Document Middleton_doc_a359d6c549

CITY OF MIDDLETON Middleton, Wisconsin FINANCIAL STATEMENTS Including Independent Auditors' Report Year Ended December 31, 2009 ---PAGE BREAK--- INDEPENDENT AUDITORS' REPORT BASIC FINANCIAL STATEMENTS CITY OF MIDDLETON TABLE OF CONTENTS December 31,2009 Government-Wide Financial Statements Statement of Net Assets Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Assets - Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Assets - Fiduciary Funds Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund Detailed Schedule of Revenues - Budget and Actual - General Fund Detailed Schedule of Expenditures - Budget and Actual- General Fund Notes to Required Supplementary Information SUPPLEMENTARY INFORMATION Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Combining Statement of Fiduciary Net Assets - Agency Funds Statement of Cash Flows - Component Unit 1-2 3 4 5 6 7 8-9 10 11 -12 13 14 - 51 52 53- 54 55- 56 57 58 - 59 60- 61 62 63 ---PAGE BREAK--- To the City Council City of Middleton Middleton, Wisconsin INDEPENDENT AUDITORS' REPORT ~AKER TILLY Baker Tilly Virchow Krause, LLP Ten Terrace Ct, PO Box 7398 Madison, W I 53707-7398 tel [PHONE REDACTED] fax [PHONE REDACTED] bakertilly.com 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 31,2009, which collectively comprise the city's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Middleton's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 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, 2009, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. The budgetary comparison information as listed in the table of contents is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. ~ anlndepel1dentmemberOf BAKER T ILLY I NTERNATIONAL Page 1 ---PAGE BREAK--- To the City Council City of Middleton Middleton, Wisconsin The City of Middleton, Wisconsin, has not presented the management's discussion and analysis that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be part of, the basic financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City of Middleton's basic financial statements. The combining financial statements and statement of cash flows - component unit as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining financial statements and statement of cash flows - component unit have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in aI/ material respects in relation to the basic financial statements taken as a whole. ~a=i~V~K~}UP May 18, 2010 Page 2 ---PAGE BREAK--- CITY OF MIDDLETON STATEMENT OF NET ASSETS December 31, 2009 Prima~ Government Business- Governmental type Component Activities Activities Totals Unit ASSETS Cash and investments $ 12,668,468 $ 6,092,803 $ 18,761,271 $ 270,721 Receivables (net of allowance for uncollectibles) Taxes 20,917,777 20,917,777 Delinquent taxes 29,578 29,578 Accounts 1,005,873 712,364 1,718,237 Interest 104,779 98,169 202,948 396 Loans 1,543,747 1,543,747 495,620 Special assessments 1,967,629 2,204,182 4,171,811 Delinquent special assessments 4,205 4,205 Due from other governments 54,607 54,607 Due from primary government 176,758 Due from component unit 1,775,678 1,775,678 Internal balances-current 222,866 (222,866) Internal balances-advances 1,969,074 (1,969,074) Prepaid items 7,111 7,111 Restricted Assets Temporarily Restricted Cash and investments 54,000 54,000 1,775,678 Leases receivable from primary government 13,135,000 Other assets 34,930 301,087 336,017 35,840 Capital Assets Land 7,439,100 2,505,107 9,944,207 154,000 Right of way 18,751,280 18,751,280 Construction in progress 7,324,743 1,008,886 8,333,629 Capital assets being depreciated 55,328,655 45,668,528 100,997,183 2,874,692 Less: Accumulated depreciation (12,921,279) (10,556,921 ) (23,478,200) (546,679) Investment in joint venture (deficit) (81,208) (81,208) Total Assets 118,147,613 45,896,265 164,043,878 18,372,026 LIABILITIES Accounts payable 2,413,448 386,494 2,799,942 2,520 Accrued liabilities 438,562 116,867 555,429 176,758 Due to other governments 7,227 7,227 Due to primary government 1,775,678 Due to component unit 176,758 176,758 Unearned revenue 20,794,423 16,583 20,811,006 Noncurrent Liabilities Due within one year 18,680,800 907,556 19,588,356 907,150 Due in more than one year 43,723,096 7,879,823 51,602,919 12,089,710 Total Liabilities 86,234,314 9,307,323 95,541,637 14,951,816 NET ASSETS Invested in capital assets, net of related debt 26,390,247 29,945,600 56,335,847 2,482,013 Restricted for equipment replacement 54,000 54,000 Restricted for subdivider's deposits 1,090,645 1,090,645 Restricted for park improvements 3,301 3,301 Restricted for police enforcement 12,563 12,563 Restricted for EMS 66,236 66,236 Restricted for drug enforcement 2,156 2,156 Restricted for library 230,755 230,755 Restricted for economic development 289,518 289,518 Restricted for senior citizens 99,359 99,359 Restricted for impact fees 87,751 87,751 Unrestricted 3,640,768 6,589,342 10,230,110 938,197 TOTAL NET ASSETS $ 31,913,299 $ 36,588,942 $ 68,502,241 $ 3,420,210 See accompanying notes to financial statements. Page 3 ---PAGE BREAK--- Functions/Programs Primary Government Governmental Activities General government Public safety Public works Leisure activities Conservation and economic development Interest and fiscal charges Total Governmental Activities Business-type Activities Water Sewer Pleasant View Golf Course Total Business-type Activities Total Primary Government Component Unit Community Development Authority CITY OF MIDDLETON STATEMENT OF ACTIVITIES For the Year Ended December 31, 2009 Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions $ 2,402,174 $ 110,889 $ 53,728 $ - 7,927,957 1,123,061 232,904 136,191 4,855,110 336,935 1,520,425 267,729 5,491,187 550,115 1,021,178 78,289 2,074,865 19,176 2,268,167 25,019,460 2,140,176 2,828,235 482,209 1,439,828 1,864,871 24,547 1,555,245 1,607,782 1,761,637 1,860,503 4,756,710 5,333,156 24,547 $ 29,776,170 $ 7,473,332 $ 2,828,235 $ 506,756 $ 986,132 $ 26,253 $ - $ General Revenues Taxes Property taxes, levied for general purposes and debt service Property taxes, levied for tax increment district Other taxes Cable television franchise fees Intergovernmental revenues not restricted to speCific programs Public gifts and/or grants Investment income Miscellaneous Transfers Total General Revenues and Transfers Change in net assets NET ASSETS - Beginning (restated) NET ASSETS - ENDING See accompanying notes to financial statements. Net (Expense) Revenue and Changes in Net Assets Prima'l Government Governmental Business-type Component Activities Activities Totals Unit $ (2,237,557) $ - $ (2,237,557) $ (6,435,801 ) (6,435,801 ) (2,730,021) (2,730,021) (3,841,605) (3,841,605) (2,055,689) (2,055,689) (2,268,167) (2,268,167) (19,568,840) (19,568,840) 449,590 449,590 52,537 52,537 98,866 98,866 600,993 600,993 (19,568,840) 600,993 (18,967,847) (959,879) 12,249,406 12,249,406 4,079,004 4,079,004 874,231 874,231 194,844 194,844 919,207 919,207 90,036 90,036 707,445 204,844 912,289 763,072 446,115 446,115 345,840 (345,840) 19,906,128 (140,996) 19,765,132 763,072 337,288 459,997 797,285 (196,807) 31,576,011 36,128,945 67,704,956 3,617,017 $ 31,913,299 $ 36,588,942 $ 68,502,241 $ 3,420,210 Page 4 ---PAGE BREAK--- CITY OF MIDDLETON BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2009 Non-major Total TIF District Capital Governmental Governmental General Debt Service No.3 Projects Funds Funds ASSETS Cash and investments $ 1,741,050 $ 75,843 $ 899,101 $ 6,109,282 $ 3,843,192 $ 12,668,468 Receivables (net) Taxes 12,222,426 8,695,351 20,917,777 Delinquent taxes 29,578 29,578 Accounts 227,276 220,225 558,372 1,005,873 Interest 104,779 104,779 Loans 1,497,311 46,436 1,543,747 Special assessments 12,708 1,954,921 1,967,629 Delinquent special assessments 4,205 4,205 Due from other funds 345,840 83,550 429,390 Due from other governments 54,607 54,607 Due from component unit 1,775,678 1,775,678 Advances to other funds 2,487,337 2,487,337 Prepaid items 7,111 7,111 TOTAL ASSETS $ 17,236,917 $ 75,843 $ 14,822,362 $ 6,329,507 $ 4,531,550 $ 42,996,179 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 742,599 $ - $ 236,850 $ 1,362,558 $ 71,441 $ 2,413,448 Due to other governments 7,227 7,227 Due to other funds 122,974 83,550 206,524 Deferred revenue 12,207,018 10,169,101 135,333 22,511,452 Deferred special assessments 16,913 1,954,921 1,971,834 Advances from other funds 154,794 363,469 518,263 Total Liabilities 13,096,731 12,515,666 1,362,558 653,793 27,628,748 Fund Balances Reserved for: Loans receivable 23,561 46,436 69,997 Delinquent personal property taxes 29,578 29,578 Advances 2,487,337 2,487,337 Debt service 75,843 1,589,129 1,664,972 Prepaid items 7,111 7,111 Unreserved and designated, reported in: General fund 308,000 308,000 Unreserved and undesignated (deficit), reported in: General fund 1,308,160 1,308,160 Special revenue funds 4,203,732 4,203,732 Capital projects funds (deficit) 694,006 4,966,949 (372,411 ) 5,288,544 Total Fund Balances 4,140,186 75,843 2,306,696 4,966,949 3,877,757 15,367,431 TOTAL LIABILITIES AND FUND BALANCES $ 17,236,917 $ 75,843 $ 14,822,362 $ 6,329,507 $ 4,531,550 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. See Note IV.D. 75,922,499 Some receivables that are not currently available are reported as deferred revenue in the fund financial statements but are recognized as revenue when earned in the government-wide statements. See Note IV.B. 3,688,863 Investment (deficit) in jOint venture is not a financial resource and, therefore, is not reported in the funds. (81,208) Some liabilities, including long-term debt, are not due and payable in the current period and, therefore, are not reported in the funds. See Note II.A. (62,984,286) NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 31,913,299 See accompanying notes to financial statements. Page 5 ---PAGE BREAK--- CITY OF MIDDLETON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended December 31, 2009 Non-major Total TIF District Capital Governmental Governmental General Debt Service NO.3 Projects Funds Funds REVENUES Taxes $ 12,555,919 $ - $ 4,079,004 $ - $ 567,719 $ 17,202,642 Intergovernmental 2,898,176 435,040 383,055 6,708 3,722,979 Licenses and permits 465,222 100,848 566,070 Fines, forfeitures and penalties 308,665 308,665 Public charges for services 1,254,961 582,284 1,837,245 Intergovernmental charges for services 368,470 368,470 Special assessments 89,664 189,008 278,672 Investment income 311,758 271,224 37,137 620,119 Miscellaneous 151,437 99,475 232,211 95,940 579,063 Total Revenues 18,404,272 5,073,751 615,266 1,390,636 25,483,925 EXPENDITURES Current General government 2,194,960 312,657 2,507,617 Public safety 6,950,343 339,258 7,289,601 Public works 3,018,238 3,018,238 Leisure activities 3,420,485 133,248 3,553,733 Conservation and economic development 434,431 675,263 1,109,694 Capital Outlay 2,439,473 10,598,877 13,038,350 Debt Service Principal retirement 10,464,563 885,000 11,349,563 Debt issuance costs 13,950 13,950 Interest and fiscal charges 1,733,509 749,645 2,483,154 Total Expenditures 16,018,457 12,198,072 4,074,118 10,612,827 1,460,426 44,363,900 Excess (deficiency) of revenues over (under) expenditures 2,385,815 {12,198,072) 999,633 {9,997,561 ) {69,790) {18,879,975) OTHER FINANCING SOURCES (USES) Debt issued 1,900,000 10,000,000 11,900,000 Premium on debt 78,300 78,300 Discount on debt (15,000) (15,000) Sale of capital assets 18,652 18,652 Transfers in 345,840 8,522,538 454,000 305,337 9,627,715 Transfers out (3,267,922) (400,000) (5,420,027) (63,300) (130,626) (9,281,875) Total Other Financing Sources (Uses) (2,903,430) 8,122,538 (3,520,027) 10,454,000 174,711 12,327,792 Net Change in Fund Balance (517,615) (4,075,534) (2,520,394) 456,439 104,921 (6,552,183) FUND BALANCES - Beginning 4,657,801 4,151,377 4,827,090 4,510,510 3,772,836 21,919,614 FUND BALANCES - ENDING $ 4,140,186 $ 75,843 $ 2,306,696 $ 4,966,949 $ 3,877,757 $ 15,367,431 See accompanying notes to financial statements. Page 6 ---PAGE BREAK--- CITY OF MIDDLETON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2009 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities an~ different because: Governmental funds report capital outlays as expenditures. However, in the statement of net assets the cost of these assets is capitalized and they are depreciated 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 Less: Some items are reported as capital outlay but are not capitalized Depreciation is reported in the government-wide statements Net book value of assets retired Receivables not currently available are reported as deferred revenue in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. Debt and lease proceeds provide current financial resources to governmental funds, but issuing these obligations increases long-term liabilities in the statement of net assets. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Debt issued Debt retired The proportionate share of the change in net assets related to joint ventures reported in the statement of activities neither provides nor uses current financial resources and is not reported in the fund statements. 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 Debt issuance costs Accrued interest on debt $ (6,552,183) 13,038,350 (4,204,973) (1,325,227) (5,225) (130,803) (11,900,000) 11,349,563 46,139 (143,995) (9,980) 175,622 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 337,288 See accompanying notes to financial statements. Page 7 ---PAGE BREAK--- CITY OF MIDDLETON STATEMENT OF NET ASSETS - PROPRIETARY FUNDS December 31,2009 ASSETS Current Assets Cash and investments Accounts receivable, net Accrued interest Due from other funds Total Current Assets Noncurrent Assets Restricted assets Cash and investments Special assessments receivable Other assets Property held for future use Capital assets Construction work in progress Property and equipment Less: Accumulated depreciation Total Capital Assets (Net of Accumulated Depreciation) Total Noncurrent Assets Total Assets $ Business-type Activities - Enterprise Funds Pleasant View Golf Water Sewer Course 3,676,170 $ 2,416,633 $ - 331,620 376,842 3,902 73,348 24,821 125,452 68,012 4,206,590 2,886,308 3,902 54,000 2,204,182 301,087 1,008,886 22,295,015 14,379,341 11,499,279 (6,329,789) (3,505,416) (721,716) 16,974,112 10,873,925 10,777,563 17,275,199 13,132,107 10,777,563 21,481,789 16,018,415 10,781,465 Totals $ 6,092,803 712,364 98,169 193,464 7,096,800 54,000 2,204,182 301,087 1,008,886 48,173,635 (10,556,921) 38,625,600 41,184,869 48,281,669 Page 8 ---PAGE BREAK--- Busi11ess-t:tl2e Activities - Enterl2rise Funds Pleasant View Golf Water Sewer Course Totals LIABILITIES Current Liabilities Accounts payable $ 106,642 $ 243,460 $ 36,392 $ 386,494 Accrued interest 10,901 5,719 100,247 116,867 Accrued compensated absences 18,846 6,282 12,428 37,556 Due to other funds 345,840 70,490 416,330 Unearned revenues 16,583 16,583 Current portion of long term debt 230,000 120,000 520,000 870,000 Total Current Liabilities 728,812 445,951 669,067 1,843,830 Noncurrent Liabilities Accrued compensated absences 25,387 8,462 35,974 69,823 Advances from other funds 1,969,074 1,969,074 General obligation debt 495,000 260,000 7,055,000 7,810,000 Total Noncurrent Liabilities 520,387 268,462 9,060,048 9,848,897 Total Liabilities 1,249,199 714,413 9,729,115 11,692,727 NET ASSETS Invested in capital assets, net of related debt 16,249,112 10,493,925 3,202,563 29,945,600 Restricted for: Equipment replacement 54,000 54,000 Unrestricted (deficit) 3,983,478 4,756,077 (2,150,213) 6,589,342 TOTAL NET ASSETS $ 20,232,590 $ 15,304,002 $ 1,052,350 $ 36,588,942 See accompanying notes to financial statements. Page 9 ---PAGE BREAK--- CITY OF MIDDLETON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS - PROPRIETARY FUNDS For the Year Ended December 31,2009 Business-t:i~e Activities - Enter~rise Funds Pleasant View Golf Water Sewer Course Totals OPERATING REVENUES Charges for services $ 1,864,871 $ 1,607,782 $ 1,860,503 $ 5,333,156 Total Operating Revenues 1,864,871 1,607,782 1,860,503 5,333,156 OPERATING EXPENSES Operation and maintenance 998,017 1,303,944 1,296,141 3,598,102 Depreciation 401,281 225,197 112,838 739,316 Total Operating Expenses 1,399,298 1,529,141 1,408,979 4,337,418 Operating Income 465,573 78,641 451,524 995,738 NONOPERATING REVENUES (EXPENSES) Investment income 133,667 71,177 204,844 Interest expense (40,530) (22,170) (352,658) (415,358) Amortization of debt issuance costs (3,934) (3,934) Total Nonoperating Revenues (Expenses) 93,137 45,073 (352,658) (214,448) Income before contributions and transfers 558,710 123,714 98,866 781,290 Capital contributions 24,547 24,547 Transfers out (345,840) (345,840) Change in Net Assets 237,417 123,714 98,866 459,997 TOTAL NET ASSETS - Beginning 19,995,173 15,180,288 953,484 36,128,945 TOTAL NET ASSETS - ENDING $ 20,232,590 $ 15,304,002 $ 1,052,350 $ 36,588,942 See accompanying notes to financial statements. Page 10 ---PAGE BREAK--- CITY OF MIDDLETON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS For the Year Ended December 31, 2009 Business-type Activities - Enterprise Funds Pleasant View Golf Water Sewer Course Totals CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 1,580,341 $ 1,585,972 $ 1,861,325 $ 5,027,638 Cash received from city for services 373,144 373,144 Cash paid to suppliers for goods and services (690,686) (1,209,143) (711,512) (2,611,341 ) Cash paid to employees for services (326,608) (88,645) (570,864) (986,117) Net Cash Flows From Operating Activities 936,191 288,184 578,949 1,803,324 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Advance from general fund 267,106 267,106 Net Cash Flows From Noncapital Financing Activities 267,106 267,106 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid (215,000) (175,000) (2,170,000) (2,560,000) Interest paid (44,444) (24,677) (360,306) (429,427) Acquisition and construction of capital assets (696,270) (56,348) (15,749) (768,367) Net Cash Flows From Capital and Related Financing Activities (955,714) (256,025) (2,546,055) (3,757,794) CASH FLOWS FROM INVESTING ACTIVITIES Investment income 60,319 46,356 106,675 Investments sold and matured 1,603,938 609,555 2,213,493 Marketable securities purchased (1,423,429) (921,021) (2,344,450) Net Cash Flows From Investing Activities 240,828 (265,110) (24,282) Net Increase (Decrease) in Cash and Cash Equivalents 221,305 (232,951) (1,700,000) (1,711,646) CASH AND CASH EQUIVALENTS - Beginning of Year 347,494 1,160,131 1,700,000 3,207,625 CASH AND CASH EQUIVALENTS - END OF YEAR $ 568,799 $ 927,180 $ - $ 1,495,979 Page 11 ---PAGE BREAK--- Business-t~pe Activities - Enterprise Funds Pleasant View Golf Water Sewer Course Totals RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income $ 465,573 $ 78,641 ~ 451,524 $ 995,738 Adjustments to Reconcile Operating Income to Net Cash Provided From Operating Activities Depreciation expense 401,281 225,197 112,838 739,316 Depreciation charged to sewer utility 42,697 42,697 Changes in Noncash Components of Working Capital Accounts receivable (11,816) (19,195) 822 (30,189) Other accounts receivable 3,660 3,660 Due from other funds 50,490 (2,615) 47,875 Accounts payable 21,854 7,686 4,331 33,871 Accrued compensated absences 13,831 (230) 9,434 23,035 Unearned revenues 3,583 3,583 Due to other funds (54,962) (1,300) (56,262) NET CASH FLOWS FROM OPERATING ACTIVITIES $ 936,191 $ 288,184 $ 578,949 $ 1,803,324 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET ASSETS - PROPRIETARY FUNDS Cash and investments - statement of net assets - proprietary funds $ 3,676,170 $ 2,416,633 $ - $ 6,092,803 Restricted cash and investments - statement of net assets - proprietary funds 54,000 54,000 Less: Non-cash equivalents (3,107,371) (1,543,453) (4,650,824) CASH AND CASH EQUIVALENTS - END OF YEAR $ 568,799 $ 927,180 $ - $ 1,495,979 NONCASH INVESTING, CAPITAL AND RELATED FINANCING ACTIVITIES Developer financed additions to utility plant $ 24,547 $ - $ See accompanying notes to financial statements. Page 12 ---PAGE BREAK--- ASSETS Cash and investments Taxes receivable CITY OF MIDDLETON STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31,2009 Due from other governmental units TOTAL ASSETS LIABILITIES Accounts payable Due to other governmental units TOTAL LIABILITIES See accompanying notes to financial statements. Agency Funds $ 17,210,093 14,857,190 142,081 $ 32,209,364 $ 87,810 32,121,554 $ 32,209,364 Page 13 ---PAGE BREAK--- CITY OF MIDDLETON INDEX TO NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE I. Summary of Significant Accounting Policies A. Reporting Entity B. Government-Wide and Fund Financial Statements C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation D. Assets, Liabilities, and Net Assets or Equity 1. Deposits and Investments 2. Receivables 3. Inventories and Prepaid Items 4. Restricted Assets 5. Capital Assets 6. Other Assets 7. Compensated Absences 8. Long-Term Obligations/Conduit Debt 9. Claims and Judgments 10. Equity Classifications 11. Basis for Existing Rates - Proprietary Funds II. Reconciliation of Government-Wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Statement of Net Assets III. Stewardship, Compliance, and Accountability A. Budgetary Information B. Excess Expenditures Over Appropriations C. Deficit Balances D. Limitations on the City's Tax Levy IV. Detailed Notes on All Funds A. Deposits and Investments B. Receivables C. Restricted Assets D. Capital Assets E. Interfund Receivables/Payables, Advances and Transfers F. Long-Term Obligations G. Lease Disclosures H. Governmental Activities Net Assets/Fund Balances I. Restatement of Net Assets J. Component Unit V. Other Information A. Employees' Retirement System B. Risk Management C. Commitments and Contingencies D. Joint Ventures E. Effect of New Accounting Standards on Current-Period Financial Statements F. SubsequentEven~ 15 15 16 18 20 20 22 23 23 24 25 25 25 26 26 27 28 28 28 28 28 29 29 29 29 31 32 33 36 39 42 43 45 46 48 48 49 49 50 51 51 Page 14 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Middleton, Wisconsin 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. 