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CITY OF MIDDLETON Middleton, Wisconsin FINANCIAL STATEMENTS December 31,2000 ---PAGE BREAK--- Independent Auditors' Report CITY OF MIDDLETON TABLE OF CONTENTS December 31, 2000 General Purpose Financial Statements Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types Combined Statement of Revenues, Expenditures, and Changes in Fund Fund Balances - Actual and Budget - General and Capital Projects Funds Combined Statement of Revenues, Expenses, and Changes in Retained Earnings - All Proprietary Fund Types Combined Statement of Cash Flows - All Proprietary Fund Types Notes to Financial Statements Supplemental Information General Fund - Detailed Schedule of Revenues General Fund - Detailed Schedule of Expenditures Special Revenue Funds - Combining Balance Sheet Special Revenue Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balances Capital Projects Funds - Combining Balance Sheet Capital Projects Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balances Enterprise Funds - Combining Balance Sheet Enterprise Funds - Combining Statement of Revenues, Expenses and Changes in Retained Earnings Enterprise Funds - Combining Statement of Cash Flows Agency Funds - Combining Balance Sheet Fire District Agency Fund - Statement of Cash Increases and Cash Decreases 2-3 4 5 6 7 8 - 33 34 - 35 36 - 38 39 40 41 42 43 44 45 46 47 ---PAGE BREAK--- Virchow, Krause & Company, LLP Certified Public Accountants & Consultants To the City Council City of Middleton Middleton, Wisconsin INDEPENDENT AUDITORS' REPORT We have audited the general purpose financial statements of the City of Middleton, Wisconsin as of and for the year ended December 31, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the city's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Middleton, Wisconsin at December 31, 2000, and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The supplemental information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the City of Middleton, Wisconsin . The supplemental information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. Madison, Wisconsin March 16,2001 Page 1 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS December 31,2000 (With Comparative Totals for December 31, 1999) Governmental Fund Types General Special Debt Fund Revenue Service ASSETS AND OTHER DEBITS Cash and investments $ 2,555,057 $ 1,756,096 $ 583,297 Receivables Taxes 6,899,929 Delinquent personal property taxes 12,041 Accounts 152,160 71,677 Loans 110,710 Special assessments 33,101 Interest 70,042 Due from other funds 886,356 Due from other governmental units 162 Prepaid items 300 Advances to other funds 1,354,930 Inventories 2,972 Restricted Assets Cash and investments Fixed assets Accumulated depreciation Deferred charges Other assets 300 Other Debits Amount available in debt service and capital projects funds for retirement of long-term obligations Amount to be provided for retirement of long-term obligations TOTAL ASSETS AND OTHER DEBITS $ 11,964,078 $ 1,941,755 $ 583,297 Capital Projects $ 3,267,604 2,401,654 126,549 42,713 966,261 8,916 147,506 $ 6,961,203 ---PAGE BREAK--- Account Groups Proprietary Fiduciary General General Totals Fund Type Fund Type Fixed Long-Term (Memorandum Only) Enterprise Agency Assets Obligations 2000 1999 $ 3,050,748 $ 10,270,232 $ - $ - $ 21,483,034 $ 28,303,070 9,778,905 19,080,488 16,798,821 12,041 97 573,237 923,623 844,322 153,423 138,867 2,635,957 3,635,319 1,317,318 70,295 149,253 239,004 172,239 1,206,101 1,396,732 57,108 57,270 31,907 10,278 10,578 10,918 1,354,930 1,286,197 33,538 36,510 33,957 24,600 24,600 12,300 27,970,963 35,318,503 63,289,466 55,153,860 (4,840,021) (4,840,021) (4,442,099) 41,639 41,639 47,344 10,900 11,200 19,008 649,037 649,037 1,209,622 45,521,067 45,521,067 43,183,645 $ 29,744,095 $ 20,116,523 $ 35,318,503 $ 46,170,104 $ 152,799,558 $ 145,584,890 See accompanying notes to financial statements. Continued on Next Page Page 2 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS December 31,2000 (With Comparative Totals for December 31, 1999) Governmental Fund Types General Special Debt Fund Revenue Service LIABILITIES, EQUITY AND OTHER CREDITS Liabilities Accounts payable $ 450,696 $ 67,032 $ - Accrued liabilities 197,093 Due to other governmental units 5,464 Due to other funds 162,278 Deferred revenues 6,826,045 Deferred special assessments 33,101 Deferred investment income 70,042 Deferred interest income 444,463 Advances from other funds General obligation bonds and notes payable Customer advances for construction Accrued compensated absences Unfunded pension liability Other liabilities Total Liabilities 8,189,182 67,032 Equity and Other Credits Investment in general fixed assets Capital paid in by city Contributions in aid of construction Retained earnings Reserved Unreserved Fund Balances Reserved for loans receivable 110,710 Reserved for advances 910,467 Reserved for noncurrent interfunds 847,281 Reserved for delinquent personal property taxes 12,041 Reserved for debt service 583,297 Reserved for encumbrances Reserved for prepaid items and inventories 300 2,972 Unreserved Designated 60,000 Undesignated (Deficit) 1,944,807 1,761,041 Total Equity and Other Credits 3,774,896 1,874,723 583,297 TOTAL LIABILITIES, EQUITY AND OTHER CREDITS $ 11,964,078 $ 1,941,755 $ 583,297 Capital Projects $ 838,578 876,162 2,401,654 966,261 8,916 1,354,930 6,446,501 42,713 65,740 974,428 (568,179) 514,702 $ 6,961,203 ---PAGE BREAK--- Proprietary Fiduciary Fund Type Fund Type Enterprise Agency $ 554,382 $ 50,528 329,917 20,059,137 160,803 6,858 3,995,000 2,400 59,249 5,101,751 20,116,523 3,738,921 15,187,256 24,600 5,691,567 24,642,344 $ 29,744,095 $ 20,116,523 Account Groups General General Totals Fixed Long-Term (Memorandum Only) Assets Obligations 2000 1999 $ - $ - $ 1,961,216 $ 1,593,693 527,010 509,578 20,064,601 19,433,190 1,206,101 1,396,732 9,227,699 8,255,897 999,362 1,194,896 78,958 215,055 444,463 375,730 1,354,930 1,286,197 44,019,671 48,014,671 45,690,480 2,400 335,328 1,065,951 1,125,200 926,072 397,633 397,633 393,526 686,849 686,849 1,697,814 46,170,104 86,091,093 83,304,188 35,318,503 35,318,503 28,252,880 3,738,921 3,738,921 15,187,256 10,914,675 24,600 5,691,567 5,162,935 153,423 138,867 910,467 910,467 847,281 893,309 12,041 97 649,037 1,209,622 974,428 135,818 3,272 1,323 60,000 254,000 3,137,669 10,667,788 35,318,503 66,708,465 62,280,702 $ 35,318,503 $ 46,170,104 $ 152,799,558 $ 145,584,890 See accompanying notes to financial statements. Continued From Previous Page Page 3 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES REVENUES Taxes Intergovernmental Licenses and permits Fines, forfeitures and penalties Public charges for services Intergovernmental charges for services Special assessments Investment income Miscellaneous revenues Total Revenues EXPENDITURES Current General government Public safety Health and social services Public works Leisure activities Conservation and development Capital Outlay Debt Service Principal retirement Interest and fiscal charges Total Expenditures For the Year Ended December 31,2000 (With Comparative Totals for the Year Ended December 31,1999) Governmental Fund Types Special Debt Capital General Revenue Service Projects $ 6,685,201 $ 282,842 $ - $ 1,673,044 2,031,064 79,723 485,719 423,389 185,162 523,236 1,696,841 169,880 22,573 395,972 528,109 37,802 16,108 474,927 171,303 13,423 117,990 10,739,917 2,110,631 16,108 3,147,652 1,031,620 3,450,167 2,851 1,790,482 1,714,107 1,405,405 317,806 263,332 13,992,017 4,215,809 1,959,216 68,733 8,304,182 1,671,588 6,175,025 14,060,750 Totals (Memorandum Only) 2000 1999 $ 8,641,087 $ 8,005,940 2,596,506 1,789,871 423,389 422,868 185,162 190,928 2,220,077 2,201,856 169,880 127,224 418,545 526,177 1,056,946 920,229 302,716 391,954 16,014,308 14,577,047 1,031,620 816,741 3,453,018 3,320,534 233 1,790,482 1,692,696 3,119,512 2,894,791 581,138 266,097 13,992,017 7,605,423 4,215,809 4,533,443 2,027,949 1,981,259 30,211,545 23,111,217 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES For the Year Ended December 31,2000 (With Comparative Totals for the Year Ended December 31, 1999) Governmental Fund Types Totals Special Debt Capital (Memorandum Only) General Revenue Service Projects 2000 1999 Excess (deficiency) of revenues over expenditures $ 2,435,735 $ 439,043 $ (6,158,917) $ (10,913,098) $ (14,197,237) U8,534,170) OTHER FINANCING SOURCES (USES) Proceeds from long-term debt 6,800,000 6,800,000 6,800,000 Debt discount and issuance costs (66,436) (66,436) (136,269) Operating transfers in 6,180,631 6,180,631 6,758,067 Operating transfers out (2,511,069) (570,656) (3,098,906) (6,180,631) (6,758,067) Total Other Financing Sources (Uses) (2,511,069) (570,656) 6,180,631 3,634,658 6,733,564 6,663,731 Excess (deficiency) of revenues and other sources over expenditures and other uses (75,334) (131,613) 21,714 (7,278,440) (7,463,673) (1,870,439) FUND BALANCES - Beginning of Year 3,850,230 2,006,336 561,583 7,793,142 14,211,291 16,081,730 FUND BALANCES - END OF YEAR $ 3,774,896 $ 1,874,723 $ 583,297 $ 514,702 $ 6,747,618 $ 14,211,291 See accompanying notes to financial statements. Page 4 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ACTUAL AND BUDGET - GENERAL AND CAPITAL PROJECTS FUNDS For the Year Ended December 31,2000 General Fund Variance - Favorable Actual Budget (U nfavorable) REVENUES Taxes $ 6,685,201 $ 6,652,404 $ 32,797 Intergovernmental 2,031,064 1,819,712 211,352 Licenses and permits 423,389 381,460 41,929 Fines, forfeitures and penalties 185,162 192,000 (6,838) Public charges for services 523,236 574,859 (51,623) Intergovernmental charges for services 169,880 167,463 2,417 Special assessments 22,573 40,296 (17,723) Investment income 528,109 500,000 28,109 Miscellaneous revenues 171,303 145,000 26,303 Total Revenues 10,739,917 10,473,194 266,723 EXPENDITURES Current General government 1,031,620 1,106,202 74,582 Public