75,000 75,000 -
Capital outlay 270,000 270,000 90,785 (179,215)
Total culture and recreation 1,052,920 1,052,920 785,443 (267,477)
Economic development
Personal services 32,670 32,670 55,070 22,400
Other services and charges 46,400 46,400 24,711 (21,689)
Total economic development 79,070 79,070 79,781 711
Total expenditures 7,500,040 7,500,040 7,271,167 (228,873)
Excess (deficiency) of revenues
over expenditures (378,200) (378,200) 201,991 580,191
(continued)
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CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2007
Over (Under)
Original Budget Final Budget Actual Budget
Other financing sources (uses}
Transfer in 80,891 80,891 80,939 48
Transfer (out) - - (159,456) (159,456)
Proceeds from sale of assets 1,000 1,000 18,100 17,100
Total other financing sources (uses) 81,891 81,891 (60,417) (142,308)
Net change in funds balances $ (296,309) $ (296,309) 141,574 $ 437,883
Fund balances
Beginning of year 5,419,913
End of year $ 5,561,487
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CITY OF MONTICELLO
Community Center Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2007
Revenue
Property taxes
Intergovernmental
Charges for services
Membership dues and fees
Interest earnings (charges)
Miscellaneous
Total revenue
Expenditures
Current
Culture and recreation
Personal services
Supplies
Professional services
Advertising
Repairs and maintenance
Insurance
Utilities
Telephone
Equipment and other rental
Other
Capital outlay
Total expenditures
Excess of revenues over
expenditures
Other financing sources (uses)
Transfers in
Transfers out
Proceeds from sale of assets
Total other financing sources (uses)
Net change in fund balances
Fund balance
Beginning of year
End of year
Over (Under)
Original Budget Final Budget Actual Budget
$ 1,246,570 $ 1,246,570
991,000 991,000
8,945 8,945
300 300
2,246,815 2,246,815
$ 1,176,130
48,207
1,011,147
(2,614)
(70,440)
48,207
20,147
(11,559)
807,610 807,610 827,643 20,033
229,150 229,150 218,234 (10,916)
41,800 41,800 32,366 (9,434)
17,500 17,500 20,149 2,649
170,500 170,500 85,053 (85,447)
47,770 47,770 22,969 (24,801)
215,000 215,000 205,170 (9,830)
11,000 11,000 10,031 (969)
17,000 17,000 18,386 1,386
23,400 23,400 30,358 6,958
46,000 46,000 - (46,000)
1,626,730 1,626,730 1,470,359 (]56,371)
620,085 620,085 763,323 143,238
250,000 250,000 250,000 -
(857,750) (857,750) (857,750) -
- - 19,420 19,420
(607,750) (607,'750) (588,330) 19,420
$ 12,335 $ 12,335 174,993 $ 162,658
315,431
$ 490,424
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CITY OF MONTICELLO
Capital Outlay Revolving Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2007
Revenue
Property taxes
Special assessments
Interest earnings
Miscellaneous
Total revenue
Expenditures
Capital outlay
Public works
Professional services
Other
Total expenditures
Excess of revenues over
expenditures
Other financing sources (uses)
Transfers in
Transfers out
Proceeds from sale of bonds
Premium on bonds issued
Total other financing sources (uses)
Net change in fund balances
Fund balance
Beginning of year
End of year
Over (Under)
Original Budget Final Budget Actual Budget
$ - $ - $ 146 $ 146
84,738 84,738 147,384 62,646
56,175 56,175 99,916 43,741
595,000 595,000 6,000 (589,000)
735,913 735,913 253,446 (482,467)
595,000 595,000 471,677 (123,323)
2,215,000 2,215,000 4,597 (2,210,403)
2,810,000 2,810,000 476,274 (2,333,726)
(2,074,087) (2,074,087) (222,828) 1,851,259
- - 79,215 79,215
- - (10,105) (10,105)
- - 725,714 725,714
- - 11,455 11,455
- - 806,279 806,279
$ (2,074,087) $ (2,074,087} 583,451 $ 2,657,538
7,887,368
$ 8,470,819
