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Comprehensive Annual Financial Report

City of Minneapolis, Minnesota for the year ended December 31, 2010

Minneapolis City of Lakes Minneapolis Finance Department

COMPREHENSIVE ANNUAL FINANCIAL REPORT

CITY OF MINNEAPOLIS, MINNESOTA

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

FINANCE DEPARTMENT

TABLE OF CONTENTS

INTRODUCTORY SECTION Page Transmittal Letter v Organization Chart x Mayor and Council xi Certificate of Achievement for Excellence in Financial Reporting xii

FINANCIAL SECTION Independent Auditor’s Report 1 Management’s Discussion and Analysis 5 Basic Financial Statements: Government-wide Financial Statements Statement of Net Assets 26 Statement of Activities 27 Fund Financial Statements Governmental Funds – Balance Sheet 28 Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Assets – Governmental Activities 29 Governmental Funds – Statement of Revenues, Expenditures, and Changes in Fund Balances 30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities – Governmental Activities 31 Proprietary Funds – Statement of Net Assets 32 Proprietary Funds – Statement of Revenues, Expenses, and Changes in Net Assets 34 Proprietary Funds – Statement of Cash Flows 35 Statement of Fiduciary Net Assets – Fiduciary Funds 37 Combining Statement of Net Assets – Discrete Component Units 38 Combining Statement of Activities – Discrete Component Units 39 Notes to the Financial Statements Note 1 - Summary of Significant Accounting Policies 41 Note 2 - Deposits and Investments 53 Note 3 - Receivables 58 Note 4 - Capital Assets 61 Note 5 - Long-Term Debt 64 Note 6 - Industrial, Commercial, and Housing Revenue Bonds and Notes 69 Note 7 - Prior Year Defeasance 70 Note 8 - Demand Bonds 70 Note 9 - Leases 71 Note 10 - Interfund Transactions 72 Note 11 - Net Assets/Fund Balances 75 Note 12 - Restricted Net Assets – Governmental Activities 75 Note 13 - Restricted Net Assets – Business Type Activities 75 Note 14 - Deficit Balances 76 Note 15 - Defined Benefit Pension Plan – Statewide Public Employees Retirement Association 76

TABLE OF CONTENTS Page Basic Financial Statements: Notes to the Financial Statements (continued) Note 16 - Defined Benefit Pension Plan – Multiple Employer Minneapolis Employees Retirement Fund 78 Note 17 - Defined Benefit Pension Plan – Single Employer Minneapolis Firefighter’s Relief Association, Minneapolis Police Relief Association 79 Note 18 - Defined Contribution Plan – CPED 81 Note 19 - Postemployment Healthcare Plan 82 Note 20 - Vacation, Severance, Sick and Compensatory Time Pay 84 Note 21 - Risk Management & Claims 84 Note 22 - Cleanup of Hazardous Materials 85 Note 23 - Other Commitments and Contingencies 85 Note 24 - Subsequent Events 85 Required Supplementary Information Other Than Management’s Discussion and Analysis: General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 87 Community Planning and Economic Development Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 88 Convention Center Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 89

Notes to the Required Supplementary Information 90

Other Supplementary Information: Combining and Individual Fund Statements and Schedules: Governmental Funds Balance Sheet – Nonmajor Funds 92 Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Funds 93 Special Revenue Funds Combining Balance Sheet – Nonmajor Funds 94 Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Funds 95 Debt Service Funds Combining Balance Sheet – Nonmajor Funds 96 Debt Service Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –

Nonmajor Funds 97 Budgetary Comparison Schedules

Arena Reserve Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 98 Board of Estimate and Taxation Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 99 HUD Consolidated Plan Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 100 Convention Facilities Reserve Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 101 Downtown Improvement District Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 102 Employee Retirement Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 103 Grants – Federal Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 104 Grants – Other Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 105 Police Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 106

TABLE OF CONTENTS

Page Other Supplementary Information:

Combining and Individual Fund Statements and Schedules: (continued) Internal Service Funds Combining Statement of Net Assets 107 Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 108 Internal Service Funds Combining Statement of Cash Flows 109 Engineering Materials and Testing Internal Service Fund

Statement of Net Assets 110 Statement of Revenues, Expenses, and Changes in Net Assets 111 Statement of Cash Flows 112

Intergovernmental Services Internal Service Fund Statement of Net Assets 113 Statement of Revenues, Expenses, and Changes in Net Assets 114 Statement of Cash Flows 115