safety 3,450,167 3,322,760 (127,407 Public works 1,790,482 1,856,466 65,984 Leisure activities 1,714,107 1,633,192 (80,915) Conservation and development 317,806 297,505 (20,301 ) Capital Outlay Total Expenditures 8,304,182 8,216,125 (88,057) Excess (deficiency) of revenues over expenditures 2,435,735 2,257,069 178,666 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt Operating transfers out (2,511,069) (2,511,069) Total Other Financing Sources (Uses) (2,511,069) (2,511,069) Excess (deficiency) of revenues and other sources over expenditures and other uses (75,334) (254,000) 178,666 FUND BALANCES - Beginning of Year 3,850,230 3,850,230 FUND BALANCES - END OF YEAR $ 3,774,896 $ 3,596,230 $ 178,666 ---PAGE BREAK--- Certain Capital Projects Funds Variance - Favorable Actual Budget (Unfavorable) $ - $ - $ 222,090 184,968 37,122 7,132 7,132 229,222 184,968 44,254 2,236,730 3,020,978 784,248 2,236,730 3,020,978 784,248 (2,007,508) (2,836,010) 828,502 800,000 800,000 800,000 800,000 (1,207,508) (2,036,010) 828,502 2,483,586 2,483,586 $ 1,276,078 $ 447,576 See accompanying notes to financial statements. Page 5 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES For the Year Ended December 31, 2000 (With Comparative Totals for the Year Ended December 31, 1999) Proprietary Fund Type Enterprise (Memorandum Only) 1999 OPERATING REVENUES Charges for services $ 2,819,999 $ 2,682,061 OPERATING EXPENSES Operation and maintenance Depreciation Taxes Total Operating Expenses Operating Income NONOPERATING REVENUES (EXPENSES) Investment income I nterest expense Total Nonoperating Revenues (Expenses) NET INCOME RETAINED EARNINGS - Beginning of Year RETAINED EARNINGS - END OF YEAR $ See accompanying notes to financial statements. 1,459,047 1,447,710 497,609 451,332 283,392 279,580 2,240,048 2,178,622 579,951 503,439 185,819 202,705 (212,538) (201,983) (26,719) 722 553,232 504,161 5,162,935 4,658,774 5,716,167 $ 5,162,935 Page 6 ---PAGE BREAK--- CITY OF MIDDLETON COMBINED STATEMENT OF CASH FLOWS- ALL PROPRIETARY FUND TYPES For the Year Ended December 31,2000 (With Comparative Totals for the Year Ended December 31, 1999) Proprietary Fund Type Enterprise CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 2,528,548 Cash received from city for services 327,556 Cash paid to suppliers for goods and services (1,191,875) Cash paid to employees for services (263,658) Cash paid for tax equivalent (251,397) Net Cash Flows From Operating Activities 1,149,174 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid (260,000) Interest paid (210,133) Acquisition and construction of fixed assets (739,995) Contributions in aid of construction received/(returned) (8,439) Special assessments received 1,032,178 Proceeds from debt issued Debt issuance costs Net Cash Flows From Capital and Related Financing Activities (186,389) CASH FLOWS FROM INVESTING ACTIVITIES Investment income 105,319 Marketable securities purchased Marketable securities redeemed (1,098,217) Cash Flows From Investing Activities (992,898) Net Increase (Decrease) in Cash and Cash Equivalents (30,113) CASH AND CASH EQUIVALENTS - Beginning of Year 1,198,331 CASH AND CASH EQUIVALENTS- END OF YEAR $ 1,168,218 (Memorandum Only) 1999 $ 2,362,771 395,857 (1,204,566) (251,235) (239,396) 1,063,431 (205,000) (193,978) (1,959,451) 90,908 42,148 500,000 (5,050) (1,730,423) 118,598 (652,846) 540,857 6,609 (660,383) 1,858,714 $ 1,198,331 ---PAGE BREAK--- RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income Adjustments to Reconcile Operating Income to Net Cash Provided From Operating Activities Rental income Depreciation expense Depreciation charged to sewer utility Changes in Assets and Liabilities Accounts receivable Other accounts receivable Due from other funds Inventories Accounts payable Accrued taxes Accrued compensated absences Due to other funds Other current liabilities NET CASH FLOWS FROM OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES $ $ Proprietary Fund Type Enterprise 579,951 34,154 497,609 24,809 (7,153) (403) (15,302) (904) 8,088 8,036 (590) 20,665 214 1,149,174 (Memorandum Only) 1999 $ 503,439 60,158 451,332 19,788 (44,179) 3,924 36,876 6,051 (6,775) 17,985 4,970 5,546 4316 $ 1,063,431 During 2000, capital additions of $170,658 were contributed to the water utility by developers and customers. During 2000, capital additions of $241,153 were contributed to the sewer utility by developers and customers. Special assessments levied but not collected during the year were $2,741,927. See accompanying notes to financial statements. Page 7 ---PAGE BREAK--- CITY OF MIDDLETON INDEX TO NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1. Summary of Significant Accounting Policies A. Reporting Entity B. Description of Fund and Account Group Structure C. Totals (Memorandum Only) D. Comparative Data E. Basis of Accounting F. Measurement Focus G. Cash and Cash Equivalents H. Inventories I. Long-Term Obligations/Conduit Debt J. General Fixed Assets K. Fixed Assets - Proprietary Funds L. Advances to Other Funds M. Encumbrances N. Budgets O. Compensated Absences P. Allowance for Uncollectible Accounts Q. Contributions in Aid of Construction - Proprietary Funds R. Claims and Judgments S. Fund Balance Terminology T. Economic Development Loans Receivable U. Other Assets V. Interfund Transactions 2. Cash and Investments 3. Long-Term Obligations 4. Employees' Retirement System 5. Interfund Receivables/Payables and Interfund Transfers 6. Advances To/From Other Funds 7. Fixed Assets 8. Segments of Enterprise Activities 9. Designated Fund Balance Page 10 10 10 12 13 13 14 15 15 15 15 16 17 17 17 18 19 19 19 19 20 20 20 20 22 25 26 26 26 27 27 Page 8 ---PAGE BREAK--- CITY OF MIDDLETON INDEX TO NOTES TO FINANCIAL STATEMENTS (cont.) December 31, 2000 NOTE 10. Tax Incremental Financing Districts 11. Commitments and Contingencies 12. Lease Disclosures 13. Joint Ventures 14. Other Postemployment Benefits 15. Contributed Capital 16. Risk Management 17. Deficit Fund Balance 18. Effect of New Accounting Standards on Current - Period Financial Statement 19. Subsequent Event Page 27 28 29 29 30 31 31 31 32 32 Page 9 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Middleton (city), Wisconsin conform to generally accepted accounting principles as applicable to governmental units. A. REPORTING ENTITY This report includes all of the funds and account groups of the City of Middleton. The reporting entity for the city consists of the primary government, organizations for which the primary government is financially accountable, and (c)other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. The primary government is financially accountable if it appoints a voting majority of the organization's governing body and (1 )it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to or burdens on the primary government. The primary government may be financially accountable if an organization is fiscally dependent on the primary government. See Note 13 regarding joint ventures. Included with the reporting entity: Community Development Authority of the City of Middleton The general purpose financial statements include the Community Development Authority of the City of Middleton ("CDA") as a component unit. The CDA is a legally separate organization. The board of the CDA is appointed by the mayor. Wisconsin Statutes provide for circumstances whereby the city can impose its will on the CDA and also create a potential financial benefit to or burden on the city. As a component unit, the CDA's transactions have been blended with Tax Incremental Financing District No.3. Separately issued financial statements of the CDA are not prepared. Excluded from the reporting entity: The Middleton Area Development Corporation is a separate legal organization that is not required to be reported in these financial statements. B. DESCRIPTION OF FUND AND ACCOUNT GROUP STRUCTURE The accounts of the city are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. The various funds are summarized by type in the financial statements. The following fund types and account groups are used by the city. Page 10 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. DESCRIPTION OF FUND AND ACCOUNT GROUP STRUCTURE (cont.) Governmental Funds General Fund The general fund is the general operating fund of the city. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds Special revenue funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. The following special revenue funds are included in these statements: Pleasant View Golf Course Subdividers' Deposits EMS Fund Railroad Depot Fund Depot Restoration Lost and Damaged Book Fund Library Gift Fund EMS Equipment Replacement Fund Debt Service Funds Library Endowment Fund Economic Development Fund Economic Development Grant Alcohol Awareness Fund Drug Forfeitures Hotel Room Tax Fund Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Projects Funds Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds). The following capital projects funds are included in these statements: Tax Incremental Financing (TIF) District No.1 Tax Incremental Financing (TIF) District NO.3 Southwest Quadrant Other Capital Projects Page 11 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. DESCRIPTION OF FUND AND ACCOUNT GROUP STRUCTURE (cont.) Proprietary Funds Enterprise Funds Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The following enterprise funds are included in these statements: Water Utility Sewer Utility Fiduciary Funds Agency Funds Agency funds are used to account for assets held by the city as an agent for individuals, private organizations, other governmental units, and/or other funds. The following agency funds are included in these statements: Fire District Tax Collection Fund Account Groups General Fixed Assets Account Group This account group is established to account for all fixed assets of the city other than those accounted for in the proprietary funds. General Long-Term Obligations Account Group This account group is established to account for all long-term obligations of the city other than those obligations accounted for in the proprietary funds. Page 12 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C. TOTALS (MEMORANDUM ONL Y) The columns captioned Totals (Memorandum Only) in the general purpose financial statements are an aggregation of the columnar statements by fund type and account group. The totals column is not comparable to a consolidation and does not present financial position, results of operations and cash flows in conformity with generally accepted accounting principles because the same basis of accounting is not used by all funds and interfund transactions and balances and account group balancing accounts have not been eliminated. D. COMPARATIVE DATA Comparative total data for the prior year has been presented in the accompanying financial statements in order to provide an understanding of changes in the city's financial position, operations and cash flows. However, comparative presentation of prior year totals by fund type) data has not been presented in all statements since their inclusion would make the statements unduly complex and difficult to read. E. BASIS OF ACCOUNTING The modified accrual basis of accounting is followed by the governmental funds and agency funds. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences, and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are recorded in the year levied as receivables and deferred revenues. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. In addition to property taxes for the city, taxes are collected for and remitted to the state and county governments as well as the local school district and technical college district. Taxes for all state and local governmental units billed in the current year for the succeeding year are reflected as deferred revenues and due to other taxing units on the accompanying balance sheet. Taxes are levied in December on the assessed value as of the prior January 1. Property tax calendar - 2000 tax roll: Lien date and levy date Tax bills mailed Payment in full, or First installment due Second installment due Personal property taxes in full Tax sale - 2000 delinquent real estate taxes December, 2000 December, 2000 January 31, 2001 January 31, 2001 July 31, 2001 January 31, 2001 October, 2004 Page 13 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) E. BASIS OF ACCOUNTING (cont.) Intergovernmental aids and grants are recognized as revenues in the period the related expenditures are incurred, if applicable, or when the city is entitled to the aids. Special assessments are recorded as revenues when they become measurable and available as current assets. Annual installments due in future years are reflected as receivables and deferred revenues. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. The city reports deferred revenues on its combined balance sheet. Deferred revenues arise when a 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 before the city has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the city has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. Proprietary funds are accounted for on the accrual basis. Revenues such as user fees are recognized in the accounting period in which they are earned; expenses are recognized in the period incurred. Unbilled receivables are not recorded as they are not considered material. The proprietary funds have elected to follow Financial Accounting Standards Board pronouncements issued before November 30, 1989, and all pronouncements of the Governmental Accounting Standards Board. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. Page 14 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) F. MEASUREMENT Focus The measurement focus of all governmental funds is the flow of current financial resources concept. Under this concept, sources and uses of financial resources, including capital outlays, debt proceeds and debt retirements are reflected in operations. Resources not available to finance expenditures and commitments of the current period are recognized as deferred revenue or a reservation of fund equity. Liabilities for claims, judgments, compensated absences and pension contributions which will not be currently liquidated using expendable available financial resources are shown in the general long-term obligations account group. The related expenditures are recognized when the liabilities are liquidated. The measurement focus of proprietary funds is the flow of economic resources. Under this concept, revenues and expenses are matched using the accrual basis of accounting. All fixed assets are capitalized at historical cost and depreciated over their useful lives. G. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the city considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. Reconciliation of cash and cash equivalents: Cash and investments - combined balance sheet Restricted cash and investments - combined balance sheet Less: Non-cash equivalents Cash and Cash Equivalents - Combined Statement of Cash Flows H. INVENTORIES Enterprise Funds $ 3,050,748 24,600 (1,907,130) $ 1,168,218 Proprietary fund inventories are generally used for construction and for operation and maintenance work, they are not for resale. They are charged to construction and operation and maintenance expense at average cost when used. Governmental fund inventory items are charged to expenditures accounts when purchased. Governmental fund year end inventory was not significant. I. LONG- TERM OBLIGA TlONS/CONDUIT DEBT Short-term and proprietary fund long-term liabilities are recorded as fund liabilities. All other long- term liabilities are recorded in the general long-term obligations account group. Proceeds of long-term debt issues not recorded as fund liabilities are reflected as "Other Financing Sources" in the operating statement of the recipient fund. Retirement of these issues is reported as an expenditure in the year in which the debt matures or is repaid, whichever is earlier. Page 15 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) I. LONG-TERM OBLIGA TlONS/CONDUIT DEBT (cont.) The city has approved the issuance of industrial revenue bonds (IRB) for the benefit of private business enterprises. IRB's are secured by mortgages or revenue agreements on the associated projects, and do not constitute indebtedness of the city. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. The total amount of IRB's outstanding at the end of the year is $744,847, made up of one series. J. GENERAL FIXED ASSETS General fixed assets acquired for governmental purposes are recorded as expenditures in the governmental funds. Purchased fixed assets are capitalized at cost or estimated cost including capitalized interest during construction in the general fixed assets account group. Contributed fixed assets are recorded at fair market value at the time received. Interest incurred during construction is not capitalized. Fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems are not capitalized. Such assets normally are immovable and of value only to the city. Therefore, the purpose of stewardship for capital expenditures is satisfied without recording these assets. Generally accepted accounting principles do not require depreciation to be recorded on general fixed assets. Therefore, depreciation on general fixed assets is not reported in the financial statements. K. FIXED ASSETS - PROPRIETARY FUNDS Additions to and replacements of utility fixed assets are recorded at original cost, which includes material, labor, overhead, and an allowance for the cost of funds used during construction when significant. Utility fixed assets are recorded at cost or fair market value at the time of contribution to the utility. The cost of renewals and betterments relating to retirement units is added to fixed asset accounts. The cost of property replaced, retired or otherwise disposed of, is deducted from fixed asset accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. Interest is capitalized on enterprise fund property acquired with tax exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. Capitalized interest cost is amortized on the same basis as the related asset is depreciated. No interest costs were capitalized during 2000. Utility fixed assets in service are depreciated using the straight-line method over the following useful lives: Page 16 ' . ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) K. FIXED ASSETS - PROPRIETARY FUNDS (cont.) Water Fixed Assets Source of supply plant Pumping plant Water treatment plant Transmission and distribution plant General plant Construction work in progress Total Sewer Fixed Assets Collection system Collection system pumping plant General plant Total $ 12-31-00 383,523 1,653,873 343,242 12,971,004 424,301 617,010 16,392,953 9,992,538 1,234,786 350,686 11,578,010 Total Enterprise Fund Fixed Assets $ 27,970,963 L. ADVANCES TO OTHER FUNDS Years 33 20 - 40 33 - 40 16 - 90 4 - 15 N/A 30 - 100 20 - 40 7- 40 Noncurrent portions of long-term interfund loan receivables are reported as advances and are offset by deferred revenue for unavailable interest earnings and by a fund balance reserve account which indicates that they do not constitute expendable available financial resources and therefore are not available for appropriation. The general fund advanced funds to TIF District NO.3 and is charging interest on the advance at a rate which is 2% over the city's cost of funds. No repayment schedule has been established. Interest on the interfund advance is recorded as a deferred revenue in the general fund until paid by the TIF District. Interest costs on the advance are recorded as an expenditure of the TIF District when the expenditure is incurred. See Note 6 for the advance balance at December 31, 2000. M. ENCUMBRANCES Encumbrances outstanding represent the estimated amount of expenditures ultimately