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 a 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; the primary government is entitled to, or has the ability to otherwise access, a majority of the economic resources received or held by the separate organization; 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. The discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that it is 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. Other Organizations The Middleton Area Development Corporation is a separate legal organization that is not reported in these financial statements. The corporation does not meet the definition of a component unit. Page 15 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Government-Wide Financial Statements The statement of net assets 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 Financial statements of the reporting entity are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, liabilities, net assets/fund equity, revenues, and expenditure/expenses. Separate financial statements are provided for governmental funds and 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. Funds are organized as major funds or non-major funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the city or meets the following criteria: a. Total assets, liabilities, 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. Page 16 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) The city reports the following major governmental funds: 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 for resources accumulated and payments made for principal and interest on long-term debt other than TIF or enterprise fund debt. Tax Incremental Financing District (TIF) NO.3 Capital Projects Fund - 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 capital improvement projects originally initiated. The city reports the following major enterprise funds: Major Enterprise Funds Water Utility - accounts for operations of the water system Sewer Utility - accounts for operations of the sewer system Pleasant View Golf Course - accounts for operations of the Pleasant View Golf Course The city reports the following non-major governmental funds: Non-Major Governmental Funds Special Revenue Funds - used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Subdividers' Deposits Economic Development Grant Land and Park Donations Shop With a Cop Community Gardens Drug Forfeitures Drug Evidence Federal Seizures Cable TV Senior Citizen Youth Commission Donations Tourism Commission EMS National Night Out Lost and Damaged Book Soccer Stadium Library Gift Community Awareness EMS Equipment Replacement Big Event Library Endowment Safety, Impact Fee Retirement Benefits EMS & Fire Impact Fee Airport Page 17 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) Capital Projects Funds - used to account for financial resources to be used for the acquisition or construction of equipment and/or major capital facilities. TIF District NO.5 In addition, the city reports the following fund types: Agency funds are 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 STA TEMENT PRESENT A TION Government-Wide Financial Statements The government-wide statement of net assets 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 unearned revenue. 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. The business-type activities follow all pronouncements of the Governmental Accounting Standards Board, and have elected not to follow Financial Accounting Standards Board pronouncements issued after November 30, 1989. 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 concerned. Page 18 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) c. MEASUREMENT Focus, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) 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 revenues. 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 the resources and the amounts are available. Amounts owed to the city which are not available are recorded as receivables and deferred revenues. Amounts received prior to the entitlement period are also recorded as deferred revenues. Special assessments are recorded as revenues when they become measurable and available as current assets. Annual installments due in future years are reflected as receivables and deferred revenues. Delinquent special assessments being held for collection by the county are reported as receivables and deferred revenue 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. The city reports deferred revenues on its governmental funds balance sheet. Deferred revenues arise from taxes levied in the current year which are for subsequent year's operations. For governmental fund financial statements, deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources are received before the city has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the city has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and revenue is recognized. Page 19 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) c. MEASUREMENT Focus, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) Fund Financial Statements (cont.) 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 enterprise funds follow all pronouncements of the Governmental Accounting Standards Board, and have elected not to follow Financial Accounting Standards Board pronouncements issued after November 30, 1989. 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, sewer, and Pleasant View Golf Course are charges to customers for sales and services. SpeCial assessments are recoded 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. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY 1. Deposits 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: a. Time deposits in any credit union, bank, savings bank or trust company maturing in three years or less. b. 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, or by the University of Wisconsin Hospitals and Clinics Authority. c. Bonds or securities issued or guaranteed by the federal government. d. The local government investment pool. Page 20 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.) 1. Deposits and Investments (cont.) e. Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency. f. Securities of an open-end management investment company or investment trust, subject to various conditions and investment options. g. 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. 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 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 banks and savings and loans with current credit information kept on file for each institution. 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 liquidation. Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on quoted market prices. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled investments of municipal accounting funds is allocated based on average balances. The difference between the bank balance and carrying value is due to outstanding checks and/or deposits in transit. Page 21 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.) 1. Deposits and Investments (cont.) 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 31,2009, 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 on the accompanying agency fund statement of fiduciary net assets. Property tax calendar - 2009 tax roll: Lien date and levy date Tax bills mailed Payment in full, or First installment due Second installment due Personal property taxes in full Tax sale - 2009 delinquent real estate taxes December 2009 December 2009 January 31, 2010 January 31,2010 July 31,2010 January 31, 2010 October 2012 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 assets. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances". Page 22 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LiABILITIES, AND NET ASSETS OR EQUITY (cont.) 2. Receivables (cont.) In the governmental fund financial statements, advances to other funds are offset equally by a fund balance reserve account which indicates that they do not constitute expendable available financial resources and, therefore, are not available for appropriation. The city has received federal grant funds for economic development loan programs to various businesses. The city records a loan receivable when the loan has been made and funds have been disbursed. It is the city's policy to record revenue when the initial loan is made from the federal grant funds. The net amount of the loan receivable balance is offset by a reserve for loans receivable. As loans are repaid, the reserve for loans receivable is reduced and the undesignated fund balance is increased. When new loans are made from loan repayments, the reserve for loans receivable is increased and the undesignated fund balance is decreased. Interest received from loan repayments is recognized as revenue when received in cash. Any unspent loan repayments at year end are presented as undesignated fund balance in the governmental fund balance sheet. 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 or 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 for 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 excess of restricted assets over current liabilities payable from restricted assets will be used first for retirement of related long-term debt. The remainder, if generated from earnings, is shown as restricted net assets. Page 23 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LiABILITIES, AND NET ASSETS OR EQu/Ty(cont.) 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. 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, 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 fund proceeds. 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. 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 assets. 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 Land Improvements Machinery and Equipment Infrastructure Water Plant Source of Supply Pumping Water Treatment Transmission and Distribution General Sewer Plant Collecting System Collecting System Pumping General 40 Years 30 Years 3 - 15 Years 20 - 50 Years 33 Years 20 - 40 Years 33 - 40 Years 16 - Years 4 -15 Years 30 - 100 Years 20 - 40 Years 7 - 40 Years Page 24 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQu/TY(cont.) 5. Capital Assets (cont.) 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. 6. Other Assets In governmental funds, debt issuance costs are recognized as expenditures in the current period. For the government-wide and the proprietary fund type financial statements, debt issuance costs are deferred and amortized over the term of the debt issue. 7. 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 fund 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. The city provides postemployment health insurance benefits for all eligible employees. Eligibility is based on retiring from the city or becoming disabled and being eligible to receive social security benefits or Wisconsin Retirement benefits. The benefits are based on contractual agreements with employee groups, local ordinances, and employee benefit policies. Employees may convert their accumulated sick leave to pay for health care premiums. The entire cost is paid by the city. Funding for those costs is provided by transferring funds from the general fund to a special revenue fund. Total expenditures for retirees' medical premiums during the year were $42,990. The number of participants currently eligible to receive benefits is 17. 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, 2009 are determined on the basis of current salary rates and include salary related payments. The city does not have a postemployment benefits liability related to GASB No. 45. 8. 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. Page 25 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LiABILITIES, AND NET ASSETS OR EQUITY (cont.) 8. Long-Term Obligations/Conduit Debt (cont.) Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face value of debts (plus any premiums) are reported as other financing sources 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 government-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 refundings 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/discounts and gains/losses, as applicable, is shown as an increase or decrease in the liability section of the statement of net assets. 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. 9. Claims and Judgments Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. Claims and judgments that would normally be liquidated with expendable available financial resources are recorded during the year as expenditures in the governmental funds. The liability for claims and judgments is only reported in governmental fund types if it has matured. The related expenditure is recognized when the liability is liquidated. 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. 10. Equity Classifications Government-Wide Statements Equity is classified as net assets and displayed in three components: a. Invested in capital assets, net of related debt - 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. Page 26 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.) 