CITY OF ST. CHARLES Financial Summary - 2006

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CITY OF ST. CHARLESFinancial Summary - 2006

2

Audit Audit Opinion

• Provides reasonable, but not absolute, assurance that financials are free of material misstatement

• Unqualified “Clean” opinion in 2006

Financial Statements• Smith Schafer reviewed the results of the audit and the financial statements

with the Mayor, Deputy Clerk and the Accountant on April 13• Management’s Discussion and Analysis (MD&A) was prepared by the City

Minnesota Legal Compliance• No Exceptions

Single Audit• None required in 2006

Management Letter• Limited personnel – Limit City’s ability to segregate accounting duties

3

Revenues

Governmental Funds

4

General Property Tax Levy

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

General Tax Levy Market Value Credit

General tax levy revenues represented 27% of total governmental revenues in 2006

Tax collections $504,402Market value credit 81,084 Total 2006 $585,486

$585,486

$543,826

$512,450

5

Tax Increment Revenues

$85,408$74,865

$82,485$76,999 $69,314

$83,470

$110,227

$118,565

$141,491

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Total TIF collections in 2006 were $141,491

TIF debt service payments and advance repayment requirements are approximately $90,000 annually

TIF collections are impacted by County valuations and the commercial property tax rates set by the State

6

LGA and HACA Revenues

$625,089

$551,502

$501,618$501,618

$618,740

$0

$200,000

$400,000

$600,000

$800,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

HACA LGA

Local government aid (LGA) & Homestead Aid Credit (HACA) are based on State formulas

LGA represented 29% of governmental revenues in 2006

LGA increased by $73,587 (13%) from 2005 to 2006

HACA was eliminated in 2002

7

Governmental Fund Revenues

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Tax Increment Investment Income

Charges for Services General Property Tax Levy

LGA/HACA

8

Property Taxes and State Aid

$0

$250,000

$500,000

$750,000

$1,000,000

$1,250,000

1999 2000 2001 2002 2003 2004 2005 2006

General Property Taxes (Taxpayers) LGA/HACA (State) Market Value Credit (State)

41%44% 43%

40% 42%41%

34% 41%

9

Expenditures

Governmental Funds

10

General Governmental Expenditures

$159,574 $165,215$175,105 $174,753

$206,057

$237,305

$247,680

$293,267 $298,932

$347,623

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Includes mayor and council, city hall, accounting, assessor, elections, advertising, building inspections and celebration costs

Increase of $48,691 in 2006 was due to a lack of full time staff in 2005.

Higher costs of building inspections beginning 2001

11

Public Safety Expenditures

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Other Expenditures Capital Outlay

Includes police department, fire protection, ambulance and the emergency management services fund

Totaled $701,179 in 2006, including $210,915 in capital outlay

Increase in 2006 due to purchase of Volk property and ambulance

12

Public Safety Expenditures

$71,562

$161,628

$13,196

$143,306

$56,233

$16,068

$136,328

$277,827

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Police Fire Ambulance EmergencyManagement

Services

Revenues Expenditures

Police protection expenditures increased by $37,240 in 2006

Ambulance expenditures include $49,748 of capital outlay in 2006 related to the purchase of an ambulance

Fire expenditures of $71,562 in 2006 were supported by township contracts of $36,174 and other revenues of $20,055 (City transfer in of $46,559 – not included in chart)

13

Public Works

$134,405

$155,783

$137,602

$161,581 $156,921 $163,196

$178,630 $178,619$173,643

$217,214

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Salaries/benefits, repairs and maintenance, supplies, fuel, and insurance

Expenditures increased by $43,571 in 2006 due to the addition of one full time employee and full time administrative staff

14

Parks and Recreation

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Other Expenditures Capital Outlay

Recreation programs, parks, swimming pool, forestry and the senior center (including capital project fund expenditures)

Expenditures totaled $346,074 in 2006 an increase of $27,261 from 2005 due to an increase in salaries and repairs to the swimming pool boiler

