Document Middleton_doc_75fd589308

1 CITY OF MIDDLETON, WISCONSIN Middleton, Wisconsin FINANCIAL STATEMENTS December 31, 2013 ---PAGE BREAK--- 2 TABLE OF CONTENTS PAGE Independent Auditors’ Report 1 Basic Financial Statements Statement of Net 4 Statement of Activities 5 Balance Sheet - Governmental 6 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 7 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental 8 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 9 Statement of Net Position - Proprietary 10 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary 11 Statement of Cash Flows - Proprietary Funds 12 Statement of Fiduciary Net Position - Fiduciary Funds 14 Notes to Financial Statements 15 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 51 Notes to Required Supplementary Information 52 Supplementary Information Detailed Schedule of Revenues - Budget and Actual - General 53 Detailed Schedule of Expenditures - Budget and Actual - General 55 Combining Balance Sheet - Nonmajor Governmental 57 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental 58 Combining Balance Sheet - Capital Projects Funds 59 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Capital Projects Funds 60 ---PAGE BREAK--- 1 An independent member of Nexia International Independent Auditors’ Report Common Council City of Middleton, Wisconsin Middleton, Wisconsin Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Middleton, Wisconsin as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the entity’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. CliftonLarsonAllen LLP CLAconnect.com ---PAGE BREAK--- 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Middleton, Wisconsin as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 50 and 51 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by the missing information, Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Middleton, Wisconsin’s basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. ---PAGE BREAK--- 3 The supplementary information as listed in the table of contents is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information as listed in the table of contents is fairly stated, in all material respects, in relation to the basic financial statements as a whole. a Middleton, Wisconsin September 8, 2014 ---PAGE BREAK--- BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- Business- Governmental type Component Activities Activities Total Unit ASSETS Cash and investments 21,789,954 $ 6,868,860 $ 28,658,814 $ 198,192 $ Receivables (net of allowance for uncollectible accounts) Taxes 23,413,562 - 23,413,562 - Delinquent taxes 14,827 - 14,827 - Accounts 616,832 903,055 1,519,887 - Interest 1,303 11,591 12,894 - Loans 1,045,000 - 1,045,000 556,445 Special assessments 1,219,125 2,101,584 3,320,709 - Due from other governments 42,000 - 42,000 - Internal balances 3,359,924 (3,359,924) - - Prepaid items 213,208 - 213,208 - Restricted assets - cash and investments - 60,820 60,820 - Property held for future use - 301,087 301,087 - Capital assets not being depreciated 28,235,941 2,511,163 30,747,104 154,000 Capital assets being depreciated 50,955,141 36,731,633 87,686,774 2,081,289 Total assets 130,906,817 46,129,869 177,036,686 2,989,926 LIABILITIES Accounts payable 1,357,050 430,041 1,787,091 1,075 Deposits 574,448 - 574,448 - Accrued liabilities 443,154 45,117 488,271 - Due to other governments 7,509 - 7,509 - Noncurrent liabilities: Due within one year 6,280,741 799,371 7,080,112 - Due in more than one year 48,249,278 5,030,789 53,280,067 - Total liabilities 56,912,180 6,305,318 63,217,498 1,075 DEFERRED INFLOWS OF RESOURCES Subsequent year tax levy 23,080,931 - 23,080,931 - NET POSITION Net investment in capital assets 34,367,993 33,777,825 68,145,818 2,235,289 Restricted Community development 9,064,869 - 9,064,869 - Library 356,253 - 356,253 - Impact fees 676,649 - 676,649 - Tourism 1,195,129 - 1,195,129 - Public safety 33,980 - 33,980 - Senior center 162,197 - 162,197 - Equipment replacement - 60,820 60,820 - Unrestricted 5,056,636 5,985,906 11,042,542 753,562 TOTAL NET POSITION 50,913,706 $ 39,824,551 $ 90,738,257 $ 2,988,851 $ Primary Government CITY OF MIDDLETON, WISCONSIN STATEMENT OF NET POSITION December 31, 2013 The accompanying notes are an integral part of the financial statements. 4 ---PAGE BREAK--- Operating Capital Charges for Grants and Grants and Governmental Business Type Component FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Totals Unit Primary Government Governmental activities: General government 4,235,573 $ 243,220 $ 551,475 $ - $ (3,440,878) $ - $ (3,440,878) $ Public safety 9,318,550 1,846,772 168,640 - (7,303,138) - (7,303,138) Public works 4,175,004 130,417 1,141,492 294,851 (2,608,244) - (2,608,244) Health and human services 437,254 28,995 45,153 - (363,106) - (363,106) Leisure activities 5,001,318 430,584 863,706 491,215 (3,215,813) - (3,215,813) Conservation and economic development 816,021 193,813 17 - (622,191) - (622,191) Interest and fiscal charges 1,285,861 - - - (1,285,861) - (1,285,861) Total governmental activities 25,269,581 2,873,801 2,770,483 786,066 (18,839,231) - (18,839,231) Business-type activities: Water 1,521,927 2,202,387 - 1,313,963 - 1,994,423 1,994,423 Sewer 2,216,007 1,966,351 - 604,184 - 354,528 354,528 Pleasant View Golf Course 1,702,459 1,832,607 - - - 130,148 130,148 Total business-type activities 5,440,393 6,001,345 - 1,918,147 - 2,479,099 2,479,099 Total primary government 30,709,974 $ 8,875,146 $ 2,770,483 $ 2,704,213 $ (18,839,231) 2,479,099 (16,360,132) Component Unit Community Development Authority 111,636 $ 12,693 $ - $ - $ (98,943) $ General revenues: Taxes: Property taxes, levied for general purposes 13,642,727 - 13,642,727 - Property taxes, levied for tax increment district 8,611,683 - 8,611,683 - Other taxes 1,427,906 - 1,427,906 - Cable television franchise fees 211,878 - 211,878 - Intergovernmental revenues not restricted to specific programs 733,100 - 733,100 - Investment income 199,791 45,363 245,154 17,528 Gain on sale of City property 1,605 - 1,605 - Miscellaneous 114,547 - 114,547 - Total general revenues 24,943,237 45,363 24,988,600 17,528 Transfers 412,893 (412,893) - - Change in net position 6,516,899 2,111,569 8,628,468 (81,415) NET POSITION - BEGINNING OF YEAR 44,396,807 37,712,982 82,109,789 3,070,266 NET POSITION - END OF YEAR 50,913,706 $ 39,824,551 $ 90,738,257 $ 2,988,851 $ Primary Government Changes in Net Position Net (Expenses) Revenues and Program Revenues CITY OF MIDDLETON, WISCONSIN STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 The accompanying notes are an integral part of the financial statements. 5 ---PAGE BREAK--- Nonmajor Total Debt TIF District Capital Governmental Governmental General Service No. 3 Projects Funds Funds ASSETS Cash and investments 7,402,044 $ 105,746 $ 4,555,020 $ 5,468,665 $ 4,258,479 $ 21,789,954 $ Receivables (net) Taxes Tax levy 15,048,149 - 7,823,747 209,035 - 23,080,931 Special assessments on tax roll 18,856 - 281,621 - - 300,477 Other 32,154 - - - - 32,154 Delinquent taxes 14,827 - - - - 14,827 Accounts 309,528 - - 33,641 273,663 616,832 Interest 1,303 - - - - 1,303 Loans - - 1,045,000 - - 1,045,000 Special assessments 20,234 - 1,198,891 - - 1,219,125 Due from other governments 42,000 - - - - 42,000 Due from other funds 1,519 - - - - 1,519 Advances to other funds 2,594,780 - 793,180 - - 3,387,960 Prepaid items 213,208 - - - - 213,208 TOTAL ASSETS 25,698,602 $ 105,746 $ 15,697,459 $ 5,711,341 $ 4,532,142 $ 51,745,290 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES LIABILITIES Accounts payable 1,144,817 $ - $ 16,131 $ 15,187 $ 180,915 $ 1,357,050 $ Deposits - - - - 574,448 574,448 Due to other funds 29,555 - - - - 29,555 Due to other governments 7,509 - - - - 7,509 Total liabilities 1,181,881 - 16,131 15,187 755,363 1,968,562 DEFERRED INFLOWS OF RESOURCES Subsequent year tax levy 15,048,149 - 7,823,747 209,035 - 23,080,931 Loans receivable - - 1,045,000 - - 1,045,000 Special assessments 20,234 - 1,480,512 - - 1,500,746 Other receivables 2,743 - - - - 2,743 15,071,126 - 10,349,259 209,035 - 25,629,420 FUND BALANCES Nonspendable 2,822,815 - - - - 2,822,815 Restricted Debt service - 105,746 - - - 105,746 Community development - - 5,332,069 - 1,207,288 6,539,357 Library - - - - 356,253 356,253 Capital improvements - - - 5,487,119 - 5,487,119 Impact fees - - - - 676,649 676,649 Tourism - - - - 1,195,129 1,195,129 Public safety - - - - 33,980 33,980 Senior center - - - - 162,197 162,197 Committed Library - - - - 38,254 38,254 Airport - - - - 107,029 107,029 Assigned Post employment benefits 1,272,349 - - - - 1,272,349 Public safety 494,011 - - - - 494,011 Debt service 1,200,000 - - - - 1,200,000 Unassigned 3,656,420 - - - - 3,656,420 Total fund balances 9,445,595 105,746 5,332,069 5,487,119 3,776,779 24,147,308 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES 25,698,602 $ 105,746 $ 15,697,459 $ 5,711,341 $ 4,532,142 $ 51,745,290 $ CITY OF MIDDLETON, WISCONSIN December 31, 2013 BALANCE SHEET GOVERNMENTAL FUNDS The accompanying notes are an integral part of the financial statements. 6 ---PAGE BREAK--- Fund balances - total governmental funds 24,147,308 $ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds. 79,191,082 Some receivables that are not currently available are reported as unearned revenue or deferred inflows of resources in the fund financial statements, but are recognized as revenue when earned in the government-wide statements. Loans 1,045,000 Special assessments 1,500,746 Other receivables 2,743 Some liabilities, including long-term debt, are not due and payable in the current period and therefore are not reported in the funds. Long-term debt (49,985,000) Landfill post-closure liability (538,564) Debt discount or premium (325,208) Compensated absences (3,681,247) Accrued interest payable (443,154) NET POSITION OF GOVERNMENTAL ACTIVITIES 50,913,706 $ CITY OF MIDDLETON, WISCONSIN RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION December 31, 2013 The accompanying notes are an integral part of the financial statements. 