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CITY OF MONTICELLO
Sanitary Sewer Access Fund
Schedule ofRevenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2007
Revenue
Special assessments
Charges for services
Access fees
Interest earnings
Total revenue
Expenditures
Current
Public works
Professional services
Other
Capital outlay
Total expenditures
Excess (deficiency) of revenues over
expenditures
Other financing sources (uses)
Bond proceeds
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balance
Beginning of year
End of year
Over (Under)
Original Budget Final Budget Actual Budget
$ 206,930 $ 206,430 $ 260,097 $ 53,167
920,000 920,000 448,583 (471,417)
239,050 239,050 467,103 228,053
1,365,980 1,365,980 1,175,783 (190,197)
- - 284,456 284,456
- - 7,700 7,700
8,490,000 8,490,000 67,329 (8,422,671)
8,490,000 8,490,000 359,485 (8,130,515)
(7,124,020) (7,124,020) 816,298 7,940,318
6,000,000 6,000,000 - (6,000,000)
(1,082,300) (1,082,300) (1,879,009) (796,709)
4,917,700 4,917,700 (1,879,009) (6,796,709)
$ (2,206,320) $ (2,206,320) (1,062,711) $ 1,143,609
7,059,254
$ 5,996,543
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CITY OF MONTICELLO
Notes to the Required Supplementary Information
December 31, 2007
Budgetary Information
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
A. Prior to September 1, the City administrator submits to the City Council a proposed operating
budget for the fiscal year commencing the following January 1. The operating budget includes
proposed expenditures and the means of financing them. The City Council adopts the proposed
budget as amended and adjusted by the City Council and certifies the proposed property tax levy
to the County Auditor according to Minnesota Statutes.
B. Public hearings are conducted at the City Council's chambers in the Municipal Building.
C. On or before December 28, the final budget is legally enacted by City Council resolutions and the
final property tax levy certified to the County Auditor.
D. Management is authorized to transfer budgeted amounts between departments within a fund;
however, any revisions that alter the total expenditures of any fund must be approved by the City
Council.
E. The City has legally adopted budgets for the General Fund, certain special revenue funds, and the
Debt Service Fund. Expenditures may not legally exceed budgeted appropriations at the total
fund level. Monitoring of budgets is maintained at the expenditure category level (i.e., personal
services, supplies, charges for services, and capital outlay) within each program. All amounts
over budget have been approved by the City Council through the disbursement process. The City
is not legally required to adopt an annual budget for the Capital Projects Fund. Project-length
' financial plans are adopted for the Capital Projects Fund.
F. Budgets are adopted on a basis consistent with accounting principles generally accepted in the
' United States of America. Budgeted amounts are as originally adopted, or as amended by the
City Council. All annual appropriations lapse at year-end.
1
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i,
1
t
1
1
COMBINING NONMAJOR FUND
STATEMENTS
it
CITY OF MONTICELLO
Nonmajor Governmental Funds
Combining Balance Sheet
as of December 31, 2007
Assets
Cash and investments
Receivables
Delinquent taxes
Deferred special assessments
Delinquent special assessments
Accounts
Accrued interest
Notes receivable
Prepaid items
Total assets
Liabilities and Fund Balances
Liabilities
Accounts and contracts payable
Other accrued liabilities
Due to other governmental units
Deferred revenue
Total liabilities
Fund balances
