Three Rivers PARK DISTRICT

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1 Three Rivers PARK DISTRICT

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3 THREE RIVERS PARK DISTRICT STATE OF MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2011 PREPARED BY: DEPARTMENT OF FINANCE

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5 THREE RIVERS PARK DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2011 TABLE OF CONTENTS Letter of Transmittal Organizational Chart Principal Officials Consultants and Advisors Certificate of Achievement I. INTRODUCTORY SECTION II. FINANCIAL SECTION Page Independent Auditor's Report Management's Discussion and Analysis (Unaudited) 9 11 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Scott County Special Revenue Func:l Statement of Net Assets - Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Assets - Propr:ietary Funds Statement of Cash Flows - Proprietary Funds Notes to Basic Financial Statements Required Supplementary Information Schedule of Funding Progress- Other Post-Employment Benefits Plan 65

6 THREE RIVERS PARK DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2011 TABLE OF CONTENTS- (CONTINUED) Combining and Individual Fund Statements and Schedules: Page Combining Balance Sheet - Nonmajor Governmental Funds 68 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 70 Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Gl~n Lake Golf Course Fund 72 Combining Statement of Net Assets - Internal Service Funds 73 Combining Statement of Revenues, Expenses and Changes in Net Assets - Internal Service Funds 74 Combining Statement of Cash Flows - Internal Service Funds 75 III. STATISTICAL SECTION Net Assets Change in Net Assets Governmental Activities Tax Revenue by Source Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Tax Capacity and Estimated Actual Value of Taxable Property Property Tax CapaCity Rates - Direct and Overlapping Governments Principal Property Tax Payers Property Tax Levies and Collections Ratios of Outstanding Debt by Type Ratio of General Bonded Debt Outstanding Direct and Overlapping Governmental Activity Debt Legal Debt Margin Information Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Full-Time Equivalent Park District Employees by Function Operating In.dicators by Function Capital Asset Statistics by Function

7 SECTION I INTRODUCTORY SECTION

8 ANOKA OUNJY WRIGHT COUNTY CARVER COUNTY NORTH DAKOTA COUNTY - Park District Regional Trail System Regional Trail to be Developed State, Federal or other Regional Trails/Parks + Park Entrance SCOlT COUNTY

9 Three Rivers PARK DISTRICT ~ Three Rivers Park District Board of Commissioners Sara Wyatt District 1 Marilynn Corcoran, District 2 Joan Peters District ~ April 30, 2012 The Honorable Members of the Three Rivers Park District Board of ~ommissioners State law requires that every general-purpose local government publish within six months of the close of each year a complete set of audited financial statements. The Three Rivers Park District, (hereafter referred to as the Park District) while not covered by the above requirement, has opted to issue these audited financial statements to enhance the accountability to the Park District's constituents. Therefore, we hereby issue the Comprehensive Annual Financial Report of the Park District, for the fiscal year ended December 31, This report was prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as established by the Government Accounting Standards Board. Dale Woodbeck, Vice Chair District 4 John Gibbs District 5 Larry Blackstad, Chair Appointed Barbara Kinsey Appointed Cris Gears Superintendent This report consists of managements representations of the Park District's finances. Consequently, management assumes full responsibility for the completeness and reliability of the information contained in this report. To provide a reasonable basis for making these representations, management has established internal controls designed to protect the Park District's assets from loss, theft or misuse and to provide sufficient information for the preparation of these financial statements in conformity with GAAP. Because the cost of internal control should not exceed anticipated benefits, the Park District's internal controls have been designed to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. As management, we assert that to the best of our knowledge and belief the financial report is accurate in all material respects. The Park District's financial statements have been audited by Malloy, Montague, Karnowski, Radosevich, & Co., P.A., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements for the year ended December 31, 2011, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Based upon the audit, the independent auditor concluded that there was a reasonable basis for rendering an unqualified opinion that the Park District's financial statements for the year ended December 31, 2011, are fairly presented in conformity with GAAP. The independent auditor's report is located at the front of the financial section of this report. Adm'inistrative Center, 3000 Xenium Lane North, Plymouth, MN Information TTY Fax

10 GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This transmittal letter is designed to complement the MD&A and should be read in conjunction with it. The Park District's MD&A can be found immediately following the independent auditor's report. Profile of the Government The Park District was created in 1957 by the Minnesota Legislature as a special purpose government entity responsible not for the establishment of parks and playgrounds of a local or neighborhood type, but rather for the acquisition, development and maintenance of large parks, wildlife sanctuaries, forest land and other reservations, and a means for public access to historic sites and to lakes, rivers and streams and other natural phenomena (Minnesota Statutes, Chapter 398). Over the last 54 years, the Park District has developed an outstanding system of nearly 27,000 acres in 10 regional parks, seven park reserves, 101 miles on 10 different regional trails, and four special recreation features. These facilities support a wide variety of activities ranging from golf and downhill skiing to bird banding and picnicking. Surveys indicate that The Park District is well known and well respected by visitors and non-visitors alike. The general public and visitors give very high ratings to. Three Rivers for environmental stewardship, environmental education, recreation, maintenance and operations, and public safety services. The popularity and success of the Park District is reflected in the annual visitations which is more than 8 million visitors. The Park District has operated under several different names since its creation. The original name, Hennepin County Park Reserve District, was changed by the State Legislature in 1985 to the Suburban Hennepin Regional Park District. The Park District, looking for a more user friendly name, did business using the shortened name, Hennepin Parks, until 2003 when the operating name was changed to Three Rivers Park District, to better represent the area served by the Park District. In 2005, the State Legislature officially changed the Park District's name to Three Rivers Park District. The Park District's jurisdiction includes Hennepin County, except for the City of Minneapolis; Scott County through an agreement which establishes the Park District as a regional park authority for that county; and facilities owned by the Park District in five adjacent counties: Dakota, Wright, Carver, Anoka and Ramsey. The Park District has the authority to levy property taxes and issue debt within statutorily prescribed limits. In addition, it has the power to enact and enforce ordinances on its property. The Board of Commissioners is the Park District's governing body. The Board is comprised of seven (7) Commissioners: five (5) are elected by district and the Hennepin County Board of Commissioners appoints two (2) at large. The Park District is independent for financial reporting purposes; and the Park District's officials exercise oversight responsibility in the operation of the park system. This includes the provision of staff for maintenance and program purposes, system planning, land acquisition and development, and administrative services. The annual budget serves as the foundation for the Park District's financial planning and control. All departments of the Park District submit requests for appropriation to the Superintendent in July of each year. The Superintendent uses these requests as -2-

11 the starting point for developing a proposed budget. The Superintendent then presents this proposed budget to the Board for review. The Board holds public hearings on the proposed budget and adopts the budget by late November. The adopted preliminary operating budget is submitted to Hennepin County for review. The Board considers any County recommendations in December and reaffirms the final budget by January 1, the beginning of the Park District's fiscal year. The appropriated budget is prepared by fund, function, and department. The Superintendent may make transfers of appropriations within a fund. Transfers of appropriations between funds, however, require the approval of the Board. A budgetto-actual comparison is provided in this report for the general fund and the major special revenue funds as part of the basic financial statements for the governmental funds. In order to ensure that Three Rivers Park District can set meaningful priorities as funding becomes more difficult, the Board of Commissioners adopted a vision plan in July of 2010 that outlines the Park District's commitment to maintain natural resources and promote recreation over the next ten years. The vision plan includes 31 specific actions that the Park District will undertake during the next decade, including both major construction and system-wide operational changes. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment in which the Park District operates. The following information should be useful in assessing the Park District's economic condition. Local Economy, Important Events and Future Prospects The economic slowdown that started in 2008 continues to be the major challenge facing the Park District. Property tax revenues, which comprise 83% of the budgeted revenue for the general fund, have been impacted by a reduced collection rate combined with a shrinking tax base. The Park District is required by state law to levy taxes based on a 98% collection rate. While the average collection rate for the past decade has been closer to 99%, the rate has dropped closer to 98% over the past two years. In addition to decreasing collection rates, the valuation of the Park District's tax base decreased for a second straight year after more than two decades of steady growth. The decrease in valuation is a combination of the slowing housing market and the increase in foreclosures over the past several years. The Park District's ability to levy taxes for operations is limited to.03224% of this valuation, meaning that as the valuation decreases, the levy limit also decreases. For 2011, the Park District's tax levy limit was $31,371,040. The actual tax levy for operations in 2011 was $29,596,069. The asset management program provides a sound, comprehensive, fiscally responsible method to manage capital development, maintenance, rehabilitation, information technology, and other significant activities of the Park District at a system-wide level. An effective asset management program facilitates decision making that prioritiies projects, reduces costs and maximizes assets. The Park District's Board of Commissioners is responsible for setting the asset management program budget each year. Within the context of the Vision Plan, the Board has determined that the distribution of capital funding needed for the asset management program be based on the following unranked principles: - 3-

12 Take good care of what we already have through provision of the necessary funding to maintain parks and trails using recognized national standards scheduling for roads, trails, buildings and other park infrastructure. Give preference to cap.ital projects that best meet the goals of the Vision Plan. Give preference to capital projects that reduce operational expenses or that generate additional net revenue. Give preference to capital projects that have matching dollars/resources from outside sources. The 2011 asset management plan totaled $19 million; including projects in our capital improvement program, infrastructure management program, preservation and rehabilitation program, information and technology program and public and life safety program. Projects include trail rehabilitation, roads, parking lots, and pathway rehabilitation, phase two of Crow Hassan Maintenance facility, planning and design for several regional trails. Regional park development grants, private donations, and Park District general obligation bonds will be used to finance the projects. The projects completed in 2011 include; elevator and restroom addition, septic system, and accessibility improvements at Lowry Nature Center, camper cabins, and single track mountain bike trail at Elm Creek Park Reserve, office building at Baker Near Wilderness Settlement, pavement management at Baker National Golf Course, horse trailer parking lot, campground road construction, and beach wall constructions at Baker Park Reserve, Medicine Lake Regional Trail and Sunny Lake Refuge trail development. Long-term Financial Planning The Park District Board approved a Financial Management Plan in 1989 that provides the framework for managing and accounting for public funds in a manner that protects the public's interest while ensuring resources are properly accounted for and used to further the Park District's mission. The Plan has been amended eight times since its adoption, with the most recent amendment occurring in late The recent amendment included language change to the Reserve levels based on the implementation of GASB Statement 54. The Plan has grown to include sixty-nine policy statements grouped in the following categories: Operating Budgets Revenue Sources Gifts and Donations Reserve Levels Accounting, Auditing and Financial Reporting Capital Improvement, Preservation and Rehabilitatio n Planning and Funding Golf and Alpine Operations Debt Management Investments Risk Management Special Assessments Vehicle/Mobile Equipment Funding The Park District's Vision: through leadership, advocacy 1 innovation and action, Three Rivers is a. model of a sustainable regional system of parks and trails; that meets the needs of the present while ensuring that the needs of future generations are well-met. The plan is designed to guide future resource allocation decisions and ensure that funds are appropriated to activities and functions that further the Park District's mission today and into the next decade. The 2011 Vision Plan actions included: Create three new parkland classifications within the Three Rivers system, and advocate for their establishment in the metropolitan regional parks system. Adopt and implement a comprehensive Sustainability Plan that reflects phased targets for greenhouse gas emission, waste reduction and water consumption targets through

13 Expand environmental education opportunities for school-age children. Reconstruct Eastman Nature Center to maximize the Three Rivers' Vision and meet the needs of the current and future population of NW Hennepin County. Add additional camper cabins to the system. The Board of Commissioners has identified 5 actions for 2012: Promote innovative natural resources management approaches and projects: participate in public/private research partnerships to control and adapt to invasive species. Lead efforts to acquire private properties within parks, and to secure land or easements as needed for other initiatives. Reach out to the diverse population of Hennepin County. Develop a collaborative plan for Lake Minnetonka - including its regiona1 and local parks, trails, recreations, historic and interpretive opportunities and island opportunities. Collaborate with other agencies and entities to explore pooling resources to maximize efficiencies and products. Awards and Acknowledgements Certirtcate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Park District for its comprehensive annual financial report (CAFR) for the fiscal year ended December 31, This was the twenty-second consecutive year the Park District has received this certificate. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit had to publish an easily readable and efficiently organized CAFR that satisfied both U.S. generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate. AcknowledqeQ1ent The preparation of this report could not have been accomplished without the efficient and dedicated service of all members of the Finance Department. We would also like to express our appreciation to the Superintendent, Associate Superintendents, Department Directors, and Board of Commissioners for their interest and support in planning and conducting the financial operations of the Park District in a responsible and progressive manner. Respectfully submitted~ Howard D. Koolick Director of Finance/CFQ 077~ Jill M. Cremers Finance Manager - 5-

14 MISSION STATEMENT The mission ofthe Park District Is to promote environmental stewardship througl'! recreation and education In a natural resources-based park systam. Board of C-ommissioners Superintendent Legal DI.'ISIOrl (If Rcc:-eut1on ond ::c~cabon 01V1~onu' Adrr: n s: 2:o. DI','ISIOn ofp2rt<s d n c ~~a tu r a: R c sou rc-.~'5 I 0'\ - --~ e ;;tl r-crn ~n: cr Dcpi.l~:i.l rt of o.3i1:1 ng ZJnd D._,vt-~P~t.'nt F1r.~ncc Associate Superintendent DlredDr Associate Superintendent Director Associate Superintendent Guest Services Engineering Human Resou~es Payrol Maint./Central Serv.lces Facility Services Landscape Architect1Jre Information Technolo.QY Accounts Payable Foreslry /Horticulb.Jre Program Services A rch1te cture Research Revenue Analysis Wildlife Special Revenue Facilities Planning Marketing &Communications Budgeting W11ter Resources Volunteer Services GIS Governmental Relations Risk Management Public Safety NOTE: White boxes within Divisions and Departments represent "functions" rather - than "positions".

15 PRINCIPAL OFFICIALS The Board of Commissioners is the policy body for the Park District. Five members are elected by District, and two are appointed at large by the Hennepin County Board of Commissioners. Larry Blackstad, Chair Dale Woodbeck, Vice Chair Sara Wyatt Marilynn Corcoran Joan Peters John Gibbs Barbara Derus Kinsey Appointed Term expires 12/31/2014 Elected - District 4 Term expires 12/31/2012 Elected - District 1 Term expires 12/31/2012 Elected - District 2 Term expires 12/31/2012 Elected - District 3 Term expires 12/31/2012 Elected - District 5 Term expires 12/31/2012 Appointed Term expires 12/31/2012 Senior Management Cristofer A. Gears Jeffrey R. Brauchle, P. A. Boe R. Carlson Thomas K. McDowell Margaret A. Dahlof Howard D. Koolick Donald J. DeVeau Superintendent and Secretary to the Board General Counsel Associate Superintendent/ Administration Associate Superintendent/Recreation and Education Associate Superintendent/Parks and Natural Resources Director of Finance/CFO Director of Planning and Development CONSULTANTS AND ADVISORS External Auditor Financial Consultant Bond Counsel Insurance and Risk Management Malloy, Montague, Karnowski, Radosevich, & Co., P.A Public Financial Management, Inc. McGrann, Shea, Carnival, Straughn and Lamb, Chartered Minnesota Counties Insurance Trust - 7 -

16 Certificate of Achievement for Excellence in Financial Reporting Presented to Three Rivers Park District Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31,2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive lllliiwii financial reports (CAFRs) achieve the highest standards in govermnent accounting mid financial reporting. Executive Director - 8-

17 SECTION II FINANCIAL SECTION

18 Three Rivers PARK DISTRICT

19 M KR CERTIFIED PUBLIC ACCOUNTANTS PRINCIPALS Thomas M. Montague, CPA Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nidsen, CPA Victoria L. Holinka, CPA INDEPENDENT AUDITOR'S REPORT To the Board of Commissioners Three Rivers Park District Plymouth, Minnesota We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Three Rivers Park District (the Park District) as of and for the year ended December 31, 2011, which collectively comprise the Park District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Park District's management. Our responsibility is to express opinions on these fmancial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Park District's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Park District as of December 31, 2011, and the respective changes in financial position and cash flows, where applicable thereof, and the respective budgetary comparisons for the General Fund and the major special revenue fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 of the notes to basic financial statements, the Park District has implemented Governmental Accounting Standards Board (GASB) Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions" during the year ended December 31, Malloy, Montague, Karnowski, Radosevich & Co., P.A. (continued) 5353 Wayzata Boulevard Suite 410 Minneapolis, MN Telephone: Telefax:

20 In accordance with Government Auditing Standards, we have also issued a report dated April30, 2012 on our consideration of the Park District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Funding Progress, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by GASB, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which cons"isted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the fmancial statements that collectively comprise the Park District's basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not required parts of the basic fmancial statements. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic fmancial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. April30,

21 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) As management of the Three Rivers Park District (Park District), we offer readers of the Park District's financial statements this narrative overview and analysis of the financial activities of the Park District for the fiscal year ended December 31, 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 on pages 1-5 of this report. Financial Highlights The assets of the Park-District exceeded its liabilities by $191,554,200 (net assets). Of this amount, $31,168,011 (unrestricted net assets) may be used to meet the ongoing obligations to citizens and creditors in accordance with the Park District's fiscal policies. The Park District's total net assets increased by $5,419,909. As of the close of the current fiscal year, the Park District's governmental funds reported combined ending fund balances of $60,856,294, an increase of $7,560,419 in comparison with the prior year. Approximately 40.4 percent of this amount, $24,590,126 is available for use within the Park District's constraints and policies. The General Fund's fund balance decreased by $927,805; this decrease was due to increased expenditures for the early retirement incentive program offered during 2011 and the increase in funds transferred to cover the accumulated deficits in the Scott County Fund prior to forming the current joint powers partnership. The Park District's total bonded debt increased by $2,630,000, from $83,155,000 to $85,785,000. The key factor in this increase was the issuance of $4,575,000 in General Obligation Bonds for the purpose of financing the Park District's 2011 Capital Improvement Plan, and the issuance of $6,190,000 in General Obligation Refunding Bonds for the purpose of refunding the outstanding balance on the 2003 and 2004 General Obligation Bonds. Overview of Financial Statements This discussion and analysis is intended to serve as an introduction to the Park District's basic financial statements. The Park District's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other 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 Park District's finances, in a manner similar to the private-sector business. The statement of net assets presents information on all of the Park District's assets and liabilities, with the difference between the two reported as net assets. Over time, increases and decreases in net assets may serve as a useful indicator of whether the financial position of the Park District is improving or deteriorating. The statement of activities presents information showing how the Park District'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