10. Equity Classifications (cont.) Government-Wide Statements (cont.) b. Restricted net assets - Consists of net assets with constraints placed on their use either 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 assets - All other net assets 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. Fund Statements Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved. Unreserved fund balance includes funds set aside by management for specific uses, which are labeled "designated". The balance of unreserved fund balance is labeled "undesignated", which indicates it is available for appropriation. Proprietary fund equity is classified the same as in the government-wide statements. 11. Basis for Existing Rates - Proprietary Funds Current water rates were approved by the PSCW on February 9, 2005. Current sewer rates were approved by the common council effective January 1, 2009. Sewer rates are adjusted for rate changes from Madison Metropolitan Sewerage District. Page 27 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE 11- RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BE7WEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation between fund balance - total governmental funds and net assets - governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that "some liabilities, including long- term debt are not due and payable in the current period and, therefore, are not reported in the funds. The details of this $62,984,286 difference are as follows: Bonds and notes payable Compensated absences Capital leases payable Accrued interest Accrued interest - due to component unit Unamortized debt issuance costs Combined Adjustment for Long-Term Liabilities NOTE 111- STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. BUDGETARY INFORMATION $ 47,193,856 2,075,040 13,135,000 438,562 176,758 (34,930) $ 62,984,286 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 I. C. A budget has been adopted for the general fund, debt service fund, certain special revenue funds, and capital projects funds. Wisconsin Statute 65.90 requires that an annual budget be adopted for all funds. The budgeted amounts presented include any amendments made. The city administrator may authorize transfers of budgeted amounts between departments up to $1,000. Transfers exceeding $1,000 between departments and changes to the overall budget must be approved by a two-thirds council action. Appropriations lapse at year end unless specifically carried over. Budgets are adopted at the departmental level of expenditure. B. EXCESS EXPENDITURES OVER ApPROPRIA TlONS The following individual funds experienced excess expenditures over appropriations: Capital Projects Funds Capital projects fund $ Budgeted Expenditures 4,162,450 $ Actual Expenditures 10,612,827 $ Excess Expenditures Over Budget 6,450,377 The city controls expenditures at the departmental level. Some individual departments experienced expenditures which exceeded appropriations. The detail of those items can be found in the city's year-end budget to actual report. Page 28 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE 111- STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (cont.) C. DEFICIT BALANCES Generally accepted accounting principles require disclosure of individual funds that have deficit balances at year end. As of December 31,2009, the following individual fund held a deficit balance: Community awareness National night out Big event TIF District NO.5 $ 8,464 199 74,887 372,411 Excess expenditures over revenues Excess expenditures over revenues Excess expenditures over revenues Excess expenditures over revenues The TIF district deficit is anticipated to be funded with future incremental taxes levied over the life of the district. Beginning October 1, 2004, the life of new districts varies by type of district (20-27 years) and may be extended in some cases. Other fund deficits are anticipated to be funded with future contributions, general tax revenues, long-term borrowing, or transfers from the general fund. D. LIMITATIONS ON THE CITY'S TAX LEVY As part of Wisconsin's Act 28 (2009), 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 3% for the 2009 levy collected in 2010 and 3% for the 2010 levy collected in 2011. Changes in debt service from one year to the next are generally exempt from this limit. The levy limit is set to expire after the 2010 levy. NOTE IV - DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS The city's cash and investments at year end were comprised of the following: Carrying Bank Associated Value Balance Risks Demand deposits $ 16,967,324 $ 17,198,500 Custodial credit Money market 2,086,692 2,086,692 Custodial credit Mutual funds 14,119,484 14,119,484 Credit, interest rate Other external investment pool - Madison Community Foundation 154,559 154,559 Credit, interest rate LGIP 2,696,830 2,696,830 Credit, interest rate Petty cash 475 N/A Total Cash and Investments $ 36,025,364 $ 36,256,065 Page 29 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS (cont.) Reconciliation to financial statements Per statement of net assets Unrestricted cash and investments Restricted cash and investments Per statement of net assets - Fiduciary Funds Agency Total Cash and Investments $ 18,761,271 54,000 17,210,093 $ 36,025,364 Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for interest bearing accounts and unlimited amounts for noninterest bearing accounts. 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. The Madison Community Foundation ("Foundation") is a community endowment fund. The Foundation is not registered with Securities and Exchange Commission. It constitutes a contractual agreement between the city and Foundation with respect to investment of city assets. The Foundation reports the fair value of its underlying assets annually. At December 31, 2009, the fair value of the Foundation's assets was substantially equal to the city's share as reported above. 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, 2009, $11,016,605 of the city's total bank balances were exposed to custodial credit risk as follows: Uninsured and uncollateralized $ 11,016,605 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 investments or collateral securities that are in the possession of an outside party. The city had no investments exposed to custodial credit risk. Page 30 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) A. DEPOSITS AND INVESTMENTS (cont.) Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. As of December 31,2009, the city's investments were rated as follows: Investment Type Mutual fund - Federated Securities Standard & Poor's AAA Fitch Ratings AAA The city also had investments in the following external pools which are not rated: Local Government Investment Pool Madison Community Foundation Interest Rate Risk Moody's Investor Service AAA The city also had $2,696,830 invested in the local government investment pool, which had a weighted average maturity of 88 days. In addition, the city had $154,559 in another external investment pool (Madison Community Foundation), which is made up primarily of equity securities that do not have a determinable maturity date. See Note I.D.1. for further information on deposit and investment policies. B. RECEIVABLES All receivables on the balance sheet are expected to be collected within one year except for the following: Amounts Not Expected to be Collected Within One Year TIF District No.3 Sewer $ 3,428,671 $ 2,204,182 $ Nonmajor and Other Funds Total 46,436 $ 5,679,289 Revenues of the city are reported net of uncollectible amounts. Total uncollectible amounts related to revenues of the current period are as follows: Uncollectibles related to ambulance billings $ 107,890 Page 31 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) B. RECEIVABLES (cont.) Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Property taxes levied for the subsequent year are not earned and cannot be used to liquidate liabilities of the current period. Governmental funds also 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 revenue and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Totals Property taxes receivable for subsequent year $ $ 20,794,423 $ 20,794,423 Special assessments not yet due 1,971,834 1,971,834 Loan receivable 1,473,750 1,473,750 EMS receivable 62,325 62,325 Accrued interest 45,621 45,621 Park fees receivable 135,333 135,333 Total Deferred/Unearned Revenue for Governmental Funds $ 3,688,863 $ 20,794,423 $ 24,483,286 For economic development loans, the city is limited by the Wisconsin Department of Commerce 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, 2009, the city has not exceeded its maximum retention cap. When it does, a liability to the state will be recorded. c. RESTRICTED ASSETS Replacement Account The sewer utility established an equipment replacement account to be used for significant mechanical equipment replacement as required by the Wisconsin Department of Natural Resources. Following is a list of restricted assets at December 31, 2009: Replacement account $ 54,000 Page 32 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2009 was as follows: Beginning Restatement Ending Balance See Note IV.1. Additions Deletions Balance Governmental Activities Capital assets not being depreciated Land $ 7,439,100 $ - $ - $ - $ 7,439,100 Right of way 18,751,280 18,751,280 Construction in progress 7,324,743 7,324,743 To'tal Capital Assets Not Being Depreciated 26,190,380 7,324,743 33,515,123 Capital assets being depreciated Land improvements 6,595,903 209,765 6,805,668 Buildings 11,630,765 (3,028,692) 44,548 8,646,621 Machinery and equipment 3,645,141 607,428 147,063 4,105,506 Streets - infrastructure 18,633,767 260,443 24,636 18,869,574 Storm sewers - infrastructure 8,750,194 8,750,194 Traffic signals - infrastructure 1,085,975 225,047 1,311,022 Sidewalks - infrastructure 3,079,676 3,079,676 Bridges - infrastructure 3,116,828 161,403 3,278,231 Rail spur - infrastructure 482,163 482,163 Total Capital Assets Being Depreciated 57,020,412 (3,028,692) 1,508,634 171,699 55,328,655 Less: Accumulated depreciation for Land improvements (1,428,381) (219,700) (1,648,081) Buildings (3,011,584) 528,312 (210,452) (2,693,724) Machinery and equipment (1,966,686) (306,829) 141,838 (2,131,677) Streets - infrastructure (2,557,473) (285,040) 24,636 (2,817,877) Storm sewers - infrastructure (1,544,436) (143,047) (1,687,483) Traffic signals - infrastructure (406,984) (47,182) (454,166) Sidewalks - infrastructure (1,088,674) (60,941) (1,149,615) Bridges - infrastructure (230,254) (37,571) (267,825) Rail spur - infrastructure (56,366) (14,465) {70,831) Total Accumulated Depreciation {12,290,838) 528,312 {1,325,227) 166,474 {12,921,279) Total Capital Assets, Net of Depreciation $ 70,919,954 $ (2,500,380) $ 7,508,150 $ 5,225 $ 75,922,499 Page 33 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS (cont.) Depreciation expense was charged to functions as follows: Governmental Activities General government Public safety Public works, which includes the depreciation of streets, storm sewers, traffic signals, sidewalks, bridges and rail spur Leisure activities Total Governmental Activities Depreciation Expense Water Utility Capital assets not being depreciated Land and land rights Construction work in progress Total Capital Assets Not Being Depreciated Capital assets being depreciated Source of supply Pumping Treatment Transmission and distribution Administrative and general assets Total Capital Assets Being Depreciated Total Capital Assets Less: Accumulated depreciation for Source of supply Pumping Treatment Transmission and distribution Administrative and general assets Total Accumulated Depreciation Net Water Plant Beginning Balance $ 222,277 482,785 705,062 319,783 1,739,511 343,242 18,926,169 562,271 21,890,976 22,596,038 (260,747) (975,583) (332,960) (3,834,011) (514,379) {5,917,680) $ 16,678,358 Additions $ - 526,101 526,101 183,390 29,917 213,307 739,408 (10,553) (61,452) (1,922) (345,404) {24,323) {443,654) $ 295,754 Deletions $ - 10,247 21,298 31,545 31,545 10,247 21,298 