Reserved for notes receivable
Reserved for prepaid items
Unreserved -designated
Unreserved - undesignated
Total fund balances
Total liabilities and fund balances
Special Revenue Funds
Central
Orderly Minnesota
Shade Tree Annexation Library Water Access Initiative
$ 44,410 $ 3,814 $ 12,046 $ 297,177 $ 90
700 23 1,283 - -
- - - 275,361 -
- - - 32,569 -
426 30 310 2,138 -
295 34 8 4,392 ]0
- - 205 19 -
$ 45,831 $ 3,901 $ 13,852 $ 611,656 $ 100
$ 404 $
4
700
1,108
784 $ 1,567 $ 9 $
- 80 -
- 60 -
23 1,283 307,931 _
807 2,990 307,440
- - 205 19 -
44,723 3,094 10,657 303,697 100
44,723 3,094 10,862 303,716 100
$ 45,831 $ 3,901 $ 13,852 $ 611,656 $ 100
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1
Park City
' Economic Storm Sewer Minnesota Pathway Streets Environmental
Recovery Grant Access Investment Dedication Reconstruction Cleanup Totals
$ 490 $ 1,680,570 $ 790,552 $ 967,081 $ 839,749 $ - $ 4,635,979
- - - - 19,148 - 21,154
- 793,762 - 415,480 358,342 - 1,842,945
= 113,212 = 96,186 23,592 = 265,559
' 7,966 5,119 7,008 22,997
54 16,165 6,099 7,687 7,478 - 42,222
- - 239,940 - - - 239,940
' - 25 - - - - 249
$ 544 $ 2,611,700 $ 1,036,591 $ 1,491,553 $ 1,255,317 $ - $ 7,071,045
$ _ $ 19,705 $ _ $ 2,015 $ _ $ _ $ 24,484
80
- - - - - - 64
= 906,975 = 511,666 401,082 2, I 29,660
' 926,680 5 13,681 401,082 = 2,154,288
_ - 239,940 = - - 234,940
25 - - 249
- - - - 730,520 - 730,520
544 1,684,995 796,651 977,872 123,715 3,946,048
544 1,685,020 1,036,591 977,872 854,235 = 4,916,757
$ 544 $ 2,611,700 $ 1,036,591 $ 1,491,553 $ 1,255,317 $ - $ 7,071,045
'
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CITY OF MONTICELLO
Nonmajor Governmental Funds
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2007
Revenue
Property taxes
Special assessments
Intergovernmental
Charges for services
Other
Investment earnings (chazges)
Miscellaneous
Total revenue
Expenditures
Current
Public works
Culture and recreation
Capital outlay
Public works
Economic development
Total expenditures
Excess (deficiency) of revenue
over expenditures
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing sources (uses)
Change in fund balances
Fund balances
Beginning of year
End of year
Special Revenue Funds
Central
Orderly Minnesota
Shade Tree Annexation Library Water Access Initiative
$ 19,175 $ 669 $ 34,668 $ - $ -
- - - 72,918 -
773 25 1,418 - -
1,892 - 50 91,008 -
2,390 290 (48) 40,660 -
2,532 - - - 100
26,762 984 36,088 204,586 100
13,757 - 35,334 - -
- - - 261,057 -
- 1,355 - - -
13,757 1,355 35,334 261,057 -
13,005 (371) 754 (56,471) 100
- - - 10,105 -
- - - (310,695) (3,203)
- - - (300,590) (3,203)
13,005 (371) 754 (357,061) (3,103)
31,718 3,465 10,108 660,777 3,203
$ 44,723 $ 3,094 $ 10,862 $ 303,716 $ 100
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Park City
Economic Storm Sewer Minnesota Pathway Streets Environmental
Recovery Grant Access Investment Dedication Reconstruction Cleanup Totals
'
$ - $ - $ - $ - $ 517,499 $ - $ 572,011
- 212,666 - 130,640 105,889 - 522,113
_ - _ = 21,155 23,371
75,231 43,951 = 212,132
544 141,321 62,380 64,849 65,504 = 377,890
2,632
544 424,218 62,380 195,489 753,998 - 1,710,149
- - - 2,619 - - 2,619
- - - - - - 49,091
- 432,189 - - - - 693,246
_ - _ - _ = 1,355
432,189 2,619 746,311
544 (2,971) 62,380 192,870 753,998 - 963,838
- - _ _ - - 10,105
' (17,485} (262,700) (564,009) (48) (1,158,140)
(17,485) (262,700) - - (564,009) (48) (1,148,035)
' (16,941) (265,671) 62,380 192,870 189,989 (48) (184,197)
17,485 1,950,691 974,211 785,002 664,246 48 5,100,954
$ 544 $ 1,685,020 $ 1,036,591 $ 977,872 $ 854,235 $ - $ 4,916,757
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