15

Park and Recreation Expenditures

$38,745

$147,239

$83,631

$116,843

$61,756

$9,446$4,394

$6,790 $4,000$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

Recreatio

n

Swimming Pool

Parks

Forestry

Senior Citiz

en's Cntr

Public

Transp

Revenue

Expenditures

Park and recreation expenditures in excess of program revenues are supported by the City’s general revenues including property taxes and local government aid

16

Library Expenditures

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Other Expenditures Capital outlay

Salaries and benefits, books, supplies, insurance, utilities, printing, etc… (including capital project fund expenditures)

Totaled $133,585 in 2006

Received library aid during 2006 from Winona County and Olmsted County totaling $26,950 and a grant from the state of $63,600

Excludes capital outlay related to the addition to the library in 2003-2005 totaling $676,333

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Economic Development Expenditures

$120,617

$51,069

$5,599

$129,028

$70,938

$172,110

$31,395

$97,781

$33,822

$75,208

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Economic development expenditures in 2006 included $29,000 in revolving loans and professional services of $20,519

2002 included the $126,000 loan to HBC (mortgage on old City Hall building)

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Governmental Fund Expenditures

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Library Parks and Recreation General Government Public Works Public Safety

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Reserves

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General Fund - Reserves

$616,656

$769,774

$584,105

$827,222

$613,708

$888,506

$599,455

$969,990

$627,122

$969,709

$659,176

$1,066,386

$686,782

$1,145,739

$683,060

$998,727

$360,890

$1,215,650

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Unreserved Fund Balance Total Expenditures

Unreserved General Fund balance as a % of expenditures

• 2006 30%• 2005 68%• 2004 60%• 2003 62%• 2002 65%• 2001 62%• 2000 69%• 1999 71%• 1998 80%

Decrease in fund balance due to transfer for:

Library $136,813EMS 32,000TIF 63,431

Parkland Dedication 55,250

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Economic Development Fund - Fund Balance

$16,455

$82,197

$135,037

$66,507$72,830

($24,239)

$9,932

($23,256)($15,110)

($54,943)

-$100,000

-$75,000

-$50,000

-$25,000

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Provides economic development loans to local businesses

Outstanding principal receivable on economic development loans at 12/31/06 $242,920

Borrowed $126,000 from the Electric Fund for Loan to HBC in 2002

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Library Fund - Fund Balance

$102,857$114,508

$126,661$135,119

$237,766 $235,259

$273,951

($162,360)

($348,428)

$28,547

-$400,000

-$300,000

-$200,000

-$100,000

$0

$100,000

$200,000

$300,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Deficit fund balance in 2004 and 2005 resulting from construction was eliminated in 2006 with transfers from the General Fund of $136,813 and Capital Improvement Fund of $240,000

Pledges receivable totaled $4,168 at 12/31/06

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Volunteer Fire Fund - Fund Balance

$100,409

$159,809

$222,464

$11,477

$101,915

($38,334)

$117,147

$131,464

$164,755

$116,985

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Funds received in 2006: • City $46,559• Townships

36,174• Fire calls 6,461• Interest 4,797• Donations

8,797

Builds fund balance in anticipation of equipment needs

Transferred $64,000 to the EMS fund for the purchase of a building

24

Advertising Fund - Fund Balance

$11,475

$6,775 $5,197 $6,468$2,366

($3,577) ($3,755)

($17,477) ($20,435)

($2,621)

-$40,000

-$20,000

$0

$20,000

$40,000

$60,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Funds used for City promotion/Fireworks

Levied $8,000 in the Advertising fund and transferred in $12,850 from the Library Fund in 2006

25

Celebration Fund - Fund Balance

$1,258 $2,115 $1,764 $2,070$3,678

$258

($4,638)($8,012)

($11,832) ($10,290)

-$20,000

$0

$20,000

$40,000

$60,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Funds used for annual flowerfest celebration

Revenues exceeded expenditures by $1,542 during 2006

Levied $3,000 in the Celebration fund

Levied $15,000 in the Celebration fund in 2007

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Ambulance Fund - Fund Balance