to result if unperformed contracts and open purchase orders at year end are fulfilled. Encumbrances outstanding at year end are reported as reservations of fund balance and do not represent liabilities or expenditures. Encumbrance accounting applies only to governmental fund types. There were no material encumbrances outstanding at year end. Page 17 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. BUDGETS Budgetary information is derived from the annual operating budget and is presented using the same basis of accounting for each fund as described in Note 1.E. A budget has been adopted for the general fund and the other capital projects fund and comparisons of actual to budget are presented in the general purpose financial statements. Annual budgets have not been legally adopted for other funds. Project length budgets have been formally adopted for TIF No. 1 and 3. The TIF project budgets have not been included in these financial statements since the project length budgets are not comparable to annual TIF financial activity and the inclusion of the budget to actual comparison would be misleading. Since budgets have not been prepared for all capital projects funds, comparisons between the actual columns in the combined statement of revenues, expenditures and changes in fund balances and the combined statement of revenues, expenditures and changes in fund balances - actual and budget are not meaningful. A reconciliation of the results of operations for all capital projects funds as presented on page 4 and the budgeted capital projects on page 5 is as follows: Excess (Deficiency) of Revenues Over Expendi- Revenues Expenditures tures All capital projects funds (page 4) $ 3,147,652 $ 14,060,750 $ (10,913,098) Less: Unbudgeted capital projects funds TIF No.1 28,643 28,643 TIF No.3 2,493,815 11,824,020 (9,330,205 ) Southwest Quadrant 395,972 395,972 Total Unbudgeted Capital Projects Funds 2,918,430 11,824,020 (8,905,590) Other Capital Projects Funds (Page 5) $ 229,222 $ 2,236,730 $ (2,007,508) The budgeted amounts presented include those amendments properly approved by the governing body. During the year, department heads may authorize limited transfers of budgeted amounts within departments. The city administrator can approve transfers between departments in amounts up to $1,000. Transfers exceeding $1,000 between departments and changes to the overall budget must be approved by city council action. There were no material supplemental appropriations during the year. Appropriations lapse at year end unless specifically carried over. Budgets are adopted at the departmental level of expenditure. Budgets have not been formally adopted for other governmental funds. Wisconsin Statute 65.90 requires that an annual budget be adopted for all funds. Budgetary comparisons are not required for proprietary funds. Page 18 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) O. COMPENSATED ABSENCES Governmental Funds Under terms of employment, employees are granted sick leave, vacations and floating holidays in varying amounts. Only benefits considered to be vested are disclosed in these statements. The amount of accumulated sick leave and vacation that will not be repaid with expendable available resources is $1,065,951 and is recorded in the general long-term obligations account group. Enterprise Funds Vested sick leave is recorded as a liability by the individual fund when it is earned by the employee. The same is true for vacation pay. $59,249 of vested sick leave and vacation pay is recorded as accrued liabilities at year end. All Funds Payments for vacation and sick leave will be made at rates in effect when the benefits are used. Accumulated vacation and sick leave liabilities at December 31, 2000 are determined on the basis of current salary rates, and includes salary related payments. P. ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS General accounts receivable have been adjusted for all known uncollectible accounts. No allowance is necessary at year end. Delinquent real estate taxes as of July 31 are paid in full by the county, which assumes the collection thereof. No provision for uncollectible accounts receivable has been made in the enterprise funds because the water and sewer utilities have the right by law to place delinquent bills on the tax roll. Q. CONTRIBUTIONS IN AID OF CONSTRUCTION - PROPRIETARY FUNDS Contributions in aid of construction represent amounts received from customers for construction and the value of property (plant) contributed to the utility. These amounts are not subject to repayment. R. CLAIMS AND JUDGMENTS Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. Claims and judgments that would normally be liquidated with expendable available financial resources are recorded during the year as expenditures in the governmental funds. If they are not to be liquidated with expendable available financial resources, a liability is recorded in the general long-term obligations account group. The related expenditure is recognized when the liability is liqUidated. Claims and judgments are recorded in the proprietary funds as expenses when the related liabilities are incurred. At December 31, 2000, the city has recorded $41,000 as a current liability in the general fund for a claim related to the relocation of the Wisconsin Hoofers Riding Club. Page 19 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) S. FUND BALANCE TERMINOLOGY Fund balances are segregated into three separate classifications. Reservations represent the portion of fund balances which may not be appropriated for expenditure or have been segregated for specific future uses by legal mandate. Designations of fund balances represent tentative plans by the city for financial resource utilization in a future period as documented in the minutes or budgeting process for a succeeding year. Such plans are subject to change from original authorizations and may never result in expenditures. Undesignated fund balance represents the amount available for appropriation after reservations and designations. It also is a measurement of current working capital position. T. ECONOMIC DEVELOPMENT LOANS RECEIVABLE The city has received federal grant funds for economic development loan programs to various businesses. The city records a loan receivable when the loan has been made and funds have been disbursed. It is the city's policy to record revenue when the initial loan is made from the federal grant funds. The net amount of the loan receivable balance is offset by a reserve for loans receivable. As loans are repaid, the reserve for loans receivable is reduced and the designated fund balance is increased. When new loans are made from loan repayments, the reserve for loans receivable is increased and the designated fund balance is decreased. Interest received from loan repayments is recognized as revenue when received in cash. Any unspent loan repayments at year end are presented as designated fund balance in the general purpose financial statements. For economic development loans, the city is limited by the Wisconsin Department of Commerce to the amount of program income from economic development loans it may retain and loan to other businesses. Program income includes the principal and interest received from economic development loans repayments. Based upon its current population, the city may retain $750,000. At December 31, 2000, the city has not exceeded its maximum retention cap. When it does, a liability to the state will be recorded. U. OTHER ASSETS The water utility has other assets recorded on their books for preliminary survey and investigation expenses. Page 20 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) v. INTERFUND TRANSACTIONS Quasi-external transactions 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. All other interfund transactions, except quasi-external transactions and reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. NOTE 2 - CASH AND INVESTMENTS Investment of municipal funds is restricted by state statutes. Available investments are limited to: 1. Time deposits in any credit union, bank, savings bank, trust company or savings and loan association maturing in three years or less. 2. Bonds or securities of any county, city, drainage district, technical college district, village, town, or school district of the state. Also, bonds issued by a local exposition district, a local professional baseball park district, or by the University of Wisconsin Hospitals and Clinics Authority. 3. Bonds or securities issued or guaranteed by the federal government. 4. The local government investment pool. 5. Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency. 6. Securities of an open-end management investment company or investment trust, subject to various conditions and investment options. 7. Repurchase agreements with public depositories, with certain conditions. No violations of these restrictions occurred during the year. The city's deposits and investments are categorized to give an indication of the level of custodial credit risk assumed by the entity at year end. Category 1 includes items that are insured or registered or which are collateralized by or evidenced by securities held by the city or its agent in the city's name. Category 2 includes deposits collateralized with securities held by the pledging institutions trust department or agent in the city's name, or uninsured and unregistered investments for which the securities are held by the counter party's trust department or agent in the city's name. Category 3 includes uncollateralized deposits, and uninsured and unregistered investments, with securities held by the counterparty or its trust department or agent but not in the city's name. Page 21 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 2 - CASH AND INVESTMENTS (cont.) Local and area banks $ 404,402 Federal securities 748,197 Commercial paper 121,907 Sub-Totals $ 1,274,506 Local government investment pool Mutual funds Petty cash Total Deposits and Investments Category 2 3 $ - $ 12,599,256 $ - $ 12,599,256 Carrying Total Amount $ 13,003,658 $ 12,669,381 748,197 753,368 121,907 121,907 $ 13,873,762 13,544,656 851,035 7,110,917 1,026 $ 21,507,634 Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on quoted market prices. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled investments of municipal accounting funds is allocated based on average balances. The difference between the bank balance and carrying value is due to outstanding checks and/or deposits in transit. Interest earned on southwest quadrant fund investments, a capital projects fund, is recorded in the debt service fund. Interest earned on other capital projects fund investments is recorded in the general fund. Deposits in local and area banks are insured by the FDIC in the amount of $100,000 for each interest bearing account and $100,000 for each noninterest bearing account. Bank accounts are also insured by the State Deposit Guarantee Fund in the amount of $400,000. However, due to the relatively small size of the Guarantee Fund in relationship to the total deposits covered and other legal implications, recovery of material principal losses may not be significant to individual municipalities. This coverage has not been considered in computing the amounts in category 1 above. The Wisconsin Local Government Investment Pool (LGIP) is part of the State Investment Fund (SIF), and is managed by the State of Wisconsin Investment Board. The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice. At December 31, 2000, the fair value of the LGIP's assets were substantially equal to the city's share as reported above. Investments in the local government investment pool are covered under a surety bond issued by Financial Security Assurance, Inc. The bond insures against losses arising from principal defaults on substantially all types of securities acquired by the pool except U.S. Government and agency securities. The bond provides unlimited coverage on principal losses, reduced by any FDIC and State of Wisconsin Guarantee Fund insurance. Page 22 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 2 - CASH AND INVESTMENTS (cont.) Fluctuating cash flows during the year due to tax collections, receipt of state aids and/or proceeds from borrowing may have resulted in temporary balances exceeding insured amounts by substantially higher amounts. NOTE 3 - LONG-TERM OBLIGATIONS A. GENERAL OBLIGATION DEBT All general obligation notes and bonds payable are backed by the full faith and credit of the city. Notes and bonds in the general long-term obligations account group will be retired by future property tax levies accumulated by the debt service fund, or by tax increment district levies. Proprietary fund debt is payable by revenues from user fees of those funds, or if the revenues are not sufficient, by future tax levies. The city levies property taxes annually for the full amount of principal and interest due in the following year. The debt service fund administers the collection of these levies and the subsequent payments of principal and interest. The following is a summary of the long-term debt transactions for the year ended December 31, 2000: General obligation debt Title of Issue 1. General Obligation Debt 1992 General obligation promissory notes 1994 State trust fund loan 1995 General obligation promissory notes 1996 General obligation refunding bonds 1996 General obligation promissory notes 1997 General obligation promissory notes 1997 General obligation promissory notes 1998 General obligation promissory notes Balance 1-1-00 Increases Decreases Balance 12-31-00 $ 45,690,480 $ 6,800,000 $ 4,475,809 $ 48,014,671 Date of Issue 7 -15-92 12-07 -94 5-01-95 10-01-96 6-01-96 3-01-97 4-01-97 4-01-98 Due Date Interest Rates 6-01-02 4.70%- 5.25% 3-15-04 4.5% 6-01-01 4.55% - 4.95% 10-01-96 4.00% - 5.65% 6-01-06 4.00%- 5.15% 3-01-07 3.95%- 5.15% 3-01-12 3.90%- 5.40% 9-01-083.90%-4.60% Original Indebted- ness $ 1,900,000 $ 500,000 7,650,000 7,875,000 5,675,000 9,250,000 6,480,000 9,675,000 Balance 12-31-00 675,000 249,671 750,000 7,400,000 3,990,000 6,525,000 5,520,000 8,850,000 Page 23 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - LONG-TERM OBLIGATIONS (cont.) Title of Issue Date of Issue Due Date Interest Rates Original Indebted- ness Balance 12-31-00 1999 General obligation Promissory notes 5-15-99 3-01-09 3.50%- 4.40% $ 7,300,000 $ 7,255,000 2000 General obligation Promissory notes Total General Obligation Debt Less: Proprietary fund general obligation debt Total General Long-Term Obligations Account Group Debt 4-01-00 B. OTHER LONG- TERM OBLIGA TlONS Other Liabilities Long-term liability for accumulated vacation, floating holidays and vested sick leave (Note 1.0.) Unfunded pension liability (Note 4) City's share of landfill district deficit fund balance (Note 11) Land contract - Morey Airport Dated December 28, 1998 to be repaid in 2000. Total Other Long-Term Liabilities 3-01-10 4.80%- 5.20% 6,800,000 6,800,000 48,014,671 (3,995,000) $ 44,019,671 Balance Balance 1-1-00 Increases Decreases 12-31-00 $ 866,447 $ 199,504 $ - $ 1,065,951 393,526 29,454 25,347 397,633 746,762 59,913 686,849 951,052 951,052 $ 2,957,787 $ 228,958 $1,036,312 $ 2,150,433 Page 24 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - LONG-TERM OBLIGATIONS (cont.) Debt service requirements to maturity are as follows: General Proprietary Fund Long-Term Debt Long-Term Debt Principal Interest Principal Interest 2001 $ 4,018,360 $ 2,140,723 $ 265,000 $ 194,683 2002 4,000,986 1,815,529 280,000 182,640 2003 4,368,731 1,632,884 290,000 167,392 2004 4,431,594 1,439,432 305,000 153,526 2005 4,660,000 1,232,485 315,000 141,073 2006 and thereafter 22,540,000 4,239,597 2,540,000 475,818 Totals $ 44,019,671 $ 12,500,650 $ 3,995,000 $ 1,315,132 Totals $ 6,618,766 6,279,155 6,459,007 6,329,552 6,348,558 29,795,415 $ 61,830,453 Estimated payments of accumulated employee benefits and other commitments are not included in the above schedule. $583,297 is on deposit in the debt service fund which is available to meet the above debt service requirements as of December 31, 2000. In addition, $65,740 is available in the capital projects fund for future debt payments. In accordance with Wisconsin Statutes, total general obligation indebtedness of the city may not exceed five percent of the equalized value of taxable property within the city's jurisdiction. The debt limit as of December 31,2000 was $66,220,735. Total general obligation debt outstanding at year end was $48,014,671. There are a number of limitations and restrictions contained in the various bond indentures and loan agreements. The city believes it is in compliance with all significant limitations and restrictions. NOTE 4 - EMPLOYEES' RETIREMENT SYSTEM All eligible city employees participate in the Wisconsin Retirement System (System), a cost- sharing multiple-employer defined benefit public employee retirement system (PERS). All permanent employees expected to work over 600 hours a year are eligible to participate in the System. Covered employees in the General category are required by statute to contribute 5.8% of their salary (4.3% for Executives and Elected Officials, 4.9% for Protective Occupations with Social Security, and 5.8% for Protective Occupations without Social Security) to the plan. Employers generally make these contributions to the plan on behalf of employees. Employers are required to contribute an actuarially determined amount necessary to fund the remaining projected cost of future benefits. The payroll for city employees covered by the system for the year ended December 31, 2000 was $3,166,826; the employer's total payroll was $4,247,844. The total required contribution for the year ended December 31, 2000 was $442,644 or 13.98 percent of covered payroll. Of this amount, 100 percent was contributed for the current year. Total contributions for the years ending December 31, 1999 and 1998 were $433,099 and $421,829, respectively, equal to the required contributions for each year. Page 25 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 4 - EMPLOYEES' RETIREMENT SYSTEM (cont.) Employees who retire at or after age 65 (62 for elected officials and 55 for protective occupation employees) are entitled to receive a retirement benefit. Employees may retire at age 55 (50 for protective occupation employees) and receive actuarially reduced benefits. Retirement benefits are calculated as 1.6% (2.0% for Executives, Elected Officials, and Protective Occupations with Social Security and 2.5% for Protective Occupations without Social Security) of final average earnings for each year of creditable service. Final average earnings is the average of the employee's three highest years earnings. Employees terminating covered employment before becoming eligible for a retirement benefit may withdraw their contributions and, by doing so, forfeit all rights to any subsequent benefit. For employees beginning participation on or after January 1, 1990 and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. PartiCipants employed prior to 1990 and on or after April 24, 1998 are immediately vested. The System also provides death and disability benefits for employees. Eligibility for and the amount of all benefits is determined under Chapter 40 of Wisconsin Statutes. The System issues an annual financial report which may be obtained by writing to the Department of Employee Trust Funds, P.O. Box 7931, Madison, WI 53707-7931. The pension-related debt for the city as of December 31, 2000 was $397,633. This amount is included in the general long-term obligations account group as the city's best estimate of its unfunded commitment to the plan. This liability was determined in accordance with provisions of GASB Statement 27 regarding pension-related debt. Depending on actuarial assumptions, this estimate can vary significantly. NOTE 