CITY OF CHASKA, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2006 ASSETS GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL Cash And Investments $ 17,458,936 $ 5,691,074 $ 23,150,010 Receivables: Taxes 383,039-383,039 Special Assessments 9,357,326-9,357,326 Accounts 156,515 3,559,204 3,715,719 Interest 177,527 10,790 188,317 Other Receivables 2,680,495-2,680,495 Internal Balances (2,787,210) 2,787,210 - Due From Other Governments 1,538,344 61,785 1,600,129 Lease Receivable - Current - 344,812 344,812 Inventories - 1,049,673 1,049,673 Prepaid Items: Net Pension Obligation 303,455-303,455 Long Term Lease Receivable - 26,638,950 26,638,950 Restricted Cash & Investments: Cash with Escrow Agent - Debt Service 819,767 34,746,257 35,566,024 Accrued Interest on Investments - 350,518 350,518 Deferred Charges 299,552 1,246,072 1,545,624 Land Held For Resale 2,287,346-2,287,346 Capital Assets (net of accumulated depreciation): Land 10,658,752 364,805 11,023,557 Works of Art & Historical Treasures 82,662-82,662 Buildings 6,524,288 34,481,926 41,006,214 Other Improvements 4,477,390 299,259 4,776,649 Furniture & Equipment 1,772,157 3,019,540 4,791,697 Infrastructure 23,046,944 8,556,283 31,603,227 Construction in Progress 20,199,504 811,300 21,010,804 TOTAL ASSETS 99,436,789 124,019,458 223,456,247 LIABILITIES Accounts Payable 1,015,674 438,727 1,454,401 Salaries Payable 192,406 126,770 319,176 Deposits Payable - 159,097 159,097 Accrued Interest Payable 187,287 895,301 1,082,588 Due To Other Governments 317,814 1,564,657 1,882,471 Unearned Revenue 2,685,949 112,507 2,798,456 Non-current Liabilities: Due Within One Year 9,095,158 1,593,596 10,688,754 Due in More than One Year 45,192,710 75,998,787 121,191,497 TOTAL LIABILITIES 58,686,998 80,889,442 139,576,440 NET ASSETS Invested In Capital Assets, Net of Related Debt 41,440,880 33,767,513 75,208,393 Restricted for: Other Purposes 3,046,281-3,046,281 Debt Service 8,224,794 5,615,768 13,840,562 Capital Projects 10,443,748-10,443,748 Unrestricted (22,405,912) 3,746,735 (18,659,177) TOTAL NET ASSETS $ 40,749,791 $ 43,130,016 $ 83,879,807 The notes to the financial statements are an integral part of this statement. 28
CITY OF CHASKA, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2006 NET (EXPENSE) REVENUE AND PROGRAM REVENUES CHANGES IN NET ASSETS OPERATING CAPITAL CHARGES FOR GRANTS AND GRANTS AND GOVERNMENTAL BUSINESS-TYPE FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS ACTIVITIES ACTIVITIES TOTAL Governmental Activties: General Government $ 3,106,894 $ 1,395,903 $ 28,347 $ 331,977 $ (1,350,667) $ - $ (1,350,667) Economic Development 4,659,713 135,774 1,097,663 3,551,488 125,212-125,212 Public Safety 3,853,321 193,802 463,323 31,898 (3,164,298) - (3,164,298) Public Works 4,143,012 807,976 79,842 7,198,692 3,943,498-3,943,498 Parks, Recreation and Arts 639,366 62,298 43,483 16,506 (517,079) - (517,079) Interest on Long-Term Debt 2,328,113 - - - (2,328,113) - (2,328,113) Total Governmental Activities 18,730,419 2,595,753 1,712,658 11,130,561 (3,291,447) - (3,291,447) 29 Business-type Activities: Electric 22,019,548 23,672,899 25,722 203,948-1,883,021 1,883,021 Water 2,372,720 1,221,984-223,867 - (926,869) (926,869) Sewer 1,944,018 1,834,351-12,766 - (96,901) (96,901) Community Center 3,156,832 2,563,421 - - - (593,411) (593,411) Par 30 Golf Course 201,444 161,502 - - - (39,942) (39,942) Chaska Town Course 1,918,495 1,570,764 - - - (347,731) (347,731) Turbine Generator 3,548,378 2,404,608 - - - (1,143,770) (1,143,770) Internet Service Provider 1,574,089 852,032 - - - (722,057) (722,057) Total Business-type Activities 36,735,524 34,281,561 25,722 440,581 - (1,987,660) (1,987,660) TOTAL $ 55,465,943 $ 36,877,314 $ 1,738,380 $ 11,571,142 (3,291,447) (1,987,660) (5,279,107) General Revenues: Property Taxes 8,006,361-8,006,361 Franchise Taxes 2,114,657-2,114,657 Grants & Contributions Not Restricted to Specific Functions 348,563-348,563 Investment Earnings 1,286,314 1,837,540 3,123,854 Other 724,466 47,250 771,716 Transfers 412,627 (412,627) - Total General Revenues & Transfers 12,892,988 1,472,163 14,365,151 Change in Net Assets 9,601,541 (515,497) 9,086,044 Net Assets - Beginning 30,859,730 43,645,513 74,505,243 Prior period adjustment 288,520-288,520 Net Assets - Beginning - as restated 31,148,250 43,645,513 74,793,763 Net Assets - Ending $ 40,749,791 $ 43,130,016 $ 83,879,807 The notes to the financial statements are an integral part of this statement.