22 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Both of the government-wide financial statements distinguish functions of the Park District 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 Park District include Parks and Natural Resources, Recreation and Education, Administrative, and Legislative. The business-type activities of the Park District include Baker National Golf Course, Hyland Ski and Snowboard Area, and Eagle Lake Golf Course. The government-wide financial statements can be found on pages 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 Park District, 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 Park District can be divided into two categories: governmental funds, and proprietary funds. Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Park District maintains fifteen 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 six of these funds which are considered to be major funds. Data from the other nine funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The Park District adopts an annual appropriated budget for its general fund and certain special revenue funds. A budget to actual comparison has been provided for these funds to demonstrate compliance with these budgets. The governmental fund financial statements can be found on pages of this report. Proprietary Funds - The Park District maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Park District uses enterprise funds to account for its Baker National Golf Course, Hyland Ski and Snowboard Area, and Eagle Lake Golf Course

23 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30, 2011 for Hyland Ski and snowboard Area Fund) Internal service funds are an accounting device used to accumulate and allocate costs internally among the Park District's various functions. The Park District.uses internal service funds to account for its fleet of vehicles and equipment, and for its risk management functions. Both internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Because both of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The basic proprietary fund financial statements can be found on pages of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found following the governmental and proprietary fund financial statements. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Park District's progress in funding its Other Post-Employment Benefits (OPEB). Required supplementary information can be found on page 65 of this report. The combining and individual statements and schedules in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information on OPEB. Government-wide Financial Analysis Statement of Net Assets As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Park District, assets exceeded liabilities by $191,554,200. By far the largest portion of the Park Districts net assets (76 percent) reflects its investment in capital assets (e.g. land, buildings, land improvements, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The Park District uses these capital assets to provide services to park guests; consequently, these assets are not available for future spending. Although the Park District 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. The Park District's net assets increased from one year ago. Our analysis that follows focuses on the net assets and the changes in net assets of the Park District's governmental and business-type activities

24 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31,.2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Three Rivers Park District's Statement of Net Assets Current and other assets Capital assets - net Total assets Long-term liabilities outstanding Other liabilities Total liabilities Net assets: Invested in capital assets net of related debt Restricted Unrestricted Total net assets Govern menta I Activities $ 69,417,116 $ 62,005,699 2Q1,662,664 2Q1,Hi1,6Qe $ $ $ 86,417,577 $ 82,806,448 1,Z32,2Z4 4,81J.22Q $ $ $139,643,003 $136,843,129 14,107,390 14,560,018 26,1Z,eJ6 21,HJ,722 $ $ Business-Type Activities Total $ 5,725,168 $ 5,031,846 $75,142,284 $67,037,545 10,387,268 10,326, ,Q5Q,6J2 2U,SS8,JS1 $ $ $ $ $ 4,247,226 $ 4,619,429 $90,664,803 $87,425,877 21Q, ,738 4,2Z3,21J 5,Q35,728 $ $ $ $ $ 6,456,296 $ 6,065,790 $146,099,299 $142,908, , ,500 14,286,890 14,739,518 1,282,175 1,312,132 31,168,Qll 2e.485,851 $ $ $ $ A portion of the Park District's net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets, $31,168,011, may be used to meet the Park District's ongoing obligations to park users and creditors. At the end of the current fiscal year, the Park District is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior year. Restricted net assets of our governmental activities decreased by $452,628 as restricted assets were spent for the construction of a variety of capital improvement projects. In addition, The Park District's capital assets, net of related debt increased by $2,799,874 as the Park District started a number of new capital projects while continuing to make progress on projects started in prior years. The net assets of our business-type activities increased by $1,037,549, or 9.8%. This increase was due to a great operating year at Hyland Ski and Snowboard Area combined with a capital contribution at Baker National Golf Course with the completion of the parking lot pavement management project. Governmental Activities Governmental activities increased the Park District's net assets by $4,382,360, thereby accounting for 80.8% of the total growth in the net assets.of the Park District. Key elements of this are as follows: - 14-

25 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Three Rivers Park District's Changes in Net Assets Governmental Business-Type Activities Activities IQtgl Revenues: Program revenues: Charges for services $ 6,880,606 $ 6,941,859 $ 6,548,758 $ 6,489,705 $ 13,429,364 $ 13,431,564 Operating grants and contributions 3,636,722 4,112,555 9,049 3,879 3,645,771 4,116,434 Capital grants and contributions 5,598,201 5,509,298 5,598,201 5,509,298 General revenues: Property taxes 39,418,659 39,810, , ,648 39,808,788 40,192,793 Unrestricted Investment earnings 782, ,328 81, , , ,038 Gain on the sale of capital assets 66, ,686 66, ,686 Other 1,696,236 S5S,825 6,535 23, ,771 S 1,952 Total revenues 58,078,561 57,763,696 7,036,055 7,000,069 65,114,616 64,763,765 Expenses: Parks and Natural Resources 24,176,014 2;2,908,212 24,176,014 22,908,212 Recreation and Education 14,465,157 13,998,245 14,465,157 13,998,245 Administrative 5,532,137. 5,618,990 5,532,137 5,618,990 Legislative 6,095,107 4,613,448 6,095,107 4,613,448 Interest and fiscal charges on debt 2,619,496 2,735,109 2,619,496 2,735,109 Baker National Golf Course 1,977,693 2,026,250 1,977,693 2,026,250 Hyland Ski & Snowboard Area 3,620,169 3,309,185 3,620,169 3,309,185 Eagle Lake Golf Course 1,208,934 1,1Z7,59 1,2Q8, ,528 Total expenses 52,887,211 49,874,0Q4 6,806,726 6,513,033 52,694, ,037 Increase(decrease) In net assets before transfers 5,190,650 7,889, , ,036 5,419,909 8,376,728 Transfers (808,220) ( ) 808, ,353 Change In net assets 4,382,360 7,457,339 1,037, ,389 5,419,909 8,376,728 Net assets on January 1 175,546,869 l68,q89,530 10,5S7,422 2,66S,Q33 186,131,221 lz7,757,563 Net assets on December 31 S1Z S1Z5 5~6 869 S11 62~ 9Z1 SlO 5BZ ~22 S191 55~ 200 S1B6 13~ 291 Revenues for the Park District's governmental activities increased by $314,865, or.5%. The major components of this increase are explained as follows: Property taxes decreased by $391,486, or 1.0%. This decrease was largely due to delinquent property tax collections for 2011 being lower than Operating and capital grants and contributions revenue decreased by $386,930 or 4.0%. This decrease was due to a decrease in grant funding from the federal government for construction projects that were in progress during Charges for services revenue experience a slight decrease in 2011, due to a mild winter recreational season. The decrease, $61,253 or.9% was related to less cross-country ski fees collected in

26 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Investment earnings increased $376,759 or 93.0%. This increase was primarily due to the market value, of the pooled funds with Hennepin County, exceeding book value at December 31, The portfolio turned around from 2010 due to fixed rate security prices moving inversely with changes in interest rates. The Park District's other revenue increased by $837,411, or 97.5%. This increase is due to a payment received by the Park District for a legal matter that was settled in Expenses - The Park District's expenses for governmental activities increased by $3,013,907, or 6.0%. The change was partially due to a normal inflationary increase in expenses to operate and maintain high standards for quality facilities, programs and recreational opportunities throughout the Park District, but also due to increased health insurance costs, and the liability paid to employees who participated in the one-time early retirement incentive program. Revenues by Source- Governmental Activities Property Taxes 67.9% Other % Operating and capital grants, contributions, and investment earnings 17.3% Charges for Services 11.8% $30,000,000 Expenses and Program Revenue - Governmental Activities $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Parks & Natural Recreation & Administrative Resources Education Legislative Interest and fiscal charges on debt Expenses Program revenues - 16-

27 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Business-Type Activities Revenues by Source - Business-type Activities Charges for Services 93.1% Property Taxes 5.5% Operating and capital grants, contributions, and investment earnings 1.3% Expenses and Program Revenues - Business-type Activities $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Baker National Golf Course Hyland Ski & Snowboard Area Eagle Lake Golf Course Expenses Program revenues Revenues - The Park District's business-type revenues increased by $35,986, or.5%. Charges for services increased $59,053, which makes up the largest portion of this increase. Expenses- The Park District's expenses for business-type activities increased by $293,763, or 4.5% which is due to the repair, maintenance, and related costs for the fire walkway at Hyland Ski and Snowboard Area. In addition, commodities increased due to the increase in the number of skiers and increased food sales at Hyland Ski and Snowboard Area

28 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Financial Analysis of the Park District's Funds As noted earlier, the Park District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the Park District's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Park District's financing requirements. In particular, unassigned fund balance may serve as a useful measure of the Park District's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Park District's governmental funds reported combined ending fund balances of $60,856,294, an increase of $7,560,419 in comparison with the prior year. Committed, assigned, and unassigned fund balance, which is available for spending at the Park District's discretion, has a balance of $24,590,126, or 40.4% of fund balance at year end. The remainder of fund balance is nonspendable or restricted to indicate that it is not available for new spending because it has already been obligated; 1) for assets not readily available, such as prepaid items and inventories, 2) for permanent fund trust accounts, 3) for future debt service payments, 4) for capital improvement projects, and 5) for maintenan!=e and rehabilitation of existing Park District facilities. The General Fund is the chief operating fund of the Park District. At the end of the current fiscal year, unassigned fund balance of the general fund was $2,320,109, while total fund balance reached $17,105,453. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 6.4% of total general fund expenditures, while total fund balance represents 47.2% of that same amount. The Park District, in an effort to ensure financial stability and adequate cash flow, has established four fund balance allocations for the General Fund. The Park District's Board of Commissioners committed fund balance to ensure the Park District can adequately fund obligations for accrued employee benefits. The financial management plan assigned fund balance to ensure the Park District can adequately fund: ~ the costs of operations from the beginning of the year until the first property tax collections are received in May. ~ next year's budget commitments by relying on receiving its allocation of state maintenance and operation funding. ~ emergencies and unforeseen circumstances without a major impact on existing customer service levels The committed and assigned fund balances demonstrate the Park District's dedication to responsible financial management and continued high quality programming and facilities for the public. The amount committed for compensated absences as of December 31, 2011 is $2,627,667. The total of the assigned fund balance in the General Fund as of December 31, 2011 is $11,784,032. The fund balance of the Park District's general fund decreased $927.~805 during the current fiscal year. Key factors in this decrease are as follows: General fund property tax revenue decreased by $63,794 or.2%, due to prior year delinquent property collections

29 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30, 2011 for Hyland Ski and Snowboard Area Fund) General fund intergovernmental revenue decreased $228,594 or 15.7% due to the reduction in the Metropolitan Council 2011 general operations and maintenance contribution. General fund charges for services increased by $417,245 or 8.3% due to the Concession Fund revenues reported in the General Fund in 2011 and not in During 2011, the Park District implemented GASB Statement No. 54, which not only changes fund balance reporting but also changes the definition of a special revenue fund. The Concession Fund no longer meets the special revenue fund definition and for reporting purposes is combined into the Park District's General Fund. Total general fund expenditures increased by $1,793,246 or 5.2% in the current fiscal year. Current year expenditures increased in all four functional areas (parks and natural resources, recreation and education, administrative, and legislative). This increase is due partially because the Concession Fund expenditures are reported in the General Fund in 2011, and due to the increased costs associated with the early retirement incentive program. The Scott County special revenue fund increased by $906,394, due to the Park District's desire to fund the accumulated deficits from the operations of Parks in Scott County prior to forming the current joint powers partnership. The transfer to fund the accumulated deficits was in the amount of $853,447, or 94.2% of increase. The G.O. Bond C.I.P. fund decreased by $486,135, resulting from capital project expenditures exceeding the unspent portion of 2011 bond proceeds. The capital project expenditures included installation of solar panels at Richardson Nature Center and the shower building at Baker Park Reserve. Other construction costs include the office building at Baker Near Wilderness Settlement, the beach retaining wall, and the horse trailer parking lot at Baker Park Reserve, the off-leash dog area at Fish Lake Regional Park, the elevator and restroom addition at Lowry Nature Center, and the unheated storage building at Silverwood Park. The Metro-Three Rivers C.I.P. Fund had zero net change in fund balance due to grant revenues matching project expenditures. The Land Acquisition, Development and Betterment fund increased by $1,770,325, with $1,418,268 or 80.1% due to a final reimbursement from Northern Natural Gas for the costs of replacement of trees at Carver Park damaged or removed by pipeline construction. The debt service fund has a total fund balance of $17,414,799, all of which is restricted for the payment of debt service. The net increase in fund balance during the current year in the debt service fund was $6,661,035. This increase is primarily due to the issuance of refunding bonds in December of 2011, for the purpose of calling and redeeming all outstanding bonds from the 2003 and 2004 General Obligation Bonds. The 2003 bonds can be called at any time; the 2004 bonds are callable for the first time on February 1, Proprietary funds. The Park District's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets of the Baker National Golf Course at the end of the year amounted to $164,742, those of Hyland Ski and Snowboard Area amounted to $4,451,639, and those of Eagle Lake Golf Course amounted to $376,252. The total net assets for these funds increased by $551,549, $526,880, and $1,293 for Baker National Golf Course, Hyland Ski and Snowboard Area and Eagle Lake Golf Course, respectively

30 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) Golf course revenues were lower by $94,056 and $66,006 from 2010 at Baker National Golf Course and at Eagle Lake Golf Course. The 2011 expenses decreased by $74,437 at Baker National G.olf Course due to a reduction in personnel and depreciation costs. Eagle Lake Golf Course 2011 expenses increased $34,402, due to additional depreciation expense for the miniature golf course constructed in General Fund Budgetary Highlights During the year, there was a $2,478,558 increase in appropriations between the original and final amended budget. Following are the main components of the increase: $268,081 represents appropriation increases for prior year encumbrances $275,365 represents additions approved by the Board of Commissioners to both revenues and expenditures for unanticipated revenues and the associated operating expenditures. $1,935,112 represents the use of unassigned fund balance. Actual revenues and other financing sources exceeded budget by $1,235,299. Property tax revenues exceeded budget by $281,724, as the Park District is required to budget assuming a 98% collection rate. The actual collection rate for 2011 was 98.6%. Park use and rental charges exceeded budgeted amounts as the number of park visitors increased and their desire for fee based programming and activities was higher than anticipated. Expenditures and other financing uses were $22,894 less than budgeted. This represents.1% variance to budget which was achieved primarily through active budget management by all individuals responsible for budgets. When combined with the budget excess in revenues and other sources, the General Fund's fund balance decrease of $927,805 was $1,258,193 less than planned in the budget. Capital Asset and Debt Administration Capital assets. The Park District's investment in capital assets for its governmental and business-type activities as of December 31, 2011 amounts to $212,050,632 (net of accumulated depreciation). This investment in capital assets includes land, land improvements, buildings, infrastructure, and equipment. The total increase in the Park District's investment in capital assets for the current fiscal ye ar was $492,281 net of accumulative depreciation. Major capital asset events completed during the current fiscal year included the following: ~ Purchase of land at Elm Creek Park Reserve - $252,631 ~ Purchase of land and restoration of properties at Lake Rebecca Park Reserve - $318,158 ~ Sunny Lake Refuge Trail Development - $578,073 ~ Medicine Lake Regional Trail Development - $253,580 ~ Completion o(beach Wall Construction at Baker Park Reserve - $653,373 ~ Completion of Campground Road Construction at Baker Park Reserve- $565,024 ~ Completion of Horse Trailer Parking Lot at Baker Park Reserve- $95,234 ~ Completion of Pavement Management at Baker National Golf Course - $798,290 ~ Completion of Single Track Mountain Bike Trail at Elm Creek Park Reserve- $248,872 ~ Completion of Office Building at Baker Near Wilderness Settlement- $379,946 ~ Completion of Accessibility Improvements at Lowry Nature Center- $91,

31 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) > Completion of Elevator and Restroom Addition at Lowry Nature Center - $244,252 > Completion of Unheated Storage Building at Silverwood Park- $232,153 > Completion of Camper Cabins at Elm Creek Park Reserve- $119,883 > Completion of Septic System at Lowry Nature Center - $60,695 > Completion of Boardwalk at Eastman Nature Center - $52,050 > Completion of Tamarack Boardwalk at Carver Park Reserve- $39,900 > Completion of ADA Ramp and Paver Pathway at Silverwood Park- $77,334 > Completion of Solar Panel Installation at Richardson Nature Center - $209,893 > Completion of Solar Panel Installation on Shower Building at Baker Park Reserve - $95,058 Three Rivers Park District Capital Assets (net of depreciation) Capital Assets Land Buildings and structures Land improvements Furniture and equipment Infrastructure Construction in progress Governmental Business-Type Activities Activities Total $85,292,038 $85,400,467 $ 417,179 $ 417,179 $85,709,217 $85,817,646 43,148,563 38,943,057 11,299,398 13,985,206 8,994.4Q2 43,725,936 3,200,630 38,901,992 5,694,462 9,506,949 1,072,807 14,448,114 9,1ZB.15Q 2,B9Q 3,349,521 46,349,193 47,075,457 5,419,552 44,637,519 44,321,544 1,210,491 12,372,205 10,717,440 13,985,206 14,448,114 6,997,292 9,17B,15Q Total Capital Assets $ $ $ $ ~3 $ $ Additional information on the Park District's capital assets can be found in Note 3 of the notes to the financial statements. Long-term debt. At year-end, the Park District had $85,793,408 in bonds, notes and capital leases outstanding versus $83,171,375 last year. The increase was due to the issuance of bonds, including 6.19 million in general obligation refunding bonds. The refunding bonds were sold to pay off the remaining balances on the, 2003 and 2004 bonds, resulting in a reduction of future debt service payments by $743,740; and a present value savings of $710,709. Three Rivers Park District Long-term Debt (General Obligation and Revenue Bonds, and Capital Leases) Long-term Debt General Obligation Bonds $81,810,000 Revenue Bonds Capital Leases Total Long-term Debt $ Governmental Activities Business-Type Activities Total $78,780,000 $Z8,Z80,000 $ 3,975, $ 3,983,~08 $ $81,810,000 $78,780,000 4,375,000 3,975,000 4,375,o"o $ ~.391,325 $85 Z93 ~08 $83,1Z1,3Z5-21 -

32 Three Rivers Park District Management's Discussion and Analysis For the year ended December 31, 2011 (June 30,2011 for Hyland Ski and Snowboard Area Fund) The Park District's previous ratings of "Aaa" from Moody's and "AAA" from Fitch were both confirmed for the 2011 bond issue; citing the Park District's large and diverse tax base, proactive financial management, and ample financial reserves as reasons for the ratings. Additional information on the Park District's long-term debt can be found in Note 4 of the basic financial statements. Economic factors and next year's budget 8t rates The Park District continues to see its property tax base decline due to decreased real estate valuations and continued foreclosures. The Park District's ability to levy taxes for operations is limited to.03224% of this valuation; meaning that as the valuation decreases, the levy limit for the Park District also decreases. The gap between the actual levy and the levy limit has decreased from more than $7.5 million in 2005 to less than $1.8 million in With the tax base continuing to decline for 2012, the Park District has used the 2012 budget to begin the process of decreasing its levy by reducing costs. The Park District's 2012 General Fund Operating Budget was approved with a.87% decrease from the 2011 budget. The budget included a reduction in excess of $800,000 in property taxes due to the elimination of several existing vacant positions in addition to the positions that were eliminated through an early retirement incentive program offered in The 2012 General Fund budget provides funding for the priorities identified below through a combination of increased park guest fees, repriorttization of costs and other sources. ~ Maintain high standards for quality facilities, programs and recreational opportunities while decreasing property taxes levied within suburban Hennepin County. ~ Continue to support natural resource management priorities. ~ Implement critical actions in the Park District's Vision Plan ~ Continue to coordinate with neighboring cities, townships and counties. ~ Promote the Park Districts mission through programming and service to park guests. Contacting the Park District's Financial Management This financial report is designed to provide our taxpayers, park guests and our creditors with a general overview of the Three Rivers Park District's finances and to show the Park District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Finance Department at 3000 Xenium Lane North, Plymouth, MN 55441, (763) , or jcremers@threeriversparkdistrict.org. -22-