5 - INTERFUND RECEIVABLES/PAYABLES AND INTERFUND TRANSFERS The following is a schedule of interfund receivables and payables: Receivable Fund General fund General fund General fund General fund Other capital projects Other capital projects Other capital projects Water utility Water utility Sewer utility Total Payable Fund TIF District NO.3 capital projects fund Southwest quadrant capital projects fund Sewer utility Fire district agency fund General fund Water utility Sewer utility General fund Sewer utility Water utility Amount $ 28,881 847,281 3,336 6,858 43,300 95,386 8,820 118,978 44,634 8,627 $ 1,206,101 Page 26 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 5 - INTERFUND RECEIVABLES/PAYABLES AND INTERFUND TRANSFERS (cont.) The following is a schedule of interfund transfers: Fund Transferred From General fund Fund Transferred To Debt service fund Debt service fund Debt service fund Debt service fund Debt service fund Pleasant View Golf Course special revenue fund TIF District No.1 capital projects fund TIF District NO.3 capital projects fund Southwest Quadrant capital projects fund Total NOTE 6 - ADVANCES To/FROM OTHER FUNDS The following is a schedule of interfund advances: Receivable Fund Payable Fund General fund TIF NO.3 capital projects fund NOTE 7 - FIXED ASSETS A summary of general fixed assets follows: Balance 1-1-00 Additions Deletions Land $ 10,544,896 $ 5,987,033 $ - Golf course 5,063,100 117,097 Buildings 5,782,583 879,240 2,233 Improvements other than buildings 3,686,757 199,339 33,249 Equipment and vehicles 2,941,824 58,316 108,658 Furniture and fixtures 233,720 8,936 40,198 Totals $ 28,252,880 $ 7,249,961 $ 184,338 Amount $ 2,511,069 570,656 610,942 2,138,014 349,950 $ 6,180,631 Amount $ 1,354,930 Balance 12-31-00 $ 16,531,929 5,180,197 6,659,590 3,852,847 2,891,482 202,458 $ 35,318,503 Page 27 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 8 - SEGMENTS OF ENTERPRISE ACTIVITIES There are services provided by the city which are financed by user charges. The key financial data for the year ended December 31, 2000 for those services are as follows: Operating revenues Depreciation expense Operating income Net income (loss) Capital contributions Fixed Assets Additions Deletions Net working capital Total assets Long-term debt payable Total equity NOTE 9 - DESIGNATED FUND BALANCE $ Water 1,540,304 314,539 509,032 559,407 162,219 474,090 24,890 2,208,064 16,499,639 2,330,000 13,374,479 Designated fund balance as of December 31, 2000 includes the following item: General Fund Subsequent year's budget $ 60,000 NOTE 10 - TAX INCREMENTAL FINANCING DISTRICTS Sewer $ 1,279,695 183,070 70,919 (6,175) 4,110,362 461,442 134,606 370,158 13,244,456 1,665,000 11,267,865 Following is the cumulative status of tax incremental financing district no. 3 transactions as of December 31, 2000: Expenditures Interest and fiscal charges Administration and promotion Relocation Capital expenditures Engineering Discount on borrowing Total Expenditures $ 700,461 780,564 1,453,395 26,318,345 558,791 306,415 30,117,971 Page 28 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 10 - TAX INCREMENTAL FINANCING DISTRICTS (cont.) Revenues Tax increment Intergovernmental Investment income Misce"aneous revenues Total Revenues Amount to be Recovered Through Increments $ 5,566,182 263,629 1 ,873,331 286,740 7,989,882 $ 22,128,089 State statutes allow the districts to receive tax increments until the net project costs are fully recovered or until recovery is statutorily ended. The amount to be recovered shown above wi" be increased by interest payments made in the future. The tax increment on the 2000 tax roll collected in 2001 is as follows: TIF No.3 $ 2,128,882 NOTE 11 - COMMITMENTS AND CONTINGENCIES From time to time, the city is party to various pending claims and legal proceedings. The city attorney and administration are involved in various lawsuits that may result in an unfavorable outcome. No liability has been recorded on the city's books. The city has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial. As stated in Note 13, the city jointly operates the Metropolitan Refuse District, Inc. (district). For the year ending September 30, 1994, the district was required to adopt Governmental Standards Board Statement No. 18, "Accounting for Municipal Solid Waste Landfi" Closure and Postclosure Care Costs." The district's fund balance at September 30,2000 is a deficit of $1,107,820. Reporting standards require the city to report its share of the net deficit. The city's proportionate share in the operations of the district is 62%, which amounts to $686,849 of the district's net deficit. The city's share of the net deficit has been reported in the general long-term obligations account group. See also Note 3 and Note 13. On December 6, 1996, the city entered into a developer agreement with Western Center Properties, Inc. for developing Greenway Center Phase The agreement requires the developer to make land improvements sufficient enough to increase the taxable value of the property by $31,000,000 over an eight year period. The city has agreed to purchase land and public improvements outlined in the agreement throughout the life of the project for an amount not to exceed $3,150,500. Page 29 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 11 - COMMITMENTS AND CONTINGENCIES (cont.) On March 13, 1998, the developer assigned all rights, title and interest in the developer agreement with the city to Associated Bank - Green Bay. In 1993, well #7 was redrilled due to lack of alignment and the contractor has filed suit to recover these costs. The case went to arbitration in January 2001. The outcome of the arbitration proceeding determined the utility was responsible for $211,000 of contractor expenses plus interest. A liability for this amount has been recorded in the December 31, 2000 financial statements. The water utility has received a $99,000 claim (including attorney and appraiser fees) for a difference in appraisals for a valuation of an easement condemnation. NOTE 12 - LEASE DISCLOSURES In March of 2000, the city entered into a 61 month operating lease agreement for golf carts. Annual lease payments total $29,353. The city has no other material capital or operating leases. NOTE 13 - JOINT VENTURES METROPOLITAN REFUSE DISTRICT, INC. The City of Middleton and the Villages of Shorewood Hills and Waunakee jointly operate the local sanitary landfill, which is called the Metropolitan Refuse District, Inc. The landfill stopped accepting waste in 1997. The communities share in the operation of the district based on estimated population as follows: City of Middleton Village of Shorewood Hills Village of Waunakee 62% 7 31 The governing body is made up of citizens from each community. Local representatives are appointed by each city. The governing body has authority to adopt its own budget and control the financial affairs of the district. The city made payments totaling $100,000 to the district in 2000. The city will continue to support the district's postclosure care costs at reduced costs in the future. Financial information of the district as of September 30, 2000 is available directly from the district's office. The transactions of the District are not reflected in these financial statements. Page 30 ---PAGE BREAK--- NOTE 13 - JOINT VENTURES CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 METROPOLITAN REFUSE DISTRICT, INC. (cont.) The district's landfill is being monitored for possible groundwater contamination as required by the Wisconsin Department of Natural Resources. The costs for groundwater monitoring are being budgeted for on an annual basis. At the current time it is not possible to determine if extensive contamination has occurred and the effects, if any, on the District's financial statements. MIDDLETON FIRE DISTRICT The City of Middleton and the Towns of Springfield, Westport and Middleton jOintly operate the local fire district, which is called the Middleton Fire District, which provides fire protection. The communities share in the operation of the District based on the ratio of equalized values of each member. The governing body is made up of citizens from each community. Local representatives are appointed by the municipalities. The governing body has authority to adopt its own budget and control the financial affairs of the district. The city has made payments totaling $231,143 to the district in 2000. The city believes that the District will continue to provide services in the future at similar rates. Financial information of the District as of December 31, 2000 is available directly from the District's office. The City of Middleton is the fiscal agent for the Middleton Fire District. Transactions of the district are accounted for in the Fire District Agency Fund. NOTE 14 - OTHER POSTEMPLOYMENT BENEFITS The city provides postemployment health insurance benefits for all eligible employees. Eligibility is based on retiring from the city or becoming disabled and being eligible to receive social security benefits or Wisconsin Retirement benefits. The benefits are based on contractual agreements with employee groups, local ordinances, and employee benefit policies. Employees may convert their accumulated sick leave to pay for health care premiums. The cost of those premiums is recognized as an expenditure in the year of retirement. The entire cost is paid by the city. Funding for those costs is provided out of the current operating budget of the city's general fund. Total expenditures for retirees medical premiums during the year were $29,805. The number of participants currently eligible to receive benefits is eight. The total amount outstanding at year end to be paid in the future is $201,757 and is included in the general fund as an accrued liability. Page 31 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2000 NOTE 15 - CONTRIBUTED CAPITAL During the year, contributed capital changed by the