Annual Comprehensive Financial Report for the Year Ended
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Annual Comprehensive Financial Report For the year ended December 31, 2020 City of Brooklyn Center, Minnesota Member of the Government Finance Officers Association of the United States ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY OF BROOKLYN CENTER, MINNESOTA Dr. Reginald M. Edwards Acting City Manager Prepared By: FINANCE DIVISION DEPARTMENT OF FISCAL & SUPPORT SERVICES Mark Ebensteiner Finance Director Andrew Splinter Assistant Finance Director FOR THE YEAR ENDED DECEMBER 31, 2020 Member of Government Finance Officers Association of the United States and Canada This page has been left blank intentionally. CITY OF BROOKLYN CENTER, MINNESOTA TABLE OF CONTENTS Page No. INTRODUCTORY SECTION Letter of Transmittal 1 Principal Officials 9 Organizational Chart 10 Certificate of Achievement 11 FINANCIAL SECTION Independent Auditor's Report 13 Management's Discussion and Analysis 17 Basic Financial Statements Government-wide Financial Statements Statement of Net Position 29 Statement of Activities 30 Fund Financial Statements Governmental Funds Balance Sheet 32 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 35 Statement of Revenues, Expenditures and Changes in Fund Balances 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 38 Statement of Revenues, Expenditures and Changes in Fund Balance: Budget and Actual General Fund 39 Tax Increment District No. 3 Special Revenue Fund 40 Proprietary Funds Statement of Net Position 42 Statement of Revenues, Expenses and Changes in Net Position 44 Statement of Cash Flows 46 Notes to the Financial Statements 49 Required Supplementary Information Schedule of Changes in the City's Total OPEB Liability and Related Ratios 91 Schedule of City Contributions - Public Employees General Employees Retirement Fund 92 Schedule of City's and Non-Employer Proportionate Share of Net Pension Liability - Public Employees General Employees Retirement Fund 94 Schedule of City Contributions - Public Employees Police and Fire Fund 96 Schedule of City's and Non-Employer Proportionate Share of Net Pension Liability - Public Employees Police and Fire Fund 98 Schedule of Changes in Net Pension Asset and Related Ratio - Fire Relief Association 99 Schedule of City Contributions - Fire Relief Association 100 Schedule of City Contributions - International Union of Operating Engineers Central Pension Fund 101 Combining and Individual Fund Statements and Schedules Governmental Funds Nonmajor Governmental Funds Combining Balance Sheet 106 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 107 Nonmajor Special Revenue Funds Combining Balance Sheet 108 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 110 CITY OF BROOKLYN CENTER, MINNESOTA TABLE OF CONTENTS Nonmajor Capital Projects Funds Combining Balance Sheet 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 113 Schedule of Revenues, Expenditures and Changes in Fund Balance: Budget and Actual General Fund 114 Special Revenue Funds Housing and Redevelopment Authority 119 Economic Development Authority 120 Community Development Block Grant 121 Police Forfeitures 122 Revolving Loan Fund 123 Centerbrook Golf Course 124 Tax Increment District No. 2 125 Tax Increment District No. 3 126 Tax Increment District No. 4 127 Tax Increment District No. 5 128 Tax Increment District No. 6 129 Tax Increment District No. 7 130 Tax Increment District No. 8 131 City Initiatives Grant 132 Debt Service Fund 133 Capital Projects Funds Capital Improvements 134 Municipal State-Aid for Construction 135 Special Assessment Construction 136 Street Reconstruction 137 Capital Reserve Emergency 138 Technology 139 Debt Service Fund by Account Combining Balance Sheet 140 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 142 Schedule of Revenues, Expenditures and Changes in Fund Balance: Budget and Actual G.O. Improvement Bonds, 2013B 144 G.O. Improvement Bonds, 2015A 145 G.O. Improvement Bonds, 2016A 146 G.O. Improvement Bonds, 2017A 147 G.O. Improvement Bonds, 2018A 148 G.O. Improvement Bonds, 2019A 149 G.O. Tax Increment Bonds, 2016C 150 G.O. Tax Increment Bonds, 2016B 151 G.O. Tax Increment Refunding Bonds, 2015B 152 G.O. Tax Increment Bonds, 2013A 153 Proprietary Funds Internal Service Funds Combining Statement of Net Position 156 Combining Statement of Revenues, Expenses and Changes in Net Position 158 Combining Statement of Cash Flows 160 STATISTICAL SECTION (UNAUDITED) Financial Trends Net Position by Component 164 Changes in Net Position 166 Governmental