31,545 $ - $ 6,771 221,171 715,964 381,321 $ 1,325,227 Ending Balance $ 222,277 1,008,886 1,231,163 319,783 1,739,511 343,242 19,099,312 570,890 22,072,738 23,303,901 (271,300) (1,037,035) (334,882) (4,169,168) {517,404) {6,329,789) $ 16,974,112 Page 34 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS (cont.) Beginning Ending Balance Additions Deletions Balance Sewer Utility Capital assets not being depreciated Land and land rights $ 66,830 $ - $ - $ 66,830 Capital assets being depreciated Collection system 12,543,291 55,909 2,202 12,596,998 Collection system pumping 1,305,786 1,305,786 Administrative and general assets 409,288 439 409,727 Total Capital Assets Being Depreciated 14,258,365 56,348 2,202 14,312,511 Total Capital Assets 14,325,195 56,348 2,202 14,379,341 Less: Accumulated depreciation (3,282,421) {225,197) 2,202 {3,505,416) Net Sewer Plant $ 11,042,774 $ (168,849) $ - $ 10,873,925 Beginning Ending Balance Additions Deletions Balance Pleasant View Golf Course Capital assets not being depreciated Land and land rights $ 2,216,000 $ - $ - $ 2,216,000 Total Capital Assets Not Being Depreciated 2,216,000 2,216,000 Capital assets being depreciated Land improvements 7,291,981 7,291,981 Buildings 1,325,553 1,325,553 Equipment 649,996 15,749 665,745 Total Capital Assets Being Depreciated 9,267,530 15,749 9,283,279 Total Capital Assets 11,483,530 15,749 11,499,279 Less: Accumulated depreciation for Buildings (144,855) (41,981) (186,836) Land improvements (133,873) (19,124) (152,997) Equipment (330,150) {51,733) (381,883) Total Accumulated Depreciation {608,878) {112,838) {721,716) Net Golf Course $ 10,874,652 $ {97,089) $ - $ 10,777,563 Total Net Capital Assets- Business Type Activities $ 38,595,784 $ 38,625,600 Page 35 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) D. CAPITAL ASSETS (cont.) Depreciation expense was charged to functions as follows: Business-type Activities Water Sewer Pleasant View Golf Course Total Business-type Activities Depreciation Expense $ $ 401,281 225,197 112,838 739,316 Depreciation expense is different from additions because of joint metering, salvage cost of removal, internal allocations, and cost associated with the disposal of assets. E. INTERFUND RECEIVABLES/PAYABLES, ADVANCES AND TRANSFERS The following is a schedule of interfund receivables and payables including any overdrafts on pooled cash and investment accounts: Receivable Fund Payable Fund Amount Cable TV National night out $ 199 Cable TV Community awareness 8,464 Cable TV Big event 74,887 General Water utility 345,840 Water utility General 54,962 Sewer utility General 68,012 Water utility Sewer utility 70,490 Total - Fund Financial Statements 622,854 Less: Eliminations (399,988) Total Government-Wide Financial Statements $ 222,866 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. For the statement of net assets, interfund balances which are owed within the governmental activities or business-type activities are netted and eliminated. Page 36 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) E. INTERFUND RECEIVABLES/PAYABLES, ADVANCES AND TRANSFERS (cont.) The general fund advanced funds to TIF District NO.3 and TIF District NO.5. No repayment schedule has been established. Interest on the interfund advance is recorded as a deferred revenue in the general fund until paid by the TIF District. Interest costs on the advance are recorded as an expenditure of the TIF District when the expenditure is incurred. The general fund has also advanced funds to the Pleasant View Golf Course. No repayment schedules have been established on the advances to Pleasant View Golf Course. The following is a schedule of interfund advances: Receivable Fund General fund General fund General fund Total - Fund Financial Statements Less: Eliminations Payable Fund Pleasant View Golf Course TIF District NO.3 TIF District NO.5 Total- Government-Wide Financial Statements $ $ Amount Not Due Within Amount One Year 1,969,074 $ 1,969,074 154,794 363,469 363,469 2,487,337 $ 2,332,543 (518,263) 1,969,074 The principal purpose of these interfunds is to finance costs incurred in these funds rather than borrowing externally. For the statement of net assets, interfund balances which are owed within the governmental activities or business-type activities are netted and eliminated. The following is a schedule of amounts due from the component unit to the primary government: TIF District NO.3 capital projects fund Component unit - CDA $ 1,775,678 This amount represents the unspent debt proceeds by the CDA that is intended to be spent on capital projects within TIF District NO.3 or used for debt payments. Page 37 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) E. INTERFUND RECEIVABLES/PAYABLES, ADVANCES AND TRANSFERS (cont.) The following is a schedule of interfund transfers: Principal Fund Transferred To Fund Transferred From Amount Purpose General fund Water utility $ 345,840 Payment in lieu of tax Capital projects fund Debt service 400,000 Prior debt service refund Capital projects fund TIF District No.3 54,000 Project costs Debt service fund General fund 2,962,585 Debt service Retirement benefits General fund 305,337 Future retirement benefits Debt service fund TIF District No.3 5,366,027 Debt service Debt service fund Safety impact fee 130,626 Debt service Debt service fund Capital projects fund 63,300 Debt service Subtotal - Fund Financial Statements 9,627,715 Less: Fund eliminations (9,281,875) Total Government-Wide Statement of Activities $ 345,840 Government Activity Business-type Activity $ 345,840 Business-type Activity Government Activity Total $ 345,840 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 restricted to debt service from the funds collecting the receipts to the debt service fund, and use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. Page 38 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGA nONS Long-term obligations activity for the year ended December 31, 2009 was as follows: Beginning Ending Balance Increases Decreases Balance GOVERNMENTAL ACTIVITIES Bonds and Notes Payable: General obligation debt $ 45,758,419 $ 1,900,000 $ 10,464,563 $ 37,193,856 Note anticipation notes 10,000,000 10,000,000 Total Bonds and Notes Payable 45,758,419 11,900,000 10,464,563 47,193,856 Other Liabilities: Vested compensated absences 1,931,045 882,141 738,146 2,075,040 Capital leases 14,020,000 885,000 13,135,000 Total Other Liabilities 15,951,045 882,141 1,623,146 15,210,040 Total Governmental Activities Long-Term Liabilities $ 61,709,464 $12,782,141 $ 12,087,709 $ 62,403,896 BUSINESS-TYPE ACTIVITIES Bonds and Notes Payable: General obligation debt $ 11,240,000 $ - $ 2,560,000 $ 8,680,000 Other Liabilities: Vested compensated absences 84,344 80,338 57,303 107,379 Total Business-type Activities Long-Term Liabilities $ 11,324,344 $ 80,338 $ 2,617,303 $ 8,787,379 General Obligation Debt Amounts Due Within One Year $ 7,066,936 10,000,000 17,066,936 693,864 920,000 1,613,864 $ 18,680,800 $ 870,000 37,556 $ 907,556 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 31,2009, was $137,957,385. Total general obligation debt outstanding at year end was $45,873,856. Page 39 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGATIONS (cont.) General Obligation Debt (cont.) Original Date of Final Interest Indebted- Balance Governmental Activities Issue Maturit~ Rates ness 12-31-09 General Obligation Debt 2000 General obligation promissory notes 4-01-00 3-01-10 4.80%-5.20% $ 6,800,000 $ 2,000,000 2001 General obligation promissory notes 3-15-01 3-11-11 4.00%-4.40% 8,000,000 150,000 2002 General obligation promissory notes 3-15-02 3-01-12 2.125% - 4.50% 6,250,000 3,200,000 2002 State trust fund loan 11-06-02 3-15-19 5.00% 2,170,000 1,572,342 2003 General obligation promissory notes 5-01-03 9-01-13 2.00% - 3.40% 9,980,000 5,790,000 2003 State trust fund loan 1-30-03 3-15-19 5.00% 930,000 666,514 2004 General obligation refunding bond 6-15-04 3-01-12 2.00% - 4.00% 4,540,000 655,000 2004 General obligation promissory notes 6-15-04 3-01-14 2.50% - 4.25% 1,910,000 1,000,000 2005 General obligation promissory notes 6-01-05 12-01-11 3.25% - 3.50% 3,300,000 2,000,000 2006 General obligation promissory notes 6-01-06 12-01-13 4.00% - 4.25% 2,000,000 1,500,000 2006 General obligation promissory notes 12-27-06 12-01-14 3.75% - 4.00% 2,330,000 1,930,000 2008 General obligation refunding bonds 6-02-08 12-01-27 3.00% - 4.00% 6,530,000 6,530,000 2008 General obligation promissory notes 6-09-08 12-01-17 3.50% - 4.00% 2,000,000 2,000,000 2008 General obligation refunding bonds 12-30-08 9-01-21 3.50% - 4.45% 3,550,000 3,550,000 2008 General obligation promissory notes 12-30-08 12-01-17 3.00% - 4.25% 2,750,000 2,750,000 2009 State trust fund loan 8-11-09 3-15-13 3.50% 500,000 500,000 2009 State trust fund loan 10-26-09 3-15-13 3.50% 1,400,000 1,400,000 Total Governmental Activities- General Obligation Debt $ 37,193,856 Page 40 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) F. LONG-TERM OBLIGA TlONS (cont.) General Obligation Debt (cont.) Business-type Activities General Obligation Debt Date of Issue Final Maturity Interest Rates Original Indebted- ness Balance 12-31-09 2002 General obligation promissory notes 3-15-02 3-01-12 2.125% - 4.50% $ 6,005,000 $ 4,675,000 2004 General obligation refunding 6-15-04 3-01-12 2.00%-4.00% 2,040,000 1,105,000 2006 General obligation promissory notes 12-27-06 12-01-14 3.75% - 4.00% 1,200,000 1,200,000 2008 General obligation refunding bonds 12-30-08 9-01-21 3.505 - 4.45% 1,700,000 1,700,000 Total Business-type Activities- General Obligation Debt Debt service requirements to maturity are as follows: 2010 $ 2011 2012 2013 2014 2015 - 2019 2020 - 2024 2025 - 2027 Totals $ Governmental Activities General Obligation Debt Principal Interest 7,066,936 $ 1,277,898 6,586,456 1,108,567 7,043,807 831,310 5,069,905 605,965 2,011,395 462,005 6,045,357 1,353,107 1,985,000 521,600 1,385,000 112,200 37,193,856 $ 6,272,652 $ $ Business-type Activities General Obligation Debt Principal Interest 870,000 $ 374,902 925,000 331,564 1,000,000 284,564 660,000 245,078 715,000 213,783 3,810,000 480,456 700,000 28,725 8,680,000 $ 1,959,072 $ 8,680,000 Totals $ 9,589,736 8,951,587 9,159,681 6,580,948 3,402,183 11,688,920 3,235,325 1,497,200 $ 54,105,580 Estimated payments of accumulated employee benefits and other commitments are not included in the above schedule. The note anticipation notes are included in the next section. Also, the capital lease principal and interest requirements are not included. They are equal to the CDA's lease revenue bonds required payments. See Note IV.J. for the repayment schedule. Page 41 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cant.) F. LONG-TERM OBLIGA TlONS (cant.) Note Anticipation Notes Note anticipation notes at December 31, 2009, consist of the following: Note Anticipation Notes 2009 Note anticipation note Capital Leases Refer to Note IV.G. Other Debt Information Date of Issue 7-01-09 Final Maturity 7-01-10 Interest Rate 1.75% Original Indebted- ness Balance 12-31-09 $10,000,000 $ 10,000,000 The compensated absences liability attributable to governmental activities will be liquidated primarily by the general fund. There are a number of limitations and restrictions contained in the various bond indentures and loan agreements. The city believes it is in compliance with all significant limitations and restrictions, including federal arbitrage regulations. G. LEASE DISCLOSURES Lessee - Capital Leases The Tax Increment District No.3 (TIF District No.3) is leasing land and other capital assets from the Community Development Authority (CDA). The CDA borrowed $16,475,000 in revenue bonds for these costs in 2002. The annual lease payments to be paid are the same as the CDA's annual debt service payments on the bonds. See Note IV.J. for the repayment