Property Services Internal Service Fund Statement of Net Assets 116 Statement of Revenues, Expenses, and Changes in Net Assets 117 Statement of Cash Flows 118

Equipment Services Internal Service Funds Statement of Net Assets 119 Statement of Revenues, Expenses, and Changes in Net Assets 120 Statement of Cash Flows 121

Public Works Stores Internal Service Fund Statement of Net Assets 122 Statement of Revenues, Expenses, and Changes in Net Assets 123 Statement of Cash Flows 124

Self-Insurance Internal Service Fund Statement of Net Assets 125 Statement of Revenues, Expenses, and Changes in Net Assets 126 Statement of Cash Flows 127

Combining Statement of Fiduciary Net Assets – Agency Funds 128 Fiduciary Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds 129 Schedule of Governmental Activity Bonds and Notes 131 Schedule of Business–Type Activity Bonds and Notes 137 Schedule of Expenditures of Federal Awards 140 Notes to the Schedule of Expenditures of Federal Awards 144 Municipal Building Commission

Balance Sheet 146 Statement of Revenues, Expenditures, and Changes in Fund Balances 147

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STATISTICAL SECTION

Statistical Section (Unaudited)

Schedule 1 - Net Assets by Component 150 Schedule 2 - Changes in Net Assets 151 Schedule 3 - Fund Balance, Governmental Funds 152 Schedule 4 - Changes in Fund Balance, Governmental Funds 153 Schedule 5 - Assessed Value and Actual Value of Taxable Property 154 Schedule 6 - Direct and Overlapping Property Tax Rates 155 Schedule 7 - Principal Property Tax Payers 156 Schedule 8 - Property Tax Levies and Collections 157 Schedule 9 - Ratios of Outstanding Debt by Type 158 Schedule 10 - Ratios of Net General Bonded Debt Outstanding 159 Schedule 11 - Direct and Overlapping Governmental Activities Debt 160 Schedule 12 - Legal Debt Margin Information 161 Schedule 13 - Pledged-Revenue Coverage 162 Schedule 14 - Demographic and Economic Statistics 166 Schedule 15 - Principal Employers 167 Schedule 16 - Full-time Equivalent City Government Employees by Function 168 Schedule 17 - Operating Indicators by Function/Program 169 Schedule 18 - Capital Assets Statistics by Function/Program 171

May 13, 2011 Mayor R. T. Rybak, Council President Barbara Johnson, City Council Members,

Minneapolis City of Lakes

Finance Department

Heather Johnston Interim City Finance Officer

350 South 5th Street - Room 325M

Minneapolis MN 55415-1315

Office 612-673-3375 And Citizens of the City of Minneapolis, Minnesota Fax 612-673-2042 TTY 612-673-2157 TRANSMITTAL We are pleased to present the Comprehensive Annual Financial Report (“CAFR”) for the City of Minneapolis (the “City”) for the year ended December 31, 2010. The purpose of the report is to provide the Mayor, City Council, City Staff, citizens, bond holders, and other interested parties with useful information concerning the City’s operations and financial position. The City is responsible for the accuracy, completeness, and fairness of the data presented in this report. To the best of our knowledge, the following report is accurate in all material respects. It has been prepared in accordance with standards prescribed by the Governmental Accounting Standards Board (“GASB”), the Government Finance Officers Association of the United States and Canada (“GFOA”) and other rule- making bodies. We believe the report contains all disclosures necessary for the reader to understand the City’s financial affairs. The transmittal letter is designed to complement the Management’s Discussion and Analysis (“MD&A”) and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditor’s report. STEWARDSHIP The City prepares financial reports to promote accountability. The City’s elected officials are accountable to the citizens; City management is accountable to the elected officials. This report gives citizens and other interested parties one means of assessing whether the elected and appointed officials in the City have faithfully carried out their role of being good stewards of the City’s resources. INTERNAL CONTROLS The City’s management is responsible for establishing a comprehensive framework of internal controls in order to:

1) Safeguard City assets from loss or unauthorized use or disposal. 2) Provide reliable financial records for preparing internal and external

financial reports and for maintaining accountability over City assets. 3) Ensure compliance with applicable federal and state laws and

regulations related to programs for which the City receives assistance.

v www.ci.minneapolis.mn.us

Affirmative Action Employer

No system of internal controls can be perfect. Therefore, internal controls are meant to provide “reasonable assurance” rather than absolute assurance. Reasonable assurance means:

1) The cost of a control should not exceed the benefits likely to be derived from that control. 2) The costs and benefits of internal controls are subject to estimates and judgments by management.

