Loading...
HomeMy WebLinkAbout2011-05-12 - Council Agenda PacketAgenda Corcoran City Council May 12, 2011 7:00 PM 1. Call to Order /Roll Call 2. Pledge of Allegiance 3. Agenda Approval 4. Open Forum 5. Presentations a. Corcoran Jaycees - Elected Officials Wall Plaque 6. Planning Business - None 7. Engineering - None 8. Public Hearing - None 9. Consent Agenda a. 04/28/11 Draft Council Minutes* b. Resolution 2011 -022 Sponsorship of NW Trails* c. 04/28/11 Draft Local Board Of Appeal Minutes* 10. Staff Reports /Memos a. Draft Minutes of the April 26, 2011 P & T Commission Meeting* b. Excellence in Service Award — Police Clerk* 11. Unfinished Business a. PW Facility Development Update b. Sewer and Water Project Update 12. New Business a. 2010 Audit Results* b. KDV Memo* c. Financial Guidelines* 13. Claims as Presented* a. Escrow Claims (Fund #500) b. Building Inspections Claims c. All Other Claims As Presented 14. Unscheduled Items 15. Closed Meeting a. Public Works Facility Agenda Corcoran City Council May 12, 2011 7:00 PM 16. Review of Upcoming Council Meetings 17. Adjournment *Includes Materials Materials relating to these agenda items can be found in the House Agenda Packet by Door. Agenda Memo -May 12, 2011 To: Mayor and City Council From: Dan Donahue, City Administrator Regarding: Administrator Notes 4) Open Forum. 5) Presentations. Corcoran Jaycees will make a presentation to the council regarding the elected official's wall plaque bearing names and photos to be hung in city hall. 6) Planning and Zoning. None 7) Engineering. None 8) Public Hearing. None 9) Consent Agenda a) Council Draft Minutes of April 28, 2011 b) Resolution 2011 -022, Northwest Trails Snowmobile Club. This resolution continues the current program (since 2008) of the city being the recipient of the DNR grant funds and acting as the financial agent for the disbursement of the funds to the NW Trails Snowmobile Club for maintenance of the DNR /city approved snowmobile trails. c) Local Board of Appeals April 28, 2011 Draft Minutes 10)Staff Reports. a) Draft Minutes of P & T Commission Meeting of April 26, 2011 b) Excellence In Service Award - Police Clerk. See report. 11)Unfinished Business. a) Public Works Facility Update. No written report for this meeting. The council members might have some information to share. b) Sewer & Water Update. No written report. At the council meeting of May 26, 2011, staff will bring back examples and options for financial and development policies to consider. c) 2030 Comp Plan. If you approve of the re- edits, I will then send off to Ms. Goodroad for final assembly. 12)New Business a) 2010 Audit. Our auditors are finished and will present the 2010 Audit results to the council. They will also make a brief presentation. Audit looks good. The General Fund End had a surplus of $19,646 plus $11,584 (from closing out the Chisholm Trail account and the City Geo Thermal project). The General Fund year end balance grew some $31,230. We stand at about 23.5% in reserves (up from 21 %). It's slowly climbing but it is climbing. Suggest that the council accept the audit at this meeting. Since this is the first time you have seen it, I will put Page 1 Agenda Memo -May 12, Zo„ back on the May 26th council agenda for approval and submission to the State Auditor. b) KDV Memo. Joe Rigdon of KDV (see memo) recommends that we take action on four of the capital funds accounts. I recommend that we let stand the first two funds (Infrastructure Planning and Shannon Lane). The council in 2002 set up the Infrastructure Planning Fund to track the cost of planning for the Hwy 55 Commercial Core development. Back then they knew that this would have a deficit for some years and it would eventually be paid when development actually happened. The Shannon Lane deficit is because we are carrying the debt and the financing for the project. Assessments will eventually pay off the fund. The last two funds (Chisholm Trail and City Hall Geothermal) are now closed but the council needs to pass a motion acknowledging this action. There is a net surplus of $11,584 going to the General Fund in closing these two accounts (this has been accounted for in the 2010 audit). c) Financial Guidelines. Back in 2008, the council received several financial policy recommendations from Financial Consultant Joe Rigdon. These policies came out of the need to have good financial policies that would govern city financial actions in the future. They also came out of the city auditors recommendation the city have firm policies in place that cover all financial related transactions of the city. The council has reviewed the policies on a couple of occasions. You last reviewed in 2010. At that time you asked that staff further review and amend to make them more applicable to Corcoran. Staff has spent considerable time in this process and has developed a Financial Guidebook for the city. An important point regarding the Guidebook is that it is not a set of "policies" that are open ended for interpretation. It is a set of guidelines and best practices. I do not believe that the recommended Guidebook has anything in it that would cause the city to alter or change how it does its business. There are no financial impacts that would cause budget issues or increased cost to the city. 13)Claims. 14)Unscheduled and Other Items 15)Upcoming Council Meetings Council Calendar Planning Commission Parks & Trails Commission 515111 612111 717111 814111 911111 1016111 Guenthner Cossette Gmach Asleson Milbrandt Guenthner 5117111 6121111 7119111 8116111 9120111 10/18111 Page 2 City of Corcoran City Council Meeting Minutes April 28, 2011 9a. The Corcoran City Council met on April 28, 2011, at City Hall in Corcoran, Minnesota. Present were, Mayor Guenthner, Councilor Asleson, Councilor Cossette, Councilor Gmach, and Councilor Milbrandt. Also present were City Administrator Donahue, City Engineer VanderTop, City Attorney Carson, Director of Public Safety Gormley, Public Works Superintendent Meister, Corporal Hamilton and City Clerk Heinecke. Mayor Guenthner called the meeting to order at 7:12 pm. 1. Call to Order /Roll Call 2. Pledge of Allegiance 3. Agenda Approval MOTION: made by Milbrandt, seconded by Gmach to approve the agenda with the removal of Planning Business. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). 4. Open Forum None 5. Presentations None 6. Planning Business None 7. Engineering a. Modify MSAS Designation — Resolution 2011 -20 MOTION: made by Gmach, seconded by Cossette to approve Resolution 2011 -20 as presented Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). in 8. Public Hearing Dust Control Public Hearing opened at 7:17 Jim Bickford -10135 Highland Ridge. Questioned who is assessed for Dust Control Application. Objected to the way properties are assessed. Don Jesezewski -6215 Willow Dr. Questioned why mandatory instead of voluntary? Dennis Stieg -19510 Stieg Rd. Objected to Stieg Rd homeowners paying the assessment when many others use the road. Dennis Covington -7131 Old Settlers Rd. Suggested Dust Control should be funded as road maintenance as in asphalt maintenance, gravel, etc. Suggested it may be time to reduce the amount of dust control product used to reduce the expense. Patrick Hank -9425 Trail Haven. Suggested after this many years, dust control application should be funded as a road maintenance issue. MOTION: made by Milbrandt, seconded by Gmach to close the public hearing at 7:34 Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). Council discussed the history of the dust control program and decided to continue this decision to a second public hearing after the actual 2011 dust control expenses are incurred. City of Corcoran City Council Meeting Minutes April 28, 2011 9a. MOTION: made by Gmach, seconded by Milbrandt to continue the public hearing to a later date yet to be determined. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). 9. Consent Agenda a. Draft Minutes 04/14/11 Council Meeting b. Resolution 2011 -19 — State of MN, JPA c. Set Storm Water Pollution Prevention Plan Public Hearing MOTION: made by Cossette, seconded by Milbrandt to approve 04/14/11 council meeting minutes as presented. A '* , Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandi. °Motion carried 5:0). MOTION: made by Gmach, seconded by Cossette to approve Resolution 2011 -19 with edits as suggested. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). MOTION: made by Cossette, seconded by Milbrandt to approve June 9, 2011 as the Public Hearing date for the Storm Water Pollution Prevention Plan. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). 10. Staff Reports/Memos /Correspondence a. Draft Minutes of Planning Commission, April 5, 2011 Council acknowledged receipt of minutes and thanked commissioners for their work on the ordinance update process. No action taken. b. Cash Flow Reports Council acknowledged receipt of report, and provided staff with feedback on ways to improve the report. No action taken. c. Performance Report -1St Quarter Council acknowledged receipt of report, and provided staff with feedback on ways to improve the report. No action taken. d. City of Medina Letter Regarding Loretto Pond Agreement Council acknowledged receipt of the letter. Staff will send a letter to the Mayor of Medina requesting additional information. e. Met Council Letter Council acknowledged receipt of letter. No action taken. L Rockford School District Mayor Guenthner and Chad Robran met with the Superintendent of the Rockford School District. Mayor Guenthner will continue the dialog with Rockford Schools regarding the city parks. g. Council acknowledged receipt of a resident letter complimenting Pat Meister and the Public Works department on the wonderful job they do on the roads. 11. Unfinished Business a. Door to Door Solicitation Attorney Carson commented on the memo presented to council. Council discussed the memo and directed staff to draft a simple ordinance /permit process. City of Corcoran City Council Meeting Minutes April 28, 2011 9a. b. Sewer & Water Utility Project Rusty Fifield, Northland Securities presented financial management options for the Sewer & Water Utility Project. Mr. Fifield will return May 26, 2011 with additional information. Engineer VanderTop met with the Maple Grove city engineer to discuss a joint powers agreement. MOTION: made by Gmach, seconded by Milbrandt to authorize staff to draft an agreement with Maple Grove. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). c. Public Works Facility Engineer VanderTop discussed the County Road 50 property and the County Road 30 property related to a public works facility. Council discussed the possibility of other available property. MOTION: made by Cossette, seconded by Asleson to continue searching property options for another 60 days. Motion amended to allow 30 days search. Voting Aye: Guenthner, Asleson, Cossette, and Milbrandt. Voting Nay: Gmach (Motion carried 4:1). d. Code Enforcement Position MOTION: made by Gmach, seconded by Cossette to accept the code enforcement job description as presented and appoint Tanya Wagner to the position. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). e. 2030 Comp Plan Administrator distributed updated 2030 Comp plan. An appropriate resolution for approval will be presented at May 12, 2011 council meeting. 12. New Business a. 2011 Fee Sche' n e MOTIOM, made by Gmach, seconded by Asleson to accept the 2011 Fee Schedule as presented. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). 13. Claims as Presented a. Escrow Claims (Fund #500) MOTION: made by Cossette, seconded by Gmach to approve escrow claims as presented. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). b. Building Inspections Claims MOTION: made by Cossette, seconded by Gmach to approve building inspection claims as presented. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). c. All Other Claims As Presented MOTION: made by Cossette, seconded by Asleson to approve all other claims as presented. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). City of Corcoran City Council Meeting Minutes April 28, 2011 9a. 14. Review of Upcoming Council Meetings a. Audit results b. 2030 Comp Plan resolution c. Public Works Facility Update d. Sewer and Water Utility Project Update MOTION: made by Asleson, seconded by Cossette to adjourn. Voting Aye: Guenthner, Asleson, Cossette, Gmach, and Milbrandt. (Motion carried 5:0). Meeting adjourned at 10:43 pm l Jeanie Heinecke, City Clerk/Bookkeeper "'N City of Corcoran May 12, 201 County of Hennepin State of Minnesota RESOLUTION NO. 2011 -022 9b. Motion By: Seconded By: RESOLUTION SPONSORING THE NORTHWEST TRAILS ASSOCIATION TO ACQUIRE STATE OF MINNESOTA DNR FUNDING (2011 -2012 SEASON) WHEREAS, the City of Corcoran desires to establish a public snowmobile trail in furtherance of its public recreation program; and WHEREAS, the Northwest Trails Association has asked the City of Corcoran to act as a sponsor to help acquire, construct, and maintain its trails; and WHEREAS, the Northwest Trails Association has indicated it will help and assist the City to acquire, construct, and maintain said trail; and WHEREAS, the State of Minnesota offers financial and technical assistance to the City for the construction of an approved trail; that the trail sponsored by Corcoran would be known as the Snowmobile Trails of Northwest Hennepin County. NOW, THEREFORE, BE IT REOLVED BY THE CITY OF CORCORAN: The City of Corcoran shall apply to the State of Minnesota, through the Department of Natural Resources, for financial and technical assistance in accordance with the laws, rules and regulations governing said assistance. 2. If said assistance is granted, the City of Corcoran shall contract with the Northwest Trails Association for the acquisition of the necessary interests in land and the subsequent construction and maintenance of the trail. With the exception of the financial assistance provided by the State contract with the City, the City of Corcoran shall not be liable for any costs incurred by the club. The City shall be responsible only for the allocation of funds to the extent of the actual monies provided through the State contract. VOTING AYE ❑ Guenthner, Ken ❑ Asleson, Rich ❑ Cossette, Tom ❑ Gmach, George ❑ Milbrandt, Rosalyn VOTING NAY ❑ Guenthner, Ken ❑ Asleson, Rich ❑ Cossette, Tom ❑ Gmach, George ❑ Milbrandt, Rosalyn Whereupon, said Resolution is hereby declared adopted on this 12th day of May, 2011. ATTEST: Jeanie Heinecke — City Clerk /Bookkeeper Page 1 of 1 Kenneth Guenthner - Mayor City Seal CITY OF CORCORAN CITY COUNCIL LOCAL BOARD OF REVIEW April 28, 2011 9c. CALL TO ORDER AND ROLL CALL Mayor Guenthner reconvened the Local Board of Review meeting at 7:00 p.m. Present were Mayor Guenthner, Councilor Asleson, Councilor Cossette, Councilor Gmach, and Councilor Milbrandt. Also present were City Administrator Donahue, City Clerk Heinecke, City Assessor's Rolf Erickson and Lisa Mott along with Luanne Hagen from Hennepin County. On April 14, 2011 the Local Board of Review (City Council) listened to the owners and their representatives. City Assessor Rolf Erickson submitted the following recommendations. MOTION by Cossette, seconded by Asleson, to accept the City Assessor's ommendation with regard to the following properties: PID NUMBER OWNER/REP ASSESSOR RECOMMENDATION 09- 119 -23 -44 -0003 Pat Hank Reduce to $344,000 *. 15- 119 -23 -44 -0001 Robert Nilsson Reduce to $283,000 06- 117 -23 -12 -0005 Loren & Darleen Noreen Reduce to $376,000 01- 119 -23 -12 -0001 Dennis Steig Information Only 30- 119 -23 -21 -0001 Phil Gleason Information Only 15- 119 -23 -14 -0002 Tom S icza No Change Voting Aye: Guenthner, Asleson, Cossette, Gmach, Milbrandt (Motion carried 5:0) *'Or MOTION by Gmach, seconded by Milbran ccept the City Assessor's recommendation with regard to the following William E. Mason properties: PID NUMBER ASSESSOR RECOMMENDATION 36- 119 -23 -23 -0003 No Change 36- 119 -23 -23 -0006 No Chan 36- 119 -23 -23 -0007 No Chan" 36- 119 -23 -23 -0008 No Change 36- 119 -23 -32 -0003 No Change 36- 119 -23 -32 -0007 No Change 36- 119 -23 -32 -0010 No Change 36- 119 -23 -32 -0011 No Change 26- 119 -23 -32 -0012 No Change 36- 119 -23 -32 -0013 No Change 36- 119 -23 -32 -0014 No Change 36- 119 -23 -32 -0015 No Change Voting Aye: Guenthner, Asleson, Cossette, Gmach, Milbrandt (Motion carried 5:0) 3. ADJOURNMENT MOTION made by Cossette seconded by Milbrandt, to adjourn at 7:11 p.m. Voting Aye: Guenthner, Asleson, Cossette, Gmach, Milbrandt (Motion carried 5:0) Jeanie Heinecke, City Clerk I Oa. Corcoran Parks and Trails Commission Tuesday, April 26, 2011 7:00 PM Present: Trish Krueger, Tom Anderson, Kevin Dale, Chad Robran, Student Lindsay Jacobs, Robert Vassello, Val Nybo, Student Michelle Hansmann, Student Charles Jacobs Absent: Rachael Tessmer, Others: Council Liaison Ken Guenthner, Council member Rich Asleson, City Administrator Dan Donahue, TDKA Consultant Sherri Busse 1. Convene. Chair Krueger called the meeting to order at 7:00 PM in the Corcoran Community Center 2. Approvals: a. Agenda. i. Add Tree Give a Way Report to 8 Other usiness. ii. Add Athletic Association to 9 Announcements iii. Motion: Nybo /Anderson to approve agenda as amended. All voted Aye (6:0). b. Minutes of 11.16.10 Commission Meeting: i. Motion: Anderson/Dale to approve minutes as presented. All voted aye (6:0). c. Minutes of 03.16.11 Commission Meeting: i. Change incorrect day of the week in the heading of the minutes from Tuesday to Wednesday ii. Change Student Commissioner Lindsey Jacobs from present to absent iii. Motion: Vassello/Nybo to approve with changes. All voted aye (6:0) 3. Open Forum. None 4. Presentations. Randy Baudler of the Northwest Trails Snowmobile Club. Gave an overview of the club and updated Commission of their activities in the city. 5. Unfinished Business a. Ryan/Streeter Property Turnback Proposal. Donahue updated the Commission on the proposal and reviewed the letter from the city engineer that had been received by the city council at their meeting of April 14, 2011 on the matter. Donahue related that the council expressed interest in pursuing the proposal but the issue of long term maintenance and who is Parks & Trails Minutes 04.26.2011 responsible has yet to be worked out. Also, the engineer recommended that Ryan/Street put up a $5,000 escrow prior to the city moving forward on further considerations. The escrow is still being considered by Ryan /Streeter. The Commission again stated that they remain interested in pursuing this proposal for possible future parks and trails purposes. b. TDKA Consultant Sherri Busse. i. Ms. Buss began a long discussion that outlined her memo of April 18, 2011 to the Commission. A lot of discussion centered on the fact that the 2030 Comprehensive Plan greatly expanded (more than doubled) the proposed parks and trails in the city with a cost of $33 million. However, the expected area and intensity of future development had not changed significantly from the 2020 Comprehensive Plan. There now existed a disconnect of approximately $20 million between cost and ability to fund such a plan. Further, the memo outlined options for a fee structure and concluded that the fees charged land owners and developers in Corcoran would have to increase three fold above what neighboring cities charge for park dedication. To do this is impossible and could not be supported in state law according to Ms. Busse. ii. The Commissioners after discussion asked Ms. Busse to: 1. Develop scenarios to meet our development goals in the 2030 Comp Plan 2. Articulate what are the issues before the Commission and City of Corcoran 3. Write a memo that explores the issues, costs, value of Parks development, options for Park Development Fees, and give rationale for recommendations. iii. There was discussion on when the information could be developed by Ms. Busse. She stated that the current Scope of Work and the contract called for one more meeting. She can have the information put together for the June meeting. However, she may not be able to attend the meeting if the regular schedule was followed of the third Tuesday of the month. She said she would see what she could do to have her schedule changed in order to attend the Corcoran P & T meeting on June 21St 6. New Business a. Fee schedule. Donahue went through the proposed city fee schedule and pointed out the parks related areas of the schedule that the Commission should make recommendations to the city Council. After review and discussion the Commission agreed to the plan as presented Parks & Trails Minutes 04.26.2011 b. Motion: Anderson/Robran to recommend to the City Council the approval of the City Fee Schedule as presented. All voted aye. (6:0) 7. Committee Reports a. City Council Liaison Mayor Ken Guenthner. He updated the Commission on the major activities of the City Council which were: i. The Public Works Facility development. He discussed the current feasibility study on the city owned property immediately south of city hall; and the two additional proposals (property west of the city park along Co. Rd. 50 and the propertyaLest of Cain road and south of Co. Rd. 30). ii. Sewer and Water project. He talked about activities to date and the beginning discussion by the council at their meeting on April 28, 2011 **4� N iii. 2030 Comprehensive Plan and the efforts to finalize the editing of the document that was accepted by the Met Council at the end of 2009. The council was finishing their review and the document would be soon assembled for the council's final approval. b. Donahue presented information to the Commission on a request city staff had received about amending the current policy on use of alcohol in the Community Center. The request was to amend by allowing the lessee to serve (not sell) beer and wine without hiring a caterer (as is required in the current policy). Donahue said that the city staff after checking with the MN League of Cities and our insurance broker recommends that this request for the amendment seems reasonable as long as all other provisions of the policy are followed. Donahue said that there was no hurry on the matter but that the person making the request for a change might be coming to an upcoming city council meeting to press her case. The Chair asked tha this be put on the next agenda. c. Signage. No Report' d. Park Dedication Fund Report. Not discussed and will be reviewed again at the next meeting e. Park Dedication Fund Report-Draft. Not discussed and will be reviewed again at next meeting 8. Other Business a. Agenda schedule. No discussion b. Tree Give Away. Anderson reported to the Commission the efforts he and other volunteers undertook to distribute the trees that were purchased with the Jaycees donation. Because the trees came in earlier than planned this year, they had to be distributed well before the planned give a way on May 7th at the Annual Clean Up Day. He noted that among the volunteers were student Commissions Lindsey Jacobs and Michelle Hansmann. Parks & Trails Minutes 04.26.2011 9. Announcements. Commissioner Dale had left the meeting at this point. He had asked the Chair to announce that he had resigned his position as President of the Corcoran Athletic Association effective May 10, 2011. 10.Adjourn. Motion by Robran/Anderson to adjourn. All voted aye (5:0) at 9:52 pm. Respectfully Submitted, Daniel J. Donahue Cit: al STAFF REPORT / POLICE DEPARTMENT Agenda Item 10b.i Council Meeting: Prepared By: May 12, 2011 Chief Sean Gormley Topic: Action Required: Employee Excellence in Service Award Information Only Background - In 1999, Professional Law Enforcement Assistants Association (PLEAA) was established as a nonprofit professional organization for support staff of Minnesota law enforcement agencies (State, County and City). The members of PLEAA, at their annual spring training conference, recognize outstanding law enforcement support staff based on a nomination from their home agency. Propose — This past March, Corporal Hamilton submitted a nomination for Corcoran Police Records Clerk, Paula Steelman. Please see attached letter. I am pleased to report to the City Council and our community that Ms. Paula Steelman was chosen by her colleagues for the 2011 PLEAA Excellence in Service Award. Recommendation — None — information only i7F1• i�` G.LIC March 21, 2011 CITY OF CORCORAN POLICE DEPARTMENT Chief Sean Gormley PLEAA Excellence in Service Award Committee Attn. Jill Schmidt Minnetonka Police Department 14600 Minnetonka Boulevard Minnetonka, MN 55345 Dear PLEAA Award Committee, MaIBER U+NESOTA C HIEFS OF POLICE ASSOCIATION l0b.ii It is important to recognize each and every member of PLEAA for the important "networking, support and training" this organization provides each other and to the law enforcement community. The ideas of a few in 1999 to create PLEAA, has grown into an organization which police administrations rely on as the professional voice of our support staff. Police agency support staff plays such a key role in the very success of that organization. I am very pleased that PLEAA has taken the time to recognize the "Top 10" professional support staff in law enforcement. With that, I am very honored and proud to nominate, Paula Steelman from the Corcoran Police Department. To help set the foundation of why I feel so strongly that Paula Steelman is a worthy recipient for the PLEAA Excellence in Service Award, I must first provide some Corcoran Police Department history. The City of Corcoran in located in Northwestern Hennepin County serving a population of 6,000 spread across 36 square miles. The 1st part-time police officer began patrolling Corcoran in 1963. It was not until 2005 that local police services expanded to cover 24 hours a day - 7 days a week. This change doubled our police officers and created new administration challenges. The need for a full -time professional police clerk became a priority. August 2008 could not have come soon enough as Paula Steelman became our 1st fulltime Police Clerk. This hiring too, needs a little history review. The interview panel prepared to meet twelve well qualified candidates. As the morning progressed, we prepared for candidate number four, Paula Steelman. The room just lit up as she began to fire away at the questions. I am confident that each interview panel member had strong feels that this candidate was the "perfect fit ". As the day progressed, our minds kept benchmarking against candidate number four. We had planned to call the top three finalists back for a ..20:0..C.OTJNT.Y .ROAD 116 • CORC OR. N. XfINNTi SO TA 55340 • PHONE (763) 420 -995,6 • FAX (763 ) 420 -8965 second interview. Nope, not needed, candidate number four, Paula Steelman was who this police department and community needed. And to our delight, she left West Metro Fire Department and accepted the position with the Corcoran Police Department. This now leads me to the supporting foundation as to why Paula Steelman is a perfect candidate for the PLEAA Excellence in Service Award. When Paula arrived at Corcoran Police Department for day one, she was greeted with a work area which had not had an employee for the past six months. Police administration kept the absolute basic functions afloat, but every other aspect of the police clerk's duties remained untouched. I suspect the best analogy is - that when the police clerk leaves for a week vacation (always well earned) and returns to the feeling of — "Where to I start?" Now multiple that by six months, that is what was facing Paula. And to complicate maters more, there was no play books, no guides created for; who, what, where, when and how. No systems in place, a lack of organization and in dire need of help. This was the guidance provided to Paula from the Administration — This is your work area and we trust in you. We will support your efforts and creativity. We will work hard to provide the tools needed to accomplish the task asked of you. We will work with you to seek out the solutions to the challenges that lie ahead. You will not be alone, and together we will build a professional clerical environment that you, the members of the department and the community will be proud to be served by. With that guidance, here is how Paula tackled these enormous challenges to get Corcoran Police Clerical needs back on track. Her first priority was to network with members of PLEAA. This is where she knew that the wealth of information, support and guidance could be found. Thank you PLEAA for being there for Paula and the Corcoran Police Department. Next, Paula tackled the organizational needs of her work area. Today, you will find that the clerical area is highly organized; the work flow is spot on, the location and organization of this area makes its seamless to quickly find what one needs. With this organization came great efficiencies. That visual appearance of organization gave the feeling of confidence to our customers as well. On to "Systems" — as Paula began to learn her clerical position, she built along the way a detailed guide of "Systems ". She felt strongly that having systems in place with supporting documentation, would not only help the department with continuity but she could pass this information along to future new police clerks. With all systems go, she was on to technology. Paula's strong background and quick learning ability with new technologies played very well to Corcoran's needs. The once bare work area of a single computer monitor quickly became command central. With these technologies, even more efficiencies became clear and available to all members of the police department. A virtual tour of Paula's work area speaks volumes of her abilities and vision. From left to right; laser printer, laptop MDC, high speed scanner, weather radio, master phone system, dual screen high -end workstation, building camera security monitor, fax machine, police radio, BCA PsPortals — HC CAD Visor workstation, and In -car Camera Server — and yes, she can work all of this simultaneously. With all the demands and requests placed upon Paula, she still found time to create, implement and direct out reach programs to the community. Once such program was to organize an event which allowed underprivileged youths to spend a day with their local police officers at a MN Twins Baseball Game with all expenses paid — how cool was that!! After all of that, what stands out the most with Paula is, Paula herself. These are the skills we can not teach. For those of you, who have had the pleasure to meet and spend time with Paula; can appreciate just how all of us at Corcoran Police Department feel about her. Kindness effortlessly flow from her — Integrity comes without thought, it just is — Confidentiality and trust is tighter than Fort Knox — Customer Service is simply second nature — Creativity and her vision has redefined Corcoran Police Department clerical services — Problem solving — solution based outcomes is the norm — Making time to help others grow and become successful is priceless- Paula is such an important person at Corcoran Police Department and to our success that we make sure we let her each day how much we appreciate her. Again, I applaud PLEAA and its members for leading the way to support law enforcement support staff. Best of success at your Annual Conference, April 2011 Respectfully, John Hamilton Corporal, Corcoran Police Department CITY OF CORCORAN CORCORAN, MINNESOTA MANAGEMENT LETTER FOR THE YEAR ENDED DECEMBER 31, 2010 I,A 4 ABDO EICK& NIMI)c 110 LLP Certified 1°aa2ilic Accnunucants &+Consultants 1BD0 EICK & ME A A 4EURSLLP Gemfzed Public Accountunu & Consuitaants 5201 Eden Avenue Suite 250 Edina, MN 55436 Management, Honorable Mayor and City Council City of Corcoran, Minnesota April 29, 2011 We have audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the City of Corcoran, Minnesota (the City), for the year ended December 31, 2010. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated November 22, 2010. Professional standards also require that we provide to you the following information related to our audit. Our Responsibility under Auditing Standards Generally Accepted in the United States of America As stated in our engagement letter, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As part of our audit, we considered the internal control over financial reporting of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control over financial reporting. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. Significant Audit Findings Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all such deficiencies have been identified. However, as discussed on the following page, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies presented as findings 2010 -1 and 2010 -2 on the following pages to be significant deficiencies in internal control over financial reporting. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com City of Corcoran April 29, 2011 Page 2 2010 -1: Limited Segregation of Duties Related to Cash Disbursements and Receipts Condition: During our audit we reviewed procedures over cash disbursements and receipts and found the City to have limited segregation of duties in these transaction cycles. Criteria: There are four general categories of duties: authorization, custody, recording and reconciliation. In an ideal system, different employees perform each of these four major functions. In other words, no one person has control of two or more of these responsibilities. Cause: As a result of the limited number of staff, the City is not able to completely segregate all accounting functions. In each of the cycles a single employee has control over two or more of the duties related to the four major functions. Effect.• The existence of limited segregation of duties increases the risk of fraud and error. Recommendation: While we recognize the current staff is not large enough to eliminate this deficiency, we recommend the City consider implementing the following compensating controls. For the cash disbursement and receipting cycles, we suggest that the City Administrator receive the bank statement online from the bank website every month and review, verifying the proper endorsements, scanning the cancelled checks and wire payments for any unusual payees or amounts, and agreeing a sample of deposits to the receipt journal. The amounts withdrawn for payroll should be compared to the payroll register, time sheets, and respective journal entry. The City Administrator should indicate his approval by initialing the statement. It is important that the Council is aware of this condition and monitor all financial information. • Council should also be reminded of their duties over finance at least annually. Some typical monitoring duties would include the following tasks: o Claims approval is an important control and should be at the front of the meeting to ensure that council reviews the claims closely. o A thorough review of budget versus actual reporting and narrative at least quarterly. o Monitor progress over the development of documented policies and procedures. Management Response: Staff is currently reviewing process guidelines with the intent of presenting to council for approval. Performance reporting is available and provided to council on a regular and /or quarterly basis. Effective with the May 27, 2010 council meeting, check numbers will be included on the agenda and in the meeting minutes. Existing Personnel Policy requires that PTO earned in a year must be used during the following year (minimum of two weeks). 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 3 2010 -2: Developer Escrow Account Deficit Balances Condition: It was noted again during audit fieldwork that some developer escrow accounts had deficit account balances. In total $56,329 was owed by 16 accounts. Also, any service charge for deficit balances was not factored into the amount owed. Criteria: The City needs to have funds in amounts sufficient to cover the planning, legal, engineering and any other City cost that a developer incurs. Cause: It appears that reconciliations have been completed for current accounts, but collection efforts were not sufficient to eliminate deficit balance in 2010. Effect: The effect allowing deficit balances means that shortfall needs to be funded with other resources. In the current situation other positive developer accounts are funding the deficits. Recommendation: We recommend that the City enforce a policy and implement a monitoring procedure that ensures deposits are received in advance of any activity and that work stops prior to an account becoming negative. This policy should also address service charges for any account that does become negative. The City should transfer funds to eliminate any uncollectable accounts. We also recommend that the City continue to reconcile balances monthly. Management Response: Escrow accounts are reviewed quarterly by financial staff. A policy has been instituted by the financial staff to contact contract staff if return of escrow balance is requested to ensure all costs have been recorded. Contract staff is also notified to stop work if escrow account has a deficit balance. The large development deficit balances will remain unresolved until the developments are revived (until the general regional economic situation is resolved). 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 4 Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of compliance with certain provisions of Minnesota statutes. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance required to be reported under Minnesota statute. Summary of Prior Year Findings 2009 -3 Approval of Claims Condition: During our audit, we noted that that there were claims paid that did not appear on the claims approval list included in the agenda packets. Criteria: Minnesota statute §412.271 requires that no order for payment shall be issued until the claim to which it relates has been audited and allowed by the Council. Current Year Status: This finding was eliminated as a result of the City implementing procedures to ensure that all claims are presented to Council and is now in compliance with Minnesota Statute. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year. We noted no transaction entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumption about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements are capital asset basis, depreciation, compensated absences, other postemployment benefits payable and allocation of payroll. We evaluated the key factors and assumptions used to develop these accounting estimates in determining that it is reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 5 Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit or the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, a financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated April 29, 2011. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 6 Financial Position and Results of Operations Our principal observations and recommendations are summarized below. These recommendations resulted from our observations made in connection with our audit of the City's financial statements for the year ended December 31, 2010. General Fund The General fund is used to account for resources traditionally associated with government, which are not required legally or by sound principal management to be accounted for in another fund. The General fund balance increased $31,230 from 2009. The fund balance of $698,923 is 23 percent of the 2011 budgeted expenditures. We recommend the fund balance be maintained at a level sufficient to fund operations until the major revenue sources are received in June. We feel a reserve of approximately 50 percent of planned expenditures and transfers out is adequate to meet working capital and small emergency needs. At the current level, the fund balance is below what is generally recommended as a minimum. The City has a reserve fund policy that sets a goal to attain 40 percent of planned expenditures in reserve. The Office of the State Auditor (the OSA) has issued a Statement of Position relating to fund balance stating "a local government should identify fund balance separately between reserved and unreserved fund balance. The local government may assign and report some or all of the fund balance as designated and undesignated." The OSA also recommends local governments adopt a formal policy on the level of unreserved fund balance that should be maintained in the general and special revenue funds. This helps address citizen concerns as to the use of fund balance and tax levels. The purposes and benefits of a fund balance are as follows: • Expenditures are incurred somewhat evenly throughout the year. However, property tax and state aid revenues are not received until the second half of the year. An adequate fund balance will provide the cash flow required to finance the governmental fund expenditures. • The City is vulnerable to legislative actions at the State and Federal level. The State continually adjusts the local government aid and property tax credit formulas. We also have seen the State mandate levy limits for cities over 2,500 in population. An adequate fund balance will provide a temporary buffer against those aid adjustments and levy limits. • Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These would include capital outlay, replacement, lawsuits and other items. An adequate fund balance will provide the financing needed for such expenditures. • A strong fund balance will assist the City in maintaining, improving or obtaining its bond rating. The result will be better interest rates in future bond sales. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 7 A table summarizing the General fund balance in relation to budget follows: $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Fund Balance in Relation to Budget $2,943,164 $2,980,185 $3,005,739 $2,757,525 $2,609,192 19% 24% 21% 22% 23° /; $- 2006 2007 2008 2009 2010 2011 tActualFund Balance (Budget We have compiled a peer group average derived from information available on the website of the Office of the State Auditor for Cities of the 4th class which have populations between 2,500 and 10,000. In 2009, the average General fund balance as a percentage of expenditures was 63 percent. Based on comparison to peer groups, the City's General fund balance is lower than average. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni Percent General of Fund Fund Balance Budget Fund Balance to Year December 31 Year Budget Budget 2006 $ 507,549 2007 $ 2,609,192 19 % 2007 652,837 2008 2,757,525 24 2008 608,047 2009 2,943,164 21 2009 667,693 2010 2,980,185 22 2010 698,923 2011 3,005,739 23 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Fund Balance in Relation to Budget $2,943,164 $2,980,185 $3,005,739 $2,757,525 $2,609,192 19% 24% 21% 22% 23° /; $- 2006 2007 2008 2009 2010 2011 tActualFund Balance (Budget We have compiled a peer group average derived from information available on the website of the Office of the State Auditor for Cities of the 4th class which have populations between 2,500 and 10,000. In 2009, the average General fund balance as a percentage of expenditures was 63 percent. Based on comparison to peer groups, the City's General fund balance is lower than average. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni A summary of 2010 General fund revenue and expenditures is as follows: Revenues Expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Transfers in Transfers out Sale of capital assets Total other financing sources (uses) Net change in fund balances Fund balances, January I Fund balances, December 31 Some variances of both revenues and expenditures are summarized below: Final Budgeted Actual Amounts Amounts $ 2,972,519 $ 3,109,050 2,980,185 3,089,404 (7,666) 19,646 16,426 - (4,842) 2,500 - 2,500 11,584 City of Corcoran April 29, 2011 Page 8 Variance with Final Budget $ 136,531 (109,219) 16,426 (4,842) (2,500) (5,166) 31,230 36,396 667,693 667,693 - $ 662,527 $ 698,923 $ 36,396 • Revenues provided a positive budget variance of $136,531. The largest positive variance was in miscellaneous revenue which was over budget by $83,567, mainly due to an insurance reimbursement. All other revenues had positive variances except for intergovernmental revenue and interest on investments which were $80,877 and $1,561 less the budget, respectively. • Expenditures provided a negative variance of $109,219. All of the major functions were over budget during the year except for culture and recreation capital outlay which was $6,097 under budget. The largest variances were in general government and public safety which were over budget $36,649 and $48,573, respectively. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni A summary and comparison of the 2008, 2009 and 2010 General Fund revenues are as follows: Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous Transfers in Sale of capital assets Total revenues and transfers $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 2008 2009 2010 Percent of Total City of Corcoran April 29, 2011 Page 9 Per Capita $ 2,142,323 $ 2,261,350 $ 2,385,984 76.4 % $ 408 139,708 66,523 95,626 3.1 16 219,899 263,513 229,412 7.3 39 141,300 173,924 190,859 6.1 33 103,653 104,001 110,388 3.5 19 - - 275 - - 10,126 6,272 4,439 0.2 1 9,428 27,810 92,067 2.9 16 17,187 - 16,426 0.5 3 20,546 19,400 - - - $ 2,804,170 $ 2,922,793 $ 3,125,476 100.0 % $ 535 General Fund Revenue by Source 2008 2009 2010 --*---Taxes — D—Licensesandpermits (Intergovernmental —X-- Charges for services Other 952.835.9090 • Fax 9.52.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 10 A summary of the past three years General fund expenditures and transfers are as follows: Total expenditures and transfers out $ 2,848,960 $ 2,863,147 $ 3,094,246 100.0 % $ 530 $ 518 The above chart compares the amount the City spends per capita, in comparison to a peer group. The peer group average is derived from information available on the website of the Office of the State Auditor for Cities of the 4th class which have populations between 2,500 and 10,000. The function/program of the expenditures and transfers are presented graphically as follows: $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Expenditures and Transfers out 2008 2009 I 2010 General government —IF—Public safety —*—Public works —X--Transfers out and other 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni Peer Percent of Per Group Per Programs 2008 2009 2010 Total Capita Capita General government $ 576,445 $ 567,361 $ 642,930 20.8 % $ 110 $ 129 Public safety 1,114,755 1,137,191 1,240,725 40.1 212 206 Public works 1,055,610 1,041,370 1,055,505 34.1 181 113 Culture and recreation 43,403 39,868 44,684 1.4 8 50 Total current 2,790,213 2,785,790 2,983,844 96.4 511 498 Capital outlay 46,820 62,967 105,560 3.4 18 20 Transfers out 11,927 14,390 4,842 0.2 1 n/a Total expenditures and transfers out $ 2,848,960 $ 2,863,147 $ 3,094,246 100.0 % $ 530 $ 518 The above chart compares the amount the City spends per capita, in comparison to a peer group. The peer group average is derived from information available on the website of the Office of the State Auditor for Cities of the 4th class which have populations between 2,500 and 10,000. The function/program of the expenditures and transfers are presented graphically as follows: $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Expenditures and Transfers out 2008 2009 I 2010 General government —IF—Public safety —*—Public works —X--Transfers out and other 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 11 Nonmajor Special Revenue Funds The nonmajor special revenue funds account for revenue sources that are legally restricted to expenditures for specified purposes (not including major capital projects). The funds in this account group include: 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni Fund Balances December 31, Increase Fund 2010 2009 (Decrease) Nonmaj or Reserve Donation $ 21,219 $ 36,947 $ (15,728) Police Donation 1,934 6,021 (4,087) Firearms Safety 3,457 2,479 978 DWI Forfeiture 8,102 11,760 (3,658) Drug Forfeiture 1,153 333 820 Safe and Sober - 305 (305) Total $ 35,865 $ 57,845 $ (21,980) 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 12 Debt Service Funds Debt service funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt (other than enterprise fund debt). Debt service funds may have one or a combination of the following revenue sources pledged to retire debt as follows: • Property taxes - Primarily for general City benefit projects such as parks and municipal buildings. Property taxes may also be used to fund special assessment bonds which are not fully assessed. • Tax increments - Pledged exclusively for tax increment/economic development districts. • Capitalized interest portion of bond proceeds - After the sale of bonds, the project may not produce revenue (tax increments or special assessments) for a period of one to two years. Bonds are issued with this timing difference considered in the form of capitalized interest. • Special assessments - Charges to benefited properties for various improvements In addition to the above pledged assets, other funding sources may be received by Debt Service funds as follows: • Residual project proceeds from the related capital projects fund • Investment earnings • State or federal grants • Transfers from other funds The following is intended to provide that information: Cash Total Outstanding Maturity Debt Description Balances Assets Debt Date 309 G.O. Equipment Certificates 2006/2008/2010 $ 21,924 $ 21,924 $ 1,266,000 2013/2020 407 Facility Expansion 2,106 2,106 166,000 2015 Total $ 24,030 $ 24,030 $ 1,432,000 It is important for the City to monitor its cash flows over the life of the debt to ensure sufficient resources for payment of principal and interest. The above are funded with annual tax levies. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 13 Capital Projects Funds The capital projects funds account for the acquisition of capital assets or construction of major capital projects. The funds in this group include: Fund Major Tax Increment Financing Infrastructure Planning Shannon Lane Subtotal Nonmaj or Park Capital Capital Equip -Cert City Hall Geothermal Public Works Capital Police Capital Asphalt Maintenance County 19 Improvement Chisholm Trail Road Subtotal Total Fund Balances (Deficits) December 31, 2010 2009 $ 2,874,396 $ 2,639,567 (175,741) (173,439) (107,722) (120,075) Increase (Decrease) $ 234,829 (2,302) 12,353 2,590,933 2,346,053 244,880 331,392 370,951 (39,559) 219,023 93,693 125,330 - (2,194) 2,194 1,297 1,280 17 62,599 74,899 (12,300) 70,665 69,739 926 331,461 350,220 (18,759) - 8,839 (8,839) 1,016,437 967,427 49,010 $ 3,607,370 $ 3,313,480 $ 293,890 Occasionally, fund balance deficits will occur. This could happen for a variety of reasons including cost overruns, funding shortfalls or incurring project costs in advance of revenue resources. It is important that the City have a plan in place whenever there is a deficit fund balance. The City should evaluate each deficit and ensure its current position is consistent with the financing plans in place. Annual review will ensure that deficits are addressed promptly. The City should consider transferring resources from existing funds when beginning an internally financed project. The current practice of allowing deficits to carry over year to year may have the effect of overstating reserve levels in other funds. We recommend that the City document how internally financed projects will be paid for over their existence. The documentation should be contained in a policy. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 14 Developer agency accounts In total, the City is maintaining $26,213 in cash in its developer funds. In addition to this balance the City is owed an additional $56,329 by accounts that are in deficit. The deficit balances are identified below: Accounts receivable Armbruster 09 -011 $ 110 Blocks and rocks 201 Corcoran lions 8 Corcoran wildlife 4,284 Ess 1,990 Gazelle marketing 144 Hank prelim & final plat 1,114 Hedgestone final plat 22,579 Hedgestone re -zone 09 -008 853 Larson farms 709 Laurent - hedgstone 16,863 Meadow view - prairie creek 411 Northern natural gas 09 -009 230 Ridesport stables LLC 08 -003 753 Unallocated 3,352 United properties 2,728 Total $ 56,329 The unallocated amount represents an unreconciled difference carried over for the last 5 years. We recommend the City either research and identify the difference or transfer other City funds to close out the deficit. It cannot be determined based on a review of the last five years of detail where this amount originated. The deficits were previously discussed in our internal control findings. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 15 Ratio Analysis The following captures a few ratios from the City's financial statements that give some additional information for trend and peer group analysis. The peer group average is derived from information available on the website of the Office of the State Auditor. Different peer group averages are used for Cities of the 4`h class (population 2,500 — 10,000). The majority of these ratios facilitate the use of economic resources focus and accrual basis of accounting at the government -wide level. A combination of solvency (ability to pay its long -term obligations), funding (comparison of financial amounts and economic indicators to measure changes in financial capacity over time) and common -size (comparison of financial data with other cities regardless of size) ratios are shown below. Ratio Calculation Source 2007 2008 Debt to assets Total liabilities /total assets Government -wide Debt per capita Bonded debt/population Government -wide Taxes per capita Tax revenues /population Government -wide Current expenditures per capita Governmental fund current expenditures /population Capital expenditures per capita Governmental fund capital expenditures /population Capital assets % left to Net capital assets/ depreciate - Governmental gross capital assets Represents the City of Corcoran Peer group average 18% 21% 36% 34% 2009 2010 18% 22% 34% N/A $ 166 $ 238 $ 208 $ 303 $ 2,673 $ 2,677 $ 2,713 N/A $ 427 $ 449 $ 491 $ 500 $ 382 $ 401 $ 399 N/A Governmental funds $ 445 $ 487 $ 491 $ 530 $ 553 $ 663 $ 625 N/A Governmental funds $ 72 $ 98 $ 129 $ 185 $ 409 $ 323 $ 309 N/A Government -wide 71% 73% 72% 73% 70% 70% 68% N/A Debt -to- Assets Leverage Ratio (Solvency Ratio) The debt -to- assets leverage ratio is a comparison of a city's total liabilities to its total assets or the percentage of total assets that are provided by creditors. It indicates the degree to which the City's assets are financed through borrowings and other long -term obligations (i.e. a ratio of .50 would indicate half of the City's assets are financed through outstanding debt). Bonded Debt per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total bonded debt by the population of the city and represents the amount of bonded debt obligation for each citizen of the city at the end of the year. The higher the amount, the more resources are needed in the future to retire these obligations through taxes, assessments or user fees. Taxes per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total tax revenues by the population of the city and represents the amount of taxes for each citizen of the city for the year. The higher this amount is, the more reliant the city is on taxes to fund its operations. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 16 Current Expenditures per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total current governmental expenditures by the population of the City and represents the amount of governmental expenditure for each citizen of the City during the year. Since this is generally based on ongoing expenditures, we would expect consistent annual per capita results. Capital Expenditures per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total governmental capital outlay expenditures by the population of the City and represents the amount of capital expenditure for each citizen of the City during the year. Since projects are not always recurring, the per capita amount will fluctuate from year to year. Capital Assets Percentage (Common -size Ratio) This percentage represents the percent of governmental or business -type capital assets that are left to be depreciated. The lower this percentage, the older the city's capital assets are and may need major repairs or replacements in the near future. A higher percentage may indicate newer assets being constructed or purchased and may coincide with higher debt ratios or bonded debt per capita Future Accounting Standard Changes The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on future City financial statements: GASB Statement No. 54 - Fund Balance This statement was issued in March of 2009 and is effective for periods beginning after June 15, 2010. This new standard is intended to improve the usefulness of information provided to financial report users about fund balance by providing clearer, more structured fund balance classifications, and clarifying the definitions of existing governmental fund types. GASB No. 54 distinguishes fund balance between amounts that are considered non - spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that control the purposes for which specific amounts can be spent. The following classifications and definitions will be used: • Restricted - amounts constrained by external parties, constitutional provision, or enabling legislation • Committed - amounts constrained by a government using its highest level of decision - making authority • Assigned - amounts a government intends to use for a particular purpose • Unassigned - amounts that are not constrained at all will be reported in the general fund. In addition to the classifications of fund balance, the standard clarified the definitions of individual governmental fund types, for example, special revenue funds, debt service funds, and capital project funds. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 17 GASB Statement No. 57 - OPEB Measurements by Agent Employers and Agent Multiple - Employer Plans Summary The objective of this Statement is to address issues related to the use of the alternative measurement method and the frequency and timing of measurements by employers that participate in agent multiple - employer other postemployment benefit (OPEB) plans (that is, agent employers). This Statement amends Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, to permit an agent employer that has an individual - employer OPEB plan with fewer than 100 total plan members to use the alternative measurement method, at its option, regardless of the number of total plan members in the agent multiple- employer OPEB plan in which it participates. Consistent with this change to the employer- reporting requirements, this Statement also amends a Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, requirement that a defined benefit OPEB plan obtain an actuarial valuation. The amendment permits the requirement to be satisfied for an agent multiple - employer OPEB plan by reporting an aggregation of results of actuarial valuations of the individual - employer OPEB plans or measurements resulting from use of the alternative measurement method for individual - employer OPEB plans that are eligible. In addition, this Statement clarifies that when actuarially determined OPEB measures are reported by an agent multiple - employer OPEB plan and its participating employers, those measures should be determined as of a common date and at a minimum frequency to satisfy the agent multiple - employer OPEB plan's financial reporting requirements. How the Changes in This Statement Will Improve Financial Reporting The requirements in this Statement will allow more agent employers to use the alternative measurement method to produce actuarially based information for purposes of financial reporting. As a result of this change, the cost of compliance with the requirements of Statement 45 for eligible agent employers may be reduced while achieving an appropriate balance between the goals of reliable measurement of reported information and reasonable cost. In addition, the clarification that OPEB measures reported by agent multiple - employer OPEB plans and their participating employers should be determined at the same minimum frequency and as of a common date will improve the consistency of reporting with regard to funded status and funding progress information. GASB Statement No. 59 –Financial Instruments Omnibus Summary The objective of this Statement is to update and improve existing standards regarding financial reporting and disclosure requirements of certain financial instruments and external investment pools for which significant issues have been identified in practice. This Statement provides for the following amendments: • Statement 31 is clarified to indicate that a 2a7 -like pool, as described in Statement 31, is an external investment pool that operates in conformity with the Securities and Exchange Commission's (SEC) Rule 2a7 as promulgated under the Investment Company Act of 1940, as amended. • Statement No. 40, Deposit and Investment Risk Disclosures, is amended to indicate that interest rate risk information should be disclosed only for debt investment pools —such as bond mutual funds and external bond investment pools —that do not meet the requirements to be reported as a 2a7 -like pool. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2010. Earlier application is encouraged. 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni City of Corcoran April 29, 2011 Page 18 How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will improve financial reporting by providing more complete information, by improving consistency of measurements, and by providing clarifications of existing standards. Emphasizing the applicability of SEC requirements to 20 -like external investment pools provides practitioners with improved guidance. Finally, limiting interest rate risk disclosures for investments in mutual funds, external investment pools, and other pooled investments to debt investment pools provides better guidance regarding the applicability of interest rate risk disclosures. This report is intended solely for the information and use of the City's Council, management, others within the City and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. The comments and recommendation in this report are purely constructive in nature, and should be read in this context. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff. April 29, 2011 Minneapolis, Minnesota 952.835.9090 • Fax 952.835.3261 www.aemcpas.coni ABDO, EICK & MEYERS, LLP Certified Public Accountants CITY OF CORCORAN CORCORAN, MINNESOTA ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2010 THIS PAGE IS LEFT BLANK INTENTIONALLY CITY OF CORCORAN, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 2010 INTRODUCTORY SECTION Elected and Appointed Officials FINANCIAL SECTION Page No. Independent Auditor's Report 9 Management's Discussion and Analysis 13 Basic Financial Statements Government -wide Financial Statements Statement of Net Assets 24 Statement of Activities 25 Fund Financial Statements Governmental Funds Balance Sheet 28 Reconciliation of the Balance Sheet to the Statement of Net Assets 31 Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficits) to the Statement of Activities 34 General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 35 Fiduciary Funds Statement of Fiduciary Net Assets 36 Notes to Financial Statements 37 Required Supplementary Information Schedule of Funding Progress for the Postemployment Benefit Plan 59 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 62 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) 66 General Fund Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 70 Fiduciary Funds Combining Statement of Net Assets 76 Supplementary Information (Unaudited) Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds OTHER REQUIRED REPORTS Report on Minnesota Legal Compliance Report on Internal Control over Financial Reporting Based on an Audit of Financial Statements Schedule of Findings and Responses -1- 81 W THIS PAGE IS LEFT BLANK INTENTIONALLY -2- INTRODUCTORY SECTION CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -3- THIS PAGE IS LEFT BLANK INTENTIONALLY -4- Name Ken Guenthner Roz Milbrandt George Gmach Chris Hudok Ron Thomas Dan Donahue Jeannie Heinecke CITY OF CORCORAN, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 2010 ELECTED Term Expires 12/31/10 12/31/12 12/31/12 12/31/10 12/31/10 APPOINTED Irbil Title Mayor Council Member Council Member Council Member Council Member City Administrator City Clerk THIS PAGE IS LEFT BLANK INTENTIONALLY IN FINANCIAL SECTION CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 11re THIS PAGE IS LEFT BLANK INTENTIONALLY -8- neno EfCK & �r 01 1 MEYER LLP Certified Pe blw Accouniaw & Consuhams 5201 Eden Avenue Suite 250 Edina, MN 55436 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Council City of Corcoran, Minnesota We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Corcoran, Minnesota (the City), as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2010, and the respective changes in financial position and the respective budgetary comparison schedule for the General fund, where applicable thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America. Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 13 through 22 and the Schedule of Funding Progress for the Postemployment Benefit Plan on page 59 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 952.835.9090 • Fax 952.835.3261 -9- www.aeincpas.coni THIS PAGE IS LEFT BLANK INTENTIONALLY -10- Our audit was conducted for the purpose of forming an opinion on the basic financial statements that collectively comprise the City's basic financial statements as a whole. The introductory section, combining and individual fund financial statements and schedules, and supplementary information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory section and supplementary information have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. April 29, 2011 Minneapolis, Minnesota 952.835.9090 • Fax 952.835.3261 www.aemcpas.com -11- OL&&O"ILL? of ABDO, EICK & MEYERS, LLP Certified Public Accountants THIS PAGE IS LEFT BLANK INTENTIONALLY -12- Management's Discussion and Analysis As management of the City of Corcoran (the City), Minnesota, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2010. Financial Highlights • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $7,853,371 (net assets). Of this amount, $4,407,045 (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 $4,366,188 an increase of $317,840 in comparison with the prior year. $24,030 of this amount has been reserved for debt service and the remaining $4,342,158 is unreserved and available for spending at the City's discretion, $35,865 of which has been designated for police expenditures. • At the end of the current fiscal year, unreserved fund balance for the General fund was $698,923 or 22.6 percent of total General fund expenditures. • The City's noncurrent liabilities increased by $600,613 or 41 percent during the current fiscal year as a result of issuing $470,000 of G.O. Equipment Certificates and a $336,454 note payable. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. -13- The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of combining and individual fund financial statements and schedules that further explains and supports the information in the financial statements. Figure 1 shows how the required parts of this annual report are arranged and relate to one another. In addition to these required elements, we have included a section with combining and individual fund financial statements and schedules that provide details about nonmajor governmental funds, which are added together and presented in single columns in the basic financial statements Figure 1 Required Components of the City's Annual Financial Report Management's Discussion and Analysis Government -wide Fund Financial Financial Statements Statements Notes to the Financial Statements Summary Detail -14- Figure 2 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure and contents of each of the statements. Figure 2 Major features of the Government -wide and Fund Financial Statements 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, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (governmental activities). The governmental activities of the City include general government, public safety, public works, and culture and recreation. -15- Fund Financial Statements Government -wide Governmental Funds Statements Scope Entire City government The activities of the City that (except fiduciary funds) and are not proprietary of the City's component units fiduciary, such as police, fire and parks Required financial . Statement of Net Assets • Balance Sheet statements • Statement of Activities • Statement of Revenues, Expenditures, and Changes in Fund Balances Accounting Basis and Accrual accounting and Modified accrual accounting measurement focus economic resources focus and current financial resources focus Type of asset/liability All assets and liabilities, both Only assets expected to be information financial and capital, and used up and liabilities that short-term and long -term come due during the year or soon thereafter; no capital assets included Type of in flow /out flow All revenues and expenses Revenues for which cash is information during year, regardless of received during or soon after when cash is received or paid the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter 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, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (governmental activities). The governmental activities of the City include general government, public safety, public works, and culture and recreation. -15- The government -wide financial statements include not only the City itself (known as the primary government), but also a legally separate Economic Development Authority for which the City is financially accountable. The Economic Development Authority, although legally separate, functions for all practical purposes as a department of the City, and therefore has been included as part of the primary government. The government -wide financial statements start on page 24 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a 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 financial statements. By doing so, readers may better understand the long -term impact by the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 20 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General fund, Tax Increment Financing fund, Infrastructure Planning fund, and Shannon Lane fund all of which are considered to be major funds. Data from the other 16 governmental funds are combined into a single, aggregated presentation identified as other nonmajor governmental funds. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements or schedules elsewhere in this report. The City adopts an annual appropriated budget for its General fund. A budgetary comparison statement has been provided for the General fund to demonstrate compliance with this budget. (Page 35) The basic governmental fund financial statements start on page 28 of this report. Fiduciary funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on page 36 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements start on page 37 of this report. Other Information The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented following the notes to financial statements. Combining and individual fund statements and schedules start on page 62 of this report. -16- Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $7,853,371 at the close of the most recent fiscal year. The largest portion of the City's net assets is unrestricted (56.1 percent). It may be used to meet the City's ongoing obligations to citizens and creditors. The amount invested in capital assets net of related debt is 43.8 percent of the total and reflects its investment in capital assets (e.g., land, buildings, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. 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 sources, since the capital assets themselves cannot be used to liquidate these liabilities. Assets Current and other assets Capital assets Total assets Liabilities Noncurrent liabilities outstanding Other liabilities Total liabilities Net assets Investment in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets Summary of Net Assets 2010 Governmental Activities $ 4,919,822 5,205,518 10,125,340 Increase 2009 (Decrease) $ 4,576,075 4,531,271 9,107,346 $ 343,747 674,247 1,017,994 2,058,798 1,458,185 600,613 213,171 143,595 69,576 2,271,969 1,601,780 670,189 3,437,064 3,330,271 106,793 9,262 2,468 6,794 4,407,045 4,172,827 234,218 $ 7,853,371 $ 7,505,566 $ 347,805 A portion of net assets ($9,262) is restricted for debt service and the remaining balance of unrestricted net assets ($4,407,045) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets for its governmental activities. -17- Governmental activities. Governmental activities increased the City's net assets by $347,805. Changes in Net Assets Expenses General government Governmental Activities 641,707 52,120 Public safety 1,466,461 Increase 165,599 2010 2009 (Decrease) Revenues Culture and recreation 89,825 91,579 Program revenues Interest on long -term debt 59,917 54,784 Charges for services $ 485,471 $ 370,275 $ 115,196 Operating grants and contributions 287,736 249,067 38,669 Capital grants and contributions 164,170 618,640 (454,470) General revenues Net assets, January 1 7,505,566 6,569,412 Property taxes /tax increments 2,919,533 2,837,822 81,711 Franchise fees 34,674 33,326 1,348 Grants and contributions not restricted to specific programs 1,515 1,772 (257) Unrestricted investment earnings 51,203 94,905 (43,702) Gain on sale of capital assets - 34,597 (34,597) Total revenues 3,944,302 4,240,404 (296,102) Expenses General government 693,827 641,707 52,120 Public safety 1,466,461 1,300,862 165,599 Public works 1,286,467 1,215,318 71,149 Culture and recreation 89,825 91,579 (1,754) Interest on long -term debt 59,917 54,784 5,133 Total expenses 3,596,497 3,304,250 292,247 Change in net assets 347,805 936,154 (588,349) Net assets, January 1 7,505,566 6,569,412 936,154 Net assets, December 31 $ 7,853,371 $ 7,505,566 $ 347,805 -18- The following graph depicts various governmental activities and shows the revenue and expenses directly related to those activities. $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Expenses and Program Revenues - Governmental Activities Graph General government Public safety Public works Culture and Interest on long -term recreation debt L Expenses ■ Program Revenues Revenues by Source - Governmental Activities Graph Franchise fees 1% Property taxes 74% Unrestricted investments earnings 1% -19- Charges for services 13% erating grants and contributions 7% Capital grants and contributions 4% Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. Governmental funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows 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 $4,366,188 an increase of $317,840 in comparison with the prior year. Approximately 99 percent of this total amount ($4,306,293) constitutes unreserved fund balance, which is available for spending at the City's discretion. A portion of unreserved fund balance ($35,865) is designated for police expenditures and the remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed to pay debt service in the amount of $24,030. The General fund is the chief operating fund of the City. At the end of the current year, the fund balance of the General fund was $698,923. As a measure of the General fund's liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 23 percent of fund expenditures and transfers out. Major funds 2010 December 31, 2009 Increase (Decrease) General $ 698,923 $ 667,693 $ 31,230 The increase in the General fund was mainly due to revenues being greater than expected. The fund balance is moderately strong in relation to the following years budget (23 percent). Tax Increment Financing $ 2,874,396 $ 2,639,567 $ 234,829 The Tax increment Financing fund balance continues to increase and is projected to be used to fund project costs in the development districts. Infrastructure Planning $ (175,741) $ (173,439) $ (2,302) The Infrastructure Planning fund decreased slightly in 2010. The fund deficit is planned to be eliminated with future collections of fees or transfers from other funds. Shannon Lane $ (107,722) $ (120,075) $ 12,353 The Shannon Lane fund increase by $12,353 as a result of grant proceeds and collection of special assessments. The fund deficit is planned to be eliminated with future assessment collections and transfers from other funds. General Fund Budgetary Highlights The City's General fund budget was not amended during the year. The 2010 amended budget called for a decrease in fund balance of $5,166, while actual results showed an increase of $31,230. Revenues and other financing sources were over budget by $150,457, while expenditures and other financing uses were over budget by $114,061. -20- Capital Asset and Debt Administration Capital Assets: The City's investment in capital assets for its governmental type activities as of December 31, 2010, amounts to $5,205,518 (net of accumulated depreciation). This investment in capital assets includes land, structures, improvements, machinery and equipment, park facilities, roads, highways and bridges. Capital Assets Net of Depreciation 2010 Governmental Activities 2009 Increase (Decrease) Land $ 1,219,800 $ 1,219,800 $ - Infrastructure 1,693,860 442,232 1,251,628 Buildings 1,084,642 1,010,180 74,462 Machinery 1,070,650 964,905 105,745 Construction in progress 136,566 894,154 (757,588) Total $ 5,205,518 $ 4,531,271 $ 674,247 Major capital asset events during the current fiscal year included the following: • Completing implementation of city hall laserfische system. • Purchase and equipping two new 2010 Crown Victoria squad cars. • Purchase of Mack dump truck. • Purchase of 2011 GMC Sierra pickup. • Completion of Shannon Lane bridge project. • Capitalization of County Road 19 Improvement project. Construction in progresE 2.6% Machinery 20.6% Capital Assets Land 23.4% 20.8% structure 2.6% Additional information on the City's capital assets can be found in Note 3B starting on page 47 of this report. -21- Long -term debt: At the end of the current fiscal year, the City had total bonded debt outstanding of $1,432,000. Of this amount, $1,266,000 is general obligation equipment certificates, and $166,000 is lease revenue bonds for municipal facilities. The City also had a $336,454 note payable outstanding at year end. The following table highlights the total debt of the City. Outstanding Debt G.O. Bonds Lease revenue bonds Notes payable Other postemployment benefits payable Compensated absences payable Total Governmental Activities 2010 $ 1,266,000 166,000 336,454 64,357 225,987 217,964 8,023 $ 2,058,798 $ 1,458,185 $ 600,613 The City's total debt increased by $600,613 (41 percent) during the current fiscal year. This is primarily due to the issuance of new debt in 2010. Minnesota statutes limit the amount of net general obligation debt a City may issue to 3 percent of the market value of taxable property within the City. Net debt is debt payable solely from ad valorem taxes. The current debt limitation for the City is approximately $23 million, which is significantly in excess of the City's outstanding general obligation debt. Additional information on the City's long -term debt can be found in Note 3E starting on page 49 of this report. Economic Factors and Next Year's Budgets and Rates The unemployment rate for Hennepin County is currently (March 2011) 6.1 percent. This compares favorably to the State of Minnesota's average unemployment rate of 6.6 percent and the national average unemployment rate of 8.8 percent. The City's property tax rate increased from 32.995 percent in 2010 to 37.041 percent in 2011, or a 12.3 percent increase, while the City's property tax levy increased by 2.5 percent. The levy increase is primarily due to an increase in the City's capital equipment certificates debt service levy and overall increases in costs to provide services in 2011. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Administrator, City of Corcoran 8200 County Road 116, Corcoran, MN 55340. -22- Increase 2009 (Decrease) $ 1,002,000 $ 264,000 199,000 (33,000) - 336,454 39,221 25,136 225,987 217,964 8,023 $ 2,058,798 $ 1,458,185 $ 600,613 The City's total debt increased by $600,613 (41 percent) during the current fiscal year. This is primarily due to the issuance of new debt in 2010. Minnesota statutes limit the amount of net general obligation debt a City may issue to 3 percent of the market value of taxable property within the City. Net debt is debt payable solely from ad valorem taxes. The current debt limitation for the City is approximately $23 million, which is significantly in excess of the City's outstanding general obligation debt. Additional information on the City's long -term debt can be found in Note 3E starting on page 49 of this report. Economic Factors and Next Year's Budgets and Rates The unemployment rate for Hennepin County is currently (March 2011) 6.1 percent. This compares favorably to the State of Minnesota's average unemployment rate of 6.6 percent and the national average unemployment rate of 8.8 percent. The City's property tax rate increased from 32.995 percent in 2010 to 37.041 percent in 2011, or a 12.3 percent increase, while the City's property tax levy increased by 2.5 percent. The levy increase is primarily due to an increase in the City's capital equipment certificates debt service levy and overall increases in costs to provide services in 2011. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Administrator, City of Corcoran 8200 County Road 116, Corcoran, MN 55340. -22- GOVERNMENT -WIDE FINANCIAL STATEMENTS CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -23- CITY OF CORCORAN, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2010 ASSETS Cash and temporary investments Receivables Accrued interest Delinquent taxes Accounts Special assessments Due from other governments Deferred charges Capital assets Land and construction in progress Depreciable (net of accumulated depreciation) TOTAL ASSETS LIABILITIES Accounts payable Due to other governments Accrued salaries Accrued interest payable Noncurrent liabilities Due within one year Compensated absences Lease payable Notes payable Bonds payable Due in more than one year Compensated absences Lease payable Notes payable Bonds payable Other postemployment benefits payable TOTAL LIABILITIES NET ASSETS Investment in capital assets, net of related debt Restricted for debt service Unrestricted TOTAL NET ASSETS The notes to the financial statements are an integral part of this statement. -24- Governmental A rti vi ti ac $ 4,435,442 9,442 101,811 40,967 222,472 78,740 30,948 1,356,366 1 949 15? 10,125,340 154,097 20,998 23,308 14,768 99,434 34,000 100,000 214,000 126,553 132,000 236,454 1,052,000 64,357 2,271,969 3,437,064 9,262 4,407,045 $ 7,853,371 Functions/Programs Governmental activities General government Public safety Public works Culture and recreation Interest on long -term debt Total governmental activities CITY OF CORCORAN, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2010 Expenses Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Net (Expense) Revenue and Changes in Governmental Activities $ 693,827 $ 58,313 $ 10,657 $ - $ (624,857) 1,466,461 209,250 160,155 - (1,097,056) 1,286,467 216,638 101,365 87,717 (880,747) 89,825 1,270 15,559 76,453 3,457 59,917 - - - (59,917) $ 3,596,497 $ 485,471 $ 287,736 $ 164,170 (2,659,120) General revenues Taxes Property taxes, levied for general purposes 2,319,625 Property taxes, levied for debt service 300,263 Tax increments 299,645 Franchise fees 34,674 Grants and contributions not restricted to specific programs 1,515 Unrestricted investment earnings 51,203 Total general revenues 3,006,925 Change in net assets 347,805 Net assets, January 1 7,505,566 Net assets, December 31 $ 7,853,371 The notes to the financial statements are an integral part of this statement. -25- THIS PAGE IS LEFT BLANK INTENTIONALLY -26- FUND FINANCIAL STATEMENTS CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -27- CITY OF CORCORAN, MINNESOTA BALANCESHEET GOVERNMENTAL FUNDS DECEMBER 31, 2010 ASSETS Cash and temporary investments Receivables Accounts Accrued interest Delinquent taxes Special assessments Due from other governments Due from other funds TOTAL ASSETS LIABILITIES AND FUND BALANCES (DEFICITS) LIABILITIES Accounts payable Accrued salaries Due to other governments Due to other funds Deferred revenue TOTAL LIABILITIES FUND BALANCES (DEFICITS) Reserved for debt service Unreserved Designated for police expenditures Undesignated, reported in General fund Capital projects funds TOTAL FUND BALANCES (DEFICITS) TOTAL LIABILITIES AND FUND BALANCES (DEFICITS) The notes to the financial statements are an integral part of this statement. -28- 100 401 402 Tax Increment Infrastructure General Financing Planning $ 439,658 $ 2,899,640 $ - 40,168 - - 9,442 - - 101,811 - - 183,554 - - 68,049 10,460 - 283,694 - - $ 1,126,376 $ 2,910,100 $ - $ 97,782 $ 35,704 $ - 23,308 - - 20,998 - - - - 175,741 285,365 - - 427,453 35,704 175,741 698,923 - - - 2,874,396 (175,741) 698,923 2,874,396 (175,741) $ 1,126,376 $ 2,910,100 $ - 417 Other Total Shannon Governmental Governmental Lane Funds Funds $ - $ 1,096,144 $ 4,435,442 799 40,967 - 9,442 - - 101,811 38,918 - 222,472 231 - 78,740 $ 39,149 $ 1,096,943 $ 5,172,568 $ - $ 20,611 $ 154,097 - - 23,308 - - 20,998 107,953 - 283,694 38,918 - 324,283 146,871 20,611 806,380 - 24,030 24,030 - 35,865 35,865 - - 698,923 (107,722) 1,016,437 3,607,370 (107,722) 1,076,332 4,366,188 $ 39,149 $ 1,096,943 $ 5,172,568 -29- THIS PAGE IS LEFT BLANK INTENTIONALLY -30- CITY OF CORCORAN, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS AS OF DECEMBER 31, 2010 Total fund balances - governmental funds Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the fund statements. Cost of capital assets Less: accumulated depreciation Long -term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the fund statements. Long -term liabilities at year -end consist of Compensated absences payable Other postemployment benefits payable Bond principal payable Less: deferred charges, net of accumulated amortization Notes payable Leases payable Some receivables are not available soon enough to pay for current period expenditures, and, therefore, are deferred in the funds. Delinquent taxes Special assessments Governmental funds do not report a liability for accrued interest until due and payable. Total net assets - governmental activities The notes to the financial statements are an integral part of this statement. -31- $ 4,366,188 7,179,760 (1,974,242) (225,987) (64,357) (1,266,000) 30,948 (336,454) (166,000) 101,811 222,472 (14,768) $ 7,853,371 CITY OF CORCORAN, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS) GOVERNMENTALFUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other Bond issuance costs TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Bond proceeds Note proceeds TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES (DEFICITS), JANUARY 1 FUND BALANCES (DEFICITS), DECEMBER 31 The notes to the financial statements are an integral part of this statement. -32- 100 401 402 Tax Increment Infrastructure General Financing Planning $ 2,385,984 $ 299,645 $ - 95,626 - - 229,412 973 - 190,859 - - 110,388 - - 275 - - 4,439 35,693 (2,302) 92,067 - - 3,109,050 336,311 (2,302) 642,930 - - 1,240,725 - - 1,055,505 - - 44,684 - - 18,946 - - 50,711 101,482 - 35,903 - - 3,089,404 101,482 - 19,646 234,829 (2,302) 16,426 - - (4,842) - - 11,584 - - 31,230 234,829 (2,302) 667,693 2,639,567 (173,439) $ 698,923 $ 2,874,396 $ (175,741) - 642,930 - 112,700 1,353,425 685 - 1,056,190 - - 44,684 - 35,857 Other - 138,598 417 Nonmajor Total Shannon Governmental Governmental Lane Funds Funds $ - $ 300,263 $ 2,985,892 - - 95,626 5,916 156,548 392,849 - 7,243 198,102 - - 110,388 8,604 7,446 16,325 (1,482) 14,855 51,203 - 46,275 138,342 13,038 532,630 3,988,727 - 642,930 - 112,700 1,353,425 685 - 1,056,190 - - 44,684 - 35,857 35,857 - 138,598 157,544 - 630,873 783,066 - 68,069 103,972 - 239,000 239,000 - 46,965 46,965 - 13,708 13,708 685 1,285,770 4,477,341 12,353 (753,140) (488,614) - 30,147 46,573 - (41,731) (46,573) - 470,000 470,000 - 336,454 336,454 - 794,870 806,454 12,353 41,730 317,840 (120,075) 1,034,602 4,048,348 $ (107,722) $ 1,076,332 $ 4,366,188 -33- CITY OF CORCORAN, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS) TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 Total net change in fund balances - governmental funds $ 317,840 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. Capital outlays 1,031,760 Depreciation expense (337,135) The net effect of various transactions involving the sale of capital assets (20,378) The issuance of long -term debt provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Principal repayments 239,000 Debt issued or incurred (806,454) Deferred charges, net of amortization expense 8,662 Interest on long -term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (7,906) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting, they cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes (31,685) Special assessments (12,740) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences (8,023) Other postemployment benefits payable (25,136) Change in net assets - governmental activities $ 347,805 The notes to the financial statements are an integral part of this statement. -34- CITY OF CORCORAN, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2010 -35- Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Taxes $ 2,341,306 $ 2,341,306 $ 2,385,984 $ 44,678 Licenses and permits 56,100 56,100 95,626 39,526 Intergovernmental 310,289 310,289 229,412 (80,877) Charges for services 180,324 180,324 190,859 10,535 Fines and forfeitures 70,000 70,000 110,388 40,388 Special assessments - - 275 275 Interest on investments 6,000 6,000 4,439 (1,561) Miscellaneous 8,500 8,500 92,067 83,567 TOTAL REVENUES 2,972,519 2,972,519 3,109,050 136,531 EXPENDITURES Current General government 606,281 606,281 642,930 (36,649) Public safety 1,192,152 1,192,152 1,240,725 (48,573) Public works 1,073,083 1,073,083 1,055,505 17,578 Culture and recreation 42,169 42,169 44,684 (2,515) Capital outlay Public safety 18,000 18,000 18,946 (946) Culture and recreation 42,000 42,000 35,903 6,097 TOTAL EXPENDITURES 2,980,185 2,980,185 3,089,404 (109,219) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (7,666) (7,666) 19,646 27,312 OTHER FINANCING SOURCES (USES) Transfers in - - 16,426 16,426 Transfers out - - (4,842) (4,842) Sale of capital assets 2,500 2,500 - (2,500) TOTAL OTHER FINANCING SOURCES (USES) 2,500 2,500 11,584 9,084 NET CHANGE IN FUND BALANCES (5,166) (5,166) 31,230 36,396 FUND BALANCES, JANUARY 1 667,693 667,693 667,693 - FUND BALANCES, DECEMBER 31 $ 662,527 $ 662,527 $ 698,923 $ 36,396 The notes to the financial statements are an integral part of this financial statement. -35- ASSETS Cash and temporary investments Accounts receivable TOTAL ASSETS LIABILITIES Accounts payable Deposits payable TOTAL LIABILITIES CITY OF CORCORAN, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS DECEMBER 31, 2010 Agency 500 501 Lions and Escrow Jaycees Total $ 26,213 $ 6,000 $ 32,213 56,329 - 56,329 $ 82,542 $ 6,000 $ 88,542 $ 878 $ 6,000 $ 6,878 81,664 - 81,664 $ 82,542 $ 6,000 $ 88,542 The notes to the financial statements are an integral part of this financial statement. -36- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting entity The City of Corcoran (the City), Minnesota operates under a Home Rule Charter form of government. The charter provides for citizen input for initiative, referendum and recall. Under this plan, the government of the City is directed by a Council composed of an elected Mayor and four elected Council members. The Council exercises legislative authority and determines all matters of policy. The Council appoints personnel responsible for the proper administration of all affairs relating to the City. The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide the specific benefits to, or impose specific financial burdens on the primary government. Blended component units, although legally separate entities, are in substance, part of the City's operations and so data from these units are combined with data of the primary government. The City has the following component unit: Blended component unit The Economic Development Authority (the EDA) of the City was created pursuant to Minnesota statutes 469.090 through 469.108 to carry out economic and industrial development and redevelopment consistent with policies established by the City Council. The EDA may not exercise any of the powers enumerated by the authorizing statutes without prior approval of the Board of Commissioners. The only activity of the EDA has been to issue the 2004 Public Project revenue bonds. The EDA activities are blended and reported as a separate special revenue fund. Separate financial statements are not issued for this component unit. B. Government -wide and fund financial statements The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non - fiduciary activities of the City and its component unit. The effect of interfund activity has been removed from these statements. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment 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 and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. -37- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement focus, basis of accounting and financial statement presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter 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 period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. 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. All other revenue items are considered to be measurable and available only when cash is received by the City. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non - exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non - exchange transactions must also be available before it can be recognized. Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as deferred revenue. On the modified accrual basis, receivables that will not be collected within the available period have also been reported as deferred revenue in the fund financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -38- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major governmental funds: The General fund is the City's primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The Tax Increment Financing fund accounts for the City's tax increment financing activities. The Infrastructure Planning fund accounts for costs related to the City's future infrastructure needs. The Shannon Lane fund accounts for costs related to the Shannon Lane capital improvement project. Additionally, the City reports the following fund types: The Agency fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds are accounted for using the modified accrual basis of accounting. This fund is used to account for assets that the City holds for others in an agency capacity. Private - sector standards of accounting and financial reporting issued prior to December 1, 1989 generally are followed in the government -wide financial statements to the extent that those standards do not conflict with or contradict guidance of GASB. Governments also have the option of following subsequent private- sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private - sector guidance. As a general rule the effect of interfund activity has been eliminated from government -wide financial statements. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contribution, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. -39- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED D. Assets, liabilities, fund equity and net assets Deposits and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. The City may also invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated "A" or better; revenue obligations rated "AA" or better. 4. General obligations of the Minnesota Housing Finance Agency rated "A" or better. 5. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 6. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. 7. Repurchase or reverse repurchase 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, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker - dealers. 8. Guaranteed investment contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency. Investments for the City are reported at fair value. The broker money market investment pool operates in accordance with appropriate State laws and regulations. The reported value of the pool is the same as the fair value of the pool share. The City's investment policy limits the term of investments to be less than five years. All other policy provisions are limited to Minnesota statutes. -40- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Property taxes The Council annually adopts a tax levy in December and certifies it to the County for collection in the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, July and December each year. Taxes payable on homestead property, as defined by Minnesota statutes, were partially reduced by a market value credit aid. The credit is paid to the City by the State of Minnesota (the State) in lieu of taxes levied against the homestead property. The State remits this credit in two equal installments in October and December each year. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred revenue liability for taxes not received within 60 days after year end in the fund financial statements. Accounts receivable Accounts receivable include amounts billed for services provided before year end. Amounts outstanding at year end are considered fully collectible. Special assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments are recorded as receivable upon certification to the County. Special assessments are recognized as revenue when they are received in cash or within 60 days after year end. All Governmental special assessments receivable are offset by a deferred revenue liability in the fund financial statements. Interfund receivables and payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to /from other funds" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the non - current portion of interfund loans). All other outstanding balances between funds are reported as "due to /from other funds ". Capital assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are, reported in the governmental activities column in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $2,500 (amount not rounded) and an estimated useful life in excess of three years. The City reports infrastructure assets on a network and subsystem basis. Accordingly, the amounts spent for the construction or acquisition on infrastructure assets are capitalized and reported in the government -wide financial statements. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. -41- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include all such items regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through back trending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price -level index to deflate the cost to the acquisition year). As the City constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations the City values these capital assets at the estimated fair value of the item at the date of its donation. Property, plant and equipment of the City, as well as the component unit, are depreciated using the straight -line method over the following estimated useful lives: Useful Lives Assets in Years Buildings and improvements 7-40 Infrastructure 15-50 Equipment and machinery 5-60 Vehicles 3-50 Roads and highways 20-40 Land improvements 5-30 Compensated absences It is the City's policy to permit employees to accumulate a limited amount of earned but unused vacation, which is paid to the employee upon separation. A portion of unused sick leave may also be paid upon separation from City service. In governmental fund types the cost of these benefits are recognized when payments are made to the employees. The general fund is typically used to liquidate governmental compensated absences payable. Postemployment benefits other than pensions Under Minnesota statute 471.61, subdivision 2b., public employers must allow retirees and their dependents to continue coverage indefinitely in an employer- sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent coverage immediately before retirement. All premiums are funded on a pay -as- you -go basis. The liability was actuarially determined, in accordance with GASB Statement 45, at December 31, 2008. Long -term obligations In the government -wide financial statements long -term debt and other long -term obligations are reported as liabilities in the statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognized 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. -42- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Fund equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Net assets In the government -wide financial statements, net assets represent the difference between assets and liabilities. Net assets are displayed in three components: a. Invested in capital assets, net of related debt - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net assets - Consist of net assets restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c. Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt ". Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the General fund. All annual appropriations lapse at fiscal year end. The City does not use encumbrance accounting. In July of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 15, the proposed budget is presented to the Council for review. The Council holds public hearings and a final budget is prepared and adopted in December. The appropriated budget is prepared by fund, function and department. The City's department heads, with the approval of the Council, may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The budget was not amended during the year. B. Excess of expenditures over appropriations For the year ended December 31, 2010 expenditures exceeded appropriations in the following fund: Excess of Expenditures Over Fund Budget Actual Appropriations General $ 2,980,185 $ 3,089,404 $ 109,219 The excess expenditures were funded by revenues in excess of expectations. -43- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED C. Deficit fund equity The following funds had fund equity deficits at December 31, 2010: Fund Capital projects Infrastructure Planning Shannon Lane Total Amnunt $ 175,741 107,722 $ 283,463 The deficit in the Infrastructure Planning fund will be eliminated with future collections of fees and transfers from other funds. The deficit in the Shannon Lane fund will be eliminated with future special assessment collections and transfers. Note 3: DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits and investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: • United States government Treasury bills, Treasury notes, Treasury bonds; • Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; • General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; • General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; • Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and • Time deposits that are fully insured by any federal agency. -44- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a 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 selection should be approved by the City. At year end, the City's carrying amount of deposits was $3,531,520 and the bank balance was $3,600,730. Of the bank balance, $610,952 was covered by federal depository insurance, and the remainder was covered by collateral held by the City's agent in the City's name. A reconciliation of cash as shown on the Statement of Net Assets for the City follows: Carrying amount of deposits $ 3,531,520 Investments 936,135 Total $ 4,467,655 Cash and temporary investments Statement of Net Assets $ 4,435,442 Statement of Fiduciary Net Assets 32,213 Total $ 4,467,655 Investments As of December 31, 2010, the City had the following investments that are insured or registered, or securities held by the City or its agent in the City's name: 1. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. 2. Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or unavailable. -45- Fair Value Credit Segmented and Quality/ Time Carrying Types of Investments Ratings (1) Distribution (2) Amount Pooled investments Broker funds Market Mutual Fund N/A Less than 6 months $ 241,828 Non - pooled investments: Municipal Bonds AA2 One to three years 105,507 Brokered Certificates of Deposit N/A Less than 6 months 192,527 Brokered Certificates of Deposit N/A One to three years 396,273 Total non - pooled investments 694,307 Total investments $ 936,135 1. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. 2. Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or unavailable. -45- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The investments of the City are subject to the following risks: • Credit Risk. Is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes limit the City's investments to the list on page 17 of the notes. • Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's investment policy does not address custodial credit risk but typically limits its exposure by purchasing insured or registered investments. • Concentration of Credit Risk. Is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The City places no limit on the amount that may be invested in any one issuer. • Interest rate risk. Is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the maturity of its investment portfolio to less than five years. -46- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED B. Capital assets Capital asset activity for the year ended December 31, 2010 is as follows: Total accumulated depreciation (1,744,722) (337,135) 107,615 (1,974,242) Total capital assets, being depreciated, net 2,417,317 1,452,213 (20,378) 3,849,152 Governmental activities capital assets, net $ 4,531,271 $ 2,078,546 $(1,404,299) $_5 205,518 Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government Public safety Public works Culture and recreation Total depreciation expense - governmental activities -47- $ 38,940 84,414 206,091 7,690 $ 337,135 Beginning Ending Balance Increases Decreases Balance Governmental activities Capital assets not being depreciated Land $ 1,219,800 $ - $ - $ 1,219,800 Construction in progress 894,154 626,333 (1,383,921) 136,566 Total capital assets, not being depreciated 2,113,954 626,333 (1,383,921) 1,356,366 Capital assets, being depreciated Buildings 1,483,193 133,179 - 1,616,372 Equipment 2,160,338 343,626 (127,993) 2,375,971 Infrastructure 518,508 1,312,543 - 1,831,051 Total capital assets being depreciated 4,162,039 1,789,348 (127,993) 5,823,394 Less accumulated depreciation Buildings (473,013) (58,717) - (531,730) Equipment (1,195,433) (217,503) 107,615 (1,305,321) Infrastructure (76,276) (60,915) - (137,191) Total accumulated depreciation (1,744,722) (337,135) 107,615 (1,974,242) Total capital assets, being depreciated, net 2,417,317 1,452,213 (20,378) 3,849,152 Governmental activities capital assets, net $ 4,531,271 $ 2,078,546 $(1,404,299) $_5 205,518 Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government Public safety Public works Culture and recreation Total depreciation expense - governmental activities -47- $ 38,940 84,414 206,091 7,690 $ 337,135 CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED C. Interfund receivables, payables and transfers Interfund balances Receivable Fund Payable Fund Purpose Amount General Infrastructure Planning Cash flow purposes $ 175,741 General Shannon Lane Finance capital purchases 107,953 Total $ 283,694 Interfund transfers Transfer in Nonmaj or Governmental Fund General Funds Total Transfer out General $ - $ 4,842 $ 4,842 Nonmajor governmental 16,426 25,305 41,731 Total transfers out $ 16,426 $ 30,147 $ 46,573 For the year ended December 31, 2010, the City made the following one time transfers: • The following transfers were made to close funds: o Transfer of $4,842 from the General fund to close the City Hall Geothermal nonmajor governmental fund. o Transfer of $16,426 from the Chisholm Trail Road nonmajor governmental fund to close the fund to the General fund. o Transfer of $305 from the Safe and Sober nonmajor governmental fund to close the fund to the DWI Forfeiture nonmajor governmental fund. • The following transfer was made to fund an equipment purchase: o Transfer of $25,000 from the Capital Equipment -Cert nonmajor governmental fund to the Police Capital nonmajor governmental fund. -48- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED D. Deferred revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue reported in the governmental funds were as follows: Unavailable General Delinquent taxes receivable $ 101,811 Special assessment receivable 183,554 Nonmajor capital projects Special assessment receivable 38,918 Total $ 324,283 E. Long -term debt General obligation (G. O.) bonds. The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for general government activities. General obligation bonds are direct obligations of the City and pledge the full faith and credit of the City. General obligation bonds The City issued general obligation bonds for equipment purchases. The G.O. Equipment certificates will be repaid with tax levy. Each year the combined assessment and tax levy equals 105 percent of the amount required for debt service. The excess of 5 percent is to cover any delinquencies in tax or assessment payments. Total General Obligation Bonds -49- $ 1,266,000 Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Equipment Certificate of 2006 $ 500,000 3.80-4.10 % 03/15/06 12/01/13 $ 254,000 G.O. Equipment Certificate of 2008 622,000 3.50-4.05 04/08/08 12/01/17 542,000 G.O. Equipment Certificate of 2010 470,000 2.35-3.95 04/01/10 02/01/20 470,000 Total General Obligation Bonds -49- $ 1,266,000 CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual service requirements to maturity for general obligation bonds at December 31, 2010 are as follows: Year Ending December 31, 2011 2012 2013 2014 2015 2016 -2020 Total Lease revenue bonds G.O. Bonds Principal Interest Payments Payments Total $ 214,000 $ 50,478 $ 264,478 183,000 37,170 220,170 131,000 30,688 161,688 135,000 26,494 161,494 139,000 21,876 160,876 464,000 39,209 503,209 39,000 2,178 41,178 $ 1,266,000 $ 205,915 $ 1,471,915 The EDA has issued lease revenue bonds for financing building projects in accordance with Minnesota statutes 469.001 through 469.048. The agreements are supported by capital leases between the EDA and the City. The City is responsible for all operating expenses, insurance, etc. Description Public Project Authorized Interest Issue Maturity Balance at and Issued Rate Date Date Year End Lease Revenue Bonds $ 325,000 3.25-4.40 % 08/26/04 02/01/15 $ 166,000 The annual service requirements to maturity for leases outstanding at December 31, 2010 are as follows: -50- Lease Revenue Bonds Year Ending Principal Interest December 31, Payments Payments Total 2011 $ 34,000 $ 6,930 $ 40,930 2012 36,000 5,412 41,412 2013 37,000 3,828 40,828 2014 39,000 2,178 41,178 2015 20,000 440 20,440 Total $ 166,000 $ 18,788 $ 184,788 -50- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS — CONTINUED Notes payable The City currently has a note payable outstanding for related to a road construction project. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End Notes payable $ 336,454 - % 10/31/10 01/01/13 $ 336,454 The annual service requirements to maturity for notes outstanding at December 31, 2010 are as follows: Changes in long -term liabilities Long -term liability activity for the year ended December 31, 2010, was as follows: Notes Payable Year Ending Principal December 31, Payments 2011 $ 100,000 2012 100,000 2013 136,454 Total $ 336,454 Changes in long -term liabilities Long -term liability activity for the year ended December 31, 2010, was as follows: -51- Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities G.O. bonds $ 1,002,000 $ 470,000 $ 206,000 $ 1,266,000 $ 214,000 Lease revenue bonds 199,000 - 33,000 166,000 34,000 Notes payable - 336,454 - 336,454 100,000 Compensated absences 217,964 103,927 95,904 225,987 99,434 Other postemployment benefits payable 39,221 25,136 - 64,357 - Total $ 1,458,185 $ 935,517 $ 334,904 $ 2,058,798 $ 447,434 -51- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE 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 General Employees Retirement Fund (GERF) 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. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers and peace officers who qualify for membership by Minnesota statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all PEPFF members and GERF members hired prior to 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 members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that ceases upon death of the retiree - -no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees, who are entitled to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296 -7460 or 1 -800- 652 -9026. -52- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED 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 Minnesota statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.1 percent and 6.0 percent, respectively, of their annual covered salary in 2010. PEPFF members are required to contribute 9.4 percent of their annual covered salary in 2010. In 2010, the City was required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan GERF members, 7.0 percent for Coordinated Plan GERF members, and 14.1 percent for Basic Plan PEPFF members. Employer contribution rates for the Coordinated Plan and PEPFF will increase to 7.25 percent and 14.40 percent, respectively, effective January 1, 2011. The City's contributions to the GERF for the years ending December 31, 2010, 2009, and 2008 were $39,652, $31,654, and $27,467, respectively. The City's contributions to the PEPFF for the years ending December 31, 2010, 2009, and 2008 were $72,168, $75,589, and $65,098, respectively. The City's contributions were equal to the contractually required contributions for each year as set by Minnesota statute. Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS A. Plan description The City's defined benefit healthcare plan ( "the Retiree Health Plan ") provides healthcare insurance for eligible retirees and their spouses. The Retiree Health Plan is affiliated with the healthcare plan administered through LOGIS, an agent multiple - employer postemployment healthcare plan. LOGIS is a consortium of Minnesota local government units controlled by its members. LOGIS' Board of Directors is composed of one representative from each agency. LOGIS issues a publicly available financial report that includes financial statements and required supplementary information for the health plan. That report may be obtained by writing to LOGIS, 5750 Duluth Street, Golden Valley, MN 55422, or by calling (763) 543 -2600. B. Funding policy The contribution requirements of plan members and the City are established and may be amended by LOGIS' Board of Directors. The required contributions are based on projected pay -as- you -go financing requirements. The City contributed $9,334 to the plan for the year ended December 31, 2010. As of January 1, 2010, there was one retiree receiving health benefits from the plan. -53- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS - CONTINUED C. Annual other postemployment benefit cost The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC) of the City, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Annual required contribution $ 32,844 Interest on net OPEB obligation 1,820 Adjustment to annual required contribution (1,409) Adjustment for previous contribution differences 1,215 Annual OPEB cost (expense) 34,470 Contributions made (9,334) Increase in net OPEB obligation 25,136 Net OPEB obligation - beginning of year 39,221 Net OPEB obligation - end of year $ 64,357 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year 2010 and 2009 follows: Trend Information Fiscal Percentage Year Annual Annual OPEB Net OPEB Ending OPEB Cost Contributed Obligation 12/31/2010 S 34,470 27.0 % $ 64,357 12/31/2009 39,221 - 39,221 -54- CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS - CONTINUED D. Funded status and funding progress As of January 1, 2010, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $260,905, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $967,428, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 27.0 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. In the January 1, 2010 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.5 percent investment rate of return, which is a blended rate of the expected long -term investment returns on plan assets and on the employer's own investments. The initial healthcare trend rate was 9.0 percent, reduced by decrements to an ultimate rate of 5 percent after twelve years. The unfunded actuarial accrued liability (UAAL) is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at December 31, 2010, was twenty-nine years. 