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2009 Annual Financial Report COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF CHANHASSEN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2009 Finance Department Greg Sticha, Finance Director Member of Government Finance Officers Association of United States and Canada - This page intentionally left blank - CITY OF CHANHASSEN, MINNESOTA TABLE OF CONTENTS Page ReferenceNo. I. INTRODUCTORY SECTION Letter of Transmittal3 Certificate of Achievement7 Organization9 Organization Chart10 II. FINANCIAL SECTION Independent Auditor's Report13 Management's Discussion and Analysis15 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net AssetsStatement 131 Statement of ActivitiesStatement 232 Fund Financial Statements: Balance Sheet - Governmental FundsStatement 334 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental FundsStatement 436 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds Statement 538 Statement of Net Assets - Proprietary FundsStatement 639 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary FundsStatement 740 Statement of Cash Flows - Proprietary FundsStatement 841 Statement of Net Assets - Fiduciary FundsStatement 942 Notes to Financial Statements43 Required Supplementary Information: Budgetary Comparison Schedule - General FundStatement 1080 Budgetary Comparison Schedule - Note to RSI86 CITY OF CHANHASSEN, MINNESOTA TABLE OF CONTENTS Page ReferenceNo. Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental FundsStatement 1192 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental FundsStatement 1293 Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1396 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue FundsStatement 1497 Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 15100 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Debt Service FundsStatement 16102 Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 17106 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Project FundsStatement 18108 Special Revenue Funds: Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Contribution FundStatement 19110 CATVStatement 20111 Combining Statement of Net Assets - Agency FundsStatement 21114 Combining Statement of Changes in Assets and Liabilities - Agency FundsStatement 22115 Supplementary Financial Information: Combined Schedule of IndebtednessExhibit 1118 Debt Service Payments to Maturity: General Obligation BondsExhibit 2120 General Obligation Improvement BondsExhibit 3121 Revenue BondsExhibit 4122 Taxable Valuations, Tax Levies and Tax RatesExhibit 5123 Schedule of Deferred Tax LeviesExhibit 6124 CITY OF CHANHASSEN, MINNESOTA TABLE OF CONTENTS Page ReferenceNo. III. STATISTICAL SECTION (UNAUDITED) Financial Trends: Net Assets by ComponentTable 1128 Changes in Net AssetsTable 2130 Fund Balances - Governmental FundsTable 3134 Changes in Fund Balances - Governmental FundsTable 4136 Revenue Capacity: Tax Capacity and Estimated Market Value of Taxable PropertyTable 5138 Direct and Overlapping Property Tax RatesTable 6140 Principal Property TaxpayersTable 7141 Property Tax Levies and CollectionsTable 8143 Debt Capacity: Ratios of Outstanding Debt by TypeTable 9144 Direct and Overlapping Governmental Activities DebtTable 10146 Legal Debt Margin InformationTable 11147 Pledged Revenue CoverageTable 12148 Demographic and Economic: Demographic and Economic StatisticsTable 13149 Principal EmployersTable 14151 Operating Information: Full-Time Equivalent City Government Employees by Function/ProgramTable 15152 Operating Indicators by Function/ProgramTable 16154 Capital Asset Statistics by Function/ProgramTable 17156 - This page intentionally left blank - I. INTRODUCTORY SECTION 1 - This page intentionally left blank - 2 7 - This page intentionally left blank - 8 CITY OF CHANHASSEN, MINNESOTA ORGANIZATION December 31, 2009 Term Expires Mayor: Tom Furlong12/31/10 Council Members: Bethany Tjornhom12/31/12 Vicki Erns12/31/10 t Jerry McDonald12/31/12 Bryan Litse12/31/10 y City Manager: Todd GerhardtAppointed Finance Director: Greg StichaAppointed Community Development Director: Kathryn AanensoAppointed n Public Works Director/City Engineer: Paul OehmeAppointed Parks and Recreation Director: Todd HoffmanAppointed 9 CityofChanhassen,Minnesota CityofChanhassen,Minnesota Organization Chart Citizens EnvironmentalSenior CommissionCommission PlanningPark & RecreationPark & Recreation Mayor -Council CommissionCommission Economic Development Development Authority Administration Law EnforcementPublicCommunityParks and Finance & FireWorksDevelopmentRecreation Administration Administration 10 II. FINANCIAL SECTION 11 - This page intentionally left blank - 12 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Chanhassen, Minnesota, we offer readers of the City of Chanhassen, Minnesota’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2009. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. Financial Highlights The assets of the City of Chanhassen, Minnesota exceeded its liabilities at the close of the most recent fiscal year by $161,455,845 (net assets). Of this amount, $26,550,091 (unrestricted net assets) may be used to meet the City’s ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. The City’s total net assets decreased by $5,773,557. As of the close of the current fiscal year, the City of Chanhassen, Minnesota’s governmental funds reported combined ending fund balances of $18,252,869. The amount designated or reserved through legal restrictions and City Council authorization is $18,774,032. At the end of the current fiscal year the general fund balance of $4,873,859, included $46,750 reserved, $3,690,000 designated and $1,137,109 undesignated. The City’s total debt decreased by $5,588,333 during the current fiscal year, from $39,124,676 to $33,536,343. The decrease is attributed to a combination of refinancing the 2005A G.O. Bond and 2006A G.O. SA Bond into the 2009A G.O. Refunding Bond and making current year debt service payments. The refinancing included the use of cash reserves. Overview of the Financial Statements The management’s discussion and analysis is intended to serve as an introduction to the City of Chanhassen, Minnesota’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements . The government-wide financial statements are designed to provide readers with a broad overview of the City of Chanhassen, Minnesota’s finances, in a manner similar to a private-sector business. 15 Managements Discussion and Analysis ’ The statement of net assets presents information on all of the City of Chanhassen, Minnesota’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 of Chanhassen, Minnesota 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 cash flows. 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 of Chanhassen, Minnesota that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Chanhassen, Minnesota include general government, public safety, public works, parks and recreation and community development. The business-type activities of the City of Chanhassen, Minnesota include water, sewer, and surface water management. The government-wide financial statements can be found on Statements 1 and 2 of this report. Fund Financial statements . A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Chanhassen, Minnesota, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Chanhassen, Minnesota can be divided into three categories: governmental funds, proprietary 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 financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 16 Managements Discussion and Analysis ’ The City of Chanhassen, Minnesota maintains five individual major 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 following major funds: General Fund 2009A G.O. Refunding Bonds Public Works Facility Revolving Assessment Fund Lyman Blvd Improvements Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Chanhassen, Minnesota adopts an annual appropriated budget for its general and special revenue funds. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on Statements 3 through 5 of this report. Proprietary funds . The City of Chanhassen, Minnesota maintains three enterprise funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the following funds: Water Sewer Surface Water Management The basic proprietary fund financial statements can be found on Statements 6 through 8 of this report. Fiduciary funds . Fiduciary funds are used to account for resources held for benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Chanhassen, Minnesota’s own program. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found on Statement 9 of this report. 17 Managements Discussion and Analysis ’ Notes to the financial statements . The notes provide additional information that is essential to a full understanding of the data provided in the government–wide and fund financial statements. The notes to the financial statements can be found following Statement 9 of this report. Other information. The combining statements referred to earlier in connection with non- major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on Statement 11 through 22 of this report. Government-Wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Chanhassen, Minnesota, assets exceeded liabilities by $161,455,845 at the close of the most recent fiscal year. The largest portion of the City of Chanhassen, Minnesota’s net assets ($127,603,117 or 79%) reflects its investment in capital assets (e.g. land, buildings, machinery, and equipment) net of any related debt used to acquire those assets that is still outstanding. The City of Chanhassen, Minnesota uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Chanhassen, Minnesota’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. CITY OF CHANHASSEN, MINNESOTA'S NET ASSETS Governmental ActivitiesBusiness-Type ActivitiesTotals 200920082009200820092008 Assets: Current and other assets$26,773,873$37,338,712$12,680,187$13,870,692$39,454,060$51,209,404 Capital assets92,111,19988,717,20767,191,91967,956,752159,303,118156,673,959 Total assets$118,885,072$126,055,919$79,872,106$81,827,444$198,757,178$207,883,363 Liabilities: Long-term liabilities outstanding$21,732,346$26,606,863$11,803,997$12,517,813$33,536,343$39,124,676 Other liabilities3,322,849878,729442,141650,5563,764,9901,529,285 Total liabilities$25,055,195$27,485,592$12,246,138$13,168,369$37,301,333$40,653,961 Net assets: Invested in capital assets, net of related debt$72,106,198$70,611,368$55,496,919$55,541,752$127,603,117$126,153,120 Restricted7,302,63712,787,568 - - 7,302,63712,787,568 Unrestricted14,421,04215,171,39112,129,04913,117,32326,550,09128,288,714 Total net assets$93,829,877$98,570,327$67,625,968$68,659,075$161,455,845$167,229,402 18 Managements Discussion and Analysis ’ A portion of the of the City of Chanhassen, Minnesota’s net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($26,550,091) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Chanhassen, Minnesota is able to report positive balances in all three categories of net assets, both for the City as a whole, as well as for its separate governmental and business-type activities. Governmental Activities Total net assets of the City’s governmental activities decreased $4,740,450, or 4.8%. The components of net assets increased or decreased as follows: Net assets invested in capital assets, net of related debt, increased $1,494,830 due primarily to the construction of the Public Works Facility which was offset by current year depreciation. Net assets restricted for debt service decreased $5,703,873. The decrease is attributed to a combination of refinancing the 2005A G.O. Bond and 2006A G.O. SA Bond into the 2009A G.O. Refunding Bond and making current year debt service payments. The refinancing included the use of cash reserves. Net assets restricted for tax increment purposes increased $218,942. Unrestricted net assets decreased $750,349. Liabilities decreased $2,430,397, or 8.8%, in 2009. This was primarily due to the same reason indicated above; the refinancing of the 2005A G.O. Bond and 2006A G.O. SA Bond into the 2009A G.O. Refunding Bond. 19 Managements Discussion and Analysis ’ Business-type Activities The net assets of the City’s business-type activities decreased by $1,033,107, or 1.5%. Amounts invested in capital assets, net of related debt decreased $44,833 and unrestricted net assets decreased $988,274, due to amounts expended for various infrastructure projects. City of Chanhassen, Minnesota's Changes in Net Assets Governmental ActivitiesBusiness-Type ActivitiesTotals 200920082009200820092008 Revenues: Program revenues: Charges for services$2,272,423$3,051,081$5,580,042$5,074,906$7,852,465$8,125,987 Operating grants and contributions363,540346,0235,33236,350368,872382,373 Capital grants and contributions1,265,2873,221,6361,684,9821,527,6242,950,2694,749,260 General revenues: Property taxes9,921,5989,651,758 - - 9,921,5989,651,758 Tax increment collections473,674574,101 - - 473,674574,101 Grants and contributions not restricted to specific programs27,612108,039 - - 27,612108,039 Unrestricted investment earnings357,9531,150,993141,070797,079499,0231,948,072 Miscellaneous - - 10,54922,46410,54922,464 Gain on sale of capital assets4,52432,195 - - 4,52432,195 Total revenues14,686,61118,135,8267,421,9757,458,42322,108,58625,594,249 Expenses: General government2,597,1472,469,055 - - 2,597,1472,469,055 Public safety3,158,4653,062,941 - - 3,158,4653,062,941 Public works9,123,1656,220,816 - - 9,123,1656,220,816 Parks and recreation3,663,1243,025,987 - - 3,663,1243,025,987 Community development628,339704,979 - - 628,339704,979 Interest on long-term debt1,031,567652,015 - - 1,031,567652,015 Water - - 3,311,1293,234,1393,311,1293,234,139 Sewer - - 3,276,0423,072,5883,276,0423,072,588 Surface water management - - 1,093,1651,121,1971,093,1651,121,197 Total expenses 20,201,80716,135,7937,680,3367,427,92427,882,14323,563,717 Increase in net assets before transfers(5,515,196)2,000,033(258,361)30,499(5,773,557)2,030,532 Transfers774,7461,112,623(774,746)(1,112,623) - - Change in net assets(4,740,450)3,112,656(1,033,107)(1,082,124)(5,773,557)2,030,532 Net assets - beginning, as previously stated98,570,32795,457,67168,659,07569,794,363167,229,402165,252,034 Prior period adjustment - - - (53,164) - (53,164) Net assets - beginning, as restated98,570,32795,457,67168,659,07569,741,199167,229,402165,198,870 Net assets - ending$93,829,877$98,570,327$67,625,968$68,659,075$161,455,845$167,229,402 20 Managements Discussion and Analysis ’ Governmental Activities Revenues Revenues for the City’s governmental activities decreased by $3,449,215, or 19%. Capital grants and contributions decreased by approximately $2 million which was primarily due to a one year infusion of state aids in the previous year. Expenses Expenses for the City’s governmental activities increased by $4,066,014, or 25%. Public works increased approximately $2.9 million due to expenses related to the construction of the public works facility and Parks and Recreation increased approximately $600,000 due to a contribution to Independent School District #112 for athletic fields at the new Chanhassen High School. Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Grants and contributions not restricted to specific programs Tax increment collections 3.2% Governmental Activities -Revenues 0.2% Gain on sale of capital assets 0.1% Unrestricted investment earnings 2.4% Charges for services 15.6% Operating grants and contributions 2.4% Property taxes 67.5% Capital grants and contributions 8.6% 21 Managements Discussion and Analysis ’ Interest on long-term debt Governmental Activities -ExpensesGovernmental Activities -Expenses 5% Community development 3% General government 13% Publicsafety 16% Parks and recreation 18% Public works 45% Business-Type Activities Revenues Revenues for the City’s business-type activities decreased by $36,448, or 0.5%. In addition to the decrease in revenues mentioned above, transfers to business-type activities on the statement of activities decreased from $1,112,623 in 2008 to $774,746 in 2009. This reduction is attributed to fewer construction related transfers in 2009 as compared to 2008. Expenses The City’s expenses for business-type activities increased by $252,412, or 3%. There are no specific significant items that can be attributed to the increases in expenses during 2009. 22 Managements Discussion and Analysis ’ Below are specific graphs showing the business-type activities revenue and expense comparisons: Unrestricted investment Miscellaneous 0.1% earnings 1.9% Business-TypeActivities -Revenue Capital grants and contributions 22.9% Operating grants and contributions 0.1% Charges for services 75% Business-Type Activities -Expenses Surface Water 14.2% Water 43.1% Sewer 42.7% 23 Managements Discussion and Analysis ’ Financial Analysis of the Government's Funds Governmental Funds . The focus of the City of Chanhassen, Minnesota’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 of Chanhassen, Minnesota’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. At the end of the current fiscal year, the City of Chanhassen, Minnesota’s governmental funds reported combined ending fund balances of $18,252,869. Approximately 86.4% of this total amount ($15,776,998) constitutes unreserved, but designated, fund balance. The reserved portion of the fund balance ($2,997,034) has already been committed 1) to provide for prepaid items ($47,071), 2) for future programs ($36,332), and 3) to pay debt service ($2,913,631). The general fund decreased by $7,860 in 2009. This small decrease was the outcome of a significant decrease in permit revenue for 2009, which was offset by significant reductions in spending within the general fund. The 2009A G.O. Refunding Bonds debt service fund increased by $350,598, which was due to the creation of this fund in 2009. The Public Works Facility capital project fund decreased by $6,056,328, which was due to expenses related to construction of the facility. The Revolving Assessment fund decreased by $1,031,616. The decrease was related to the significant decrease in transfers in from other funds for costs associated with construction projects accounted for within this fund. The Lyman Blvd Improvements fund decreased by $2,204,259. The decrease was due to expenses related to the construction of Lyman Blvd. The nonmajor special revenue funds increased by $150,429 in 2009. There were no significant expenses or capital costs within the CATV fund for 2009. The nonmajor debt service funds decreased by $3,973,558 in 2009, due to regularly scheduled debt service payments and the refinancing of the 2005A G.O. Bond and 2006A G.O. SA Bond into the 2009A G.O. Refunding Bond. The nonmajor capital project funds decreased by $11,981. There were no significant items that attributed to this decrease. 24 Managements Discussion and Analysis ’ Proprietary funds . The City of Chanhassen, Minnesota’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The unrestricted net assets in the respective proprietary funds are water $6,327,568, sewer $3,780,559 and surface water management $2,020,922. The water fund had an increase in net assets in 2009 of $237,793 while the sewer and surface water management funds had decreases in net assets of $972,925 and $297,975, respectively. Budgetary Highlights General Fund The expenditure and revenue budgets were amended in 2009. Budgetary Variances – Revenues The negative general fund revenue variance of $262,933 was mostly due to lower than anticipated investment earnings for 2009. Budgetary Variances – Expenses The City’s expenses for the general fund had a positive variance of $437,773, which was 4.6% of the City’s total budget. A number of items contributed to this positive variance; the most significant of which was cost savings in the fuel and legal budgets for 2009. 