7 ---PAGE BREAK--- Nonmajor Total Debt TIF District Capital Governmental Governmental General Service No. 3 Projects Funds Funds REVENUES Taxes 14,136,261 $ - $ 8,611,683 $ - $ 1,142,077 $ 23,890,021 $ Intergovernmental 2,015,429 - 466,932 137,792 799,721 3,419,874 Licenses and permits 828,552 - - - 237,608 1,066,160 Fines, forfeitures, and penalties 291,296 - - - - 291,296 Public charges for services 1,407,170 - - - 461,145 1,868,315 Intergovernmental charges for services 1,919,130 - - - - 1,919,130 Special assessments 125,324 - 189,008 - - 314,332 Contributions - - - - 29,495 29,495 Investment income 69,966 - 198,801 - 30,636 299,403 Miscellaneous 180,640 - 116,250 5,000 222,115 524,005 Total revenues 20,973,768 - 9,582,674 142,792 2,922,797 33,622,031 EXPENDITURES Current General government 2,551,419 - 2,596,352 449,117 - 5,596,888 Public safety 8,286,465 - - - 4,684 8,291,149 Public works 3,332,707 - - - - 3,332,707 Health and human services 437,254 - - - - 437,254 Leisure activities 1,348,136 - - - 3,163,736 4,511,872 Conservation and economic development 586,595 - - 30,000 174,076 790,671 Debt service Principal - 11,975,000 - - - 11,975,000 Debt issuance costs - 62,575 - - - 62,575 Interest and fiscal charges - 1,455,297 - - - 1,455,297 Capital outlay - - 364,622 3,226,759 - 3,591,381 Total expenditures 16,542,576 13,492,872 2,960,974 3,705,876 3,342,496 40,044,794 Excess of revenues over (under) expenditures 4,431,192 (13,492,872) 6,621,700 (3,563,084) (419,699) (6,422,763) OTHER FINANCING SOURCES (USES) Long-term debt issued - - - 4,000,000 - 4,000,000 Premium on debt issued - 169,047 - - - 169,047 Proceeds from sale of capital assets 73 - - 9,736 - 9,809 Transfers in 654,019 8,108,335 - 72,624 1,007,346 9,842,324 Transfers out (4,535,852) - (4,381,022) (156,885) (355,672) (9,429,431) Net change in fund balances 549,432 (5,215,490) 2,240,678 362,391 231,975 (1,831,014) FUND BALANCES - BEGINNING OF YEAR 8,896,163 5,321,236 3,091,391 5,124,728 3,544,804 25,978,322 FUND BALANCES - END OF YEAR 9,445,595 $ 105,746 $ 5,332,069 $ 5,487,119 $ 3,776,779 $ 24,147,308 $ For the Year Ended December 31, 2013 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES CITY OF MIDDLETON, WISCONSIN GOVERNMENTAL FUNDS The accompanying notes are an integral part of the financial statements. 8 ---PAGE BREAK--- Net change in fund balances - total governmental funds (1,831,014) $ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However in the statement of activities, the cost of these assets is allocated over their estimated useful lives with depreciation expense reported in the statement of activities. Capital outlay is reported as an expenditure in the fund financial statements but is capitalized in the government-wide financial statements. 2,758,787 Less: Some items are reported as capital outlay but are not capitalized Depreciation is reported in the government-wide statements (1,870,466) Receivables not currently available are reported as deferred inflows in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. (473,519) Proceeds from the sale of capital assets are recorded as revenues in the governmental funds but are removed from revenues in the statement of activities $(9,809). The gain on the sale of capital assets is recognized in the statement of activities $(1,605). (8,204) Debt and lease proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Debt issued (4,000,000) Premium on debt issued (169,047) Debt retired 11,975,000 Landfill post-closure liability 6,655 Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences (103,304) Amortization of debt premium and discount 14,016 Accrued interest on debt 217,995 Change in net position of governmental activities 6,516,899 $ CITY OF MIDDLETON, WISCONSIN For the Year Ended December 31, 2013 TO THE STATEMENT OF ACTIVITIES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, The accompanying notes are an integral part of the financial statements. 9 ---PAGE BREAK--- Pleasant View Golf ASSETS Water Sewer Course Totals Current Assets Cash and investments 4,413,995 $ 2,454,865 $ - $ 6,868,860 $ Accounts receivable 402,965 500,090 - 903,055 Accrued interest 1,956 9,635 - 11,591 Due from other funds 12,900 16,655 - 29,555 Total current assets 4,831,816 2,981,245 - 7,813,061 Noncurrent Assets Restricted cash and investments - 60,820 - 60,820 Special assessments receivable - 2,101,584 - 2,101,584 Property held for future use 301,087 - - 301,087 Capital assets: Property and equipment 26,160,417 15,332,075 11,462,696 52,955,188 Less: Accumulated depreciation (8,256,908) (4,408,322) (1,047,162) (13,712,392) Total capital assets, net 17,903,509 10,923,753 10,415,534 39,242,796 Total noncurrent assets 18,204,596 13,086,157 10,415,534 41,706,287 Total assets 23,036,412 16,067,402 10,415,534 49,519,348 LIABILITIES Current Liabilities Accounts payable 42,695 359,237 28,109 430,041 Due to other funds - - 1,519 1,519 Accrued interest - - 45,117 45,117 Accrued compensated absences 25,338 11,354 - 36,692 Current portion of long-term debt - - 762,679 762,679 Total current liabilities 68,033 370,591 837,424 1,276,048 Noncurrent Liabilities Accrued compensated absences 130,063 56,196 142,238 328,497 Advances from other funds - - 3,387,960 3,387,960 General obligation debt - - 4,702,292 4,702,292 Total noncurrent liabilities 130,063 56,196 8,232,490 8,418,749 Total liabilities 198,096 426,787 9,069,914 9,694,797 NET POSITION Net investment in capital assets 17,903,509 10,923,753 4,950,563 33,777,825 Restricted for equipment replacement - 60,820 - 60,820 Unrestricted 4,934,807 4,656,042 (3,604,943) 5,985,906 Total net position 22,838,316 $ 15,640,615 $ 1,345,620 $ 39,824,551 $ Business-type Activities Enterprise Funds December 31, 2013 CITY OF MIDDLETON, WISCONSIN PROPRIETARY FUNDS STATEMENT OF NET POSITION The accompanying notes are an integral part of the financial statements. 10 ---PAGE BREAK--- Pleasant View Golf Water Sewer Course Total OPERATING REVENUES Charges for services and sales 2,202,387 $ 1,966,351 $ 1,832,607 $ 6,001,345 $ OPERATING EXPENSES Operation and maintenance 1,019,909 1,928,191 1,427,156 4,375,256 Depreciation 502,018 287,816 112,923 902,757 Total operating expenses 1,521,927 2,216,007 1,540,079 5,278,013 Operating income (loss) 680,460 (249,656) 292,528 723,332 NONOPERATING REVENUES (EXPENSES) Investment income 29,640 15,723 - 45,363 Interest expense - - (162,380) (162,380) Total nonoperating revenues (expenses) 29,640 15,723 (162,380) (117,017) Income (loss) before capital contributions and transfers 710,100 (233,933) 130,148 606,315 CAPITAL CONTRIBUTIONS 1,313,963 604,184 - 1,918,147 TRANSFERS IN - - 16,726 16,726 TRANSFERS OUT (415,355) (14,264) - (429,619) Change in net position 1,608,708 355,987 146,874 2,111,569 NET POSITION - BEGINNING OF YEAR 21,229,608 15,284,628 1,198,746 37,712,982 NET POSITION - END OF YEAR 22,838,316 $ 15,640,615 $ 1,345,620 $ 39,824,551 $ Enterprise Funds For the Year Ended December 31, 2013 PROPRIETARY FUNDS CITY OF MIDDLETON, WISCONSIN STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION Business-type Activities The accompanying notes are an integral part of the financial statements. 11 ---PAGE BREAK--- Pleasant View Golf Water Sewer Course Totals CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 2,233,956 $ 1,944,483 $ 1,832,607 $ 6,011,046 $ Payments to suppliers for goods and services (500,334) (1,634,284) (604,123) (2,738,741) Payments to employees for services (440,510) (236,583) (792,694) (1,469,787) Net cash provided by operating activities 1,293,112 73,616 435,790 1,802,518 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to other funds (415,355) (14,264) - (429,619) Transfers from other funds - - 16,726 16,726 Advance from TIF No. 3 - - 360,030 360,030 Net cash provided by (used in) noncapital financing activities (415,355) (14,264) 376,756 (52,863) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets (175,530) (4,616) (26,669) (206,815) Principal paid on capital debt - - (595,000) (595,000) Interest paid on capital debt - - (194,026) (194,026) Net cash used in capital and related financing activities (175,530) (4,616) (815,695) (995,841) CASH FLOWS FROM INVESTING ACTIVITIES Interest income received 35,448 8,457 - 43,905 Net increase (decrease) in cash and cash equivalents 737,675 63,193 (3,149) 797,719 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 3,676,320 2,452,492 3,149 6,131,961 CASH AND CASH EQUIVALENTS - END OF YEAR 4,413,995 $ 2,515,685 $ - $ 6,929,680 $ Business-type Activities Enterprise Funds For the Year Ended December 31, 2013 CITY OF MIDDLETON, WISCONSIN STATEMENT OF CASH FLOWS PROPRIETARY FUNDS The accompanying notes are an integral part of the financial statements. 12 ---PAGE BREAK--- Pleasant View Golf Water Sewer Course Totals Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) 680,460 $ (249,656) $ 292,528 $ 723,332 $ Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense 502,018 287,816 112,923 902,757 Depreciation charged to sewer utility 45,075 - - 45,075 Changes in noncash components of working capital Accounts receivable 31,569 (21,868) - 9,701 Due from other funds (1,362) (2,838) 1,519 (2,681) Accounts payable 35,217 59,056 (865) 93,408 Accrued compensated absences 135 1,106 29,685 30,926 Net cash provided by operating activities 1,293,112 $ 73,616 $ 435,790 $ 1,802,518 $ Reconciliation of cash and cash equivalents to the statement of net position - proprietary funds Cash and investments 4,413,995 $ 2,454,865 $ - $ 6,868,860 $ Restricted cash and investments - 60,820 - 60,820 Cash and cash equivalents, end of year 4,413,995 $ 2,515,685 $ - $ 6,929,680 $ NONCASH INVESTING, CAPITAL, AND RELATED FINANCING ACTIVITIES Developer financed additions to Utility capital assets 1,313,963 $ 604,184 $ - $ 1,918,147 $ Business-type Activities Enterprise Funds CITY OF MIDDLETON, WISCONSIN STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2013 (Concluded) The accompanying notes are an integral part of the financial statements. 13 ---PAGE BREAK--- Total Fire Agency Tax Roll District Funds ASSETS Cash and investments 24,893,108 $ 245,786 $ 25,138,894 $ Taxes receivable 14,218,814 13,009 14,231,823 Total assets 39,111,922 $ 258,795 $ 39,370,717 $ LIABILITIES Accounts payable - $ 63,618 $ 63,618 $ Due to other governmental units 39,111,922 195,177 39,307,099 Total liabilities 39,111,922 $ 258,795 $ 39,370,717 $ CITY OF MIDDLETON, WISCONSIN STATEMENT OF FIDUCIARY NET POSITION December 31, 2013 FIDUCIARY FUNDS The accompanying notes are an integral part of the financial statements. 14 ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 15 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Middleton, Wisconsin (the City) conform to generally accepted accounting principles as applicable to governmental units. The accepted standard- setting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (GASB). A. Reporting Entity This report includes all of the funds of the City of Middleton, Wisconsin. The reporting entity for the City consists of the primary government, organizations for which the primary government is financially accountable, and 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. A legally separate organization should be reported as a component unit if the elected officials of the primary government are financially accountable to the organization. The primary government is financially accountable if it appoints a voting majority of the organization’s governing body and 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. A legally separate tax exempt organization should be reported as a component unit of the reporting entity if all of the following criteria are met: the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents; and the primary government is entitled to, or has the ability to otherwise access, a majority of the economic resources received or held by an individual organization that the specific primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and are reported with similar funds of the primary government. Discretely presented component units are reported in a separate column in the government-wide financial statements to emphasize that they are legally separate from the primary government. Discretely Presented Component Unit - Community Development Authority of the City of Middleton The government-wide 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 financial statements have been presented as a discrete column in the basic financial statements. Separately issued financial statements of the CDA are not prepared. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 16 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-Wide and Fund Financial Statements Government-Wide Financial Statements The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Likewise, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City does not allocate indirect expenses to functions in the statement of activities. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. Fund Financial Statements Each fund is considered to be a separate accounting entity and is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position/fund balance, revenues, and expenditure/expenses. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 17 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-Wide and Fund Financial Statements (Continued) Funds are organized as major funds or nonmajor funds within the governmental and enterprise fund financial statements. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type, and b. The same element of the individual governmental fund or enterprise fund that met the 10% test is at least 5% of the corresponding total for all governmental and enterprise funds combined. c. In addition, any other governmental or enterprise fund that the City believes is particularly important to financial statement users may be reported as a major fund. The City reports the following major governmental funds: General Fund - accounts for the City’s primary operating activities. It is used to account for all financial resources except those required to be accounted for in another fund. Debt Service Fund - accounts resources accumulated and payments made for principal and interest on long-term debt other than enterprise fund debt. Tax Incremental Financing District (TIF) No. 3 Capital Projects Funds - accounts for expenditures outlined in the TIF project plan and related revenues and proceeds from long- term borrowing. Capital Projects Fund - accounts for proceeds from long-term borrowing and other resources to be used for improvement projects originally initiated. The City reports the following major enterprise funds: Water Utility - accounts for operations of the water system. Sanitary Sewer - accounts for operations of the sewer system. Pleasant View Golf Course - accounts for operations of the Pleasant View Golf Course. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 18 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-Wide and Fund Financial Statements (Continued) The City reports the following nonmajor governmental funds: Special Revenue Funds - used to account for the proceeds of specific revenue sources (other than major capital projects) that are restricted to expenditures for specified purposes. Subdividers’ Deposits Economic Development Grant Lost and Damaged Books Tourism Commission Library Gift Police Activities Library Endowment EMS Activities Library Public Land Activities Airport Senior Center Activities Safety Impact Fee and Other In addition, the City reports the following fund types: Agency funds - used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. Tax Roll Fire District C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-Wide Financial Statements The government-wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows of resources. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Special assessments are recorded as revenue when earned. Unbilled receivables are recorded as revenues when services are provided. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 19 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s Water and Sewer utility and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are 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. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal 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 inflows of resources. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. Intergovernmental aids and grants are recognized as revenues in the period the City is entitled to the resources and the amounts are available. Amounts owed to the City, which are not available, are recorded as receivables and deferred inflows of resources. Amounts received prior to the entitlement period are also recorded as unearned revenues. Special assessments are recorded as revenues when they become measurable and available as current assets. Amounts due in future years are reflected as receivables and deferred inflows of resources. Delinquent special assessments being held for collection by the county are reported as receivables and deferred inflows of resources in the General Fund. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, special assessments, 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. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 20 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The City reports unearned revenues and deferred inflows of resources on its governmental funds balance sheet. Deferred inflows of resources arise from taxes levied in the current year which are for the subsequent year’s operations, special assessments to be collected in future years and loans receivable to be collected in future years. For governmental fund financial statements, deferred inflows of resources arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned 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 unearned revenue or deferred inflow of resources is removed from the balance sheet and revenue is recognized. Proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. Agency funds follow the accrual basis of accounting and do not have a measurement basis. The proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Water Utility, Sewer Utility, and Pleasant View Golf Course are charges to customers for sales and services. Special assessments are recorded as receivables and contributions when levied. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. All Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, deferred inflows of resources 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 BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 21 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity 1. Cash and Investments 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. Investment of City funds is restricted by state statutes. Available investments are limited to: 1. Time deposits in any credit union, bank, savings bank, or trust company authorized to transact business in the state 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, a local professional football stadium district, a local cultural arts district, the University of Wisconsin Hospitals and Clinics Authority, or the Wisconsin Aerospace 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. The City has adopted an investment policy that follows the state statute for allowable investments. The City is exposed to custodial credit risk and credit risk for deposits and investments, as well as interest rate risk for investments. The City’s policies with respect to these risks are as follows: Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the City. To minimize credit risk, investments are limited to government agencies, the highest rated commercial paper, AAA rated money market funds, and CD’s from Wisconsin’s highest rated banks. Custodial risk is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover deposits that are in possession of an outside party. Most institutions do not offer custodial/collateral services for CD’s; therefore, investments should be diversified among institutions avoiding concentrations of credit. In addition, investments should be placed only with Wisconsin financial institutions with current credit information kept on file for each institution. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 22 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 1. Cash and Investments (Continued) Interest rate risk is the risk that changes in interest rates will adversely affect the fair market value of an investment resulting in losses if the investment was liquidated prior to maturity. The investment portfolio should be laddered over a three-year maturity schedule. Staggered investment maturities maximize liquidity to meet ongoing operations, and also allow the opportunity for reinvestment. Continual reinvestment allows City funds to ride the yield curve, minimizing interest rate risk for any given period. Investments should be held to maturity eliminating losses and risk from early liquidations. 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 fund balance. The difference between the bank balance and carrying value is due to outstanding checks and/or deposits in transit. 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, 2013, the fair value of the City’s share of the LGIP’s assets was substantially equal to the amount as reported in these statements. 2. Receivables Property taxes are levied in December on the assessed value as of the prior January 1. 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 receivables and due to other taxing units in the accompanying agency fund statement of fiduciary net position. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 23 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 2. Receivables (Continued) Property tax calendar - 2013 tax roll: Lien date and levy date December 2013 Tax bills mailed December 2013 Payment in full, or January 31, 2014 First installment due January 31, 2014 Second installment due July 31, 2014 Personal property taxes in full January 31, 2014 Tax deed - 2013 delinquent real estate taxes October 2016 Accounts receivable have been shown net of an allowance for uncollectible accounts. 