CHASKA 30
Governmental Funds City of Chaska December 31, 2006 31
CITY OF CHASKA, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2006 ASSETS TOTAL HWY. 312 TIF DISTRICT #4 NONMAJOR GOVERNMENTAL GENERAL RALF LOANS REVOLVING GOVERNMENTAL FUNDS Cash And Investments $ 2,708,487 $ 233,730 $ - $ 11,356,226 $ 14,298,443 Investment With Escrow Agent - - - 819,767 819,767 Receivables: Taxes 287,779-64,090 31,170 383,039 Special Assessments 3,825-1,305,995 8,047,506 9,357,326 Accounts 110,994 - - 45,521 156,515 Interest 5,347-126,473 38,373 170,193 Other Receivables 60,416-518,841 2,101,238 2,680,495 Due from Other Funds - - - 15,904,005 15,904,005 Due From Other Governments 32,764-1,425,000 80,580 1,538,344 Interfund Receivable - - - 655,190 655,190 Advance to Other Funds - - - 354,898 354,898 Land Held for Resale - 2,287,346 - - 2,287,346 TOTAL ASSETS $ 3,209,612 $ 2,521,076 $ 3,440,399 $ 39,434,474 $ 48,605,561 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ 98,739 $ - $ 27,285 $ 888,504 $ 1,014,528 Salaries Payable 192,406 - - - 192,406 Due To Other Funds - - 14,173,605 1,730,400 15,904,005 Due To Other Governments 462 - - 317,352 317,814 Interfund Payable - - 182,363 1,511,832 1,694,195 Deferred and Unearned Revenue 103,815 2,500,000 3,421,958 9,892,909 15,918,682 Advance from Other Funds - 1,800,000-176,548 1,976,548 TOTAL LIABILITIES 395,422 4,300,000 17,805,211 14,517,545 37,018,178 FUND BALANCES: Reserved - - - 25,715,261 25,715,261 Unreserved, Designated Reported In: General Fund 2,811,761 - - - 2,811,761 Special Revenue Funds - - - 2,286,840 2,286,840 Unreserved, Undesignated Reported In: General Fund 2,429 - - - 2,429 Special Revenue Funds - - - 186,244 186,244 Capital Project Funds - (1,778,924) (14,364,812) (3,271,416) (19,415,152) TOTAL FUND BALANCES 2,814,190 (1,778,924) (14,364,812) 24,916,929 11,587,383 TOTAL LIABILITIES AND FUND BALANCES $ 3,209,612 $ 2,521,076 $ 3,440,399 $ 39,434,474 $ 48,605,561 The notes to the financial statements are an integral part of this statement. 32
CITY OF CHASKA, MINNESOTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS DECEMBER 31, 2006 Total fund balances - governmental funds $ 11,587,383 Amounts reported for governmental activities in the statement of net assets are different because: Issuance costs are recorded as expenditures in the current period in the governmental funds. Under full accrual, the expenditures are recorded as deferred charges and amortized over the life of the debt. 299,552 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in governmental funds. Cost of Capital Assets 81,101,056 Less: Accumulated Depreciation (14,339,359) Due to availability, certain revenues are not recognized under the governmental fund statements until received; however, under full accrual in the government-wide Statement of Activities, revenues are recorded when earned regardless of when received. 13,232,733 Internal service funds are used by management to charge the costs of property & liability insurance to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net assets. 3,166,681 Internal balances from business-type activities for internal service fund services. (126,555) Governmental funds do not report an asset for net pension obligations. 303,455 Interest on long-term debt is included in the change in net assets as it accrues, regardless of when payment is due. However, it is included in the change in fund balances when due. (187,287) Long-term liabilities, including bonds payable and compensated absences, are not payable with current financial resources and, therefore, are not reported in governmental funds. Due within one year (9,095,158) Due in more than one year (45,192,710) Net assets of governmental activities $ 40,749,791 The notes to the financial statements are an integral part of this statement. 33
CITY OF CHASKA, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2006 TOTAL HWY. 312 TIF DISTRICT #4 NONMAJOR GOVERNMENTAL GENERAL RALF LOANS REVOLVING GOVERNMENTAL FUNDS REVENUES Taxes: Property $ 3,258,716 $ - $ 4,137,017 $ 607,996 $ 8,003,729 Franchise 2,114,657 - - - 2,114,657 Licenses and Permits 615,389 - - - 615,389 Intergovernmental 775,414 3,377,615 92,900 2,701,824 6,947,753 Charges for Services 1,017,733 - - 817,484 1,835,217 Fines and Forfeitures 84,350 - - - 84,350 Special Assessments 4,692-29,305 1,597,474 1,631,471 Other Revenue 211,893 13,480 415,889 2,120,741 2,762,003 TOTAL REVENUES 8,082,844 3,391,095 4,675,111 7,845,519 23,994,569 EXPENDITURES CURRENT: General Government 2,681,469 - - 39,972 2,721,441 Economic Development - 3,377,615 616,311 612,217 4,606,143 Public Safety 3,090,945 - - - 3,090,945 Public Works 2,081,885-133,335 2,145,825 4,361,045 Parks, Recreation and Arts 413,446 - - 62,544 475,990 DEBT SERVICE: Principal - - - 8,545,000 8,545,000 Interest - - 98,366 2,293,866 2,392,232 Issuance Costs & Fiscal Agent Fees - - 15,396 116,917 132,313 CAPITAL OUTLAY 2,071-790,347 6,740,196 7,532,614 TOTAL EXPENDITURES 8,269,816 3,377,615 1,653,755 20,556,537 33,857,723 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (186,972) 13,480 3,021,356 (12,711,018) (9,863,154) OTHER FINANCING SOURCES (USES) Transfers In 112,500 - - 10,539,312 10,651,812 Transfers Out - - (5,447,281) (4,791,904) (10,239,185) Bonds Issued - - 1,267,485 8,282,515 9,550,000 Premium on Bonds Issued - - 9,251 59,816 69,067 TOTAL OTHER FINANCING SOURCES AND (USES) 112,500 - (4,170,545) 14,089,739 10,031,694 NET CHANGE IN FUND BALANCES (74,472) 13,480 (1,149,189) 1,378,721 168,540 FUND BALANCES, January 1 2,888,662 (1,792,404) (13,215,623) 23,538,208 11,418,843 FUND BALANCES, December 31 $ 2,814,190 $ (1,778,924) $ (14,364,812) $ 24,916,929 $ 11,587,383 The notes to the financial statements are an integral part of this statement. 34