25 Managements Discussion and Analysis ’ Capital Asset and Debt Administration Capital assets . The City of Chanhassen, Minnesota’s, investment in capital assets for its governmental and business type activities as of December 31, 2009, amounts to $159,303,118 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery and equipment. City of Chanhassen, Minnesota’s Capital Assets (Net of Depreciation ) BeginningEnding Primary GovernmentBalanceIncreaseDecreaseBalance Governmental activities: Capital assets not being depreciated: Land$17,024,757$1$ - $17,024,758 Construction in progress4,319,2447,728,701(4,071,838)7,976,107 Total capital assets not being depreciated21,344,0017,728,702(4,071,838)25,000,865 Capital assets - being depreciated: Buildings and structures15,203,969268,447 - 15,472,416 Machinery and equipment6,805,509415,535(81,047)7,139,997 Other improvements 5,137,66671,402 - 5,209,068 Infrastructure103,910,3734,251,322(1,087,467)107,074,228 Total capital assets being depreciated131,057,5175,006,706(1,168,514)134,895,709 Less accumulated depreciation for: Buildings and structures4,093,092368,077 - 4,461,169 Machinery and equipment4,187,507442,257(73,350)4,556,414 Other improvements 1,526,632235,150 - 1,761,782 Infrastructure53,877,0804,038,030(909,100)57,006,010 Total accumulated depreciation63,684,3115,083,514(982,450)67,785,375 Governmental activities capital assets - net$88,717,207$7,651,894($4,257,902)$92,111,199 BeginningEnding Primary GovernmentBalanceIncreaseDecreaseBalance Business-type activities: Capital assets not being depreciated: Land$1,895,136$88,908$ - $1,984,044 Construction in progress5,681,958998,228(5,514,555)1,165,631 Total capital assets not being depreciated7,577,0941,087,136(5,514,555)3,149,675 Capital assets - being depreciated: Buildings and structures12,445,429 - - 12,445,429 Machinery and equipment2,242,180140,384(20,209)2,362,355 Other improvements 88,194,1846,527,250(274,195)94,447,239 Total capital assets being depreciated102,881,7936,667,634(294,404)109,255,023 Less accumulated depreciation for: Buildings and structures249,591248,909 - 498,500 Machinery and equipment1,063,992132,870(20,209)1,176,653 Other improvements 41,188,5522,601,969(252,895)43,537,626 Total accumulated depreciation42,502,1352,983,748(273,104)45,212,779 Business-type activities capital assets - net67,956,7524,771,022(5,535,855)67,191,919 Total capital assets - net$156,673,959$12,422,916($9,793,757)$159,303,118 Additional information on the City of Chanhassen, Minnesota’s capital assets can be found in Note 4. 26 Managements Discussion and Analysis ’ Long-term debt . At the end of the current fiscal year, the City of Chanhassen, Minnesota had total bonds payable outstanding of $33,529,411, a decrease of $5,591,462 from 2008. The decrease is attributed to a combination of refinancing the 2005A G.O. Bond and 2006A G.O. SA Bond into the 2009A G.O. Refunding Bond and making current year debt service payments. The balance of the bonds payable outstanding is comprised of: $13,045,000 in general obligation bonds, $6,625,000 for special assessment debt which is supported in part by special assessments, $11,695,000 of revenue bonds which financed capital investments for the water, sewer and surface water management operations and $960,000 in tax increment bonds. Additional long-term debt in the amount of $869,411 for compensated absences was also outstanding at the end of 2009. City of Chanhassen, Minnesota’s Outstanding Debt Governmental ActivitiesBusiness-Type ActivitiesTotals 200920082009200820092008 General obligation bonds$13,045,000$13,905,000$ - $ - $13,045,000$13,905,000 Revenue bonds335,000435,00011,695,00012,415,00012,030,00012,850,000 Tax increment bonds960,0001,015,000 - - 960,0001,015,000 General improvement bonds 6,625,0007,155,000 - - 6,625,0007,155,000 Loan payable for highway construction - 3,375,125 - - - 3,375,125 Compensated absences760,414717,935108,997102,813869,411820,748 Total$21,725,414$26,603,060$11,803,997$12,517,813$33,529,411$39,120,873 The City’s bond rating was reaffirmed in 2009 by Standard & Poor’s when the City issued the 2009A G.O. Refunding Bonds. The City of Chanhassen is one of only 12 communities in the State of Minnesota to have a AAA bond rating from either Standard & Poor’s or Moody’s. State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total estimated market value. The current debt limitation for the City of Chanhassen, Minnesota is $105,056,604. Of the City's outstanding debt, $11,175,086 is counted within the statutory limitation. Additional information on the City of Chanhassen, Minnesota’s long-term debt can be found in Note 5. Requests for information. This financial report is designed to provide a general overview of the City of Chanhassen, Minnesota’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, 7700 Market Boulevard, P.O. Box 147, Chanhassen, Minnesota 55317. 27 - This page intentionally left blank - 28 BASIC FINANCIAL STATEMENTS 29 - This page intentionally left blank - 30 CITY OF CHANHASSEN, MINNESOTA Statement 1 STATEMENT OF NET ASSETS December 31, 2009 Primary Government GovernmentalBusiness-TypeTotals Assets:ActivitiesActivities20092008 Cash and investments$20,854,264$10,893,723$31,747,987$43,430,687 Accrued interest receivable163,02781,757244,784367,802 Due from other governmental units52,5254,27056,79531,690 Accounts receivable - net79,5751,134,5521,214,1271,347,174 Property taxes receivable661,875 - 661,875417,816 Special assessments receivable5,265,905186,0075,451,9125,564,257 Prepaid items47,0719,29656,36723,538 Internal balances(350,369)350,369 - - Inventories - at cost - 20,21320,21326,440 Capital assets (net of accumulated depreciation): Nondepreciable25,000,8653,149,67528,150,54028,921,095 Depreciable67,110,33464,042,244131,152,578127,752,864 Total assets118,885,07279,872,106198,757,178207,883,363 Liabilities: Accounts payable389,47193,214482,685346,017 Accrued interest payable375,342197,915573,257320,206 Contracts payable584,34860,585644,933270,035 Due to other governmental units1,745,29856,4441,801,742206,136 Salaries payable188,43333,833222,266293,926 Unearned revenue39,95715040,10792,965 Compensated absences payable: Due within one year44,5296,38250,91150,952 Due in more than one year715,885102,615818,500769,796 Other post employment benefits payable: Due in more than one year6,932 - 6,9323,803 Loans payable: Due within one year - - - 318,002 Due in more than one year - - - 3,057,123 Bonds payable: Due within one year1,880,000740,0002,620,0002,955,000 Due in more than one year19,085,00010,955,00030,040,00031,970,000 Total liabilities25,055,19512,246,13837,301,33340,653,961 Net assets: Invested in capital assets, net of related debt72,106,19855,496,919127,603,117126,153,120 Restricted for: Debt service6,461,780 - 6,461,78012,165,653 Tax increment purposes840,857 - 840,857621,915 Unrestricted14,421,04212,129,04926,550,09128,288,714 Total net assets$93,829,877$67,625,968$161,455,845$167,229,402 The accompanying notes are an integral part of these financial statements. 31 CITY OF CHANHASSEN, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2009 Charges For ExpensesServices Functions/Programs Primary government: Governmental activities: General government$2,597,147$530,141 Public safety3,158,4651,163,524 Public works9,123,165171,969 Parks and recreation3,663,124387,615 Community development628,33919,174 Interest and fees on long-term debt1,031,567 - Total governmental activities20,201,8072,272,423 Business-type activities: Water3,311,1292,689,170 Sewer3,276,0422,378,111 Surface water management1,093,165512,761 Total business-type activities7,680,3365,580,042 Total primary government$27,882,143$7,852,465 The accompanying notes are an integral part of these financial statements. 32 Statement 2 Net (Expense) Revenue and Program RevenuesChanges in Net Assets Primary Government OperatingCapital Totals Grants andGrants andGovernmentalBusiness-Type ContributionsContributionsActivitiesActivities20092008 $9,790$ - ($2,057,216)$ - ($2,057,216)($2,027,295) 230,935 - (1,764,006) - (1,764,006)(1,375,531) 100,0001,265,287(7,585,909) - (7,585,909)(2,678,396) 22,815 - (3,252,694) - (3,252,694)(2,128,319) - -(609,165) - (609,165)(655,497) - - (1,031,567) - (1,031,567)(652,015) 363,5401,265,287(16,300,557)0(16,300,557)(9,517,053) -1,024,257 - 402,298402,298(49,376) -495,095 - (402,836)(402,836)(594,464) 5,332165,630 - (409,442)(409,442)(145,204) 5,3321,684,9820(409,980)(409,980)(789,044) $368,872$2,950,269(16,300,557)(409,980)(16,710,537)(10,306,097) General revenues: General property taxes9,921,598 - 9,921,5989,651,758 Tax increment collections473,674 - 473,674574,101 Grants and contributions not restricted to specific programs27,612 -27,612108,039 Unrestricted investment earnings357,953141,070499,0231,948,072 Gain on sale of capital assets4,524 -4,52432,195 Miscellaneous -10,54910,54922,464 Transfers774,746(774,746) - - Total general revenues and transfers11,560,107(623,127)10,936,98012,336,629 Change in net assets(4,740,450)(1,033,107)(5,773,557)2,030,532 Net assets - beginning, as previously stated98,570,32768,659,075167,229,402165,252,034 Prior period adjustment - - - (53,164) Net assets - beginning, as restated98,570,32768,659,075167,229,402165,198,870 Net assets - ending$93,829,877$67,625,968$161,455,845$167,229,402 The accompanying notes are an integral part of these financial statements. 33 CITY OF CHANHASSEN, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2009 368 2009A G.O. 421 Public Works Refunding BondsFacility General Fund Assets: Cash and investments$4,895,880$330,546$1,342,193 Accrued interest receivable26,64810,26931,032 Due from other governmental units52,525 - - Accounts receivable - net16,597 - - Property taxes receivable584,6529,783 - Special assessments receivable4,2793,418,737 - Prepaid items46,750 - - Total assets$5,627,331$3,769,335$1,373,225 Liabilities and Fund Balances Liabilities: Accounts payable$124,067$ - $99,918 Due to other funds - - - Contracts payable - - 573,805 Due to other governmental units92,881 - - Salaries payable185,049 - - Deferred revenue351,4753,418,737 - Total liabilities753,4723,418,737673,723 Fund balances: Reserved for: Prepaid items46,750 - - Future programs - - - Debt service -350,598 - Unreserved reported in: Designated: General Fund3,690,000 - - Special Revenue Funds - - - Capital Project Funds - - 699,502 Undesignated reported in: General Fund1,137,109 - - Debt Service Funds - - - Capital Project Funds - - - Total fund balances4,873,859350,598699,502 Total liabilities and fund balances$5,627,331$3,769,335$1,373,225 Fund balance reported above 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 funds. Other long-term assets are not available to pay for current- period expenditures and, therefore, are deferred in the funds. Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Net assets of governmental activities The accompanying notes are an integral part of these financial statements. 34 Statement 3 603 Lyman Blvd Other 601 Revolving Improvements 06-GovernmentalIntra Activity Assessment Fund03FundsElimination Totals Governmental Funds 20092008 $3,894,287$ - $10,391,358$ - $20,854,264$31,038,698 31,75848762,833 -163,027219,353 - - - -52,52518,989 - -62,978 -79,575321,508 - -67,440 -661,875417,816 1,589,427 -253,462 - 5,265,9055,301,150 - -321 -47,07121,198 $5,515,472$487$10,838,392$0$27,124,242$37,338,712 $4,890$ -$160,596$ - $389,471$234,352 -260,75289,617 -350,369 - 9,698 -845 -584,348170,346 59,0831,593,334 - - 1,745,29820,834 - -3,384 -188,433249,737 1,587,425 -255,817 - 5,613,4545,625,999 1,661,0961,854,086510,25908,871,3736,301,268 - -321 -47,07121,198 - -36,332 -36,33229,499 - - 2,563,033 - 2,913,6316,641,747 - - - - 3,690,0003,586,750 - -668,992 -668,992525,692 3,854,376 - 6,864,128 - 11,418,00618,732,625 - - - - 1,137,1091,273,796 - -342,877 -342,877237,721 - (1,853,599)(147,550) - (2,001,149)(11,584) 3,854,376(1,853,599)10,328,133018,252,86931,037,444 $5,515,472$487$10,838,392$0$27,124,242$37,338,712 $18,252,869$31,037,444 92,111,19988,717,207 5,573,4975,533,034 (22,107,688)(26,717,358) $93,829,877$98,570,327 The accompanying notes are an integral part of these financial statements. 35 CITY OF CHANHASSEN, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2009 368 2009A G.O. 421 Public Refunding BondsWorks Facility General Fund Revenues: General property taxes$6,933,324$147,748$ - Tax increment collections - - - Licenses and permits1,050,954 - - Intergovernmental227,268 - - Special assessments58,150 - Charges for services622,316 - - Fines and forfeits122,496 - - Investment income53,522 -99,077 Contributions and donations26,365 - - Refunds and reimbursements36,319 - - Other158,098 - - Total revenues9,230,667155,89899,077 Expenditures: Current: General government1,832,354 - - Public safety2,943,095 - - Public works2,090,027 - - Parks and recreation1,796,135 - - Community development426,916 - - Capital outlay: General government - - - Public safety - - - Public works - - 7,455,405 Parks and recreation - - - Debt service: Principal - - - Interest and paying agent fees - - - Bond issuance costs - - - Developer assistance - - - Total expenditures9,088,5270 7,455,405 Revenues over (under) expenditures142,140155,898 (7,356,328) Other financing sources (uses): Bond premium - - - Loans issued - - - Refunding bonds issued - - - Redemption of refunded bonds - - - Transfers in -194,7001,300,000 Transfers out(150,000) - - Sale of capital assets - - - Total other financing sources (uses)(150,000)194,700 1,300,000 Net change in fund balance(7,860)350,598 (6,056,328) Fund balance - January 14,881,719 - 6,755,830 Fund balance - December 31$4,873,859$350,598$699,502 The accompanying notes are an integral part of these financial statements. 36 Statement 4 603 Lyman Blvd Other 601 Revolving Improvements 06-GovernmentalIntra Activity Totals Governmental Funds Assessment Fund03FundsEliminations 20092008 $ - $ - $2,753,317$ - $9,834,389$9,582,333 - -473,674 -473,674574,101 - -34,800 - 1,085,7541,810,545 -62,682107,488 -397,4382,147,970 401,455 -130,541 -540,151623,893 - -328,444 -950,760841,209 - - - -122,496124,633 68,256 -137,098 -357,9531,150,993 - -20,841 -47,20643,410 - -25,388 -61,70751,247 - -12,590 -170,688238,030 469,711 62,682 4,024,181 0 14,042,216 17,188,364 - -238,344 - 2,070,6982,102,512 - -35,949 - 2,979,0442,885,296 1,220,4492,151,446248,882 - 5,710,8042,786,397 - -691,850 - 2,487,9851,933,353 - -101,003 -527,919468,819 - -143,663 -143,663233,600 - -55,152 -55,15254,284 557,207115,49551,217 - 8,179,3244,677,179 - -235,292 -235,292642,508 - - 2,553,002 - 2,553,0022,689,552 - -920,529 -920,529874,848 - -73,182 -73,18293,811 - -90,354 -90,354226,055 1,777,656 2,266,941 5,438,419 0 26,026,948 19,668,214 (1,307,945)(2,204,259)(1,414,238)0 (11,984,732)(2,479,850) - -226,991 -226,991 - - - - - -24,839 - - 6,020,000 - 6,020,0007,550,000 - - (8,387,123) - (8,387,123) - 385,329 -257,639(813,653)1,324,0152,646,011 (109,000) -(554,653)813,653 - - - -16,274 -16,27410,695 276,329 0 (2,420,872)0 (799,843)10,231,545 (1,031,616)(2,204,259)(3,835,110)0 (12,784,575)7,751,695 4,885,992350,66014,163,243 - 31,037,44423,285,749 $3,854,376($1,853,599)$10,328,133$0$18,252,869$31,037,444 The accompanying notes are an integral part of these financial statements. 37 CITY OF CHANHASSEN, MINNESOTA Statement 5 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2009 20092008 Amounts reported for governmental activities in the statement of activities (page 32) are different because: Net changes in fund balances - total governmental funds (Statement 4)($12,784,575)$7,751,695 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays differ from depreciation in the current period.3,529,917636,586 The net effect of various miscellaneous transactions involving capital assets is to increase (decrease) net assets.(135,925)(1,029,924) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.40,463197,529 The issuance of long-term debt (e.g., bonds, leases) 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. This amount is the net effect of these differences in the treatment of long-term debt and related items.4,920,125(4,686,959) Other post employment benefits in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.(3,129)(3,803) 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.(307,326)247,532 Change in net assets of governmental activities (Statement 2)($4,740,450)$3,112,656 The accompanying notes are an integral part of these financial statements. 38 CITY OF CHANHASSEN, MINNESOTA Statement 6 STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2009 Surface Water WaterSewerManagement Totals Assets:20092008 Current assets: Cash and cash equivalents$5,592,524$3,323,375$1,977,824$10,893,723$12,391,989 Accrued interest receivable36,60727,36917,78181,757148,449 Due from other governmental units - - 4,2704,27012,701 Due from other funds350,369 - - 350,369 - Accounts receivable - net533,795501,39999,3581,134,5521,025,666 Special assessments receivable48,84318,056 - 66,89964,521 Connection charges receivable81,42237,686 - 119,108198,586 Prepaid items3,9893,1292,1789,2962,340 Water meter inventory20,213 - - 20,21326,440 Total current assets6,667,762 3,911,014 2,101,411 12,680,187 13,870,692 Noncurrent assets: Capital assets: Land1,370,974145,550467,5201,984,0441,895,136 Buildings and structures12,445,429 - - 12,445,42912,445,429 Machinery and equipment1,894,128459,2019,0262,362,3552,242,179 Other improvements39,906,40131,978,93722,561,90194,447,23988,194,185 Construction in progress221,48422,228921,9191,165,6315,681,958 Total capital assets55,838,416 32,605,916 23,960,366 112,404,698 110,458,887 Less: Allowance for depreciation(19,120,823)(16,607,936)(9,484,020)(45,212,779)(42,502,135) Net capital assets36,717,59315,997,98014,476,34667,191,91967,956,752 Total assets43,385,35519,908,99416,577,75779,872,10681,827,444 Liabilities: Current liabilities: Accounts payable65,3177,71820,17993,214111,665 Accrued interest payable192,9844,931 - 197,915209,711 Contracts payable16,6228,19235,77160,58599,689 Due to other governmental units2,44454,000 - 56,444185,302 Deferred revenue - - 150150 - Salaries payable15,69211,4806,66133,83344,189 Compensated absences payable - due within one year2,7602,5841,0386,3826,382 Bonds payable - due within one year610,000130,000 - 740,000720,000 Total current liabilities905,819 218,905 63,799 1,188,523 1,376,938 Noncurrent liabilities: Compensated absences payable - due in more than one ye a44,37541,55016,690102,61596,431 Bonds payable - due in more than one year10,820,000135,000 - 10,955,00011,695,000 Total noncurrent liabilities10,864,375 176,550 16,690 11,057,615 11,791,431 Total liabilities11,770,194395,45580,48912,246,13813,168,369 Net assets: Invested in capital assets, net of related debt25,287,59315,732,98014,476,34655,496,91955,541,752 Unrestricted6,327,5683,780,5592,020,92212,129,04913,117,323 Total net assets$31,615,161$19,513,539$16,497,268$67,625,968$68,659,075 The accompanying notes are an integral part of these financial statements. 