We believe that the City’s internal controls reasonably safeguard assets, assure that financial transactions are properly recorded and reported, and ensure compliance with applicable federal and state laws and regulations. As the City’s governing board, the Mayor and City Council are responsible to:

1) Ensure that the City administration fulfills its responsibilities in the preparation of the financial statements;

2) Review the scope of the City’s audits and the accounting principles applied in the City’s financial reporting.

To ensure independence, the Office of the State Auditor has full and free access to meet with the City Council to discuss the results of their assessment of the adequacy of internal accounting controls and the quality of the City’s financial reporting. THE CITY AND ITS SERVICES Physical Description The City, located in Hennepin County, is the largest city in Minnesota and serves as the center of finance, industry, trade, and transportation for the Upper Midwest region of the United States. Minneapolis is 59 square miles, including five square miles of inland water. The City drapes along the banks of the nation’s largest river, the Mississippi. Minneapolis is known as “The City of Lakes” featuring 22 lakes and 170 city parks. The Minneapolis Park System is one of the City’s most prized assets. There are 81 residential neighborhoods within the City offering a broad range of housing to more than 163,000 households. Minneapolis has more than thirty theaters; the Guthrie Theater and the Children’s Theatre Company are recognized as two of the country’s best. The City boasts two world-class art museums and is home to the internationally acclaimed Minnesota Orchestra. Minneapolis is home to an estimated 386,700 people (2010 Census data). According to 2010 Census data, the population within the City grew by just over 1.0 percent from 2000 to 2010, continuing a trend of increasing population in the last two decades. Minneapolis, as the major city within the larger metropolitan area, enjoys a strong and highly diverse business foundation of companies involved in manufacturing supercomputers, electronics, medical instruments, milling, machine manufacturing, food processing and graphic arts. In addition, with seven hospitals and the University of Minnesota, Minneapolis is a nationally known medical center that produces many high technology medical products. Most of the information above is from the Minneapolis Fast Facts, and the State of the City, both publications of the City’s Community Planning and Economic Development Department. The State of the City contains a wealth of demographic and other data, which paint a detailed and thorough picture of the City. The State of the City 2011 and Minneapolis Fast Facts can be accessed from City’s web site.

Form of Government and Organization The City is a municipal corporation governed by a Mayor–Council form of government. The Mayor and 13 City Council Members from individual wards are elected for terms of four years, without limit on the number of terms that may be served. City Council As provided in the City Charter, the City Council governs Minneapolis through its legislative, administrative, and financial power over City functions. The Council levies taxes, enacts ordinances and resolutions, licenses businesses, and exercises budgetary and policy control over City departments. Council members represent the interests of their constituents. They respond to inquiries, suggestions and complaints regarding City programs and services and meet regularly with constituents to discuss developments affecting the ward that they represent, and the City as a whole. Mayor The Mayor is responsible for a variety of leadership duties, including: appointing representatives to a variety of agencies and commissions, nominating department head candidates for Executive Committee and Council approval, proposing the annual operating and capital budgets, and reviewing, approving, or vetoing all Council actions. Departments The City organizes itself by departments, which are managed by department heads (see City of Minneapolis organization chart at the end of this transmittal letter). These City departments provide a broad range of services including: police; fire; health and family support services; public works; assessment of property; attorney services; civil rights; planning; regulatory services; and management support services. THE REPORTING ENTITY The City organizes its financial activities in a variety of funds. In accordance with GASB Statement No. 14, the City’s financial statements include all funds of the City (“primary government”) as well as its component units. The primary government represents all funds under the ultimate control of the Mayor and City Council. Component units are separate legal entities. While legally separate, component units are part of City government in substance. The City’s financial statements would be misleading without incorporating component unit information. Some component units are reported in a separate column of the City’s financial statement set apart from the rest of the primary government. Units are discretely presented in the financial statements because, while the City is financially accountable for them, they do not meet the criteria for a blended component unit. The Minneapolis Park and Recreation Board, the Municipal Building Commission (“MBC”), and Meet Minneapolis are discretely presented components in the City’s financial statements. FINANCIAL POLICES The City has a policy to maintain a fund balance in the General Fund that is 15% of the following year’s revenue budget. This balance is to be used for cash flow purposes, unanticipated expenditures of a non-recurring nature, or to meet unexpected increases in service delivery costs. The fund balance of the General Fund at December, 31, 2010, was $61.4 million, which is $2.5 million more than policy requires. For additional information on the 2010 fund balance in the General Fund, see Managements Discussion and Analysis.