33 BASIC FINANCIAL STATEMENTS

34 ThreeRivers PARK DISTRICT

35 THREE RIVERS PARK DISTRICT STATEMENT OF NET ASSETS As of December 31, 2011 (June 30, 2011 for the Hyland Ski and Snowboard Area Fund) Governmental Business-Type ASSETS Activities Activities Total Cash, cash equivalents, and investments $ 63,625,252 $ 5,331,307 $ 68,956,559 Property taxes receivable 547, ,511 Other receivables 52, ,242 Internal balances 3,458 (3,458) Due from other governmental units 4,063,375 1,250 4,064,625 Prepaid items 312,256 6, ,563 Inventory 427, , ,996 Restricted cash and Investments 179, ,500 Deferred charges 385,853 75, ,288 Capital assets: Nondepreciable 94,286, ,069 94,706,509 Depreciable 164,894,488 19,496, ,391,017 Accumulated depreciation (57,518,264) (9,528,630) (67,046,894) UABILITIES Total assets 271,079,780 16,113, ,192,916 Accounts payable 997,754 35,142 1,032,896 Contracts payable 806, ,139 Retainage payable 233, ,323 Due to other governmental units 512,941 1, ,649 Unearned revenue 44,515 66, ,175 Accrued interest 1,089,402 81,888 1,171,290 Accrued liabilities 1,048,200 55,241 1,103,441 Noncurrent liabilities: t Due within one year 16,562, ,058 17,074,482 Due in more than one year 69,855,153 3,735,168 73,590,321 NET ASSETS Total liabilities 91,150,551 4,488,165 95,638,716 Invested in capital assets, net of related debt 139,643,003 6,456, ,099,299 Restricted for Maintain and rehabilitate existing facilities 2,945,564 2,945,564 Debt service 9,890, ,500 10,069,734 Noerenberg Trust Non-Expendable 1,200,000 1,200,000 C.E. French Endowment Non-Expendable 28,519 28,519 Expendable 31,032 31,032 Eastman library Non-Expendable 5,025 5,025 Expendable 7,016 7,016 Unrestricted 26,178,836 4,989,175 31,168,011 Total net assets $179,929,229 $ 11,624,971 $ 191,554,200 The notes to the financial statements are an integral part of this statement. -23-

36 THREE RIVERS PARK DISTRICT STATEMENT OF ACTIVITIES For the Year Ended December 31, 2011 (June 30, 2011 for the Hyland Ski and Snowboard Area Fund) Net (Expenses) Revenue Program Revenues and Changes in Net Assets Operatmg Capital Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental activities: Parks and Natural Resources $ 24,176,014 $ 194,706 $ 2,058,395 $ 5,598,201 $ (16,324,712) $ $ (16,324,712) Recreation and Education 14,465,157 6,664, ,587 (7,651,559) (7,651,559) Administrative 5,532,137 21,889 10,388 (5,499,860) (5,499,860) Legislative 6,095,107 1,418,352 (4,676,755) (4,676,755) Interest and fiscal charges on debt 2,619,496 (2,619,496) (2,619,496) Total governmental activities 52,887,911 6,880,606 3,636,722 5,598,201 (36,772,382) (36,772,382) Business-type activities: Baker National Golf Course 1,977,693 1,744,452 (233,241) (233,241) Hyland Ski & Snowboard Area 3,620,169 4,055,968 1, , ,338 Eagle Lake Golf Course 1,208, ,338 7,510 (453,086) (453,086) I Total business-type activities 6,806,796 6,548,758 9,049 (248,989) (248,989) N.j:> I Total government $ 59,694,707 $13,429,364 $ 3,645,771 $ 5,598,201 (36,772,382) (248,989) {37,021,371) The notes to the financial statements are an integral part of this statement. General revenues: Property taxes 39,418, ,129 39,808,788 Unrestricted investment earnings 782,087 81, ,671 Gain on the sale of capital assets 66,050 66,050 Other 1,696,236 6,535 1,702,771 Transfers (808,290) 808,290 Total ~eneral revenue and transfers 41,154,742 1,286,538 42,441,280 Change in net assets 4,382,360 1,037,549 5,419,909 Net Assets- Beginning 175,546,869 10,587, ,134,291 Net Assets - Ending $179,929,229 $ 11,624,971 $ 191,554,200

37 MAJOR GOVERNMENTAL FUNDS General Fund The General Fund accounts for the revenues and expenditures relating to normal governmental activities which are not accounted for in another fund. It is the main operating fund of the Park District. Special Revenue Funds The Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are restricted to expenditures for specific purposes. Scott County The Scott County fund accounts for revenues and expenditures associated with all regional park facilities in Scott County per the covenants of a joint powers agreement. Capital Project Funds Capital projects funds account for the financial resources to be used for the acquisition, development and betterment of Park District facilities other than those facilities financed by proprietary funds. General Obligation Bonds CIP Fund A fund established to account for the revenue from General Obligation Bond sales. These monies will be used to fund the Capital Improvement Plan. Metro-Three Rivers Park Districts CIP Fund A fund established to account for monies received from Metropolitan Council (Minnesota) grants and expended in accordance with grant agreements between the Park District and the Metropolitan Council. This fund applies to all Three Rivers Park Districts' facilities not located in Scott County. Land Acquisition, Development and Betterm~nt Fund A fund established to account for the revenues and expenditures associated with park acquisition and improvement that is not funded by Metropolitan Council grants. Debt Service Fund The Debt Service Fund accounts for the accumulation of resources for, and the payment of, long-term debt principal, interest, and related costs, which are not accounted for in another fund.

38 ThreeRivers PARK DISTRICT

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40 THREE RIVERS PARK DISTRICT BALANCE SHEET- GOVERNMENTAL FUNDS As of December 31, 2011 ASSETS General Scott County G.O. Bond C.l.P. Cash, cash equivalents, and investments Property taxes receivable Other receivables Due from other funds Due from other governmental units Prepaid items Inventory Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Contracts payable Retainage payable Accrued liabilities Due to other funds Due to other government units Deferred/unearned revenue Total Liabilities Fund Balances: Nonspendable: Prepaid items Inventory C.E. French EndowiT)ent Noerenberg Trust - non-expendable Eastman Library Restricted: Capital improvement projects Maintain and rehabilitate existing facilities Debt Service C.E. French Endowment Eastman Library Committed: Future park & trail acquisition and improvement Compensated absences Maintain and rehabilitate existing facilities Betterment of and access to facilities & programs Operation & improvement of parks & trails in Scott County Assigned Future park operating and maintenance costs Capital improvement projects Working capital Contingencies Unassigned: Total Fund Balances Total Liabilities and Fund Balances $ 17,958, ,965 50, ,186 58, ,637 83,008 $ 18,965,991 $ 396, , , ,380 1,860, ,637 83,008 2,627, ,536 7,590,341 3,450,155 2,320,109 17,105,453 $ 18,965,991 $ 51,559 $ 14,951, ,4~8 154,523 $ 80,659 $ 15,107,409 $ 9,622 $ 276, ,234 76,099 16, ,631 1,100 27, ,641 28,418 24,529 14,132,768 52,947 14,132,768 $ 80,659 $ 15,107,409 The notes to the financial statements are an integral part of this statement. :

41 Metro- Land Acquisition Three Rivers Development Debt Other Total C.I.P. & Betterment Service Governmental Governmental $ $ 4,747,604 $17,460,154 $4,877,295 $ 60,046, , ,511 52,184 2,860,892 2,986,078 3,508, ,000 4,063,375 18, ,038 3, ,399 $ 3,508,557 $ 5,089,604 $17,607,700 $7,760,561 $ 68,120,481 $ 36,077 $ 2,075 $ 45,355 $ 136,545 $ 902, ,316 67, , , ,323 11, ,870 2,860, ,186 2,986, , , , , ,026 3,508, , , ,763 7,264,187 18, ,038 3, ,399 28,519 28,519 1,200,000 1,200,000 5,025 5,025 77,008 14,209,776 2,945,564 2,945,564 17,414,799 17,414,799 31,032 31,032 7,016 7,016 4,745,529 4,745,529 2,627,667 1,222,142 1,222, , ,501 24, ,536 1,323,069 1,323,069 7,590,341 3,450,155 (137,452) 2,182,657 4,745,529 17,414,799 7,404,798 60,856,294 $ 3,508,557 $ 5,089,604 $17,607,700 $ 7,760,561 $ 68,120,

42 THREE RIVERS PARK DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS As of December 31, 2011 FUND BALANCE - TOTAL GOVERNMENTAL FUNDS $ 60,856,294 Amounts reported for governmental activities in the statement of net assets are different because: 1) Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds: Governmental capital assets $ 245,811,584 Less accumulated depreciation (48,902,970) 196,908,614 2) Long term liabilities are not payable with current financial resources and are therefore not reported in the governmental funds. Bonds payable $ (81,810,000) OPEB Liability (882,074) Accrued interest and other charges (1,705,695) Compensated absences (2,627,667) (87,025,436) 3) Internal service funds are used by management to charge the cost of insurance and equipment rental to individual funds. Equipment rental $ 6,489,540 Risk management 1,807,248 8,296,788 4) Internal service funds charges of cost to proprietary funds for insurance and equipment rental to individual funds. Internal activity $ 3,458 3,458 5) Adjustments for deferred revenue on long-term assets not available to pay current-period expenditures. Tax deferral $ 547,511 Long-term receivable 342, ,511 Total Net Assets $ 179,929,229 The notes to the financial statements are an integral part of this statement. -28-

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44 THREE RIVERS PARK DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS For the Year Ended December 31, 2011 General Revenues: Property taxes $ 29,382,872 Intergovernmental 1,228,607 Charges for park use 4,028,522 Golf charges for services Concession charges for services 572,075 Rental charges for services 692,104 Merchandise charges for services 114,212 Lesson and league charges for services 31,088 Investment earnings (charges) 299,341 Fines and forfeitures 95,782 Other 50,200 $ Scott County 628, , ,553 33,361 49,049 16,049 89,623 (12,045) 7,026 $ G.O. Bond C.I.P. 894,901 69,990 69,355 Total revenues 36,494,803 1,240,120 1,034,246 Expenditures: Current: Parks and Natural Resources 15,867,577 Recreation and Education 9,436,590 Administrative 5,121,405 Legislative 5,599,170 Debt Service: Principal Interest Bond issuance costs Capital projects Capital outlay 158, , ,21"9 34,470 1,690,807 90, ,480 42, ,566 2,068,460 Total expenditures 36,183,487 1,316,019 5,137,696 Excess of revenues over (under) expenditures 311,316 (75,899) (4,103,450) Other financing sources (uses): Transfer in 246,242 Transfer (out) (1,490,510) Refunding bonds issued Issuance of debt Premium and (discount) Sa.le of capital assets 5, ,293 (1,200,000) 4,575, ,315 Total other financing sources (uses) (1,239,121) 982,293 3,617,315 Net Change in Fund Balances (927,805) 906,394 (486,135) Fund balances, January 1. 18,033,258 (853,447) 14,618,903 Fund balance, December 31 $ 17,105,453 $ 52,947 $ 14,132,768 The notes to the financial statements are an integral part of this statement. -30-

45 Metro-.Land Acquisition Three Rivers Development Debt Other Total C.I.P. & Betterment Service Governmental Governmental $ $ $10,404,408 $ $ 39,787,280 4,599, ,680 1,712,406 9,192,033 8,790 4,176, , ,163 49, ,694 64, ,219 21, , , ,324 61, , , ,566 95,782 1,418, ,161 1,771,010 4,599,533 1,607,713 10,559,366 2,882,830 58,418,611 3,241,929 21,573,643 5, ,264 10,545, ,701 5,483, , ,761 6,450,229 7,735,000 7,735,000 2,699,185 2,699,185 46,855 89, ,733 2,075 16,873 1,378,247 4,137, ,672 6,669,677 4,599, ,423 10,481,040 4,698,200 62,623,398 1,400,290 78,326 (1,815,370) (4,204,787) 1,708,217 2,936,752 (256,242) (2,946,752) 6,190,000 6,190,000 4,575, , , , , ,035 6,582,709 1,451,975 11,765,206 1,770,325 6,661,035 (363,395) 7,560,419 2,975,204 10,753,764 7,768,193 53,295,875 $ $4,745,529 $17,414,799 $ 7,404,798 $ 60,856,

46 THREE RIVERS PARK DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2011 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 7,560,419 Amounts reported for governmental activities in the statement of activities are different because: 1) Governmental funds report capital outlays as expenditures. However, in the statement of activities the 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 exceeded depreciation in the current period. The net effect of various miscellaneous transactions involving capital assets, including disposal, which decrease net assets. Capital outlays $ 7,818,177 Depreciation (5,350,187) Sale of assets (942,489) Contribution of assets to business-type activities (798,290) ,211 2) Long-term debt service activity. Bond principal payments Change in interest payable, premium & discounts Change in arbitrage liability OPEB liability Issuance of bonds Compensated absences $ 7,735,000 (466,165) 17,454 (182,488) (10,765,000) 173,800 ( 3,487,399) 3) Net change due to internal service funds incorporated into statement of activities. Internal activity Portion for business-type activities 4) Changes in deferred revenue for activities that do not provide current financial resources. Tax deferral Long-term receivable $ 22,577 42,173 $ (368,621) (114,000) 64,750 (482,621) Change in net assets of governmental activities $ 4,382,360 The notes to the financial statements are an integral part of this statement. -32-

47 THREE RIVERS PARK DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL - 'GENERAL FUND For the Year Ended December 31, 2011 Variance Original Budget as Over/(Under) Budget Amended Actual Amended Budget REVENUES: Property taxes $ 29,101,148 $ 29,101,148 $29,382,872 $ 281,724 Intergovernmental 930,282 1,139,933 1,228,607 88,674 Charges for park use 3,242,-625 3,333,422 4,028, ,100 Concession charges for services 566, , ,075 30,190 Rental charges for services 679, , ,104 12,124 Merchandise charges for services 68,338 68, ,212 45,874 Lesson and league charges for services 26,300 26,300 31,088 4,788 Investment earnings 220, , ,341 79,341 Fines and forfeits 69,000 69,000 95,782 26,782 Other 20,862 20,862 50,200 29,338 Total revenues 34,925,503 35,200,868 36,494,803 1,293,935 OTHER FINANCING SOURCES: Transfer in 299, , ,242 (53,283) Sale of capital assets 10,500 10,500 5,147 (5,353) Total revenue and other financing sources 35,235,528 35,510,893 36,746,192 1,235,299 EXPENDITURES: Parks and Natural Resources 15,908,120 16,248,668 15,867,577 (381,091) Recreation and Education 9,440,536 9,475,602 9,436,590 (39,012) Administrative 5,175,939 5,209,136 5,121,405 (87,731) Legislative 4,441,637 5,041,262 5,599, ,908 Capital outlay 97, , ,745 (73,735) Total expenditures 35,064,082 36,207,148 36,183,487 (23,661) OTHER FINANCING USES: Transfers out 154,251 1,489,743 1,490, Total expenditures and other financing uses 35,218,333 37,696,891 37,673,997 (22,894) NET CHANGE IN FUND BALANCES $ 17,195 $ (2,185,998) (927,805) $ 1,258,193 FUND BALANCE AT BEGINNING OF YEAR 18,033,258 FUND BALANCE AT END OF YEAR $ 17,105,453 The notes to the financial statements are an integral part of this.statement

48 THREE RIVERS PARK DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL- SCOTT COUNTY SPECIAL REVENUE FUND For the Year Ended December 31, 2011 Variance Original Budget as Over/(Under) Budget Amended Actual Amended Budget REVENUES: I ntergovernmenta I $ 697,311 $ 692,394 $ 628,906 $ (63,488) Charges for park use 73,490 73, ,598 66,108 Golf charges for services 359, , ,553 (71,247) Concession charges for services 30,000 33,361 3,361 Rental charges for services 50,200 50,200 49,049 (1, 151) Merchandise charges for services 13,000 13,000 16,049 3,049 Lesson and league charges for services 74,000 74,000 89,623 15,623 Investment earnings (charges) (12,045) (12,045) Other 7,026 7,026 Total revenues 1,267,801 1,292,884 1,240,120 (52,764) OTHER FINANCING SOURCES: Transfers in 128, , , ,447 Total revenue and other financing sources 1,396,647 1,421,730 2,222, ,683 EXPENDITURES: Parks and Natural Resources 759, , ,330 13,407 Recreation and Education 495, , ,219 (52,039) Legislative 141, ,018 34,470 (68,548) Total expenditures 1,396,647 1,423,199 1,316,019 (107,180) OTHER FINANCING USES: Total expenditures and other financing uses 1,396,647 1,423,199 1,316,019 (107,180) NET CHANGE IN FUND BALANCES $ $ (1,469) 906,394 $ 907,863 FUND BALANCE AT BEGINNING OF YEAR (853,447) FUND BALANCE AT END OF YEAR $ 52,947 The notes to the financial statements are an integral part of this statement

49 PROPRIETARY FUNDS Enterprise Funds Enterprise funds are used to account for Park District operations that are financed and operated in a manner similar to private business enterprises - where the intent of the Park District's Board of Commissioners is that the costs of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges and fees; and that periodic determination of net income is appropriate for accountability purposes. Baker National Golf Course Fund This fund accounts for the day-to-day operations of the Baker National Golf Course and Driving Range. Hyland Ski and Snowboard Area Fund This fund accounts for the day-to-day operations of the alpine ski and snowboard operation and the golf practice center at the Hyland Ski and Snowboard Area. Eagle Lake Golf Course Fund This fund accounts for the day-to-day operations of the Eagle Lake Golf Course and Driving Range. Internal Service Funds Internal service funds are used by the Park District to account for the financing of the worker's compensatlon and general insurance services, as well as equipment replacement, provided to other departments of the Park District. Equipment Internal Service Fund This fund is used to account for the rental of vehicles and other equipment to other departments and related costs. Risk Management Internal Service Fund This fund is used to account for all insurance premiums, recoveries, self-funded losses, legal costs and other expenses associated with risk management activities of the Park District.