56SIS CITY OF CORCORAN, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 6: OTHER INFORMATION A. Risk management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust ( LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self - sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. B. Legal debt margin The City's statutory debt limit is computed as three percent of the taxable market value of property within the City. Long -term debt issued and financed partially or entirely by special assessments is excluded from the debt limit computation. The 2010 taxable value of property located in the City is $779,011,500 which calculated to a debt limit of $23,370,345. The City has $1,266,000 of G.O. Equipment Certificates subject to this limit. C. Commitment and contingencies Tar increment districts The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. -56- REQUIRED SUPPLEMENTARY INFORMATION CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 eye THIS PAGE IS LEFT BLANK INTENTIONALLY -58- CITY OF CORCORAN, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2010 Schedule of Funding Progress for the Postemployment Benefit Plan Unfunded -59- Actuarial UAAL as a Actuarial Actuarial Actuarial Accrued Percentage Valuation Value of Accrued Liability Funded Covered of Covered Date Assets Liability (UAAL) Ratio Payroll Payroll 1/1/2010 $ - $ 260,905 $ 260,905 - % $ 967,428 27.0 % 1/1/2009 - 264,794 264,794 - 1,015,988 26.1 -59- THIS PAGE IS LEFT BLANK INTENTIONALLY -60- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -61- CITY OF CORCORAN, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2010 -62- Special Revenue 201 202 204 Reserve Police Firearms Donation Donation Safety ASSETS Cash and temporary investments $ 22,543 $ 1,934 $ 3,457 Accounts receivable - - - TOTAL ASSETS $ 22,543 $ 1,934 $ 3,457 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 1,324 $ - $ - FUND BALANCES Reserved for debt service - - - Unreserved Designated for police expenditures 21,219 1,934 3,457 Undesignated - - - TOTAL FUND BALANCE 21,219 1,934 3,457 TOTAL LIABILITIES AND FUND BALANCES $ 22,543 $ 1,934 $ 3,457 -62- Special Revenue - Continued Capital Projects 205 206 502 415 416 418 DWI Drug Safe and Park Capital City Hall Forfeiture Forfeiture Sober Capital Equip -Cert Geothermal $ 9,176 $ 1,153 $ - $ 331,392 $ 235,379 $ - $ 9,975 $ 1,153 $ - $ 331,392 $ 235,379 $ - $ 1,873 $ - $ 8,102 1,153 8,102 1,153 $ 16,356 $ 331,392 219,023 $ 9,975 $ 1,153 $ - $ 331,392 $ 235,379 $ -63- CITY OF CORCORAN, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET - CONTINUED DECEMBER 31, 2010 ASSETS Cash and temporary investments Accounts receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable FUND BALANCES Reserved for debt service Unreserved Designated for police expenditures Undesignated TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES -64- Capital Projects - Continued 410 308 305 Public Works Police Asphalt Capital Capital Maintenance $ 1,297 $ 63,657 $ 70,665 $ 1,297 $ 63,657 $ 70,665 - $ 1,058 $ - 1,297 62,599 70,665 $ 1,297 $ 63,657 $ 70,665 Capital Projects - Continued 310 504 County Road Chisholm 19 Improvement Trail Road $ 331,461 $ - Debt Service 309 407 G.O. Equipment Facility Certificates Expansion Total 21,924 $ 2,106 $ 1,096,144 $ 331,461 $ - $ 21,924 $ 2,106 $ 1,096,943 $ 331,461 $ - $ 21,924 $ 2,106 $ 1,096,943 $ - $ - $ - $ - $ 20,611 21,924 2,106 24,030 - - 35,865 331,461 - 21,924 2,106 1,076,332 $ 331,461 $ - $ 21,924 $ 2,106 $ 1,096,943 -65- CITY OF CORCORAN, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS) FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Taxes Intergovernmental State aid for streets Other state aid Charges for services Special assessments Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current Public safety Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other charges Bond issuance costs TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Bond proceeds Note proceeds TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES (DEFICITS), JANUARY 1 FUND BALANCES, DECEMBER 31 -66- Special Revenue 201 202 204 Reserve Police Firearms Donation Donation Safety 7,243 - - 314 36 54 10,140 6,522 5,065 33,425 4,081 4,141 6,564 - 33,425 10,645 4,141 (15,728) (4,087) 978 (15,728) (4,087) 978 $ 21,219 $ 1,934 $ 3,457 Special Revenue - Continued Capital Projects 205 206 502 415 416 418 DWI Drug Safe and Park Capital City Hall Forfeiture Forfeiture Sober Capital Equip -Cert Geothermal $ - $ - $ - $ - $ - $ - - - - 10,000 - - - - 69,305 - - - 185 13 - 4,646 2,651 (36) 9,875 1,009 - 13,664 - - 10,060 1,022 69,305 28,310 2,651 (36) 1,546 202 69,305 12,477 - - 14,023 202 69,305 (3,963) 820 305 - 305 - (3,658) 820 - 33,245 2,612 - 81,249 - - 193,919 - 67,869 200 - 67,869 322,321 2,612 - (39,559) (319,670) (2,648) - - - 4,842 (305) - (25,000) - - - 470,000 - (305) - 445,000 4,842 -67- CITY OF CORCORAN, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS) - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Taxes Intergovernmental State aid for streets Other state aid Charges for services Special assessments Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current Public safety Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other charges Bond issuance costs TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Bond proceeds Note proceeds TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES (DEFICITS), JANUARY 1 FUND BALANCES, DECEMBER 31 -68- Capital Projects - Continued 410 308 305 Public Works Police Asphalt Capital Capital Maintenance 17 1,008 926 17 1,008 926 38,308 - 17 (37,300) 926 - 25,000 - 25,000 - 17 (12,300) 926 $ 1,297 $ 62,599 $ 70,665 Capital Projects - Continued Debt Service 310 504 309 407 G.O. County 19 Chisholm Equipment Facility Improvement Trail Road Certificates Expansion Total $ - $ - $ 256,789 $ 43,474 $ 300,263 - - - - 10,000 77,243 - - - 146,548 - - - - 7,243 - 7,446 - - 7,446 4,498 141 623 (221) 14,855 - - - - 46,275 81,741 7,587 257,412 43,253 532,630 112,700 - - - - 35,857 - - - - 138,598 436,954 - - - 630,873 - - - - 68,069 206,000 33,000 239,000 - 38,561 8,404 46,965 - - - 13,708 436,954 - 244,561 41,404 1,285,770 (355,213) 7,587 12,851 1,849 (753,140) - - - - 30,147 (16,426) - - (41,731) - - - - 470,000 336,454 - - - 336,454 336,454 (16,426) - - 794,870 (125, " / -)9) (25,2139) 11,21-) 1 1,849 41,130 331,461 - 21,914 2,1U6 $ 1,0'/69331 -69- CITY OF CORCORAN, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 (With comparative actual amounts for the year ended December 31, 2009) 2010 2009 REVENUES Taxes General property taxes Cable franchise fees Total Licenses and permits Business Nonbusiness Total Intergovernmental State Property tax credits Pera aid Police state aid State aid for streets Other County Recycling Other Total Charges for services General government Public safety Streets and highways Recycling Total Fines and forfeitures Special assessments Interest on investments Miscellaneous Other Refunds and reimbursements Total TOTAL REVENUES Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts $ 2,311,306 $ 2,311,306 $ 2,351,310 $ 40,004 $ 2,228,024 30,000 30,000 34,674 4,674 33,326 18,500 18,500 18,260 (240) 18,420 37,600 37,600 77,366 39,766 48,103 56,100 56,100 95,626 39,526 66,523 75,255 75,255 55,269 55,269 1,515 (53,754) 1,772 1,845 1,845 1,845 - 1,845 51,000 51,000 49,913 (1,087) 51,619 92,175 92,175 84,891 (7,284) 100,722 87,000 87,000 64,453 (22,547) 80,450 1 G nnn 1 G nnn 1 A 47,4 1 17,4 1 5 RZd 1011 136,531 2,903,393 31,869 31,869 31,303 (566) 26,743 10,000 10,000 12,258 2,258 10,760 75,255 75,255 79,389 4,134 74,977 63,200 63,200 67,909 4,709 61,444 180,324 180,324 190,859 10,535 173,924 70,000 70,000 110,388 40,388 104,001 - - 275 275 - 6,000 6,000 4,439 (1,561) 6,272 8,500 8,500 92,067 83,567 13,870 - - - - 13,940 8,500 8,500 92,067 83,567 27,810 1011 136,531 2,903,393 CITY OF CORCORAN, MINNESOTA GENERALFUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With comparative actual amounts for the year ended December 31, 2009) 2010 2009 EXPENDITURES Current General government City Council Personal services Supplies Other services and charges Total Newspaper /newsletter Other services and charges Administrator Personal services Supplies Other services and charges Total Clerk Personal services Supplies Other services and charges Total Elections Supplies Auditor /treasurer Other services and charges Assessor Supplies Other services and charges Total Budgeted Amounts Original Final Actual Variance with Actual Amounts Final Budget Amounts $ 7,105 $ 7,105 $ 7,105 $ - $ 7,115 100 100 9 91 - 33 33 1,101 (1,068) 30 7,238 7,238 8,215 (977) 7,145 4,700 4,700 4,703 (3) 3,770 112,328 112,328 114,592 (2,264) 81,027 2,000 2,000 1,567 433 705 1,498 1,498 1,737 (239) 31,794 115,826 115,826 117,896 (2,070) 113,526 161,420 161,420 155,419 6,001 100,017 1,000 1,000 725 275 1,653 852 852 1,497 (645) 27,441 163,272 163,272 157,641 5,631 129,111 9,000 9,000 6,507 2,493 1,366 16,500 16,500 29,044 (12,544) 84,555 500 500 1,331 (831) 427 49,284 49,284 49,284 - 48,699 49,784 49,784 50,615 (831) 49,126 -71- CITY OF CORCORAN, MINNESOTA GENERALFUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With comparative actual amounts for the year ended December 31, 2009) 2010 2009 Other general government Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Other services and charges 71,411 71,411 63,914 7,497 Current - Continued Total 71,411 71,411 63,914 7,497 General government - continued Total general government 606,281 606,281 642,930 (36,649) Legal services Public safety Other services and charges $ 28,000 $ 28,000 $ 69,753 $ (41,753) $ 24,425 Planning administration Personal services 754,827 754,827 791,707 (36,880) Supplies - - - - 92 Other services and charges 77,000 77,000 72,551 4,449 21,120 Total 77,000 77,000 72,551 4,449 21,212 Information technology Fire Supplies 9,385 9,385 5,285 4,100 7,260 City center (6,613) 236,742 Building inspection Supplies 18,600 18,600 22,088 (3,488) 17,808 Other services and charges 35,565 35,565 34,718 847 36,977 Total 54,165 54,165 56,806 (2,641) 54,785 Other general government Supplies - - - - 597 Other services and charges 71,411 71,411 63,914 7,497 70,483 Total 71,411 71,411 63,914 7,497 71,080 Total general government 606,281 606,281 642,930 (36,649) 567,361 Public safety Police Personal services 754,827 754,827 791,707 (36,880) 729,979 Supplies 65,600 65,600 64,220 1,380 52,387 Other services and charges 104,025 104,025 87,331 16,694 90,969 Total 924,452 924,452 943,258 (18,806) 873,335 Fire Other services and charges 242,000 242,000 248,613 (6,613) 236,742 Building inspection Other services and charges 25,700 25,700 48,854 (23,154) 27,114 Total public safety 1,192,152 1,192,152 1,240,725 (48,573) 1,137,191 -72- CITY OF CORCORAN, MINNESOTA GENERALFUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With comparative actual amounts for the year ended December 31, 2009) 2010 2009 EXPENDITURES - CONTINUED Current - Continued Public works Streets and highways Personal services Supplies Other services and charges Total Snow and ice removal Supplies Engineering Other services and charges Recycling Supplies Other services and charges Total Total public works Culture and recreation Parks Personal services Supplies Other services and charges Total culture and recreation Total current expenditures Capital outlay Public safety Public works Culture and recreation Total capital outlay TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES Budgeted Amounts Original Final Actual Variance with Actual Amounts Final Budget Amounts $ 395,113 $ 395,113 $ 398,389 $ (3,276) $ 387,646 440,100 440,100 420,205 19,895 391,333 108,450 108,450 96,390 12,060 45,913 42,169 42,169 943,663 943,663 914,984 28,679 824,892 2,983,844 (70,159) 2,785,790 18,000 18,000 29,000 29,000 32,703 (3,703) 28,450 50,711 (44,211) 649 42,000 42,000 36,000 36,000 41,277 (5,277) 123,377 105,560 (39,060) 62,967 2,980,185 2,980,185 1,075 1,075 202 873 511 63,345 63,345 66,339 (2,994) 64,140 64,420 64,420 66,541 (2,121) 64,651 1,073,083 1,073,083 1,055,505 17,578 1,041,370 13,369 13,369 17,795 (4,426) 17,511 20,200 20,200 17,799 2,401 15,274 8,600 8,600 9,090 (490) 7,083 42,169 42,169 44,684 (2,515) 39,868 2,913,685 2,913,685 2,983,844 (70,159) 2,785,790 18,000 18,000 18,946 (946) 13,868 6,500 6,500 50,711 (44,211) 649 42,000 42,000 35,903 6,097 48,450 66,500 66,500 105,560 (39,060) 62,967 2,980,185 2,980,185 3,089,404 (109,219) 2,848,757 (7,666) (7,666) 19,646 27,312 54,636 -73- THIS PAGE IS LEFT BLANK INTENTIONALLY -74- CITY OF CORCORAN, MINNESOTA GENERALFUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With comparative actual amounts for the year ended December 31, 2009) 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts OTHER FINANCING SOURCES (USES) Transfers in $ - $ - $ 16,426 $ 16,426 $ - Transfers out - - (4,842) (4,842) (14,390) Sale of capital assets 2,500 2,500 - (2,500) 19,400 TOTAL OTHER FINANCING SOURCES (USES) 2,500 2,500 11,584 9,084 5,010 NET CHANGE IN FUND BALANCES (5,166) (5,166) 31,230 36,396 59,646 FUND BALANCES, JANUARY 1 667,693 667,693 667,693 - 608,047 FUND BALANCES, DECEMBER 31 $ 662,527 $ 662,527 $ 698,923 $ 36,396 $ 667,693 d�19 CITY OF CORCORAN, MINNESOTA COMBINING STATEMENT OF NET ASSETS FIDUCIARY FUNDS DECEMBER 31, 2010 -76- Agency 500 501 Lions and Escrow Jaycees Total ASSETS Cash and temporary investments $ 26,213 $ 6,000 $ 32,213 Accounts receivable Armbruster 09 -011 110 - 110 Blocks and rocks 201 - 201 Corcoran lions 8 - 8 Corcoran wildlife 4,284 - 4,284 Ess 1,990 - 1,990 Gazelle marketing 144 - 144 Hank prelim & final plat 1,114 - 1,114 Hedgestone final plat 22,579 - 22,579 Hedgestone re -zone 09 -008 853 - 853 Larson farms 709 - 709 Laurent - hedgstone 16,863 - 16,863 Meadow view - prairie creek 411 - 411 Northern natural gas 09 -009 230 - 230 Ridesport stables LLC 08 -003 753 - 753 Unallocated 3,352 - 3,352 United properties 2,728 - 2,728 Total accounts receivable 56,329 - 56,329 TOTAL ASSETS $ 82,542 $ 6,000 $ 88,542 -76- CITY OF CORCORAN, MINNESOTA COMBINING STATEMENT OF NET ASSETS - CONTINUED FIDUCIARY FUNDS DECEMBER 31, 2010 10A Agency 500 501 Lions and Escrow Jaycees Total LIABILITIES Accounts payable $ 878 $ 6,000 $ 6,878 Deposits payable Bechtold family 2,642 - 2,642 Centerpoint energy 6,816 - 6,816 Corcoran business park 18,250 - 18,250 Corcoran business park grading 17,831 - 17,831 Corcoran wildlife 10 -009 2,369 - 2,369 Dennis johnson 6,550 - 61550 Doboszenski new facility 244 - 244 Gleason admin permit 10 -004 126 - 126 Great river energy 612 - 612 Hall 09 -004 23 - 23 Hank donita driveway 334 - 334 Heitke farm 1 - 1 Hendries 435 - 435 Hodgin acres construction 338 - 338 JRL 226 - 226 Kelly 3,095 - 3,095 Lennar family 4,770 - 4,770 Lymangood 250 - 250 Mottet 10 -002 348 - 348 Nilsson 10 -011 1,425 - 1,425 Park place storage 10 -006 335 - 335 RJ's corner store 151 - 151 Rush creek headwaters 5,925 - 5,925 Rush creek meadows final plat 1,293 - 1,293 Ryan 138 - 138 Satellite chelters 10 -007 1,542 - 1,542 Savoie fields 1,567 - 1,567 Secure IT 10 -001 428 - 428 St. John's church 1,363 - 1,363 Stephan homes 10 -064 650 - 650 Sunram 484 - 484 Wm mchugh 10 -013 1,103 - 1,103 Total deposits payable 81,664 - 81,664 TOTAL LIABILITIES $ 82,542 $ 6,000 $ 88,542 10A THIS PAGE IS LEFT BLANK INTENTIONALLY -78- SUPPLEMENTARY INFORMATION (UNAUDITED) CITY OF CORCORAN CORCORAN, MINNESOTA FO THE YEAR ENDED DECEMBER 31, 2010 -79- THIS PAGE IS LEFT BLANK INTENTIONALLY -80- CITY OF CORCORAN, MINNESOTA SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTAL FUNDS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous TOTAL REVENUES Per Capita EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other Bond issuance costs TOTAL EXPENDITURES Per Capita Total Long -term Indebtedness Per Capita $ 642,930 Percent Total 13.32 Increase 2010 2009 (Decrease) $ 2,985,892 $ 2,815,302 6.06 % 95,626 66,523 43.75 392,849 651,789 (39.73) 198,102 179,617 10.29 110,388 104,001 6.14 16,325 33,187 (50.81) 51,203 94,905 (46.05) 138,342 77,578 78.33 $ 3,988,727 $ 4,022,902 (0.85) % $ 683 $ 697 (2.00) % $ 642,930 $ 567,361 13.32 % 1,353,425 1,181,295 14.57 1,056,190 1,047,849 0.80 44,684 39,868 12.08 35,857 226,690 (84.18) 157,544 76,865 104.96 783,066 373,075 109.90 103,972 68,939 50.82 239,000 181,000 32.04 46,965 67,369 (30.29) 13,708 - 100.00 $ 4,477,341 $ 3,830,311 16.89 % $ 766 $ 663 15.53 % $ 1,432,000 $ 1,201,000 19.23 % 245 208 17.85 General Fund Balance - December 31 $ 698,923 $ 667,693 4.68 % Per Capita 120 116 3.46 The purpose of this report is to provide a summary of financial information concerning the City of Corcoran to interested citizens. The complete financial statements may be examined at City Hall, 8200 County Road 116, Corcoran, MN 55340 Questions about this report should be directed to Dan Donahue, City Administrator at (763) 420 -2288. -81- THIS PAGE IS LEFT BLANK INTENTIONALLY -82- OTHER REQUIRED REPORTS CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 -83- THIS PAGE IS LEFT BLANK INTENTIONALLY -84- ABDO EfCK & r.0111 M E 1 EELS LLP Certified Atblic Accountants & Consultants 5201 Eden Avenue Suite 250 Edina, MN 55436 REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and Council City of Corcoran, Minnesota We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Corcoran, Minnesota (the City), as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements, and have issued our report thereon dated April 29, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the Minnesota Office of the State Auditor pursuant to Minnesota statute, section 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Local Government covers seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our study included all of the listed categories. The results of our tests indicate that for the items tested, the City complied with the material terms and conditions of applicable legal provisions. This report is intended solely for the information and use of the Council, management, and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. April 29, 2011 Minneapolis, Minnesota 952.835.9090 • Fax 9.T2.&35.3261 -85- www.aemcpas.com OL&&k4"Ju� ABDO, EICK & MEYERS, LLP Certified Public Accountants ABDO EfCK & r.0111 M E 1 EELS LLP Certified Atblic Accountants & Consultants 5201 Eden Avenue Suite 250 Edina, MN 55436 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS Honorable Mayor and Council City of Corcoran, Minnesota In planning and performing our audit of the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Corcoran, Minnesota, (the City) for the year ended December 31, 2010, in accordance with auditing standards generally accepted in the United States of America, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all such deficiencies have been identified. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies presented as findings 2010 -1 and 2010 -2 in the Schedule of Findings and Responses to be significant deficiencies in internal control over financial reporting. 952.835.9090 • Fax 952.835.3261 -86- www.aeincpas.coni In addition, we noted other matters involving the internal control and its operation that we have reported to management of the City in a separate letter dated April 29, 2011. The City's written responses to the significant deficiencies identified in our audit have not been subjected to the audit procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. This report is intended solely for the information and use of the Council, management, and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. April 29, 2011 Minneapolis, Minnesota -87- OL76LO dWQfWJLV ABDO, EICK & MEYERS, LLP Certified Public Accountants CITY OF CORCORAN, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES DECEMBER 31, 2010 Finding Description 2010 -1 Limited Segregation of Duties Related to Cash Disbursements and Receipts Condition: During our audit we reviewed procedures over cash disbursements and receipts and found the City to have limited segregation of duties in these transaction cycles. Criteria: There are four general categories of duties: authorization, custody, recording and reconciliation. In an ideal system, different employees perform each of these four major functions. In other words, no one person has control of two or more of these responsibilities. Cause: As a result of the limited number of staff, the City is not able to completely segregate all accounting functions. In each of the cycles a single employee has control over two or more of the duties related to the four major functions. Effect.• The existence of limited segregation of duties increases the risk of fraud and error. Recommendation: While we recognize the current staff is not large enough to eliminate this deficiency, we recommend the City consider implementing the following compensating controls. For the cash disbursement and receipting cycles, we suggest that the City Administrator receive the bank statement online from the bank website every month and review, verifying the proper endorsements, scanning the cancelled checks and wire payments for any unusual payees or amounts, and agreeing a sample of deposits to the receipt journal. The amounts withdrawn for payroll should be compared to the payroll register, time sheets, and respective journal entry. The City Administrator should indicate his approval by initialing the statement. It is important that the Council is aware of this condition and monitor all financial information. • Council should also be reminded of their duties over finance at least annually. Some typical monitoring duties would include the following tasks: o Claims approval is an important control and should be at the front of the meeting to ensure that council reviews the claims closely. o A thorough review of budget versus actual reporting and narrative at least quarterly. o Monitor progress over the development of documented policies and procedures. Management Response: Staff is currently reviewing process guidelines with the intent of presenting to council for approval. Performance reporting is available and provided to council on a regular and /or quarterly basis. Effective with the May 27, 2010 council meeting, check numbers will be included on the agenda and in the meeting minutes. Existing Personnel Policy requires that PTO earned in a year must be used during the following year (minimum of two weeks). -88- CITY OF CORCORAN, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED DECEMBER 31, 2010 Finding Description 2010 -2 Developer Escrow Account Deficit Balances Condition: It was noted again during audit fieldwork that some developer escrow accounts had deficit account balances. In total $56,329 was owed by 16 accounts. Also, any service charge for deficit balances was not factored into the amount owed. Criteria: The City needs to have funds in amounts sufficient to cover the planning, legal, engineering and any other City cost that a developer incurs. Cause: It appears that reconciliations have been completed for current accounts, but collection efforts were not sufficient to eliminate deficit balance in 2010. Effect: The effect allowing deficit balances means that shortfall needs to be funded with other resources. In the current situation other positive developer accounts are funding the deficits. Recommendation: We recommend that the City enforce a policy and implement a monitoring procedure that ensures deposits are received in advance of any activity and that work stops prior to an account becoming negative. This policy should also address service charges for any account that does become negative. The City should transfer funds to eliminate any uncollectable accounts. We also recommend that the City continue to reconcile balances monthly. Management Response: Escrow accounts are reviewed quarterly by financial staff. A policy has been instituted by the financial staff to contact contract staff if return of escrow balance is requested to ensure all costs have been recorded. Contract staff is also notified to stop work if escrow account has a deficit balance. The large development deficit balances will remain unresolved until the developments are revived (until the general regional economic situation is resolved). -89- Memo To: City of Corcoran Mayor and City Council From: Joe Rigdon, CPA (Kern, DeWenter, Viere, Ltd.) Date: March 31, 2011 Re: 2010 Year -End Transfers and 12/31/10 Interfund Loans Capital Protects Funds: ... Infrastructure Planning fund #402 had a $175,741 cash balance deficit at 12/31/10, and had no activity in 2010, other than negative interest earnings. The Infrastructure Planning fund may have been a "revolving" type of fund that was intended to be a source for various infrastructure related projects. However, the fund apparently paid for or financed a project or projects without a revenue repayment source. Recommendation: Temporary loan at 12/31/10 of $175,741 from the General Fund to the Infrastructure Planning capital projects fund. ... Shannon Lane fund #417 was internally financed in 2009 and had a $107,953 cash balance deficit at 12/31/10. Receipt of annual payments on deferred special assessments receivable of an originally assessed amount of $45,000 will partially decrease this deficit when received. However, additional revenue sources appear to be necessary to fully eliminate the fund deficit. Recommendation: Temporary loan at 12/31/10 of $107,953 from the General Fund to the Shannon Lane capital projects fund. ... Chisholm Trail fund #504 had a $16,426 fund balance surplus at 12/31/10. Annual payments on deferred special assessments receivable were collectable through 2010. Recommendation: Close the Chisholm Trail fund to the General Fund via a 2010 transfer of $16,426. ... City Hall Geothermal fund #418 had a $4,842 fund balance deficit at 12/31/10. The project is considered complete at year -end. Recommendation: Close the City Hall Geothermal fund from the General Fund via a 2010 transfer of $4,842. 12c. CITY OF C ORC�RA� FINANCIAL GUIDELINES ADOPTED DATE 8200 COUNTY ROAD 116, CORCORAN MN 55340 763.420.2288 — OFFICE 763.420.6056 — FAX E -mail — general @ci.corcoran.mn.us / Web Site — www.ci.corcoran.mn.us FINANCIAL GUIDELINES TABLE OF CONTENTS UNRESERVED FUND BALANCE ........................................ ............................... 3 BUDGET........................................................................ ............................... 5 CAPITALIZATION ............................................................. ............................... 7 INVESTMENT................................................................ ............................... 11 RECONCILIATION OF BANK/INVESTMENT ACCOUNTS ..... ............................... 19 RECEIPT AND DEPOSIT OF FUNDS ................................ ............................... 21 PAYROLL..................................................................... ............................... 25 PURCHASE OF GOODS AND SERVICES .......................... ............................... 29 DISBURSEMENT AND PAYMENT OF CLAIMS ................... ............................... 35 2 AV Unreserved Fund Balance Guideline General Fund The City of Corcoran understands that it has a responsibility to provide prudent fiscal policies in order to retain the financial health of the municipality. Therefore, it is the intent of this document to provide guidelines for ensuring and maintaining an appropriate level of general funds, unreserved and reserved, to sustain the financial integrity of the city and to ensure proper accountability of the fiscal management of the city. Fund balance in governmental funds is the difference between assets and liabilities, which is divided into reserved and unreserved components. Unreserved fund balance represents amounts considered available for new spending. The function of reserved fund balance is to isolate the portion of fund balance that is not available for the following period's budget, so that unreserved fund balancV, can serve as a measure of current available financial resources. Reserved fund balance is necessary for two reasons: • Resources not available for spending • Legal restrictions on spendin The Minnesota State Auditor recommends an unreserved fund balance in the general and special revenue funds of approximately 35% to 50% of fund operating revenues or no less than five months of operating expenditures, which should provide the local government with adequate funds until the next property tax revenue collection cycle. The City of Corcoran has identified that an unreserved general fund balance between 35% and 40% of its subsequent years' annual general fund expenditures budget will ensure the financial integrity of the city. The goal will be to attain a 40% balance and not allow it to decrease below 35 %. To achieve and maintain that desired level of unreserved fund balance, the City Council and City Administrator shall diligently work together through proper fiscal management to create a balanced budget which will provide for and protect the unreserved general fund balance of the city. Tools to be utilized to maintain the integrity of the budget, the budget process, and the fund balance shall include, but not be limited to, financial and accounting policies, procedures, and internal controls of the city. Throughout the fiscal year, the City Administrator shall, at a minimum, provide a quarterly budget analysis to the City Council. This analysis shall provide a forecast of the revenues and expenditures identified in the general fund budget for the year. It will identify deficiencies and surpluses as they occur, and the reasons behind such changes. The budget analysis report shall also identify the anticipated unreserved general fund balance that is projected to be available at year end. 3 THIS PAGE INTENTIONALLY LEFT BLANK Budget Guideline Budget: A budget is a comprehensive financial plan for a specific period of time. It outlines city activities and service levels, and contains estimates of probable costs and available sources during the coming year. The city's budget serves three essential purposes: • To set public policy • To act as a legislative control on taxing and spending Abby ity Council • To serve as a financial planning tool The city's operating budget will be legally adopted (appropriated) on an annual basis consistent with generally accepted accounting principles. All annual appropriations will lapse at each fiscal year end. The appropriated budget will be prepared by fund, function, department, and object (revenue or expenditure) code. The legal level of budgetary control, or the lowest level at which the city may not exceed appropriations, is the department level. Budget Process: Before preparing the annual budget, the city will review potential revenue sources. A review of available intergovernmental grants and aids, special assessments, licenses and permits, charges for services, fines and forfeits, and other sources of city revenue will be completed. After estimating all other revenues, the city will determine the amount necessary to be collected from property taxes, within any mandated property tax levy limits. This includes a determination of whether the city's property tax capacity rate is adequate to meet the revenue needs of the city. In July of each year, each department head of the city will submit subsequent year requests for budget appropriations to the City Administrator. Budget appropriations will include personnel services, supplies, and other services and charges. Capital outlay requests will be obtained from the most current year of the five -year Capital Improvement Plan and will be incorporated into the current year operating budget. Debt service (principal, interest, and fiscal charges) budgets will be in compliance with individual debt covenants. The City Council may hold budget meetings or workshops at which the City Administrator and Department heads will present the proposed overall budget for the City Council's review. The City Council will approve a preliminary budget and property tax levy by September 15 of each year. The preliminary property tax levy will be certified by September 15 of each year to Hennepin County. 5 Additional budget meetings or workshops may be held, prior to a truth in taxation public hearing generally conducted in early December. After the truth in taxation public hearing has been held, the City Council will approve a final budget and property tax levy by December of each year. The final property tax levy will be certified each December to Hennepin County for collection in the following year. The county is responsible for collecting and remitting all property taxes for the city. Budget Monitoring: After the close of each month's accounting, the Clerk/Treasurer will prepare monthly revenue and expenditure budget reports, including current year budget, current year actual, and current year variance. Additional information may be included, as requested by the City Council. Monthly budget reports will be reviewed by the City Administrator and Department heads and distributed to the City Council. Department heads will be held responsible for individual department budgets and actual results, under the supervision of the City Administrator and/or City Council. 