schedule. Tax increment revenues generated by TIF District No.3 are expected to be paid over to the CDA to make the debt payments. Lessee - Operating Leases The city has no material outstanding operating leases. Lessor - Capital Leases The city has no material outstanding sales-type or direct financing leases. Lessor - Operating Leases The city does not receive material lease payments from property rented to others. Page 42 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) H. GOVERNMENTAL ACTIVITIES NET ASSETS/FuND BALANCES Governmental activities net assets reported on the government wide statement of net assets at December 31, 2009 include the following: Governmental Activities Invested in capital assets, net of related debt Capital assets, net of accumulated depreciation Less: related long-term debt outstanding (excluding unspent capital related debt proceeds) Total Invested in Capital Assets, Net of Related Debt Restricted Subdivider's deposits Park improvements Police enforcement EMS Drug enforcement Library Economic development Senior citizens Impact fees Total Restricted Unrestricted Total Governmental Activities Net Assets $ 75,922,499 (49,532,252) 26,390,247 1,090,645 3,301 12,563 66,236 2,156 230,755 289,518 99,359 87,751 1,882,284 3,640,768 $ 31,913,299 Governmental fund balances reported on the fund financial statements at December 31, 2009 include the following: Reserved Major Funds General Fund Delinquent personal property taxes $ 29,578 Advances 2,487,337 Prepaid items 7,111 Total $ 2,524,026 Debt Service Fund Debt service $ 75,843 TIF District NO.3 Capital Projects Fund Reserved for loans receivable $ 23,561 Reserved for debt service 1,589,129 Total $ 1,612,690 Page 43 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) H. GOVERNMENTAL ACTIVITIES NET ASSETS/FuND BALANCES (cont.) Governmental Activities (cont.) Reserved (cont.) Non-Major Funds Economic Development Grant Special Revenue Fund Reserved for loans receivable Unreserved - Designated General Fund 2010 budget Unreserved - Undesignated Major Funds General fund TIF District No.3 capital projects fund Capital projects fund Non-Major Funds Special Revenue Funds Subdividers' deposits Land and park donations Community gardens Drug evidence Cable TV Youth commission donations EMS Lost and damaged book Library gift EMS equipment replacement Library endowment Retirement benefits Airport Economic development grant Shop with a cop Drug forfeitures Federal seizures Senior citizen Tourism commission National night out (deficit) Community awareness (deficit) Big event (deficit) Safety impact fee EMS and fire impact fee Total Capital Projects Fund TIF District No.5 (deficit) $ 46,436 $ 308,000 $ 1,308,160 $ 694,006 $ 4,966,949 $ 1,090,645 3,301 10,442 9,356 239,466 2,988 66,236 71,297 57,716 1,256 173,309 1,521,960 307,932 243,082 13,851 3,207 2,156 99,359 285,571 (199) (8,464) (74,887) 36,401 47,751 $ 4,203,732 $ (372,411 ) Page 44 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) H. GOVERNMENTAL ACTIVITIES NET ASSETS/FuND BALANCES (cont.) Business-Type Activities Invested in Capital Assets, Net of Related Debt The following calculations support the net assets invested in capital assets, net of related debt. Capital assets Accumulated depreciation Sub-totals Less: Current portion of capital related long-term debt Long-term portion of capital related long-term debt Sub-totals Total Net Assets Invested in Capital Assets, Net of Related Debt Restricted Equipment replacement Total Restricted Unrestricted (Deficit) I. RESTATEMENT OF NET ASSETS $ $ $ $ $ Water 23,303,901 $ (6,329,789) 16,974,112 (230,000) (495,000) (725,000) 16,249,112 $ $ - $ 3,983,478 $ Pleasant View Golf Sewer Course Totals 14,379,341 $ 11,499,279 $ 49,182,521 (3,505,416) (721,716) (10,556,921 ) 10,873,925 10,777,563 38,625,600 (120,000) (520,000) (870,000) (260,000) (7,055,000) (7,810,000) (380,000) (7,575,000) (8,680,000) 10,493,925 $ 3,202,563 $ 29,945,600 54,000 $ - $ 54,000 54,000 $ - $ 54,000 4,756,077 $ (2,150,213) $ 6,589,342 Net assets for the CDA and governmental activities have been restated to reflect capital assets owned by the CDA that were previously recorded in the governmental activities in error. Governmental Activities Net Assets - December 31,2008 (as reported) Less: Senior center capital assets Governmental Activities Net Assets - December 31,2008 (as restated) CDA Net Assets - December 31, 2008 (as reported) Add: Senior center capital assets CDA Net Assets - December 31,2008 (as restated) The effect of the correction on the prior year's statement of activities was not material. $ $ $ $ 34,076,391 (2,500,380) 31,576,011 1,116,637 2,500,380 3,617,017 Page 45 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) J. 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 assets 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. a. Basis of Accounting/Measurement Focus The CDA follows the full accrual basis of accounting and the flow of economic resources measurement focus. b. Restricted Cash and Investments The bond ordinances relating to the CDA bonds requires the establishment of certain accounts. These are as follows: Construction fund Debt reserve fund Total Additional information on the above deposits and investments follows: $ 185,548 1,590,130 $ 1,775,678 The investments of the CDA in u.S. treasuries have associated risks of custodial credit risk and interest rate risk. Custodial Rate Risk Investments - for an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the CDA will not be able to recover the value of its investments or collateral securities that are in possession of an outside party. As of December 31,2009, the CDA's investments were exposed to custodial credit risk as follows: u.S. Treasuries Neither insured nor registered and held by counterparty $ 1,525,678 Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Page 46 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cant.) J. COMPONENT UNIT (cant.) b. Restricted Cash and Investments (cant.) Interest Rate Risk (cant.) As of December 31,2009, the CDA's investments were as follows: Investment Type Fair Value Maturity (In Months) Less than 6 U.S. Treasuries $ 1,525,678 $ 1,525,678 c. Capital Assets Land Buildings $ Beginning Restatement Balance See Note IV.I. Additions - $ 154,000 $ - 2,874,692 Ending Deletions Balance $ - $ 154,000 2,874,692 Less: Accumulated depreciation (18,367) {528,312) {546,679) Totals (18,367) $ - $ 2,482,013 $ 2,500,380 d. CDA Lease Revenue Bonds Balance Balance 1-1-09 Increases Decreases 12-31-09 2002 redevelopment lease revenue bonds dated August 15, 2002 with interest at 2.60%- 4.75%. Principal payments vary. Bonds mature October 1,2020. $ 6,200,000 $ - $ 415,000 $ 5,785,000 $ 2002 redevelopment lease revenue bonds dated August 15, 2002 with interest at 4.3%-6.65%. Principal payments vary. Bonds mature October 1, 2020. 7,820,000 470,000 7,350,000 Less: Unamortized debt discounts (150,990) (12,850) (138,140) Totals $ 13,869,010 $ - $ 872,150 $ 12,996,860 $ Useful Lives 40 Amounts Due in Less Than One Year 430,000 490,000 (12,850) 907,150 Page 47 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31, 2009 NOTE IV - DETAILED NOTES ON ALL FUNDS (cont.) J. COMPONENT UNIT (cont.) d. CDA Lease Revenue Bonds (cont.) Debt service requirements to maturity are as follows: Principal 2010 $ 920,000 $ 2011 965,000 2012 1,010,000 2013 1,060,000 2014 1,110,000 2015 - 2019 6,535,000 2020 1,535,000 Totals $ 13,135,000 $ Interest Totals 707,030 $ 1,627,030 664,384 1,629,384 617,836 1,627,836 565,720 1,625,720 513,720 1,623,720 1,596,777 8,131,777 94,822 1,629,822 4,760,289 $ 17,895,289 There are a number of limitations and restrictions contained in the various bond indentures and agreements. The CDA believes it is in compliance with all significant limitations and restrictions. NOTE V - OTHER INFORMATION A. EMPLOYEES' RETIREMENT SYSTEM All eligible city employees participate in the Wisconsin Retirement System (System), a cost-sharing multiple-employer defined benefit public employee retirement system (PERS). All permanent employees expected to work over 600 hours a year are eligible to participate in the System. Covered employees in the General category are required by statute to contribute 6.0% of their salary (3.0% for Executives and Elected Officials, 3.4% for Protective Occupations with Social Security, and 5.1 % for Protective Occupations without Social Security) to the plan. Employers generally make these contributions to the plan on behalf of employees. Employers are required to contribute an actuarially determined amount necessary to fund the remaining projected cost of future benefits. The payroll for city employees covered by the system for the year ended December 31, 2009 was $7,699,141 and the employer's total payroll was $8,395,198. The total required contribution for the year ended December 31, 2009 was $945,740 or 12.2% of covered payroll. Of this amount, 100% was contributed by the employer for the current year. Total contributions for the years ending December 31, 2008 and 2007 were $882,965 and $885,304, respectively, equal to the required contributions for each year. Page 48 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE V-OTHER INFORMATION (cont.) A. EMPLOYEES' RETIREMENT SYSTEM (cont.) Employees who retire at or after age 65 (62 for elected officials, 54 for protective occupation employees with less than 25 years of service, and 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. Final average earnings is 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 are immediately vested. The System also provides death and disability benefits for employees. Eligibility for and the amount of all benefits is determined under Chapter 40 of Wisconsin Statutes. The System issues an annual financial report which may be obtained by writing to the Department of Employee Trust Funds, P.O. Box 7931, Madison, WI 53707-7931. The city has no pension-related liability. 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; workers compensation; and health care of its employees. All of these risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded the commercial coverage in any of the past three years. There were no significant reductions in coverage compared to the prior year. C. COMMITMENTS AND CONTINGENCIES From time to time, the city is party to various pending 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 or results of operations. Funding for the operating budget of the city comes from many sources, including property taxes, grants and aids from other units of government, user fees, fines and permits, and other miscellaneous revenues. The State of Wisconsin provides a variety of aid and grant programs which benefit the city. Those aid and grant programs are dependent on continued approval and funding by the Wisconsin governor and legislature, through their budget processes. The State of Wisconsin is currently experiencing budget problems, and is considering numerous alternatives including reducing aid to local governments. Any changes made by the State to funding or eligibility of local aid programs could have a significant impact on the future operating results of the city. The city has received federal and state grants for specific purposes that are subject .to review and audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial. Page 49 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE V - OTHER INFORMATION (cont.) C. COMMITMENTS AND CONTINGENCIES (cont.) As stated in Note V.D., the city jOintly operates the Metropolitan Refuse District, Inc. (District). The District's fund balance at September 30,2009 is a deficit of $142,471. 