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ECONOMIC CONDITION AND OUTLOOK A discussion and analysis of City’s overall financial condition during the fiscal year ended 2010 is included as part of the MD&A. LONG-TERM FINANCIAL PLANNING The City’s approach and policies regarding long-term financial planning are discussed in detail in the Management Discussion & Analysis section of this report. DEBT MANAGEMENT The primary goal of the City’s debt management practices is to maintain its ability to access capital markets at the lowest possible cost (interest rate) without endangering its ability to finance essential services. The City’s conservative financial practices have earned its general obligation debt some of the highest ratings available from national bond rating services as follows:

 Fitch - AAA  Standard & Poor's - AAA  Moody's Investors Service - Aaa

INDEPENDENT AUDIT Minnesota law requires the Office of the State Auditor (“OSA”) to perform the City’s annual audit. The OSA’s report on the City’s financial statements is based on their audit in accordance with generally accepted auditing standards. The Auditor’s unqualified audit opinion is included as page one through three in the financial section of this report. In addition to meeting the State and City’s financial audit requirements, the OSA’s audit was designed to meet the requirements of the federal Single Audit Act and the related U.S. Office of Management and Budget’s Circular A- 133. The OSA prepares a separate report on covered activities. CERTIFICATE OF ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2009. A Certificate of Achievement is valid for a period of one year only. The City has received this prestigious award for 41 years. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized CAFR, the contents of which conform to program standards. The report must satisfy both generally accepted accounting principles and applicable legal requirements. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA for review. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget for the year 2010.

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MAYOR AND COUNCIL CITY OF MINNEAPOLIS, MINNESOTA

2010 Mayor .................................................................................................. R.T. RYBAK CITY COUNCIL Ward 1................................................................................................. KEVIN REICH

Ward 2…………...…………. ............................................................. CAM GORDON

Ward 3…………...…………. ............................................................. DIANE HOFSTEDE

Ward 4………………...............President…………………………...BARBARA JOHNSON

Ward 5...................................... .......................................................... DON SAMUELS

Ward 6…………………………Vice-President ................................ ROBERT LILLIGREN

Ward 7................................................................................................. LISA GOODMAN

Ward 8................................................................................................. ELIZABETH GLIDDEN

Ward 9................................................................................................. GARY SCHIFF

Ward 10............................................................................................... MARGARET TUTHILL

Ward 11............................................................................................... JOHN QUINCY

Ward 12............................................................................................... SANDRA COLVIN ROY

Ward 13............................................................................................... BETSY HODGES

xii

An Equal Opportunity Employer

REBECCA OTTO STATE AUDITOR

STATE OF MINNESOTA OFFICE OF THE STATE AUDITOR

SUITE 500

525 PARK STREET SAINT PAUL, MN 55103-2139

(651) 296-2551 (Voice) (651) 296-4755 (Fax)

[email protected] (E-mail) 1-800-627-3529 (Relay Service)

INDEPENDENT AUDITOR’S REPORT

Mayor and Members of the City Council City of Minneapolis We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Minneapolis, Minnesota, as of and for the year ended December 31, 2010, 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’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Meet Minneapolis, which represents 1 percent, a negative 3 percent, and 8 percent, respectively, of the assets, net assets, and revenues of the aggregate discretely presented component units. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Meet Minneapolis component unit, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of Meet Minneapolis were not audited in accordance with Government Auditing Standards. 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 and the report of other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the report of the other auditors, 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 aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Minneapolis as of December 31, 2010, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. The City of Minneapolis adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, as of and for the year ended December 31, 2010. GASB Statement 53 addresses the recognition, measurement, and disclosure of information regarding derivative instruments entered into by state and local governments. Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. In accordance with auditing standards generally accepted in the United States of America, we have applied certain limited procedures to the required supplementary information, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Minneapolis’ basic financial statements taken as a whole. The introductory section, the other supplementary information, and the statistical section 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 other supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly presented in all material respects in relation to the basic financial statements taken as a whole. The other supplementary information also includes prior year partial comparative information, which has been derived from the City’s 2009 financial statements and, in our report dated June 21, 2010, we expressed unqualified opinions on the respective financial

statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. In accordance with Government Auditing Standards, we have also issued a report dated May 13, 2011, on our consideration of the City of Minneapolis’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. It does not include Meet Minneapolis which was audited by other auditors. REBECCA OTTO GREG HIERLINGER, CPA STATE AUDITOR DEPUTY STATE AUDITOR May 13, 2011

THIS PAGE IS INTENTIONALLY BLANK

(All dollar amounts are expressed in thousands unless otherwise indicated.)