50 Three Rivers PARK DISTRICT

51 THREE RIVERS PARK DISTRICT STATEMENT OF NET ASSETS PROPRIETARY FUNDS As of December 31, 2011 (June 30, 2011 for the Hyland Ski and Snowboard Area Fund) Business-Type Activities - Enterprise Funds Governmental Baker Ryland ski Activities - National & Snowboard Eagle Lake Internal Golf Course Area Golf Course Total Service Funds ASSETS: Current Assets: cash and cash equivalents $ 228,266 $ 4,615,919 $ 487,122 $ 5,331,307 $ 3,578,356 Customers and other receivables Due from other governmental units 1,250 1,250 Prepaid items 690 5,617 6,307 3,218 Inventories 10, ,048 3, , ,828 Total current assets 239,807. 4,742, ,050 5,473,691 3,893,402 Noncurrent Assets: Restricted assets - cash and cash equivalents 179, ,500 Deferred charges 39,084 36, ,43? Capital assets: Nondepreciable 309, , ,069 Depreciable 7,722,476 6,691,465 5,082,588 19,496,529 13,369,344 Accumulated depreciation (4,463,742) (3,305,296) (1,759,592) (9,528,630) (8,615,294) Total capital assets 3,568,234 3,496,738 3,322,996 10,387,968 4,754,050 Total noncurrent assets 3,786,818 3,496,738 3,359,347 10,642,903 4,754,050 Total assets 4,026,625 8,239,572 3,850,397 16,116,594 8,647,452 UABILITIES: Current Liabilities: Accounts payable 2,742 30,298 2,102 35,142 95,231 Contracts payable Due to other government units ,708 14,413 Unearned revenue 66,660 66,"660 Accrued interest 16,112 65,776 81,888 Accrued liabilities 16,327 28,174 10,740 55,241 18,596 Current portion bonds payable 180, , ,000 Current portion capital lease obligation 8,408 8,408 Current portion compensated absences 29,700 39,700 14,250 83,650 50,650 Total current liabilities 245, , , , ,890 Noncurrent liabilities: Bonds payable 516,528 2,986,736 3,503,264 Accrued liabilities 126,734 Compensated absences 48, ,804 57, ,904 45,040 Total noncurrent liabilities 564, ,804 3,044,476 3,735, ,774 Total liabilities 810, ,603 3,377,885 4,488, ,664 NET ASSETS: Invested In capital assets, net of related debt 2,871,706 3,488,330 96,260 6,456,296 4,754,050 Restricted for Debt Service 179, ,500 Unrestricted 164,742 4,451, ,252 4,992,633 3,542,738 Total net assets $3,215,948 $ 7,939,969 $ 472,512 11,628,429 $ 8,296,788 Adjustment to reflect the consolidation of Internal service fund activities related to enterprise funds. (3,458) Total net assets - business-type activities $ 11,624,971 The notes to the financial statements are an integral part of this statement

52 THREE RIVERS PARK DISTRICT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS- PROPRIETARY FUNDS For the Year Ended December 31, 2011 (June 30, 2011 for the Hyland Ski and Snowboard Area Fund) Business-Type Activities- Enterprise Funds Governmental Baker Hyland Ski Activities - National & Snowboard Eagle Lake Internal Golf Course Area Golf Course Total Service Funds OPERATING REVENUES: Golf charges for services $1,127,980 $ 22,336 $ 489,492 $ 1,639,808 $ Ski & snowboard charges for services 1,837,150 1,837,150 Concession charges for service 177, ,573 34, ,548 Rental charges for service 234, ,698 34, ,157 Merchandise 97, ,058 14, ,787 Lesson and league charges for service 102, , ,034 1,225,241 Interfund services used 3,512,852 Miscellaneous charges 4,415 15,300 13,352 33, ,128 Total operating revenues 1,744,452 4,055, ,338 6,548,758 3,912,980 OPERATING EXPENSES: Salaries and wages 707,024 1,683, ,790 2,795, ,817 Retirement contributions 82, ,346 50, ,387 82,936 Insurance contributions and other benefits 89, ,839 68, , ,839 Supplies and commodities 297, ,449 91,030 1,036,851 1,053,253 Professional service fees 32,953 32, ,777 Repair and maintenance service fees 4, ,010 1, , ,890 Communication 2,340 6,009 1,275 9,624 1,812 Utilities 34, ,035 31, ,465 Equipment rental 327, ,807 96, ,098 8,834 Claims settlements 33,686 Insurance premiums 252,569 Other services and charges 71, ,166 33, ,520 36,511 Depreciation 326, , , ,475 1,051,492 Total operating expenses 1,942,751 3,606,612 1,019,489 6,568,852 4,227,416 OPERATING INCOME (LOSS) (198,299) 449,356 (271,151) (20,094) (314,436) NONOPERATING REVENUES (EXPENSES): Property tax revenue 390, ,129 Intergovernmental 1,539 1,539 Investment earnings (charges) 6,487 70,582 4,515 81,584 59,067 Gain (loss) on disposal of assets 60,903 Interest and fees on bonded debt (56,003) (139,76'8) (195,771) Other 1,074 5,403 7,568 14,045 Total nonoperating revenues (expenses) (48,442) 77, , , ,970 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (246,741) 526,880 (8,707) 271,432 (194,466) CONTRIBUTIONS: Capital contributions 798, , ,043 TRANSFERS: Transfer in 10,000 10,000 CHANGE IN NET ASSETS 551, ,880 1,293 1,079,722 22,577 NET ASSETS - BEGINNING 2,664,399 7,413, ,219 10,548,707 8,274,211 NET ASSETS - ENDING $3,215,948 $7,939,969 $.472,512 $11,628,429 $8,296,788 Adjustment to reflect the consolidation of Internal service fund activities related to enterprise funds. (42,173) Change in net assets - business-type activities $ 1,037,549 The notes to the financial statements are an integral part of this statement. -36-

53 THREE RIVERS PARK DISTRICT STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS For the Year Ended December 31, 2011 (June 30, 2011 for the Hyland Ski and Snowboard Area Fund) Business-Type Activities - Enterprise Funds Governmental Baker Hyland Ski Activities - National & Snowboard Eagle Lake Internal Golf Course Area Golf Course Total Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Interfund services used $ $ $ $ $3,512,852 Charges for services 1,740,037 4,043, ,928 6,518, ,921 Payments to suppliers (737,529) (1,322,971) (252,709) (2,313,209) (1,780,-115) Payments to employees (866,232) (2,024,863) (514,832) (3,405,927) (1,158,183) Claims and premiums paid (255,602) Other operating revenues 5,489 20,703 20,920 47,112 1,207 Net cash provided by (used In) operating activities 141, ,676 (11,693) 846, ,080 CASHFLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Property tax re'tenue 390, ,129 Transfers from. other funds 10,000 10,000 Intergovernemental revenue Cash repaid to other funds (149,857) (149,857) Net cash provided by (used In) noncapital financing activities (149,568) 400, ,561 CASH FLOWS FROM CAPIT~L AND RELATED FINANCING ACTIVITIES: Purchase of property and equipment (3,575) (19,835) (23,410) (636,002) Proceeds from sale of property 88,611 Principal payments on capital debt (175,000) (225,000) (400,000) Interest and fees paid on capital debt (35,943) (135,488) (171,431) Payment on captial lease obligation (7,967) (7,967) Net cash (used in) capital and related financing activities (214,518) (27,802) (360,488) (602,808) (547,391) CASH FLOWS FROM INVESTING ACTIVITIES: Interest' received (charged) 6,487 70,582 4,515 81,584 59;067 Net cash provided by (used In) Investing activities 6,487 70,582 4,515 81,584 59,067 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (66,266) 609,888 32, , ,756 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 474,032 4,006, ,659 4,934,722 3,347,600 CASH AND CASH EQUIVALENTS AT END OF YEAR (INCLUDING RESTRICTED CASH) $ 407,766 $ 4,615,919 $ 487,122 $5,510,807 $3,578,356 The notes to the financial statements are an integral part of this statement

54 THREE RIVERS PARK DISTRICT STATEMENT OF CASH FLOWS- PROPRIETARY. FUNDS (Continued) For the Year Ended December 31, 2011 (June 30, 2011 for the Hyland Ski and Snowboard Area Fund) Business-Type Activities - Enterprise Funds Governmental Baker Hyland Ski Activities - National & Snowboard Eagle Lake Internal Golf Course Area Golf Course Total Service Funds RECONCILIATION OF OPERATING (LOSS)/INCOME TO NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES: Operating Income (loss) $(198,299) $ 449,356 $ (271,151) $ (20,094) (314,436) Adjustments to reconcile operating Income (loss) to net cash provided by (used In) operating activities: Miscellaneous revenue (charges) 1,074 5,403 7,568 14,045 Depreciation 326, , , ,475 1,051,492 (Increase) decrease in: Receivables (58) (58) Prepaid expenses 110 (4,657) (4,547) (3,218) Inventory (1,813) (26,757) 1,562 (27,008) (40,633) Increase (decrease) in: Accounts payable 1,035 3,682 1,450 6,167 (30,421) Contracts payable Other accrued liabilities 6,666 5,194 4,991 16,851 36,209 Due to other government units ,234 Compensated absences 6,112 15,959 5,007 27,078 8,853 Unearned revenue 3,139 3,139 Net cash provided by (used In) operating activities $ 141,765 $ 716,676 $ (11,693) $ 846,748 $ 719,080 NONCASH ACTIVITIES: Disposal of assets $ $ $ $ $ 27,708 Property contributed by other funds $ 798,290 $ $ $ 798,290 $ 217,043 Accrued Interest expense $ 16,112 $ $ 65,776 $ 81,888 $ Capital debt amortization $ (23,778) $ $ (8,217) $ (31,995) $ The notes to the financial statements are an Integral part of this statement. -38-

55 NOTES TO BASIC FINANCIAL STATEMENTS

56 Three Rivers PARK DISTRICT

57 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Three Rivers Park District, formerly known as the Hennepin County Park Reserve District and the Suburban Hennepin Regional Park District, was organized in 1957 as a special park district pursuant to authority provided by Minnesota Statutes, Chapter 398. The primary purpose of the Park District is to acquire, develop, and operate large parks, forests, and other reservations, trail systems, and wildlife sanctuaries. The Park District is governed by a seven-member Board of Commissioners; five commissioners are elected from districts within suburban Hennepin County, and two commissioners are appointe~ by the Hennepin County Board of Commissioners. The accounting policies of the Park District conform to U.S. generally accepted accounting principles applicable to governmental entities, as of December 31, The following is a summary of the more significant policies: A. Financial Reporting Entitv The accompanying financial statements of the Three Rivers Park District include the primary government (the Park District) and its component units, entities for which the Park District is considered financially accountable. The Park District may be considered financially accountable for another entity if it appoints a voting majority of the governing body, is able to impose its will on that organization, if the organization can provide financial benefits or impose financial burdens on the Park District or if the organization is fiscally dependent on the Park District. The Park District does not have any component units. Pursuant to the terms of an agreement between the Park District and Scott County, Minnesota, the Park District provides staff, planning, land acquisition, administrative and operational services to all regional park facilities in Scott County, and keeps records of all related financial transactions. The funds and accounts relating to these activities, consisting of $2,222,413 of revenues with transfers and $1,316,019 of expenditures, are included in the Scott County Special Revenue Fund in the accompanying financial statements. The Park District has entered into a joint powers agreement with Hennepin County whereby the Park District manages and operates the Glen Lake Golf and Practice Center, an executive golf facility owned by Hennepin County. Under the terms of the agreement, the Park District is reimbursed by Hennepin County for all costs incurred. All land, buildings and equipment are owned by Hennepin County. The agreement specifies that Hennepin County and the Park District will split profits on a 70%-30% allocation, once a fund balance of $150,000 is achieved and maintained. All activity has been recorded in a Special Revenue Fund - Glen Lake Golf Course Fund, a nonmajor fund included with the Park's other nonmajor governmental funds in these financial statements. B. Government-wide and Fund Financial Statements The basic financial statements include both government-wide (based on the Park District as a whole) and fund financial statements. While the fund financial statement model emphasizes major and nonmajor funds, in the government-wide model the focus is on the Park District as a whole. Both the government-wide and fund financial statements (within the basic financial statements) categorize primary activities as either governmental or business-type

58 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) In the government-wide Statement of Net Assets, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, and (b) are reflected, on a full accrual, economic resources measurement focus, which incorporates long-term assets and receivables as well as long-term debt and obligations. The Park District generally uses restricted assets first for expenses incurred for which both restricted and unrestricted assets are available. The Park District may defer the use of restricted assets based on a review of the specific transaction. The. government-wide Statement of Activities reflects both the gross cost and the net cost per functional category, which are otherwise being supported by general revenues (property taxes, interest income, etc.). The Statement of Activities reduces gross expenses (including depreciation) by the related program revenues, and operating and capital grants and contributions. The program revenues must be directly associated with the function or a business-type activity. Program revenues are derived directly from the program itself or from parties outside the Park District's taxpayers as a whole. The Park District does not allocate indirect expenses. The operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column includes capital-specific grants. The governmental fund financial statements are presented using the current financial resources measurement focus and the modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. Since the governmental fund statements are presented using a measurement focus and basis of accounting different from that used in the government-wide statements' governmental activities column, a reconciliation is presented that briefly explains the adjustments necessary to reconcile ending net assets and the change in net assets. The focus of the current financial statement reporting model is on the Park District as a whole and on the Park District's major funds, including both.governmental funds and enterprise funds (by category). Each presentation provides valuable information that can be analyzed and compared (between years and between governments) to enhance the usefulness of the information. In the fund financial statements, financial transactions and accounts of the Park District are organized on the basis of funds. The operation of each fund is considered to be an independent fiscal and separate accounting entity, with a self-balancing set of accounts recording cash and/or other financial resources together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulation, restrictions, or limitations. Major Governmental Funds - The Park District reports the following major governmental funds: _ General Fund - The General Fund is the general operating fund of the Park District. It is used to account for all financial resources except those required to be accounted for in another fund. This fund records revenues such as property tax revenues, licenses and permits, fines and penalties, intergovernmental revenues, and interest earnings. Most of the current day-to-day operations of the governmental units are financed from this fund. -40-

59 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Scott County Fund - The Special Revenue Scott County Fund is used to account for revenues and expenditures associated with all regional park facilities in Scott County per the covenants of a joint powers agreement. G.O. Bond C.I.P. Fund -The G.O. Bond C.I.P. Fund is used to account for the acquisition or construction of major capital facilities that are financed with bonding activity, other than those that are financed by proprietary funds. Metro-Three Rivers C.I.P. Fund -The Metro-Three Rivers C.I.P. Fund is used to account for the acquisition or construction of major capital facilities that are financed with grant activity through the Metropolitan Council. Land Acquisition. Development and Betterment Fund - The Land Acquisition, Development and Betterment Fund is used to account for the acquisition or construction of major capital facilities, other than those that are financed by proprietary funds. Debt Service Fund - The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, long:-term debt principal, interest, and related costs, which are not accounted for in another fund. Major Proprietary Funds - The Park District reports the following major proprietary funds: Baker National Golf Course Fund - The Baker Natior'al Golf Course Fund is used to account for resources and payments related to the operation and maintenance of the Baker National Golf Course. Hyland Ski and Snowboard Area Fund - The Hyland Ski and Snowboard Area Fund is used to account for resources and payments related to the operation and maintenance of the Hyland Ski and Snowboard Area. Eagle Lake Golf Course Fund - The Eagle Lake Golf Course Fund is used to account for resources and payments related to the operation and maintenance of the Eagle Lake Golf Course. Other Funds - The Park District reports the following other funds: Internal Service Funds - Internal Service Funds are used to account for the worker's compensation, employee dental benefits, and general insurance services, as well as equipment replacement, provided to other departments or agencies of the Park District. c. Measurement Focus and Basis of Accounting The accounting and reporting treatment applied to a fund is determined by its measurement focus. Governmental Funds: Measurement Focus: Governmental Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Reported fund balance is - 41-

60 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) considered a measure of "available spendable resources." Governmental fund operating statements represent increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Basis of Accounting: Governmental Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when susceptible to accrual (i.e., when they become measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. 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. Other revenue is considered available if collected within 60 days. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Revenues: Major revenues that are susceptible to accrual include property taxes, excluding delinquent taxes received over 60 days after year-end; intergovernmental revenues; charges for services; and interest on investments. Major revenues that are not susceptible to accrual include fees and miscellaneous revenues; such revenues are recorded only as received because they are not measurable until collected. Deferred Revenues: Deferred revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources are received by the Park District before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when all revenue recognition criteria are met, the liability for deferred revenue is removed and revenue is recognized. Expenditures: Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on long-term debt, as well as expenditures related to compensated absences and OPEB, which are recognized when due. Proprietary Funds: Measurement Focus: Proprietarj funds are accounted for on a flow of economic resources measurement focus. This means that all assets, including capital assets, and all liabilities, including long-term liabilities, associated with fund activity are included on the balance sheets. Proprietary fund type operating statements present increases (i.e., revenues) and decreases (i.e., expenses) in net total assets. Basis of Accounting: Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded at the time liabilities are incurred. All applicable GASB pronouncements have been applied to the Proprietary Funds. Additionally, the following pronouncements issued on or before November 30, 1989 have been applied unless those pronouncements conflict with or contradict GASB: Statements and Interpretations of the Financial Accounting Standards Board (FASB), Accounting Principles Board (APB) opinions, and Accounting Research -42-

61 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Bulletins (ARB) of the Committee on Accounting Procedures. 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 Park District has elected not to follow subsequent private-sector guidance. Operating versus Nonoperating Items: 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 revenue of the Park District's enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. Budgets The Park District followed these procedures in establishing the 2011 budgetary data reflected in the financial statements: 1. The Park District's Board of Commissioners, after holding public hearings, approved an operating budget for the fiscal year commencing January 1. The operating budget includes proposed expenditures and the means of financing them. 2. The Park District submitted the budget to the Hennepin County (Minnesota) Board of Commissioners. The County Board may, within 15 days, veto or modify an item contained in the budget. The Park District Board may re-approve a vetoed or modified item by a two-thirds majority. 3. After adoption of a final budget and on or before five working days after December 20, the Park District certified to Hennepin County the amount of ad valorem taxes to be levied. 4. The Park District's Board may make modifications to the adopted budget by increasing or decreasing appropriations and may authorize the transfer of budgeted amounts between departments within any fund. The Park District's management may amend the budget up to the total fund level without seeking the approval of the Park District Board. 5. Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring of budgets is maintained at the expenditure category level (i.e. personal services, commodities, contractual services, other charges, capital outlay) within each activity. 6. Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual appropriated budgets are adopted for the General Fund and the following special revenue funds: Scott County, and Glen Lake Golf Course. Formal budgetary integration is not employed for the Debt Service Fund 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 reporting controls. The Board made supplemental budgetary appropriations - 43-