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 for the Water and Sewer Utilities because they have the right by law to place delinquent bills on the tax roll, and other delinquent bills are generally not significant. During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as “due to and from other funds.” Long-term interfund loans (noncurrent portion) are reported as “advances from and to other funds.” Interfund receivables and payables between funds within governmental activities are eliminated in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”. In the General Fund financial statements, advances to other funds are offset equally by a fund balance nonspendable account which indicates that they do not constitute expendable available resources and, therefore, are not available for appropriation. The City has received federal grant funds for economic development loan programs to various businesses. It is the City’s policy to record revenue and expenditure when the initial loan is made from the federal grant funds. The City records a loan receivable and deferred inflows of resources when the loan has been made and funds have been disbursed. As loans are repaid, the receivable is reduced and revenue is recorded. Interest received from loan repayments is recognized as revenue when received in cash. Any unspent loan repayments at year end are presented as restricted fund balance in the governmental fund balance sheet. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 24 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 3. Inventories and Prepaid Items Governmental fund inventory items are charged to expenditure accounts when purchased. Year-end inventory was not significant. Proprietary fund inventories are generally used for construction and for operation and maintenance work. They are not for resale. They are valued at cost based on weighted average, and charged to construction and/or operation and maintenance expense when used. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 4. Restricted Assets Mandatory segregations of assets are presented as restricted assets. Such segregations are required by bond agreements and other external parties. Current liabilities payable from these restricted assets are so classified. The remainder, if generated from earnings, is shown as restricted net position. 5. Capital Assets Government-Wide Statements Capital assets, which include property, plant, and equipment, are reported in the government- wide financial statements. Capital assets are defined by the government as assets with an initial cost of more than $5,000 for general capital assets and $25,000 for infrastructure assets, and an estimated useful life in excess of one year. Capital assets are generally defined by the utilities as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. All capital assets are valued at historical cost or estimated historical cost if actual amounts are unavailable. Donated capital assets are recorded at their estimated fair value at the date of donation. Additions to and replacements of capital assets of business-type activities are recorded at original cost or the fair value at the time of construction, which includes material, labor, overhead, and an allowance for the cost of funds used during construction when significant. For tax-exempt debt, the amount of interest capitalized equals the interest expense incurred during construction netted against any interest revenue from temporary investment of borrowed funds. No net interest was capitalized during the current year. The cost of renewals and betterments relating to retirement units is added to plant accounts. The cost of property replaced, retired, or otherwise disposed of, is deducted from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 25 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 5. Capital Assets (Continued) Government-Wide Statements (Continued) Depreciation of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation reflected in the statement of net position. Depreciation is provided over the assets’ estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows: Buildings 40 Years Land improvements 30 Years Machinery and equipment 3-15 Years Infrastructure 20-50 Years Water Plant Source of supply 34 Years Pumping 22-31 Years Water treatment 22-30 Years Transmission and distribution 18-77 Years General 4-17 Years Sewer Plant Collecting system 30-77 Years Collecting system pumping 20-40 Years General 7-40 Years Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same way as in the government-wide statements. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 26 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 6. Compensated Absences Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay is accrued when incurred in the government-wide and proprietary financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, or are payable with expendable available resources. 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, 2013 are determined on the basis of current salary rates and include salary-related payments. 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. 7. Long-Term Obligations/Conduit Debt All long-term obligations to be repaid from governmental and business-type resources are reported as liabilities in the government-wide statements. The long-term obligations consist primarily of notes and bonds payable, and accrued compensated absences. Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face-value of debts are reported as other financing sources, premium or discount on debt is reported as other financing sources or uses, and payments of principal and interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the government-wide statements. For the governmental-wide statements and proprietary fund statements, bond premiums and discounts are deferred and amortized over the life of the issue. Gains or losses on prior debt refunding are amortized over the remaining life of the old debt, or the life of the new debt, whichever is shorter. The balance at year-end for both premiums and discounts is shown as an increase or decrease in the liability section of the statement of net position. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 27 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 7. Long-Term Obligations/Conduit Debt (Continued) The City may approve 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. No industrial revenue bonds were outstanding as of the end of the year. 8. Claims and Judgments Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. The liability and expenditure for claims and judgments is only reported in governmental fund types if it has matured. Claims and judgments are recorded in the government-wide statements and proprietary funds as expenses when the related liabilities are incurred. There were no significant claims or judgments at year-end. 9. Equity Classifications Government-Wide Statements Equity is classified as net position and displayed in three components: a. Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances (excluding unspent debt proceeds) of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position - Consists of net position with constraints placed on their use by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. c. Unrestricted net position - All other net position that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.” When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 28 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 9. Equity Classifications (Continued) Fund Statements In the governmental fund financial statements, governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either: Not in spendable form; or Legally or contractually required to be maintained intact. Restricted fund balance is reported when constraints placed on the use of resources are either: Externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or Imposed by law through constitutional provisions or enabling legislation Committed fund balance is reported for amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Common Council. Assigned fund balance is reported for amounts that are constrained by the City management’s intent to be used for specific purposes, but is neither restricted nor committed. Unassigned fund balance is the residual classification for the General Fund or deficit balances in other funds. When committed, assigned, and unassigned amounts are available for use, it is the City’s policy to use committed resources first, then assigned resources, then unassigned resources as they are needed. 10. Basis for Existing Rates - Proprietary Funds Billings are rendered and recorded quarterly based on metered usage. The utilities do not accrue revenues beyond billing dates. Water rates were approved by the Public Service Commission of Wisconsin and became effective March 31, 2011. Sewer rates were approved by the Common Council effective January 1, 2013. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 29 NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Budgetary Information 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. A budget has been adopted for the General Fund, Debt Service Fund, certain special revenue funds, and capital project funds. Wisconsin Statute Section 65.90 requires that an annual budget be adopted for all funds. The budgeted amounts presented include any amendments made. The City may authorize transfers of budgeted amounts between departments up to $1,000. Transfers exceeding $1,000 between departments and changes in the overall budget must be approved by a two-thirds vote of the City Council. Appropriations lapse at year-end unless specifically carried over. Excess Expenditures over Appropriations The following individual funds experienced excess expenditures over appropriations: The legal level of budget control is the function level in the General Fund and total expenditures in all other funds. The City controls expenditures at the departmental level for management purposes. TIF District No. 3 debt service was included in the Debt Service Fund, rather than TIF District No. 3. TIF District No. 3 debt service was funded by TIF. The detail of those items can be found in the City’s year-end budget to actual report. Limitations on the City’s Tax Levy As part of Wisconsin’s Act 32 (2011), legislation was passed that limits the City’s future tax levies. Generally, the City is limited to its prior tax levy dollar amount (excluding TIF Districts), increased by the greater of the percentage change in the City’s equalized value due to new construction or zero percent for the 2012 levy collected in 2013 and thereafter. Changes in debt service from one year to the next are generally exempt from this limit, with certain exceptions. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 30 NOTE 3 - DETAILED NOTES ON ALL FUNDS A. Cash and Investments The City's cash and investments at year-end were comprised of the following: Carrying Bank Associated Value Balance Risks Petty cash 1,470 $ - $ Demand deposits Noninterest bearing 40,620,804 36,748,246 $ Custodial credit Certificates of deposit 8,247,412 8,247,412 Custodial credit Money market 4,950,559 4,950,559 Custodial credit Total deposits 53,818,775 49,946,217 Investments Madison Community Foundation 231,464 228,865 Local Government Investment Pool (LGIP) 5,011 5,011 Credit, interest rate Total investments 236,475 233,876 Total cash and investments 54,056,720 $ 50,180,093 $ Reconciliation to the statement of net position: Unrestricted cash and investments 28,658,814 $ Restricted cash and investments 60,820 Fiduciary funds - Agency Fund 25,138,894 53,858,528 Cash and investments held for component unit: Unrestricted 198,192 Total cash and investments 54,056,720 $ The City’s library had $231,464 in an endowment fund at the Madison Community Foundation, which is pooled with all other investments of the Foundation. The Foundation has variance power over the funds in the endowment. Deposits in each local bank are insured by the FDIC in the amount of $250,000 for demand deposits and $250,000 for time and savings deposits. 