CITY OF MINNEAPOLIS MANAGEMENT’S DISCUSSION AND ANALYSIS REQUIRED SUPPLEMENTARY INFORMATION

This section of the City of Minneapolis’ comprehensive annual financial report presents a discussion and analysis of the City’s financial performance during the fiscal year ended December 31, 2010. Please read it in conjunction with the transmittal letter at the front of this report and the City’s basic financial statements following this section. All dollar amounts are expressed in thousands unless otherwise indicated. FINANCIAL HIGHLIGHTS  Assets of the City of Minneapolis exceeded liabilities at the close of the 2010 fiscal year by $1,519,330 (net assets). Of

this amount, $95,488 is restricted for specific purposes (restricted net assets) and $1,266,494 is invested in capital assets net of related debt and $157,348 in unrestricted net assets.

 The City’s total net assets increased by $114,592. Governmental activities increased the City’s net assets by $82,403

and the business type activities increased the net assets by $32,189  As of December 31, 2010, unreserved fund balance for the general fund was $60,092.  The City’s total long-term bond and note liability decreased by $75,544 from the prior year. Total bonds and notes

issued in 2010 was $194,806 including $98,355 of refunding transactions and total debt retirement was $270,350, including refunding transactions. Major new debt issuances included bonds of $32,300 for various infrastructure improvements in the five-year capital plan, $5,950 for special assessment projects, $43,000 for two economic development projects, and $15,201 of general obligation Water Revenue notes for water infrastructure projects.

OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include 3 components; 1) Government-wide financial statements; 2) Fund financial statements; and 3) Notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide Financial Statements—Government-wide financial statements are designed to provide readers with a broad overview of City finances, in a manner similar to a private-sector business. The statement of net assets presents information on all City assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of these government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or in part a portion of these costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, culture and recreation, health and welfare, and community development. The business-type activities of the City include sanitary sewer, stormwater, solid waste and recycling, water works, economic development, and parking. The government-wide financial statements include not only the City of Minneapolis (known as primary government), but also legally separate entities for which the City is accountable. For the City of Minneapolis, component units are included in the basic financial statements of the City, and consist of legally separate entities for which the City is financially accountable (discretely presented component units) and have substantially the same board as the City or provide services almost entirely

(All dollar amounts are expressed in thousands unless otherwise indicated.)

to the primary government (blended component units). An example of blended funds is the Board of Estimate and Taxation (BET). Examples of discretely presented component units include the Minneapolis Park and Recreation Board (Park Board), the Municipal Building Commission (MBC) and Meet Minneapolis. The government-wide financial statements can be found on pages 26-27 of this report. Fund Financial Statements—A fund is a grouping of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance. All of the funds in the City can be divided into three categories - governmental funds, proprietary funds, and fiduciary funds. Governmental Funds—These funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented in governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financial decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Minneapolis maintains 17 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund, the Community Planning and Economic Development Special Revenue Fund, the Convention Center Special Revenue Fund, Permanent Improvement Capital Project, the Development Debt Service Fund, and the Special Assessment Debt Service Fund, all of which are considered to be major funds. Data from the other 11 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The governmental funds’ financial statements can be found on pages 28-31 of this report. Proprietary Funds—The City of Minneapolis maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Minneapolis uses the enterprise funds to account for its Sanitary Sewer, Stormwater, Water Works, Municipal Parking, Solid Waste and Recycling, and Community Planning and Economic Development (CPED) activities. The City uses internal service funds to account for its property management services, fleet services, business information services, central stores, engineering lab, outside purchase of asphalt and cement services, city attorney, workers’ compensation, unemployment benefits and other payroll related services. Because these services predominately benefit governmental rather than business- type functions, they have been included within governmental activities in the government-wide financial statements. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The proprietary funds’ financial statements can be found on pages 32-36 of this report. Fiduciary Funds—Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the programs of the City. The fiduciary fund financial statements can be found on page 37 of this report. Notes to the Financial Statements—The notes to the financial statements provide additional information that is essential to a full understanding of the information provided in the government-wide financial statements. The notes to the financial statements can be found on pages 41-85 of this report.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Required Supplementary Information—In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. The required supplementary information can be found on pages 87-90 of this report. The combining statements referred to earlier, in connection with non-major governmental funds and internal service funds, are presented immediately following the required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Assets The City’s assets exceeded liabilities by $1,519,330 at the close of the fiscal year ending December 31, 2010 compared to $1,404,738 at the end of the previous year.