CITY OF CHASKA, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2006 Total net change in fund balances - governmental funds $ 168,540 Amounts reported for governmental activities in the Statement of Activities are different because: Issuance costs are recorded as expenditures in the current period in the governmental funds. Under full accrual, the expenditures are recorded as deferred charges and amortized over the life of the debt. 75,567 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Further detail on increases/decreases can be found in the note on capital assets. (Increases include donations of capital assets and Construction in Progress that is reclassified.) Capital Outlay 8,407,358 Less: Depreciation Expense (1,958,150) Donations of capital assets typically are not reported in the governmental funds. Such donations must be reported, however, in both of the government-wide financial statements. This amount represents revenue from developer donated capital assets. 3,026,107 Certain revenues are recognized as soon as it is earned. Under modified accrual basis of accounting, certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. 750,140 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Further detail on the additions and reductions can be found in the note on long-term debt. Additions to long-term debt (reduces governmental fund balances) (10,016,116) Reductions to long-term debt (increases governmental fund balances) 8,986,119 Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (3,254) Net pension obligation activity is not recognized in the Governmental Funds but recognized as the expense/revenue is incurred in the Statement of Activities. 14,935 Internal service funds are used by management to charge the costs of property & liability insurance to individual funds. This amount represents the change in net assets of internal service funds, which is reported with governmental activities. 150,295 Change in net assets - governmental activities $ 9,601,541 The notes to the financial statements are an integral part of this statement. 35
CITY OF CHASKA, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2006 VARIANCE WITH ORIGINAL FINAL BUDGET AND FINAL POSITIVE BUDGET ACTUAL (NEGATIVE) REVENUES: Taxes: Property $ 3,261,638 $ 3,258,716 $ (2,922) Franchise 2,025,397 2,114,657 89,260 Licenses And Permits 1,113,995 615,389 (498,606) Intergovernmental 733,829 775,414 41,585 Charges For Services 968,520 1,017,733 49,213 Fines And Forfeitures 56,253 84,350 28,097 Special Assessments - 4,692 4,692 Other Revenue 73,323 211,893 138,570 TOTAL REVENUES 8,232,955 8,082,844 (150,111) EXPENDITURES: Current: General Government 2,745,037 2,681,469 63,568 Public Safety 2,982,806 3,090,945 (108,139) Public Works 2,185,755 2,081,885 103,870 Parks, Recreation and Arts 430,857 413,446 17,411 Capital Outlay 1,000 2,071 (1,071) TOTAL EXPENDITURES 8,345,455 8,269,816 75,639 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (112,500) (186,972) (74,472) OTHER FINANCING SOURCES (USES): Transfers In 112,500 112,500 - NET CHANGE IN FUND BALANCES - (74,472) (74,472) FUND BALANCES, January 1 2,888,662 2,888,662 - FUND BALANCES, December 31 $ 2,888,662 $ 2,814,190 $ (74,472) The notes to the financial statements are an integral part of this statement. 36
Proprietary Funds City of Chaska December 31, 2006 37
CITY OF CHASKA, MINNESOTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS DECEMBER 31, 2006 BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS ASSETS COMMUNITY ELECTRIC WATER CENTER Current Assets: Cash And Investments $ 3,096,960 $ 121,402 $ 26,744 Restricted Assets: Cash And Investments With Escrow Agent - - - Accrued Interest On Investments - - - Receivables: Accounts: Current 2,021,447 76,015 107,582 Unbilled 1,012,217 34,558 - Allowance For Uncollectible Accounts (18,757) (723) (235) Interest 6,819 - - Due From Other Funds 962,358 - - Due From Other Governments - - 61,260 Interfund Receivable 1,687,177 - - Lease Receivable - - - Inventories 848,752 120,184 - Total Current Assets 9,616,973 351,436 195,351 Noncurrent Assets: Restricted Cash And Investments with Escrow Agent - - - Lease Receivable - - - Advance To Other Funds 2,774,586 - - Deferred Charges - 234,400 - Capital Assets: Land 240,721 33,618 90,466 Buildings 5,079,031 17,255,218 19,191,717 Other Improvements - - 185,826 Furniture & Equipment 1,241,577 268,157 1,137,016 Infrastructure 12,387,701 3,053,039 - Construction In Progress - - 811,300 Less: Accumulated Depreciation (9,051,978) (4,418,244) (8,074,701) Total Net Capital Assets 9,897,052 16,191,788 13,341,624 Total Noncurrent Assets 12,671,638 16,426,188 13,341,624 TOTAL ASSETS 22,288,611 16,777,624 13,536,975 38
GOVERNMENTAL ACTIVITIES- INTERNAL TURBINE NONMAJOR SERVICE GENERATOR ENTERPRISE TOTALS FUND $ 492,699 $ 1,953,269 $ 5,691,074 $ 3,160,493 1,693,482-1,693,482-350,518-350,518 - - 255,333 2,460,377 - - 74,200 1,120,975 - - (2,433) (22,148) - - 3,971 10,790 7,334 - - 962,358 - - 525 61,785-25,508-1,712,685-344,812-344,812 - - 80,737 1,049,673-2,907,019 2,365,602 15,436,381 3,167,827 33,052,775-33,052,775-26,638,950-26,638,950-1,277,651-4,052,237-1,011,672-1,246,072 - - - 364,805 - - 8,265,839 49,791,805 - - 229,269 415,095 - - 3,232,200 5,878,950 - - 2,615,861 18,056,601 - - - 811,300 - - (6,240,520) (27,785,443) - - 8,102,649 47,533,113-61,981,048 8,102,649 112,523,147-64,888,067 10,468,251 127,959,528 3,167,827 (Continued) 39