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 57%, which amounts to $81,208 of the District's net deficit. The city's share of the net deficit has been reported in the government-wide statement of net assets. See also Note V.D. D. JOINT VENTURES Metropolitan Refuse District, Inc. The City of Middleton and the Villages of Shorewood Hills and Waunakee jointly operate the local sanitary landfill, which is called the Metropolitan Refuse District, Inc. The landfill stopped accepting waste in 1997. The communities share in the operation of the District based on estimated population as follows: City of Middleton Village of Shorewood Hills Village of Waunakee 57% 6 37 The governing body is made up of citizens from each community. Local representatives are appointed by each city. The governing body has authority to adopt its own budget and control the financial affairs of the District. The city made payments totaling $61,560 to the District in 2009. The city has an equity interest (deficit) of $(81 ,208) at year end. The city will continue to support the District's postclosure care costs in the future. The District's landfill is being monitored for possible groundwater contamination as required by the Wisconsin Department of Natural Resources. The costs for groundwater monitoring are being budgeted for on an annual basis. At the current time it is not possible to determine if extensive contamination has occurred and the effects, if any, on the District. 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 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 three 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, WI 53590. The city does not have an equity interest in this joint venture. Page 50 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO FINANCIAL STATEMENTS December 31,2009 NOTE V - OTHER INFORMATION (cont.) D. JOINT VENTURES (cont.) Middleton Fire District The City of Middleton and the Towns of Springfield, Westport and Middleton jointly operate the local fire District, which is called the Middleton Fire District, which provides fire protection. The communities share in the operation of the District based on the ratio of equalized values of each member. The governing body is made up of 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 $685,670 to the District in 2009 for operating expenses. The city believes that the District will continue to provide services in the future at similar rates. The transactions of the District are not reflected in these financial statements. The city does not have an equity interest in this joint venture. Separately issued financial statements of the District are not prepared. E. EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS The Governmental Accounting Standards Board (GASB) has approved GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, and Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Application of these standards may restate portions of these financial statements. F. SUBSEQUENT EVENTS On April 15, 2010, the City of Middleton issued $2,010,000 General Obligation Promissory Notes dated April 15, 2010 with interest between 1.2%-3.8% to finance capital projects. The notes are due September 1, 2017. Also, on April 15, 2010, the City of Middleton issued $10,110,000 General Obligation Refunding Bonds dated April 15, 2010 with interest between 1.45%-5.85% to refinance the note anticipation notes for the new police facility. The bonds will mature September 1, 2029. Page 51 ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31,2009 Budgeted Amounts Variance with Original Final Actual Final Budget REVENUES Taxes $ 12,614,018 $ 12,614,018 $ 12,555,919 $ (58,099) Intergovernmental 2,850,188 2,850,188 2,898,176 47,988 Licenses and permits 512,650 512,650 465,222 (47,428) Fines, forfeitures and penalties 280,000 280,000 308,665 28,665 Public charges for services 1,317,994 1,317,994 1,254,961 (63,033) Interdepartmental charges for services 355,600 355,600 368,470 12,870 Special assessments 56,500 56,500 89,664 33,164 Investment income 620,000 620,000 311,758 (308,242) Miscellaneous 59,500 59,500 151,437 91,937 Total Revenues 18,666,450 18,666,450 18,404,272 (262,178) EXPENDITURES Current General government 2,630,538 2,630,538 2,194,960 435,578 Public safety 6,962,421 6,962,421 6,950,343 12,078 Public works 3,128,157 3,128,157 3,018,238 109,919 Leisure activities 3,468,394 3,468,394 3,420,485 47,909 Conservation and development 439,355 439,355 434,431 4,924 Total Expenditures 16,628,865 16,628,865 16,018,457 610,408 Excess of revenues over expenditures 2,037,585 2,037,585 2,385,815 348,230 OTHER FINANCING SOURCES (USES) Sale of capital assets 5,000 5,000 18,652 13,652 Transfers in 310,000 310,000 345,840 35,840 Transfers out {2,962,585) {2,962,585) p,267,922) p05,337) Total Other Financing Sources (Uses) {2,647,585) {2,647,585) {2,903,430) {255,845) Net Change in Fund Balance (610,000) (610,000) (517,615) 92,385 FUND BALANCE - Beginning 4,657,801 4,657,801 _~4,657,801 FUND BALANCE - ENDING $ 4,047,801 $ 4,047,801 $ 4,140,186 $ 92,385 See independent auditors' report and accompanying notes to required supplementary information. Page 52 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF REVENUES - BUDGET AND ACTUAL For the Year Ended December 31,2009 Budgeted Amounts Variance with Original Final Actual Final Budget TAXES General property tax $ 12,269,908 $ 12,269,908 $ 12,249,406 $ (20,502) Fees in lieu of taxes 44,110 44,110 44,110 Room tax 297,000 297,000 243,308 (53,692) Interest and penalties on taxes 3,000 3,000 19,095 16,095 TOTALS 12,614,018 12,614,018 12,555,919 (58,099) INTERGOVERNMENTAL REVENUES Shared taxes from state 361,532 361,532 347,513 (14,019) State aid - road allotment 1,433,650 1,433,650 1,433,975 325 State aid - exempt computer aid 132,210 132,210 136,654 4,444 State aid - fire insurance dues 75,000 75,000 74,575 (425) State aid - law enforcement 6,000 6,000 State aid - medical transportation aid 13,100 13,100 State aid - miscellaneous grants 5,000 5,000 31,440 26,440 Federal and state aid - other 90,000 90,000 85,180 (4,820) County aid - library 630,321 630,321 638,722 8,401 County aid - signals 2,500 2,500 3,654 1,154 County aid - senior citizens 46,075 46,075 45,993 (82) School district payments for liaison officer 73,900 73,900 81,370 7,470 TOTALS 2,850,188 2,850,188 2,898,176 47,988 LICENSES AND PERMITS Liquor and malt beverage licenses 35,000 35,000 38,095 3,095 Operators' licenses 9,000 9,000 10,805 1,805 Contractor's licenses 6,000 6,000 6,338 338 Alarm licenses 10,500 10,500 9,034 (1,466) Cigarette licenses 150 150 180 30 Bicycle licenses 100 100 94 Dog and cat licenses 500 500 1,476 976 Cable TV franchise license 130,000 130,000 129,999 (1 ) Other miscellaneous licenses 1,200 1,200 1,960 760 Building permits 175,000 175,000 155,139 (19,861) Recycling permits 1,200 1,200 1,551 351 Electrical permits 50,000 50,000 39,397 (10,603) Plumbing permits 50,000 50,000 40,313 (9,687) Erosion control permits 30,000 30,000 15,100 (14,900) Park reservation permits 14,000 14,000 15,741 1,741 TOTALS 512,650 512,650 465,222 (47,428) FINES, FORFEITURES AND PENAL TIES Court penalties 165,000 165,000 187,965 22,965 Parking violations 50,000 50,000 43,104 (6,896) Court costs 65,000 65,000 77,596 12,596 TOTALS 280,000 280,000 308,665 28,665 See independent auditors' report and accompanying notes to required supplementary information. Page 53 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF REVENUES - BUDGET AND ACTUAL (cont) For the Year Ended December 31,2009 Budgeted Amounts Original Final Actual PUBLIC CHARGES FOR SERVICES Clerk fees $ 12,000 $ 12,000 $ 18,404 Police special services 12,000 12,000 21,496 Police department fees 30,000 30,000 21,457 Ambulance services 802,800 802,800 701,617 EMS fixed cost abatement 92,194 92,194 96,946 Plan commission charges 15,000 15,000 11,838 Senior citizens 16,000 16,000 32,859 Swimming pool 224,000 224,000 216,412 Summer recreation 60,000 60,000 74,013 Public works charges 8,000 8,000 11,941 Other recreation 42,000 42,000 46,978 Zoning 4,000 4,000 1,000 TOTALS 1,317,994 1,317,994 1,254,961 INTERDEPARTMENTAL CHARGES FOR SERVICES Administration reimbursements - utilities 103,000 103,000 115,870 Administration reimbursements - TIF 245,000 245,000 245,000 Administration reimbursements - Landfill 5,000 5,000 5,000 Administration reimbursements - Fire District 2,600 2,600 2,600 TOTALS 355,600 355,600 368,470 SPECIAL ASSESSMENTS Curb, gutter and sidewalks 56,000 56,000 88,594 Interest on special assessments 500 500 1,070 TOTALS 56,500 56,500 89,664 INVESTMENT INCOME 620,000 620,000 311,758 MISCELLANEOUS Rent of city buildings and offices 28,000 28,000 26,358 Compensation for loss of fixed assets 5,302 Refund of prior year's expenditures 30,000 30,000 103,779 Sale of materials 1,500 1,500 998 Miscellaneous revenue - MADC 15,000 TOTALS 59,500 59,500 151,437 OTHER FINANCING SOURCES Sale of capital assets 5,000 5,000 18,652 Transfer in - Water Utility 310,000 310,000 345,840 TOTALS 315,000 315,000 364,492 TOTAL REVENUES AND OTHER FINANCING SOURCES $ 18,981,450 $ 18,981,450 $ 18,768,764 See independent auditors' report and accompanying notes to required supplementary information. Variance with Final Budget $ 6,404 9,496 (8,543) (101,183) 4,752 (3,162) 16,859 (7,588) 14,013 3,941 4,978 (3,000) (63,033) 12,870 12,870 32,594 570 33,164 (308,242) (1,642) 5,302 73,779 (502) 15,000 91,937 13,652 35,840 49,492 $ (212,686) Page 54 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL For the Year Ended December 31,2009 Budgeted Amounts Variance with Original Final Actual Final Budget GENERAL GOVERNMENT Council $ 53,605 $ 53,605 $ 46,727 $ 6,878 Police commission 9,000 9,000 9,847 (847) Landmarks commission 600 600 2,012 (1,412) Middleton youth commission 24,935 24,935 23,834 1,101 Art committee 3,000 3,000 66 2,934 Board of review 375 375 204 171 Municipal court 78,455 78,455 83,103 (4,648) General administration 624,638 624,638 664,423 (39,785) Information technology 514,588 514,588 503,361 11,227 Independent auditing 41,000 41,000 40,627 373 Legal counseling 205,000 205,000 270,126 (65,126) Special legal counsel 5,000 5,000 3,767 1,233 Buildings and grounds 139,232 139,232 145,811 (6,579) Illegal taxes and tax refunds 5,000 5,000 4,211 789 Property and liability insurance 340,000 340,000 352,777 (12,777) Income continuation insurance 13,000 13,000 15,406 (2,406) Contingency 554,110 554,110 554,110 Group life insurance 14,000 14,000 14,368 (368) Vision care 500 (500) Additional expenditures - prior years 5,000 5,000 13,790 {8,790) TOTALS 2,630,538 2,630,538 2,194,960 435,578 PUBLIC SAFETY Police administration 540,441 540,441 527,241 13,200 Police patrol 3,434,961 3,434,961 3,363,944 71,017 Code compliance 72,834 72,834 76,642 (3,808) Training 50,850 50,850 54,431 (3,581) Police uniform allowance and equipment 27,000 27,000 25,492 1,508 School patrol 12,850 12,850 13,069 (219) Fire suppression 672,000 672,000 685,670 (13,670) Public fire protection 373,144 373,144 373,144 EMS 999,156 999,156 1,090,932 (91,776) Building inspector 108,829 108,829 105,085 3,744 Electrical inspector 95,107 95,107 95,107 Plumbing inspection 63,823 63,823 61,223 2,600 Emergency preparedness 6,425 6,425 2,824 3,601 Sealer of weights and measures 5,000 5,000 4,400 600 Erosion control enforcement 30,000 30,000 22,204 7,796 Communications 470,001 470,001 448,935 21,066 TOTALS 6,962,421 6,962,421 6,950,343 12,078 See independent auditors' report and accompanying notes to required supplementary information. Page 55 ---PAGE BREAK--- CITY OF MIDDLETON GENERAL FUND DETAILED SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (cont.) For the Year Ended December 31,2009 Budgeted Amounts Original Final Actual PUBLIC WORKS Machinery $ 328,627 $ 328,627 $ 241,148 Garage 54,300 54,300 54,560 Public works salaries and fringes 620,377 620,377 701,565 Protective equipment 3,800 3,800 2,674 Engineering 738,488 738,488 633,888 Street maintenance 40,000 40,000 25,106 Street cleaning 6,800 6,800 5,942 Snow and ice