2010 2009 2010 2009 2010 2009

Current and other assets 631,081$ 674,551$ 243,174$ 184,384$ 874,255$ 858,935$ Capital assets 1,031,177 1,007,348 939,842 924,275 1,971,019 1,931,623

Total assets 1,662,258 1,681,899 1,183,016 1,108,659 2,845,274 2,790,558

Current and other liabilities 141,663 193,344 62,192 45,608 203,855 238,952 Long-term liabilities 740,530 790,893 381,559 355,975 1,122,089 1,146,868

Total liabilities 882,193 984,237 443,751 401,583 1,325,944 1,385,820

Net assets: Invested in capital, net of related debt 631,808 526,551 634,686 615,455 1,266,494 1,142,006 Restricted net assets 60,814 112,895 34,674 34,464 95,488 147,359 Unrestricted net assets 87,443 58,216 69,905 57,157 157,348 115,373

Total net assets 780,065 697,662 739,265 707,076 1,519,330 1,404,738

Total liabilities and net assets 1,662,258$ 1,681,899$ 1,183,016$ 1,108,659$ 2,845,274$ 2,790,558$

Statement of Net Assets

December 31, 2010

Governmental Activities Business-type Activities Total

The largest portion of the City’s net assets, $1,266,494 reflects its investment in capital assets (e.g. land, buildings, machinery, and equipment); less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investments in capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Another portion of the City’s net assets represents unrestricted net assets of $157,348, and for the second year, the city reports a positive unrestricted net assets balance in its governmental activities. The following table presents the net assets of the Primary government, (the City) and its discrete component units (Park Board, Meet Minneapolis, and the Municipal Building Commission):

(All dollar amounts are expressed in thousands unless otherwise indicated.)

2010 2009 2010 2009 2010 2009

Current and other assets 874,255$ 858,935$ 31,479$ 25,860$ 905,734$ 884,795$ Capital assets 1,971,019 1,931,623 307,290 296,099 2,278,309 2,227,722 Total assets 2,845,274 2,790,558 338,769 321,959 3,184,043 3,112,517

Current and other liabilities 203,855 238,952 23,968 16,105 227,823 255,057 Long-term liabilities 1,122,089 1,146,868 14,109 10,594 1,136,198 1,157,462 Total liabilities 1,325,944 1,385,820 38,077 26,699 1,364,021 1,412,519

Net assets: Invested in capital, net of related debt 1,266,494 1,142,006 301,419 294,857 1,567,913 1,436,863 Restricted net assets 95,488 147,359 2 7,574 95,490 154,933 Unrestricted net assets 157,348 115,373 (729) (7,171) 156,619 108,202 Total net assets 1,519,330 1,404,738 300,692 295,260 1,820,022 1,699,998

Total liabilities and net assets 2,845,274$ 2,790,558$ 338,769$ 321,959$ 3,184,043$ 3,112,517$

Primary Government Discrete Component Units Total

City and Discrete Component Units Statement of Net Assets

December 31, 2010

Statement of Activities The following table presents the changes in net assets for governmental and business-type activities:

2010 2009 2010 2009 2010 2009

Revenues

Program revenues: Charges for services $ 161,814 $ 100,551 $ 252,563 $ 265,644 $ 414,377 $ 366,195

Operating grants and contributions 118,118 92,775 - - 118,118 92,775 Capital grants and contributions 28,198 26,928 1,215 1,826 29,413 28,754

General revenues: Property taxes 217,519 263,776 - - 217,519 263,776 Property tax increment 42,117 13,440 - - 42,117 13,440 Franchise fees 27,855 28,053 - - 27,855 28,053 Convention center taxes 61,307 54,868 - - 61,307 54,868 Other taxes 42 202 - - 42 202 Local government aid 56,578 70,540 - - 56,578 70,540 Interest and investment earnings 5,961 6,843 271 4,126 6,232 10,969 Miscellaneous 1,440 10,239 - 88 1,440 10,327

Total revenues 720,949 668,215 254,049 271,684 974,998 939,899

TotalBusiness-type ActivitiesGovernmental Activities

Statement of Activities

For the Year Ended December 31, 2010

(All dollar amounts are expressed in thousands unless otherwise indicated.)