CITY OF CHASKA, MINNESOTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS DECEMBER 31, 2006 BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS LIABILITIES COMMUNITY ELECTRIC WATER CENTER Current Liabilities: Accounts Payable 9,720 31,799 93,577 Contracts Payable - - 254,696 Salaries Payable 41,849 12,854 42,810 Deposits Payable 101,858-19,525 Compensated Absences 59,672 20,480 30,924 Accrued Interest Payable - 45,169 - Due To Other Funds - - - Due To Other Governments 1,544,138 99 17,987 Interfund Payable 25,508 - - Revenue Bonds Payable - 675,000 - Unearned Revenue - - 44,453 Total Current Liabilities 1,782,745 785,401 503,972 Noncurrent Liabilities: Compensated Absences 36,884 3,295 30,876 Advance From Other Funds 1,277,651 - - Revenue Bonds Payable - 13,325,000 - Unamortized Premium On Revenue Bonds - 44,112 - Total Noncurrent Liabilities 1,314,535 13,372,407 30,876 TOTAL LIABILITIES 3,097,280 14,157,808 534,848 NET ASSETS Invested in Capital Assets, Net of Related Debt 9,897,052 2,426,188 13,341,624 Restricted - - - Unrestricted 9,294,279 193,628 (339,497) TOTAL NET ASSETS $ 19,191,331 $ 2,619,816 $ 13,002,127 The notes to the financial statements are an integral part of this statement. 40
(Continued) GOVERNMENTAL ACTIVITIES- INTERNAL TURBINE NONMAJOR SERVICE GENERATOR ENTERPRISE TOTALS FUND - 48,935 184,031 1,146 - - 254,696 - - 29,257 126,770 - - 37,714 159,097 - - 42,520 153,596-850,132-895,301 - - 962,358 962,358 - - 2,433 1,564,657 - - 648,172 673,680-765,000-1,440,000 - - 68,054 112,507-1,615,132 1,839,443 6,526,693 1,146-19,996 91,051 - - 1,152,936 2,430,587-61,650,000-74,975,000-888,624-932,736-62,538,624 1,172,932 78,429,374-64,153,756 3,012,375 84,956,067 1,146-8,102,649 33,767,513-5,615,768-5,615,768 - (4,881,457) (646,773) 3,620,180 3,166,681 $ 734,311 $ 7,455,876 43,003,461 $ 3,166,681 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 126,555 Net assets of business-type activities $ 43,130,016 41
CITY OF CHASKA, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2006 BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS COMMUNITY ELECTRIC WATER CENTER OPERATING REVENUES: Sales $ 23,672,899 $ 1,221,984 $ 2,455,311 OPERATING EXPENSES: Production 17,404,511 411,059 - Distribution / Collections 1,398,409 490,750 - Administration 562,867 231,937 2,395,181 Franchise Fees 1,944,000 - - Depreciation 640,843 676,216 771,655 TOTAL OPERATING EXPENSES 21,950,630 1,809,962 3,166,836 OPERATING INCOME (LOSS) 1,722,269 (587,978) (711,525) NON-OPERATING REVENUES: Investment Earnings 260,072 37,586 25,671 Intergovernmental 25,722 210,589 112,553 Payments - - - Proceeds From Sale Of Capital Assets - - - Miscellaneous Refunds And Reimbursements 8,613 34,194 - TOTAL NON-OPERATING REVENUES 294,407 282,369 138,224 NON-OPERATING EXPENSES: Interest 80,164 553,748 - Issuance Costs & Fiscal Agent Fees - 14,892 - Loss On Disposal Of Capital Assets - - - TOTAL NON-OPERATING EXPENSES 80,164 568,640 - INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS 1,936,512 (874,249) (573,301) CAPITAL CONTRIBUTIONS 203,948 13,278 - TRANSFERS IN (OUT) Transfers In - 376,528 100,000 Transfers Out (342,187) (7,700) (126,568) Total Transfers In (Out) (342,187) 368,828 (26,568) CHANGE IN NET ASSETS 1,798,273 (492,143) (599,869) NET ASSETS, January 1 17,393,058 3,111,959 13,601,996 NET ASSETS, December 31 $ 19,191,331 $ 2,619,816 $ 13,002,127 The notes to the financial statements are an integral part of this statement. 42
GOVERNMENTAL ACTIVITIES - OTHER INTERNAL TURBINE NONMAJOR SERVICE GENERATOR ENTERPRISE TOTALS FUND $ 2,324,444 $ 4,418,649 $ 34,093,287 $ 549,688-1,346,866 19,162,436 - - 865,792 2,754,951-112,219 2,281,626 5,583,830 483,598 - - 1,944,000 - - 822,158 2,910,872-112,219 5,316,442 32,356,089 483,598 2,212,225 (897,793) 1,737,198 66,090 1,449,158 65,053 1,837,540 116,542 - - 348,864-80,164-80,164 - - 18,616 18,616 - - - 42,807 2,531 1,529,322 83,669 2,327,991 119,073 3,391,252 130,367 4,155,531-44,907-59,799 - - 217,589 217,589-3,436,159 347,956 4,432,919-305,388 (1,162,080) (367,730) 185,163-12,766 229,992 - - - 476,528 - (405,000) (7,700) (889,155) - (405,000) (7,700) (412,627) - (99,612) (1,157,014) (550,365) 185,163 833,923 8,612,890 43,553,826 2,981,518 $ 734,311 $ 7,455,876 $ 43,003,461 $ 3,166,681 Change in net assets - total Enterprise Funds (550,365) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 34,868 Change in net assets - Business-type Activities $ (515,497) 43
CITY OF CHASKA, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2006 BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS COMMUNITY ELECTRIC WATER CENTER CASH FLOWS FROM OPERATING ACTIVITIES: Receipts From Customers And Users $ 23,344,833 $ 1,213,053 $ 2,571,749 Payments To Suppliers (20,024,383) (815,364) (1,021,862) Payments To Employees (1,029,471) (397,361) (1,202,782) Net Cash Provided (Used) By Operating Activities 2,290,979 328 347,105 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Transfers From Other Funds - 376,528 100,000 Transfers To Other Funds (342,187) (7,700) (126,568) Due From Other Funds (962,358) - - Due To Other Funds - - - Intergovernmental 25,722 210,589 112,553 Miscellaneous Refunds/Reimbursements 8,613 - - Net Cash Provided (Used) By Non-Capital Financing Activities (1,270,210) 579,417 85,985 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Deferred Issuance Charges - 14,892 - Capital Contributions 203,948 13,278 - Principal Paid On Bonds - (595,000) - Interest And Fiscal Charges (80,164) (572,713) - Proceeds From Sale Of Capital Assets - - - Construction And Acquisition of Capital Assets (734,268) (263,967) (1,284,113) Lease Principal Received - - - Interfund Loans To Other Funds (433,625) - - Interfund Loans From Other Funds (24,055) - - Interest Payments On Interfund Loans - - - Miscellaneous Refunds/Reimbursements - 34,194 - Net Cash Provided (Used) By Capital And Related Financing Activities (1,068,164) (1,369,316) (1,284,113) CASH FLOWS FROM INVESTING ACTIVITIES: Interest On Investments 264,278 37,586 25,671 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 216,883 (751,985) (825,352) CASH AND CASH EQUIVALENTS, January 1 2,880,077 873,387 852,096 CASH AND CASH EQUIVALENTS, December 31 $ 3,096,960 $ 121,402 $ 26,744 CASH AND CASH EQUIVALENTS: Cash And Investments $ 3,096,960 $ 121,402 $ 26,744 Restricted Assets-Revenue Bonds: Cash And Investments - - - Total Cash And Cash Equivalents $ 3,096,960 $ 121,402 $ 26,744 44