following amounts: Water Sewer Capital Paid in by City Balance - January 1, 2000 $ 1,932,660 $ 1,806,261 Balance - December 31, 2000 $ 1,932,660 $ 1,806,261 Contributions in Aid of Construction Balance - January 1, 2000 $ 6,281,679 $ 4,632,996 Developer contributions 170,658 241,153 Developer contributions refunded (8,439 ) Customer advances reclassified as contributions 135,909 Special assessments levied 3,733,300 Balance - December 31, 2000 $ 6,443,898 $ 8,743,358 NOTE 16 - RISK MANAGEMENT Total $ 3,738,921 $ 3,738,921 $ 10,914,675 411,811 (8,439) 135,909 3,733,300 $ 15,187,256 The city is exposed to various risks of loss related to torts; theft of, damage to, or destruction to assets; errors and omissions; workers compensation; and health care of its employees. All of these risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded the commercial coverage in any of the past three years. There were no significant reductions in coverage compared to the prior year. NOTE 17 - DEFICIT FUND BALANCE Generally accepted accounting principles require disclosure of individual funds that have deficit balances at year end. As of December 31, 2000, the following individual fund held a deficit balance: Fund Southwest quadrant Amount Reason $ 847,281 Debt service costs in excess of cash flows from special assessments. The southwest quadrant fund deficit is anticipated to be funded with future collections of special assessments. Page 32 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 18 - EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS In 1999, the Governmental Accounting Standards Board (GASB) approved Statement Nos. 33 and 34. These Statements require significant changes from the current method of financial reporting for all state and local governments in the United States. GASB Statement 33 Accounting and Financial Reporting for Nonexchange Transactions is effective for the City of Middleton for the fiscal year beginning January 1, 2001. GASB Statement 34 Basic Financial Statements-and Management Discussion and Analysis-for State and Local Governments is effective for the City of Middleton for the fiscal year beginning on January 1, 2003. These Statements require retroactive application of certain accounting and reporting standards, which may restate portions of these financial statements. NOTE 19 - SUBSEQUENT EVENT On March 15, 2001, the city issued $10,000,000 general obligation promissory notes for various capital projects. Page 33 ---PAGE BREAK--- SUPPLEMENTAL INFORMATION ---PAGE BREAK--- L; t, v: CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF REVENUES For the Year Ended December 31,2000 Actual Budget TAXES General property tax $ 6,297,713 $ 6,290,404 Omitted property tax 7,177 7,000 Taxes from city owned utility 257,381 255,000 Room tax 121,220 115,000 Interest on taxes 1,710 2,000 TOTALS $ 6,685,201 $ 6,669,404 INTERGOVERNMENTAL REVENUES Shared taxes from state $ 717,389 $ 635,267 State aid - road allotment 635,675 636,046 Federal and state aid - other 307,696 307,000 County aid - library 332,199 332,199 County aid - signals 6,402 6,500 County aid - senior citizens 31,703 29,700 TOTALS $ 2,031,064 $ 1,946,712 LICENSES AND PERMITS Liquor and malt beverage licenses $ 21,905 $ 22,700 Operators' licenses 8,175 7,000 Contractor's licenses 6,090 5,000 Alarm licenses 8,193 3,500 Cigarette licenses 150 160 Bicycle licenses 201 100 Dog and cat licenses 330 200 Cable TV franchise licenses 138,804 138,000 Other miscellaneous licenses 398 1,800 Building permits 139,966 130,000 Electrical permits 34,983 43,000 Plumbing permits 44,012 54,000 Erosion control permits 11,600 10,000 Park reservation permits 8,582 7,000 TOTALS $ 423,389 $ 422,460 FINES, FORFEITURES AND PENAL TIES Court penalties $ 127,348 $ 135,000 Parking violations 25,925 26,000 Court costs 31,889 31,000 TOTALS $ 185,162 $ 192,000 Page 34 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF REVENUES (cont.) For the Year Ended December 31,2000 Actual Budget PUBLIC CHARGES FOR SERVICES Clerk fees Sale of materials and supplies Police special services Police department fees Ambulance services EMS fixed cost abatement Public works charges Senior citizens Swimming pools Summer recreation Other recreation Zoning TOTALS INTERGOVERNMENTAL CHARGES FOR SERVICES Local general government services SPECIAL ASSESSMENTS Curb, gutter and sidewalks Interest on special assessments TOTALS INVESTMENT INCOME Investment income MISCELLANEOUS Rent of city buildings and offices Compensation for loss of fixed assets Refund of prior year's expenditures Sale of city property Pool contribution TOTALS $ $ $ $ $ $ $ $ 13,339 $ 9,000 2,171 2,000 9,800 9,000 36,674 30,000 136,860 160,000 31,684 31,669 9,534 45,000 4,682 5,000 205,378 222,725 45,489 40,525 27,125 37,940 500 1,000 523,236 $ 593,859 169,880 $ 167,463 21,194 $ 1,379 38,700 1,596 22,573 $ 40,296 528,109 $ 500,000 13,200 $ 17,000 40,290 32,302 49,000 60,511 54,000 25,000 25,000 171,303 $ 145,000 Page 35 ---PAGE BREAK--- CITY OF MIDDLETON - . GENERAL FUND DETAILED SCHEDULE OF EXPENDITURES For the Year Ended December 31, 2000 Actual Budget GENERAL GOVERNMENT Council $ 41,511 $ 41,077 Police commission 3,121 5,000 Landmarks commission 59 600 Middleton youth commission 12,000 12,000 Municipal court 16,884 16,870 General administration 390,890 392,976 Information technology 37,947 40,000 Independent aud iting 15,792 13,650 Legal counseling 142,189 142,000 Special legal counsel 574 2,000 Buildings and grounds 90,573 90,756 Illegal taxes and tax refunds 2,566 5,000 Reduction of prior years revenue 240 Property and liability insurance 175,330 175,000 Board of review 120 375 Additional expenses - prior years 1,590 5,000 Emergency preparedness 81,002 79,920 Income continuation insurance 13,276 12,650 Group life insurance 5,956 3,800 Contingency 243,000 TOTALS $ 1,031,620 $ 1,281,674 PUBLIC SAFETY Police administration $ 355,843 $ 359,330 Police patrol 1,879,915 1,799,684 Training 25,603 24,200 Special projects 1,315 1,600 Police uniform allowance and equipment 11,056 11,500 School patrol 9,434 11,331 Fire suppression 231,143 234,531 Public fire protection 348,277 350,000 Building inspector 85,116 85,263 Electrical inspector 63,508 60,744 Plumbing inspection 28,736 27,479 Sealer of weights and measures 2,640 2,640 Erosion control enforcement 4,543 EMS 173,074 176,757 Communications 229,964 228,216 TOTALS $ 3,450,167 $ 3,373,275 Page 36 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF EXPENDITURES (cont.) For the Year Ended December 31,2000 Actual PUBLIC WORKS Machinery $ 193,441 Garage 41,190 Protective equipment 3,282 Engineering 474,055 Street maintenance 166,419 Street cleaning 27,160 Snow and ice control 70,778 Traffic signs and markings 54,695 Traffic signals 24,990 Street lighting 49,860 Tree and brush 61,218 Sidewalk maintenance 6,665 Storm sewers 13,457 Mass transit 145,000 Garbage collection 205,394 Sanitary landfill 100,000 Leaf pick-up 31,172 Track and signal maintenance Recycling 121,706 TOTALS $ 1,790,482 LEISURE ACTIVITIES Library $ 823,021 Senior citizens center 151,639 Recreation administration 68,502 Swimming pool 245,220 Summer recreation 73,630 Other recreation 32,789 Parks 317,845 Cable television 1,461 TOTALS $ 1,714,107 Budget $ 200,933 42,182 3,400 473,975 182,091 43,954 81,945 51,450 24,996 47,700 79,399 7,895 12,487 148,095 225,050 100,000 38,451 300 120,250 $ 1,884,553 $ 827,845 170,886 70,438 245,180 53,620 42,190 312,449 $ 1,722,608 Page 37 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF EXPENDITURES (cont.) For the Year Ended December 31,2000 Actual CONSERVATION AND DEVELOPMENT Forestry - parks $ 22,047 Weed control 2,804 Creek maintenance 3,888 Water resources 29,964 Water pollution abatement grant 299 Conservancy land commission 91,002 Public land 35,160 Planning commission 132,642 TOTALS $ 317,806 , Budget $ 41,240 3,496 3,496 24,900 14,000 91,000 49,350 122,620 $ 350,102 Page 38 ---PAGE BREAK--- CITY OF MIDDLETON SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 2000 Lost and Sub- Railroad Damaged Pleasant View dividers' EMS Depot Depot Book Golf Course Deposits Fund Fund Restoration Fund ASSETS Cash and investments $ 211,506 $ 983,421 $ 16,153 $ 9,561 $ 152 $ 19,787 Accounts receivable Loan receivable Inventories 2,972 Other assets 300 TOTAL ASSETS $ 214,778 $ 983,421 $ 16,153 $ 9,561 $ 152 $ 19,787 LIABILITIES AND FUND BALANCES Accounts payable $ 1,332 $ - $ - $ - $ - $ 8,502 Total Liabilities 1,332 8,502 Fund Balances Reserved for loan receivable Reserved for inventories 2,972 Unreserved Undesignated 210,474 983,421 16,153 9,561 152 11,285 Total Fund Balances 213,446 983,421 16,153 9,561 152 11,285 TOTAL LIABILITIES AND FUND BALANCES $ 214,778 $ 983,421 $ 16,153 $ 9,561 $ 152 $ 19,787 ---PAGE BREAK--- EMS Economic Economic Library Equipment Library Develop- Develop- Alcohol Hotel Gift Replacement Endowment ment ment Awareness Drug Room Tax Fund Fund Fund Fund Grant Fund Forfeitures Fund Totals $ 4,547 $ 79,158 $ 198,478 $ 117,390 $ 95,250 $ 1,856 $ 3,102 $ 15,735 $ 1,756,096 71,677 71,677 110,710 110,710 2,972 300 $ 4,547 $ 79,158 $ 198,478 $ 117,390 $ 205,960 $ 1,856 $ 3,102 $ 87,412 $ 1,941,755 $ - $ - $ - $ 41,000 $ - $ - $ - $ 16,198 $ 67,032 41,000 16,198 67,032 110,710 110,710 2,972 4,547 79,158 198,478 76,390 95,250 1,856 3,102 71,214 1,761,041 4,547 79,158 198,478 76,390 205,960 1,856 3,102 71,214 1,874,723 $ 4,547 $ 79,158 $ 198,478 $ 117,390 $ 205,960 $ 1,856 $ 3,102 $ 87,412 $ 1,941,755 Page 39 ---PAGE BREAK--- ---PAGE BREAK--- EMS Economic Economic Library Equipment Library Develop- Develop- Alcohol Hotel Gift Replacement Endowment ment ment Awareness Drug Room Tax Fund Fund Fund Fund Grant Fund Forfeitures Fund Totals $ - $ - $ - $ - $ - $ - $ - $ 282,842 $ 282,842 25,000 41,559 79,723 3,908 440 98,152 1,696,841 7,470 18,436 37,802 6,215 5,056 13,423 6,215 25,000 49,029 22,344 5,056 440 380,994 2,110,631 2,851 2,851 13,770 459,908 1,405,405 1,724 263,332 