$41,021$45,608

$87,876

$130,837

$160,404 $158,237

$179,764

$166,880

$0

$50,000

$100,000

$150,000

$200,000

$250,000

1999 2000 2001 2002 2003 2004 2005 2006

Ambulance revenues increased to $143,306 in 2006 from $123,746 in 2005

New capital lease of ambulance vehicle in 2006 totaling $48,300

Transferred $64,000 to the EMS fund for the purchase of a building

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Emergency Management Services Fund - Fund Balance

$26,568

$0

$25,000

$50,000

$75,000

$100,000

2004 2005 2006

New fund established in 2006 to account for the purchase of the Volk property

The plan is to transfer $150,000 into this fund annually through 2012

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Debt Service

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General Obligation Bonds

$412,000 $389,000 $355,000 $355,000$296,000

$264,000$230,000

$1,785,000

$195,000

$1,785,000

$0

$250,000

$500,000

$750,000

$1,000,000

$1,250,000

$1,500,000

$1,750,000

$2,000,000

1999 2000 2001 2002 2003 2004 2005 2006

Water Impr Bonds of 1983

Street Impr Bonds of 2005

GO Bonds Outstanding:• Water Impr Bond of

1983• Street Impr Bond of

2005

Supported by property taxes and fund balance reserve of $202,912

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Tax Increment Bonds

$665,000 $665,000$635,000

$605,000$575,000

$540,000

$465,000 $465,000

$425,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

1999 2000 2001 2002 2003 2004 2005 2006

Tax Increment Bond of 1996

Refunding Tax Increment Bond of 2004

TIF Bonds are supported by increments on TIF property

First principal payment on TIF Refunding Bond of 2004 was made as due in 2006

TIF Bonds of 1996 were paid in full in 2005 with proceeds of 2004 Refunding Bond proceeds

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General Obligation Revenue Bonds

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

2001 2002 2003 2004 2005 2006

Water and Sewer Revenue Bonds of 2002Water and Sewer Revenue Bonds of 2004Electric Revenue Bonds of 1997Electric Revenue Bonds of 2004

Revenue Bonds are supported by Utility Fund ratepayers.

GO Water and Sewer Revenue Bonds of 2002 balance at 12/31/06 was $805,000

GO Water and Sewer Revenue Bonds of 2004 balance at 12/31/06 was $1,005,000

GO Electric Revenue Bonds of 1997 balance at 12/31/06 was $30,000

GO Electric Revenue Bonds of 2004 balance at 12/31/06 was $3,435,000

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Other Long-Term Debt

$100,000 $91,907$83,452

$74,594

$44,634

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

1999 2000 2001 2002 2003 2004 2005 2006

Fire Truck LoanAmbulance Capital Lease2006 Ambulance Capital Lease

Fire Truck Loan payments due through 2013

New Ambulance Capital Lease in 2006

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5 Year Debt Service Requirements

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

2007 2008 2009 2010 2011

Notes payable GO Bonds

GO TIF Bonds GO Revenue Bonds

Includes both principal and interest

34

Capital Projects

35

Capital Projects Funds - Expenditures

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Capital Improvements Tax Increment

Major capital improvements in 2006 totaled $357,309 and consisted of:

• Skate park $30,000• St. Charles welcome

sign $15,556• Street project $76,306• Disc golf course $6,019• Playground equipment

$52,863• Park bridges $35,978• Bike trail $45,040• Police car $20,774

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Capital Improvement Fund - Fund Balance

$643,749

$218,722

$310,069

$408,044

$206,269

$338,046

$204,917

$591,549

$268,985

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Funded through property taxes, donations, and interest

Transferred $240,000 to the Library fund

37

TIF Capital Improvement Fund - Fund Balance

$24,253

$310,541

($159,179)

$6,032

($202,480)

-$4,772

$21,871

$387,250

($178,829)

$7,720

($177,630)

-$6,282

-$300,000

-$200,000

-$100,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

2005 2006

TIF #1 TIF #2 TIF #3 TIF #4 TIF #5 TIF #6

TIF #5, borrowed from utilities and capital improvements funds for White Water Industrial Park infrastructure

TIF #3 (Whitewater Apts.) has a $178,829 deficit

Expected TIF #5 (Whitewater Park) increment collections increased to $26,460 in 2006 from $22,528 in 2005