GOVERNMENTAL ACTIVITIES - OTHER INTERNAL TURBINE NONMAJOR SERVICE GENERATOR ENTERPRISE TOTALS FUND $ 2,324,444 $ 4,376,544 $ 33,830,623 $ 549,688 (112,219) (3,311,888) (25,285,716) (482,452) - (1,316,164) (3,945,778) - 2,212,225 (251,508) 4,599,129 67,236 - - 476,528 - (405,000) (7,700) (889,155) - - - (962,358) - - 962,358 962,358 - - - 348,864 - - - 8,613 2,531 (405,000) 954,658 (55,150) 2,531 42,157-57,049 - - 12,766 229,992 - (725,000) - (1,320,000) - (3,482,433) (115,127) (4,250,437) - - 18,616 18,616 - - (1,018,988) (3,301,336) - 316,624-316,624-24,055 - (409,570) - - 199,022 174,967 - - (15,240) (15,240) - - - 34,194 - (3,824,597) (918,951) (8,465,141) - 1,526,798 65,047 1,919,380 116,500 (490,574) (150,754) (2,001,782) 186,267 35,729,530 2,104,023 42,439,113 2,974,226 $ 35,238,956 $ 1,953,269 $ 40,437,331 $ 3,160,493 $ 492,699 $ 1,953,269 $ 5,691,074 $ 3,160,493 34,746,257-34,746,257 - $ 35,238,956 $ 1,953,269 $ 40,437,331 $ 3,160,493 (Continued) 45
CITY OF CHASKA, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2006 BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: COMMUNITY ELECTRIC WATER CENTER Operating Income (Loss) $ 1,722,269 $ (587,978) $ (711,525) Adjustments To Reconcile Operating Income (Loss) To Net Cash Provided (Used) By Operating Activities: Depreciation Expense 640,843 676,216 771,655 Allowance For Uncollectible Accounts 1,118 89 43 (Increase) Decrease In Assets: Accounts Receivable (337,120) (9,020) (699) Due From Other Governments - - 97,990 Inventory (70,731) 47,432 - Increase (Decrease) In Liabilities: Accounts Payable (6,841) (126,163) (5,270) Contracts Payable - (3,031) 168,202 Salaries Payable (251) 2,686 5,624 Deposits Payable 11,844-4,142 Unearned Revenue - - 14,962 Due To Other Governments 329,848 97 1,981 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 2,290,979 $ 328 $ 347,105 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES: Trade In Of Capital Assets $ - $ - $ - The notes to the financial statements are an integral part of this statement. 46
(Continued) GOVERNMENTAL ACTIVITIES - OTHER INTERNAL TURBINE NONMAJOR SERVICE GENERATOR ENTERPRISE TOTALS FUND $ 2,212,225 $ (897,793) $ 1,737,198 $ 66,090-822,158 2,910,872 - - 425 1,675 - - (48,020) (394,859) - - (525) 97,465 - - (19,628) (42,927) - - (103,308) (241,582) 1,146 - - 165,171 - - (11,251) (3,192) - - 1,967 17,953 - - 4,048 19,010 - - 419 332,345 - $ 2,212,225 $ (251,508) $ 4,599,129 $ 67,236 $ - $ 14,491-47
CHASKA 48
Fiduciary Funds City of Chaska December 31, 2006 49
CITY OF CHASKA, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS DECEMBER 31, 2006 ASSETS AGENCY FUNDS Cash And Cash Equivalents $ 310,208 Receivables: Accounts 7,297 Other 709 Due From Other Funds 2,432 TOTAL ASSETS $ 320,646 LIABILITIES Accounts Payable $ 5,574 Due To Other Funds 2,432 Due To Other Governments 210,800 Deposits Payable 101,840 TOTAL LIABILITIES $ 320,646 The notes to the financial statements are an integral part of this statement. 50
Note 1 Summary of Significant Accounting Policies The City of Chaska (the City) operates under the Optional Plan A Statutory, as modified, form of government according to applicable State of Minnesota statutes. The Plan A, as modified, form prescribes a modified Administrator-Council form of organization. The Council consists of an elected mayor and four council members. The City provides the following services: public safety, highways and streets, culture-recreation, public improvements, planning and zoning, and general administration. The City also operates utilities in the areas of electric, water and sewer and also operates a community center, two golf courses, an Internet service and a gas turbine generator. The financial statements of the City are prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The significant accounting policies that the City follows are described below to enhance the usefulness of the financial statements to the reader. A) The Financial Reporting Entity These financial statements present the City (primary government) and its component units. The City includes all funds, organizations, institutions, agencies, departments, and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the basic financial statements of the City because of the significance of its operational or financial relationship with the City. The City is considered financially accountable for a component unit if it appoints a voting majority of the organization s governing body and it is able to impose its will on the organization by significantly influencing the programs, projects, activities, or level of services performed or provided by the organization, or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the City. As a result of applying the component unit definition criteria above, one organization has been defined and is presented as if they were part of the City in this report as follows: Blended component unit The Chaska Economic Development Authority (EDA) was established in 1987 by Resolution No. 87-25 of the Chaska City Council. The EDA is included in these financial statements by reason of the EDA Board being comprised of City Council members. Activities of the EDA are financed by a tax levy of the City for that purpose. There are no other statements for the EDA other than those presented in this report. 51