39 CITY OF CHANHASSEN, MINNESOTA Statement 7 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2009 Surface Water WaterSewerManagement Totals 20092008 Operating revenues: Charges for services$2,584,114$2,316,653$500,576$5,401,343$4,915,441 Penalties and other105,05661,45812,185178,699159,465 Total operating revenues2,689,170 2,378,111 512,761 5,580,042 5,074,906 Operating expenses: Personal services534,075335,248218,5601,087,8831,037,866 Materials and supplies223,00335,81927,245286,067276,835 Contractual services: MCES - 1,311,819 - 1,311,8191,202,670 Other390,689388,948165,631945,2681,077,854 Repairs and maintenance316,039249,511 - 565,550337,344 Depreciation1,364,010938,009681,7292,983,7482,957,755 Total operating expenses2,827,816 3,259,354 1,093,165 7,180,335 6,890,324 Operating income (loss)(138,646)(881,243)(580,404)(1,600,293)(1,815,418) Nonoperating revenues (expenses): Investment income62,40755,21923,444141,070797,079 Connection charges824,212308,58724,9651,157,764961,820 Intergovernmental - - 9,1569,15636,350 Special assessment revenue40,68918,745 - 59,43493,691 Interest and fiscal charges(465,965)(12,721) - (478,686)(510,846) Gain (loss) on disposal of capital assets(17,348)(3,967) - (21,315)(26,754) Miscellaneous 7441,7744,2076,72522,464 Total nonoperating revenues (expenses)444,739 367,637 61,772 874,148 1,373,804 Income before contributions and transfers306,093 (513,606)(518,632)(726,145)(441,614) Transfer in - - - - 77,428 Transfer out (200,000)(706,594)(417,421)(1,324,015)(2,723,439) Capital contributions131,700247,275638,0781,017,0532,005,501 Change in net assets237,793 (972,925)(297,975)(1,033,107)(1,082,124) Net assets - January 1, as previously reported31,377,36820,486,46416,795,24368,659,07569,794,363 Prior period adjustment - - - - (53,164) Net assets - January 1, as restated31,377,36820,486,46416,795,24368,659,07569,741,199 et assets - December 31$31,615,161$19,513,539$16,497,268$67,625,968$68,659,075 N CapitalTransfers - ContributionsNet Amounts reported above$1,017,053($1,324,015) Amounts reported for business-type activities in the statement of activities are different because: Transfer in of capital assets from governmental activities(549,269)549,269 Amounts reported on the statement of activities$467,784($774,746) The accompanying notes are an integral part of these financial statements. 40 CITY OF CHANHASSEN, MINNESOTA Statement 8 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2009 Surface Water Totals WaterSewerManagement 20092008 Cash flows from operating activities: Receipts from customers and users$2,616,302$2,344,593$510,261$5,471,156$5,107,854 Payment to suppliers(1,081,684)(1,959,429)(203,026)(3,244,139)(2,760,029) Payment to employees(535,383)(337,418)(219,254)(1,092,055)(1,031,890) Operating grant - - 9,1569,15636,350 Miscellaneous revenue7441,7744,2076,72522,464 Net cash flows from operating activities999,97949,520101,3441,150,8431,374,749 Cash flows from noncapital financing activities: Transfers in - - - - 77,428 Transfers out(200,000)(706,594)(417,421)(1,324,015)(2,723,439) (Increase) in interfund receivable(350,369) - - (350,369) - Net cash flows from noncapital financing activities(550,369)(706,594)(417,421)(1,674,384)(2,646,011) Cash flows from capital and related financing activities: Acquisition of capital assets(592,516)(155,975)(521,811)(1,270,302)(2,563,678) Proceeds from sale of capital asset3,999 - - 3,999 - Connection charges879,230333,04724,9651,237,2421,054,249 Special assessment revenue45,30211,754 - 57,05693,546 Principal paid on bonds(590,000)(130,000) - (720,000)(1,500,000) Interest and fiscal charges(475,486)(14,996) - (490,482)(539,887) Net cash flows from capital and related financing activities(729,471)43,830(496,846)(1,182,487)(3,455,770) Cash flows from investing activities: Investment income93,02569,55245,185207,762804,654 Net (decrease) in cash and cash equivalents(186,836)(543,692)(767,738)(1,498,266)(3,922,378) Cash and cash equivalents - January 15,779,3603,867,0672,745,56212,391,98916,314,367 Cash and cash equivalents - December 31$5,592,524 $3,323,375 $1,977,824 $10,893,723 $12,391,989 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($138,646)($881,243)($580,404)($1,600,293)($1,815,418) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenue (expense)7441,7744,2076,72522,464 Operating grant - - 9,1569,15636,350 Depreciation1,364,010938,009681,7292,983,7482,957,755 Changes in assets and liabilities: Decrease (increase) in receivables(72,868)(33,518)5,931(100,455)32,948 (Increase) in prepaid items(2,853)(2,123)(1,980)(6,956)(1,369) Decrease (increase) in inventory6,227 - - 6,227(7,965) Increase (decrease) in payables(156,635)26,621(17,295)(147,309)149,984 Total adjustments1,138,625 930,763 681,748 2,751,136 3,190,167 Net cash provided by operating activities$999,979$49,520$101,344$1,150,843$1,374,749 Noncash investing, capital and financing activities: Water system assets in the amount of $131,700 and $894,130 were contributed to the Water Fund in 2009 and 2008, respectively. Sewer system assets in the amount of $247,275 and $260,654 were contributed to the Sewer Fund in 2009 and 2008, respectively. Surface water management system assets in the amount of $638,078 and $850,717 were contributed to the Surface Water Fund in 2009 and 2008, respectively. The accompanying notes are an integral part of these financial statements. 41 CITY OF CHANHASSEN, MINNESOTA Statement 9 STATEMENT OF NET ASSETS FIDUCIARY FUNDS December 31, 2009 Agency Funds 20092008 Assets: Cash and investments$694,817$709,405 Liabilities: Accounts payable$ -$1,500 Escrow deposits payable694,817707,905 Total liabilities$694,817$709,405 The accompanying notes are an integral part of these financial statements. 42 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Chanhassen, Minnesota (the City) was incorporated in 1967 and operates under the State of Minnesota Statutory Plan B form of government. The governing body consists of a five member City council elected by voters of the City. The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A. FINANCIAL REPORTING ENTITY In accordance with GASB pronouncements and accounting principles generally accepted in the United States of America, the financial statements of the reporting entity should include those of the City (the City) (the primary government) and its component units. The component unit discussed below is included in the City’s reporting entity because of the significance of its operational or financial relationships with the City. COMPONENT UNITS In conformity with accounting principles generally accepted in the United States of America, the financial statements of the component unit have been included in the financial report as a blended component unit. Pursuant to the authorization of Minnesota Statutes Section 469.094, on April 28, 1997 the City transferred to the Economic Development Authority of the City all activities, programs, operations, and authority of the existing City Housing and Redevelopment Authority (HRA). The Economic Development Authority (EDA), an entity legally separate from the City, is governed by a board which is substantially the same as the City Council. The City is in a relationship of financial benefit or burden with the EDA. Separate financial statements for the EDA are not prepared. JOINTLY GOVERNED ORGANIZATIONS Southwest Area Transit Commission. The City, in conjunction with the Cities of Eden Prairie and Chaska, has agreed to establish the Southwest Area Transit Commission (the Commission). The purpose of the Commission is to provide alternative methods of public transit service to the three cities. The Commission’s board is composed of two commissioners from each of the cities. . The City is a member of a joint powers Western Area Fire Training Association (WAFTA) group along with ten other communities. WAFTA operates a fire training facility in western Carver County. The site has been identified by the Minnesota Pollution Control Agency (MPCA) as contaminated, potentially requiring clean-up. At this time, there is not an estimated dollar amount of the cost to remediate the site nor has a claim been asserted against WAFTA or the City. 43 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business-type activity. 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 business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included among program revenues are reported instead of general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The City’s only fiduciary funds are agency funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. 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 all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year 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. 44 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Property taxes, special assessments, intergovernmental revenues, charges for services 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. The City reports the following major governmental funds: General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. 2009A General Obligation Improvement Bond Fund (368) accounts for the accumulation of resources for payment of the general obligation bonds issued to finance utility improvements. Public Works Facility(421) accounts for the construction costs of the new public works facility. Revolving Assessment Fund (601) accounts for the City’s annual street re-construction program. The individual property owner will pay a portion of the cost of the annual project with assessments and the City will fund their portion with the reserves created in this fund and an annual tax levy in future years. Lyman Blvd Improvements (603) accounts for the street and utility improvement of Lyman Blvd. The City reports the following major proprietary funds: The Water Fund accounts for the water service charges which are used to finance the water system operating expenses. The Sewer Fund accounts for the sewer service charges which are used to finance the sanitary sewer system operating expenses. The Surface Water Management Fund accounts for the surface water charges which are used to finance the surface water system operating expenses. Additionally, the City reports the following fund type: Agency funds account for the assets of various escrow deposits and the Moon Valley Restoration Funds held by the City in a trustee capacity or as an agent. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. 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. 45 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the water, sewer, and surface water management enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for an allowable use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. D.BUDGETS Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General and Special Revenue Funds. Budgeted amounts are reported as originally adopted, or as amended by the City Council. There was one budget amendment during 2009 to the General Fund and no amendments to the Special Revenue Funds. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is at present not considered necessary to assure effective budgetary control or to facilitate effective cash management. E.LEGAL COMPLIANCE - BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 46 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 4. Management may authorize transfer of budgeted amounts between departments within any fund. All budget amendments between funds must be approved by the City Council. The legal level of budgetary control is at the fund level. Budgetary monitoring, by departments or divisions and by category, is required by the City policy. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. Budgetary control for Capital Projects Funds is accomplished through the use of project controls. The Special Revenue Funds expenditures did not exceed budget appropriation. F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. Investment income is allocated to individual funds on the basis of the fund's equity in the cash and investment pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivable in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. For purposes of the statement of cash flows, the Proprietary Funds consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the Proprietary Fund types have original maturities of 90 days or less. Therefore the entire balance in such fund types is considered cash equivalents. G. PROPERTY TAX REVENUE RECOGNITION The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 15 and December 15 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. 47 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes property tax revenue in the period for which taxes were levied. Uncollectible property taxes are not material and have not been reported. GOVERNMENT FUND FINANCIAL STATEMENTS The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January are fully offset by deferred revenue because they are not available to finance current expenditures. The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of the taxable valuation of commercial/industrial real property to various taxing authorities within the defined metropolitan area. The valuation "shared" is a portion of commercial/industrial property valuation growth since 1971. H. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. GOVERNMENT FUND FINANCIAL STATEMENTS Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, 48 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 deferred and special deferred assessments receivable in governmental funds are completely offset by deferred revenues. I. INVENTORIES GOVERNMENTAL FUNDS The original cost of materials and supplies has been recorded as expenditures at the time of purchase. These funds do not maintain material amounts of inventories. PROPRIETARY FUNDS Inventories of the Proprietary Funds are stated at cost, which approximates market, using the first-in, first-out (FIFO) method. J. CAPITAL ASSETS Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, trails, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of the initial capitalization of general infrastructure assets, the City chose to include all such items regardless of their acquisition date amount. These assets are reported at historical or estimated historical cost, using the 1987 base highway construction price trend, when historical costs were unavailable. 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. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.For the year ended December 31, 2009, no interest was capitalized in connection with construction in progress. Property, plant and equipment of the City is depreciated using the straight line method over the following estimated useful lives: Buildings and structures 20 – 50 years Machinery and equipment 3 – 30 years Drainage systems 30 years Water and sewer lines 30 years Streets 25 – 50 years Trails 15 years Sidewalks 25 years Other improvements 7 – 40 years 49 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 K. INTERFUND RECEIVABLES/PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as “due to/from other funds.” All short-term “due to/from other funds” at December 31, 2009 are planned to be eliminated in 2010. Long-term interfund loans are classified as “interfund loan receivable/payable.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Property taxes and special assessment receivables have been reported net of estimated uncollectible accounts (See Note 1 G and H). Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. L. COMPENSATED ABSENCES The City compensates all employees upon termination for unused vacation and unused sick time up to a maximum based upon length of service. The City compensates nonexempt employees for unused comp time. All vacation pay and comp time is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance with the provisions of Statement of Government Accounting Standards No. 16, Accounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. However, a liability is recognized for that portion of accumulating sick leave benefits that is vested as severance pay. The City’s liability for compensated absences at December 31, 2009 is scheduled below: Vacation$485,802 Severance355,509 Comp time28,100 $869,411 M. LONG-TERM OBLIGATIONS In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are immaterial and are expensed in the year of bond issuance. 50 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. N. FUND EQUITY In the fund financial statements, governmental funds report reservations of fund balance for amounts not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. O. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. Interfund interest paid out of governmental funds is either eliminated against governmental activities investment earnings, (if paid to governmental activities) or reclassified to a transfer out (if paid to business-type activities) on the statement of activities. All other interfund transactions are reported as transfers. P. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. Q. RECLASSIFICATIONS Certain amounts in the prior year have been reclassified to conform with the current year presentation. 51 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 R. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation between fund balances – total governmental funds and net assets – governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this ($22,107,688) difference are as follows: Bonds payable($20,965,000) Accrued interest payable(375,342) Compensated absences(760,414) Other post employment benefit payable(6,932) Net adjustment to decrease fund balances - total governmental funds to arrive at net assets - governmental activities($22,107,688) 2.EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The government fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances – total governmental funds andchanges in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $3,529,917 difference are as follows: Capital outlay/construction$8,613,431 Depreciation expense(5,083,514) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$3,529,917 52 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Another element of that reconciliation states that “the net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins and donations) is to increase (decrease) net assets.” The details of this ($135,926) difference are as follows: Donation of capital assets increase net assets in the statement of activities, but do not appear in the governmental funds because they are not financial resources$599,408 Transfer of capital assets to Enterprise Funds.(549,269) The statement of activities reports losses arising from the trade-in or disposal of existing assets to acquire new capital assets. Conversely, governmental funds do not report any gain or loss on trade-in of capital assets(186,064) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities($135,925) Another element of that reconciliation states that “revenues on the statement of activities that do not provide current financial resources are not reported as revenues in the funds.” The details of this $40,463 difference are as follows: General property taxes deferred revenue: At December 31, 2008($222,385) At December 31, 2009309,594 Special assessments deferred revenue: At December 31, 2008(5,300,427) At December 31, 20095,263,903 Other 2008 revenue has been deferred because it was not collected within 60 days from year-end. At December 31, 2008(10,222) At December 31, 2009 - Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities.$40,463 53 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the long-term debt consumes the current financial resources of governmental funds.” Neither transaction, however, has any effect on net assets. The details of this $4,920,125 difference are as follows: Debt issued: Bonds issued($6,020,000) Principal repayments: General obligation debt860,000 General obligation improvement bonds 1,538,000 General obligation tax increment bonds55,000 Public project revenue bonds100,000 Redemption of refunded bonds8,387,125 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities.$4,920,125 Another element of that reconciliation states that “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.” The details of this ($307,326) difference are as follows: Compensated absences($42,479) Accrued interest(264,847) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities.($307,326) Note 2 DEPOSITS AND INVESTMENTS A. DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. Minnesota Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2009, the bank balance of the City’s deposits was covered by federal depository insurance or covered by collateral pledged and held in the City’s name. 54 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: a)United States government treasury bills, treasury notes, treasury bonds; b)Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c)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; d)General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; e)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 f)Time deposits that are fully insured by any federal agency. At December 31, 2009, the carrying amount of the City’s deposits with financial institutions was $3,875,237. B. INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities, or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: 1)any security which is a general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; 2)any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; and 3)a general obligation of the Minnesota Housing Finance Agency which is a moral obligation of the State of Minnesota and is rated “A” or better by a national bond rating agency. d) Bankers acceptance of United States banks. 55 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6. As of December 31, 2009, the City had the following investments and maturities: Investment Maturities (in Years) FairLess Investment TypeRatingValueThan 11-56-10 Freddie Mac NotesAAA$1,072,500$ - $1,072,500$ - Federal Farm Credit Bank NotesAAA4,011,0051,001,2503,009,755 - Federal Home Loan Bank NotesAAA8,192,4444,115,0124,077,432 - Federal Home Loan Mortgage Corp. NotesAAA4,583,4812,058,4962,524,985 - Federal National Mortgage Assn. NotesAAA4,043,9382,040,6952,003,243 - Municipal bondsAAA95,16495,164 - - Certificate of depositsN/A5,399,9273,958,2401,441,687 - Money market mutual fundN/A1,168,0231,168,023 - - Total$28,566,482$14,436,880$14,129,602$0 Total investments$28,566,482 Classifications above are by maturity date. SomeDeposits3,875,237 investments listed above have call dates that occur in lessPetty cash1,085 than one year. Total cash and investments$32,442,804 C. INVESTMENT RISKS The City’s investment policy is to follow Minnesota State Statutes as described above which reduces the City’s exposure to credit, custodial credit, and interest rate risks. Specific risk information for the City is as follows: – The City’s investment policy requires the City to diversify its investment portfolio Interest rate risk to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated, i.e., not investing in maturities longer than five years. 56 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Credit risk – The City does not have a formal investment policy that further limits the ratings of their investments from those that are authorized by Minnesota Statutes. The City’s external investment pool investment is with the 4M fund which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. The 4M fund is an unrated 2a7-like pool and the fair value of the position in the pool is the same as the value of pool shares. Concentration of credit risk – The City places no limit on the amount the City may invest in any one issuer. More than 5% of the City’s investments are in various holdings as follows: Federal Farm Credit Bank Notes14.0% Federal Home Loan Bank Notes28.7% Federal Home Loan Mortgage Corp. Notes16.0% Federal National Mortgage Assn. Notes14.2% Custodial Credit Risk – For investments in securities, custodial credit risk is the risk that in the event of a failure of the counterparty, the City will not be able to recover the value of its investments in securities that are in the possession of an outside party. As of December 31, 2009, all investments of the City were held by the broker-dealer, of which $1,000,000 is insured through SIPC. Each broker- dealer has provided additional protection by purchasing additional private insurance. This insurance is subject to aggregate limits applied to all of the broker’s accounts. Note 3 RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2009 are as follows: CertifiedDelinquent Special AccountsPropertyAssessment ReceivableTaxesReceivableTotal Major Funds: General$ - $81,321$162$81,483 2009A G.O. Refunding - - 3,366,4793,366,479 Revolving Assessment Fund - - 1,379,9281,379,928 Water8,809 - 77,27286,081 Sewer - - 37,99637,996 Nonmajor Funds - - 199,200199,200 $8,809$81,321$5,061,037$5,151,167 57 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 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 and unearned revenue reported in the governmental funds were as follows: Major Funds 2009A G.O.RevolvingSurface General RefundingAssessment WaterNonmajor FundBondsFundManagementFundsTotal Unavailable: Delinquent property taxes receivable$307,239$ - $ - $ - $ - $307,239 Special assessments not yet due4,2793,418,7371,587,425 - 255,8175,266,258 Total unavailable revenue311,5183,418,7371,587,4250255,8175,573,497 Unearned: Atenna rental fees received but not yet earned31,192 - - - - 31,192 Donations/ rentals received but not yet earned8,765 - - 150 - 8,915 Total unearned revenue39,95700150040,107 Total deferred (unavailable)/unearned revenue for governmental funds$351,475$3,418,737$1,587,425$150$255,817$5,613,604 Note 4 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2009 was as follows: BeginningEnding Primary Government BalanceIncreaseDecreaseBalance Governmental activities: Capital assets not being depreciated: Land$17,024,757$1$ - $17,024,758 Construction in progress4,319,2447,728,701(4,071,838)7,976,107 Total capital assets not being depreciated21,344,0017,728,702(4,071,838)25,000,865 Capital assets being depreciated: Buildings and structures15,203,969268,447 - 15,472,416 Machinery and equipment6,805,509415,535(81,047)7,139,997 Other improvements 5,137,66671,402 - 5,209,068 Infrastructure103,910,3734,251,322(1,087,467)107,074,228 Total capital assets being depreciated131,057,5175,006,706(1,168,514)134,895,709 Less accumulated depreciation for: Buildings and structures4,093,092368,077 - 4,461,169 Machinery and equipment4,187,507442,257(73,350)4,556,414 Other improvements 1,526,632235,150 - 1,761,782 Infrastructure53,877,0804,038,030(909,100)57,006,010 Total accumulated depreciation63,684,3115,083,514(982,450)67,785,375 Governmental activities capital assets - net$88,717,207$7,651,894($4,257,902)$92,111,199 58 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 BeginningEnding Primary Government BalanceIncreaseDecreaseBalance Business-type activities: Capital assets not being depreciated: Land$1,895,136$88,908$ - $1,984,044 Construction in progress5,681,958998,228(5,514,555)1,165,631 Total capital assets not being depreciated7,577,0941,087,136(5,514,555)3,149,675 Capital assets being depreciated: Buildings and structures12,445,429 - - 12,445,429 Machinery and equipment2,242,180140,384(20,209)2,362,355 Other improvements 88,194,1846,527,250(274,195)94,447,239 Total capital assets being depreciated102,881,7936,667,634(294,404)109,255,023 Less accumulated depreciation for: Buildings and structures249,591248,909 - 498,500 Machinery and equipment1,063,992132,870(20,209)1,176,653 Other improvements 41,188,5522,601,969(252,895)43,537,626 Total accumulated depreciation42,502,1352,983,748(273,104)45,212,779 Business-type activities capital assets - net67,956,7524,771,022(5,535,855)67,191,919 Total capital assets - net$156,673,959$12,422,916($9,793,757)$159,303,118 Depreciation expense was charged to functions/programs of the City as follows: Governmental activities: General government$343,833 Public safety175,315 Public works3,411,339 Parks and recreation1,153,027 Total depreciation expense - governmental activities$5,083,514 Business-type activities: Water$1,364,010 Sewer938,009 Storm sewer681,729 Total depreciation expense - business-type activities$2,983,748 59 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 CITY INDEBTEDNESS The City issues general obligation bonds, to provide funds for the acquisition and construction of major capital facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. GOVERNMENTAL ACTIVITIES As of December 31, 2009, the governmental activities long-term debt of the City consisted of the following: FinalAuthorized Issue Maturity Interest AndOutstanding DateDateRateIssued12/31/09 General Long-Term Debt: General obligation bonds: G.O. Library Bonds, Series 2002A 3/01/022/01/22 1.55% - 4.85%$6,095,000$4,600,000 G.O. Park Refunding, Series 2005C11/16/052/01/10 3.50%2,590,000895,000 G.O. Capital Improvement Plan Bonds, Series 2008A11/18/082/01/304.00% - 4.60%7,550,0007,550,000 Total general obligation bonds16,235,00013,045,000 Revenue Bonds: 2000 Public Project Revenue Bonds12/01/002/01/124.75% - 5.35%930,000335,000 Tax Increment Bonds: G.O. Tax Increment Refunding Bonds, Series 2004C8/10/042/01/213.00% - 6.00%1,170,000960,000 General Improvement Bonds: G.O. Improvement Bonds, Series 2004A8/10/042/01/152.50% - 4.00%2,070,000605,000 G.O. Improvement Bonds, Series 2006A6/13/062/01/143.75% - 3.80%6,640,000 - G.O. Improvement Refunding Bonds, Series 2009A6/03/092/01/173%6,020,0006,020,000 Total improvement bonds14,730,0006,625,000 Compensated absences payableN/AN/AN/AN/A760,414 Total City indebtedness - governmental activities$33,065,000$21,725,414 60 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 BUSINESS-TYPE ACTIVITIES As of December 31, 2009, the business-type activities long-term debt of the City consisted of the following: FinalAuthorized Issue Maturity Interest AndOutstanding DateDateRateIssued12/31/09 G.O. Revenue Bonds: Water and Sewer Revenue Bonds of 2001, Series A7/15/20012/1/20123.50% - 4.65%$1,645,000$265,000 Water Revenue Bonds of 2004, Series B8/10/20042/1/20254.00% - 4.50%7,930,0006,785,000 Water Revenue Bonds of 2005, Series B11/16/20052/1/20213.75% - 3.90%5,465,0004,645,000 Total G.O. Revenue Bonds15,040,00011,695,000 Compensated absences payableN/AN/AN/AN/A108,997 Total City indebtedness - Business-type activities$15,040,000$11,803,997 GOVERNMENTAL ACTIVITIES Annual debt service requirements to maturity for the governmental activities long-term debt are as follows: G.O. Improvement BondsG.O. Tax Increment BondsPublic Project Revenue BondsAll Other G.O. Bonds Year EndingGovernmental ActivitiesGovernmental ActivitiesGovernmental ActivitiesGovernmental Activities December 31,PrincipalInterestPrincipalInterestPrincipalInterestPrincipalInterest 2010$560,000$221,602$60,000$50,485$105,000$14,899$1,155,000$539,151 2011260,000179,60060,00047,725110,0009,308525,000507,918 2012265,000171,37565,00044,720120,0003,210540,000486,441 2013270,000162,91370,00041,345 - - 565,000463,787 20143,540,000105,37570,00037,775 - - 590,000439,683 2015575,00043,40075,00034,005 - - 615,000414,127 2016565,00026,17580,00029,895 - - 640,000387,254 2017590,0008,85085,00025,440 - - 675,000358,910 2018 - - 90,00020,580 - - 705,000328,981 2019 - - 95,00015,308 - - 740,000297,344 2020 - - 100,0009,600 - - 780,000263,672 2021 - - 110,0003,300 - - 815,000227,942 2022 - - - - - - 855,000190,104 2023 - - - - - - 405,000162,013 2024 - - - - - - 425,000144,270 2025 - - - - - - 445,000125,454 2026 - - - - - - 465,000105,545 2027 - - - - - - 490,00084,412 2028 - - - - - - 510,00062,035 2029 - - - - - - 540,00038,275 2030 - - - - - - 565,00012,995 Total$6,625,000$919,290$960,000$360,178$335,000$27,417$13,045,000$5,640,313 It is not practicable to determine the specific year for payment of long-term accrued compensated absences. 61 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 The revenue bond issued was sold by the City’s Economic Development Authority (EDA) to fund the construction of a municipal facility. The City makes lease payments to the EDA to fund debt service on these issues. The EDA is a blended component unit of the City and the bond is reported in the governmental activities column on the Statement of Net Assets. The City has issued General Improvement Bonds to provide funds for various construction projects. The bonds have interest rates ranging from 2.50% to 4.90% and are payable over the next six years. In case of a default by property owners, the City can place a lien on the property in order to recover the default. The balance payable at December 31, 2009 is $6,625,000. BUSINESS-TYPE ACTIVITIES Annual debt service requirements to maturity for the business-type long-term debt are as follows: G.O. Revenue Bonds Year EndingBusiness-Type Activities December 31,PrincipalInterest 2010$740,000$460,357 2011700,000431,954 2012730,000403,783 2013690,000376,012 2014715,000348,799 2015750,000320,424 2016775,000290,887 2017805,000260,080 2018845,000227,391 2019880,000192,676 2020915,000156,323 2021960,000117,918 2022505,00086,935 2023535,00063,787 2024560,00039,150 2025590,00013,275 Total$11,695,000$3,789,751 It is not practicable to determine the specific year for payment of long-term accrued compensated absences. 62 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 CHANGE IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 31, 2009 was as follows: BeginningEnding Due Within BalanceAdditionsDeletionsBalanceOne Year Governmental activities: Bonds payable: General obligation$13,905,000$ - $860,000$13,045,000$1,155,000 G.O. improvement bonds7,155,0006,020,0006,550,0006,625,000560,000 G.O. tax increment bonds1,015,000 - 55,000960,00060,000 Public project revenue bonds435,000 - 100,000335,000105,000 Total bonds payable22,510,0006,020,0007,565,00020,965,0001,880,000 Loan payable3,375,125 - 3,375,125 - - Compensated absences717,935419,796377,317760,41444,529 Total governmental activity long-term liabilities$26,603,060$6,439,796$11,317,442$21,725,414$1,924,529 Business-type activities: G.O. revenue bonds $12,415,000$ - $720,000$11,695,000$740,000 Compensated absences102,81380,91774,733108,9976,382 Total business-type activity long-term liabilities$12,517,813$80,917$794,733$11,803,997$746,382 For the governmental activities, loans payable and compensated absences are generally liquidated by the General and Special Revenue Funds. All long-term bonded indebtedness outstanding at December 31, 2009 is backed by the full faith and credit of the City, including special assessment, tax increment and water revenue bond issues. Delinquent assessments receivable at December 31, 2009 totaled $6,006. General Obligation Water Revenue Bonds are serviced by the Sewer and Water Enterprise Funds and are carried as debt of that fund. Other bonds are supported by various Debt Service Funds. All bonds are backed by the full faith, credit, and taxing power of the City. CURRENT REFUNDING On June 3, 2009, the City issued the $6,020,0000 General Obligation Improvement Refunding Bonds, Series 2009A with net interest cost of 2.504% to refund the 2010 through 2017 maturities aggregating $3,057,123 principal amount of the City’s $4,067,000 Improvement Bonds, Series 2005A (State Highway Loan) with an average interest rate of 4.13% and to refund the 2010 through 2014 maturities aggregating $5,330,000 principal amount of the City’s $6,640,000 Improvement Bonds, Series 2006A with interest rates of 3.750% to 3.800%. The net proceeds of $6,173,808 (net of reoffering premium of $203,000 and issuance costs if $49,272) plus $2,300,000 of prior issue debt service funds was used to retire all outstanding principal of the refunded bonds on July 1, 2009. 63 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 The City refunded the 2005A and 2006A Bonds to reduce total debt service payments over the next eight years by $487,751 and to obtain an economic gain (difference between the present value of debt service payments on old and new debt) of $376,095. REVENUE PLEDGED Future revenue pledged for the payment of long-term debt is as follows: Revenue PledgedCurrent Year Percent ofDebt serviceRemainingPrincipalPledged Use ofTotalas a % ofTerm ofPrincipaland InterestRevenue Bond IssueProceedsTypeDebt Servicenet revenuesPledgeand InterestPaidReceived 2004A Improvement bondsInfrastructure improvementsSpecial assessments31%n/a2004 - 2015$639,594$406,438$45,917 2004C TIF Refunding bondsDowntown Redevelopment ProjectTax increment100%n/a2004 - 2021$1,320,178$107,979$212,732 2001A Sewer Revenue bondsUtility infrastructure improvementsSewer usage charges100%6.1%2001 - 2012$280,354$144,565$2,378,111 2004B Water Revenue bondsUtility infrastructure improvementsWater usage charges100%21.7%2004 - 2025$9,414,971$582,954$2,689,170 2005B Water Revenue bondsUtility infrastructure improvementsWater usage charges100%17.9%2005 - 2021$5,789,426$481,633$2,689,170 2009A Improvement bondsAdvance refund 2005A & 2006A bondsSpecial assessments68%n/a2009 -2017$6,904,697$6,776,942$8,150 Note 6 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT General obligation bond issues sold by the City are financed by ad valorem tax levies. Special assessment bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2009. Future scheduled tax levies for all bonds outstanding at December 31, 2009 totaled $22,931,415. 64 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 7 PENSION PLANS A. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) PLAN DESCRIPTION All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) 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 Statute, Chapters 353 and 356. PERF 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, firefighters and peace officers who qualify for membership by 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. 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 PERF and PEPFF. That report may be obtained on the internet at www.mnpera.org, by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. 65 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 B. FUNDING POLICY Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members were required to contribute 9.10% and 6.0%, respectively, of their annual covered salary in 2009. PEPFF members were required to contribute 9.4% of their annual covered salary in 2009. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 6.75% for Coordinated Plan PERF members, and 14.1% for PEPFF members. Employer contribution rates for the Coordinated Plan PERF members will increase to 7% effective January 1, 2010. The City’s contributions to the Public Employees Retirement Fund for the years ending December 31, 2009, 2008 and 2007 were $297,106, $278,047 and $260,100, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2009, 2008 and 2007 were $17,384, $15,567 and $13,784, respectively. The City’s contributions were equal to the contractually required contributions for each year as set by state statute. C. CHANHASSEN FIRE RELIEF ASSOCIATION PLAN DESCRIPTION The volunteer firefighters of the City are members of the Chanhassen Fire Department Relief Association. The Chanhassen Fire Department Relief Association is the administrator of a single employer defined benefit Public Employee Retirement System (PERS) established to provide benefits for members of the Chanhassen Fire Department. Plan provisions are established and may be amended by the Relief Association’s Board of Trustees within the guidelines of the State of Minnesota statutes. The Relief Association provides retirement and disability benefits to members, and benefits to survivors upon death of eligible members. All benefit provisions and the obligation to make contributions are established and administered in accordance with Minnesota Statutes. The Relief Association issues a publicly available financial report that includes financial statements and required supplementary information. 