13,770 1,724 2,851 459,908 1,671,588 (7,555) 25,000 49,029 20,620 5,056 440 (2,851 ) (78,914) 439,043 (570,656) (570,656) (7,555) 25,000 49,029 20,620 5,056 440 (2,851 ) (78,914) (131,613) 12,102 54,158 149,449 55,770 200,904 1,416 5,953 150,128 2,006,336 $ 4,547 $ 79,158 $ 198,478 $ 76,390 $ 205,960 $ 1,856 $ 3,102 $ 71,214 $ 1,874,723 Page 40 ---PAGE BREAK--- ASSETS Cash and investments Taxes receivable Accounts receivable Loans receivable Special assessments Interest receivable Due from other funds TOTAL ASSETS LIABILITIES AND FUND BALANCES Accounts payable Due to other funds Deferred revenues Deferred special assessments Deferred interest income Advances from other funds Total Liabilities Fund Balances Reserved for loans receivable Reserved for debt service Reserved for encumbrances Unreserved Undesignated (deficit) Total Fund Balances (Deficit) TOTAL LIABILITIES AND FUND BALANCES CITY OF MIDDLETON CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET December 31,2000 TIF TIF District District No.1 NO.3 $ 65,740 $ 1,921,301 2,380,404 5,200 42,713 8,916 $ 65,740 $ 4,358,534 $ - $ 557,422 28,881 2,380,404 8,916 1,354,930 4,330,553 42,713 65,740 31,745 (46,477) 65,740 27,981 $ 65,740 $ 4,358,534 Other Southwest Capital Quadrant Projects Totals $ - $ 1,280,563 $ 3,267,604 21,250 2,401,654 121,349 126,549 42,713 966,261 966,261 8,916 147,506 147,506 $ 987,511 $ 1,549,418 $ 6,961,203 $ - $ 281,156 $ 838,578 847,281 876,162 21,250 2,401,65.1 966,261 966,261 8,916 1,354,930 1,834,792 281,156 6,446,501 42,713 65,740 942,683 974,428 (847,281) 325,579 (568,179) (847,281) 1,268,262 514,702 $ 987,511 $ 1,549,418 $ 6,961,203 Page 41 ---PAGE BREAK--- CITY OF MIDDLETON CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES For the Year Ended December 31,2000 TIF TIF Other District District Southwest Capital No.1 No. 3 Quadrant Projects Totals REVENUES Taxes $ - $ 1,673,044 $ - $ - $ 1,673,044 Intergovernmental 263,629 222,090 485,719 Special assessments 395,972 395,972 Investment income 28,643 446,284 474,927 Miscellaneous revenues 110,858 7,132 117,990 Total Revenues 28,643 2,493,815 395,972 229,222 3,147,652 EXPENDITURES Capital outlay 11,755,287 2,236,730 13,992,017 Interest and fiscal charges 68,733 68,733 Total Expenditures 11,824,020 2,236,730 14,060,750 Excess (deficiency) of revenues over expenditures 28,643 (9,330,205) 395,972 (2,007,508) (10,913,098) OTHER FINANCING SOURCES (USES) Proceeds from long-term debt 6,000,000 800,000 6,800,000 Debt discount and issuance costs (58,620) (7,816) (66,436) Operating transfers out (610,942) (2,138,014) (349,950) (3,098,906) Total Other Financing Sources (Uses) (610,942) 3,803,366 (349,950) 792,184 3,634,658 Excess (deficiency) of revenues and other sources over expenditures and other uses (582,299) (5,526,839) 46,022 (1,215,324) (7,278,440) FUND BALANCES (DEFICIT) - Beginning of Year 648,039 5,554,820 (893,303) 2,483,586 7,793,142 FUND BALANCES (DEFICIT) - END OF YEAR $ 65,740 $ 27,981 $ (847,281) $ 1,268,262 $ 514,702 Page 42 ---PAGE BREAK--- CITY OF MIDDLETON ENTERPRISE FUNDS COMBINING BALANCE SHEET December 31,2000 Water Sewer Utility Utility Totals ASSETS Current Assets Cash and investments $ 2,600,813 $ 449,935 $ 3,050,748 Accounts receivable 248,130 325,107 573,237 Interest receivable 70,295 70,295 Due from other funds 163,612 8,627 172,239 Inventories 33,538 33,538 Total Current Assets 3,116,388 783,669 3,900,057 Other Property and Investments Cash and investments 24,600 24,600 Special assessments receivable 81,617 2,554,340 2,635,957 Preliminary engineering 10,900 10,900 Total Other Property and Investments 92,517 2,578,940 2,671,457 Utility Plant Property and equipment 15,775,943 11,578,010 27,353,953 Construction work in progress 617,010 617,010 Less: Accumulated depreciation (3,124,669) (1,715,352) (4,840,021) Total Property and Equipment 13,268,284 9,862,658 23,130,942 Deferred Charges Unamortized debt expenses 22,450 19,189 41,639 Total Deferred Charges 22,450 19,189 41,639 TOTAL ASSETS $ 16,499,639 $ 13,244,456 $ 29,744,095 ---PAGE BREAK--- Water Sewer Utility Utility Totals LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 347,633 $ 206,749 $ 554,382 Accrued taxes 265,417 265,417 Accrued interest 38,400 26,100 64,500 Accrued compensated absences 7,861 3,872 11,733 Due to other funds 104,013 56,790 160,803 Current portion of long-term debt 145,000 120,000 265,000 Total Current Liabilities 908,324 413,511 1,321,835 Deferred Credits Accrued compensated absences 31,836 15,680 47,516 Customer advances for construction 2,400 2,400 Total Deferred Credits 31,836 18,080 49,916 Long-Term Debt Net of Current Maturities General obligation notes 2,185,000 1,545,000 3,730,000 Total Long-Term Debt 2,185,000 1,545,000 3,730,000 Total Liabilities 3,125,160 1,976,591 5,101,751 Equity Capital paid in by city 1,932,660 1,806,261 3,738,921 Contributions in aid of construction 6,443,898 8,743,358 15,187,256 Total Contributed Capital 8,376,558 10,549,619 18,926,177 Retained earnings Reserved 24,600 24,600 Unreserved 4,997,921 693,646 5,691,567 Total Retained Earnings 4,997,921 718,246 5,716,167 Total Equity 13,374,479 11,267,865 24,642,344 TOTAL LIABILITIES AND EQUITY $ 16,499,639 $ 13,244,456 $ 29,744,095 Page 43 ---PAGE BREAK--- CITY OF MIDDLETON ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 2000 Water Sewer Utility Utility OPERATING REVENUES Charges for services $ 1,540,304 $ 1,279,695 OPERA TING EXPENSES Operation and maintenance 440,482 1,018,565 Depreciation 314,539 183,070 Taxes 276,251 7,141 Total Operating Expenses 1,031,272 1,208,776 Operating Income 509,032 70,919 NONOPERA TING REVENUES (EXPENSES) Investment income 173,687 12,132 Interest expense (123,312) (89,226) Total Nonoperating Revenues (Expenses) 50,375 (77,094) NET INCOME (LOSS) 559,407 (6,175) RETAINED EARNINGS - Beginning of Year 4,438,514 724,421 RETAINED EARNINGS - END OF YEAR $ 4,997,921 $ 718,246 Totals $ 2,819,999 1,459,047 497,609 283,392 2,240,048 579,951 185,819 (212,538) (26,719) 553,232 5,162,935 $ 5,716,167 Page 44 ---PAGE BREAK--- CITY OF MIDDLETON ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS For the Year Ended December 31,2000 Water Sewer Utility Utility Totals CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 1,451,512 $ 1,077,036 $ 2,528,548 Cash received from city for services 327,556 327,556 Cash paid to suppliers for goods and services (268,697) (923,178) (1,191,875) Cash paid to employees for services (172,434) (91,224) (263,658) Cash paid for tax equivalent (251,397) (251,397) Net Cash Flows From Operating Activities 1,086,540 62,634 1,149,174 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid (140,000) (120,000) (260,000) Interest paid (121,612) (88,521) (210,133) Acquisition and construction of capital assets (277,959) (462,036) (739,995) Contributions in aid of construction received/(returned) (8,439) (8,439) Special assessments received 40,805 991,373 1,032,178 Net Cash Flows From Capital and Related Financing Activities (507,205) 320,816 (186,389) CASH FLOWS FROM INVESTING ACTIVITIES Investment income 93,187 12,132 105,319 Marketable securities redeemed (1,098,217) (1,098,217) Cash Flows From Investing Activities (1,005,030) 12,132 (992,898) Net Increase (Decrease) in Cash and Cash Equivalents (425,695) 395,582 (30,113) CASH AND CASH EQUIVALENTS - Beginning of Year 1,119,378 78,953 1,198,331 CASH AND CASH EQUIVALENTS - END OF YEAR $ 693,683 $ 474,535 $ 1,168,218 ---PAGE BREAK--- RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income Adjustments to Reconcile Operating Income to Net Cash Provided From Operating Activities Rental income Depreciation expense Depreciation charged to sewer utility Changes in Noncash Components of Working Capital Accounts receivable Other accounts receivable Due from other funds Inventories Accounts payable Accrued taxes Accrued compensated absences Due to other funds Other current liabilities NET CASH FLOWS FROM OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES $ Water Utility 509,032 34,154 314,539 24,809 201,577 (359) (21,417) (904) 15,766 8,036 (395) 1,559 143 $ $ 1,086,540 $ Sewer Utility 70,919 183,070 (208,730) (44) 6,115 (7,678) (195) 19,106 71 $ Totals 579,951 34,154 497,609 24,809 (7,153) (403) (15,302) (904) 8,088 8,036 (590) 20,665 214 62,634 $ 1,149,174 During 2000, capital additions of $170,658 were contributed to the water utility by developers and customers. During 2000, capital additions of $241,153 were contributed to the sewer utility by developers and customers. Special assessments levied but not collected during the year were $2,741,927. Page 45 ---PAGE BREAK--- ASSETS Cash and investments Taxes receivable CITY OF MIDDLETON AGENCY FUNDS COMBINING BALANCE SHEET December 31,2000 Fire District $ - Due from other governmental units 57,108 Prepaid items 10,278 TOTAL ASSETS $ 67,386 LIABILITIES Liabilities Accounts payable $ 50,528 Due to other governmental units 10,000 Due to other funds 6,858 TOTAL LIABILITIES $ 67,386 Tax Collection Fund Totals $ 10,270,232 $ 10,270,232 9,778,905 9,778,905 57,108 10,278 $ 20,049,137 $ 20,116,523 $ - $ 50,528 20,049,137 20,059,137 6,858 $ 20,049,137 $ 20,116,523 Page 46 ---PAGE BREAK--- CITY OF MIDDLETON FIRE DISTRICT AGENCY FUND STATEMENT OF CASH INCREASES AND CASH DECREASES For the Year Ended December 31,2000 CASH INCREASES Intergovernmental fire protection charges Miscellaneous revenues Increase in payables Decrease in prepaids Total Cash Increases CASH DECREASES Increase in receivables Salaries and wages Fringe benefits Inspections Office supplies Other materials and supplies Communications Equipment maintenance Building maintenance Gas and oil Training Insurance Utilities Miscellaneous Capital outlay Total Cash Decreases Net Cash Increase (Decrease) CASH BALANCE - Beginning of Year CASH BALANCE - END OF YEAR $ 509,396 10,728 14,623 640 535,387 25,263 117,768 56,183 74,121 37,970 4,076 3,404 16,125 8,617 2,976 8,226 23,273 8,986 2,691 145,708 535,387 $ Page 47