B) Government-Wide and Fund Financial Statements The basic financial statements include both government-wide financial statements and fund financial statements. Government-wide financial statements (i.e. the Statement of Net Assets and that Statement of Activities) report information based on the City as a whole and exclude fiduciary activity. Also, for the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Direct expenses also include allocated expenses to functional programs from centralized expenses reported in the Self Insurance Fund. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, 2) operating grants and contributions that are restricted to meeting the operational requirements of a particular function, and 3) capital grants and contributions (including special assessments) that are restricted to meeting the capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. The accounts of the City are organized on the basis of funds and separate Fund Financial Statements and are provided for on three different broad fund categories (Governmental, Proprietary and Fiduciary). Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions and activities. A fund is a separate accounting entity with self-balancing accounts that include assets, liabilities, fund equity, revenues and expenditures/expenses. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements present information for individual major funds in separate columns. Nonmajor funds are presented in total in one column in the fund financial statements. Major Governmental Funds The City of Chaska reports the following major governmental funds: The General Fund is the general operating fund of the City and is used to account for all financial resources except those required to be accounted for in another fund. Capital Projects Fund Highway 312 R.A.L.F. Loan Fund - This fund is used to account for land acquisitions for the new Highway 312 funded by the Metropolitan Council Right-Of-Way Acquisition Loan Fund (R.A.L.F.) Capital Project Fund - TIF District #4 Revolving Fund - This fund was established in1985 within the Chaska Flood Control Project Area. This fund is the primary fund for collection of all District #4 tax revenue which is used in turn to finance expenditures in other District #4 Funds that the City uses as a means to account for project costs. 52
Major Proprietary Funds The City of Chaska reports the following major Proprietary funds: Electric Fund This fund is used to account for revenues and expenses of the City s Electric Utility. Water Fund This fund is used to account for revenues and expenses of the City s Water Utility. Chaska Community Center This fund is used to account for revenues and expenses of the Chaska Community Center. Turbine Generator This fund is used to account for the operations of the City s Turbine Generator Utility. Other Funds The City reports the following other funds: Internal Service Funds account for operations that provide services to other departments or agencies of the government on a cost reimbursement basis. The City of Chaska has one Internal Service Fund the Self-Insurance Fund. This fund is used to account for the purchase of property, liability, and workers compensation insurance for all City departments. Costs are allocated to the departments. Fiduciary Funds account for assets held on behalf of outside parties, including other governments, or other funds within the City. The City s only fiduciary fund type is an agency fund. Agency funds account for assets that the City holds on behalf of others as their agent and are custodial in nature. The following is a list of the City s Fiduciary funds: o Builders Deposit Fund. This Agency fund is used to account for assets held in a custodial capacity in the form of deposits from builders that will be refunded upon project completion. o Developers Fund. This Agency fund is used to account for assets held in a custodial capacity in the form of billings to developers for contractual services. o MCES Collection Fund. This Agency fund is used to account for the collection of assets held in a custodial capacity in the form of sewer availability charges remitted monthly to the Metropolitan Council Environmental Services (MCES). Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statement to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. 53
As a general rule, the effect of interfund activity has been eliminated from the governmentwide financial statements. Exceptions to this general rule are franchise taxes and other administrative charges between the City s Enterprise funds and other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. C) Measurement Focus and Basis of Accounting Government-Wide Financial Statements: The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Economic resources measurement focus aims to reporting all inflows, outflows and balances affecting or reflecting an entity s net assets. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Fund Financial Statements: Governmental Funds Governmental Funds use a current financial resources measurement focus and the modified accrual basis of accounting. This means that only current assets and current liabilities are generally included on the balance sheets. As stated earlier, the government-wide financial statements use an economic resources measurement focus and the accrual basis of accounting. Therefore, a reconciliation on the governmental funds statements becomes necessary to explain the difference in balances between the government-wide statements and the governmental fund statements. The reported fund balance (net current assets) is considered a measure of available, spendable resources. Governmental funds operating statements present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available, spend-able resources during a period. Their revenues are recognized when they become measurable and available and thus susceptible to accrual. Measurable means the amount of the transaction can be determined and available means collectable within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City generally considers revenues as available if they are collected within 60 days after year-end. Grants and similar revenues are recognized when all requirements imposed by the provider have been met. Major revenues that are susceptible to accrual include property taxes, special assessments, intergovernmental revenues, charges for services, and interest on investments. Major revenues that are not susceptible to accrual include licenses and permits, fees and miscellaneous revenue. Such revenues are recorded only as received because they are not measurable until collected. 54