Activities Tax Revenue by Source 172 Fund Balances - Governmental Funds 174 Changes in Fund Balances - Governmental Funds 176 CITY OF BROOKLYN CENTER, MINNESOTA TABLE OF CONTENTS Revenue Capacity Assessed Tax Capacity and Estimated Actual Value of Taxable Property 178 Property Tax Rates - Direct and Overlapping Governments 180 Principal Property Taxpayers 182 Property Tax Levies and Collections 183 Debt Capacity Ratios of Outstanding Debt by Type 184 Ratios of General Bonded Debt Outstanding 185 Computation of Direct and Overlapping Governmental Activities Debt 186 Legal Debt Margin Information 188 Pledged Revenue Coverage 190 Demographic and Economic Information Demographic and Economic Statistics 191 Principal Employers 192 Operating Information Full-Time City Government Positions by Function 193 Operating Indicators by Function 194 Capital Asset Statistics by Function 195 This page has been left blank intentionally. May 24, 2021 Honorable Mayor and Members of the City Council City of Brooklyn Center Transmitted herewith is the Annual Comprehensive Financial Report of the City of Brooklyn Center for the fiscal year ended December 31, 2020. Management of the City of Brooklyn Center assumes full responsibility for the completeness and reliability of the information contained in this report based on the current system of internal control. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Minnesota Statutes and City Charter Section 7.12 require that the financial statements of the City of Brooklyn Center be audited annually by the State Auditor or a certified public accountant selected by the City Council. These financial statements have been audited by Malloy, Montague, Karnowski, Radosevich, & Co., P.A. (MMKR). Their opinion is included in the financial section of this report Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. Management’s Discussion and Analysis complements this letter of transmittal and should be read in conjunction with it. Profile of the City of Brooklyn Center The City of Brooklyn Center was incorporated in 1911. It is a northern suburb of the Twin Cities metropolitan area, adjacent to the City of Minneapolis and located 10 miles from its downtown area. The City is wholly within Hennepin County and covers an area of about 8.5 square miles. The Mississippi River forms the City’s eastern boundary. The City has operated under the council-manager form of government since the adoption of the City Charter in 1966. The governing body is comprised of the Mayor and four Council Members elected at large. All members serve four-year terms with two of the Council Members standing for election during each national election year cycle. The Mayor and Council Members hire a City Manager who is responsible for the daily operations of the City. The City provides a full range of municipal services to its citizens. These include police and fire protection and services, zoning and code enforcement, municipal planning, parks, recreation activities, construction and maintenance of streets, provision of water, wastewater collection and 1 treatment, stormwater collection and treatment, and street lighting. Community and economic development are facilitated through a Housing and Redevelopment Authority and an Economic Development Authority (EDA). The Boards of those two organizations are comprised of the Mayor and members of the City Council. The City also has internal departments providing human resources, engineering, financial management and information technology support to these various functions. The City operates a conference and meeting facility at the Earle Brown Heritage Center, two municipal liquor stores, and Centerbrook, an executive nine-hole golf course. Financial planning and control for the City of Brooklyn Center is based on the Annual Operating Budget and the multi-year Capital Improvement Program. Under Minnesota Statutes, a preliminary property tax levy must be adopted no later than September 30 of each year for the ensuing year’s collection. This establishes a maximum levy that may subsequently be lowered but not raised. Effective establishment of this levy requires that a preliminary budget be prepared. The City Manager, with the assistance of staff, prepares such a budget each year and presents it to the City Council in August, prior to the consideration of the preliminary tax levy. In addition, the City Council reviews the recommended rates and charges for utility funds and other operations on an annual basis as part of the budget process. Citizens receive a notice of taxes proposed