62 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) throughout the year for the General Fund, totaling $2,478,558, $268,081 relating to encumbrances, $275,365 relating to unanticipated grants and park use charges, and $1,935,112 for use of unassigned fund balance. The Board approved the use of the General Funds unassigned fund balance for the early retirement incentive program, the 2011 information and technology program, and the transfer to cover accumulated deficits in the Scott County Fund. The Board also made supplemental budgetary appropriations for Scott County Special Revenue Fund totaling $26,552, $1,469 relating to encumbrances and $25,083 relating to concessions charges for services. No supplemental budgetary appropriations were made for Glen Lake Golf Course. 7. Budgeted amounts are as originally adopted, or as amended by the Park District Board of Commissioners. Budgeted expenditure appropriations lapse at year-end. Encumbrances represent purchase commitments. Encumbrances outstanding at year-end are reported in fund balances since they do not constitute expenditures or liabilities. E. Cash. Cash Equivalents. and Investments Cash balances for all funds, except for small amounts on hand or in Park District depositories and amounts noted below, are deposited in pooled accounts of Hennepin County. The County invests cash surpluses for these accounts. Investment earnings, including gains and losses on sales of securities, are allocated to the Park District's funds on the basis of average cash balances. Cash balances in the G.O. Bond Fund are invested by the Park District directly and investment earnings, including gains and losses on sales of securities, are allocated to the Park District's G.O. Bond Fund. Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less from the time of purchase. For purposes of the statement of cash flows, the Proprietary Funds consider all unrestricted investments held in the pooled accounts of Hennepin County to be cash equivalents because this pool is used essentially as a demand deposit account. The Park District's pooled investments, primarily consisting of securities of the federal government or its agencies, are recorded at fair value. F. Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered, as well as short-term cash deficits. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheets of the fund financial statements. G. Inventories and Prepaid Items All inventories are valued at cost based on physical counts, which approximates a first-in, first-out basis. Inventory in the General Fund consists of expendable supplies for consumption. The cost of inventory is recorded as an expenditure/expense when consumed (i.e., consumption method) in the General Fund, as well as, special revenue and proprietary fund types. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial sta~ements. -44-

63 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) H. Restricted Assets Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. I. Capital Assets Capital assets, which include land, buildings and structures, land improvements, furniture and equipment, machinery and automobiles, and infrastructure (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activity columns in the government-wide statements. Capital assets are defined as assets with an initial cost of more than $2,000 ($40,000 for infrastructure type assets) and an estimated useful life of greater than one year. All capital assets are recorded at historical cost or estimated historical cost if actual cost was not available. Donated capital assets are valued at the fair market value as of the date of donation. Capital outlays are recorded as expenditures in the Park District's governmental fund financial statements, which use the modified accrual basis of accounting. Capital outlays are capitalized in the Park District's government-wide and proprietary fund statements of net assets, which use the full accrual basis of accounting. Depreciation on the Park District's capital assets (including infrastructure) is recorded on a government-wide and proprietary fund basis. Capital assets not being depreciated include land and construction in progress. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Years Land improvements Buildings Machinery and equipment Ski Jump Trail systems Street and infrastructure Leasehold improvements Lesser of remaining life of lease or Life of leasehold improvements J. Compensated Absences The Park District compensates all employees upon termination for unused vacation pay, up to a maximum of 240 hours. Park District employees are also entitled to sick leave benefits upon resignation in good standing or retirement after completion of ten years of service. The amount of severance benefits is limited to orie-half of their sick leave accumulation, up to a maximum of 600 hours of sick leave

64 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) The expense and related liability for accrued vacation and sick pay is recognized when earned in the government-wide and all proprietary fund financial statements. The liability for the non-vested accumulating rights has been estimated and recorded as part of the liability for compensated absences. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignation or retirement. K. 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, and proprietary fund type statements of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. L. Bond premiums. Discounts. and Issuance Costs 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 and discounts on debt issuances are reported as other financing sources and uses respectively. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. M. Interfund Transactions Interfund services provided are accounted for as revenues and expenditures. Transactions that constitute reimbursements to a fund for expenditures initially made from it that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. Other interfund transactions are reported as transfers in (out). Interfund transactions within the respective categories of governmental activities and business-type activities in the government-wide statement of activities are eliminated. The internal balances caption on the government-wide statement of net assets represents interfund receivables or payables between the two types of activities: governmental and business-type. N. Property Taxes Property tax levies are set by the Board of Commissioners in December, and are certified to Hennepin County (the County) for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads all levies over taxable property. Such taxes become a lien on January 1 and are recorded as receivables by the Park District at that date. Within the fund financial statements, property taxes are accrued and recognized as revenue, excluding delinquent taxes received over 60 days after year-end. Deferred revenue in governmental activiti"es is susceptible to full accrual on the government-wide statements. -46-

65 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Real property taxes may be paid by taxpayers in two equal installments, on May 15 and October 15. The County provides tax settlements to taxing districts four times a year in January, May, June, and ~ovember. In the governmental fund financial statements, taxes that remain unpaid at December 31 are classified as delinquent taxes receivable and are fully offset by deferred revenue, because they are not known to be available to finance current expenditures. No allowance for uncollectible taxes has been provided because such amounts are not expected to be material. 0. Rjsk Management The Park District is exposed to various risks of loss related to torts; damage to, and destruction of, assets; errors and omissions; injuries to employees; and natural disasters. The risk management activities of the Park District are accounted for by the Risk Management Fund, an internal service fund that charges its costs to user departments. Such reimbursements are recorded as quasi-external transactions. The Park District insures for risks associated with general liability and property with a Minnesota Counties Intergovernmental Trust. The Risk Management Fund provides coverage of insurance premiums that will cover up to a maximum of $1,500,000 for general liability claims and either replacement cost or actual cash value for property and equipment claims. The Park District is self-insured for worker's compensation costs. The Park District provides coverage through the Risk Management Fund up to the retention factor of $450,000 per occurrence. Claims in excess of that amount are covered 100% by Workers Compensation Reinsurance Agency. In 1997, the Park District also began a self-insurance program for dental benefits. Accordingly, the Park District has not purchased outside insurance for the risk of losses to which it is exposed. Instead, the Park District management believes it is more economical to manage its risks internally and set aside assets for claim settlement. Participants in the program make premium payments to the Risk Management Internal Service Fund. The excess amount received above the claims is $139,859 at December 31, The liability recorded by the Risk Management Fund includes estimated settlements for claims reported but not yet settled as of December 31, 2011, estimated deductible/premium adjustments not settled as of December 31, 2011, as well as, an estimate of claims incurred but not reported. 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. Changes in the fund's liability amount are as follows: Beginning of year liability Claims and change in estimates Claims payments Accrued liabilities 2011 $ 108, ,575 (299,557) $ $ 140, ,765 (278,544) $ The funds total accrued liability for December 31, 2011 is $141,288 of this amount $126,734 represents the non-current liability

66 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) P. Hyland Ski and Snowboard Area Enterprise Fund Fiscal Year End Due to its seasonal nature, the Hyland Ski and Snowboard Area Proprietary Fund has a fiscal year-end of June 30. To conform to the U.S. generally accepted accounting principles; the Park District has included, in its financial statements, the audited financial statements of the Hyland Ski and Snowboard Area Proprietary Fund for the fiscal year-ended June 30, Q. Endowments The Park District receives a variety of donations from constituents and business partners that contain restrictions on their use. Most are intended to be used within one year of receipt and are accounted for in the General Donations Special Revenue Fund. The Park District does maintain three permanent funds for endowments that have extended lives due to restrictions placed on the funds by the donor. The Board of Commissioners has the authority to spend the investment earnings from the original donation and Park District policy requires all spending of these funds to be approved by the Board. Investment earnings allocated to these funds are earned and realized upon allocation to the funds. The amounts available to spend are reflected in the Net Assets as expendable. The three endowments, the C.E. French Endowment, the Noerenberg Trust and the Eastman Library Trust are described below: C.E. French Endowment - This fund accounts for the original donations of $28,519 to honor the Park District's first Park Superintendent. At Mr. French's request, the funds are to be used for staff development and training. Mr. French's desire was that the funds remain in perpetuity. Noerenberg Trust - This fund accounts for the original donation of $1.2 million to fund the operation of the Noerenberg Memorial Gardens. The trust document requires the Park District maintain the original donation while allowing the Park District to spend all investment earnings on operations of the gardens. Eastman Library Trust - This fund accounts for the original donation of $5,025 made to create a library at Eastman Nature Center. The trust allows the Park District to spend funds on books and materials for the library, but not on regular operations. The Park District has opted to not spend the entire endowment to allow for periodic updating of library materials as needed. R. Use of Estjmates The preparation of financial statements, in accordance with accounting principles generally accepted in the United States of America, requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. s. Net Assets In the government-wide and proprietary fund financial statements, net assets represent the difference between assets and liabilities. Net assets are displayed in three components: Invested in Capital Assets, Net of Related Debt - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. -48-

67 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Restricted Net Assets - Consists of net assets restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Unrestricted Net Assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt." T. Fund Balance Classifications In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable - Consists of amounts that are not in spendable form, such as prepaid items, inventory, other long-term assets, and legally or contractually required to be maintained intact. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. Restricted - Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. Committed - Consists of internally imposed constraints that are established by resolution of the Park Districts Board of Commissioners. Those committed amounts cannot be used for any other purpose unless the Park District's Board of Commissioners removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Assigned - Consists of internally imposed constraints. These constraints consist of amounts intended to be used by the Park District for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds, assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority. Pursuant to Park District's Board of Commissioners resolution, the Park District's Chief Financial Officer is authorized to establish assignments of fund balance. Unassigned - The residual classification for the General Fund which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for.use, it is the Park District's policy to first use restricted resources, then use unrestricted resources as they are needed. When committed, assigned, or unassigned resou rces are available for use, it is the Park District's policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. -49-

68 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) u. Change in Accounting principle For the year ended December 31, 2011, the Park District has implemented GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions." The objective of this statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. With the implementation of GASB Statement No. 54, the Park Districts Concession Fund was closed into the General Fund eliminating the Concession Fund from the statements and increasing the beginning fund balance of the General Fund by $496,555. In addition, the Coon Rapids Dam Rehabilitation fund was reclassified from a special revenue fund to a capital projects fund. 2. CASH AND INVESTMENTS A. Components of Cash and Investments Cash and investments at year end consist of the following: Deposits $ 1,483,474 Investments 67,598,816 Cash on Hand Total $ 69,136,059 Cash and investments are shown on the statement of net assets as follows: B. Deposits Cash, cash equivalents and investments $68,956,559 Restricted cash and investments Total $69,136,059 In accordance with applicable Minnesota Statutes, the Park District maintains deposits at depository banks authorized by the Board of Commissioners, including checking accounts and certificates of deposits. The following is considered the most significant risk associated with deposits: Custodial credit risk - In the case of deposits, this is the risk that' in the event of a bank failure, the Park District's deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not:covered by federal deposit insurance or corporate surety bonds. -50-

69 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or better; revenue obligations rated "AA" or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The Park District has no additional deposit policies addressing custodial credit risk. At year-end, the carrying amount of the Park District's deposits was $1,483,474 while the balance on the bank records was $832,620. At December 31, 2011, all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the Park District's agent in the Park District's name. C. Investments The Park District had the following investments at year end: Credit Risk Interest Risk- Maturity Duration in Years Investment Type Rating Agency Less than 1 Total Certificate of Deposit N/A N/A $976,000 $ 976,000 Investment pools/mutual funds Hennepin County Investment N/R N/R N/A 57,395,870 Pool Smith Barney I nstitutiona I AAAm S&P N/A 7,428,319 Cash Management Fund Aaa Moody's Wells Fargo Securities AAAm S&P N/A 1,798,627 Aaa Moody's Total Investments S6Z,S98,816 N/ A - Not Applicable N/R - Not Rated Investments are subject to various risks, the following of which are considered the most significant: Custodial credit risk - For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the Park District would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Park District does not have a formal investment policy addressing this risk, but typically limits its exposure by purchasing insured or registered investments, or by the control of who holds the securities. Credit risk - This Is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the Park District's investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a -51-

70 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) statistical rating agency, and all of the investments have a final maturity of thirteen months or less; general obligations rated "A" or better; revenue obligations rated "AA" or better; general obligations of the Minnesota Housing Finance Agency rated "A" or better; bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a.united States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a "depository" by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. The Park District's investment policies do not further address credit risk. Concentration risk - This is the risk associated with investing a significant portion of the Park District's investment (considered 5 percent or more) in the securities of a single issuer, excluding U.S. guaranteed investments (such as Treasuries), investment pools, and mutual funds. The Park District places no limit on the amount it may invest in any one issuer. The Park District does not have an investment in any one issuer that is in excess of 5 percent. Interest rate risk - This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The Park District does not have an investment policy limiting the duration of investments. 3. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2011 was as follows: Beginning Additions/ Retirements/ Ending Balance Reclassification Reclassification Balance Governmental activities: Land $ 85,400,467 $ 575,454 $ (683,883) $ 85,292,038 Construction in progress 9!178!150 7!773!178 (7!956!926) 8!994!402 Subtotal non-depreciable capital assets 94,578,617 8,348,632 (8,640,809) 94,286,440 Buildings and structures 56,590,993 1,069,892 (899,737) 56,761,148 Land improvements 54,035,161 2,561,025 56,596,186 Furniture and equipment 22,295,216 3,620,330 (472,407) 25,443,139 Infrastructure 25!864! !979 26!094!015 Subtotal depreciable capital assets 158!785!406 7!481!226 (1!372!144) 164!894!488 Totals at historical cost 253!364!023 15!829!858 (10!012!953) 259!180!928 Less accumulated depreciation: Buildings and structures (12,865,057) (1,393,181) 645,653 (13,612,585) Land improvements (15,133,169) {2,519,960) (17,653,129) Furniture and equipment (12,788,267) (1,795,651) 440,177 (14,143,741) Infrastructure (11!415!922) (692!887) (12!108!809) Total accumulated depreciation (52!202!415) (6!401!679) 1!085!830 (57!518!264) Governmental activities capital assets, net $201,161,608 $ 9,428,179 $(8, ) : $201,662,

71 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Beginning Additions/ Retirements/ Balance Reclassification Reclassification Business-type activities: Land $ 417,179 $ $ Construction in progress 2,890 Subtotal non-depreciable capital assets 417,179 2,890 Ending Balance $ 417,179 2, ,069 Buildings and structures 6,137,539 Land improvements 9,644, ,290 Furniture and equipment 2,891,913 20,520 Subtotal depreciable capital assets 18,674, ,810 Totals at historical cost 19,091, ,700 Less accumulated depreciation: Buildings and structures (2,788,018) (148,891) Land improvements ( 4,225,008) (523,380) Furniture and equipment {1,681,422) {158,204) Total accumulated depreciation {8,694,448) {830,475) Business-type activities capital assets, net $ 10,396,743 $ (8,775) $ {3,707) (3,707) 6,137,539 10,442,850 2,916,140 19,496,529 19,916,598 (2,936,909) ( 4, 748,388) {1,843,333) (9,528,630) $ 10,387,968 Depreciation expense was charged to governmental activities as follows: Parks and Natural Resources Recreation and Education Administrative Legislative Capital assets held by the government's internal service funds are charged to various functions based on their usage of the assets Total depreciation expense, governmental activities Depreciation expense was charged to business-type activities as follows: Baker National Golf Course Hyland Ski & Snowboard Area Eagle Lake Golf Course Total depreciation expense, business-type activities $1,388,934 3,759, ,187 31, ,492 $ $326, , ,897 $ Included in construction-in-progress are several projects in various stages of completion. Outstanding commitments for these projects were $3,393,667 at December 3L Funds available in the G.O. Bond Capital Projects Fund, Coon Rapids Dam Rehabilitation Fund, Maintenance and Rehabilitation Fund and the Land Acquisition Development and Betterment Fund will be used to finance these commitments. -53-

72 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) 4. LONG-TERM OBLIGATIONS The bonded long-term debt obligations outstanding at year-end are summarized as follows: Governmental-type activities: Original Balance Issuance December 31, Maturities Rates Amount General Obligation Bonds %-3.50% $ 6,000,000 $ 2,005, General Obligation Bonds %-4.35% 8,650,000 5,715, General Obligation Bonds %-4.00% 13,310,000 9,620, General Obligation Bonds %-4.125% 22,045,000 17,345, General Obligation Bonds %-4.375% 14,360,000 12,120, General Obligation Refunding Bonds % 2,585,000 1,350, General Obligation Capital Equipment Notes %-2.55% 420, , General Obligation Bonds %-3.50% 6,450,000 4,740, General Obligation Refunding Bonds %-3.75% 11,655,000 9,040, General Obligation Capital Equipment Notes % 685, , General Obligation Bonds %-3.00% 4,410,000 3,805, General Obligation Bonds %-3.00% 4,700,000 4,700, General Obligation Bonds %-3.00% 4,575,000 4,575, General Obligation Refunding Bonds %-3.00% 6,190,000 6,190,000 Total governmental-type activities: $ $ Business-type activities: 2003 Refunding Revenue Bonds %-3.30% $ 1,795,000 $ 705, General Obligation Crossover Refunding Bonds %-4.125% 3,715,000 3,270,000 Total business-type activities: $5!510!000 $3!915!