control 65,000 65,000 89,166 Traffic signals 20,000 20,000 14,011 Traffic signs and markings 37,000 37,000 40,751 Street lighting 106,000 106,000 98,707 Tree and brush 2,000 2,000 240 Storm sewers 10,000 10,000 10,146 Mass transit 368,515 368,515 382,539 Garbage collection 445,000 445,000 445,408 Sanitary landfill 61,650 61,650 61,560 Recycling 220,600 220,600 210,827 TOTALS 3,128,157 3,128,157 3,018,238 LEISURE ACTIVITIES Library 1,704,819 1,704,819 1,646,256 Historical SOciety 273 Senior citizens center 425,118 425,118 400,888 Dining center 3,000 3,000 20,767 Recreation programs and events 61,145 61,145 56,574 Recreation administration 113,972 113,972 110,071 Swimming pool 269,925 269,925 278,593 Summer recreation 78,445 78,445 76,231 Parks 811,970 811,970 830,832 TOTALS 3,468,394 3,468,394 3,420,485 CONSERVATION AND DEVELOPMENT Water resources 48,800 48,800 49,700 Conservancy land commission 110,121 110,121 88,124 Planning commission 280,434 280,434 295,114 Forestry 1,493 TOTALS 439,355 439,355 434,431 OTHER FINANCING USES Transfers out - debt service fund 2,962,585 2,962,585 2,962,585 Transfers out - retirement benefits fund 305,337 TOTALS 2,962,585 2,962,585 3,267,922 TOTAL EXPENDITURES AND OTHER FINANCING SOURCES $ 19,591,450 $ 19,591,450 $ 19,286,379 Variance with Final Budget $ 87,479 (260) (81,188) 1,126 104,600 14,894 858 (24,166) 5,989 (3,751) 7,293 1,760 (146) (14,024) (408) 90 9,773 109,919 58,563 (273) 24,230 (17,767) 4,571 3,901 (8,668) 2,214 {18,862) 47,909 (900) 21,997 (14,680) (1,493) 6,417 {305,337) {305,337) $ 306,564 See independent auditors' report and accompanying notes to required supplementary information. Page 56 ---PAGE BREAK--- CITY OF MIDDLETON NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31,2009 BUDGETARY iNFORMA nON Budgetary information is derived from the annual operating budget and is presented using generally accepted accounting principles and the modified accrual basis of accounting. Excess expenditures and other financing uses over appropriations are as follows: Original and Amended Actual Budget Expenditures Excess General Fund Current Expenditures Police commission $ 9,000 $ 9,847 $ (847) Landmarks commission 600 2,012 (1,412) Municipal court 78,455 83,103 (4,648) General administration 624,638 664,423 (39,785) Legal counseling 205,000 270,126 (65,126) Buildings and grounds 139,232 145,811 (6,579) Property and liability insurance 340,000 352,777 (12,777) Income continuation insurance 13,000 15,406 (2,406) Group life insurance 14,000 14,368 (368) Vision care 500 (500) Additional expenditures - prior years 5,000 13,790 (8,790) Code compliance 72,834 76,642 (3,808) Training 50,850 54,431 (3,581 ) School patrol 12,850 13,069 (219) Fire suppression 672,000 685,670 (13,670) EMS 999,156 1,090,932 (91,776) Garage 54,300 54,560 (260) Public works salaries and fringes 620,377 701,565 (81,188) Snow and ice control 65,000 89,166 (24,166) Traffic signs and markings 37,000 40,751 (3,751) Storm sewers 10,000 10,146 (146) Mass transit 368,515 382,539 (14,024) Garbage collection 445,000 445,408 (408) Historical SOCiety 273 (273) Senior citizens center 377,213 400,888 (23,675) Dining center 3,000 20,767 (17,767) Swimming pool 269,925 278,593 (8,668) Parks 811,970 830,832 (18,862) Water resources 48,800 49,700 (900) Planning commission 280,434 295,114 (14,680) Forestry 1,493 (1,493) Transfers out - retirement benefits fund 305,337 (305,337) See Independent Auditors' Report. Page 57 ---PAGE BREAK--- SUPPLEMENTARY INFORMATION ---PAGE BREAK--- CITY OF MIDDLETON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2009 Sl2ecial Revenue Funds Economic Sub- Land and Youth Lost and EMS Develop- dividers' Park Community Drug Cable Commission Damaged Library Equipment Library Retirement ment Del20sits Donations Gardens Evidence TV Donations EMS Book Gift Rel2lacement Endowment Benefits Airl20rt Grant ASSETS Cash and investments $ 864,534 $ 6,412 $ 10,442 $ 9,886 $ 104,551 $ 2,988 $ 66,236 $ 72,864 $ 57,716 $ 1,256 $ 173,309 $ 1,521,960 $ 321,742 $ 243,082 Accounts receivable 379,492 51,365 366 Loans receivable 46,436 Due from other funds 83,550 TOTAL ASSETS $ 1,244,026 6,412 10,442 $ 9,886 $ 239,466 $ 2,988 $ 66,236 $ 72,864 $ 57,716 $ 1,256 $ 173,309 $ 1,521,960 $ 322,108 $ 289,518 LIABILITIES AND FUND BALANCES Accounts payable 18,048 3,111 530 1,567 14,176 Due to other funds Deferred revenue 135,333 Advance from other funds Total Liabilities 153,381 3,111 530 1,567 14,176 Fund Balances Reserved for loans receivable 46,436 Unreserved Undesignated (deficit) 1,090,645 3,301 10,442 9,356 239,466 2,988 66,236 71,297 57,716 1,256 173,309 1,521,960 307,932 243,082 Total Fund Balances 1,090,645 3,301 10,442 9,356 239,466 2,988 66,236 71,297 57,716 1,256 173,309 1,521,960 307,932 289,518 TOTAL LIABILITIES AND FUND BALANCES $ 1,244,026 $ 6,412 $ 10,442 $ 9,886 $ 239,466 $ 2,988 $ 66,236 $ 72,864 $ 57,716 $ 1,256 $ 173,309 $ 1,521,960 $ 322,108 $ 289,518 Page 58 ---PAGE BREAK--- CITY OF MIDDLETON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS (cont.) December 31, 2009 S[:lecial Revenue Funds Capital Projects Total Fund Nonmajor Shop With Drug Federal Senior Tourism National Soccer Community Big Safety EMS & Fire TIF District Governmental a CO[:l Forfeitures Seizures Citizen Commission Night Out Stadium Awareness Event Im[:lact Fee Iml2act Fee No.5 Funds ASSETS Cash and investments $ 13,851 $ 3,207 $ 2,156 $ 99,359 $ 183,489 $ $ $ $ - $ 36,401 $ 47,751 $ - $ 3,843,192 Accounts receivable 127,149 558,372 Loans receivable 46,436 Due from other funds 83,550 TOTAL ASSETS $ 13,851 $ 3,207 $ 2,156 $ 99,359 $ 310,638 - $ - $ - $ - $ 36,401 $ 47,751 $ - $ 4,531,550 LIABILITIES AND FUND BALANCES Accounts payable 25,067 8,942 71,441 Due to other funds 199 8,464 74,887 83,550 Deferred revenue 135,333 Advance from other funds 363,469 363,469 Total Liabilities 25,067 199 8,464 74,887 372,411 653,793 Fund Balances Reserved for loans receivable 46,436 Unreserved Undesignated (deficit) 13,851 3,207 2,156 99,359 285,571 (199) (8,464) (74,887) 36,401 47,751 (372,411 ) 3,831,321 Total Fund Balances 13,851 3,207 2,156 99,359 285,571 (199) (8,464) (74,887) 36,401 47,751 (372,411) 3,877,757 TOTAL LIABILITIES AND FUND BALANCES $ 13,851 $ 3,207 $ 2,156 $ 99,359 $ 310,638 $ - $ - $ - $ - $ 36,401 $ 47,751 $ - $ 4,531,550 Page 59 ---PAGE BREAK--- CITY OF MIDDLETON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON MAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2009 Seecial Revenue Funds Sub- Land and Youth Lost and EMS Economic dividers' Park Community Drug Cable Commission Damaged Library Equipment Library Retirement Development Deeosits Donations Gardens Evidence TV Donations EMS Book Gift Reelacement Endowment Benefits Aire°rt Grant REVENUES Taxes $ $ - $ - $ $ $ - $ - $ - $ $ - $ - $ - $ $ Intergovernmental 6,708 Licenses and perrnits Public charges for services 345,083 64,845 44,520 127,836 Investrnent income 31,398 5,739 Miscellaneous 11,198 10,655 206 1,082 4,340 3,506 Total Revenues 345,083 11,198 10,655 206 64,845 1,082 6,708 44,520 4,340 34,904 127,836 5,739 EXPENDITURES Current: General government 58,417 42,990 Public safety 334,170 Leisure activities 14,005 213 189 28,058 12,941 16,855 Conservation and development 246,042 53,390 Total Expenditures 246,042 14,005 213 58,417 189 28,058 12,941 334,170 16,855 42,990 53,390 Excess (deficiency) of revenues over expenditures 99,041 (2,807) 10,442 206 6,428 893 6,708 16,462 (8,601) (334,170) 18,049 (42,990) 74,446 5,739 OTHER FINANCING SOURCES (USES) Transfers In 305,337 Transfers Out Total Other Financing Sources (Uses) 305,337 Net change in fund balance 99,041 (2,807) 10,442 206 6,428 893 6,708 16,462 (8,601) (334,170) 18,049 262,347 74,446 5,739 FUND BALANCES - Beginning of Year 991,604 6,108 9,150 233,038 2,095 59,528 54,835 66,317 335,426 155,260 1,259,613 233,486 283,779 FUND BALANCES (DEFICIT) - END OF YEAR $1,090,645 $ 3,301 $ 10,442 $ 9,356 $ 239,466 $ 2,988 $ 66,236 $ 71,297 $ 57,716 1,256 $ 173,309 $1,521,960 $ 307,932 $ 289,518 Page 60 ---PAGE BREAK--- CITY OF MIDDLETON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (cont.) For the Year Ended December 31, 2009 Seecial Revenue Funds Capital Projects Total Funds Nonmajor Shop With Drug Federal Senior Tourism National Soccer Community Big Safety EMS & Fire TIF District Governmental a Coe Forfeitures Seizures Citizen Commission Ni\lhtOut Stadium Awareness Event Imeact Fee Imeact Fee NO.5 Funds REVENUES Taxes $ $ $ $ $ 567,719 $ $ $ - $ - $ $ $ $ 567,719 Intergovernmental 6,708 Licenses and permits 60,216 40,632 100,848 Public charges for services 582,284 Investment income 37,137 Miscellaneous 215 17,273 1,954 875 12,815 31,821 95,940 Total Revenues 215 17,273 569,673 875 12,815 31,821 60,216 40,632 1,390,636 EXPENDITURES Current: General government 21,394 189,856 312,657 Public safety 4,470 618 339,258 Leisure activities 11,096 672 11,063 38,156 133,248 Conservation and development 375,831 675,263 Total Expenditures 4,470 618 11,096 375,831 672 11,063 21,394 38,156 189,856 1,460,426 Excess (deficiency) of revenues over expenditures (4,470) 215 (618) 6,177 193,842 (672) (10,188) (8,579) (6,335) 60,216 40,632 (189,856) (69,790) OTHER FINANCING SOURCES (USES) Transfers In 305,337 Transfers Out (90,626) (40,000) (130,626) Total Other Financing Sources (Uses) (90,626) (40,000) 174,711 Net change in fund balance (4,470) 215 (618) 6,177 193,842 (672) (10,188) (8,579) (6,335) (30,410) 632 (189,856) 104,921 FUND BALANCES - Beginning of Year 18,321 2,992 2,774 93,182 91,729 473 10,188 115 (68,552) 66,811 47,119 (182,555) 3,772,836 FUND BALANCES (DEFICIT) - END OF YEAR $ 13,851 $ 3,207 $ 2,156 $ 99,359 $ 285,571 $ (199) $ - $ (8,464) $ (74,887) $ 36,401 $ 47,751 $ (372,411) $ 3,877,757 Page 61 ---PAGE BREAK--- CITY OF MIDDLETON COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS December 31,2009 Fire Tax Roll District ASSETS Cash and investments $ 17,210,093 $ - Taxes receivable 14,857,190 Due from other governmental units 142,081 TOTAL ASSETS $ 32,067,283 $ 142,081 LIABILITIES Accounts payable $ - $ 87,810 Due to other governmental units 32,067,283 54,271 TOTAL LIABILITIES $ 32,067,283 $ 142,081 Totals $ 17,210,093 14,857,190 142,081 $ 32,209,364 $ 87,810 32,121,554 $ 32,209,364 Page 62 ---PAGE BREAK--- CITY OF MIDDLETON STATEMENT OF CASH FLOWS - COMPONENT UNIT For the Year Ended December 31,2009 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from economic loan repayments Economic and housing loans Cash received from customers Cash paid to suppliers for goods and services Net Cash Flows From Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES I nterest received CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Paid to primary government Principal paid Interest paid Capital lease interest received Capital lease principal received Net Cash Flows From Noncapital Financing Activities Net Increase in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS - Beginning of Year CASH AND CASH EQUIVALENTS - END OF YEAR RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FROM OPERATING ACTIVITIES Operating income (loss) Non-cash items included in operating income: Depreciation Changes in Assets and Liabilities Loans receivable Accounts payable NET CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET ASSETS - COMPONENT UNIT Cash and investments - statement of net assets - component unit Restricted cash and investments - statement of net assets - component unit CASH AND CASH EQUIVALENTS - END OF YEAR NONCASH INVESTING, CAPITAL AND RELATED FINANCING ACTIVITIES: Capital assets transferred from governmental activities $2,500,380. Component Unit - CDA $ 7,486 (61,480) 26,253 (212,588) (240,329) 24,888 (4,317) (885,000) (746,257) 746,257 885,000 (4,317) (219,758) 2,266,157 $ 2,046,399 $ (204,882) $ 18,367 (53,994) 180 $ (240,329) $ 270,721 1,775,678 $ 2,046,399 Page 63