0 Capitalization Guideline Capital Assets: Capital assets are major assets that benefit more than a single fiscal period. Typical examples are land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and various intangible assets. Capital assets are reported in the applicable governmental or business -type activities columns in the city's government -wide financial statements. Infrastructure assets are long -lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems. Capital assets for the city will be defined as assets with an estimated use ife 'n excess of two years and an initial, individual cost of the following: • Land and Improvements $15,000 or more • Buildings and Improvements $15,000 or more • Other Improvements and Infrastructure $15,000 or more • Machinery, Equipment, and Vehicles k $5,000 or more Capital assets will be reported at their historical cost. In the absence of historical cost information, the asset's estimated historical cost may be used. Assets donated by parties outside the city will be reported at their fair value on the date the donation is made. The historical cost of a capital asset will �vlude the following: • Ancillary charges necessary to place the asset in its intended location (such as freight charges) • Ancillary charges necessary to place the asset in its intended condition for use (such as installation and site preparation charges) • Capitalized interest The historical cost of a capital asset will include the cost of any subsequent additions or improvements but exclude the cost of repairs. An addition or improvement, unlike a repair, either enhances a capital asset's functionality (effectiveness or efficiency), or it extends a capital asset's expected useful life. For example, periodically resurfacing a road would be treated as a repair (the cost would not be capitalized), while adding a new lane constitutes an addition (a cost that would be capitalized). Any capital asset currently recorded that does not meet the capitalization threshold guidelines of this policy will be exempted from the requirements of this policy. 7 Depreciation Depreciation is the portion of the cost of a capital asset charged as an expense during a particular period. In accounting for depreciation, the cost of a capital asset, less any salvage value, is prorated over the estimated useful life of such an asset, and each period is charged with a portion of such cost. Through this process, the entire cost of the asset is ultimately charged off as an expense. The city's capital assets will be depreciated using the straight line method over the following estimated useful lives: • Land and Improvements Not Depreciated • Buildings and Improvements 10 to 50 years • Other Improvements and Infrastructure 20 to 50 years • Machinery, Equipment, and Vehicles 5 to 20 years • Construction in Progress Not Depreciated Accounting for Capital Assets: All capital asset records will be maintained for internal control and audit urposes. The Clerk/Treasurer will maintain a listing of all capital assets, including acquisitions and disposals of capital assets, depreciation expense, and accumulated depreciation. Department heads will immediately notify the Clerk/Treasurer of all capital asset acquisitions or disposals. Upon notification of the acquisition or disposal of capital assets and /or review of the city's financial transactions, the Clerk/Treasurer will update the capital assets listing. Each department head will complete a physical inventory of their respective department's capital assets by December 31 of each year. The Clerk/Treasurer will reconcile the physical inventory to the listing of capital asset:4m- A 7 Capital Improvement Plan: Capital tp"rovement Plan (CIP) will be developed for a period of five years. To be considered in the CIP, a capital asset or project must meet the useful life and capitalization amount thresholds as described above. Certain assets not meeting those thresholds may be included for informational and planning purposes at the City Council's discretion. The city will maintain its physical assets in a manner adequate to protect the city's capital investment and to minimize future maintenance and replacement costs. The city will provide for maintenance and replacement from current revenues where possible. Department heads will identify the needs, estimated costs, and potential funding sources for each capital asset or project for potential inclusion in the CIP. The City Administrator will be responsible for preparing and presenting the five year CIP annually to the City Council for approval. As resources are available, the most current year of the CIP will be incorporated into the current year operating budget as the capital improvement budget. The CIP will be reviewed and updated annually. Years two through five will be for planning purposes only. Any substantive change to the CIP after approval must be approved by the City Council. N. Sale of City -Owned Assets: Per Minnesota Statute § 15.054, officers and employees of the city are generally prohibited from selling city -owned assets to another officer or employee of the city. This prohibition does not apply to the sale of items acquired or produced for sale to the general public in the ordinary course of business. In addition, city employees and officers are allowed to sell city assets if the sale is in the normal course of their duties. Assets no longer needed for public purposes can be sold to a city employee (but not to an officer) under the following conditions: • There has been reasonable public notice and the perty is sold by public auction or sealed bid. • The employee is the highest responsible bi r. • The employee who buys the property t not be, directly involved in e public auction or sealed bid process. There is no exception that allows the sale of eml real estate to a city officer or 6 THIS PAGE INTENTIONALLY LEFT BLANK 10 Investment Guideline I. Governing Authority: Legality The investment program shall be operated in conformance with federal, state, and other legal requirements, including Minnesota Statute § t 18A. The city may make electronic fund transfers for investments upon compliance with Minnesota Statute § 471.381. II. Scope: This guideline applies to the investment of all surplu§&nZkof the Pooling of Funds Except for cash in certain restricted and special funds, the city will c idate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping, and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. III. General Obiectives: ` The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: 1. Safety Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. a. Credit Risk The city will minimize credit risk, which is the risk of loss due to the failure of the security issuer or backer, by: • Limiting investments to the types of securities listed in Section VII of this Investment Guideline. • Pre - qualifying the financial institutions, broker /dealers, intermediaries, and advisers with which the city will do business in accordance with Section V. Diversifying the investment portfolio so that the impact of potential losses from any one type of security or from any one individual issuer will be minimized. 11 b. Interest Rate Risk The city will minimize interest rate risk, which is the risk that the market value of securities in the portfolio will fall due to changes in market interest rates, by: • Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. • Investing operating funds primarily in shorter -term securities, money market mutual funds, or similar investment pools and limiting the average maturity of the portfolio in accordance with this guideline. (sees _ . n VIll). 2. Liquidity The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). Alternatively, a portion of the portfolio may be placed in money market mutual funds or local government investment pools which offer same -day liquidity for short-term funds. The funds shall be invested to assure that funds are available to meet immediate payment requirements, including payroll, accounts payable, and debt service. 3. Yield The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk curities in anticipation of earning a fair return relative to the risk being assumed. .Securities shall generally be held until maturity with the following exceptions: • W security with declining credit may be sold early to minimize loss of • A secttty swap would improve the quality, yield, or target duration in the portfolio:, • Liquidity Ineeds of the portfolio require that the security be sold. IV. Standards of Care: 1. Prudence The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and 12 this investment guideline and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this guideline. The "prudent person" standard states that, "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." 2. Ethics and Conflicts oflnterest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial /investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the city. 3. Delegation of Authority Authority to manage the investment program is (ranted to the City Administrator, hereinafter referred to as investment officer. Responsibility for the operation of the investment program is hereby delegated to the investment officer, who shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this investment guideline. Procedures should include references to: safekeeping, delivery vs. payment, investment accounting, repurchase agreements, wire transfer agreements, and collateral /depository agreements. No person may engage in an investment transaction except as provided under the terms of this guidline and the procedures established by the investment officer. The investment officer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. F V. Authorized Financial Institutions, Depositories, and Broker/Dealers: 1. Authorized Financial Institutions, Depositories, and Broker /Dealers A list will be maintained of financial institutions and depositories authorized to provide investment services. In addition, a list will be maintained of approved security broker /dealers selected by creditworthiness (e.g., a minimum capital requirement of $10,000,000 and at least five years of operation). These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 150-1 (uniform net capital rule). 13 All financial institutions and broker /dealers who desire to become qualified for investment transactions must supply the following as appropriate: • Audited financial statements demonstrating compliance with state and federal capital adequacy guidelines. • Proof of National Association of Securities Dealers (NASD) certification (not applicable to Certificate of Deposit counterparties). • Proof of state registration. • Completed broker /dealer questionnaire (not applicable to Certificate of Deposit counterparties). • Certification of having read and understood and agreeing to comply with the city's investment policy. • Per Minnesota Statute § 118A.04, prior to completing an initial transaction with a broker, a city shall provide annually to the broker a written statement of investment restrictions which shall include a provision that all future investments are to be made in accordance with Minnesota Statutes governing the investment of public funds. A broker must acknowledge annually receipt of the statement of investment restrictions in writing and agree to handle the government city's account in accordance with these restrictions. A city may not enter into a transaction with a broker until the broker has provided this written agreement to the government entity. • Evidence of adequate insurance coverage. An annual review of the financial condition and registration of all qualified financial institutions and broker /dealers will be conducted by the investment officer. Vl. Safekeeping and Custody: 1. Delivery vs. Payment All trades of marketable securities will be executed by delivery vs. payment (DVP) to ensure that securities are deposited in an eligible financial institution prior to the release of funds. 2. Safekeeping Securities will be held by an independent third -party custodian selected by the entity as evidenced by safekeeping receipts in the city's name. The safekeeping institution shall annually provide a copy of their most recent report on internal controls (Statement of Auditing Standards No. 70, or SAS 70). 3. Internal Controls The investment officer shall establish a system of internal controls, which shall be documented in writing. The internal controls shall be reviewed by the City Council and with the independent auditor. The controls shall be designed to 14 prevent the loss of public funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the city. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. Accordingly, the investment officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures or alternatively, compliance should be assured through the city's annual independent audit. VIL Suitable and Authorized Investments: 1. Investment Types Consistent with the GFOA Policy Statement on State and Local Laws Concerning Investment Practices, the following investments will be permitted by this policy and are those defined by state and local law where apicae: • U.S. Treasury obligations which carry the full faitl'and credit guarantee of the United States government and are considered to be the most secure instruments available; • U.S. government agency and instrumentality obligations that have a liquid market with a readily determinable market value; • Canadian government obligations (payable in local currency); • Certificates of deposit and other evidences of deposit at financial institutions, • Bankers' acceptances; • Commercial paper, rated in the highest tier (e.g., A -1, P -1, F -1, or D -1 or higher) by a nationally recognized rating agency; • Investment -grade obligations of state, provincial and local governments and public authorities; • Repurchase agreements whose underlying purchased securities consist of the aforementioned instruments; • Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar- denominated securities; and • Local government investment pools either state - administered or developed through joint powers statutes and other intergovernmental agreement legislation. Investment in derivatives of the above instruments shall require authorization by the City Council. 15 2. Collateralization In accordance with the GFOA Recommended Practices on the Collateralization of Public Deposits, full collateralization will be required on all demand deposit accounts, including checking accounts and non - negotiable certificates of deposit. 3. Repurchase Agreements Repurchase agreements shall be consistent with GFOA Recommended Practices on Repurchase Agreements. VIII. Investment Parameters: v 1. Diversification It is the policy of the city to diversify its investment portfolios. To eliminate risk of loss resulting from the over - concentration of assets in a specific maturity, issuer, or class of securities, all cash and cash equivalent assets in all city funds shall be diversified by maturity, issuer, and class of security. Diversification strategies shall be determined and revised periodically by the City Council /investment officer for all funds. In establishing specific diversification strategies, the following general policies and constraints shall apply: Portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Maturities selected shall provide for stability of income and reasonable liquidity. For cash management funds: • Liquidity shall be assured through practices ensuring that the next disbursement date and payroll date are covered through maturing investments or marketable U.S. Treasury bills. • Positions in securities having potential default risk (e.g., commercial paper) shall be limited in size so that in case of default, the portfolio's annual investment income will exceed a loss on a single issuer's securities. • Risks of market price volatility shall be controlled through maturity diversification. • The City Council /investment officer shall establish strategies and guidelines for the percentage of the total portfolio that may be invested in securities other Ahan repurchase agreements, Treasury bills, or collateralized certificates of deposit. The City Council shall conduct a periodic review of these guidelines and evaluate the probability of market and default risk in various investment sectors as part of its considerations. 2. Maximum Maturities To the extent possible, the city shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the city will not directly invest in securities maturing more than five (5) years from the date of purchase or in accordance with state and local statutes and ordinances. 16 The city shall adopt maturity limitations, consistent with the investment objectives. Reserve funds and other funds with longer -term investment horizons may be invested in securities exceeding five (5) years if the maturities of such investments are made to coincide as nearly as practicable with the expected use of funds. The intent to invest in securities with longer maturities shall be disclosed to the legislative body. Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as local government investment pools, money market funds, or overnight repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations. 3. Competitive Bids The investment officer shall obtain competitive bids from Npased rokers or financial institutions on all purchases of investment instrum on the secondary market. IX. Reporting: 1. Methods The investment officer shall prepare an investment report at least quarterly, including a management summary that provides an analysis of the status of the current investment portfolio and the individual transactions executed over the last quarter. This management summary will be prepared in a manner which will allow the city to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report should be provided to the City Council. The report will include the following: • Listing of individual securities, including description, date of purchase, date of maturity, purchase price, interest rate, current market value, and change in market value. • Summary of transactions for the reporting period, including interest earnings, realized and unrealized gains or losses resulting from appreciation or depreciation in the value of investments, deposits and withdrawals, and investments purchased and sold. • Each quarterly report shall indicate any areas of policy concern and suggested or planned revision of investment strategies. 2. Performance Standards The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return during a market /economic environment of stable interest rates. A series of appropriate benchmarks shall be established against which portfolio performance 17 shall be compared on a regular basis. The benchmarks shall be reflective of the actual securities being purchased and risks undertaken and the benchmarks shall have a similar maturity as the portfolio. 3. Marking to Market The market value of the portfolio shall be calculated at least quarterly and a statement of the market value of the portfolio shall be issued at least quarterly. This will ensure that review of the investment portfolio, in terms of value and price volatility, has been performed consistent with the GFOA Recommended Practice on "Mark -to- Market Practices for State and Local Government Investment Portfolios and Investment Pools." In defining market value, considerations should be given to the GASB Statement 31 pronouncement. X. Policy Considerations: 1. Exemption Any investment currently held that does not meet the guidelines of t licy shall be exempted from the requirements of this policy. At maturity or li idation, such monies shall be reinvested only as provided by this policy. 2. Amendments This policy shall be reviewed on an annual basis. Any changes must be approved by the investment officer and the City Council, as well as the individuals charged with maintainina internal controls. Reconciliation of Bank and Investment Accounts Guideline Monthly Reconciliation: The city will establish procedures calling for monthly reconciliations between bank accounts and the general ledger. The reconciliations will also include the city's outstanding investments. All reconciliations will be reviewed and approved by the City Administrator. Significant variances will be investigated immediately, with any needed adjustments to the general ledger approved by the City Administrator. 1. Reconciliation of Bank Accounts: Reconciliation of Bank Accounts Guidelines: The following steps will be taken on a monthly basis to ensure complete and accurate reconciliation between bank accounts and the general ledger. The City Clerk/Treasurer will be responsible for monthly bank reconciliations. 1. Monthly bank statements will be reconciled he general ledger and account for all: a. Receipts b. Disbursements, accounting for both cane 1pd tstanding checks c. Payroll disbursed via electronic draw on a d. Transfers between bank/investment accounts e. Wire transfers £ Electronic receipt and payment of funds g. Bank charges and earned interest 2. Subsidiary ledgers will be used to: a. Track daily bank account activity. b. Reconcile general ledger cash balances to bank balances on a monthly basis. 3. Bank reconciliations will be completed upon receipt of the bank statements. 4. The Clerk/Treasurer will sign and date each monthly reconciliation when it has been completed. 5. The Clerk/Treasurer will track all adjusting journal entries necessary to correct any variances determined through the reconciliation process. a. All journal entries will be approved by the City Administrator. b. The City Administrator will initial and date all journal entry adjustment forms. 6. All monthly bank account reconciliations will be reviewed, approved, initialed, and dated by the City Administrator upon completion by the Clerk/Treasurer. 19 2. Reconciliation of Investment Accounts: Reconciliation of Investment Accounts Guidelines: The following steps will be taken on a monthly basis to ensure complete and accurate reconciliation of the city's outstanding investments: The Clerk/Treasurer will be responsible for monthly investment reconciliations. 1. Monthly investment account statements will be reconciled to the general ledger and used to account for: a. Interest earnings b. Change in fair market value c. Deposits and withdrawals d. Investments purchased and sold e. Investment balances 2 3 The Clerk/Treasurer will reconcile all investment accounts utilizing a subsidiary ledger or spreadsheet. _ The Clerk/Treasurer will maintain a record will be utilized to: a. Maintain control over investments. b. Ensure that the city receives the correct The record of investments will include: a. Date each investment was purchased b. Description of each investment c. Date of maturity d. Purchase price e. Interest rate f. Interest earnings g. Interest receivable h. Date sold i. Proceeds when sold MOW j. Current market value k. l hanae in fair market value 'investments due. 4. All ffiftbly investment reconciliations and the record of investments will be reviewed, approve ' itialed, and dated by the City Administrator upon completion by the 20 Receipt and Deposit of Funds Guideline Depositories: A city that receives and disburses funds may deposit the funds only in financial institutions designated by its governing body. The city may deposit funds in amounts that are federally insured or if it deposits more than this amount, it must either have the depository furnish a bond or assign collateral to protect the excess deposit. 1. Designating a Depository Pursuant to Minnesota Statutes § 118A, all city councils must designate one or more financial institutions as a depository of city funds. A city may designate one or more of the following financial institutions as a depository: • Savings associations • Commercial banks • Trust companies • Credit unions • Industrial loan and thrift companies Depository Guidelines: • Annual designation of the City of Corcoran depositories will be made by the City Council during the first council meeting of the New Year. • Designation of depositories will be made by a City Council resolution and the resolution will state the terms and conditions of the deposit and be filed with the Clerk/Treasurer. • City of Corcoran depositories will be one or more of the above mentioned financial institutions. 2. Collateralization of Public Deposits The safety of public funds should be the foremost objective in public funds management. Collateralization of public deposits through the pledging of appropriate securities or surety bonds by depositories is an important safeguard for such deposits. State programs pertaining to the collateralization of public deposits have generally proven to be beneficial for both the public sector and its depositories. Historically, the maximum amount of FDIC Coverage has been $100,000 per depositor, not per separate account (the federal deposit insurance limit has been increased to $250,000 per depositor in 2008, and may be subject to further change). Pursuant to Minnesota Statue § 118A.03 (2007), deposited amounts in excess of the federal deposit insurance limits must be protected by collateral security or a corporate surety bond executed by a company authorized to do business in the state which, when computed at its market value, shall be at least ten percent more that the amount of the excess deposit at the close of the banking day. Likewise, if a deposit is made in a nonmember bank (not covered by FDIC insurance), a city will need to obtain collateral or a corporate surety bond even if the deposit is less than the federal deposit insurance limit. The financial institution may furnish both a surety bond and collateral aggregating the required amount. State and local government depositors should take all possible actions to comply with federal requirements in order to ensure that their security interests in collateral pledged to secure deposits are enforceable against the receiver of a failed financial institution. The city must 21 ensure that the following criteria must be met in order to perfect a security interest in pledged collateral under federal law: • The assignment must be in writing; • The assignment must have been approved by the depository's board of directors or loan committee, and the approval must be reflected in the minutes of the board or committee; • The assignment must have been continuously, from the time of its execution, an official record of the depository. Collateralization of Public Deposits Guidelines: • The City Administrator will ensure that a collateralization pledge is received from each city depository following the first depository board meeting of each year. • The City Administrator will ensure that each collateralization pledge: • Must be accompanied by a written assignment to the city from the financial institution. • Assignment must state that, upon default, the financial institution must release to the city on demand, free of exchange or any other charges, the pledged collateral. • The City Administrator will ensure that the assignment was approved by the depository's board of directories and that the approval is reflected in the minutes of the board and that a copy of the depository board of director's minutes be kept on file with the Clerk/Treasurer. • The City Administrator will verify that the assignment has been continuously, from the time of its execution, an official record of the depository. • The City Administrator will verify that the collateral is one of the following as per Minnesota Statute § 118A.03, subd. 2: • United States government treasury bills, notes, or bonds; • Issues of a United States government agency or instruments that are quoted by a recognized industry quotation service available to the government entity; • A general obligation of a state or local government, with taxing powers, rated "A" or better; • A revenue obligation of a state or local government, with taxing powers, rated "AA" or better; • General obligation securities of a local government with taxing powers pledged as collateral against funds deposited by that same local government entity; • An irrevocable standby letter of credit issued by a Federal Home Loan Bank accompanied by written evidence that the Federal Home Loan Bank's public debt is rated "AA" or better by Moody's or Standard and Poor's. • Time deposits that are fully insured by any federal agency. • The City Administrator will ensure that the depository pledged collateral when computed at its market value, is at least ten percent more than the amount of the excess deposit at the close of the banking day which by definition incorporates a financial institution's cutoff hour. 22 Billin The City Administrator will be responsible for implementing and providing internal control for all billing. The city periodically will bill for services, including annual recycling, annual dust control, and other (escrows, police, parks, miscellaneous): • The Administrative Assistant or Office Assistant will send out annual for recycling and dust control, while other bills are prepared and sent by the Clerk/Treasurer. • The Office Assistant will record payments and prepare deposits slips for recycling and dust control receipts. • The Office Assistant will maintain a database of individual recycling and dust control accounts receivable. • Late fees and interest penalties on delinquent b ssessed by the City Council. Receipts bills The City Administrator will be responsible fo k plementing and providing internal control for all receipts. Pursuant to Minnesota Statute § 412.141, all city `re+n�s, including receipts from city utilities, must go to the City Treasurer for deposit. Thc..> Treasurer should make certain that deposits are never in excess of the FDIC guarantee, the city is in receipt of the depository's collateral pledge. Receipting Process Guidelines: 1. Receipt Forms • Receipt forms will be pre- numbered. • The original receipt will be given to the person making the payment. • A copy of each receipt will be maintained within the Clerk/Treasurer's records. 2. Receipt Distribution • Issuing the receipt will be completed immediately upon receiving the payment. A separate receipt will be issued for all money received, including amounts received by mail. • The original receipt will be attached to any detailed accompanying remittance and kept on file with the Clerk/Treasurer. 