73 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Changes in long-term debt during 2011 are summarized as follows: Beginning Ending Balance Additions Reductions Balance Governmental-type activities: Bonds payable: General obligation bonds $78,780,000 $10,765,000 $(7,735,000) $81,810,000 Plus unamortized bond premiums 438, ,02~ (71,~:32) 1,002,146 Total bonds payable 79,218,558 11,400,024 (7,806,436) 82,812,146 OPEB liability 699, ,706 (68,218) 882,074 Compensated absences 2,888,304 1,~44,447 (1,602,32~) 2,723,357 Total governmental-type activities payable $82,806,448 $13, $(9,484,048) $86,417,577 Due Within One Year $ 15,205,000 15,205,000 1,;357,424 $ 16,562,424 Business-type activities: Bonds payable: Revenue bonds $4,375,000 $ $(400,000) $3,975,000 Less unamortized bond discounts (60,422) 6,@6 (51,736) Total bonds payable 4,314,578 (391,314) 3,923,264 Capital lease payable 16,375 (7,967) 8,408 Compensated absences 288, ,Q55 (95,277) 315,554 Total business-type activities payable $4, $ 123,055 $C495,258l $4,247,226 $ 420, ,000 8,408 8;3,65Q $ 512,058 Long-term debt maturities are as follows: Governmental-Type Activities General Obligation Bonds Year Principal Interest 2012 $15,205,000 $2,502, ,660,000 2,198, ,715,000 1,790, ,840,000 1,605, ,125,000 1,301, ,880,000 3,141, ,385, ,195 $ 81,810,000 ~ 12,688,

74 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Business-TyQe Activities Revenue Bonds CaQital Lease Year PrinciQal Interest PrinciQal Interest 2012 $ 420,000 $ 155,616 $ 8,408 $ , , , , ,000 98, ,000 87, ,605, , ,000 7,968! 3,975,000 ~ 857,513 ~ 8,408 ~ 467 General Obligation bonds issued for the acquisition and development of large parks, trails, and facilities, as well as fund the computer equipment replacement plan, are backed by the full faith credit and taxing power of the Park District and are financed through the Debt Service Fund. General Obligation Revenue bonds issued to finance the construction of the Eagle Lake Golf Course, are backed by the full faith credit and taxing power of the Park District and are supported by the Eagle Lake Golf Course Enterprise Fund and are carried as debt of this fund. Revenue bonds, issued to finance improvements at Baker National Golf Course, are serviced by the Baker National Golf Enterprise Fund and are carried as debt of this fund. To comply with the bond covenants, a cash restriction of $179,500 has been made. In 2011, the Park District issued $6,190,000 of General Obligation Refunding Bonds for the purpose of refunding the 2013 through 2014 maturities of the Park District's outstanding General Obligation bonds, Series 2003 and the 2013 through 2020 maturities of the Park District's outstanding General Obligation bonds, Series The bonds bear an interest rate of 2.00% % and mature in February The refunding reduced the Park District's total future debt service payments by $743,740 and resulted in a present value savings of $710,709. The Park District entered into a lease agreement in the prior year to finance the acquisition of snow grooming equipment for the Hyland Ski and Snowboard Area, which has a June 30 fiscal year end. The lease qualifies as a capital lease and therefore, the equipment and associated liabilities have been recorded as a capital asset in the Hyland Ski and Snowboard Area Enterprise Fund statements. There are three annual lease payments of $8,875 due, with the final payment due November As of December 31, 2011 the lease payment is shown in the Hyland Ski and Snowboard Area Fund statements due to having a June 30, 2011 year end. The asset acquired through the capital lease is recorded as Furniture and Equipment in the amount of $25,250, with Accumulated Depreciation in the amount of $4,

75 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) The compensated absences balance represents the accumulated vacation and severance pay amounts owed to employees as of year-end. Actual payments upon termination are made from the fund to which the employee is assigned at the time employment ceases. In addition to the General Fund, the following funds are involved in paying compensated absences upon termination: Scott County Special Revenue Fund, Glen Lake Special Revenue Fund, Baker National Golf Course Fund, Hyland Ski and Snowboard Area Fund, Eagle Lake Golf Course Fund and the Equipment Internal Service Fund. The OPEB liability is generally liquidated by the General Fund. other post-employment benefits can be found at Note 12. Additional information for 5. PLEDGED REVENUE Bond Issue 2003 Refunding Revenue Bonds Use of Proceeds Improvements at Baker National Golf Course Type Net operating revenues of Baker National Golf Course Revenue Pledged Percent of Total Debt Service 100% Term of Pledge Remaining Principal and Interest $ 761,397 Principal and Interest Paid $ 210,943 Current Year Pledged Revenue Received $ 1,744, G.O. Crossover Refunding Bonds Construction of Eagle Lake Golf Course Net operating 100% revenues of Eagle Lake Golf Course and taxes levied for Debt Service $4,071,116 $ 360,488 $ 748, INTERFUND RECEIVABLES AND PAYABLES Interfund borrowing is utilized for cash flow purposes. December 31, 2011 are as follows: Interfund receivables and payables at A. Due To/Due From Major Governmental Funds: Due From Other Funds Due to Other Funds General Fund Metro-Three Rivers C.I.P. $ 125,186 $ 2,860,892 Other Governmental Funds: Special Revenue Funds: Rehabilitation and Maintenance Glen Lake Golf Course 2,860, ,186 Total Governmental Funds $2,9.86,078 ==~~~~= -57- $2,986,078

76 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) 7. INTERFUND TRANSFERS Interfund transfers include a number of transfers and administrative charges in accordance with the Financial Management Plan, Capital Improvement Plan, Joint Powers Agreements, and Trust Agreements. Most of these transfers are designed to allocate financial resources between funds when one fund receives benefit from the services of another fund. In addition, transfer from the Rehabilitation and Maintenance Fund to the General Fund is to mitigate the cost of operations funded by the taxpayers. Finally, the transfers between the Noerneberg Trust Fund and the General Fund are to reimburse the General Fund for the cost of operating Noerenberg Gardens in accordance with the donor's wishes. Transfers made during 2011 are as follows: Transfers In Transfers Out Major Governmental Funds General Fund: Rehabilitation & Maintenance Fund $ 199,628 $ Scott County 982,293 General Obligation Bond Equipment 482,045 Noerenberg Memorial Garden Trust Fund 46~614 26~172 Total General Fund $ $ Scott Cou ot : General Fund $ $ General Obligation Bonds C.I.P.: Rehabilitation and Maintenance Fund $ $ Other Governmental Funds: Sgecial Revenue Funds: Rehabilitation and Maintenance Fund General Fund $ $ 199,628 General Obligation Bonds C.I.P. 1,200,000 General Donations Fund Eagle Lake Golf 10~000 Total Special Revenue Funds $ $ Cagital Project Fund: General Obligation Bond Equipment General Fund $ $ Permanent Fund: Noerenberg Trust Fund General Fund $ 26~172 $ 46~614 Total Permanent Funds $ $ Total Other Governmental Funds $ 1,208,212 $ 256,2~2 Total Governmental Funds $ 2,936,252 $ 2,946,

77 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Transfers In Transfers Out Proprietary Funds: Eagle Lake Golf General Donations Fund $ $ Total Proprietary Funds $ $ Total All Funds $ $ In addition to the above cash transfers the governmental activities transferred $798,290 in capital assets to the business-type activities in INTERGOVERNMENTAL REVENUE AND DEFERRED REVENUE Metropolitan Council Parks and Open Space grants are reported in the Capital Projects Funds. These grants are used for acquiring open space lands and for various construction projects in the Park District's parks as described in the grant agreements. Through December 31, 2011, the Park District has received authorizations for $122,700,464 grant projects and has received cash payments of $108,647,923. In addition, the Park District receives regional operations and maintenance funding which is recorded in the General Fund and Lottery-in-lieu-of funding which is recorded in the Rehabilitation and Maintenance Fund. Such funding in 2011 amounted to $743,536 and $1,421,805 respectively. 9. CONTINGENCIES A. Litigation There are several lawsuits in which the Park District is involved. Although the outcome of these lawsuits is not presently determinable, the Park District's officials estimate that the potential claims not covered by insurance resulting from such litigation would not materially affect the financial statements of the Park District. No loss has been recorded on the Park District's financial statements relating to these claims. B. Audits of Federal and State Grants The Park District receives financial assistance from federal and state government agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are 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 funds or the overall financial position of the Park District at December 31, RETIREMENT PLANS A. Plan Descriptions All full-time and certain part-time employees of the Park District are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). -59-

78 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) PERA administers the General Employees Retirement Fund (GERF), and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who quality 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. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first ten years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1. 7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2. 7 percent of average salary for Basic Plan members and 1. 7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all PEPFF members and for GERF members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is fifty-five for PEPFF members and sixty-five for Basic and Coordinated members hired prior to July 1, A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single-life annuity is a lifetime annuity that ceases upon the death of the retiree--no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the internet at or by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, or by calling (651) or

79 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,.2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) 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 Park District makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 6.25%, respectively, of their annual covered salary in PEPFF members are required to contribute 9.60% of their annual covered salary in The Park District is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members, and 14.40% for PEPFF members. The Park District's contributions for the years ending December 31, 2011, 2010 and 2009 were as follows: ~ GERF $1,409,625 $1,369,087 $1,339,522 PEPFF 246, , ,505 :1!1,655,239 :li1,630,2z6 :li1,600,02z These contributions were equal to the contractually required contributions for each year as set by State statute. The employer contribution rates for both plans will remain the same in 2012, in accordance with state law. C. pefined Contribution Plan Two commissioners of the Park District are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by the Public Employees Retirement Association of Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and twenty-five hundredths of one percent of the assets in each member's account annually

80 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) Total contributions made by the Park District during 2011 were: Contribution Amount Employee Employer $1,669 $1, FUND DEFICITS Percentage of Covered Payroll Employee Employer 5.0% 5.0% Reguired Rate 5.0% The following fund had a deficit fund balance at December 31, 2011: Other Governmental Fund: Glen Lake Golf Course $ (132,404) The deficit fund balance for Glen Lake Golf Course will be eliminated through future operating profits. 12. OTHER POST-EMPLOYMENT BENEFITS A. Plan Description The Park District provides post-employment insurance benefits to certain eligible employees through Park District's Other Post-Employment Benefits Plan, a single-employer defined benefit plan administered by the Park District. All post-employment benefits are based on contractual agreements with employee groups. These contractual agreements do not include any specific contribution or funding requirements. The plan does not issue a separately available financial report. These benefits are summarized as follows: Post-Employment Insurance Benefits -All retirees of the Park District have the option under state law to continue their medical insurance coverage through the Park District from the time of retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to continue coverage for medical and dental insurance. The Park District is legally required to include any retirees for whom it provides health insurance coverage in the same insurance pool as its active employees, whether the premiums are paid by the Park District or the retiree. Consequently, participating retirees are considered to receive a secondary benefit known as an "implicit rate subsidy." This benefit relates to the assumption that the retiree is receiving a more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the Park District's younger and statistically healthier active employees. B. Funding Policy The required contribution is based on projected pay-as-you-go financing requirements, with additional amounts to pre-fund benefits as determined annually by the Park District

81 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDE D DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) c. Annual OPEB Cost and Net OPEB Obligation The Park District's annual OPEB cost (expense) is calculated based on annual required contributions (ARC) of the Park District, an amount determined on an actuarially determined basis in accordance with the parameters of GASB Statement Nos. 43 and 45. The ARC represents a level funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the Park District's annual OPEB cost for the year, the amount actually contributed to the plan, and the changes in the Park District's net OPEB obligation to the plan: 2011 Fiscal Year Ended Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions made Increase in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year $ 244,554 31,481 (25,329) 250,706 68, , ,586 $ 882,074 The Park District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the past three years are as follows: Fiscal Year Ended Annual OPEB Cost Employer. Contribution Percentage of Annual OPEB Cost Contributed Net OPEB Obligation December 31, 2009 December 31, 2010 December 31, 2011 $316, , ,706 $80,946 48,932 68, % 19.4% 27.2% $496, , ,074 D. Funded Status and Funding Progress As of January 1, 2010, the most recent actuarial valuation date, the plan was zero percent funded. The actuarial accrued liability for benefits was $1,707,242, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $1,707,242. The covered payroll (annual payroll of active employees covered by the plan) was $19,232,442, and the ratio of the UAAL to the covered payroll was nine percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and ARCs of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are - 63-

82 THREE RIVERS PARK DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (JUNE 30, 2011 FOR ENTERPRISE HYLAND SKI AND SNOWBOARD AREA FUND) made about the future. The Schedule of Funding Progress immediately following the notes to the basic financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2010 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included: a 4.5 percent investment rate of return (net of administrative expenses) based on the Park District's own investments; an annual healthcare cost trend rate of 9.0 percent initially, reduced by decrements to an ultimate rate of 5.0 percent after twelve years for medical insurance; and an annual healthcare trend rate of 5.0 percent for dental insurance. Both rates include a 3.0% inflation assumption and a zero percent projected salary increase. The UAAL is being amortized on a level dollar basis over a closed period. The remaining amortization period at January 1, 2010 was 30 years. 13. Special Termination Benefits During the 2011 fiscal year, the Park District offered a one-time early retirement incentive program, for employees meeting a certain age and years of service eligibility requirements. During the one-year program, employees who decided to retire on or before November 15, 2011, were eligible for an after tax payment of $20,000 or elect to stay on the Park District's health insurance plan for an amount of time equivalent to a $20,000 value of insurance premium payments. During the year, twenty employees participated in this program, resulting in a cost of $614,725 to the Park District. As of December 31, 2011, the total liability has been paid or accrued in the governmental-wide and fund financial statements

83 REQUIRED SUPPLEMENTARY INFORMATION

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85 THREE RIVERS PARK DISTRICT REQUIRED SUPPLEMENTARY INFORMATION Other Post-Employment Benefits Plan Schedule of Funding Progress Actuarial Valuation Date Actuarial Accrued liability Actuarial Unfunded Value of Actuarial Plan Accrued Funded Assets Liability Ratio Covered Pa:troll Unfunded Liability as a Percentage of Pa:troll January 1, 2008 $ 2,384,927 $ $ 2,384,927 $16,791, % January 1, 2010 $ 1,707,242 $ $ 1,707,242 $19,232, % -65-

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87 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

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89 NONMAJOR FUNDS Special Revenue Funds The Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are restricted to expenditures for specific purposes. Rehabilitation and Maintenance A fund established to account for the revenues and expenditures associated with funding from the State of Minnesota and the Metropolitan Council for operations and maintenance from state funds in lieu of lottery proceeds. Glen Lake Golf Course This fund is used to account for activity related to operating Hennepin County's golf facility. General Donations This fund was established to account for the receipt and expenditure of general donations from individuals and organizations. Capital Projects Funds Capital projects funds account for the financial resources to be used for the acquisition, development and betterment of Park District facilities other than those facilities financed by proprietary funds. Scott-Three Rivers CIP A fund established to account for monies contributed by Scott County and the Park District to fund capital projects for Park District facilities in Scott County. Coon Rapids Dam {CRD) Rehabilitation This fund was established to account for funds for pur.pose of maintaining, repairing and/or operating the Coon Rapids Dam and Walkway. General Obligation Bond Equipment A fund established to account for the revenue from General Obligation Bond sales. These monies will be used to fund the Technology Plan. Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. C.E. French Endowment This fund accounts for the original donations to honor the Park District's first Park Superintendent. At Mr. French's request, the funds are to be used for staff development and training. Mr. French's desire was that the funds remain in perpetuity. Noerenberg Trust This fund was established to account for a substantial bequest to provide ongoing revenue for annual operation of and capital improvements to the Noerenberg Memorial Gardens property, which was also part of the bequest. Eastman Library Trust This fund was established to account for the specific donations of which the investment earnings are used to proviqe additional resource materials for the library at the Eastman Nature (:enter in the Elm Creek Park Reserve.

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92 THREE RIVERS PARK DISTRICT COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS As of December 31, 2011 Special Revenue Total Rehabilitation Glen Lake General Special ASSETS & Maintenance Golf Course Donations Revenue Cash, cash equivalents, and Investments $ 1,139,579 $ $ 713,598 $ 1,853,177 Due from other funds 2,860,892 2,860,892 Prepaid Items 17,326 1,075 18,401 Inventory 3,973 3,973 Total Assets $ 4,017,797 $ 5,048 $ 713,598 $ 4,736,443 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 61,745 $ 4,444 $ 32,932 $ 99,121 Contracts payable 67,289 67,289 Accrued liabilities 4,110 7,356 11,466 Due to other funds 125, ,186 Due to other government units 14, ,236 Total Liabilities 147, ,452 33, ,298 Fund balances: Nonspendable: Prepaid Items 17,326 1,075 18,401 Inventory 3,973 3,973 C.E. French Endowment Noerenberg Trust - non-expendable Eastman Library Restricted: Capital Improvement projects Maintain and rehabilitate existing facilities 2,630,580 2,630,580 C.E. French Endowment Eastman Library Committed: Maintain and rehabilitate existing facilities 1,222,142 1,222,142 Betterment of and access to facilities & programs 680, ,501 Assigned Capital Improvement projects Unassigned: (137,452) (137,452) Total Fund Balances 3,870,048 (132,404) 680,501 4,418,145 Total Liabilities and Fund Balances $ 4,017,797 $ 5,048 $ 713,598 $ 4,736,

93 Capital Project Permanent Scott- Total Total Three Rivers CRD G.O. Bond Capital C.E. French Noerenberg Eastman Total Non major C.I.P. Rehabilitation Equipment Project Endowment Trust Library Permanent Governmental $323,321 $1,139,710 $289,319 $1,752,350 $ 59,551 $ 1,200,000 $ 12,217 $1,271,768 $4,877,295 2,860,892 18,401 3,973 $323,321 $1,139,710 $289,319 $1,75.2,350 $ 59,551 $ 1,200,000 $ 12,217 $1,271,768 $ 7,760,561 $ 8,337 $ 22,743 $ 6,174 $ 37,254 $ $ $ 170 $ 170 $ 136,545 67,289 11, , ,277 8,337 22,743 6,209 37, ,763 18,401 3,973 28,519 28,519 28,519 1,200,000 1,200,000 1,200,000 5,025 5,025 5,025 77,008 77,008 77, , ,984 2,945,564 31,032 31,032 31,032 7,016 7,016 7,016 1,222, ,501 1,116, ,102 1,323,069 1,323,069 (137,452) 314,984 1,116, ,110 1,715,061 59,551 1,200,000 12,041 1,271,592 7,404,798 $323,321 $1,139,710 $289,319 $1,752,350 $ 59,551 $ 1,200,000 $ 12,217 $1,271,768 $7,760,

94 THREE RIVERS PARK DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2011 Special Revenue Revenues: Rehabilitation Glen Lake General Total & Maintenance Golf Course Donations Special Revenue Intergovernmental $ 1,421,805 $ 22,916 $ $ 1,444,721 Charges for park use 8,790 8,790 Golf charges for services 538, ,610 Concession charges for services 49,258 49,258 Rental charges for services 64,066 64,066 Merchandise charges for services 21,369 21,369 Lesson and league charges for service 130, ,613 Investment earnings 63,626 1,068 14,906 79,600 Other 560 4, , ,161 Total" revenues 1,485, , ,16']. 2,488,188 Expenditures: Current: Parks and Natural Resources 2,593, ,777 2,916,590 Recreation and Education 345, , ,800 Administrative Legislative 267, ,761 Capital projects 16,873 16,873 Capital outlay 111,001 36, ,476 Total expenditures 2,721, , ,363 3,853,500 Excess of revenues over (under) expenditures (1,235,696) (95,420) (34,196) (1,365,312) Other financing sources (uses): Transfer in 1,200,000 1,200,000 Transfer (out) (199,628) (10,000) (209,628) Total other financing sources (uses) 1,000,372 (10,000) 990,372 Net Change in Fund Balances (235,324) (95,420) (44,196) (374,940) Fund balances, January 1 4,105,372 (36,984) 724,697 4,793,085 Fund balance, December 31 $ 3,870,048 $ (132,404) $ 680,501 $ 4,418,

95 capital Projects Permanent Scott- Total Three Rivers CRD G.O. Bond Total C.E. French Noerenberg Eastman Total Non major C.I.P. Rehabilitation Equipment Capital Projects Endowment Trust Ubrary Permanent Governmental $134,461 $ 133,224 $ $ 267,685 $ $ $ $ $ 1,712,406 8, ,610 49,258 64,066 21, ,613 6,539 22, ,017 1,243 20, , ,557 75,000 75, , , , ,702 1,243 20, ,940 2,882,830 93, , ,339 3,241, , , , , ,761 16,873 31, , , , , , , , ,698,200 16,137 (1,560) (486,111) (471,534) 1,243 20,442 (209) 21,476 (1,815,370) 482, ,045 26,172 26,172 1,708,217 (46,614) (46,614) (256,242) 482, ,045 (20,442) (20,442) 1,451,975 16,137 (1,560) (4,066) 10,511 1,243 (209) 1,034 (363,395) 298,847 1,118, ,176 1,704,550 58,308 1,200,000 12,250 1,270,558 7,768,193 $314,984 $1,116,967 $283,110 $ 1,715,061 $ 59,551 $1,200,000 $ 12,041 $1,271,592 $7,404,

96 THREE RIVERS PARK DISTRICT 72.

97 INTERNAL SERVICE FUNDS Internal service funds are used by the Park District to account for the financing of goods or services, provided by one department to other departments of the Park District on a cost reimbursement basis. Equipment Internal Service Fund This fund is used to account for the rental of vehicles and other equipment to other departments and related costs. Risk Management Internal Service Fund This fund is used to account for all insurance premiums, recoveries, self-funded losses, legal costs and other expenses associated with risk management activities of the Park District.