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 custodial credit risk. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 31 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) A. Cash and Investments (Continued) Custodial Credit Risk Deposits - Custodial credit risk is the risk that in the event of a financial institution failure, the City’s deposits may not be returned to the City. As of December 31, 2013, $7,409,174 of the City’s total bank balances was exposed to custodial credit risk as uninsured and uncollateralized. Investments - For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The City had no investments exposed to custodial credit risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The City had investments in the following external pools which are not rated: Local Government Investment Pool Interest Rate Risk The City had $5,011 invested in the local government investment pool, which had a weighted average maturity of 89 days. The City had $8,247,412 invested in certificate of deposits with a weighted average maturity of 204 days. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 32 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Nonmajor TIF District Capital Governmental Water Sewer General No. 3 Projects Funds Utility Utility Total Taxes 15,113,986 $ 8,105,368 $ 209,035 $ - $ - $ - $ 23,428,389 $ Accounts 1,657,285 - 33,641 273,663 402,965 500,090 2,867,644 Interest 1,303 - - - 1,956 9,635 12,894 Loans - 1,045,000 - 22,442 - - 1,067,442 Special assessments 20,234 1,198,891 - - - 2,101,584 3,320,709 Other governments 42,000 - - - - - 42,000 Total receivables 16,834,808 10,349,259 242,676 296,105 404,921 2,611,309 30,739,078 Less allowance for uncollectibles (1,347,757) - - (22,442) - - (1,370,199) Net total receivables 15,487,051 $ 10,349,259 $ 242,676 $ 273,663 $ 404,921 $ 2,611,309 $ 29,368,879 $ All receivables on the balance sheet are expected to be collected within one year except for the following: TIF District Sewer No. 3 Utility Total Amounts not expected to be collected within one year 2,243,891 $ 2,101,584 $ 4,345,475 $ ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 33 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) C. Deferred Inflows of Resources and Unearned Revenue Governmental funds report deferred inflows of resources and unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred inflows of resources reported in the governmental funds were as follows: Unavailable Unearned Total Property taxes - $ 23,080,931 $ 23,080,931 $ Loan receivable 1,045,000 - 1,045,000 Special assessments not yet due 1,500,746 - 1,500,746 EMS and other receivables 2,743 - 2,743 2,548,489 $ 23,080,931 $ 25,629,420 $ For economic development loans, the City is limited by the Wisconsin Economic Development Corporation to the amount of program income from economic development loans that 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, 2013, the City has not exceeded its maximum retention cap. When it does, a liability to the state will be recorded. D. Restricted Assets Replacement Account The sewer utility establishes an equipment replacement account to be used for significant mechanical equipment replacement as required by the Wisconsin Department of Natural Resources. The balance in the equipment replacement fund at December 31, 2013 was $60,820. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 34 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) E. Capital Assets Capital asset activity for the year ended December 31, 2013 was as follows: ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 35 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) E. Capital Assets (Continued) ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 36 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) E. Capital Assets (Continued) ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 37 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) E. Capital Assets (Continued) Depreciation expense was charged to functions as follows: Governmental activities General government 37,923 $ Public safety 504,964 Public works, which includes the depreciation of streets, storm sewers, traffic signals, sidewalks, bridges, and rail spur 821,079 Conservation and development 23,255 Leisure activities 483,245 Total governmental activities depreciation expense 1,870,466 $ Business-type activities Water Utility Depreciation 547,093 $ Depreciation charged to Sewer Utility operation and maintenance expenses (45,075) 502,018 Sewer Utility 287,816 Pleasant View Golf Course 112,923 Total business-type activities depreciation expense 902,757 $ ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 38 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) F. Interfund Receivables/Payables and Transfers The following is a schedule of interfund receivables and payables reported in due to and due from other funds in the financial statements, including any overdrafts on pooled cash and investment accounts. Receivable Fund Payable Fund Amount General Fund Pleasant View Golf Course 1,519 $ Water Utility General Fund 12,900 Sewer Utility General Fund 16,655 Total fund financial statements 31,074 $ For the statement of net position, interfund balances, which are owed within the governmental activities or business-type activities, are netted and eliminated. The balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made. All amounts are due within one year. The General Fund and TIF District No. 3 have advanced funds to the Pleasant View Golf Course. No repayment schedules have been established on the advances to the Pleasant View Golf Course and these amounts are not expected to be paid within one year. The principal purpose of these advances is to finance costs internally rather than borrowing externally. For the statement of net position, interfund balances which are owed within the governmental activities or business-type activities are netted and eliminated. The following is a schedule of interfund advances. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 39 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) F. Interfund Receivables/Payables and Transfers (Continued) The following is a schedule of interfund transfers: Pleasant Nonmajor Debt Capital View Golf Special Transfer Out Fund General Service Projects Course Revenue Total General - $ 3,439,156 $ 72,624 $ 16,726 $ 1,007,346 $ 4,535,852 $ TIF District No. 3 - 4,381,022 - - - 4,381,022 Capital Projects Fund - 156,885 - - - 156,885 Water Utility 415,355 - - - - 415,355 Sewer Utility 14,264 - - - - 14,264 Nonmajor Special Revenue Funds 224,400 131,272 - - - 355,672 Totals 654,019 $ 8,108,335 $ 72,624 $ 16,726 $ 1,007,346 $ 9,859,050 $ Transfer In Fund Generally, transfers are used to move revenues from the fund that collects them to the fund that the budget requires to expend them, move receipts to debt service from the funds collecting the receipts to the debt service fund, and use unrestricted revenue collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. The transfer from the Water Utility to the General Fund is for payment in lieu of property taxes. For the statement of activities, interfund transfers within the governmental activities or business-type activities are netted and eliminated. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 40 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) G. Long-Term Obligations Long-term obligations activity for the year ended December 31, 2013 was as follows: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities Bonds and notes payable General obligation debt 57,960,000 $ 4,000,000 $ 11,975,000 $ 49,985,000 $ 5,280,000 $ Debt premium and discount 170,177 169,047 14,016 325,208 30,741 Landfill post-closure liability 545,219 - 6,655 538,564 - 58,675,396 4,169,047 11,995,671 50,848,772 5,310,741 Other liabilities: Vested compensated absences 3,577,943 1,071,556 968,252 3,681,247 970,000 Total other liabilities 3,577,943 1,071,556 968,252 3,681,247 970,000 Total governmental activities long-term liabilities 62,253,339 $ 5,240,603 $ 12,963,923 $ 54,530,019 $ 6,280,741 $ Business-type activities Bonds and notes payable General obligation debt 6,000,000 $ - $ 595,000 $ 5,405,000 $ 735,000 $ Debt premium 87,650 - 27,679 59,971 27,679 6,087,650 - 622,679 5,464,971 762,679 Other liabilities: Vested compensated absences 334,263 67,618 36,692 365,189 36,692 Total business-type activities long-term liabilities 6,421,913 $ 67,618 $ 659,371 $ 5,830,160 $ 799,371 $ 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 governmental funds will be retired by future property tax levies or tax increments. Business-type activities debt is payable by revenues from user fees of those funds or, if the revenues are not sufficient, by future tax levies. In accordance with Wisconsin Statutes, total general obligation indebtedness of the City may not exceed 5% of the equalized value of taxable property within the City’s jurisdiction. The debt limit as of December 31, 2013, was $138,171,950. Total general obligation debt outstanding at year end was $55,390,000. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 41 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) G. Long-Term Obligations (Continued) General Obligation Debt (Continued) Date of Final Interest Original Balance Type Issue Maturity Rates Amount 12/31/13 Governmental Activities General Obligation Debt 2004 General obligation promissory notes 06/15/04 03/01/14 2.50%-4.25% 1,910,000 $ 215,000 $ 2006 General obligation promissory notes 12/27/06 12/01/16 3.75%-4.00% 2,330,000 530,000 2008 General obligation refunding bonds 06/02/08 12/01/27 3.00%-4.00% 6,530,000 5,860,000 2008 General obligation promissory notes 06/09/08 12/01/17 3.50%-4.00% 2,000,000 1,400,000 2008 General obligation promissory notes 12/30/08 12/01/17 3.00%-4.25% 2,750,000 1,950,000 2010 General obligation refunding bonds 04/15/10 09/01/29 1.45%-8.5% 10,110,000 9,295,000 2010 General obligation promissory notes 04/15/10 09/01/17 1.20%-3.80% 2,010,000 1,260,000 2010 Taxable general obligation refunding bonds 11/23/10 09/01/20 .85%-3.75% 6,580,000 5,515,000 2010 General obligation refunding bonds 11/23/10 09/01/20 2.00%-4.00% 4,625,000 4,015,000 2011 General obligation promissory notes 05/09/11 09/01/19 2.00%-3.00% 2,500,000 2,500,000 2012 Taxable general obligation promissory notes 05/12/12 03/01/19 .46%-1.85% 2,540,000 2,195,000 2012 General obligation promissory notes 05/12/12 09/01/20 2.00%-2.25% 2,015,000 1,780,000 2012 General obligation promissory notes 12/28/12 09/01/21 1.00%-2.00% 4,500,000 4,360,000 2012 General obligation refunding bonds 12/28/12 09/01/32 1.05%-3.80% 5,110,000 5,110,000 2013 General obligation promissory notes 12/23/13 02/01/23 2.00%-3.00% 4,000,000 4,000,000 Total governmental activities- general obligation debt 49,985,000 $ ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 42 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) G. Long-Term Obligations (Continued) General Obligation Debt (Continued) Debt service requirements to maturity are as follows: Principal Interest Principal Interest Totals 2014 5,280,000 $ 1,405,670 $ 735,000 $ 164,000 $ 7,584,670 $ 2015 5,240,000 1,320,587 825,000 148,400 7,533,987 2016 5,185,000 1,194,771 2,145,000 130,700 8,655,471 2017 5,395,000 1,051,743 300,000 66,875 6,813,618 2018 4,900,000 896,745 300,000 54,125 6,150,870 2019-23 15,020,000 2,711,508 1,100,000 67,975 18,899,483 2024-28 6,735,000 1,123,272 - - 7,858,272 2029 2,230,000 168,866 - - 2,398,866 Totals $ 49,985,000 $ 9,873,162 $ 5,405,000 $ 632,075 $ 65,895,237 Governmental Business-type Long-Term Debt Long-Term Debt Estimated payments of accumulated employee benefits and other commitments are not included in the above schedule. The compensated absences liability attributable to governmental activities will be liquidated primarily by the General Fund. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 43 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) H. Governmental Activities Net Position/Fund Balances Governmental Activities Governmental activities net position reported on the government wide Statement of Net Position at December 31, 2013 include the following: Net investment in capital assets Capital assets, net of accumulated depreciation $ 79,191,082 Less: related long-term debt (excluding unspent capital related debt proceeds) (44,823,089) Total invested in capital assets, net of related debt 34,367,993 Restricted Community development 9,064,869 Library 356,253 Impact fees 676,649 Tourism 1,195,129 Public safety 33,980 Senior center 162,197 11,489,077 Unrestricted 5,056,636 Total governmental activities net position 50,913,706 $ ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 44 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) H. Governmental Activities Net Position/Fund Balances (Continued) Governmental Fund Balances Governmental fund balances reported on the fund financial statements at December 31, 2013 include the following: TIF Debt District Capital General Service No. 3 Projects Nonmajor Total Nonspendable Prepaid items 213,208 $ - $ - $ - $ - $ 213,208 $ Advances to other funds 2,594,780 - - - - 2,594,780 Noncurrent receivables 14,827 - - - - 14,827 2,822,815 - - - - 2,822,815 Restricted Debt service - 105,746 - - - 105,746 Community development - - 5,332,069 - 1,207,288 6,539,357 Library - - - - 356,253 356,253 Capital improvements - - - 5,487,119 - 5,487,119 Impact fees - - - - 676,649 676,649 Tourism - - - - 1,195,129 1,195,129 Public safety - - - - 33,980 33,980 Senior center - - - - 162,197 162,197 - 105,746 5,332,069 5,487,119 3,631,496 14,556,430 Committed Library - - - - 38,254 38,254 Airport - - - - 107,029 107,029 - - - - 145,283 145,283 Assigned Post employment benefits 1,272,349 - - - - 1,272,349 Public safety 494,011 - - - - 494,011 Debt service 1,200,000 - - - - 1,200,000 2,966,360 - - - - 2,966,360 Unassigned 3,656,420 - - - - 3,656,420 Total fund balances 9,445,595 $ 105,746 $ 5,332,069 $ 5,487,119 $ 3,776,779 $ 24,147,308 $ ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 45 NOTE 3 - DETAILED NOTES ON ALL FUNDS (Continued) H. Governmental Activities Net Position/Fund Balances (Continued) Business-Type Activities Business-type activities net position reported on the government-wide and proprietary funds statement of net position at December 31, 2013 include the following: Pleasant View Golf Water Sewer Course Totals Capital assets 26,160,417 $ 15,332,075 $ 11,462,696 $ 52,955,188 $ Accumulated depreciation (8,256,908) (4,408,322) (1,047,162) (13,712,392) Subtotals 17,903,509 10,923,753 10,415,534 39,242,796 Less capital related long-term debt - - 5,464,971 5,464,971 Net investment in capital assets 17,903,509 10,923,753 4,950,563 33,777,825 Restricted for equipment replacement - 60,820 - 60,820 Unrestricted (deficit) 4,934,807 4,656,042 (3,604,943) 5,985,906 Total business-type activities net position 22,838,316 $ 15,640,615 $ 1,345,620 $ 39,824,551 $ I. Component Unit This report contains the Community Development Authority (CDA), which is included as a component unit. Financial information is presented as a discrete column in the statement of net position and statement of activities. In addition to the basic financial statements and the preceding notes to financial statements which apply, the following additional disclosures are considered necessary for a fair presentation. Basis of Accounting/Measurement Focus The CDA follows the full accrual basis of accounting and the flow of economic resources measurement focus. Capital Assets Beginning Ending Useful Balance Additions Deletions Balance Lives Land 154,000 $ - $ - $ 154,000 $ - Buildings 2,874,692 - - 2,874,692 40 years Less: Accumulated depreciation (730,910) (62,493) - (793,403) - Totals 2,297,782 $ (62,493) $ - $ 2,235,289 $ ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 46 NOTE 4 - OTHER INFORMATION A. Employees’ Retirement System Eligible City of Middleton employees participate in the Wisconsin Retirement System (System), a cost sharing multiple-employer defined benefit public employee retirement system (PERS). All employees, initially employed by a participating WRS employer prior to July 1, 2011, expected to work at least 600 hours a year and expected to be employed for at least one year from employee’s date of hire are eligible to participate in the System. All employees, initially employed by a participating WRS employer on or after July 1, 2011, and expected to work at least 1200 hours a year and expected to be employed for at least one year from the employee’s date of hire are eligible to participate in the System. Covered employees are required to contribute one-half of the actuarially determined contribution rate for general category employees, and executives and elected officials. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. Contribution rates for 2013 are: Employee Employer General 6.65% 6.65% Executives & Elected Officials 7.00% 7.00% Protective with Social Security 6.65% 9.75% Protective without Social Security 6.65% 12.35% The payroll for City employees covered by the System for the year ended December 31, 2013 was $8,988,398; the employer’s total payroll was $9,756,621. The total required contribution for the year ended December 31, 2013 was $1,386,896 or 15.4% of covered payroll. Of this amount, $789,067 was contributed by the employer for the current year and $597,829 was contributed by the employees for the current year. Total contributions for the years ending December 31, 2012 and 2011 were $1,181,687 and $974,735, respectively, equal to the required contributions for each year. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 47 NOTE 4 - OTHER INFORMATION (Continued) A. Employees’ Retirement System (Continued) Employees who retire at or after age 65, (62 for elected officials, 54 for protective occupation employees with less than 25 years of service, 53 for protective occupation employees with more than 25 years of service), are entitled to receive a retirement benefit. Employees may retire at age 55, (50 for protective occupation employees), and receive actuarially reduced benefits. The factors influencing the benefit are: final average earnings, years of creditable service, and a formula factor. The final average earnings are the average of the employee's three highest year's 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 through June 30, 2011 are immediately vested. For participants employed after July 1, 2011, five years of creditable service is required for eligibility. 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. B. Risk Management The City is exposed to various risks of loss related to torts, theft of, damage to, or destruction of assets; errors, and omissions; worker’s 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 have been no significant reductions in insurance coverage to the prior year. C. Other Postemployment Benefits The City provides other postemployment benefits (OPEB) to its retirees for health insurance. Prior to January 1, 2013, the City participated in a community rated plan, and accordingly, did not have an OPEB liability. Plan Description The City provides a single-employer defined benefit healthcare plan administered by Unity Health Insurance. 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. Retirees pay the full premium cost for health insurance. Employees may convert their accumulated sick leave to pay for health care premiums. The plan does not issue stand-alone financial statements. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 48 NOTE 4 - OTHER INFORMATION (Continued) C. Other Postemployment Benefits (Continued) Funding Policy The contribution of plan members and the employer are established and may be amended by the City Common Council. The required contribution is based on pay-as-you-go financing. For 2013, total expenditures for retirees’ medical premiums during the year were $118,624. The number of participants currently eligible to receive benefits is 21. Annual OPEB Costs and Net OPEB Obligation The City’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City did not obtain an actuarial valuation for 2013, but rather estimated the implicit rate subsidy liability using an alternative method. The City intends to obtain an actuarial valuation in 2014. The City’s estimated net unfunded actuarial accrued liability (UAAL) at December 31, 2013 is $2,862,888 and the ratio of the UAAL to covered payroll was 32%. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend amounts determined regarding the funded status of the plan and the annual required contributions of the Employer, and are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. In addition, the projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 49 NOTE 4 - OTHER INFORMATION (Continued) D. Commitments and Contingencies From time to time, the City becomes party to claims and legal proceedings. Although, the outcome of such matters cannot be forecasted with certainty, it is the opinion of management and the City’s legal counsel that the likelihood is remote that most of such claims or proceedings will not have a material adverse effect on the City’s financial position. Expenditures of the City’s Tax Increment Districts are subject to review and audit by the Wisconsin Department of Revenue and the overlapping taxation districts. The City has allocated certain expenditures for administration, public safety, public lands administration, and transit services which were reimbursed to the City’s General Fund. For 2012 and 2013, these costs amount to approximately $3.2 million. Review by the Wisconsin Department of Revenue or the overlapping taxation districts could result in a portion of these expenditures being disallowed. The City has entered into various development agreements in connection with the Tax Increment Districts. Under the terms of these agreements, the City has made commitments for development incentives or reimbursements. Commitments for projects undertaken through 2013 totaled $9.4 million of which $1.3 million has been paid. The remaining commitment is $8.1 million. E. Joint Ventures Metropolitan Refuse District, Inc. The City of Middleton and the Villages of Shorewood Hills and Waunakee are members of the Metropolitan Refuse District, Inc. (District), which owns and operates the closed local sanitary landfill. The landfill stopped accepting waste at the end of 1996. The three member communities share in the operational costs of the District based on estimated population, with the 2013 percentages as follows: City of Middleton 56% Village of Shorewood Hills 5% Village of Waunakee 39% The District is made up of member from each community. For the City, the corporate member is the Mayor or the Mayor’s appointed designee. For each of the Villages, the corporate member is the Village President or the Village President’s appointed designee. At the annual meeting, members appoint directors and officers as the governing body. The governing body has authority to adopt its own budget and control of financial affairs of the District. The District’s fund balance at December 31, 2013 is a deficit of $961,722. 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 56%, which amounts to $538,564 of the District’s net deficit. The City’s share of the net deficit has been reported in the government-wide statement of net position as landfill post- closure cost. The City made payments totaling $51,300 to the District in 2013. The City will continue to support the District’s postclosure care costs in the future. ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO FINANCIAL STATEMENTS December 31, 2013 50 NOTE 4 - OTHER INFORMATION (Continued) E. Joint Ventures (Continued) Metropolitan Refuse District, Inc. (Continued) The District’s closed 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. Separately issued financial statements of the District are not prepared. Multijurisdictional Public Safety Information System Commission (MJPISC) The City of Fitchburg, City of Sun Prairie, City of Middleton, and City of Verona jointly operate the Multijurisdictional Public Safety Information System Commission. On March 20, 2003, the City of Middleton, City of Fitchburg, and the City of Sun Prairie executed an intergovernmental agreement under authority of Section 66.0301 of the Wisconsin Statutes. The City of Verona joined the Commission in 2009. The Commission adopts its own budget. Net operating costs including debt service are shared by the four communities equally. The department is governed by the Intermunicipal Commission. The Commission consists of one representative from each community. The transactions of the Commission are not reflected in these financial statements. Separately issued financial statements of the Commission can be obtained from the City of Sun Prairie at 300 East Main Street, Sun Prairie, Wisconsin 53590. The City does not have an equity interest in this joint venture. 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 operations of the District based on the ratio of equalized values of each member. The governing body is made up of elected officials 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 $1,179,035 to the District in 2013 for operating expenses. The transactions of the District are not reflected in these financial statements. The City does not have an equity interest in the joint venture. Separately issued financials statements of the District are not prepared. This information is an integral part of the accompanying financial statements. ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND For the Year Ended December 31, 2013 Variance with Original Final Actual Final Budget REVENUES Taxes 14,013,042 $ 14,013,042 $ 14,136,261 $ 123,219 $ Intergovernmental 1,891,635 2,025,427 2,015,429 (9,998) Licenses and permits 539,600 539,600 828,552 288,952 Fines, forfeitures, and penalties 315,000 315,000 291,296 (23,704) Public charges for services 1,292,816 1,292,816 1,407,170 114,354 Interdepartmental charges for services 1,919,130 1,919,130 1,919,130 - Special assessments 96,000 96,000 125,324 29,324 Investment income 62,000 62,000 69,966 7,966 Miscellaneous 88,374 88,374 180,640 92,266 Total revenues 20,217,597 20,351,389 20,973,768 622,379 EXPENDITURES Current General government 2,879,540 3,062,096 2,551,419 510,677 Public safety 7,867,939 7,867,939 8,286,465 (418,526) Public works 3,342,731 3,350,631 3,332,707 17,924 Health and human services 431,569 431,569 437,254 (5,685) Leisure activities 1,369,186 1,371,286 1,348,136 23,150 Conservation and development 561,966 561,966 586,595 (24,629) Total expenditures 16,452,931 16,645,487 16,542,576 102,911 Excess of revenues over expenditures 3,764,666 3,705,902 4,431,192 725,290 OTHER FINANCING SOURCES (USES) Sale of capital assets - - 73 73 Transfers in 890,000 614,400 654,019 39,619 Transfers out (4,784,666) (4,579,126) (4,535,852) 43,274 Total other financing sources (uses) (3,894,666) (3,964,726) (3,881,760) 82,966 Net change in fund balance (130,000) (258,824) 549,432 808,256 FUND BALANCE - Beginning 8,896,163 8,896,163 8,896,163 - FUND BALANCE - Ending 8,766,163 $ 8,637,339 $ 9,445,595 $ 808,256 $ CITY OF MIDDLETON, WISCONSIN Budgeted Amounts 51 ---PAGE BREAK--- CITY OF MIDDLETON, WISCONSIN NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended December 31, 2013 52 NOTE 1 - BUDGETARY INFORMATION Budgetary information is derived from the annual operating budget and is presented using the same basis of accounting for each fund as described in the notes to the financial statements. A budget has been adopted for the General Fund, Debt Service Fund, certain special revenue funds, and capital project funds. Wisconsin Statute Section 65.90 requires that an annual budget be adopted for all funds. The budgeted amounts presented include any amendments made. The City may authorize transfers of budgeted amounts between departments up to $1,000. Transfers exceeding $1,000 between departments and changes in the overall budget must be approved by a two-thirds vote of the City Council. Appropriations lapse at year-end unless specifically carried over. NOTE 2 - EXCESS EXPENDITURES OVER APPROPRIATIONS The following functions experienced excess expenditures over appropriations: Excess Budgeted Actual Expenditures Expenditures Expenditures Over Budget General Fund Public safety 7,867,939 $ 8,286,465 $ 418,526 $ Health and human services 431,569 437,254 5,685 Conservation and development 561,966 586,595 24,629 The legal level of budget control is the function level in the General Fund and total expenditures in all other funds. The City controls expenditures at the departmental level for management purposes. TIF District No. 3 debt service was included in the Debt Service Fund, rather than TIF District No. 3. TIF District No. 3 debt service was funded by TIF. The detail of those items can be found in the City’s year-end budget to actual report. ---PAGE BREAK--- SUPPLEMENTARY INFORMATION ---PAGE BREAK--- DETAILED SCHEDULE OF REVENUES - BUDGET AND ACTUAL GENERAL FUND For the Year Ended December 31, 2013 Variance with Original Final Actual Final Budget TAXES General property tax 13,581,442 $ 13,581,442 $ 13,598,627 $ 17,185 $ Fees in lieu of taxes 44,100 44,100 44,100 - Room tax 385,000 385,000 489,462 104,462 Interest and penalties on taxes 2,500 2,500 4,072 1,572 Total taxes 14,013,042 14,013,042 14,136,261 123,219 INTERGOVERNMENTAL Shared taxes from state 391,125 391,125 395,678 4,553 State aid - road allotment 1,048,271 1,076,604 1,076,605 1 State aid - exempt computer aid 160,000 265,459 265,459 - State aid - fire insurance dues 88,900 88,900 89,261 361 State aid - law enforcement 86,000 86,000 74,219 (11,781) Federal and state aid - other 55,250 55,250 55,396 146 County aid - signals 8,200 8,200 9,508 1,308 County aid - senior citizens 45,153 45,153 45,153 - County aid - youth center 8,736 8,736 4,150 (4,586) Total intergovernmental 1,891,635 2,025,427 2,015,429 (9,998) LICENSES AND PERMITS Liquor and malt beverage licenses 35,000 35,000 33,813 (1,187) Operators' licenses 12,000 12,000 13,580 1,580 Contractors' licenses - - 400 400 Alarm licenses 9,000 9,000 9,772 772 Cigarette licenses 1,000 1,000 630 (370) Bicycle licenses - - 15 15 Dog and cat licenses 6,000 6,000 2,258 (3,742) Cable TV franchise license 200,000 200,000 211,878 11,878 Other miscellaneous licenses 2,100 2,100 2,805 705 Building permits 160,000 160,000 314,336 154,336 Electrical permits 35,000 35,000 76,537 41,537 Plumbing permits 35,000 35,000 81,665 46,665 Erosion control permits 12,500 12,500 24,101 11,601 Other public land fees - - - - Zoning permits 12,000 12,000 30,100 18,100 Park reservation permits 20,000 20,000 26,662 6,662 Total licenses and permits 539,600 539,600 828,552 288,952 FINES, FORFEITURES, AND PENALTIES Court penalties 190,000 190,000 173,536 (16,464) Parking violations 40,000 40,000 47,204 7,204 Court costs 85,000 85,000 70,556 (14,444) Total fines, forfeitures, and penalties 315,000 315,000 291,296 (23,704) Budgeted Amounts CITY OF MIDDLETON, WISCONSIN 53 ---PAGE BREAK--- DETAILED SCHEDULE OF REVENUES - BUDGET AND ACTUAL GENERAL FUND For the Year Ended December 31, 2013 Variance with Original Final Actual Final Budget Budgeted Amounts CITY OF MIDDLETON, WISCONSIN PUBLIC CHARGES FOR SERVICES Clerk fees 10,000 $ 10,000 $ 12,347 $ 2,347 $ Vehicle registration fees 1,000 1,000 1,050 50 Police special services - - 25 25 Police department fees 10,000 10,000 10,392 392 Ambulance services 680,248 680,248 788,291 108,043 EMS fixed cost abatement 196,068 196,068 196,068 - Plan commission charges 15,000 15,000 17,157 2,157 Senior citizens 15,500 15,500 28,995 13,495 Swimming pool 206,000 206,000 225,443 19,443 Summer recreation 105,000 105,000 94,758 (10,242) Fall-Winter-Spring recreation 44,000 44,000 31,821 (12,179) Public works charges 10,000 10,000 93 (9,907) Other recreation - - 730 730 Total public charges for services 1,292,816 1,292,816 1,407,170 114,354 INTERDEPARTMENTAL CHARGES FOR SERVICES Administration reimbursements - Utilities 135,000 135,000 135,000 - Administration reimbursements - TIF 1,776,530 1,776,530 1,776,530 - Administration reimbursements - Landfill 5,000 5,000 5,000 - Administration reimbursements - Fire District 2,600 2,600 2,600 - Total interdepartmental charges for services 1,919,130 1,919,130 