3. Cash Receipts • Cash rec ed in person (generally by the Administrative Assistant or the Police Clerk) will be kept in a cash box which will be locked in a secure place in the office during and at the close of the business day. • Cash received by the city will be accompanied by a copy of the receipt issued. Each individual receipt will include the date, amount, remitter, appropriate accounting code, description of the receipt, and initials of the city staff receiving the payment. • All cash receipts will be deposited at least weekly by the Clerk/Treasurer or other employee. 4. Check Receipts • Includes checks received via the mail, electronically, and that are in person (generally by the Administrative Assistant or the Police Clerk). 23 collected • Checks received by the city will be kept in a cash box which will be locked in a secure place in the office during and at the close of the business day. • Checks received by the City will be accompanied by copies of the receipts issued. Each individual receipt will include the date, amount, remitter, appropriate accounting code, description of the receipt, and initials of the city staff receiving the payment. • All checks receipts will be deposited at least weekly by the Clerk/other employee. 5. Electronic Receipts Electronic receipts or wire transfers generally include: • Investment dollars received • Property tax settlements • Grants • Draws against project funds • Court fines The City Administrator will be responsible for implementing and providing internal control for all electronic or wire transfer receipts. • The City Administrator will document the process and anticipate the to be wired to the designated depository on a particular date and time. • The City Administrator will obtain notification from the depository that the wire transfer has been received. • The depository will deliver a wire transfer receipt to the City Administrator who in turn provides that information to the Clerk/Treasurer. • For all electronic receipts, a copy of any electronic receipt notification be received or printed by the Clerk /Treasurer who will prepare any appropriate general ledger transactions, including receipts and adjusting journal entries. funds will 6. Accounting for Receipts All receipts including cash, checks, electronic receipts, and wire transfers will be accounted in the general ledger in the following manner: • All cash and check receipts will be entered into the general ledger in the form of a receipt batch by the Clerk/Treasurer. All electronic receipts and wire transfers will be entered into the general ledger in the form of a separate receipt batch or adjusting journal entry per occurrence. • Each individual receipt will include the date, amount, remitter, appropriate accounting code, description of the receipt, and initials of the city staff receiving the payment. • The receipt batch total will be reconciled and agreed to the total of all cash, check, or electronic receipts to be deposited. • A receipt batch report will be prepared and printed by the Clerk/Treasurer and provided to the City Administrator. • The City Administrator will review the receipt batch report, and approve by initialing and dating the report. The signed and approved receipt batch report will be kept on file with the Clerk/Treasurer. • All cash and check receipts will be deposited at least weekly. • All deposits will be made by the Clerk/Treasurer or other employee. 24 A bank receipt will be attached to a copy of the deposit slip by the Clerk/Treasurer, who will compare for accuracy. 25 26 Payroll Guideline Paying City Employees: Pursuant to Minnesota Statute § 412.271, subd. 2, when city employees are paid on an hourly or daily basis the city must keep a payroll. The payroll must indicate each employee's name and the number of hours or days the employee has worked. A timekeeper, supervisor, officer, or employee having knowledge of how much an employee has worked must sign a declaration stating that the hours and days indicated on the payroll are accurate to the best of his or her knowledge. The employee being paid must also sign a declaration stating that he or she has done the work for which payment is received. Payroll Reporting Guidelines: The City Administrator will be responsible for implementin nd providing internal control for all payroll accounting. 1. Time Sheet Records • City Staff Positions All city staff members will keep track of their ti- e b recording hours worked on a time sheet which will be signed by each employee and the appropriate department head or City Administrator prior to the payroll date. In the case of the City Administrator and Director of Public Safety, time off sheets will be filled out for time used and submitted to the office manager to be kept on file. • Elected Officials N4e All elected officials will be paid a part-time salary twice a year (June and December). The City Administrator will be responsible for authorizing the elected officials' payroll. 2. Payroll Reporting: • Pay Period City staff will be paid every two weeks. There are twenty six pay periods in the year. The pay period will begin on Saturday and end on Friday. Elected officials will be paid twice per year, in June and in December. • Pay*oU Calculatio% On the:Monday morning of the payroll week, the office manager will collect sheets for the prior two week pay period for all city staff members, and perform''the, following: • Enter all time sheet information onto a prepared spreadsheet, and transfer information to the payroll; provider through an online site. • Verify totals and submit to the payroll service provider. Payroll must be submitted by Wednesday noon of the payroll week for payroll checks to be received by Friday. If an emergency situation should arise that the office manager is not able to process payroll, a generic spreadsheet found in the PR Allocations file can be filled in with the pertinent information. This can be emailed or faxed to the payroll provider for data input and records retrieval. • The payroll service will produce the payroll reports and prepare the payroll checks, which will be delivered to the city no later than Thursday of the payroll week. • Upon receipt of the payroll reports, the office manager will review for accuracy. The payroll reports will be provided to the City Administrator who will also review for propriety and accuracy. Payroll reports will then be: 27 • Signed by the City Administrator approving payment for all city staff • Returned to the office manager for data retention • Payroll Check Distribution: Payroll checks will be distributed to all city staff members on the Friday following the last day of the pay period. Direct deposits, payroll taxes, and payroll service fees will be handled electronically by the payroll service through the city's depository. • Payroll Records and Reporting: The office manager will file the approved payroll reports with time sheets and leave requests. Payroll authorization changes will be filed in human resources files. For each payroll, the office manager will file Deferred Comp, MSRS, HSA, and PERA or any other reports online, while the payroll service will handle federal and state payroll tax returns. Quarterly and year -end reporting, including federal forms 941, W2, and W3, will be handled by the city's payroll service. The office manager will record the payroll information onto the Payroll Allocation worksheet and submit it to the clerk to enter into the accounting software. (This process should be done by Thursday of payroll processing week). The clerk will notify the City Administrator the process has been completed and have monies transferred to the City's checking account before 3:00 pm on Thursday. (This avoids overdrafts since 100% of the staff has direct deposit and online banking is used for benefit disbursements) 3. Leave Time Reporting: NK The office manager will track information pertaining to human resources including personnel information, salary history, hours worked, annual and compensatory leave balances, and benefits. The office manager will enter the information into payroll from the time sheets, including regular and overtime hours worked, leave used, holiday pay, and compensatory time used or earned. Regular leave reports will be generated and compared to the payroll reports as an added internal control measure. The City Administrator will be responsible to monitor overtime and annual leave and compensatory time balances. • Request for Time Off: The request for time off form will be utilized by all city staff members when requesting time off: y • The staff member must note if the time off requested is compensatory time or annual leave. • The specific date and time requested must be noted on the form. o The request for time off form will be presented to the department head or City Administrator for a signature authorizing the time off. o All requests for time off forms will be included with the payroll time sheets for that particular payroll period. Purchase of Goods and Services Guideline 1. Purchasing: In the City of Corcoran, department heads have the responsibility to make all purchases while taking advantage of savings through bulk purchasing, systematic procedures, and effective expenditure controls. 2. Standards and Specifications: For all purchases, the city will have standards of quality. The standards will be brief, clear descriptions of the minimum requirements for purchases. The standards must be broad enough to include all competitive supplies and equipment. A. The department requiring the item will develop the specifications that will be used to make the purchase. Standard specifications are available for many items. B. Standard specifications will meet the needs of all departments when an item is used by two or more departments. .� 3. Making Purchases: Regular Purchasing Guidelines: All normal purchasing will adhere to the following process: The department head needing the item will: • Include a description of the product, quantity, and applicable specifications. • The department head will determine whether the budget has authorized the purchase and if sufficient funds are available. • The department head will cancel the requisition if the budget does not allow the purchase or if funds are not available. (Note: The City Council may modify the city's budget to make funds available, but may not increase the total amount that has been levied). • The department head will request a purchase order number from the Clerk/Treasurer for product purchased over $1,000.00. • If it is an approved budgeted item, the department head may then proceed to acquire the requested item. • If the city is required to obtain bids for the proposed purchase, the requisition will be referred to the City Council for further action (see competitive bidding requirements). • After the city has received the item and tested its compliance with the specifications, the city will process and pay the associated invoice according to the approval and payment of bills policy (see inspection and testing). Emergency Purchasing: In emergency situations, the Mayor and City Council may authorize expenditures which may be necessary to maintain the operational status of the city. Such expenditures will require approval at the next regular City Council meeting. • Before deciding that an emergency exists, the Mayor and City Council will consult with the city attorney. • An emergency must be declared by the Mayor. • An emergency must be confirmed by the City Council. • An emergency must be real and unexpected. • An emergency cannot be declared so the City Council can dispense with regular bidding requirements. 29 4. Inspection and testing: Inspection and Testing Guidelines: The following steps will be taken before the City pays for purchased items: • The department head or designated employee receiving the item will determine whether it conforms to the city's specifications for that item. • The department head or designated employee will check packing slips or bills of lading for accuracy and that all items were received by the city. • The department head will retain the packing slip or bill of lading to attach to the corresponding invoice. 5. Competitive Bidding: Competitive Bidding Guidelines: Pursuant to Minnesota Statute § 471.345, the following types of contracts must be competitively bid if they are expected to exceed $100,000: • Contracts for the sale or purchase of supplies, materials, or equipment or the rental thereof. • Contracts for the construction, alteration, repair or maintenance of real or personal property. For contracts that are expected to exceed $25,000 but not to exceed $100,000, the city can: • Choose the competitive- bidding process, or • Make the contract by direct negotiation process: • Two or more quotations must be obtained if possible. • The city must keep all quotations on file for at least one year. For contracts that are expected to be $25,000 or less, the city has the discretion to: • Make the contract by obtaining quotations: • Two or more quotations must be obtained if possible. • The city must keep all quotations on file for at least one year. Buy the item on the open market. Pursuant to Minnesota Statute § 471.35, a city that calls for bids for purchase of supplies or equipment that are competitive in nature cannot prepare specifications to exclude all but one type of supply or equipment. Specifications must allow free and full competition. Specifications may not give a prospective bidder an unfair advantage. Specifications must be sufficiently definite and precise to afford a basis for comparable bids. Reverse Auction and onic Sale: Cities also have authority for the following procedures related to purchases and sales: • Reverse Auction Purchases — Minnesota Statute § 471.345, subd. 16 A city may contract to purchase supplies, materials and equipment (but not services), using an electronic purchasing process in which vendors compete to provide the supplies, materials, or equipment at the lowest price in an open and interactive environment. • Electronic Sales — Minnesota Statute § 471.345, subd. 17 A city may contract to sell supplies, materials, and equipment which is surplus, obsolete, or used, using an electronic selling process in which purchasers compete to purchase the supplies, materials, or equipment at the highest purchase price in an open and interactive environment. 30 Best Value Procurement: Also, in 2007, the Minnesota Legislature authorized cities and other government entities to use a "best value" procurement process for "construction, building alteration, improvement or repair and maintenance contracts." For cities, best value procurement became available on July 1, 2007. Best value procurement is a process based on competitive proposals (as an alternative to bids) that awards the contract to "the vendor or contractor offering the best value, taking into account the specifications of the request for proposals, the price and performance criteria as set forth in Minnesota Statute § 16C.02, subd. 4a and described in the solicitation document." The price and performance criteria mentioned in the previous paragraph may include, but are not limited to: (1) the quality of the vendor's or contractor's performance on previous projects; (2) the timeliness of the vendor's or contractor's performance on previous projects; (3) the level of customer satisfaction with the vendor's or contractor's performance on previous projects; (4) the vendor's or contractor's record of performing previous projects on budget and ability to minimize cost overruns; 1* (5) the vendor's or contractor's ability to minimize change orders; (6) the vendor's or contractor's ability to prepare appropriate project plans; (7) the vendor's or contractor's technical capacities; (8) the individual qualifications of the contractor's key personnel; or (9) the vendor's or contractor's ability to assess and minimize risks. "Performance on previous projects" does not include the exercise or assertion of a person's legal rights. The solicitation document must state the relative weight of price and other selection criteria. The award must be made to the vendor or contractor offering the best value applying the weighted selection criteria. If an interview of the vendor's or contractor's personnel is one of the selection criteria, the relative weight of the interview must be stated in the solicitation document and applied accordingly. Personnel administering best value procurement procedures must be trained in REP process for best value contracting for construction projects. Cooperative Purchasing: --"W A city may contract for the purchase of supplies, materials, or equipment without regard to the competitive bidding requirements of this section if the purchase is through a national municipal association's purchasing alliance or cooperative created by a joint powers agreement that purchases items from more than one source on the basis of competitive bids or competitive quotations. 6. Advertisement for Bids: Pursuant to Minnesota Statute § 412.311, a city must publish all requests for competitive bids in the city's official newspaper at least ten days before the last day for submission of bids. As an alternative to publishing the notice in a newspaper, a city may put them on its website or in a recognized industry trade journal if certain steps (described below) are followed. 1. If a city designates an alternative method to newspaper notice: i. The city must continue to publish solicitations and requests in the newspaper for six months in addition to the alternative method. ii. The publication in the newspaper must indicate where to find the designated alternative method. iii. Alternative methods of publication must be in substantially the same format and for the same time period as is required for newspaper publication. 2. If, in the normal course of its business, a qualified newspaper maintains a web site, then 31 as a condition of accepting and publishing public notices, the newspaper must agree to post all the notices on its web site during the notice's full publication period. Pursuant to Minnesota Statute § 429.041, subd.l, there are specific requirements for advertising for competitive bids when dealing with local improvement projects. If the estimated cost of a local improvement project financed by special assessments exceeds $100,000, the publication: 1. Must appear in the city's official newspaper and at least once in a trade paper (such as the Construction Bulletin) not later than three weeks before the last date of submission for bids. 2. Must contain a statement of when the bids will be opened, which cannot be less than three weeks after its first publication. 3. The published notice must contain the following information a. Description of the project or purchase. b. Availability of specifications in the office of the city clerk.,, c. Last day for submission of bids and the place where they are due. d. Time and place for opening bids. e. Statement reserving the right of the city to reject all bids. 7. Opening and Tabulation of Bids: Ne Pursuant to Minnesota Statute § 429.041, subd.l, the city clerk should keep all bids sealed until after the last date for their submission. The city may specify in the public notice that two or more designated officers of the city will open bids publicly and tabulate them in advance of the meeting when they will be considered by the City Council. Opening and Tabulation of Bids Guidelines: The following steps will be taken when opening and tabulating competitive bids: I. All competitive bids will remain sealed until the noticed bid opening. 2. All competitive bids will be opened by the City Administrator or Clerk/Treasurer and one other city staff member or professional staff member. 3. All bids will be tabulated to include the name of the bidder and the amount of the bid. 4. After opening all bids, the City Administrator, Clerk/Treasurer, or professional staff member such as the City Engineer will perform an investigation of all bids for compliance with the specifications, their reasonableness, and the responsibility of the bidders. r 5. All bids received through competitive bidding must conform to the bid specifications. 6. An award of a contract by the City Council may be invalid if the selected bid varies materially from the specifications which may give a bidder a substantial advantage or benefit that other bidders do not have. 8. Disposition of Bids: Pursuant to Minnesota Statute § 429.041, subd. 2., the City Council may either accept one of the bids or reject all bids. Disposition of Bids Guidelines: 1. All competitive bids will be presented to the City Council once they have been opened, tabulated, and investigated. a. The City Council may either accept one of the bids or reject all bids. b. If the City Council rejects all bids, the City Council may either: 2. Issue a call for new bids. 3. Decide to undertake the project using day labor if it is a public project. a. If the City Council awards a contract, it must go to the lowest responsible 32 bidder. 4. The bidder who submits the lowest bid in dollars is not necessarily the lowest responsible bidder and the City Council has the discretion in choosing among bidders. If the lowest bidder is not awarded the contract, reasonable and appropriate reasons must be documented in the city's official minutes. 5. The responsibility of bidders includes the following: a. Financial responsibility b. Integrity c. Skill d. The likelihood of performing faithful and satisfactory work 9. Prompt Payment to Subcontractors City contracts that involve a prime contractor must require the prime contractor to pay subcontractors within ten days of the prime contractor's receipt of payment from the city for undisputed services provided by the subcontractor. The contract must require the prime contractor to pay interest of 1.5 percent per month or any part of a month to the subcontractor on any undisputed amount not paid on time. 10. Performance and Payment Bonds For some contracts, cities must require contractors to provide a performance bond and a payment bond. This requirement applies to contracts over $75,000 for the performance of public work. The required performance bond benefits the city by ensuring that the work is completed according to the terms of the contract, while the required payment bond benefits subcontractors and people who provide labor and materials, by seeing that their claims for labor and materials are paid. 11. Withholding Certificates Before a city makes the final payment to a contractor under a contract requiring the employment of employees for wages, it must make sure the contractor and any subcontractors have complied with withholding tax laws. Contractors and subcontractors show compliance by submitting a withholding affidavit to the Minnesota Department of Revenue. This can be done electronically or by mailing a completed Form IC134, "Withholding Affidavit for Contractors." If a contractor or subcontractor has withheld taxes as required, the Department of Revenue will return an electronic confirmation or sign and return the Form IC 134, certifying compliance. 33 THIS PAGE INTENTIONALL 34 City of Corcoran Disbursement and Payment of Claims Guideline Expenditures: In order for an expenditure of public funds to be lawful, it should meet both of the following standards: Public purpose: There must be a public purpose for the expenditure. The Minnesota Supreme Court has generally concluded that "public purpose" means an activity that meets all of the following standards: A�l • The activity will benefit the community as a body. • The activity is directly related to functions of government. • The activity does not have as its primary objective the benefit of a private interest. The Minnesota Supreme Court has also held that the geAral objectiv �' ,a public purpose is to promote the following for all of a city's residents: • Public health • Safety • General welfare • Security • Prosperity • Contentment Authority: low 1 There must be specific or implied authority for the expenditure in statute or in the city's charter. Specific authority is usually fairly clear. In contrast, whether authority is implied by a particular statute or charter provision is subject to interpretation. The city should consult with its city attorney as to whether authority for a specific expenditure is implied. Payment of Claims: Pursuant to Minnesota Statute § 412.271, subd.l, no disbursement of city funds shall be made except by an order drawn by the mayor and clerk upon the treasurer. Except when issued for the payment of judgments, salaries and wages previously fixed by the City Council or by statute, principal and interest on obligations, rent and other fixed charges, the exact amount of which has been previously determined by contract authorized by the City Council, no order shall be issued until the claim to which it relates has been audited and allowed by the City Council. Prompt Payment of Claims: Minnesota Statute § 471.425 requires that cities pay each vendor obligation according to the terms of the contract or, if no contract terms apply, within the standard payment period unless the city in good faith disputes the obligation. The following requirements must be met: • For cities who have regularly scheduled council meetings at least once a month, the standard payment period is defined as within 35 days of the date of receipt. 35 • A city shall calculate and pay interest to a vendor if the city has not paid the obligation according to the terms of the contract or, if no contract terms apply, within the standard payment period. • The rate of interest calculated and paid by the city on the outstanding balance of the obligation not paid according to the terms of the contract or during the standard payment period shall be 1.5 percent per month or part of a month. • No interest penalties may accrue against a purchaser who delays payment of a vendor obligation due to a good faith dispute with the vendor regarding the fitness of the product or service, contract compliance, or any defect, error or omission related thereto. If such delay undertaken by the city is not in good faith, the vendor may recover costs and attorney's fees. • The minimum monthly interest penalty payment that a city shall calculate and pay a vendor for the unpaid balance for any one overdue bill of $100 or more is $10. For unpaid balances of less than $100, the city shall calculate and pay the actual interest penalty due the vendor. Immediate Payment of Claims:` Pursuant to Minnesota Statute § 412.271, subd. 4, when payment of a claim ed on contract cannot be deferred until the next City Council meeting without loss to the city through forfeiture of discount privileges or otherwise, it may be made immediately if the itemized claim is endorsed for payment by at least a majority of all the members of the City Council. The claim shall be acted upon formally at the next City Council meeting in the same manner as if it had not been paid, and the earlier payment shall not affect the right of the city or any taxpayer to challenge the validity of the claim. W Cash Disbursement Guidelines: a The City Administrator will be responsible for implementing and providing internal control for all disbursements. 1. General Guidelines: • All general disbursements will be approved in advance by the City Council. The following exceptions may be made upon approval of the City Administrator: • Debt service payments, including principal, interest, and fiscal agent fees • Payroll and related liability payments • Investment purchases • Sales tax and fuel tax payments • Postage replenishment • Contract or other payments that have specific City Council pre- approved payment instructions • Payments in which a substantial discount can be realized by timely payment • Payments where a substantial late charge would be incurred if timely payment was not made • All general disbursements, other than from payroll, petty cash, or made electronically, will be made by pre- numbered checks. • In accordance with Minnesota Statutes § 471.38 and § 471.391, checks by which claims are paid may have printed on their reverse side, above the space for endorsement thereof, the following statement: "The undersigned payee, in endorsing this check declares that the same is received in payment of a just and correct claim against the city, and that no 36 2. part of it has heretofore been paid." When endorsed by the payee named in the check, such statement shall operate and shall be deemed sufficient as the required declaration of the claim. • Under no circumstances will blank checks be signed in advance. • Paying off of vendor statements (rather than invoices) will be prohibited. • Payment voucher forms will be utilized for all general disbursements. • Unpaid invoices will be maintained in a file by the Clerk/Treasurer. General Disbursement Process: • All invoices received by the city will be generally opened and date stamped by the Administrative Assistant, who will distribute to the appropriat department heads. • The department heads will: • Verify that the goods and /or services were received • Verify that the amount of the invoice is correct • Attach packing slips or bills of lading • Complete and attach a payment voucher fo i 1 ding: • Vendor name and address • Invoice number • Account coding • Description of invoice • Amounts i • Department head initials to indicate payment approval • Present the payment voucher forms and attached invoices to the Clerk/Treasurer • The Clerk/Treasurer processes all authorized payments by: • Completing payment voucher forms on invoices as authorized by the City Administrator • Verifying that all amounts due and account codes are accurate • Reviewing application of sales tax on each invoice for propriety • Entering all invoices into the appropriate payment batch in the general ledger • Printing checks and check registers • Preparing Claims Listing reports, to include segregations for accounts payable, payroll, or other (checks and electronic disbursements) • Copying any specific invoices for the City Council's review • The City Administrator will review the Claims Listing report for City Council approval by: o Reviewing the accounts payable report, payment voucher forms, invoices, and other pertinent backup documentation for accuracy • Providing a copy of the Claims Listing report to the City Council for approval during the regularly scheduled City Council meetings • Providing explanation to the City Council for all disbursements within the accounts payable report • Checks will be signed and mailed on the day following City Council approval of the Claims Listing and accounts payable reports: • Two authorized signers (Mayor, one other City Council member, City Administrator, Clerk/Treasurer) will sign all approved checks, while verifying that all checks are accurate by comparing the check and amount to the approved Claims Listing, accounts payable report, payment voucher forms, and invoices • After authorized signatures are obtained, the Administrative Assistant will mail the approved disbursements: 37 • check including stub will be mailed to the vendor • check stub will be attached to the payment voucher and invoice, which will then be filed 3. Electronic Disbursement Process: Electronic or wire transfers will generally be for: • Debt service payments, including principal, interest, and fiscal agent fees • Payroll and related liability payments • Investment purchases • Sales tax and fuel tax payments The City Administrator will be responsible for implementing and providing internal control for all electronic or wire transfer disbursements. • The City Administrator will document the process and anticipate the funds to be wired to the designated depository on a particular date and time. • The City Administrator will obtain notification from the depository that the wire transfer has been made. • The depository will deliver a wire transfer receipt to the City Administrator who in turn provides that information to the Clerk/Treasurer. • The Clerk/Treasurer will prepare any appropriate general ledger transactions, including payments and adjusting journal entries. • The Clerk/Treasurer will include electronic or wire transfers on each Claims Listing report. 