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99 THREE RIVERS PARK DISTRICT COMBINING STATEMENT OF NET ASSETS- IN'tERNAL SERVICE FUNDS As of December 31, 2011 ASSETS: Equipment Risk Management Current Assets: Cash and cash equivalents $ 1,620,699 $ 1,957,657 Prepaid items 3,218 Inventories 311,828 Total current assets 1,935,745 1,957,657 Noncurrent Assets: Capital assets: Depreciable 13,369,344 Accumulated depreciation (8,615,294) Total capital assets 4,754,050 Total assets 6,689,795 1,957,657 LIABILITIES: Current Liabilities: Accounts payable 80,910 14,321 Accrued liabilities 18,596 Due to other government units 5,059 9,354 Current portion of compensated absences 50,650 Total current liabilities 155,215 23,675 Noncurrent Liabilities: Accrued liabilities 126,734 Compensated absences 45,040 Total noncurrent liabilities 45, ,734 Total liabilities 200, ,409 Total $3,578,356 3, ,828 3,893,402 13,369,344 (8,615,294) 4,754,050 8,647,452 95,231 18,596 14,413 50, , ,734 45, , ,664 NET ASSETS: Invested in capital assets 4,754,050 Unrestricted 1,735,490 1,807,248 Total net assets $ 6,489,540 $ 1,807,248 4,754,050 3,542,738 $8,296,

100 THREE RIVERS PARK DISTRICT COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS- INTERNAL SERVICE FUNDS For The Year Ended December 31, 2011 Risk Equipment Management Total OPERATING REVENUES: Interfund services used $ 2,459,243 $ 1,053,609 $ 3,512,852 Miscellaneous charges 1, , ,128 Total operating revenues 2,460,450 1,452,530 3,912,980 OPERATING EXPENSES: Salaries and wages 572, ,817 Retirement contributions 82,936 82,936 Insurance contributions and other benefits 124, , ,839 Supplies and commodities 1,027,943 25,310 1,053,253 Professional service fees 332, ,777 Repair and maintenance service fees 186,439 97, ,890 Communications 1,812 1,812 Equipment rental 8,834 8,834 Claims settlements 33,686 33,686 Insurances premiums 252, ,569 Other services and charges 17,081 19,430 36,511 Depreciation 1,051,492 1,051,492 Total operating expenses 3,073,504 1,153,912 4,227,416 OPERATING INCOME (LOSS) (613,054) 298,618 (314,436) NONOPERATING REVENUES (EXPENSES): Investment earnings 29,646 29,421 59,067 Gain (loss) on disposal of assets 60,903?0,903 Total nonoperating revenues (expenses) 90,549 29, ,970 Income (loss) before contributions (522,505) 328,039 (194,466) Capital contributions 217, ,043 Change in net assets (305,462) 328,039 22,577 NET ASSETS AT BEGINNING OF YEAR 6,795,002 1,479,209 8,274,211 NET ASSETS AT END OF YEAR $ 6,489,540 $ 1,807,248 $ 8,296,

101 THREE RIVERS PARK DISTRICT COMBINING STATEMENT OF CASH FLOWS- INTERNAL SERVICE FUNDS For the Year Ended December 31, 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Interfund services used Charges for services Payments to suppliers Payments to employees Premiums and claims paid Other operating revenues Net cash provided by (used in) operating activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchase of property and equipment Sale of property Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Interest received/charged Net cash provided by (used in) investing activities INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR Equ ipment $ 2,459,243 (1,305,214) (765,494) 1, ,742.(636,002) 88,611 (547,391} 29,646 29,646 (128,003) 1,748,702 Risk Management Total $1,053,609 $3,512, , ,921 (474,901) (1,780,115) (392,689) (1,158,183) (255,602) (255,602) 1, , ,080 (636,002) 88,611 (547,391} 29,421 59,067 29,421 59, , ,756 1,598,898 3,347,600 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,620,699 $1,957,657 $3,578,356 RECONCIUATIONS OF OPERATING (LOSS) INCOME TO CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES: Operating (loss) income Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation (Increase) decrease in: Prepaid items Inventory Increase (decrease) in: Accounts payable Other accrued liabilities Due to other government units Compensated absences Net cash provided by (used in) operating activities NONCASH ~CTIVInES: Disposal of assets Property contributed by other funds $ (613,054) 1,051,492 (3,218} (40,633) (21,134) 5,556 1,880 8,853 $ 389,742 $ 27,708 $ 217,043 $ 298,618 $ (314,436) 1,051,492 (3,218} (40,633) (9,287) (30,421} 30,653 36,209 9,354 11,234 8,853 $ 329,338 $ 719,080 $ $ 27,708 $ $ 217,

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103 SECTION III STATISTICAL SECTION

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105 STATISTICAL SECTION (Unaudited) This part of Three Rivers Park District comprehensive annual financial report presents detailed information as a context for understanding this year's financial statements, note disclosures, and supplementary information. This information has not been audited by the independent auditor. Contents ~ Financial Trends 77 These tables contain trend information that may assist the reader in assessing the Park Districts current financial performance by placing it in historical perspective. Revenue Capacity 86 These schedules contain information to help the reader assess the Park District's most significant local revenue source, the property tax. Debt Capacity 91 These tables present information that may help assist the reader in analyzing the affordability of the District's current levels of outstanding debt and the District's ability to issue additional deqt in the future. Demographic and Economic Information 97 These tables offer economic and demographic indicators that are commonly used for financial analysis and that can help the reader understand the District's present and ongoing financial status. Operating Information 99 These tables contain service and infrastructure indicators that can help the reader understand how the information in the District's financial report relates to the services the District provides and the activities it performs. Source: Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial reports for the relevant year. The Park District implemented GASB Statement No. 34 in the calendar year 2003 therefore tables presenting government-wide financial data include information beginning in that year.

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107 THREE RIVERS PARK DISTRICT TABLE 1 NET ASSETS LAST NINE FISCAL YEARS (Accrual Basis of Accouting).... i" Fiscal Year Governmental activities Invested in capital assets, net of related debt $118,267' 961 $124,333,491 $124,866,838 $121,708,640 $126,200,815 Restricted 13,194,265 8,321,709 7,619,460 9,135,912 8,980,241 Unrestricted 9,267,081 9,830,813 10,123,216 13,066,881 17,385,530 Total governmental activities net assets ~140,729,307!142,486,013 i142,609,514 ~143,911,433 ~152,566,586 Business-type activities Invested in capital assets, net of related debt $ 3,828,673 $ 4,099,613 $ 4,593,876 $ 4,605,714 $ 4,868,450 Restricted 950, ,500 Unrestricted 570,878 1,077, ,348 1,612,635 2,841,073 Total business-type activities net assets ~ 5,349,727 ~ 5,176,976! 4,922,224 ~ 6,218,349 ~ 7,889,023 Primary government Invested in capital assets, net of related debt $122,096,634 $128,433,104 $129,460,714 $126,314,354 $131,069,265 Restricted 14,144,441 8,321,709 7,619,460 9,135,912 9,159,741 Unrestricted 9,837,959 10,908,176 10,451,564 14,679,516 20,226, $128,947,262 $133,174,610 $136,843,129 $139,643,003 11,457,926 12,613,160 14,560,018 14,107,390 20,962,017 22,301,760 24,143,722 26,178,836 ~161,367,205 ~168,089, ,546,869 ~179,929,229 $ 4,483,563 $ 4,650,114 $ 6,065,790 $ 6,456, , , , ,500 4,034,199 4,838,419 4,342,132 4,989,175 ~ ,262 ~ 9,668,033 ~ 10,587,422! 11,624,971 $133,430,825 $137,824,724 $142,908,919 $146,099,299 11,637,426 12,792,660 14,739, ,286,890 24,996,216 27,140,179 28,485,854 31,168,011 Total primary government net assets ~146,079,034 ~147,662,989 ~147,531, 738!150,129,782 p60,455,609 ~170,064,467 ~177,757,563. ~186,134,291 ~191,554,200 Note 1: The Park District implemented GASB Statement No. 34 in fiscal year This information is not available for previous fiscal years.

108 THREE RIVERS PARK DISTRICT TABLE 2 CHANGE IN NET ASSETS LAST NINE FISCAL YEARS Fiscal Year Expenses Governmental activities Parks and Natural Resources $ 10,902,779 $ 10,494,748 $ 12,715,237 $ 16,402,743 $ 17,165,008 $ 20,966,115 $ 22,450,620 $ 22,908,212 $ 24,176,014 Recreation -and Education 6,494,997 8,403,160 8,401,420 8,590,613 10,091,946 11,201,455 12,913,031 13,998,245 14,465,157 Administrative 7,037,796 6,713,423 7,612,108 8,167,874 4,566,537 5,289,041 5,983,536 5,618,990 5,532,137 Legislative 2,306,213 2,317,006 2,583,489 2,736,318 4,072,768 4,319,334 4,379,136 4,613,448 6,095,107 Interest and fiscal charges on debt 1,357,898 1,523,847 1,676,133 1,979,964 3,057,385 3,150,646 2,927,314 2,735,109 2,619,496 Total governmental activities expenses 28,099,683 29,452,184 32,988,387 37,877,512 38,953,644 44,926,591 48,653,637 49,874,004 52,887,911 Business_-type activities Baker National Golf Course 1,528,256 1,901,078 1,818,166 1,795,105 1,892,929 2,019,459 2,025,894 2,026,250 1,977,693 Hyland Ski and Snowboard Area 2,633,689 2,959,438 2,962,105 3,090,301 3,036,873 3,240,975 3,268,514 3,309,185 3,620,169 Eagle Lake Golf Course 1,046,133 1,156,513 1,209,032 1,258,014 1,286,919 1,309,170 1,117,669 1,177,598 1,208,934 Total business-type activities expenses 5,208,078 6,017,029 5,989,303 6,143,420 6,216,721 6,569,604 6,412,077 6,513,033 6,806,796 Total primary government expenses i 33,307,761 ~ 35,469,213 ~ 38,977,690 i 44,020,932! 45,170,365 i 51,496,195 i ,714! 56,387,037! 59,694,707 Program revenues ~ Government actlvltles ~ Charges for services Recreation and Education $ 3,666,633 $ 3,985,364 $ 3,958,255 $ 4,187,090 $ 5,197,708 $ 5,339,398 $ 5,973,030 $ 6,689,291 $ 6,664,011 other activities 883, , , , , , , , ,595 Operating grants and contributions 2,786,017 1,862,739 3,022,417 3,204,017 3,628,491 3,713,458 3,480,442 4,112,555 3,636,722 capital grants and contributions 4,841,400 3,624,247 1,319,360 2,391,280 1,460,394 5,055,715 5,556,220 5,509,298 5,598,201 Total governmental activities program revenues 12,177,797 10,171,052 8,604,943 9,945,431 10,456,039 14,306,721 15,186,408 16,563,712 1!),115,529 Business-type activities Charges for services Baker National Golf Course 1,833,460 1,836,032 1,818,841 1,766,492 1,810,103 1,787,406 1,743,362 1,837,266 1,744,452 Hyland Ski and Snowboard Area 2,968,360 3,275,321 3,049,598 3,644,967 3,688,695 4,068,917 3,964,484 3,847,220 4,055,968 Eagle Lake Golf Course 699,967 7i4, , , , , , , ,338 Operating grants and contributions 10,000 5,300 17,900 27,000 33,750 50,583 24,500 3,879 9,049 capital grants and contributions T,otal business-type activities program revenues 5,511,787 5,844,563 5,585,497 6,113,391 '6,256,249 6,606,930 6,502,154 6,493,584 6,557,807 Total primary government program revenues ~ 17,689,584! 16,015,615! 14!190,440! 16,058,822! 16,712,288 i 20,913,651! 21,688,562 i 23,057,296! 22,673,336

109 Net (expense)/revenue Governmental activities $ {15,921,886) $ (19,281,132) $ {24,383,444) $ (27,932,081) $ (28,497,605) $ {30,619,870) $ (33,467,229) $ {33,310,292) $ (36,772,382) Business-type activities 303,709 (172,466r (403,806) (30,029) 39, (19,449) (248,989) expense i ~ l!,19,453,5982 ~ (24,787,250l i 'z7 1962,110l ~ (28,458,077l! (30,582,544) ~ p3,377,152l! p3,329,741l ~ (37,021,371l General revenues and other changes In net assets Governmental activities Property taxes $ 19,270,346 $ 20,235,869 $ 23,641,159 $ 27,984,770 $ 33,289,268 $ 36,832,115 $ 39,112,020 $ 39,810,145 $ 39,418,659 Investment earnings 515, , ,771 1,620,300 2,395,557 2,320, , , ,087 Gain on the sale of capital assets 97,270 97, ,686 66,050 Other 178, , , , , , , ,825 1,696,236 Transfers 451,620 (309,230) (233,650) (994,019) (971,956) (50,409) (284,293) (432,353) (808,290) Total governmental activities 20,416,590 20,519,838 24,506,945 29,234,000 34,942,577 39,420,4B9 40,189,554 40,767,631 41,154,742 Business-type activities Property taxes 121, ,7B8 126,7B8 126, , , , , ,129 Investment earnings 31,600 44, , , , , , ,710 81,584 Other {185,983) 69,883 36,626 20,629 16,808 14,928 19,057 23,127 6,535 Transfers (426,668) 334,230 (117,350) 994, ,956 35, , , ,290 Total business-type activities (459,251) 575, ,054 1,326,154 1,631, , , ,838 1,286,538 Total primary government i 19,957,339! 21,094,990 ~ 24,655,999 ~ 30,560,154! 36,573,723! 40,191,402! 41,070,248 i 41,706,469 ~ 42,441,280 Change In net assets Governmental activities $ 4,494,704 $ 1,238,706 $ 123,501 $ 1,301,919 $ 6,444,972 $ 8,800,619 $ 6,722,325 $ 7,457,339 $ 4,382,360 Business-type activities (155,542) 402,686 (254,752) 1,296,125 1,670, , ,389 1,037,549 Total primary government! 4,339,162! 1,641,392 ~131,251) ~ 1 2,598,044 ~ ! 9,608,858! 7,693,096! ,728! 5,419,909 Note 1: The Park District implemented GASB Statement No. 34 In fiscal year This information Is not available for previous years..:.. 'f'

110 THIS PAGE LEFT BLANK INTENTIONALLY -80-

111 THREE RIVERS PARK DISTRICT TABLE 3 GOVERNMENTAL ACTIVITIES TAX REVENUE BY SOURCE LAST NINE FISCAL YEARS (Accrual Basis of Accounting) Property Tax Fiscal Year General Purpose Debt Service Total 2003 $ 15,315,074 $ 3,955,272 $ 19,270, ,171,858 4,064,011 20,235, ,036,682 4,604,477 23,641, ,032,595 5,952,175 27,984, ,104,666 8,184,602 33,289, ,230,407 9,601,708 36,832, ,828,700 10,283,320 39,112, ,393,810 10,416,335 39,810, ,107,530 10,311,129 39,418,659 Note 1: The Park District implemented GASB Statement No. 34 in fiscal year This information is not available for previous fiscal years

112 THREE RIVERS PARK DISTRICT FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accouting) 2002 General Fund Reserved $ 109,998 Unreserved 4,613,637 Nonspendable Committed Assigned Unassigned Total General Fund $ 4,723,635 All other governmental funds Reserved $13,739,961 Unreserved reported in Special revenue funds 1,842,605 Capital projects funds (342,135) Permanent funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds ~ 15!240!431 Fiscal Year $ 14,237 $ 185,150 $ 35,675 5,242,638 6,631,496 7,676,647 $ 5,256,875 $ 6,816,646 $ 7,712,322 $ 15,159,855 $ 19,699,655 $ 24,843,452 1,145,848 1,405,638 1,545,405 (96,398) (219,368) (3,626) (26,194) $ 16!209!305 $ 20!885!925 $ 26!359!037 Note: The Park District implemented GASB 54 in fiscal year 2011, resulting in significant reclassification of the components of fund balance. Years prior to 2011 have not been restated. -82-

113 TABLE $ 14,037 $ 36,914 $ 66,279 $ 35,528 $ 16,157 $ 9,724,329 12,649,599 15,158,876 16,133,231 17,520, ,645 2,627,667 11,784,032 2,320,109 $ 9,738,366 $ 12,686,513 $ 15,225,155 $ 16,168,759 $17,536,703 $17,105A53 $37,128,547 $ 46,632,302 $38,711,654 $ 32,091,654 $31,898,096 $ 1,860,724 2,906,758 3,534,476 3,483,412 3,542, , , , , ,176 (13,365) 42,971 56,946 51,374 37,014 1,284,336 34,608,187 6,672,701 1,323,069 (137A52) i 39,179,563 $ 50,036,519 i 42,526,244 i 35,761,762 i 35,759,172 $43,750,

114 THREE RIVERS PARK DISTRICT CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS ( Modified Accrual Basis of Accouting) Fiscal Year Revenue Property Taxes $17,337,?79 $19,235,352 $ 20,235,869 Intergovernmental 6,163,448 7,403,927 5,110,494 Charges for park use 2,839,143 4,300,178 4,385,052 Investment earnings 1,152, , ,158 Fines and forfeitures 70,338 67,728 76,389 Other 597, , ,558 Total Revenue 28,160,903 31,873,450 30,591,520 Expenditures Parks and Natural Resources 10,215,428 9,187,495 9,171,536 Recreation and Education 4,310,602 5,102,570 5,768,039 Administrative 2,751,652 6,484,581 6,843,553 Legislative 2,577,185 2,306,157 2,199,760 Capital outlay 10,143,645 10,372,852 6,781,302 Debt Service Principal 4,820,000 2,043,788 2,704,220 Interest 1,649,000 1,357,898 1,432,985 Bond Issuance Costs Total Expenditures 36,467,512 36,855,341 34,901,395 Excess of revenues over (under) expenditures (8,306,609) (4,981,891) ( 4,309,875) Other financing sources (uses) Transfer in 1,455,818 1,662,454 1,443,729 Transfer (out) (713,468) (1,200,834) (1,742,959) Payment to refunded bond escrow agent Refunding bonds issued Issuance of debt 2,704,149 6,345,858 9,269,209 Premium and (discount) Sales of capital assets 33J09 5, Total other financing so~rces (uses) 3,480,208 6,812,691 8,974,590 Net change in fund balance ~ (4,826,401} ~ 1,830,800 ~ 4,664,715 Debt service as a percentage of noncapital expenditures 24.6% 12.8% 14.7% 2005 $23,545,282 3,463,586 4,124, ,770 68, ,930 32,544,333 10,722,111 6,210,319 7,556,033 2,492,824 8,001,649 3,066,267 1,676,156 39,725,359 (7,181,026) 1,331,768 ( 1,554,418) 13,762, ,549,814 ~ 6,368J % -84-