2010 2009 2010 2009 2010 2009

Expenses

General government 120,378 72,276 - - 120,378 72,276 Public safety 263,806 244,134 - - 263,806 244,134 Public works 73,848 94,752 - - 73,848 94,752 Culture and recreation 13,861 13,483 - - 13,861 13,483 Health and welfare 14,240 14,164 - - 14,240 14,164 Community & economic development 146,439 110,344 6,472 6,860 152,911 117,204 Interest on long-term debt 26,152 28,753 - - 26,152 28,753 Sanitary Sewer - - 35,233 32,892 35,233 32,892 Stormwater - - 26,273 24,856 26,273 24,856 Solid waste and recycling - - 27,804 23,641 27,804 23,641 Water works - - 55,980 51,751 55,980 51,751 Municipal parking - - 49,920 51,929 49,920 51,929 Total expenses 658,724 577,906 201,682 191,929 860,406 769,835

Excess (deficiency) before transfers 62,225 90,309 52,367 79,755 114,592 170,064 Transfers 20,178 45,365 (20,178) (45,365) - -

Change in net assets 82,403 135,674 32,189 34,390 114,592 170,064 Net assets - January 1, 2010 697,662 561,988 707,076 672,686 1,404,738 1,234,674 Net assets - December 31, 2010 $ 780,065 $ 697,662 $ 739,265 $ 707,076 $ 1,519,330 $ 1,404,738

Statement of Activities

For the Year Ended December 31, 2010

TotalBusiness-type ActivitiesGovernmental Activities

Governmental Activities—Governmental activities increased the City’s net assets by $82,403 compared to an increase of $135,674 in 2009. This increase was primarily due to a decrease in debt. Governmental activities are supported by charges for services, grants, and contributions. Additionally, general revenues cover any net expense after program specific revenues are applied. In 2010, the City relied primarily on taxes, various charges for services, and grants for funding governmental activities. Specifically, property tax increment revenues supported economic development activities. A significant expense in the statement of activities, compared to fund statements, is depreciation. Current year depreciation for governmental activities was $44,835.

Government-wide Revenues

Charges for services

43%

Grants and contributions

15%

Property taxes 22%

Tax increment 4%

Franchise fees 3%

Convention center taxes 6%

Local government aid 6% Other Revenue

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Government-wide Expenses

General government 14%

Public safety 30%

Public works -Streets and other service

Culture and recreation

2% Health and welfare

Community & economic

development 17%

Interest on long-term debt 3%

Public Works - Sanitary Sewer

Public Works - Stormwater

Public Works - Solid waste and recycling

3% Public Works - Water works

Public Works - Municipal parking

Functions/Programs Expenses Program revenues

Net (Expense) Re venu e by Program

General government 120,378$ 95,576$ (24,802)$ Public safety 263,806 74,970 (188,836) Public works 73,848 35,514 (38,334) Culture and recrea tion 13,861 - (13,861) Health and welfare 14,240 10,626 (3,614) Communit y & economic development 146,439 91,444 (54,995) Interest on long term debt 26,152 - (26,152)

658,724$ 308,130$ (350,594)$

General revenues and transfers supporting governmental acti vit ies 432,997

Change in net assets 82,403 Net asset s - Janua ry 1, 2010 697,662 Net asset s - December 31, 2010 780,065$

For th e Y ear en ded Decem ber 31, 2010

S ummary of expenses and program reve nues - Governm ental A cti vities

$ 0

$ 5 0 , 00 0

$1 0 0 , 00 0

$1 5 0 , 00 0

$2 0 0 , 00 0

$2 5 0 , 00 0

$3 0 0 , 00 0

Ge n e ra l G o ve rn m e n t

P u b lic S a f e ty P u blic W o rk s Cu ltu re a n d R ec re a tio n

He a lth a n d W e lf are

Co m m u n ity De v elo p m e n t

L o ng -Te rm De b t

S u m m a r y o f E x p e n s e s a n d P r og r a m R e v e n u e s - G o ve r n m e nta l Ac ti vi tie s

E xp e n se s P r o g ra m Re ve n u e s

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Business-Type Activities—Business-type activities increased the City’s net assets by $32,189 compared with an increase of $34,390 in 2009.