66 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 FUNDING POLICY Minnesota StatutesChapter 69.772 specifies minimum support rates required on an annual basis. The minimum support rates from the municipality and from State aid are determined as the amount required to meet the normal cost plus amortizing any existing prior service costs over a ten-year period. The significant actuarial assumptions used to compute the municipal support are the same as those used to compute the accrued pension liability. The Relief Association is comprised of volunteers; therefore, members have no contribution requirements. During the year, the City recognized as revenue and as an expenditure an on-behalf payment of $99,504 made by the State of Minnesota for the Relief Association. The City’s annual pension cost for the current year and related information for the plan is as follows: Annual pension cost$167,720 Contributions made: City68,216 State aid99,504 Actuarial valuation date12/31/09 Actuarial cost methodEntry age normal Amortization methodLevel dollar Remaining amortization period: Normal cost20 years Prior service cost10 years Asset valuation methodMarket Actuarial assumptions: Investment rate of return5% Projected salary increasesN/A Includes inflation atN/A Cost of living adjustmentsNone THREE YEAR TREND INFORMATION Three-Year Trend Information AnnualPercentageNet YearPensionof APCPension EndingCost (APC)ContributedObligation 12/31/2007$135,949100%$ - 12/31/2008115,928100% - 12/31/2009167,720100% - 67 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 REQUIRED SUPPLEMENTARY INFORMATION Assets in Excess of/Pension ActuarialActuarialActuarial(Unfunded)Benefit ValuationValue ofAccruedAccruedFundedPer Year DateAssetsLiabilityLiabilityRatioof Service 12/31/2007$2,500,003$2,619,000($118,997)95.5%$4,350 12/31/20081,885,6912,874,758(989,067)65.6%5,050 12/31/20092,087,9942,679,000(591,006)77.9%5,050 The Association is comprised of volunteers; therefore, there are no payroll expenditures (i.e., there are no covered payroll amounts or percentage calculations). Note 8 OTHER POST-EMPLOYMENT BENEFITS In 2008, the City prospectively implemented the requirement of a new accounting pronouncement, GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. A.PLAN DESCRIPTION In addition to providing the pension benefits described in Note 7, the City provides post-employment health care benefits (as defined in paragraph B) for retired employees through a single-employer defined benefit plan. The City’s OPEB plan is administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The Plan does not issue a separate report. B. BENEFITS PROVIDED Retirees The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Employees who satisfy the rule of 80 or attain age 55 and have completed 10 years of service at termination can immediately commence medical benefits. Retirees may obtain dependent coverage while the participating retiree is under age 65. Covered spouses may continue coverage after the retiree’s death. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee’s death. 68 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 All health care coverage is provided through the City’s group health insurance plans. The retiree is required to pay 100% of their premium cost for the City-sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer and the City’s plan becomes secondary. C. PARTICIPANTS As of the actuarial valuation dated March 2008, participants consisted of: Retirees and beneficiaries currently purchasing health insurance through the City2 Active employees68 Total70 Participating employers1 D. FUNDING POLICY The additional cost of using a blended rate for actives and retirees is currently funded on a pay-as-you- go basis. The City Council may change the funding policy at any time. 69 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 E. ANNUAL OPEB COSTS AND NET OPEB OBLIGATION The City’s annual other post employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, 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 amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2009, was calculated as follows: Annual required contribution (ARC)$5,832 Interest on net OPEB obligation152 Annual OPEB cost5,984 Contributions made during the year(2,855) Increase (decrease) in net OPEB obligation3,129 Net OPEB obligation - beginning of year3,803 Net OPEB obligation - end of year$6,932 The City first had an actuarial valuation performed for the plan as of January 1, 2008 to determine the funded status of the plan as of that date as well as the employer’s annual required contribution (ARC) for the fiscal year ended December 31, 2009. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2008 was as follows: Percentage of Fiscal YearAnnual OPEBEmployer Annual OPEB CostNet OPEB EndedCostContributionsContributedObligation December 31, 2008$5,832$2,02934.7%$3,803 December 31, 20095,9842,85547.7%6,932 70 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 F. FUNDED STATUS AND FUNDING PROGRESS The City currently has no assets that have been irrevocably deposited in a trust for future health benefits, therefore, the actuarial value of assets is zero. The funded status of the plan was as follows: Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payroll Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2008$ - $52,268$52,2680.0%$4,180,2351.3% *Using the entry age normal actuarial pay cost method. Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. G. ACTUARIAL METHODS AND ASSUMPTIONS 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 health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) 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 financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effect 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, 2008 actuarial valuation, the entry-age normal actuarial pay cost method was used. The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses) and an initial annual health care cost trend rate of 9% reduced by 1% each year to arrive at an ultimate health care cost trend rate of 5.0%. The actuarial value of assets was $0. The plan’s unfunded actuarial accrued liability is being amortized using the level percentage of projected payroll method over 30 years on a closed basis. The remaining amortization period at December 31, 2009 was 28 years. 71 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 9 DUE TO/FROM OTHER FUNDS AND TRANSFERS Amounts reported as due to/from other funds at December 31, 2009 are as follows: FundReceivablePayable Lyman Blvd Improvements 06-03$ - $260,752 Water350,369 - Other governmental funds - 89,617 Total$350,369$350,369 Due to/from other funds are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. The funds will be repaid as tax increments are received. Interfund transfers: TransfersTransfers InOut General Fund$ - $150,000 Revolving Assessment Fund385,329109,000 Public Works Facility1,300,000 - 2009A G.O. Refunding194,700 - Nonmajor Government funds257,639554,653 Water Fund - 200,000 Sewer Fund - 706,594 Surface Water Management Fund - 417,421 Total$2,137,668$2,137,668 Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. All of the City’s interfund transfers fall under that category. All of the 2009 transfers are considered routine and consistent with previous practices. 72 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 10 CONDUIT DEBT From time to time, the City has issued conduit debt to provide financial assistance to private-sector entities for the acquisition and construction of facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2009, the outstanding conduit debt is as follows: BondsOriginal12/31/09Maturity Project NameIssuedPrincipalPrincipalDate Building Management Group12/95$1,275,000$675,0002016 Chapel Hill Academy, Series 2005A12/051,337,7001,035,9872009 St. Hubert Catholic Community, Series 200710/075,942,1405,194,1722027 As of December 31, 2009, there were an additional four conduit debt issues outstanding. The aggregate principal amount for the additional four series issued prior to July 1, 1995 could not be determined; however, their original issue amounts totaled $10,180,000. Note 11 DEFICIT FUND BALANCES The City has a deficit fund balance in the following funds at December 31, 2009: Capital Project Funds: Lyman Blvd Improvements 06-03$1,853,599 Downtown Transit Station TIF #10147,550 $2,001,149 The deficit for the Downtown Transit Station will be eliminated through tax increment collections. The Lyman Fund deficit will be eliminated through interfund transfers upon completion of the project. Note 12 COMMITMENTS AND CONTINGENCIES 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. The City continues to carry commercial insurance for risks of loss, including workers compensation, property and general liability and employee health and accident insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. 73 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 B. LITIGATION The City attorney has indicated that any existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. FEDERAL AND STATE FUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2009. D. TAX 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. The City has issued several tax increment pay-as-you-go revenue notes. These notes are not a general obligation of the City and are payable solely from tax increments. Accordingly, these notes are not reflected in the financial statements of the City. Details of the pay-as-you-go revenue notes are as follows: – issued in 2006 in the principal Taxable Tax Increment Revenue Note, Series 2006A (Gateway Place) sum of $300,000 with an interest rate of 9% per annum. Semi-annual principal payments shall be paid commencing August 1, 2009 and continuing through February 1, 2016. Payments are payable solely from available tax increment, which term means 90% of the tax increment that is received by the City in the six month period immediately before each payment date through February 1, 2014 and 65% from August 1, 2015 through February 1, 2016. The City shall have no obligation to pay unpaid balance that may remain after the final payment on February 1, 2016. At December 31, 2009 the principal amount outstanding on the note was $299,910. Taxable Tax Increment Revenue Note, Series 2003A (Presbyterian Homes) – issued in 2003 in the principal sum of $1,060,000 with an interest rate of 9% per annum. Semi-annual principal payments shall be paid commencing August 1, 2006 and continuing through February 1, 2014. Payments are payable solely from available tax increment, which term means 90% of the tax increment that is received by the City in the six month period immediately before each payment date through February 1, 2012 and 50% from August 1, 2012 through February 1, 2014. The City shall have no obligation to pay unpaid balance that may remain after the final payment on February 1, 2014. At December 31, 2009 the principal amount outstanding on the note was $567,968. 74 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Limited Revenue Tax Increment Note (North Bay) – issued in 1999 in the principal sum of $400,000, plus interest on the unpaid principal at the rate of 9% per annum. Payments are payable solely from available tax increment, which term means any tax increment generated by the minimum improvements in the years 1999 through 2013, and received during the six month period preceding a payment date, after first deducting therefrom. $37,200 is to be retained by the City on each payment date from August 1, 1999 through February 1, 2008 for special assessments. If there is insufficient tax increment to meet the obligation regarding the special assessments, such deficiency shall be deferred and shall be paid, with interest at the rate of 9% per annum, until such deficiency is eliminated. The City shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final payment on February 1, 2014. At December 31, 2009 the principal amount outstanding on the note was $204,532. E. COMMITTED CONTRACTS At December 31, 2009, the City had commitments of $1,145,234 for uncompleted construction contracts. 75 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 13 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY At December 31, 2009 the City had designated and reserved portions of its various fund equities through legal restriction and City Council authorization. Major fund equity appropriations at December 31, 2009 are shown on the various balance sheets as segregations of the fund equity. A summary of such designations is as follows: General Fund: Designated for cash flow$3,690,000 Reserved for prepaid items46,750 Total General Fund3,736,750 2009A G.O. Refunding Bonds: Reserved for debt service350,598 Public Works Facility: Designated for capital improvements699,502 Revolving Assessment Fund: Designated for capital improvements3,854,376 Other governmental funds: Reserved for prepaid items321 Reserved for future programs36,332 Reserved for debt service2,563,033 Designated for cable equipment668,992 Designated for capital improvements6,864,128 Total other governmental funds10,132,806 Total reservations and designations of fund balance$18,774,032 76 CITY OF CHANHASSEN, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 14 LEASE REVENUE The City receives revenue from agreements for the lease of space above its water towers and on City property to communication companies. The space is used for antennas and other equipment necessary to provide radio communications. For accounting purposes, the leases are considered operating leases. Lease revenue for the year ended December 31, 2009 totaled $146,309. Terms of each lease are as follows: LesseeTermsCurrent Term Sprint$19,800 per year with 3% annual increases8/1/06 - 7/31/11 Sprint$18,000 per year with 3% annual increases12/1/05 - 11/30/10 Verizon$1,587 per month through April 2012; $1,825 per month thereafter5/1/07 - 4/30/17 Nextel West Corp.$1,587 per month12/1/07 - 11/30/12 T-Mobile$1,650 per month with 3% annual increases11/1/05 - 10/31/10 T-Mobile$1,650 per month with 3% annual increases8/1/06 - 7/31/11 StoneBridge Wireless5% of gross revenues associated with equipment used on property4/1/06 - 12/31/09 Cingular/AT&T$1,650 per month with 3% annual increases8/1/07 - 7/31/12 Clearwire$1,650 per month with 3% annual increases3/1/10 - 3/1/15 Clearwire$1,650 per month with 3% annual increases3/1/10 - 3/1/15 Note 15 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 51 Accounting and Financial Reporting for Intangible Assets. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2009. Statement No. 53 Accounting and Financial Reporting for Derivative Investments. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2009. Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions.The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2010. The effect these standards may have on future financial statements is not determinable at this time. Note 16 SUBSEQUENT EVENT On January 6, 2010, the City issued 2010A G.O. Library Refunding Bonds for $3,660,000. 77 - This page intentionally left blank - 78 REQUIRED SUPPLEMENTARY INFORMATION 79 CITY OF CHANHASSEN, MINNESOTA Statement 10 REQUIRED SUPPLEMENTARY INFORMATION Page 1 of 6 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 2009 2008 Budgeted Amounts ActualVariance withActual OriginalFinalAmountsFinal BudgetAmounts Revenues: General property taxes: Current$6,903,500$6,903,500$6,783,921($119,579)$6,489,049 Delinquent100,000100,000149,40349,40392,219 Total general property taxes7,003,5007,003,5006,933,324(70,176)6,581,268 Special assessments: Penalities and interest - - 55 - Licenses and permits: Licenses - general government5,0005,0002,700(2,300)3,000 Licenses - public safety121,300121,300136,70215,402110,266 Permits - public safety1,285,500840,500878,62238,1221,224,546 Permits - public works31,50026,50026,76026032,416 Permits - community development7,8007,8006,170(1,630)7,775 Total licenses and permits1,451,1001,001,1001,050,95449,8541,378,003 Intergovernmental: State: Market value homestead credit - - - - 79,892 PERA - public safety20,00020,00020,12412419,467 State aid - fire - public safety140,000140,00099,504(40,496)115,928 Other - general government25,00025,00013,277(11,723)975 State aid - police - public safety80,00080,00094,36314,36386,685 Total intergovernmental265,000265,000227,268(37,732)302,947 Charges for services: General government78,25078,25078,249(1)78,363 Public safety3,3003,3007,5334,2335,383 Public works60,900145,400113,844(31,556)48,822 Park and recreation400,000400,000409,6869,686419,515 Community development31,55031,55013,004(18,546)40,514 Total charges for services574,000658,500622,316(36,184)592,597 Fines and forfeits: Public safety158,500158,500122,496(36,004)124,633 Refunds and reimbursements: General government11,00011,0005,837(5,163)13,230 Public safety17,95017,95014,310(3,640)21,259 Public works2,0002,0007,2695,2693,097 Park and recreation3,3003,3008,9035,60313,611 Community development750750 - (750)1,213 Total refunds and reimbursements35,00035,00036,3191,31952,410 Miscellaneous: Investment income200,000200,00053,522(146,478)216,283 Contributions and donations: General government500500600100600 Public safety2,5002,5002,9504503,100 Park and recreation17,50017,50022,8155,31526,950 Total contributions and donations20,50020,50026,3655,86530,650 80 CITY OF CHANHASSEN, MINNESOTA Statement 10 REQUIRED SUPPLEMENTARY INFORMATION Page 2 of 6 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 2009 2008 Budgeted Amounts ActualVariance withActual Revenues:OriginalFinalAmountsFinal BudgetAmounts Miscellaneous: (continued) Other: General government$145,500$145,500$153,872$8,372$149,986 Public safety6,0006,0004,016(1,984)4,726 Park and recreation - - 21021050 Total other151,500151,500158,0986,598154,762 Total miscellaneous372,000372,000237,985(134,015)401,695 Total revenues9,859,1009,493,6009,230,667(262,933)9,433,553 Expenditures: General government: Legislative: Current: Personal services34,20034,20031,8092,39130,799 Materials and supplies200200 - 200 - Contractual services88,50088,50063,73924,76171,002 Total legislative 122,900122,90095,54827,352101,801 Administrative office: Current: Personal services396,600393,400392,0561,344370,049 Materials and supplies500500180320124 Contractual services65,00062,00053,0148,98672,131 Total administrative office462,100455,900445,25010,650442,304 Finance: Current: Personal services225,500225,500228,631(3,131)213,067 Materials and supplies200200 - 200 - Contractual services64,90062,90039,90622,99449,131 Total finance290,600288,600268,53720,063262,198 Election: Current: Personal services21,50021,50010,33811,16227,853 Materials and supplies200200 - 200545 Contractual services6,2006,2004,3951,8056,388 Total election27,90027,90014,73313,16734,786 Legal: Current: Contractual services168,000168,000135,72532,275131,789 Property assessment: Current: Contractual services110,000110,000104,3145,686105,351 M.I.S.: Current: Personal services171,700171,700171,962(262)166,921 Materials and supplies2,4002,4001,4199812,594 Contractual services125,100125,10098,87526,22587,769 Total M.I.S.299,200299,200272,25626,944257,284 81 CITY OF CHANHASSEN, MINNESOTA Statement 10 REQUIRED SUPPLEMENTARY INFORMATION Page 3 of 6 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 2009 2008 Budgeted Amounts ActualVariance withActual OriginalFinalAmountsFinal BudgetAmounts Expenditures: (continued) General government: (continued) City hall: Current: Personal services$70,500$70,500$68,853$1,647$70,416 Materials and supplies48,30048,30039,3728,92845,220 Contractual services301,300296,300273,83222,468299,164 Total City hall420,100415,100382,05733,043414,800 Library: Current: Materials and supplies3,0003,0003,291(291)2,187 Contractual services134,200134,200110,64323,557128,842 Total library137,200137,200113,93423,266131,029 Total general government2,038,0002,024,8001,832,354192,4461,881,342 Public safety: Police: Current: Personal services78,20078,20077,59061075,461 Materials and supplies5,0005,0004,6393614,262 Contractual services1,541,9001,515,9001,488,73327,1671,421,796 Total police1,625,1001,599,1001,570,96228,1381,501,519 Fire department: Current: Personal services512,100512,100519,826(7,726)461,036 Materials and supplies47,10047,10038,0449,05646,317 Contractual services116,000116,00083,78032,220102,030 Total fire department675,200675,200641,65033,550609,383 Code enforcement: Current: Personal services681,100646,700651,178(4,478)635,800 Materials and supplies6,1006,1003,0143,0866,219 Contractual services33,90033,90011,39722,50312,624 Total code enforcement721,100686,700665,58921,111654,643 Animal control: Current: Personal