The City reports deferred revenue on its governmental balance sheet. Deferred revenue arises when potential revenue does not meet both the measurable and available criteria for recognition in the current period. Unearned amounts are always reported as deferred revenue; earned amounts also are reported as deferred revenue until they are available to liquidate liabilities of the current period. Examples of unearned revenue would be grant monies that are received prior to the occurrence of qualifying expenditures. In subsequent periods when both revenue recognition criteria are met, or when the government has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and revenue is recognized. Expenditures are generally recognized under the modified accrual basis of accounting where the expenditure is recorded when the related fund liability is incurred, except for principal and interest on long-term debt which is recognized when due. Proprietary and Fiduciary Funds Proprietary funds are accounted for on a flow of economic resources measurement focus and accrual basis of accounting. This means that all assets, including capital assets, and all liabilities, including long-term liabilities, associated with fund activity are included on the Statement of Net Assets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. Revenues are recognized when they are earned, and expenses are recognized at the time liabilities are incurred. Fiduciary funds also utilize the accrual basis of accounting. The City has only one Fiduciary Fund type, an agency fund, which is custodial in nature (assets equal liabilities) and does not have a measurement focus. Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues for all of the City of Chaska s enterprise funds and internal service fund are cost of sales and services, administrative expense, and depreciation of capital assets. All other revenues and expenses are reported as non-operating items. When both restricted and unrestricted resources are available for use, it is the government s policy to use restricted resources first, and then unrestricted resources as they are needed. D) Budgetary Accounting Budgets for the General fund and for certain Special Revenue funds (schedules are included in the financial statements) are adopted on a basis consistent with United States generally accepted accounting principles. All annual appropriations lapse at fiscal year-end. E) Cash and Investments Cash balances from all funds are combined and invested to the extent available as authorized by Minnesota State Statutes. Earnings from such investments are allocated to the respective 55
funds on the basis of applicable cash balance participation by each fund. Investments are stated at fair value based on quoted market prices. Cash and cash equivalents consist of available cash, cash deposits and highly liquid investments with an original maturity date at the time of purchase of three months or less. F) Receivables 1. PROPERTY TAX Property tax levies are levied by the City Council and must be levied on or before five business days after December 20 th. Levied property taxes are certified to Carver County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. A portion of the property taxes levied is paid by the State of Minnesota through Market Value Credit, which is usually included in intergovernmental revenue in the financial statements. The county spreads all levies over assessable property. Such taxes become a lien on the first of January and are recorded as receivables by the City at that date. Revenues are accrued in the year collectable net of delinquencies. Property taxes may be paid by taxpayers in two equal installments, on May 15 and October 15. The County provides tax settlements to cities and other local governments three times a year: on or before June 30, December 1, and before April 15 of the following year. Taxes, which remain unpaid at December 31, are classified as delinquent taxes receivable and are fully offset by deferred revenue in the governmental fund statements because they are not available to finance current expenditures. No allowance for uncollectible taxes has been provided because such amounts are not expected to be material. 2. SPECIAL ASSESSMENTS The principal and interest portion of special assessments is recognized as revenue in the year when collected in the governmental funds. Both the principal and interest on special assessments are payable in installments over a term of years that matches the scheduled payments for the bond issue which financed the project. Special assessments, which remain unpaid at December 31, are classified as special assessments receivable and are fully offset by deferred revenue in the governmental fund financial statements because they are not available to finance current expenditures. 3. TRADE RECEIVABLES All trade receivables are shown net of an allowance for uncollectibles on the Statement of Net Assets. On December 31, 2006 the allowance for uncollectible accounts was $22,148. 56