1,919,130 - SPECIAL ASSESSMENTS Curb, gutter, and sidewalks 95,000 95,000 125,317 30,317 Interest on special assessments 1,000 1,000 7 (993) Total special assessments 96,000 96,000 125,324 29,324 INVESTMENT INCOME 62,000 62,000 69,966 7,966 COMMERCIAL REVENUES Rent of City buildings and offices 24,000 24,000 52,940 28,940 Donations 2,000 2,000 5,442 3,442 Sale of materials 8,000 8,000 1,913 (6,087) Miscellaneous 20,000 20,000 86,924 66,924 Annual environmental impact fee 32,624 32,624 32,624 - Event/trip revenue 1,000 1,000 - (1,000) Interlocking ignition device 750 750 797 47 Total commercial revenues 88,374 88,374 180,640 92,266 OTHER FINANCING SOURCES Sale of City property - - 73 73 Transfer in - Water Utility 390,000 390,000 429,619 39,619 Transfer in - Nonmajor Funds 500,000 224,400 224,400 - Total other financing sources 890,000 614,400 654,092 39,692 TOTAL REVENUES AND OTHER FINANCING SOURCES 21,107,597 $ 20,965,789 $ 21,627,860 $ 662,071 $ 54 ---PAGE BREAK--- Variance with Original Final Actual Final Budget GENERAL GOVERNMENT Council 67,191 $ 67,191 $ 66,835 $ 356 $ Police commission 8,710 8,710 215 8,495 Landmarks commission 484 484 1,529 (1,045) Middleton youth commission 27,067 27,067 24,860 2,207 Art committee 3,000 3,000 2,171 829 Sustainability committee 7,744 7,744 7,190 554 Municipal court 107,891 107,891 101,071 6,820 General administration 878,848 935,048 820,423 114,625 Information technology 650,184 650,184 644,594 5,590 Elections 29,500 29,500 18,165 11,335 Board of review 300 300 - 300 Independent auditing 48,000 48,000 43,790 4,210 Legal counseling 200,000 200,000 205,060 (5,060) Special legal counsel 3,400 3,400 26,627 (23,227) Buildings and grounds 137,693 152,937 156,998 (4,061) Illegal taxes and tax refunds 6,000 6,000 17,008 (11,008) Property and liability insurance 394,000 394,000 356,613 37,387 Income continuation insurance 16,000 16,000 - 16,000 Contingency 228,028 265,140 - 265,140 Group life insurance 32,000 32,000 17,499 14,501 Bank fees 14,000 14,000 4,824 9,176 Miscellaneous 19,500 93,500 35,947 57,553 Total general government 2,879,540 3,062,096 2,551,419 510,677 PUBLIC SAFETY Police administration 710,205 710,205 700,209 9,996 Police patrol 3,522,815 3,522,815 3,660,514 (137,699) Code compliance 78,299 78,299 78,195 104 Training - - - - School patrol 14,477 14,477 14,344 133 Fire suppression 811,048 811,048 1,179,035 (367,987) Public fire protection 437,391 437,391 437,391 - EMS 1,493,192 1,493,192 1,416,050 77,142 Building inspector 113,940 113,940 119,228 (5,288) Electrical inspector 100,666 100,666 100,026 640 Plumbing inspection 66,489 66,489 66,045 444 Emergency preparedness 31,006 31,006 16,475 14,531 Sealer of weights and measures 4,500 4,500 4,400 100 Erosion control enforcement 16,000 16,000 18,292 (2,292) Communications 467,911 467,911 476,261 (8,350) Total public safety 7,867,939 7,867,939 8,286,465 (418,526) CITY OF MIDDLETON, WISCONSIN DETAILED SCHEDULE OF EXPENDITURES - ACTUAL AND BUDGET For the Year Ended December 31, 2013 Budgeted Amounts GENERAL FUND 55 ---PAGE BREAK--- Variance with Original Final Actual Final Budget CITY OF MIDDLETON, WISCONSIN DETAILED SCHEDULE OF EXPENDITURES - ACTUAL AND BUDGET For the Year Ended December 31, 2013 Budgeted Amounts GENERAL FUND PUBLIC WORKS Machinery 312,021 $ 312,021 $ 322,161 $ (10,140) $ Garage 44,000 44,000 51,324 (7,324) Public works salaries and fringes 629,082 629,082 630,966 (1,884) Protective equipment 3,000 3,000 3,461 (461) Engineering 701,021 701,021 687,982 13,039 Street maintenance 31,950 31,950 36,950 (5,000) Street cleaning 8,900 8,900 8,916 (16) Snow and ice control 66,450 66,450 69,114 (2,664) Traffic signals 22,250 22,250 10,719 11,531 Traffic signs and markings 42,100 42,100 52,259 (10,159) Street lighting 111,000 111,000 112,420 (1,420) Tree and brush 2,000 2,000 1,857 143 Storm sewers 50,000 47,900 54,108 (6,208) Mass transit 329,957 339,957 334,191 5,766 Garbage collection 542,000 542,000 536,921 5,079 Sanitary landfill 51,300 51,300 51,300 - Recycling 245,700 245,700 243,799 1,901 Sidewalk maintenance 150,000 150,000 124,259 25,741 Total public works 3,342,731 3,350,631 3,332,707 17,924 HEALTH AND HUMAN SERVICES Aging 431,569 431,569 437,254 (5,685) LEISURE ACTIVITIES Cable television 4,000 4,000 5,285 (1,285) Hubbard arts center - - 8,365 (8,365) Recreation programs and events 68,199 68,199 23,164 45,035 Recreation administration 129,181 129,181 129,035 146 Swimming pool 280,854 280,854 297,707 (16,853) Summer recreation 69,319 69,319 83,521 (14,202) Parks 817,633 819,733 801,059 18,674 Total leisure activities 1,369,186 1,371,286 1,348,136 23,150 CONSERVATION AND DEVELOPMENT Water resources 30,459 30,459 20,144 10,315 Conservancy land commission 75,250 75,250 117,997 (42,747) Planning commission 315,690 315,690 308,891 6,799 Other 7,500 7,500 7,638 (138) Forestry 133,067 133,067 131,925 1,142 Total conservation and development 561,966 561,966 586,595 (24,629) OTHER FINANCING USES Transfers out - Nonmajor Funds - Other - 132,624 89,350 43,274 Transfers out - Library Fund 1,007,346 1,007,346 1,007,346 - Transfers out - Debt Service Fund 3,777,320 3,439,156 3,439,156 - Total other financing uses 4,784,666 4,579,126 4,535,852 43,274 TOTAL EXPENDITURES AND OTHER FINANCING USES 21,237,597 $ 21,224,613 $ 21,078,428 $ 146,185 $ 56 ---PAGE BREAK--- Total Lost and Safety Economic Nonmajor Subdividers' Damaged Library Library Library Impact Fee Development Tourism Police EMS Public Land Senior Center Governmental Deposits Books Gift Endowment Fund Airport and Other Grant Commission Activities Activities Activities Activities Funds ASSETS Cash and investments 1,513,567 $ 38,343 $ 41,055 $ 249,745 $ 70,453 $ 118,801 $ 252,684 $ 276,100 $ 1,059,485 $ 33,980 $ 86,593 $ 355,476 $ 162,197 $ 4,258,479 $ Accounts receivable - - - - - - - - 273,663 - - - - 273,663 TOTAL ASSETS 1,513,567 $ 38,343 $ 41,055 $ 249,745 $ 70,453 $ 118,801 $ 252,684 $ 276,100 $ 1,333,148 $ 33,980 $ 86,593 $ 355,476 $ 162,197 $ 4,532,142 $ LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable 7,931 $ 89 $ - $ - $ 5,000 $ 11,772 $ - $ - $ 138,019 $ - $ - $ 18,104 $ - $ 180,915 $ Deposits 574,448 - - - - - - - - - - - - 574,448 Total liabilities 582,379 89 - - 5,000 11,772 - - 138,019 - - 18,104 - 755,363 FUND BALANCES Restricted 931,188 - 41,055 249,745 65,453 - 252,684 276,100 1,195,129 33,980 86,593 337,372 162,197 3,631,496 Committed - 38,254 - - - 107,029 - - - - - - - 145,283 Total fund balances 931,188 38,254 41,055 249,745 65,453 107,029 252,684 276,100 1,195,129 33,980 86,593 337,372 162,197 3,776,779 TOTAL LIABILITIES AND FUND BALANCES 1,513,567 $ 38,343 $ 41,055 $ 249,745 $ 70,453 $ 118,801 $ 252,684 $ 276,100 $ 1,333,148 $ 33,980 $ 86,593 $ 355,476 $ 162,197 $ 4,532,142 $ CITY OF MIDDLETON, WISCONSIN COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2013 57 ---PAGE BREAK--- Total Lost and Safety Economic Nonmajor Subdividers' Damaged Library Library Library Impact Fee Development Tourism Police EMS Public Land Senior Center Governmental Deposits Books Gift Endowment Fund Airport and Other Grant Commission Activities Activities Activities Activities Funds REVENUES Taxes - $ - $ - $ - $ - $ - $ - $ - $ 1,142,077 $ - $ - $ - $ - $ 1,142,077 $ Intergovernmental - - - - 779,524 - - - - - 5,160 - 15,037 799,721 Licenses and permits 32,751 - - - - - 146,718 - - - 58,139 - - 237,608 Public charges for services - 19,811 8,789 - 15,942 126,009 - - - - - 290,594 - 461,145 Contributions - - - 29,495 - - - - - - - - - 29,495 Investment income - - - 30,506 - - - 130 - - - - - 30,636 Miscellaneous - - - - 14,442 - - - - 19,972 - 128,007 59,694 222,115 Total revenues 32,751 19,811 8,789 60,001 809,908 126,009 146,718 130 1,142,077 19,972 63,299 418,601 74,731 2,922,797 EXPENDITURES Current: Public safety - - - - - - - - - 4,684 - - - 4,684 Leisure activities - 5,874 2,162 10,978 1,799,437 - - - 1,025,586 - - 299,549 20,150 3,163,736 Conservation and development 91,411 - - - - 82,502 - 163 - - - - - 174,076 Total expenditures 91,411 5,874 2,162 10,978 1,799,437 82,502 - 163 1,025,586 4,684 - 299,549 20,150 3,342,496 Excess of revenues over (under) expenditures (58,660) 13,937 6,627 49,023 (989,529) 43,507 146,718 (33) 116,491 15,288 63,299 119,052 54,581 (419,699) OTHER FINANCING SOURCES (USES) Transfers in - - - - 1,007,346 - - - - - - - - 1,007,346 Transfers out (224,400) - - - - - - - - - (131,272) - - (355,672) Net change in fund balances (283,060) 13,937 6,627 49,023 17,817 43,507 146,718 (33) 116,491 15,288 (67,973) 119,052 54,581 231,975 FUND BALANCES - BEGINNING OF YEAR 1,214,248 24,317 34,428 200,722 47,636 63,522 105,966 276,133 1,078,638 18,692 154,566 218,320 107,616 3,544,804 FUND BALANCES - END OF YEAR 931,188 $ 38,254 $ 41,055 $ 249,745 $ 65,453 $ 107,029 $ 252,684 $ 276,100 $ 1,195,129 $ 33,980 $ 86,593 $ 337,372 $ 162,197 $ 3,776,779 $ CITY OF MIDDLETON, WISCONSIN COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Year Ended December 31, 2013 NONMAJOR GOVERNMENTAL FUNDS 58 ---PAGE BREAK--- Public Works Public Lands TIF District Capital Capital General No. 5 Construction Construction Capital Projects Total ASSETS Cash and investments 562,714 $ 3,813,319 $ 535,708 $ 556,924 $ 5,468,665 $ Taxes receivable 209,035 - - - 209,035 Receivables - 33,641 - - 33,641 Total assets 771,749 $ 3,846,960 $ 535,708 $ 556,924 $ 5,711,341 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable 1,512 $ 222 $ 13,453 $ - $ 15,187 $ DEFERRED INFLOWS OF RESOURCES Subsequent year tax levy 209,035 - - - 209,035 FUND BALANCES Restricted 561,202 3,846,738 522,255 556,924 5,487,119 TOTAL LIABILITIES DEFERRED INFLOWS AND FUND BALANCES 771,749 $ 3,846,960 $ 535,708 $ 556,924 $ 5,711,341 $ CITY OF MIDDLETON, WISCONSIN COMBINING BALANCE SHEET CAPITAL PROJECTS FUNDS December 31, 2013 59 ---PAGE BREAK--- Public Works Public Lands TIF District Capital Capital General No. 5 Construction Construction Capital Projects Total REVENUES Intergovernmental 31,537 $ 33,641 $ 72,614 $ - $ 137,792 $ Miscellaneous - - 5,000 - 5,000 Total revenues 31,537 33,641 77,614 - 142,792 EXPENDITURES Current: General government 449,117 - - - 449,117 Conservation and development 30,000 - - - 30,000 Capital outlay 383,557 1,946,086 619,035 278,081 3,226,759 Total expenditures 862,674 1,946,086 619,035 278,081 3,705,876 Excess of revenues over (under) expenditures (831,137) (1,912,445) (541,421) (278,081) (3,563,084) OTHER FINANCING SOURCES (USES) Long-term debt issued - 3,286,750 469,700 243,550 4,000,000 Transfers in - - - 72,624 72,624 Transfers out (94,321) - - (62,564) (156,885) Sale of city property - 9,736 - - 9,736 Net change in fund balances (925,458) 1,384,041 (71,721) (24,471) 362,391 FUND BALANCES - BEGINNING OF YEAR 1,486,660 2,462,697 593,976 581,395 5,124,728 FUND BALANCES - END OF YEAR 561,202 $ 3,846,738 $ 522,255 $ 556,924 $ 5,487,119 $ For the Year Ended December 31, 2013 CITY OF MIDDLETON, WISCONSIN COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUNDS 60