services56,00053,00051,5591,44151,596 Materials and supplies5,0005,0002,8452,1554,547 Contractual services13,70013,70010,4903,21013,591 Total animal control74,70071,70064,8946,80669,734 Total public safety3,096,1003,032,7002,943,09589,6052,835,279 82 CITY OF CHANHASSEN, MINNESOTA Statement 10 REQUIRED SUPPLEMENTARY INFORMATION Page 4 of 6 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 2009 2008 Budgeted Amounts ActualVariance withActual Expenditures: (continued)OriginalFinalAmountsFinal BudgetAmounts Public works: Engineering: Current: Personal services$530,100$515,900$507,081$8,819$499,841 Materials and supplies1,3001,3001,583(283)2,034 Contractual services32,10032,10029,9822,11830,333 Total engineering563,500549,300538,64610,654532,208 Street maintenance: Current: Personal services633,800633,800644,157(10,357)622,738 Materials and supplies131,600131,600127,9173,683160,256 Contractual services35,70035,70026,9658,73520,917 Total street maintenance 801,100801,100799,0392,061803,911 Street lighting: Current: Materials and supplies5,0005,0001,3313,6692,891 Contractual services323,400323,400331,358(7,958)316,039 Total street lighting328,400328,400332,689(4,289)318,930 City garage: Current: Personal services255,100255,100257,340(2,240)247,571 Materials and supplies220,400170,400117,33253,068162,450 Contractual services59,00059,00044,98114,01943,652 Total City garage534,500484,500419,65364,847453,673 Total public works2,227,5002,163,3002,090,02773,2732,108,722 Parks and recreation: Parks and recreation commission: Current: Materials and supplies200200 - 200 - Contractual services2,0002,0002,578(578)1,094 Total parks and recreation commission2,2002,2002,578(378)1,094 Parks and recreation administration: Current: Personal services124,000124,000125,625(1,625)121,392 Materials and supplies1,0001,00033366775 Contractual services10,60010,6006,8943,7067,117 Total parks and recreation administration135,600135,600132,8522,748128,584 Recreation center: Current: Personal services227,100227,100215,79911,301232,440 Materials and supplies11,50011,50038,457(26,957)46,681 Contractual services77,00077,00078,736(1,736)96,905 Total recreation center315,600315,600332,992(17,392)376,026 83 CITY OF CHANHASSEN, MINNESOTA Statement 10 REQUIRED SUPPLEMENTARY INFORMATION Page 5 of 6 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 2009 2008 Budgeted Amounts ActualVariance withActual OriginalFinalAmountsFinal BudgetAmounts Expenditures: (continued) Parks and recreation: (continued) Senior citizen center: Current: Personal services$44,200$44,200$44,165$35$41,089 Materials and supplies4,5004,5003,3471,1532,609 Contractual services20,60020,60020,928(328)23,467 Total senior citizen center69,30069,30068,44086067,165 Recreation program: Current: Personal services177,600177,600162,40215,198175,554 Materials and supplies19,10019,10013,7125,38817,532 Contractual services93,80093,80087,3336,46793,823 Total recreation program290,500290,500263,44727,053286,909 Self-supporting programs: Current: Personal services28,60028,60031,161(2,561)30,762 Materials and supplies7,7007,7006,4491,2517,700 Contractual services49,30049,30036,44512,85545,929 Total self-supporting programs85,60085,60074,05511,54584,391 Lake Ann Park operations: Current: Personal services13,40013,4005,7237,6776,596 Materials and supplies9,5009,5006,1243,3767,927 Contractual services57,40057,40043,82113,57942,446 Total Lake Ann Park operations80,30080,30055,66824,63256,969 Park maintenance: Current: Personal services701,100701,100697,7153,385679,204 Materials and supplies81,30081,30069,57011,73074,542 Contractual services98,50098,50080,54317,95789,349 Total park maintenance880,900880,900847,82833,072843,095 Downtown maintenance: Current: Materials and supplies - - - - 8 Contractual services - - 3,953(3,953)6,205 Total downtown maintenance003,953(3,953)6,213 Recreation sports: Current: Personal services - - 3,146(3,146) - Materials and supplies - - 6,229(6,229) - Contractual services - - 4,947(4,947) - Total recreation sports0014,322(14,322)0 Total parks and recreation1,860,0001,860,0001,796,13563,8651,850,446 84 CITY OF CHANHASSEN, MINNESOTA Statement 10 REQUIRED SUPPLEMENTARY INFORMATION Page 6 of 6 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 20092008 Budgeted AmountsActualVariance withActual OriginalFinalAmountsFinal BudgetAmounts Expenditures: (continued) Community development: Planning commission: Current: Materials and supplies$200$200$ - $200$ - Contractual services4,0004,0004,066(66)3,004 Total planning commission4,2004,2004,0661343,004 Planning administration: Current: Personal services388,700388,700385,7212,979373,488 Materials and supplies700700380320241 Contractual services14,10014,1006,1347,96614,076 Total planning administration403,500403,500392,23511,265387,805 Senior facility commission: Current: Personal services22,10022,10022,0326820,937 Contractual services15,70015,7008,5837,1178,749 Total senior facility commission37,80037,80030,6157,18529,686 Total community development445,500445,500426,91618,584420,495 Total expenditures9,667,1009,526,3009,088,527437,7739,096,284 Revenues over (under) expenditures192,000(32,700)142,140174,840337,269 Other financing sources (uses): Transfers out(192,000)(192,000)(150,000)42,000(946,836) Net change in fund balance$0($224,700)(7,860)$216,840(609,567) Fund balance - January 14,881,7195,491,286 Fund balance - December 31$4,873,859$4,881,719 85 CITY OF CHANHASSEN, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE NOTE TO RSI December 31, 2009 Note A BUDGETARY INFORMATION The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the department level for the General Fund. 86 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 87 - This page intentionally left blank - 88 NONMAJOR GOVERNMENTAL FUNDS 89 - This page intentionally left blank - 90 SPECIAL REVENUE FUNDS The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal and related costs on general long-term debt. CAPITAL PROJECT FUNDS The Capital Project Funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds). 91 CITY OF CHANHASSEN, MINNESOTA Statement 11 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2009 With Comparative Totals For December 31, 2008 Totals Nonmajor SpecialDebtCapital Governmental Funds RevenueServiceProject20092008 Assets: Cash and investments$644,639$2,864,990$6,881,729$10,391,358$13,801,363 Accrued interest receivable3,63913,77345,42162,833124,145 Accounts receivable - net60,446 - 2,53262,978301,588 Property taxes receivable - 27,14740,29367,44026,981 Special assessments receivable - 232,79220,670253,4623,780,131 Prepaid items321 - - 32125 Total assets$709,045$3,138,702$6,990,645$10,838,392$18,034,233 Liabilities and Fund Balance Liabilities: Accounts payable$16$ - $160,580$160,596$59,938 Due to other funds - - 89,61789,61713,409 Contracts payable - - 84584511,924 Salaries payable3,384 - - 3,3843,916 Deferred revenue - 232,79223,025255,8173,781,803 Total liabilities3,400232,792274,067510,2593,870,990 Fund balance: Reserved 36,6532,563,033 - 2,599,6866,671,271 Unreserved: Designated668,992 - 6,864,1287,533,1207,265,835 Undesignated - 342,877(147,550)195,327226,137 Total fund balance705,6452,905,9106,716,57810,328,13314,163,243 Total liabilities and fund balance$709,045$3,138,702$6,990,645$10,838,392$18,034,233 92 CITY OF CHANHASSEN, MINNESOTA Statement 12 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2009 With Comparative Totals For The Year Ended December 31, 2008 Totals Nonmajor Special DebtCapitalGovernmental Funds RevenueServiceProject20092008 Revenues: General property taxes$ - $1,661,442$1,091,875$2,753,317$2,901,065 Tax increment collections - - 473,674473,674476,651 Licenses and permits - - 34,80034,800432,542 Intergovernmental - - 107,488107,488107,705 Special assessments - 109,44021,101130,541166,390 Charges for services228,87499,570 - 328,444191,768 Investment income8,66731,42097,011137,098653,142 Contributions and donations20,841 - - 20,84112,760 Refunds and reimbursements - - 25,38825,3881,111 Other - - 12,59012,59020,994 Total revenues258,382 1,901,872 1,863,927 4,024,181 4,964,128 Expenditures: Current: General government93,463 - 144,881238,344238,670 Public safety14,490 - 21,45935,94932,517 Public works - - 248,882248,882313,238 Parks and recreation - - 691,850691,85082,907 Community development - - 101,003101,00348,324 Capital outlay: - General government - - 143,663143,663233,600 Public safety - - 55,15255,15254,284 Public works - - 51,21751,217344,513 Parks and recreation - - 235,292235,292642,508 Debt service: - Principal - 2,553,002 - 2,553,0022,689,552 Interest and paying agent fees - 920,529 - 920,529874,848 Bond issuance costs - 73,182 - 73,182 - Developer assistance - - 90,35490,354226,055 Total expenditures107,953 3,546,713 1,783,753 5,438,419 5,781,016 Revenues over (under) expenditures150,429 (1,644,841)80,174 (1,414,238)(816,888) Other financing sources (uses): Bond premium - 226,991 - 226,991 - Refunding bonds issued - 6,020,000 - 6,020,000385,692 Redemption of refunded bonds - (8,387,123) - (8,387,123) - Loans issued - - - - 24,839 Transfers in - 217,42940,210257,6391,102,442 Transfers out - (406,014)(148,639)(554,653)(1,366,768) Sale of capital assets - - 16,27416,27410,695 Total other financing sources (uses)0 (2,328,717)(92,155)(2,420,872)156,900 Net change in fund balance150,429 (3,973,558)(11,981)(3,835,110)(659,988) Fund balance - January 1555,2166,879,4686,728,55914,163,24314,823,231 Fund balance - December 31$705,645$2,905,910$6,716,578$10,328,133$14,163,243 93 - This page intentionally left blank - 94 NONMAJOR SPECIAL REVENUE FUNDS Special Revenue Funds are established to account for taxes and other revenues set aside for a particular purpose. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the related liability is incurred. Contribution Fund – This fund accounts for the proceeds that the City receives from charitable gambling. The City collects 10% of the net proceeds from a pull-tab operation in the City. By state statute, the fund may only be used for public safety equipment and training or programs which benefit youth. CATV Fund – Under the terms of the franchise agreement with Triax Cablevision, the City is to receive 5% of the revenues derived from cable television sales within the City. These monies are dedicated solely to improving public broadcasting capabilities, studio improvements, and other capital expenditures improving the overall cable system. 95 CITY OF CHANHASSEN, MINNESOTA Statement 13 SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2009 With Comparative Totals For December 31, 2008 201 Contribution210 CATV Total Nonmajor Special Revenue FundFundFunds 20092008 Assets: Cash and investments$34,001$610,638$644,639$366,360 Accrued interest receivable2433,3963,6394,220 Accounts receivable - net2,08858,35860,446188,527 Prepaid items -32132125 Total assets$36,332 $672,713 $709,045 $559,132 Liabilities and Fund Balance Liabilities: Accounts payable$ -$16$16$ - Salaries payable -3,3843,3843,916 Total liabilities03,4003,4003,916 Fund balance: Reserved for prepayments -32132125 Reserved for youth and public safety programs36,332 - 36,33229,499 Unreserved: Designated for cable equipment - 668,992668,992525,692 Total fund balance36,332669,313705,645555,216 Total liabilities and fund balance$36,332 $672,713 $709,045 $559,132 96 CITY OF CHANHASSEN, MINNESOTA Statement 14 SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2009 With Comparative Totals For The Year Ended December 31, 2008 201 Contribution210 CATV Total Nonmajor Special Revenue FundFundFunds 20092008 Revenues: Franchisefees$ -$228874,$228874,$185566, Franchisefees$$228874$228874$185566 Investment income4828,1858,66722,794 Contributions and donations20,841 - 20,84110,260 Total revenues21,323237,059258,382218,620 Expenditures: Current: Personal services -89,48089,48083,783 ,,, Materials and supplies -1,1671,167740 Contractual services14,4902,81617,30620,804 Capital outlay - - - 141,248 Total expenditures14,49093,463107,953246,575 Revenues over (under) expenditures6,833143,596150,429(27,955) FdblJ1Funaance - January 29499,52571755,77555,5552165831715,7 dbl129499212168311 Fund balance - December 31$36,332$669,313$705,645$555,216 97 - This page intentionally left blank - 98 NONMAJOR DEBT SERVICE FUNDS Debt Service Funds are maintained on the modified accrual basis of accounting for revenues from taxes and other sources set aside for the payment of the debt obligations of the City. Principal and interest on the general long-term debt is recognized when due. General Obligation Bonds – these funds are used to account for the accumulation of resources for payment of general obligation bonds or other general indebtedness and the interest thereon. Tax Increment Bonds – these funds are used to account for the accumulation of resources for payment of tax increment general obligation bonds and the interest thereon. General Improvement Bonds – these funds are used to account for the accumulation of resources for payment of principal and interest on general obligation improvement bonds. Revenue Bonds – these funds are used to account for the bonds issued by the EDA that are repaid through a lease-purchase agreement with the City. 99 CITY OF CHANHASSEN, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS December 31, 2009 With Comparative Totals For December 31, 2008 351 1999A 354 2001B G.O.352 2000 G.O.357 2002A 300 Permanent ImprovementPublic Project ImprovementG.O. Library Revolving DebtBondsRevenue BondsBondsBonds Assets: Assets: Cash and investments$340,941$ - $119,485$ - $798,969 Accrued interest receivable1,936 - 376 - 3,814 Property taxes receivable - - 4,309 - 4,098 Special assessments receivable103,380 - - - - Total assets$446,257$0$124,170$0$806,881 Liabilities and Fund Balance Liabilities: Deferred revenue$103,380$ - $ - $ - $ - Fund balance: Reserved for debt retirement - - 124,170 - 806,881 UdUnreserved: Undesignated342,877 - - - - Total fund balance342,8770124,1700806,881 Total liabilities and fund balance$446,257$0$124,170$0$806,881 100 Statement 15 358 2003A 364 2005A 365 2005C 366 2006A 367 2008A G.O.G.O.G.O. Park G.O.G.O. Public Equipment360 2004A ImprovementRefundingImprovementWorks Totals Nonmajor Debt Service CertificateG.O. BondsBondsBondsBondsFacility BondsFunds 20092008 $ - $534,650$ - $902,416$ - $168,529$2,864,990$6,807,880 - 2,434 - 3,119 - 2,09413,77356,092 - 10,237 - 8,503 - - 27,14715,496 - 129,412 - - - - 232,7923,740,803 $0$676,733$0$914,038$0$170,623$3,138,702$10,620,271 $ - $129,412$ - $ - $ - $ - $232,792$3,740,803 - 547,321 - 914,038 - 170,6232,563,0336,641,747 - - - - - - 342,877237,721 0547,3210914,0380170,6232,905,9106,879,468 $0$676,733$0$914,038$0$170,623$3,138,702$10,620,271 101 CITY OF CHANHASSEN, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2009 With Comparative Totals For The Year Ended December 31, 2008 300351 1999A 352 2000 354 2001B 358 2003A PermanentG.O.Public Project G.O.357 2002A G.O. RevolvingImprovementRevenueImprovementG.O. Library Equipment DebtBondsBondsBondsBondsCertificate Revenues: Generalpropertytaxesyx$ -$ -$122603,$ -$491300,$ - Generalproperttaes$$$122603$$491300$ Special assessments2,407 - - 6,738 - - Charges for services99,570 - - - - - Investment income3,179 - 769 - 8,454 - Total revenues105,1560123,3726,738499,7540 Expenditures: Debt service: Principal - - 100,000 - 250,000 - Interest and paying agent fees - - 20,584 - 213,010 - Bond issuance costs - - - - - - Total expenditures00120,5840463,0100 Revenues over (under) expenditures105,15602,7886,73836,7440 Othfii()ternancng sources uses: Ohfii() Bond premium - - - - - - Refunding bonds issued - - - - - - Redemption of refunding bonds - - - - - - Transfer in - - - - - - Transfer out - (161,944) - (22,747) - (26,623) Total other financing sources (uses)0(161,944)0(22,747)0(26,623) Net change in fund balance105,156(161,944)2,788(16,009)36,744(26,623) Fund balance - January 1237,721161,944121,38216,009770,13726,623 Fund balance - December 31$342,877$0$124,170$0$806,881$0 102 Statement 16 364 2005A 365 2005C 366 2006A 367 2008A 362 2004C G.O.G.O. Park G.O.G.O. Public 360 2004A Taxable G.O. ImprovementRefundingImprovementWorksTotals Nonmajor Debt Service G.O. BondsT.I. RefundBondsBondsBondsFacility BondsFunds 20092008 $297900,$ -$137252,$612387,$ -$ -$1661442,,$1809190,, $297900$$137252$612387$$$1661442$1809190 45,917 - 25,721 - 28,657 - 109,440142,923 - - - - - - 99,5706,202 4,903 - - 7,311 - 6,80431,420296,699 348,7200162,973619,69828,6576,8041,901,8722,255,014 380,00055,000318,002610,000840,000 - 2,553,0022,689,552 26,88853,429137,40642,450200,954225,808920,529874,848 - - 32,944 - 40,238 - 73,182 - 406,888108,429488,352652,4501,081,192225,8083,546,7133,564,400 (58,168)(108,429)(325,379)(32,752)(1,052,535)(219,004)(1,644,841)(1,309,386) - - 80,457 - 146,534 - 226,991 - - - 2,710,000 - 3,310,000 - 6,020,000385,692 - - (3,057,123) - (5,330,000) - (8,387,123) - - 108,429 - 109,000 - - 217,429380,532 - - (84,547) - (110,153) - (406,014)(93,160) 0108,429(351,213)109,000(1,983,619)0(2,328,717)673,064 (58,168)0(676,592)76,248(3,036,154)(219,004)(3,973,558)(636,322) 605,489 - 676,592837,7903,036,154389,6276,879,4687,515,790 $547,321$0$0$914,038$0$170,623$2,905,910$6,879,468 103 - This page intentionally left blank - 104 NONMAJOR CAPITAL PROJECT FUNDS Capital Project Funds are used to account for the construction and financing of large capital projects. Revenues and expenditures are recognized on the modified accrual basis. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which they are incurred. Most capital projects are singular in purpose and their revenues/expenditures cannot be used for subsidizing any other operating fund. In each of these cases, bonds or other revenues received can only be used for these specific activities. The following Capital Project Funds differ in that several of the expenditure categories represent recurring types of costs, i.e., personal services, repair and maintenance of utilities, and/or recurring land improvements. 400 Capital Replacement Fund – accounts for monies collected from developers for inspection and administrative services for projects. – accounts for park dedication fees as required by the 410 Park Acquisition and Development City ordinance. These funds are then utilized to finance park and trail improvements identified in the park and recreation section of the cities comprehensive plan. – accounts for sealcoating costs on local streets. 420 Street Pavement Management 461 Gateway Place TIF District, 462 Downtown Transit Station TIF #10, 491 TID #4 Entertainment, 494 TID #5 North Bay, and 498 TID #8 Presbyterian Homes – account for financing improvements in tax increment financing districts. 600 Special Assessment Projects – accounts for the construction or projects financied by special assessments. 602 2006A Special Assessment Bonds – accounts for the construction costs related to the MUSA area improvements. 