4. Credit Cards: In accordance with Minnesota Statute § 471.382, the City Council may authorize the use of a credit card by any city officer or employee otherwise authorized to make a purchase on behalf of the city. If a city officer or employee makes or directs a purchase by credit card that is not approved by the City Council, the officer or employee is personally liable for the amount of the purchase. A purchase by credit card must otherwise comply with all statutes, rules, or city policy applicable to city purchases. 5. Petty Cash / Imprest Funds: Pursuant to Minnesota Statute § 412.271, subd. 5, the City Council may establish one or more imprest funds for the payment in cash of any proper claim against the city which it is impractical to pay in any other manner, except that no claim for salary or personal expenses of an officer or employee shall be paid from such funds. The City Council shall appoint a custodian of each such fund who shall be responsible for its safekeeping and disbursement according to law. Money for the operation of such fund shall be secured by a transfer from the general fund. A claim itemizing all the various demands for which disbursements have been made from the fund shall be presented to the City Council at the next City Council meeting after the disbursements have been made. The City Council shall act upon it as in the case of other claims and an order shall be issued to the custodian for the amount allowed. The custodian shall use the proceeds of the order to replenish the fund; and if the council fails to approve the claim in full for any sufficient reason, the custodian shall be personally responsible for the difference. The City's petty cash fund is available to make small purchases or reimbursements in cash, for items such as stamps, office supplies, parking, etc. • The petty cash fund will not exceed $100. • Petty cash will be kept in a cash box which will be locked in a secure place in the office during and at the close of the business day. • The Clerk/Treasurer will be the custodian of the petty cash fund. • Withdrawals from the petty cash fund will be made only by completing a petty cash voucher. Supporting documentation will be attached to each voucher which will state the date, amount, purpose, account code, and initials of authorizing personnel. • No staff member will be allowed to cash personal checks in the petty cash fund or to borrow from the petty cash fund. • The Clerk/Treasurer will be responsible for reconciling the petty cash fund on a monthly basis. Reimbursements to the petty cash fund will o through the general disbursement process, and will be payable to "Petty Cash ". 39 CLAIMS LISTING CHECK RANGE: 18S42-18589 Agenda Item; Agenda Item: Agenda Item: Date 4120111 4122111 4/22111 4125111 4126111 4126111 4125141 4129111 Total Agenda Item 13 a -c. Council Meeting Date: 5/12/2011 Prepared By: jheinecke 13a. FUND #500 Escrow Claims Paid to Amount Project name NONE Total - NONE Total Fund ##500 $ - (See attached Check Detail Register) 13b. Building Ins ection Claims Paid To Amount NONE H:1City Hall lnformationlCITY GOVERNMENT1Council, Commissions & CommitteeMCoundl InformationlCouncil Claims12011 Claims.As Total Building Inspections Claims $ (See attached Check Detail Register) 13c. All Other Claims $ 82,454.00 (See attached Check Detail Register) Total of Auto Deductions 24,095.61 TOTAL EXPENDITURES FOR APPROVAL $ 106,549.61 Auto Deductions I Electronic Fund Transfer 1 Other Disbursements Paid to Amount DEPT OF REVENUE -FUEL TAX 148.50 PAYROLL TAXES 9,289.77 PAYCHEX FEE 205.94 P E RA 9,289.77 CITISTREET - DEFERRED COMP 2,124.23 CITISTREET- HEALTH. SAVINGS 1,451.47 US BANK -HSA 1,383.84 NSF CHECK 202.09 H:1City Hall lnformationlCITY GOVERNMENT1Council, Commissions & CommitteeMCoundl InformationlCouncil Claims12011 Claims.As CITY OF CORCORAN 05105!11 10:30 AM Page 1 *Check Detail Register@ May 2 ©11 Paid Chk# 018551 5112/2011 CARSON, CLELLAND & SCHREDER E 100 - 41600 -300 Professional Srvs (GENERAL) Check Amt Invoice Comment 10100 Farmers State Bank E 100 -42100 -304 Legal Fees $2,404.42 Paid Chk# 018543 5/92/2011 E 205- 42100 -304 Legal Fees $31.67 E 1 00- 431 00 -21 0 Operating Supplies (GENERAL) $96.17 702934 SUPPLIES E204-42100-210 Operating Supplies (GENERAL) $267.18 708846 SUPPLIES 042911 Total ACME TOOLS $363.35 Professional Srvs (GENERAL) $206.25 Paid Chk# 018544 5/12/2011 BRENT���. �, �„ �. ��.,," �����. ��������� ,�.����.,�...- ,- ..�..��:����, E204-42100-210 Operating Supplies (GENERAL) $54.71 13504 FAS PLAQUE. Total ANDERSON, BRENT $54.71 $73.13 VVWP5620 FVaid Chic# 018545 5/12/2011 ASSOC OF TRAINING OFFICERS MN E 100 -42100 -208 Training and instruction $200.00 29669301 BURNS, WARREN, HOCHSTETLER, OLSON Total ASSOC OF TRAINING OFFICERS MN ........................................ $200.00 Paid Chk# 018546 ,�„�„ � EMPLOYEE BENEFITS 5/12/2011 ASSURANT .a.n`L. 0_Y__...,.B,_,r -FITS - •�°°.�.�°�°°•���-.,,.°�,m °° �._,__. -__m E 100- 42102 -131 Employer Paid Health $8.90 Insurance Premium E 100 - 41300 -131 Employer Paid Health $24.10 Insurance Premium E 100- 42100 -131 Employer Paid Health $121.62 Insurance Premium E 100 - 43100 -131 Employer Paid Health $73.27 Insurance Premium E 100 - 41400 -131 Employer Paid Health $26.01 Insurance Premium Total ASSURANT EMPLOYEE BENEFITS $253.90 Paid Chk# 018547 5l1212011SANKWEST E 309 -47000 -610 interest $2,503.00 2006A -0611 2006A BOND INTEREST Total BANKWEST $2,503.00 paid Chk #��018548 „ „, ,.511212011 BONESTROO ...,..... mnr.._­.n._._ u ... E 100 - 41910 -300 Professional Srvs (GENERAL) $651.50 187709 ZONING ORD -DNR Total BONESTROO $651.50 Paid Chk# 018549 5/12/2011 BURNS RYAN E204-42100-210 Operating Supplies (GENERAL) $1,146.27 FAS 11 FAS SUPPLIES/FOOD Total BURNS RYAN $1,146.27 Paid Chk# 018550 5/12/2011 BUSINESS FORMS 8 ACGOUNTING E 100 - 43100 -228 Dust Control $_150.67 43373 DUST CONTROL Total BUSINESS FORMS & ACCOUNTING $150.67 _ .. Paid Chk# 018551 5112/2011 CARSON, CLELLAND & SCHREDER E 100 - 41600 -300 Professional Srvs (GENERAL) $1,691.67 042911 CIVIL -LEGAL E 100 -42100 -304 Legal Fees $2,404.42 042911 CRIMINAL E 205- 42100 -304 Legal Fees $31.67 042911 LEGAL E 100 -43100 -228 Dust Control $183.33 042911 ORDINANCE E 100 -41600 -300 Professional Srvs (GENERAL) $481.25 042911 PEDDLERS ORDINANCE E 401 -41900 -300 Professional Srvs (GENERAL) $206.25 042911 RIGHT OF ENTRY Total CARSON, CLELLAND & SCHREDER $4,998.59 Paid Chk# 018552 5/12/2011 CDW GOVERNMENT E 100-41941-200 Office Supplies (GENERAL) $73.13 VVWP5620 PRINTER CARTRIDGE CITY OF CORCORAN 05/05/11 10 :30 AM Page 2 *Check Detail Register@ May 2011 Paid Chk# 018554 5/1212011, aCINTAS - 470 E 100 -42100 -223 Building Repair Supplies Check Amt Invoice Comment FLOOR MATS Total COW GOVERNMENT $73.13 $23.62 470637315 FLOOR MATS E 100 - 41941 -210 Operating Supplies (GENERAL) $35.02 470637316 E 100 - 41941 -321 Telephone $239.32 042111 LAND LINE E 100- 45200 -321 Telephone $61.14 042111 LAND LINE E 100 - 41941 -321 Telephone $13.96 042111 LONG DISTANCE E 100 - 42100 -321 Telephone $126.71 042111 LAND LINEIFAX E 100 -43100 -321 Telephone $80.93 042111 LAND LINE/FAX CRN SOUTH SUBSCRIPTION Total CENTURY LINK $522.06 ..... ............................... $34.00 . Paid Chk# 018554 5/1212011, aCINTAS - 470 E 100 -42100 -223 Building Repair Supplies $23.62 470630332 FLOOR MATS E 100 -42100 -223 Building Repair Supplies $23.62 470637315 FLOOR MATS E 100 - 41941 -210 Operating Supplies (GENERAL) $35.02 470637316 City Hail Scraper Mat E 100 -43100 -210 Operating Supplies (GENERAL) $55.66 470637317 PW Towels E 100 -43100 -417 Uniforms $87.32 470637318 PW Uniforms Total CINTAS -470 $225.24 Paid Chic# 012555 # 5/12/2011 CLIPPERTON, JEFFREY E 100- 43100 -380 Utility & Services (GENERAL) $186.61 050511 FEB 2011 OFF SITE UTILITIES E 100 -43100 -380 Utility & Services (GENERAL) $238.29 050511 MAR 2011 OFF SITE UTILITIES Total CLIPPERTON, JEFFREY $424.90 E204-42100-210 Operating Supplies (GENERAL) $90.00 6814 FAS HOT DOGS Total CORCORAN LOCKER $90.00 E 100- 41941 -210 Operating Supplies (GENERAL) $34.00 050111 CRN SOUTH SUBSCRIPTION Total CROW RIVER NEWS ..... ............................... $34.00 . Pafd Chk #�418558,� ., 511 212011 bONAHl1lw, pANIEL'�,..,,., .,. ....,,,.....r E 100- 41300 -210 Operating Supplies (GENERAL) $26.52 042111 MILEAGE E 100 -41300 -208 Training and instruction $225.00 042111 MN MGRS ASSIC CONFERENCE Total DONAHUE, DANIEL $251.52 .. Paid Chk# 018559, 511212011 ERKENS WATER �._. .. ,...,_ E 100-41941-210 Operating Supplies (GENERAL) $23.00 91118 OFFICE WATER E 100-41941-210 Operating Supplies (GENERAL) $28.75 94799 OFFICE WATER E 100 - 41941 -210 Operating Supplies (GENERAL) $17.25 96387 OFFICE WATER Total ERKENS WATER $69.00 Paid Chk# 018560 5/12/2011 FARMERSR.STATE BANK OFNHAMEL6�4 E 309 -47000 -610 Interest $2,503.00 2006A -0611 2006A BOND INTEREST Total FARMERS STATE BANK OF HAMEL $2,503.00 E 100 -43100 -223 Building Repair Supplies $250.00 22680 ANNUAL INSPECTION CITY OF CORCORAN 05/05/11 10:30 AM Page 3 *Check Detail Register@ May 2011 Check Amt Invoice Comment Total GREYSTONE CONSTRUCTION CO $250.00 E 100 - 42200 -300 Professional Srvs (GENERAL) $10,430,52 031111 18T QTR FIRE PROTECTION E 100 -42200 -550 Motor Vehicles $11,257.57 033111 2011 CAPITAL EQUIPMENT Total HAMEL FIRE DEPARTMENT $21,688.09 Paid Chk# 918563 �Mn5/1212011 YHENN CTY INFO TECH E 100 -42100 -323 Radio Units $746.07 190338010 RADIO LEASE E 100- 42100 -323 Radio Units $48.09 110462018 HC CAD VISOR CONNECTION FEE Total HENN CTY INFO TECH $794.16 Paid "Chk# 018564 5/12)2011 HE— N'NEPIN CO TREASURER E 100-41941-210 Operating Supplies (GENERAL) $479.70 MUNIC 52 SPECIAL ASSESSMENT FEES Total HENNEPIN CO TREASURER $479.70 $1,805.03 19568 Paid Chk# 018565 5/12/2011 HOCHSTETLER, ©DANE Total KRIS ENGINEERING $5,547.91 E416-42100-210 Operating Supplies (GENERAL) $338.93 042911 RIFLE PROJECT /CABELAS SUPPLIES E 416- 42100 -210 Operating Supplies (GENERAL) $74.17 042911 RIFLE /PROJECTMENARDS SUPPLIES SUPPLIES Total HOCHSTETLER, DUANE $413.10 .............................. $32.74 Paid Chk# 018566 � .511 212 0 11 INDELIBLE tN'C . m5 /1212011% E 100- 41941 -200 Office Supplies (GENERAL) $686.29 2905 ENVELOPES SUPPLIES Total INDELIBLE INC $686.29 $346.26 92884 Pad'Chk# 018567 w X511212011 JOSH. HUNTER Maintenance Projects $322.76 92885 G 100 -21709 Dependent Care FSA Withhold $1,420.00 042911 HUNTER REIMBURSEMENT 92887 Total JOSH HUNTER $1,420.00 Operating Supplies (GENERAL) $64.96 Paid Chk# 018568 5/12/2011 KDV LTD E 100- 41540 -300 Professional Srvs (GENERAL) $175.50 1.26747 FINANCIAL CONSULTING Total KDV LTD $175.50 PaidrvCh{c #y018669Y 5/12/201 Iv~ WKRIS ENGINEERING E 100-43125-210 Operating Supplies (GENERAL) $3,742.88 19567 SUPPLIES E 100- 43125 -210 Operating Supplies (GENERAL) $1,805.03 19568 SUPPLIES Total KRIS ENGINEERING $5,547.91 Paid "Chk# 418570 511 212 0 1 1 �,.LANO EQUIPMENT, E 100 - 43100 -220 Repair /Maint Supply (GENERAL) $32.74 42400 SUPPLIES Total LANG EQUIPMENT .............................. $32.74 Paid Chk# 018571 � m5 /1212011% E 100- 43100 -210 Operating Supplies (GENERAL) $48.08 92418 SUPPLIES E 100- 45200 -221 Maintenance Projects $346.26 92884 SUPPLIES E 100 -45200 -221 Maintenance Projects $322.76 92885 SUPPLIES E 100- 45200 -221 Maintenance Projects $322.76 92887 SUPPLIES E 204- 42100 -210 Operating Supplies (GENERAL) $64.96 94632 SUPPLIES CITY OF CORCORAN 05/05111 10:30 AM Page 4 *Check Detail Register© May 2011 Check Amt Invoice Comment Total MENARDS $1,104.82 E 100 -41300 -208 Training and Instruction $20.00 APRIL MEETING Total METROPOLITAN AREA MGRS ASSOC $20.00 Paid Chk# 018573 5/12/2011 MILLER TRUCKING AND LANDSCAPE E 1OD- 43100 -232 Gravel $308.23 102292 1 112" RIVER ROCK total MILLER TRUCKING AND LANDSCAPE $308.23 Paid Chk# 018574 - 5/1212011 WC",46H FLEET SUPPLY lNC E 100- 43100 -210 Operating Supplies (GENERAL) $87.64 59003 PARTS Total MIMSACH FLEET SUPPLY INC $87.64 Paid Chk# 018575 M 5/12/2011 MN DEPT OF NATURAL RESOURCES E 204 - 42100 -210 Operating Supplies (GENERAL) $570.00 2011 FAS FSA STUDENT FEES Total MN DEPT OF NATURAL RESOURCES $570.00 _ „ UTO PARTS - CORCORAN E 100- 42100 -220 Repair /Maint Supply (GENERAL) ($1.80) 783657 -D DUPLICATE PMT E 100 -43100 -212 Motor Fuels $65.51 787864 SUPPLIES Total NAPA AUTO PARTS - CORCORAN $63.71 Paid Chk# *018577 F„rc 5/12/2011 NEXTEL�COMMUNICATIONS E 100 -42100 -321 Telephone $287.22 317169127098 CELLULAR TELEPHONES Total NEXTEL COMMUNICATIONS $287,22 P2 d Chic# 018578 p 511 212 0 1 1 NORTHLAND TRUST di, i - E 309 - 47000 -610 Interest $10,480.50 060111 2008 CIP Total NORTHLAND TRUST SERVICES $10,480.50 w'n,- ,9n.���®NK,,,,, .�_:.. .......:.. Paid Chk# 018579 5112!2011 NW TRAILS ASSOCIATION E 100 -45200 -530 Improvements Other Than Bldgs $8,955.70 3RD 3RD BENCHMARK Total NW TRAILS ASSOCIATION $8,955.70 ,Paid-Chk# -0 850....... 16 2/20iLi' '. &OICE DEPOT..,..��, E 100 - 42100 -200 Office Supplies (GENERAL) $16.25 591889315001 SUPPLIES E204-42100-210 Operating Supplies (GENERAL) $14.67 591889315001 SUPPLIES Total OFFICE DEPOT $30.92 Paid Chk# 018581 ���511 212 0 1 1 ����RANDY' S�SANITATIO����������� E 100 - 43100 -38D Utility & Services (GENERAL) E 100- 45200 -380 Utility & Services (GENERAL) E 100-41941-980 Utility & Services (GENERAL) Total RANDY'S SANITATION $132.06 11013 -04 GARBAGE SERVICE $194.22 14039 -04 GARBAGE SERVICE $236.24 1280351 -4 CITY HALL REFUSE $562.52 Paid Chk# 01$582 5!1212011 RATWIK, ROSZAK & MALONEY, P.A. E 100 -41600 -300 Professional Srvs (GENERAL) $416.70 47429 MAR 2011 Total RATWIK, ROSZAK & MALONEY, P.A. $416.70 CITY OF CORCORAN 05/05/11 10:30 AM Page 5 *Check Detail Register@ May 2011 Check Amt Invoice Comment Paid Chk# 018583 5/12/2011 ROLF ERICKSON_ENTERPRISES INC E 100- 41550 -300 Professional Srvs (GENERAL) $4,107.00 033111 MARCH 2011 E100-41550-210 Operating Supplies (GENERAL) $22.33 033111 MARCH 2011 E100-41550-210 Operating Supplies (GENERAL) $191.55 042911 APR 2011 E 100- 41550 -300 Professional Srvs (GENERAL) $4,107.00 042911 APR 2011 Total ROLF ERICKSON ENTERPRISES INC $8,427.88 Paid Chk# 018584 5/12/2011 SPRINT E 100 -42100 -323 Radio Units $156.00 193109814041 AIR CARDS MDC /RADIO UNITS Total SPRINT $156.00 Paid Chk# 018585 5/12/2011 STEELMAN, PAULA, E 100 -42100 -200 Office Supplies (GENERAL) $169.88 050411 MILEAGE Total STEELMAN, PAULA $169.88 Paid Chk# 018586 "� 5£12/2011 SUN-PRESS & E 100 -43100 -228 Dust Control $158.46 1314423 DUST CONTROL PUBLIC HEARING Total SUN PRESS & NEWSPAPERS $158,46 G 100 -21707 Union Dues $343.44 0511 MAY 2011 DUES /LDF Total TEAMSTER LOCAL 320 $343.44 NidClik# (718566___61 M6_1P _WESTSIDEWHOjLESALETIRE E 100- 43100 -220 Repair /Maint Supply (GENERAL) $15.00 658262 TIRE REPAIR Total WESTSIDE WHOLESALE TIRE $15.00 "Paid Chk #'0'18589 . " " "" 511212011,u ..,,,YOCUM OIL - COMPANY INCm _. .. ..... ,. ,.,.w..... ,.., w,_...0 ., E 100 -42100 -212 Motor Fuels $1,870,05 432183 SQUAD FUEL E 100 -43100 -212 Motor Fuels $442.68 432184 DIESEL E 100- 42100 -212 Motor Fuels $909.64 433073 SQUAD FUEL E 100- 43100 -212 Motor Fuels $1,040.68 433173 DIESEL Total YOCUM OIL COMPANY INC .............. ............................... $4,263.05 . 10100 Farmers State Bank $82,424.00 Fund Summary 10100 Farmers State Bank 100 GENERAL FUND $64,078.69 204 FIREARMS SAFETY $2,207.79 205 DWI FORFEITURE FUND $31.67 309 D /S- EQUIPMENT CERTS $15,486.50 401 TAX INCREMENT FINANCING $206.25 416 CAPITAL - EQUIPMENT CERTS $413.10 $82,424.00 City of Corcoran Consultant Summary 5112/2011 Name Invoice Date Check # Amount Due Bonestroo 04/09/11 18548 651.50 Carson, Clelland & Schreder 04/29/11 18551 4,998.59 KDV, LTD 04/26/11 18568 175.50 Ratwik, Roszak & Malone 04/01/11 18582 416.70 Rolf Erickson Enterprises 03/28/11 18583 4,129.33 Rolf Erickson Enterprises 04/25/11 18583 4,298.55 Total 14,670.17 HACity Nall Information\CiTY GOVERNMENTICouncil, Commissions & Committees\Council Information\Council Claims12011 Claims.xls 2335 Highway 36 W St. Paul, MN 55113 Tel 651- 636 -4600 Fax 651- 636 -1311 www.bonestroo.com April 20, 2011 Bonestroo Mr. Dan Donahue City Administrator City of Corcoran 8200 County Road 116 Corcoran, MN 55340 -2113 Re: Services rendered through April 9, 2011 Dear Dan: Please find enclosed our invoice dated April 20, 2011, for the project listed below. This invoice is due within 30 days. Project Name invoice No. Amount 000504 - 10148 -0 DNR Grant Zonin Ordinance 187709 651.50 Total Amount Due: $ 651.50 Thank you for allowing us to provide our services to your community. Please remit all invoice payments to our iockbox at Bonestroo, P.O. Box 1521, Dept. #1156, Minneapolis, MN 55480- 1521. If you have questions regarding this invoice, please contact me at (651) 967 -4537. Sincerely, BONESTROO C 0 A7�r4� Tina Goodroad Project Manager Enclosures April 20, 2011 City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Invoice No: 187709 Invoice Amt: $651.50 Professional Services from March 6, 2011 to April 9, 2011 (Project 000504 - 10148 -0 Corcoran DNR Grant Zoning Ordinance Additional Services Prepare GIS zoning map updates per request. Project Manager GIS Specialist Total Labor Billings to Date Current Prior Hourly 651.50 22,004.50 Expenses 0.00 1,093.27 Totals 651.50 23,097.77 Hours Rate Amount 2.50 115.00 287.50 4.00 91-00 364.00 6.50 651.50 Total this Phase Total this Invoice Total 22,656.00 1,093.27 23,749.27 2335 Highway 36 W St. Paul, MN 55113 Tel 651- 636 -4600 fax 651 -636 -1311 www,6onegw,com At Bonestroo All invoices are due and payable within 30 days. Interest will be charged at an annual rate of 18% on all amounts not paid within 30 days. Please remit all invoice payments to our lockbox: Bonestroo PO Box 1521, Dept. #1156 Minneapolis, MN 55480 -1521 All other correspondence should continue to be sent to your local Bonestroo office. $651.50 $651.50 CARSON, CLELLAND & SCHREDER Attorneys at Law 6300 SHINGLE CREEK PARKWAY STE 305 MINNEAPOLIS, MN 55430 -2190 (763)-561-2800 April 29, 2011 CITY OF CORCORAN 8200 CO RD 116 CORCORAN, MN 55340 Professional Services Amount ..Civil 4/7/2011 Review all files for work 45.83 4/1212011 Research case law regarding city's authority to regulate building materials 150.42 Review roofing materials issue; conference with Loren and receipt of memorandum from 183.33 Kendra 4/13/2011 Research regulation of building materials; correspondence with Minnetonka City Attorney; 166.25 prepared /edit research memorandum 4/14/2011 Review building code research and correspondence to Kendra and Loren 206.25 Preparation for and meet with Dan and Sean regarding code enforcement issues 275.00 4/18/2011 Review League information from Kendra regarding use of metal 91.67 4/20/2011 Conference with Kendra regarding miscellaneous items, including, charitable gambling, code 68.75 enforcement and codification 4/21/2011 Legal research regarding City's authority to regulate building materials 126.67 4/22/2011 Conference with Attorney Jeffrey Carson; draft research memo regarding City's ability to 308.75 regulate building materials; correspondence with the League of MN Cities and research multiple city ordinances Conference with Attorney John Thames regarding metal and buildings and code provisions 68.75 SUBTOTAL: [ 1,691.671 .Dust Control Ordinance 4/18/2011 Review Dust Control (special assessment) Ordinance and email to Jeanie 183.33 SUBTOTAL: [ 183.33] .Peddler, Solicitor Ordinance 4/18/2011 Review notes from Dan and attachments 91.67 4/20/2011 Review of peddler and solicitor ordinances; draft council memo 206.25 4/21/2011 Finalize memorandum and email to Jeanie and Dan 183.33 CITY OF CORCORAN Page Amount SUBTOTAL: [ 481.25] .Sewer and Water 3/31/2011 Review email from Kent; review of documents (right -of- entry) and comment 206.25 SUBTOTAL: [ 206.25] Criminal 3/29/2011 Ploetz - review motion, review cases adn draft reply 190.00 Review voice mails and email correspondence regarding criminal matters 15.83 3/30/2011 Preparation of 3/23111 disposition letter; review files; correspondence to victims and 47.50 witnesses; memorandums to the files and instructions to legal assistant regarding document preparation Ploetz - Revisions to reply 47.50 Preparation for and attendance at Arraignment and Pretrial calendar 95.00 Review Court Trial file; review memorandum; discuss cases with Attorney John Thames; 110.83 review email correspondence and review police reports 3/31/2011 Correspondence with defense attorneys, Court Administration and preparation of disposition 23.75 letter; memorandums to the files and instructions to legal assistant 4/4/2011 Review motion documents; correspondence to defendants; memorandums to the files; 23.75 preparation for 4/5/11 Arraignment and Pretrials calendar; review files, instructions to legal assistant 4/5/2011 Attend Arraignment, Pretrial calendar and Probation Violation calendar 23.75 Preparation for 4/6/11 Arraignment and Pretrials; review and note to files 15.83 Research regarding hazardous substance; telephone conference with BCA 47.50 4/6/2011 Attend Arraignment, Pretrial calendar; note offers; update victim information; memorandums 47.50 to the files Preparation of correspondence to defense attorney and review of file 47.50 4/7/2011 Email correspondence with defense attorneys; correspondence with defendants and 31.67 witnesses; email correspondence with officers; review and confirm case resolution; update appearances on calendar; note files and preparation of disposition letters, review files, correspondence to victims, memorandums to the files and instructions to legal assistant 4/8/2011 Preparation of correspondence to defendant with offer in criminal case 39.58 4/10/2011 Preparation of one complaint 40.00 Review police reports and issue decline letter 31.67 4/11/2011 Review case resolution; preparation of disposition letter, review files, correspondence to 23.75 victims and witnesses; memorandums to the files and email correspondence with Court Administration Preparation of one complaint 40.00 Review charging Marcos and criminal statues; revise criminal complaints 31.67 4/12/2011 Review hearing officer guidelines; emails with Court Administration 15.83 4/13/2011 Jury trial preparation; email correspondence with defense attorneys and Court 23.75 Administration; review reports; note offers; note files and address discovery issues 4/14/2011 Discuss cases with Attorney John Thames; review criminal histories; preparation of 31.67 memorandums to the files; select witnesses for upcoming trials Correspondence with defendants and officers; jury trial preparation; review files; review 23.75 discovery; research charging issues and note files 4/15/2011 Review recent forfeiture case on appeal regarding DWI related forfeitures 15.83 4/19/2011 Attend Arraignments, Pretrials 47.50 CITY OF CORCORAN Page 3 Amount 4/19/2011 Correspondence with defense attorneys, defendants, victims; notes to files; review 23.75 discovery; preparation for Arraignment and Pretrials calendar, review files, memorandums to the files and instructions to legal assistant Telephone conference with defense attorney regarding continuance request; instructions to 47.50 legal assistant Pretrial calendar 71.25 4/20/2011 Attend Arraignment and Pretrials calendar 23.75 Disposition letter following court 15.83 4/21/2011 Review email correspondence; review files; preparation of disposition letter for 4/19/11 530.42 calendar; preparation of correspondence to victims and witnesses for upcoming trials; preparation of memorandum to files 4/22/2011 Correspondence with defendants; jury trial preparation, memorandums to the files and 63.33 instructions to legal assistant Preparation of criminal complaints; preparation of cases for trial, court and jury; contact and 481.25 notice to witnesses for trial testimony for monthly period SUBTOTAL: [ 2,389.99] Vehicle Forfeiture: 4/1/2011 Review and respond to emails regarding forfeiture case with lien holder 31.67 SUBTOTAL: [ 31.67] For professional services rendered $4,984.16 Client Expense Charges Criminal Expenses: Monthly support fee 14.43 SUBTOTAL: [ 14.43] Total Client Expense Charges $94.43 Total amount of this bill $4,998.59 Previous balance $2,649.84 4/21/2011 Payment- thank you ($2,649.84) Total payments and adjustments ($2,649.84) Balance due $4,998.59 CITY OF CORCORAN Page i hereby declare under the penalties of perjury that the foregoing statement for legal services is just and correct and that no part thereof has been paid. Jeffrey A. Carson, City Attorney Frpert ud,i,, li'lrvn you —edit. CerrTfiad Fr hfrr dr;-ouwaw' Wealrn –fan r"errrear rnices LJrvureas Pufrurtlwrs Te cfo i o k,�7 City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Invoice No. 926747 Date 0412612091 T"i" Cities 3800 American 130nIAYald W SLIJIC 1000 Blo.nim wn. Minnesota 55431 Phone: 952.563 OW Fax', 9.52.563,680I St. Cloud 220 P.Erk A—.e S- P -O_ Box 1303 Sr, Cloud. Minnesota 56302 Phonti : 320.251.7010 Fax: 320351.1794 Client No. PLF.,5SE i2FTLaN THIS STUB WITH REMITTANCE TO'I HE ST. CLOW) OFFICE Consulting Services Provided by Joe Rigdon 03124111: to 03/31/11 (see attached detail) 10760 wwr .kdv.cotu 877.912.7696 Technology HOP De,gk; 866.400.6426 175.50 New Charges $ 175.50 Prior Balance 0.00 Totall3alance`Due'' $ 175.50 0-30 31- 60 61 -90 91 -120 over 120 Balance 175.50 0.00 0.00 0.00 0.00 175.50 FOR YOUR CONVENIENCE Now accepting Master Card, Visa, American Express, Discover and your Bank Check Card. Call us to process. I% monthly finance charge added to balances over 60 days. Expert advice. When yorr need if." Coro ied Puhl". A'(oeantrants IYealrla 'W wigo'r ' w Fanrod Se)I'kes Bus -" Ual..I —v Ter lmrlag): Servwe,. Twin Citiea St. Claud 3$00 America,, Houlc,,ard W, 220 Park Avenue S. Suite 1000 P.O. Box 1304 Sl— minglon, Minnesota St. Mud, Minnesota 55431 56302 Phone - 952.563.6800 Phone - 320,251.70I0 Fax, 1)52 563 6801 Fax, 320.251.1784 W "'kdv.caw 977.912.7696 Technology Help Desk: 866.400.6426 0 A ao 0C3oao0 00 G C ,o r� ga 00 tl 0�0u1 �.O�+tO a�.t 00 m t o W 1cmk �Wm "0 -4K)W W aka¢ oloOOO°a I00a O m-+ V W OOa CDNP w iO aL4 �ft6Nw id C3 �-�sy - CwP ` CA Gp, ap caWi+ CAA CW1l O 4OC'J. C Q 00 N WA W W AUtN y. (WQ I CA O -4 V 11 12 Q O 4 pp 0 0 0 tl Q a 0 4 4 tl -n AO m c pt mo d © D Ol am ,, 5, m 81 mom in � a 3 wm u $ n tf/o p � N W j m A c a mQ m n c� m W s a� a p° sco a 3 i ? O 7 m 7 G C ,o r� ga C m t s a� a p° sco a 3 i ? O 7 m Tel - (612) 339 -0060 City of Corcoran Mr. Dan Donahue 8200 County Rd 116 Corcoran, MN 55340 -2113 Ratwik, Roszak & Maloney, P.A. 300 U.S. Trust Building 730 Second Avenue S. Minneapolis, MN 55402 Federal Tax ID# - 41- 1605983 Statement as of: March 31, 2011 Statement Number: 47429 Fax - (612) 339 -0038 April 1, 2011 4016 -0031: Motion vacate Arbitration Award Professional Services Hours 3/14/2011 MAS Review court order granting motion to modify arbitration decision and 1.20 award; Telephone conference with Chief Gormley regarding court order; E -mail court order to city officials; Telephone conference with SMS regarding implementation of court order. 3/15/2011 CRS Draft letter to arbitrator regarding Court Order; Prepare redacted 0.80 Award to comply with Court Order. 3/15/2011 MAS E -mail Josh Tilsen copy of order; Review and revise letter to Arbitrator 0.40 Bernice Fields, 3/18/2011 MAS Review e -mail from Arbitrator Fields; E -mail city officials regarding 0.10 revised arbitration award. Sub -total Fees: 337.50 Rate Summary Christian R. Shafer 0.80 hours at $ 135.00/ hr. Margaret A. Skelton 1.70 hours at $ 135.00/ hr. Total Hours: 2.50 Disbursements Delivery Fees 13.00 Printing /Photocopies - Taxable 54.60 Postage 7.63 Sub -total Disbursements: 75.23 Ratwik, Roszak & Maloney, P.A. Sales Tax: Total Services and Disbursements: Previous Balance Due: Total Now Due: I declare under the penalties of law that this account, claim or demand is true and correct and that no part thereof has been paid. ,RATW €K, ROSZAK & MALONEY, P.A. BJ _W ,,Atcounts Manager Page: 2 3.97 4 L40.50 457.24 STATEMENT 28- Mar -11 ROLF ERICKSON ENTERPRISES, INC. SOUTWEST ASSESSING P O BOX 47841 PLYMOUTH, MN 55447 CITY OF CORCORAN 8200 Co. Rd. 116 CORCORAN, MN 55340 MARCH 2011 ASSESSING FEE COUNTY DATA FEE BOARD OF REVIEW COPIES POSTAGE $4,107.00 $16.44 $4.19 $1.70 TOTAL $4,129.33 STATEMENT 25 -Apr -11 ROLF ERICKSON ENTERPRISES, INC. SOUTWEST ASSESSING P O BOX 47841 PLYMOUTH, MN 55447 CITY OF CORCORAN 8200 Co. Rd. 116 CORCORAN, MN 55340 APRIL 2011 ASSESSING FEE COUNTY DATA FEE $4,107.00 $16.44 MARSHALL VALUATION SERVICE YEARLY UPDATE $175.11 TOTAL $4,298.55