115 TABLE $27,823,065 $33,080,795 $ 36,672,636 $39,015,815 $39,880,218 $39,787,280 4,732,012 4,762,154 8,505,133 8,761,502 8,639,003 9,192,033 4,241,937 5,253,739 5,448,564 6,139,192 6,932,128 6,866,940 1,602,110 2,474,995 2,357, , , ,566 68,884 59,500 88, , ,227 95, ! ! ! !786 1!008!863 1!771!010 39,305,738 46,116,672 53,557,851 55,346,367 56,803,187 58,418,611 14,347,559 16,081,034 18,315,088 20,444,693 20,474,387 21,573,643 6,379,114 7,810,923 8,675,008 10,094,669 10,414,698 10,545,141 8,307,226 4,223,154 4,901,103 5,591,060 5,237,780 5,483,106 2,652,068 4,790,103 5,245,308 5,365,834 5,554,098 6,450,229 9,489,166 7,519,032 19,896,827 15,383,790 8,959,693 8,047,924 3,262,872 4,119,559 5,391,333 6,393,199 6,815,000 7,735,000 1,971,634 2,660,318 3,120,453 3,108,656 2,847,799 2,699,185 89!170 46A !204!123 65!545!120 66!381! A55 62!623!398 (7,103,901) (1,087,451) (11,987,269) (11,035,534) (3,500,268) (4,204,787) 1,042,324 2,607,036 2,945,633 2,439,034 2,632,029 2,936,752 (1,610,655) (2,610,190) (2,949,133) (2,460,984) (2,632,029) (2,946, 752) (2,570,000) (11,825,000) 2,585,000 11,655,000 6,190,000 22,545,000 14,905,000 6,870,000 5,095,000 4,700,000 4,575,000 (28,234) (28,494) 128, , , ,024 2!036 19!202 5!186 10! !182 21!950!471 14!892!554 7!015!636 5!214!656 4!865!622 11!765!206 $ 14!846!570 $ 13!805!103 $ (4!971!633) $ (5!820!878) $ 1!365!354 $ A % 16.8% 18.5% 18.3% 18.7% 19.0% - 85-

116 THREE RIVERS PARK DISTRICT TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (In Thousands of Dollars) Less Real Pro(!erty TIF and Fiscal Residential Commercial Other Personal Disparity Fiscal Year Pro(!erty Pro(!erty Property Pro(!erty Contribution 2002 $ 432,508 $ 263,075 $ 59,317 $ 13,908 $ 138, , ,160 54,261 13, , , ,832 58,521 13,995 97, , ,884 62,784 14,374 97, , ,591 63,823 15, , , ,300 69,975 16, , , ,451 69,771 16, , , ,165 70,392 16, , , ,140 69,622 17, , , ,378 65,776 18, ,602 Source: Hennepin County Taxpayer Services Division -86-

117 TABLE 6 Assessed Estimated Value as a Total Tax Total Direct Actual Percentage of Capacity Tax Rate Taxable Value Actual Value $ 630, % $60,380, % 703, % 66,605, % 803, % 79,794, % 898, % 82,465, % 998, % 91,616, % 1,105, % 101,121, % 1,192, % 108,130, % 1,198, % 108,958, % 1,161, % 104,631, % 1,082, % 97,304, % -87-

118 THREE RIVERS PARK DISTRICT TABLE 7 PROPERTY TAX CAPACITY RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Overla~~in!i! Rates Three Rivers Park District Henne~in Count:r S~ecial Districts Total Direct Metropolitan Metropolitan and Debt Debt Transit Metropolitan Mosquito Ovelapping Fiscal Year O~erating Service Total Operating Service Total Commission Council Control Rates (X) cp ~ Note: The Park District's taxing jurisdication includes 45 cities and a number of school districts with the authority to levy taxes against the Park District's constiuency. Most taxpayers are subject to taxation by one city and one school district in addition to the taxes shown above. Due to the number of combinations of city and school district taxes, it is not practical to show the tax rates from these "underlying" entities. Source: Hennepin County Taxpayer Services Division

119 THREE RIVERS PARK DISTRICT TABLE 8 PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Percentage Percentage Tax of Total Tax Tax of Total Tax Ca~acity Rank Ca~acity Ca~acity Rank Ca~acity MOAC Mall Holding LCC $ 10,856, % $ 8,599, % Best Buy Co. Inc. 2,369, % Ridgedale Joint Venture 2,299, % 2,072, % Eden Prairie Mall LCC 2,239, % 1,210, % Southdale Center 2,145, % Cousins Properties Inc. 1,634, % Allianz Life Ins. Co America 1,449, % 1,021, % United Properties 1,369, % General Mills 1,359, % Duke Realty Corporation 1,232, % 1,204, % Duke Realty Corporation 1,177, % Galleria Shopping Center LLC 1,133, % United Properties 1,094, % Delta Airlines Inc. 1,062, % Target Corporation 924, % MN ND Properties Inc. 2,547; % Kraus-Anderson Inc. Concordia Properties LLC 1,950, % Wells Operating Partnership LP 879, % ADC Telecommunications Inc. 869, % Zeller Management 859, % $ 32,348, % $ 21,214, % Source: Hennepin County Taxpayer Services Division - 89-

120 THREE RIVERS PARK DISTRICT TABLE 9 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collections within the Fiscal Total Tax Year of the Levy Fiscal Year Levied Amount Percentage 2002 $17,698,883 $ 17,525, % ,807,713 19,590, % ,940,806 20,714, % ,880,417 23,582, % ,165,859 27,777, % ,745,675 33,244, % ,354,572 36,704, % ,769,160 39,024, % ,465,666 39,830, % ,465,666 39,921, % Collections in Subsequent Total Collections to Date Years Amount Percentage $ 37,129 $17,562, % 16,578 19,606, % 95, ,810, % 172,221 23,754, % 269,561 28,046, % 370,386 33,615, % 379,542 37,084, % 330,573 39,355, % 152,825 39,983, % 39,921, % -90-

121 THREE RIVERS PARK DISTRICT TABLE 10 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities General Obligation Capital Fiscal Year Bonds Leases 2002 $29,335,000 $ Business Ty~e Activities General Golf Revenue Obligation Capital Park District Bonds Bonds Leases Total $ 2,050,000 $ 4,985,000 $ 18,637 $36,388,637 Percentage of Personal Per Capita Income (1l {2l 0.111% $ ,595,000 1,795,000 4,805, ,080 40,330, % ,010, ,230 1,795,000 4,570,000 96,898 46,645, % \ ,660, , ,975, ,091 1,660,000 8,020,000 66,586 60,548,549 1,515,000 7,865,000 34,328 79,498, % % ,795,000 74,532 1,365,000 7,700,000 89,934, % ,325,000 38,199 1,210,000 7,525,000 91,098, % ,895,000 1,050,000 3,715,000 85,660, % ,780, ,000 3,495,000 16,375 83,171, % ,810, ,000 3,270,000 8,408 85,793,408 * * Note: Information on the Park District's outstanding debt can be found in the notes to the financial statements. (1) - Personal Income information can be found on table 15 - Demographic and Economic Statistics. (2) - Population information can be found on table 15 - Demographic and Economic Statistics. * - Information not available.

122 THREE RIVERS PARK DISTRICT TABLE 11 RATIO OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Less Amounts General Available in Obligation Debt Service Fiscal Year Bonds Fund 2002 $36,370,000 $ 4,990, ,400,000 5,746, ,580,000 5,035, ,680,000 8,574, ,840,000 9,558, ,495,000 11,572, ,850,000 12,709, ,610,000 9,980, ,275,000 10,753, ,080,000 17,414,799 Percentage of Estimated Taxable Value of Per Capita Total Pro~erty ( 1 ~ (2l $31,379, % $ ,653, % ,544, % ,105, % ,281, % ,922, % ,140, % ,629, % ,521, % ,665, % * Note: Information on the Park District's outstanding debt can be found in the notes to the financial statements. (1) - Estimated taxable value of property information can be found on table 6 -Tax Capacity Value of Taxable Property. (2) - Population information can be found on table 15 - Demographic and Economic Statistics. * - Information not available

123 THREE RIVERS PARK DISTRICT TABLE 12 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVIlY DEBT AS OF DECEMBER 31, 2011 Governmental Unit Gross Debt Less Amounts Not Included in Net Debt (1) Net Debt Outstanding Percentage Applicable to Park District Estimated Share of Overlapping Debt Direct D~bt: Three Rivers Park District $ 85,785,000 $ 18,119,799 $ 67,665, % $ 67,665,201 Total Direct Debt 67,665,201 Overlapping Debt (2) Hennepin County Metropolitan Council 1,145,270,000 1,349,522, ,380,899 1,206,566, ,889, ,956, % 36.43% 539,514,547 52,079,062 Underlying Debt (3) School Districts Municipalities 1,697,275,548 1,804,253, ,107,830 1,210,262,605 1,237,167, ,990, % 74.38% 922,061, ,810,077 Total Overlapping and Underlying Debt Total Direct, Overlapping and Underlying Debt 1,955,464,786 $ 2,023,129,987 (1) - Minnesota Statutes Section provides that net debt is determined by deducting from the total debt the amount available for servicing such debt and debt which is intended to be financed primarily by means other than a real estate tax levy. (2) - Overlapping governments are those that coincide, at least in part, with the geographic boundries of the Park District's taxing jurisdiction (suburban Hennepin County). The percentage associated with each overlapping government represents the portion of taxable property for that government that is located in suburban Hennepin County. (3} - Underlying Debt is the debt of governmental entities that are wholly or partially located in suburban Hennepin County. These entities comprise a portion of the Park District's taxing jurisdiction. Since portions of these entities are located outside suburban Hennepin County, only a portion of their net debt is applicable to the Park District. The percentage associated with each underlying government represents the portion of taxable property that is located in suburban Hennepin County. Source: Hennepin County Taxpayer Services Division

124 THREE RIVERS PARK DISTRICT LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year Debt limit $301,901,552 $333,027,561 $396,173,511 $412,329,172 $458,081,934 Total net debt applicable to limit 24,344,961 27,413,600 34,974,137 45,737,213 68,281,160 Legal debt margin $277,556,591 $ 305,613,961 $361,199,374 $ 366,591,959 $389,800,774 Total net debt applicable to the limit as a percentage of the debt limit 8.06% 8.23% 8.83% 11.09% 14.91% Note: Under Minnesota law, the Park District may issue general obligation bonds provided such bonds do not cause the net debt of the Park District to exceed five-tenths of one percent (0.5%) of the taxable value of the District. In addition, no bonds shall be issued in an amount that would cause the net debt to exceed one-tenth of one percent (0.1 %) of the taxable value without first obtaining the approval of the majority of the electors voting on the question at an election. -94-

125 TABLE $ 505,606,547 $ 540,654,463 $544,793,130 $ 523,156,756 $ 486,523,567 76,922,620 77,140,867 74,629,311 71,521,236 67,665,201 $463,513,596 $470,163,819 $ 451,635,520 $ 418,858, % 14.27% 13.70% 13.67% 13.91% Legal Debt Margin Calculation for Fiscal Year 2011 Taxable Value $ 97,304,713,300 Debt Limit (.5% of Taxable Value) 486,523,567 Debt applicable to limit General Obligation Bonds 81,810,000 General Obligation Revenue Bonds 3,270,000 Less: Amount set aside for repayment of general obligation debt 17,414,799 Total net debt applicable to limit 67,665,201 Legal Debt Margin ~ 418,858,

126 THREE RIVERS PARK DISTRICT TABLE 14 PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Fiscal Year Golf Fees and other revenue Less: Operating Ex~enses Golf Revenue Bonds Debt Service Net Available Revenue Princi~al Interest Coverage 2002 $1,679,807 $1,386, (1) 1,840,537 1,559, ,867,940 1,488, ,832,304 1,516, ,794,351 1,540, ,842,124 1,599, ,818,001 1,619, ,753,348 1,644, ,840,988 1,649, ,750,939 1,616,090 $ 293,553 $ 115,000 $ 110, , , , ,148 90, , ,000 66, , ,000 63, , ,000 59, , ,000 54, , ,000 49, , ,000 43, , ,000 35, Note: Information on the Park District's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation. (1) -The golf revenue bonds were refunded in late As a part of the refunding process, the bonds due on January 1, 2004 were paid in December 2003, resulting in two principal payments in 2003 and no principal payment in

127 THREE RIVERS PARK DISTRICT TABLE 15 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Personal Income Per Capita (amounts Personal Fiscal Population expressed in Income Year (1) thousands) (2) (2) ,559 $ 32,788,348 $ 44, ,740 33,858,670 45, ,637 37,019,366 48, ,201 38,351,613 50, ,546 40,969,727 53, ,263 42,939,491 55, ,020 44,064,487 56, ,292 42,250,026 54, ,847 42,302,323 54, * * * School Median Enrollment Unemployment Age (1) (3) Rate (4) , % , % , % , % , % , % , % , % , % * 158, % Data Sources (1) - Bureau of the Census/Metropolitan Council (2) - U.S. Department of Commerce, Bureau of Economic Analysis. Amounts shown are for Hennepin County. (3) - Minnesota Department of Education - Fall registration (4) -Minnesota Department of Employment and Economic Development. Percentage is for Hennepin County. * - Information not available

128 THREE RIVERS PARK DISTRICT TABLE 16 PRINCIPAL EMPLOYERS PRIOR YEAR AND FIVE YEARS AGO Percent of Percent of Total Park Total Park District District Employer Employees Rank Employment Employees Rank Employment Super Valu Stores Inc. 55, % 56, % ADC 7, % 7, % Best Buy 6, % 6, % CH Robinson 4, % 4, % Jerry's Enterprises, Inc. 4, % 4, % Park Nicollet Health Services 4, % 8, % North Memorial Medical Center 3, % 3, % Cargill 3, % 3, % GE Capital Fleet Services 3, % 3, % Carlson Companies Inc. 3, % 5, % General Mills Inc 3, % 3, % Boston Scientific 3, % 3, % Independent School District #279 3, % 3, % Fairview Southdale Hospital 2, % * * * Honeywell 2, % 3, % Seagate Technology 4, % 109, % 119, % Source: State Department of Employment and Economic Development Note: Data not available for current year and nine years ago. * - Data not available -98-

129 THREE RIVERS PARK DISTRICT TABLE 17 FULL-TIME EQUIVALENT PARK DISTRICT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Full-time Eguivalent Em~lo~ees {12 as of Januaa1 Function 2002 { oo6 P Park and Facility Maintenance Wildlife Management Forestry and Horticulture Water Resources Carpentry and Vehicle Maintenance Visitor Center and Park Operations I Nature Center Education and Operations 'P Administration Finance Public Safety Planning and Engineering Marketing and Communications Guest and Community Services Superintendent's Office Notes: (1) - Full-time Equivalent Employees are defined as full-time and part-time employees only. Seasonal or temporary employees are not included. (2) - The Park District added a number of staff and reorganized its management structure as part of a two year plan to provide higher quality service to park guests. This reorganziation and staff growth provided more opportunities for the public to interact with staff and provided more leadership at the park level to handle issues as they arose. (3) - New positions were added for the opening of Silverwood Park, the Dakota Rail Regional Trail, increased nature center programming, and district-wide initiatives in communications and planning.

130 THREE RIVERS PARK DISTRICT TABLE 18 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS Function Parks and Recreation Park Visitors (1) 3,969,900 4,302,000 4,838,200 5,604,900 5,993,700 6,142,500 6,774,600 7,157,800 7,929,000 Patron Passes Issued (2) 51,661 48,450 47,996 * Daily Parking Passes Issued (2) 74,631 75,264 65,182 Picnic Site Reservations * 1,548 1,671 1,441 1,377 1,891 2,520 2,000 2,410 3,714 Golf Rounds of Golf Baker Championship Course 34,434 37,047 38,213 34,138 33,738 34,108 34,437 32,868 34,272 33, Baker Evergreen Course 14,523 15,086 15,079 12,975 12,904 13,747 13,901 14,432 13,801 13,i92 0 Eagle Lake Eagle Course 21,050 24,035 26,152 27,340 25,289 24,768 26,180 25,428 30,037 21,188 0 Eagle Lake Birdie Course 8,200 10,071 9,817 10,160 9,658 10,052 10,047 11,297 9,925 7,286 Cleary Lake Golf Course 21,110 22,273 24,135 20,785 20,037 20,858 19,447 21,623 19,988 19,122 Glen Lake Golf Course 33,387 31,875 33,831 33,285 31,500 31,150 30,781 31,346 30,156 26,375 Total Golf Rounds 132, , , , , , , , , ,243 Alpine Ski and Snowboard Skier Visits 118, , , , , , , , , ,651 Days Open Public Safety Number of Citations 801 2,144 3,359 3,073 2,864 2,369 2,370 1,975 2,626 1,864 (1) - Park visitor increases from are due to increases in regional trails and the ability to make snow for cross country skiing. (2) -The Park District eliminated the Patron Program and parking fees for fiscal year During 2003 and 2004, parking fees were waived during the week to encourage park use. (3) - Visitation estimates for were adjusted to reflect the seasonal multipliers from the Metropolitan Council Regional Parks and Trails Survey 2008 so that estimates are comparable across all years. * - Data not available

131 THREE RIVERS PARK DISTRICT TABLE 19 CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Function 2002 Parks and Recreation Acreage 26,797 Regional Parks 10 Park Reserves 7 Special Recreation Features 4 Chlorinated Swim Ponds 1 Creative Play Areas 9 Visitor Centers 9 Nature Centers 3 Swimming Beaches 6 Dams 1 I... 0 t;"' Golf Golf Facilities Owned 3 Golf Holes 54 Driving Ranges 4 Disc Golf Course Mini Golf Course Alpine Ski and Snowboard Ski Chalets 1 Ski Runs 14 Terrain Parks 2 Chair Lifts 3 Conveyor Lifts Other Vertical Lift Systems 2 Tubing Lanes ,802 26,820 26, ,820 26,820 26,820 26,928 26,928 27,

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133 Three Rivers PARK DISTRICT