105 CITY OF CHANHASSEN, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2009 With Comparative Totals For December 31, 2008 410 Park 400 Capital Acquisition420 Street 461 Gateway 462 Downtown ReplacementandPavementPlace TIF Transit Station FundDevelopmentManagementDistrictTIF #10 Assets: Cash and investments$1,747,159$2,933,625$815,189$758$ - Accrued interest receivable9,53923,2794,49310 - Accounts receivable - net2,532 - - - - Property taxes receivable28,419 - 9,312 - - Special assessments receivable - - - - - Total assets$1,787,649$2,956,904$828,994$768$0 Liabilities and Fund Balance Liabilities: Accounts payable$90,594$12,053$ - $ - $57,933 Due to other funds - - - - 89,617 Contracts payable845 - - - - Deferred revenue - - - - - Total liabilities91,43912,05300147,550 Fund balance (deficit): Unreserved: Designated for capital improvements1,696,2102,944,851828,994768 - Undesignated - - - - (147,550) Total fund balance (deficit)1,696,2102,944,851828,994768(147,550) Total liabilities and fund balance$1,787,649$2,956,904$828,994$768$0 106 Statement 17 602 2006A 498 TID #8 600 Special Special 491 TID #4 494 TID #5 PresbyterianAssessmentAssessment Totals Nonmajor Capital Project EntertainmentNorth BayHomesProjectsBondsFunds 20092008 $641,593$46,532$147,205$52,850$496,818$6,881,729$6,627,123 3,999 - 5532553,29345,42163,833 - - - - - 2,532113,061 -2,562 - - - 40,29311,485 - - - 20,670 - 20,67039,328 $645,592$49,094$147,758$73,775$500,111$6,990,645$6,854,830 $ - $ - $ - $ - $ - $160,580$59,938 - - - - - 89,61713,409 - - - - - 84511,924 -2,355 - 20,670 - 23,02541,000 02,355020,6700274,067126,271 645,59246,739147,75853,105500,1116,864,1286,740,143 - - - - - (147,550)(11,584) 645,59246,739147,75853,105500,1116,716,5786,728,559 $645,592$49,094$147,758$73,775$500,111$6,990,645$6,854,830 107 CITY OF CHANHASSEN, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 31, 2009 With Comparative Totals For The Year Ended December 31, 2008 400 Capital 410 Park 420 Street 461 Gateway 462 Downtown ReplacementAcquisition and PavementPlace TIF Transit Station FundDevelopmentManagementDistrictTIF #10 Revenues: General property taxes$824,000$ - $267,875$ - $ - Tax increment collections - - - 200 - Licenses and permits - 34,800 - - - Intergovernmental - - 100,000 - - Special assessments - - - - - Charges for services - - - - - Investment income22,29546,23610,18436 - Contributions and donations - - - - - Refunds and reimbursements22,8882,500 - - - Other12,590 - - - - Total revenues881,77383,536378,0592360 Expenditures: Current: General government144,881 - - - - Public safety21,459 - - - - Public works23,790 - 116,282 - 107,340 Parks and recreation36,543655,307 - - - Community development - - - 1,293 - Capital outlay: General government143,663 - - - - Public safety55,152 - - - - Public works51,217 - - - - Parks and recreation126,668108,624 - - - Developer assistance - - - - - Total expenditures603,373763,931116,2821,293107,340 Revenues over (under) expenditures278,400(680,395)261,777(1,057)(107,340) Other financing sources (uses): Loans issued - - - - - Transfer in - - - - - Transfer out - - - - (40,210) Sale of capital assets16,274 - - - - Total other financing sources (uses)16,274000(40,210) Net change in fund balance294,674 (680,395)261,777 (1,057)(147,550) Fund balance (deficit) - January 11,401,5363,625,246567,2171,825 - Fund balance (deficit) - December 31$1,696,210$2,944,851$828,994$768($147,550) 108 Statement 18 602 2006A 498 TID #8 600 Special Special 491 TID #4 494 TID #5 PresbyterianAssessmentAssessment Totals Nonmajor Capital Project EntertainmentNorth BayHomesProjectsBonds Funds 20092008 $ - $ - $ - $ - $ - $1,091,875$1,091,875 212,73278,097182,645 - - 473,674476,651 - - - - - 34,800432,542 - 7,488 - - - 107,488107,705 - - - 21,101 - 21,10123,467 - - - - - - - 9,410 - 1,3197876,74497,011333,649 - - - - - - 2,500 - - - - - 25,3881,111 - - - - - 12,59020,994 222,14285,585183,96421,8886,7441,863,9272,490,494 - - - - - 144,881133,343 - - - - - 21,45932,517 - - - - 1,470248,882313,238 - - - - - 691,85082,907 1,21325,43773,060 - - 101,00348,324 - - - - - 143,66392,352 - - - - - 55,15254,284 - - - - - 51,217344,513 - - - - - 235,292642,508 - - 90,354 - - 90,354226,055 1,21325,437163,41401,4701,783,7531,970,041 220,92960,14820,55021,8885,27480,174520,453 - - - - - - 24,839 40,210 - - - - 40,210721,910 (108,429) - - - - (148,639)(1,273,608) - - - - - 16,27410,695 (68,219)0000(92,155)(516,164) 152,710 60,148 20,550 21,888 5,274 (11,981)4,289 492,882(13,409)127,20831,217494,8376,728,5596,724,270 $645,592$46,739$147,758$53,105$500,111$6,716,578$6,728,559 109 CITY OF CHANHASSEN, MINNESOTA Statement 19 SPECIAL REVENUE FUND - CONTRIBUTION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 20092008 Budgeted AmountsActualVariance withActual OriginalFinalAmountsFinal BudgetAmounts Revenues: Investment income($1,500)($1,500)$482$1,982$2,006 Contributions and donations(12,000)(12,000)20,84132,84110,260 Totalrevenuesvu(13500),(13500),21323,34823,12266, Totalreenes(13500)(13500)213233482312266 Expenditures: Current: Contractual services17,50017,50014,4903,01017,500 Revenues over (under) expenditures($31,000)($31,000)6,833$37,833(5,234) Fund balance - January 129,49934,733 Fund balance - December 31$36,332$29,499 110 CITY OF CHANHASSEN, MINNESOTA Statement 20 SPECIAL REVENUE FUND - CATV SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2009 With Comparative Actual Amounts For The Year Ended December 31, 2008 20092008 Budgeted AmountsActualVariance withActual OriginalFinalAmountsFinal BudgetAmounts Revenues: Franchise fees$150,000$150,000$228,874$78,874$185,566 Investment income10,00010,0008,185(1,815)20,788 Totalrevenuesvu160000,160000,237059,77059,206354, Totalreenes16000016000023705977059206354 Expenditures: Current: Personal services89,10089,10089,480(380)83,783 Materials and supplies - - 1,167(1,167)740 Contractual services - - 2,816(2,816)3,304 Capital outlay - - - - 141,248 py, Total expenditures89,10089,10093,463(4,363)229,075 Revenues over (under) expenditures$70,900$70,900143,596$72,696(22,721) Fund balance - January 1525,717548,438 Fund balance - December 31$669,313$525,717 111 - This page intentionally left blank - 112 FIDUCIARY FUNDS Fiduciary Funds have been established to account for cash or other assets held by the City as a trustee or agent for others. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the related liability is incurred. Fiduciary Funds are custodial in nature (assets equal liabilities) and do not involve measurement of the results of operations. Escrow Fund – this fund is used to account for various deposits required by the City. Moon Valley Restoration Fund – this is an escrow fund which will be used to finance restoration to a gravel pit when it ceases operation. 113 CITY OF CHANHASSEN, MINNESOTA Statement 21 COMBINING STATEMENT OF NET ASSETS AGENCY FUNDS December 31, 2009 With Comparative Totals For December 31, 2008 913 Moon Valley 815 Escrow Restoration FundFundTotals 20092008 Assets: Cash and investments$609,658$85,159$694,817$709,405 Liabilities: Accounts payable$ - $ - $ - $1,500 Escrow deposits payable609,65885,159694,817707,905 Total liabilities$609,658$85,159$694,817$709,405 114 CITY OF CHANHASSEN, MINNESOTA Statement 22 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For The Year Ended December 31, 2009 BalanceBalance 01/01/09AdditionsDeletions12/31/09 Escrow Fund Assets: Cash and investments$625,127$472,514$487,983$609,658 Liabilities: Accounts payable$1,500$ - $1,500$ - Escrow deposits payable623,627472,514486,483609,658 Total liabilities$625,127$472,514$487,983$609,658 Moon Valley Restoration Fund Assets: Cash and investments$84,278$881$ - $85,159 Liabilities: Escrow deposits payable$84,278$881$ - $85,159 Totals - All Agency Funds Assets: Cash and investments$709,405$473,395$487,983$694,817 Liabilities: Accounts payable$1,500$ - $1,500$ - Escrow deposits payable707,905473,395486,483694,817 Total liabilities$709,405$473,395$487,983$694,817 115 - This page intentionally left blank - 116 SUPPLEMENTARY FINANCIAL INFORMATION 117 CITY OF CHANHASSEN, MINNESOTA COMBINED SCHEDULE OF INDEBTEDNESS December 31, 2009 Final InterestIssueMaturity Bonded indebtedness:RatesDateDate General obligation bonds: G.O. Library Bonds, Series 2002A1.55%-4.85%03/01/0202/01/22 G.O. Park Refunding Bonds, Series 2005C3.50%11/16/0502/01/10 G.O. Capital Improvement Plan Bonds, Series 2008A4.00%-4.60%11/18/0802/01/30 Total general obligation bonds Revenue bonds: 2000 Public Project Revenue Bonds4.75%-5.35%12/01/0002/01/12 Tax increment bonds: G.O. Tax Increment Refunding Bonds, Series 2004C3.00%-6.00%08/10/0402/01/21 General improvement bonds: G.O. Improvement Bonds, Series 2004A2.50%-4.00%08/10/0402/01/15 G.O. Improvement Bonds, Series 2006A3.75%-3.80%06/13/0602/01/14 G.O. Improvement Bonds, Series 2009A3%06/03/0902/01/17 Total general improvement bonds Enterprise Fund debt: GOSewerandWaterRevenueBonds2001,SeriesA..,350%.--465%.07/15/0102/01/12 GOSewerandWaterRevenueBonds2001SeriesA350%465%07/15/0102/01/12 G.O. Water Revenue Bonds of 2004, Series B4.00%-4.50%08/10/0402/01/25 G.O. Water Revenue Bonds of 2005, Series B3.75%-3.90%11/16/0502/01/21 Total Enterprise Fund debt Total bonded indebtedness Other debt: Loan payable for highway construction3.81%-4.30%04/19/0507/01/17 Compensated absences payable Total City indebtedness 118 Exhibit 1 Prior YearsPayable2009PayablePrincipal OriginalJanuary 1,December 31,Due in IssuePayments2009IssuedPayments20092009 $6,095,000$1,245,000$4,850,000$ - $250,000$4,600,000$260,000 2,590,0001,085,0001,505,000 - 610,000895,000895,000 7,550,000 - 7,550,000 - - 7,550,000 - 16,235,0002,330,00013,905,0000860,00013,045,0001,155,000 930,000495,000435,000 - 100,000335,000105,000 1,170,000155,0001,015,000 - 55,000960,00060,000 2,070,0001,085,000985,000 - 380,000605,000345,000 6,640,000470,0006,170,000 - 6,170,000 - - 6,020,000 - - 6,020,000 - 6,020,000215,000 14,730,0001,555,0007,155,0006,020,0006,550,0006,625,000560,000 1,645,000,,1,250,000,,395,000, --130,000,265,000,130,000, 16450001250000395000130000265000130000 7,930,000855,0007,075,000 - 290,0006,785,000300,000 5,465,000520,0004,945,000 - 300,0004,645,000310,000 15,040,0002,625,00012,415,0000720,00011,695,000740,000 48,105,0007,160,00034,925,0006,020,0008,285,00032,660,0002,620,000 3,853,005477,8803,375,125 - 3,375,125 - - - - 820,748500,713452,050869,41150,911 $51,958,005$7,637,880$39,120,873$6,520,713$12,112,175$33,529,411$2,670,911 119 CITY OF CHANHASSEN, MINNESOTA Exhibit 2 DEBT SERVICE PAYMENTS TO MATURITY GENERAL OBLIGATION BONDS December 31, 2009 G.O. Tax 2000IncrementG.O. ParkG.O. Capital Public ProjectG.O. LibraryRefundingRefundingImprovement RevenueBonds,Bonds,Bonds,Plan Bonds, BondSeries 2002ASeries 2004CSeries 2005CSeries 2008ATotal Bonds payable$335,000$4,600,000$960,000$895,000$7,550,000$14,340,000 Future interest payable27,4171,541,164360,17815,6634,083,4866,027,908 $362,417$6,141,164$1,320,178$910,663$11,633,486$20,367,908 Payments to maturity: 2010$119,899$462,821$110,485$910,663$320,668$1,924,536 2011119,308467,251107,725 - 565,6671,259,951 2012123,210465,873109,720 - 560,5681,259,371 2013 - 468,620111,345 - 560,1671,140,132 2014 - 470,315107,775 - 559,3681,137,458 2015 - 470,960109,005 - 558,1671,138,132 2016 - 470,686109,895 - 556,5681,137,149 2017 - 474,443110,440 - 559,4671,144,350 2018 - 472,213110,580 - 561,7681,144,561 2019 - 478,860110,308 - 558,4841,147,652 2020 - 479,249109,600 - 564,4231,153,272 2021 - 478,475113,300 - 564,4671,156,242 2022 - 481,398 - - 563,7051,045,103 2023 - - - - 567,013567,013 2024 - - - - 569,270569,270 2025 - - - - 570,454570,454 2026 - - - - 570,545570,545 2027 - - - - 574,412574,412 2028 - - - - 572,035572,035 2029 - - - - 578,275578,275 2030 - - - - 577,995577,995 $362,4176,141,164$1,320,178$910,663$11,633,486$20,367,908 120 CITY OF CHANHASSEN, MINNESOTA Exhibit 3 DEBT SERVICE PAYMENTS TO MATURITY GENERAL OBLIGATION IMPROVEMENT BONDS December 31, 2009 G.O.G.O. ImprovementImprovement Bonds,Bonds, Series 2004ASeries 2009ATotal Bonds payable$605,000$6,020,000$6,625,000 Future interest payable34,594884,697919,291 $639,594$6,904,697$7,544,291 Payments to maturity: 2010$360,131$421,472$781,603 201178,300361,300439,600 201275,850360,525436,375 201373,313359,600432,913 201426,5003,618,8753,645,375 201525,500592,900618,400 2016 -591,175591,175 2017 -598,850598,850 $639,594$6,904,697$7,544,291 121 CITY OF CHANHASSEN, MINNESOTA Exhibit 4 DEBT SERVICE PAYMENTS TO MATURITY REVENUE BONDS December 31, 2009 G.O. Sewer & WaterG.O. WaterG.O. Water RevenueRevenueRevenue BondsBonds of 2004,Bonds of 2005, Series 2001ASeries BSeries BTotal Bonds payable$265,000$6,785,000$4,645,000$11,695,000 Future interest payable15,3542,629,9711,144,4263,789,751 $280,354$9,414,971$5,789,426$15,484,751 Payments to maturity: 2010$139,008$581,154$480,195$1,200,357 201169,718583,854478,3821,131,954 201271,628581,054481,1011,133,783 2013 -582,754483,2581,066,012 2014 -583,854479,9451,063,799 2015 -584,354486,0701,070,424 2016 -584,254481,6331,065,887 2017 -583,354481,7261,065,080 2018 -586,334486,0571,072,391 2019 -588,164484,5121,072,676 2020 -589,039482,2841,071,323 2021 -593,655484,2631,077,918 2022 -591,935 -591,935 2023 -598,787 -598,787 2024 -599,150 -599,150 2025 -603,275 -603,275 $280,354$9,414,971$5,789,426$15,484,751 122 CITY OF CHANHASSEN, MINNESOTA Exhibit 5 TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES December 31, 2009 Taxable Capacity Valuations: Tax Capacity Values Property Type2008/2009 Real estate and personal property: Hennepin County$1,580,214 Carver County39,488,940 Fiscal disparities: Distribution2,117,099 Contribution(3,744,848) Less: captured tax increment value(473,702) et tax capacity$38,967,703 N Tax Levy and Tax Rates: Payable 2009 Tax CertifiedCapacity LevyRate (1) Taxes levied: Revenue$7,173,50016.372 Debt Service2,901,0656.621 Totals$10,074,56522.993 (1) Urban rate 123 CITY OF CHANHASSEN, MINNESOTA Exhibit 6 SCHEDULE OF DEFERRED TAX LEVIES December 31, 2009 Public ProjectG.O. CapitalTotalG.O.G.O.TotalTotal Years ofRevenueLibraryImprovementGeneralImprovementImprovementGeneralDeferred Levy/BondsBondsPlan BondsBondedBondsRefunding BondsImprovementTax Collectionof 2000of 2002Aof 2008ADebtof 2005Aof 2009ABondsLevies 2009/2010$122,195$496,400$599,300$1,217,895$285,000$306,300$591,300$1,809,195 2010/2011126,420495,400594,0001,215,820285,000337,500622,5001,838,320 2011/2012 - 498,800593,8001,092,600285,000336,800621,8001,714,400 2012/2013 - 501,200593,2001,094,400285,000335,900620,9001,715,300 2013/2014 - 502,400592,1001,094,500285,000550,000835,0001,929,500 2014/2015 - 502,500590,6001,093,100285,000233,800518,8001,611,900 2015/2016 - 507,000594,0001,101,000285,000232,300517,3001,618,300 2016/2017 - 505,100596,7001,101,800 - 240,700240,7001,342,500 2017/2018 - 512,800593,6001,106,400 - - - 1,106,400 2018/2019 - 513,900600,3001,114,200 - - - 1,114,200 2019/2020 - 513,700600,8001,114,500 - - - 1,114,500 2020/2021 - 517,500600,4001,117,900 - - - 1,117,900 2021/2022 - - 604,500604,500 - - - 604,500 2022/2023 - - 607,400607,400 - - - 607,400 2023/2024 - - 609,200609,200 - - - 609,200 2024/2025 - - 609,900609,900 - - - 609,900 2025/2026 - - 614,600614,600 - - - 614,600 2026/2027 - - 612,700612,700 - - - 612,700 2027/2028 - - 620,100620,100 - - - 620,100 2028/2029 - - 620,600620,600 - - - 620,600 $248,615$6,066,700$12,047,800$18,363,115$1,995,000$2,573,300$4,568,300$22,931,415 124 III. STATISTICAL SECTION (UNAUDITED) 125 - This page intentionally left blank - 126 III. STATISTICAL SECTION (UNAUDITED) This part of the City of Chanhassen, Minnesota’s Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City of Chanhassen, Minnesota’s overall financial health. Contents Pages Financial Trends These tables contain trend information to help the reader understand how the 128 City’s financial performance and well-being have changed over time. Revenue Capacity These tables contain information to help the reader assess the City’s most 138 significant local revenue source, the property tax. Debt Capacity These tables present information to help the reader assess the affordability of the 144 City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information These tables offer demographic and economic indicators to help the reader 149 understand the environment within which the City’s financial activities take place. Operation Information These tables contain service and infrastructure data to help the reader understand 152 how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these tables is derived from the comprehensive financial reports for the relevant year. 127 CITY OF CHANHASSEN, MINNESOTA NET ASSETS BY COMPONENT (1) Last Seven Fiscal Years (Accrual Basis of Accounting) 20032004 Governmental activities: Invested in capital assets, net of related debt$76,644,369$77,583,392 Restricted: Debt service2,565,4865,762,414 Tax increment purposes779,619630,566 Unrestricted11,477,63810,632,184 Total governmental activities net assets$91,467,112$94,608,556 Business-type activities: Invested in capital assets, net of related debt$46,050,122$38,888,555 Restricted: Debt service - - Tax increment purposes - - Unrestricted12,779,70121,908,224 Total business-type activities net assets$58,829,823$60,796,779 Primary government: Invested in capital assets, net of related debt$122,694,491$116,471,947 Restricted: Debt service2,565,4865,762,414 Tax increment purposes779,619630,566 Unrestricted24,257,33932,540,408 Total primary government net assets$150,296,935$155,405,335 (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 128 Table 1 20052006200720082009 $72,418,684$70,216,944$68,982,379$70,611,368$72,106,198 10,174,5027,687,15511,047,06212,165,6536,461,780 1,049,0471,063,589797,064621,915840,857 11,239,65816,220,83414,631,16615,171,39114,421,042 $94,881,891$95,188,522$95,457,671$98,570,327$93,829,877 $37,479,967$47,807,323$52,502,257$55,541,752$55,496,919 - - - - - - - - - - 23,767,12215,039,02117,292,10613,117,32312,129,049 $61,247,089$62,846,344$69,794,363$68,659,075$67,625,968 $109,898,651$118,024,267$121,484,636$126,153,120$127,603,117 10,174,5027,687,15511,047,06212,165,6536,461,780 1,049,0471,063,589797,064621,915840,857 35,006,78031,259,85531,923,27228,288,71426,550,091 $156,128,980$158,034,866$165,252,034$167,229,402$161,455,845 129 CITY OF CHANHASSEN, MINNESOTA CHANGES IN NET ASSETS (1) Last Seven Fiscal Years (Accrual Basis of Accounting) 20032004 Expenses Governmental activities: General government$2,201,345$2,338,485 Public safety2,587,0192,618,307 Public works5,140,0284,955,598 Parks and recreation2,578,5852,674,954 Community development891,2532,027,713 Interest on long-term debt1,018,936822,047 Total governmental activities expenses14,417,16615,437,104 Business-type activities: Water1,973,9131,985,908 Sewer2,774,2312,686,146 Surface water management784,557957,084 Total business-type activities expenses5,532,7015,629,138 Total primary government expenses$19,949,867$21,066,242 Program revenues Governmental activities: Charges for services: Licenses and permits$1,996,169$1,892,579 Charges for services1,075,631997,114 Fines and forfeits43,73261,801 Operating grants and contributions267,126370,090 Capital grants and contributions1,171,5892,633,916 Total governmental activities program revenues4,554,2475,955,500 Business-type activities: Charges for services: Water1,582,6321,656,911 Sewer1,633,4401,748,929 Surface water management258,132265,090 Operating grants and contributions13,2216,381 Capital grants and contributions1,694,9983,528,270 Total business-type activities program revenues5,182,4237,205,581 Total primary government program revenues$9,736,670$13,161,081 130 Table 2 Page 1 of 2 20052006200720082009 $4,518,355$2,380,103$2,439,716$2,469,055$2,597,147 2,653,3042,851,9263,098,0683,062,9413,158,465 4,915,4357,722,4667,010,9816,220,8169,123,165 2,867,3642,918,6453,023,0323,025,9873,663,124 595,878868,7491,052,104704,979628,339 505,367751,964835,059652,0151,031,567 16,055,70317,493,85317,458,96016,135,79320,201,807 2,656,3812,754,2013,112,5753,234,1393,311,129 2,719,1563,069,0693,177,3663,072,5883,276,042 1,039,7211,317,0891,238,9141,121,1971,093,165 6,415,2587,140,3597,528,8557,427,9247,680,336 $22,470,961$24,634,212$24,987,815$23,563,717$27,882,143 $2,166,022$3,612,021$2,171,558$1,810,545$1,085,754 1,196,1031,218,8161,132,4481,115,9031,064,173 104,962162,946145,682124,633122,496 361,093671,674452,798346,023363,540 5,080,5122,506,8227,464,6973,221,6361,265,287 8,908,6928,172,27911,367,1836,618,7403,901,250 1,703,5012,111,2302,461,2052,408,3792,689,170 1,905,2062,008,3562,186,6222,187,2092,378,111 299,445424,702452,148479,318512,761 1,62053945,17236,3505,332 1,961,1222,501,5983,340,5981,527,6241,684,982 5,870,8947,046,4258,485,7456,638,8807,270,356 $14,779,586$15,218,704$19,852,928$13,257,620$11,171,606 131 CITY OF CHANHASSEN, MINNESOTA CHANGES IN NET ASSETS (1) Last Seven Fiscal Years (Accrual Basis of Accounting) 20032004 Net (expense) revenue: Governmental activities($9,862,919)($9,481,604) Business-type