G) Short-Term Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as due from other funds or due to other funds. The current portion of lending/borrowing arrangements (advances) are classified as interfund receivables/payables. H) Inventory Inventories in the enterprise funds are valued at cost, which approximates market, using a weighted method. Inventories are recorded as expenses when consumed. I) Advances to Other Funds Long-term interfund loan receivables are reported as advances and are offset equally by a fund balance reserve in the governmental fund statements, which indicates that they do not constitute expendable available financial resources and therefore are not available for appropriation. J) Land Held for Resale Land held for resale represent various property purchases made by the City with the intent to sell in order to increase tax base or attract new business. These assets are stated at the lower of cost or net realizable value. K) Restricted Assets and Investments With Escrow Agent In the government-wide statement of net assets and proprietary fund financial statements, unspent bond proceeds, as well as certain resources set aside for their repayment, are classified as restricted assets because their use is limited by applicable bond covenants. In the governmental fund financial statements these proceeds are listed as Investments with Escrow Agent. In the debt service funds, the proceeds of a crossover refunding bond issue held by the refunding bond escrow agent are reported as investments with escrow agent. These proceeds and any interest earned thereon can only be used to retire the related bond issue being refunded on its crossover refunding date (the date at which the refunded issue is callable), or to pay interest on the refunding issue until that time. L) Capital Assets Capital assets, which include land, building and structures, equipment and infrastructure assets (e.g. roads, bridges, curbs, gutters, streets, sidewalks, drainage systems and lighting systems) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. All purchased capital assets are valued at cost where historical records are available and at an estimated historical cost where no historical record exists. Donated capital assets are valued at their estimated fair market value on the date received. The costs of normal maintenance and repairs that do not add to the value of, or materially extend the life of the asset are recorded as expenditures. 57
Depreciation of assets on the Government-wide statements for the primary government (governmental and business-type activities) and in the Proprietary funds financial statements is charged as an expense against operations over the estimated useful life of the asset using the straight-line method of depreciation. The City uses a $5,000 capitalization policy. Depreciation has been provided for in these financial statements based on the following estimated useful lives: Description Buildings and Structures Furniture and Equipment Improvements, other than Buildings Public Domain Infrastructure Life 25 years 3-25 years 25-50 years 10-50 years Capital Assets not being depreciated include land, works of art/historical treasures and construction in progress. In accordance with GASB 34 148, the City of Chaska has chosen to report infrastructure assets prospectively beginning in the year of implementation (2003). The government-wide financial statements include infrastructure assets that were completed in 2003, 2004, 2005 and 2006. The City will retroactively report (1981 2002) all major general infrastructure assets by December 31, 2007. M) Compensated Absences The City compensates all employees upon termination for unused vacation, personal leave, and compensatory time. Union employees, by contract, are entitled to sick leave at the rate of eight (8) hours for each calendar month of full-time service. All vacation, personal leave, and compensatory pay is recorded as an expense and liability as the benefits accrue to employees in the government-wide and proprietary fund financial statements. A liability for these amounts are reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. N) Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other 58
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. O) Fund Balance The difference between fund assets and liabilities is Fund Balance on the governmental fund statements. Governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designated fund balances represent tentative plans for future use of financial resources. P) Net Assets Net assets represent the difference between assets and liabilities in the government-wide and proprietary fund financial statements. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net assets are reported as restricted in the government-wide financial statement when there are limitations on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Q) Interfund Transactions Interfund services provided are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. In the ordinary course of business transfers between funds are made to finance projects. 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 receivable or payable between the two types of activities: governmental and business-type. Note 2 Compliance and Accountability A) Budget The City follows these procedures in establishing the annual budgetary data: 1. City Administrative Services Director prepares history of actual revenues and expenditures for the prior two years and an estimate for the current year. 2. Department heads review the history and estimate the coming year s revenues and expenditures and project for the subsequent five years. Department heads submit their five-year budgets to the City Administrative Services Director. 59