TIF #6 (Mike’s Food Center) established in 2005

38

Operational Trends

Utility Funds

39

Electric Fund

$0

$250,000

$500,000

$750,000

$1,000,000

$1,250,000

$1,500,000

$1,750,000

$2,000,000

$2,250,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Net Operating Revenues Purchased Power

Operating Expenses Net Income Before Transfers

Electric service is supported by ratepayers

Transfers out to the City General fund of $130,000 in 2006

Purchase power decrease in 2005 is due in part to the elimination of the demand charge

40

Electric Fund

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Cash and Investments Bonds Payable

Cash and investments totaled $244,377 at 12/31/06, while bonds outstanding totaled $3,465,000

Issued bond in 2004 totaling $3,760,000 for the generation project and other electric system improvements

Advanced $126,000 to Economic Development for purchase of old City Hall Building in 2002

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Water Fund

$0

$100,000

$200,000

$300,000

$400,000

$500,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Net Operating RevenuesOperating ExpensesNonoperating Revenue (Excl Cap Contr)Interest ExpenseNet Income Before Transfers and Capital Contr

Water service supported by ratepayers

Base rate increased from $9.00 to $9.45 per user

Revenues totaled $322,133 in 2006

In lieu of tax payment to the City General fund of $20,000 in 2006

42

Water Fund

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Cash and Investments Bonds Payable

Should develop cash reserves to be used for future capital replacement

In 2004 added $777,350 of the $1,205,000 GO Utility Revenue Bond of 2004 that was used for water tower improvements and water extensions

In 2002 added $349,800 of the $1,060,000 GO Utility Revenue Bonds of 2002 that was used for water construction costs

43

Sewer Fund

-$100,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

RevenuesOperating ExpensesNonoperating Income (Excl Cap Contr)Net Income Before Transfers and Capital Contributions

Sewer service supported by ratepayers

Substantial expansion of the Dover Eyota Sanitary Sewer District is under consideration

44

Sewer Fund

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Cash and Investments Bonds Payable

Should develop cash reserves to be used for future capital replacement

Issued $427,650 of the $1,205,000 GO Utility Revenue Bonds of 2004 that was used for sewer extensions and sewer system improvements

Issued $710,200 of the $1,060,000 GO Utility Revenue Bonds of 2002 that was used for sewer construction costs

45

Storm Water Fund

$0

$25,000

$50,000

$75,000

$100,000

2004 2005 2006

Revenues

Operating Expenses

Net Income Before Transfers and Capital Contributions

Fund was established in 2004

Storm water activities are supported by ratepayers

46

Storm Water Fund

$0

$10,000

$20,000

$30,000

$40,000

$50,000

2004 2005 2006

Cash and Investments Bonds Payable

Fees generated in 2004 were expended on capital assets

No debt at 12/31/06

Cash balance of $72 at 12/31/06

Improvements of $66,000, $35,000 contributed capital and $31,000 spent on storm water management projects

47

Waste Management Fund-Fund Balance

$9,954

$15,962$19,231

$25,596$27,566

$30,334$28,582

$18,594 $17,875

$8,494

$0

$20,000

$40,000

$60,000

$80,000

$100,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Collected refuse fees of $128,394 and paid out $149,640 for hauling and other costs in 2006

Uses excess revenue from hauling services for City cleanup day and maintenance of City compost site

Reclassified from a special revenue fund to an enterprise fund in 2006

Reduction is the result of a catchup billing from Waste Management

48

Summary

General Fund reserves equal 30% of annual general fund expenditures

Ambulance and Fire Funds are building reserves to finance equipment needs and meet debt service requirements

Capital Improvement fund balance of $244,011

TIF #3 (Whitewater Apts.) owes TIF #2 (Central Business District) $178,829

TIF #5 (Whitewater Park) Capital Improvement is repaying $153,000 in advances with tax increment receipts

All debt service funds are being adequately funded and all outstanding bonds are being paid on a timely basis

Utility Fund revenues continue to keep pace with rising costs, however cash reserves are minimal and substantial debt has been added since 2002.