activities(350,278)1,576,443 Total primary government net (expense) revenue(10,213,197)(7,905,161) General revenues and other changes in net assets Governmental activities: Property taxes$8,330,561$8,398,790 Tax increment collections4,804,0194,623,927 Grants and contributions not restricted to specific programs59,86755,879 Unrestricted investment earnings240,859164,712 Miscellaneous98,812222,642 Gain on sale of capital assets582,333540,646 Transfers(121,355)(96,195) Total governmental activities13,995,09613,910,401 Business-type activities: Unrestricted investment earnings90,738255,510 Miscellaneous -255,279 Transfers121,35596,195 Total business-type activities212,093606,984 Total primary government$14,207,189$14,517,385 Change in net assets: Governmental activities$4,132,177$4,428,797 Business-type activities(138,185)2,183,427 Total primary government$3,993,992$6,612,224 (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 132 Table 2 Page 2 of 2 20052006200720082009 ($7,147,011)($9,321,574)($6,091,777)($9,517,053)($16,300,557) (544,364)(93,934)956,890(789,044)(409,980) (7,691,375)(9,415,508)(5,134,887)(10,306,097)(16,710,537) $9,451,141$9,165,278$9,419,763$9,651,758$9,921,598 675,117315,398420,526574,101473,674 45,45528,592189,616108,03927,612 387,370905,9301,397,7461,150,993357,953 93,79234,644 - - - 23,795 -10,80632,1954,524 (481,824)(821,637)(5,077,531)1,112,623774,746 10,194,8469,628,2056,360,92612,629,70911,560,107 466,750768,600786,455797,079141,070 46,100102,952127,14322,46410,549 481,824821,6375,077,531(1,112,623)(774,746) 994,6741,693,1895,991,129(293,080)(623,127) $11,189,520$11,321,394$12,352,055$12,336,629$10,936,980 $3,047,835$306,631$269,149$3,112,656($4,740,450) 450,3101,599,2556,948,019(1,082,124)(1,033,107) $3,498,145$1,905,886$7,217,168$2,030,532($5,773,557) 133 CITY OF CHANHASSEN, MINNESOTA FUND BALANCES - GOVERNMENTAL FUNDS (1) Last Seven Fiscal Years (Modified Accrual Basis of Accounting) 20032004 General Fund: Reserved Prepaid items$17,056$21,003 Unreserved: Designated: General fund3,328,5303,125,910 Undesignated: General fund2,571,9493,128,630 Total general fund$5,917,535$6,275,543 All other governmental funds: Reserved: Prepaid items$4,804$523 Future programs11,85319,735 Debt service4,110,3166,922,552 Unreserved: Designated: Special revenue funds567,443533,276 Capital project funds3,638,5923,978,818 Undesignated: Special revenue funds5,948,5381,089,942 Debt service funds(3,020,544) - Capital project funds(2,013,776)(893,811) Total all other governmental funds$9,247,226$11,651,035 (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 134 Table 3 20052006200720082009 $20,239$17,376$13,210$21,173$46,750 3,199,8003,279,0503,416,9503,586,7503,690,000 3,731,0231,523,8442,061,1261,273,7961,137,109 $6,951,062$4,820,270$5,491,286$4,881,719$4,873,859 $523$523$ -$25$321 35,90937,72534,73329,49936,332 6,560,8845,262,5347,300,4926,641,7472,913,631 489,370431,665548,438525,692668,992 4,114,82013,458,6979,934,93618,732,62511,418,006 -25,020 - - - 3,403,769148,784215,298237,721342,877 (738,510)(214,183)(239,434)(11,584)(2,001,149) $13,866,765$19,150,765$17,794,463$26,155,725$13,379,010 135 CITY OF CHANHASSEN, MINNESOTA CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS (1) Last Seven Fiscal Years Revenues:20032004 General property taxes$8,292,083$8,443,464 Tax increment collections4,975,8604,917,923 Licenses and permits1,996,1681,892,579 Intergovernmental1,082,5491,013,704 Special assessments1,963,4312,262,731 Charges for services839,522943,744 Fines and forfeits43,73261,801 Investment income240,859164,712 Contributions and donations9,67524,749 Refunds and reimbursements Other364,151290,629 Total revenues19,808,030 20,016,036 Expenditures: Current: General government2,072,0512,203,607 Public safety2,424,1252,461,410 Public works1,958,0921,773,655 Parks and recreation1,629,8561,622,199 Community development312,446326,134 Capital outlay: General government - - Public safety - 99,872 Public works3,427,2361,787,737 Parks and recreation2,362615,207 Debt service: Principal 10,700,0007,752,000 Interest and paying agent fees1,070,394687,299 Bond issuance costs13,63529,317 Developer assistance578,2911,660,088 Other93,95411,046 Total expenditures24,282,44221,029,571 Revenues over (under) expenditures(4,474,412)(1,013,535) Other financing sources (uses): Bond premium - - Bonds issued630,0003,240,000 Redemption of refunding bonds - - Loans issued - - Transfers in(121,355)(54,242) Transfers out - - Bond discount(3,937)(10,387) Sale of capital assets702,596963,290 Total other financing sources (uses)1,207,3044,138,661 Net change in fund balance($3,267,108)$3,125,126 Debt service as a percentage of noncapital expenditures58.4%50.2% Debt service as percentage of total expenditures48.5%40.3% (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 136 Table 4 20052006200720082009 $9,417,527$9,140,601$9,403,109$9,582,333$9,834,389 675,798$315,398$420,526$574,101473,674 2,166,0223,727,2972,171,5581,810,5451,085,754 1,244,6562,171,5651,148,0342,147,970397,438 1,113,9221,922,9443,922,517623,893540,151 863,958899,015738,669841,209950,760 104,962162,946145,682124,633122,496 387,370905,9301,397,7461,150,993357,953 71,19843,94947,42843,41047,206 51,24761,707 430,171279,549404,426238,030170,688 16,475,584 19,569,194 19,799,695 17,188,364 14,042,216 2,722,1712,090,5652,116,9282,102,5122,070,698 2,547,6762,656,9232,924,7512,885,2962,979,044 2,367,6524,425,2373,735,9502,786,3975,710,804 1,658,2001,877,1091,848,8801,933,3532,487,985 372,938451,092841,306468,819527,919 311,25098,3966,734233,600143,663 10,26538,593505,21554,28455,152 2,334,5776,431,5946,693,3874,677,1798,179,324 462,794377,3671,491,848642,508235,292 2,035,0001,375,0001,750,0002,689,5522,553,002 691,230591,614769,212874,848920,529 -36,987 -93,81173,182 230,353111,791206,753226,05590,354 897,523300,000 - - - 16,641,629 20,862,268 22,890,964 19,668,214 26,026,948 (166,045)(1,293,074)(3,091,269)(2,479,850)(11,984,732) - - - -226,991 2,590,0006,640,000 -7,550,0006,020,000 -(3,560,000) - -(8,387,123) 105,419708,0033,014,74424,839 - 338,080702,889537,5642,646,0111,324,015 - -(1,163,065) - - -(44,610) - - - 23,795 -16,74010,69516,274 3,057,294 4,446,282 2,405,983 10,231,545 (799,843) $2,891,249$3,153,208($685,286)$7,751,695($12,784,575) 22.0%14.8%18.0%26.4%20.5% 16.4%9.6%11.0%18.6%13.6% 137 CITY OF CHANHASSEN, MINNESOTA TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Fiscal YearCommercial/Total EndedResidentialIndustrialAllTax December 31,PropertyAgriculturalPropertyOtherCapacity 2000(a)(a)(a)(a)$22,428,067 2001$18,842,469$171,965$7,743,027$558,77527,316,236 200215,094,239162,6495,334,174349,27020,940,332 200317,032,236133,3005,866,524357,87223,389,932 200419,502,882141,9395,904,892377,53125,927,244 200522,438,051178,5986,054,042388,88529,059,576 200624,904,864229,6516,537,205408,07032,079,790 200727,853,083316,4618,114,703428,20336,712,450 200829,821,326208,7899,135,911435,60339,601,629 200930,741,292190,8449,665,269471,74941,069,154 Sources: Carver County Auditor's Office and Hennepin County (a) Information not available. (1) Tax Capacity as a Percent of EMV for 2000 was calculated on Total Tax Capacity since information for Captured Tax Capacity on Tax Increment District and Fiscal Disparity Contribution was not available. For years 2001 through 2009, Adjusted Tax Capacity was used to calculate Tax Capacity as a Percent of EMV. 138 Table 5 Captured Tax Capacity onFiscalAdjustedCityEstimatedTax Capacity Tax IncrementDisparityTax CapacityDirect TaxMarketas a Percent (1) of EMV DistrictContributionValueRateValue (a)(a)$22,428,06726.89500$1,247,906,5001.80% ($5,920,832)$53,15421,448,55826.508001,593,928,1001.35% (3,309,835)3,36217,633,85937.823001,790,521,3000.98% (3,789,131)(19,916)19,580,88539.039002,010,114,7000.97% (3,958,013)17,05621,986,28732.922002,271,332,1000.97% (619,902)60,35428,500,02828.118002,552,120,2001.12% (309,211)(929,994)30,840,58526.638002,812,847,1001.10% (418,018)(955,204)35,339,22823.788003,175,746,5001.11% (479,494)(1,498,894)37,623,24123.713003,394,928,1001.11% (473,702)(1,627,749)38,967,70322.993003,501,886,8001.11% 139 CITY OF CHANHASSEN, MINNESOTA Table 6 DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES Last Ten Fiscal Years CityOverlapping Rates FiscalDirectSchoolCarver YearRateDistrict #112CountyOtherTotal Tax capacity rates (per $100 of adjusted tax capacity value) 200026.8950074.2370045.744006.27600153.15200 200126.5080060.8050043.105004.49500134.91300 200237.8230029.8080053.336007.31100128.27800 200339.0390038.4380053.137007.40200138.01600 200432.9220037.5240048.443005.84500124.73400 200528.1180033.2990044.107005.56000111.08400 200626.6380032.8080040.836005.30500105.58700 200723.7880035.8310037.802005.13200102.55300 200823.7130035.9700037.563005.54700102.79300 200922.9930035.5050038.033005.45800101.98900 Source: Carver County Auditor's Office 140 CITY OF CHANHASSEN, MINNESOTA Table 7 PRINCIPAL PROPERTY TAXPAYERS Current Year and Nine Years Ago 20092000 Percentage Percentage Taxableof Total CityTaxableof Total City CapacityCapacityCapacityCapacity TaxpayerValueRankValueValueRankValue Rosemount Inc$396,69211.0%$603,82523.4% IRET Properties354,49820.9% - - 0.0% Istar Minnesota LLC343,06630.9% - - 0.0% LTF Real Estate VRDN I LLC234,52840.6% - - 0.0% LTF Real Estate Company Inc217,71250.6% - - 0.0% DRF Chanhassen Medical Bldg213,25060.5% - - 0.0% Northern States Power Co208,49870.5%327,48241.8% Prince R. Nelson208,30580.5% - - 0.0% Target Corporation T-0862204,06290.5% - - 0.0% Park Avenue Lofts LLC196,318100.5% - - 0.0% CSM Investors Inc. - - 0.0%825,7201 4.6% Beddor Enterprises - - 0.0%462,43432.6% McGlynn Bakeries Inc #366 - - 0.0%320,00751.8% TF James - - 0.0%310,171 6 1.7% Banta Direct Marketing Group - - 0.0%243,300 7 1.4% Market Square Assoc Ltd Partnership - - 0.0%183,671 8 1.0% Bloomberg Companies, Inc. - - 0.0%177,67491.0% Individual - - 0.0%174,280 10 1.0% Total$2,576,9296.6%$3,628,56420.2% Total All Property $39,015,238$17,942,764 Source: Carver County Auditor's Office 141 - This page intentionally left blank - 142 CITY OF CHANHASSEN, MINNESOTA Table 8 PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years FiscalTaxesCollected Within TheCollections YearLeviedFiscal Year of the LevyinTotal Collections to Date EndedFor ThePercentageSubsequentPercentage December 31,Fiscal YearAmountof LevyYearsAmountof Levy 2000$5,286,618$5,226,46298.9%$34,291$5,260,75399.5% 20015,679,054 5,646,328 99.4%102,1195,748,447101.2% 20027,655,9167,557,37898.7%46,6457,604,02399.3% 20038,639,1678,206,00195.0%91,8448,297,84596.0% 20048,639,1678,323,05396.3%127,3698,450,42297.8% 20059,439,7549,124,03096.7%120,9339,244,96397.9% 20069,354,8909,066,59196.9%88,7309,155,32197.9% 20079,575,7789,447,69298.7%94,0259,541,71799.6% 20089,834,9659,555,48997.2%118,8279,674,31698.4% 200910,074,5659,668,71396.0% - 9,668,71396.0% Source: City Finance Department 143 CITY OF CHANHASSEN, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years Governmental Activities GeneralGeneral FiscalObligationRevenueTax IncrementImprovementOther YearBondsBondsBondsBondsDebt 2000$5,725,000$930,000$8,040,000$21,966,605$ - 20016,040,000930,0006,855,00019,411,686120,000 200211,355,000930,0004,915,00014,175,33180,000 200311,475,000860,0003,075,0005,890,00040,000 200410,710,000785,0001,170,0004,195,000 - 200512,215,000705,0001,170,0003,325,000105,419 20068,170,000620,0001,120,0009,210,000813,422 20077,315,000530,0001,070,0008,455,0003,828,166 200813,905,000435,0001,015,0007,155,0003,375,125 200913,045,000335,000960,0006,625,000 - Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) The Bonded Debt and Bonded Debt Per Capita are Net of Debt Service Fund Balances. The Definition of "Net Bonded Debt" in the State of Minnesota would also exclude any Enterprise Fund Debt, Special Assessment Bonds, Tax Increment Bonds and Revenue Bonds. The "Net Bonded Debt" and "Net Bonded Debt Per Capita" as defined by the State of Minnesota can be found on Table 11. 144 Table 9 Business-Type Activities Less:Percentage G.O. RevenueDebt Serviceof TaxBonded Debt (1)(1) Bonded Debt BondsTotal DebtFund BalanceCapacityPer Capita $2,770,000$39,431,605$5,747,180$33,684,425179.65%$1,654 3,996,35037,353,0362,773,25534,579,781161.22%1,604 3,576,10035,031,4313,255,09531,776,336180.20%1,420 3,175,00024,515,0001,089,77223,425,228120.22%996 10,600,00027,460,0006,795,40620,664,59481.94%882 15,545,00033,065,4199,964,65323,100,76682.82%968 14,820,00034,753,4225,411,31829,342,10496.30%1,228 13,915,00035,113,1667,623,13827,490,02879.02%1,130 12,415,00038,300,1256,972,63031,327,49583.57%1,280 11,695,00032,660,0003,256,50829,403,49275.36%1,190 145 CITY OF CHANHASSEN, MINNESOTA Table 10 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT December 31, 2009 Estimated EstimatedShare of DebtPercentageOverlapping Governmental UnitOutstandingApplicableDebt Direct debt: (1) City of Chanhassen $13,045,000100.00%$13,045,000 Overlapping debt: Eastern Carver County School District239,465,00026.82%64,224,513 Eden Prairie Independent School District78,098,3820.85%663,836 Minnetonka Independent School District125,359,5480.00% - Carver County30,610,00032.94%10,082,934 Hennepin County600,494,3190.06%360,297 Hennepin Suburban Park District71,017,7520.08%56,814 Hennepin Regulatory Railroad Authority42,430,6240.06%25,458 Metropolitan Council131,613,2800.03%39,484 Subtotal - overlapping debt1,319,088,90575,453,336 Total direct and overlapping debt$1,332,133,905$88,498,336 (1) Excludes general obligation improvement bonds and revenue bonded indebtedness 146 CITY OF CHANHASSEN, MINNESOTA Table 11 LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Year 2009 Market value$3,501,886,800 Applicable percentage3% Debt limit105,056,604 Debt applicable to limit: Total bonded debt32,660,000 Less: Special assessment bonds(6,625,000) Tax increment bonds(960,000) Revenue bonds(335,000) Enterprise Fund debt(11,695,000) Less: Cash and investments in G.O. Bond Debt Service Fund(1,869,914) 11,175,086 Legal debt margin$93,881,518 Legal Debt Margin Calculation for Fiscal Years 2000 Through 2009 Net DebtLegalAmount of DebtNet Bonded FiscalDebtApplicable toDebtApplicable toDebt Per YearPopulationLimitLimitMarginDebt LimitCapita 200020,371$24,958,130$5,138,045$19,820,08520.59%252 200121,56131,878,5625,629,81126,248,75117.66%261 200222,37635,810,42610,679,36025,131,06629.82%477 200323,52440,202,29410,571,25229,631,04226.30%449 200423,43145,426,6429,385,23236,041,41020.66%401 200523,86451,042,4048,150,62642,891,77815.97%342 200623,88956,256,9426,950,30449,306,63812.35%291 200724,32163,514,9305,844,64857,670,2829.20%240 200824,481101,847,84311,924,43889,923,40511.71%487 200924,699105,056,60411,175,08693,881,51810.64%452 147 CITY OF CHANHASSEN, MINNESOTA Table 12 PLEDGED REVENUE COVERAGE Last Ten Fiscal Years Improvement Bonds Special FiscalAssessmentDebt Service YearCollectionsPrincipalInterestCoverage 2000$2,992,985$3,550,000$846,0610.681 20012,514,3633,506,350720,4480.595 20023,159,7785,479,750522,0720.526 20031,963,4315,446,600324,3300.340 20042,262,7313,765,000110,1180.584 20051,113,922870,000139,0591.104 20061,922,944755,000103,8132.239 20073,922,517755,000360,8523.515 2008623,8911,300,000287,7270.393 2009540,1481,220,000142,9630.396 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 148 CITY OF CHANHASSEN, MINNESOTA Table 13 DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Fiscal Years Carver County ChanhassenCarver CountyCarver CountyPer Capita FiscalChanhassenUnemploymentUnemploymentPersonalPersonal (1)(2)(2)(3)(3) PopulationRateRateIncome (thousands)Income Year 200020,3711.8%2.4%$2,803,152$39,559 200121,5612.8%3.3%3,069,08641,980 200222,3763.5%4.0%3,153,20841,662 200323,5243.3%4.1%3,285,90341,917 200423,4313.2%3.9%3,562,42243,970 200523,8642.6%3.4%3,878,67546,206 200623,8892.7%3.3%4,165,61448,152 200724,3213.1%4.0%4,572,11251,768 200824,4814.0%5.0%4,798,33653,219 200924,6996.0%7.4%(a)(a) (1) Sources:Federal Census Data and Chanhassen Planning Department (2) State of Minnesota, Department of Employment and Economic Development (3) U.S. Department of Commerce, Bureau of Economic Analysis (a) Information not available Note: Information pertaining to Chanhassen Personal Income and Per Capita Personal Income is not available, information for Carver County was included instead. 149 - This page intentionally left blank - 150 CITY OF CHANHASSEN, MINNESOTA Table 14 PRINCIPAL EMPLOYERS (1) Current Year and Three Years Ago 20092006 Percentage Percentage of Total Cityof Total City Employment(2)(2) EmployerEmployeesRankEmployeesRankEmployment Rosemount, Inc.1,600127.3%1,200124.4% Lifetime Fitness1,061218.1% - - - Instant Web Companies847314.5%548411.1% Super Value Headquarters52849.0%900218.3% General Mills47558.1%600312.2% RR Donnelley36066.1%32466.6% Chanhassen Dinner Theatres30075.1%30076.1% Minnesota Landscape Arboretum23083.9%24094.9% Byerly's19093.2%28085.7% Target147102.5% - - - ABC/Lyman Lumber123112.1%175103.6% Entegris - - - 35057.1% Total5,8614,917 Source: Survey by City Administration and Finance Departments. (1) Principal employer information prior to 2006 is not available. (2) The statistic for total City employment is not available, therefore the percentage represents the percentage of the top ten listed. 151 CITY OF CHANHASSEN, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last Ten Fiscal Years Full-Time Equivalent Employees as of December 31, Function/Program200020012002 General government111112 Public safety333 Public works222323 Parks and recreation111111 Community development171717 Total646566 Source: City Finance Department 152 Table 15 Full-Time Equivalent Employees as of December 31, 2003200420052006200720082009 12121212131313 3333333 23232425252525 11111111111111 16171616151515 65666667676767 153 CITY OF CHANHASSEN, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program200020012002 Building: Permits issued1,0673,1951,387 Estimated value$84,131,650$86,644,500$85,811,450 Election: Registered voters11,66511,66511,665 Fire: Average number of employees444444 General government: Area of city - square miles23.7823.7823.78 Average number of permanent full-time employees (excluding fire department)646566 Police: Average number of employees222 Number of major crimes145145145 Water: Number of customers5,4825,4825,482 Daily average consumption - gallons2,195,4582,195,4582,195,458 Plant capacity - gallons3,850,0003,850,0003,850,000 Source: Various City departments 154 Table 16 Fiscal Year 2003200420052006200720082009 9149981,0081,1969541,046915 $85,879,250$86,893,088$62,100,325$95,610,311$106,831,600$116,477,429$58,627,700 13,72315,63215,63215,31915,31916,54416,544 43434344444545 23.7823.7823.7823.7823.7823.7823.78 65666667676767 11111313131415 3111,2881,0681,2971,2021,013702 6,5496,6606,7797,4827,6737,7367,865 3,000,0002,718,5992,571,8433,163,8643,031,4003,200,0003,642,410 8,900,0008,500,0008,650,0008,650,0008,650,0008,650,0008,650,000 155 CITY OF CHANHASSEN, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program200020012002 Fire: Number of stations222 Parks and recreation: Acres of parks350350350 Acres of open space300300300 Number of shelter buildings222 Number of playgrounds222222 Number of swimming beaches333 Number of tennis courts777 Police: Number of stations111 Public works: Miles of streets83.684.792.6 Miles of sidewalks17.017.019.4 Miles of trails33.838.138.1 Sewer: Miles of storm sewers54.056.057.3 Miles of sanitary sewers107.9108.8110.1 Number of lift stations292929 Water: Miles of watermains109.8112.1113.3 Number of wells778 Source: Various City departments 156 Table 17 Fiscal Year 2003200420052006200720082009 2222222 350375375375383383383 300300365365434434434 2333334 23252525262626 4444666 6171717171717 1111111 94.395.7102.5103.8106.2107.0110.9 19.621.024.725.526.928.431.1 41.242.042.043.047.253.053.6 59.661.062.764.266.267.169.5 113.0115.1115.4116.9119.6120.8123.0 30303031313131 116.7120.1120.8123.4126.0129.6135.1 77810111212 157 - This page intentionally left blank - 158