For th e Ye ar e n de d De ce m be r 31, 2010

Fu n cti on s/Program s Expe n se s Program re ve n u e s Ne t (Expe n se )

Re ve n u e by Program

Sanit ary sewer 35,233$ 49,358$ 14,125$ St ormwat er 26,273 39,903 13,630 Solid wast e and recycling 27,804 31,152 3,348 Wat er works 55,980 68,623 12,643 Communit y & economic development 6,472 6,426 (46) Municipal parking 49,920 58,316 8,396

201,682$ 253,778$ 52,096$

General revenues net of t ransfers out support ing business-t ype act ivit ies (19,907) C h an ge i n n e t asse ts 32,189 Net asset s - January 1, 2010 707,076 Net asset s - December 31, 2010 739,265$

S u m m ary of e xpe n se s an d program re ve n u e s - Bu si n e ss-Type Acti vi ti e s

$ 0

$ 10,000

$ 20,000

$ 30,000

$ 40,000

$ 50,000

$ 60,000

$ 70,000

Sanitary Sewer Sto rmwater So lid waste Water wo rks CP ED M unicipal P arking

Summary of Expenses and Program Revenues - Business-Type Activities

Ex penses Program Rev enues

FINANCIAL ANALYSIS OF THE CITY’S FUNDS As noted earlier, the City of Minneapolis uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds—The general government functions are contained in the General, Special Revenue, Debt Service, and Capital Project Funds. The focus of the City’s governmental funds is to provide information on near term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financial requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. During 2010, six governmental funds including the General Fund are presented as major funds. These funds include two Special Revenue Funds (Community Planning and Economic Development Fund, and Convention Center Fund), the Permanent Improvement Capital Projects Fund, and two Debt Service Funds (Development, and Special Assessment ). At December 31, 2010, the City’s governmental funds reported combined ending fund balances of $435,134 an decrease of $75,563 compared with the prior year. Approximately 48 percent of this total amount ($206,690) constitutes unreserved

(All dollar amounts are expressed in thousands unless otherwise indicated.)

fund balance, which is available for spending at the City’s discretion. The following presents the amounts of unreserved balances by various fund types:

Unreserved Fund Type Balance

General fund $ 60,092 Special revenue funds 65,760

Debt service funds 60,814 Capital projects fund 20,024

Total $ 206,690 The remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to pay for land development and specific projects ($180,308), 2) to liquidate contracts and purchase orders of the prior period ($27,920), or 3) for a variety of other restricted purposes ($20,216). The following tables provide an overview of revenues by source and expenditures by function for all governmental funds:

Increase/ (Decrease)

Revenue by Source Amount Percent of

Total Amount Percent of

Total Amount

Taxes 343,956$ 49.49 % 359,500$ 51.27 % (15,544)$ Licenses and permits 29,301 4.22 29,348 4.19 (47) Intergovernmental revenues 189,510 27.27 179,880 25.65 9,630 Charges for services and sales 56,776 8.17 59,340 8.46 (2,564) Fines and forfeits 9,934 1.43 9,621 1.38 313 Special assessments 23,849 3.43 20,897 2.98 2,952 Interest 6,269 0.90 7,037 1.00 (768) Miscellaneous revenue 35,366 5.09 35,542 5.07 (176)

Total 694,961$ 100.00 % 701,165$ 100.00 % (6,204)$

Increase/ (Decrease)

Expenditures by Function Amount Percent of

Total Amount Percent of

Total Amount

General government 72,746$ 8.81 % 65,357$ 8.87 % 7,389$ Public safety 258,507 31.31 242,061 32.86 16,446 Public works 50,165 6.08 43,495 5.90 6,670 Culture and recreation 13,808 1.67 13,424 1.82 384 Health and Welfare 13,822 1.67 13,953 1.89 (131) Community & economic development 146,082 17.70 115,384 15.66 30,698 Capital Outlay 60,659 7.35 83,656 11.36 (22,997) Debt service - principal retirement 179,242 21.71 102,518 13.91 76,724 Debt service - interest and fiscal charges 30,505 3.70 56,924 7.73 (26,419)

Total 825,536$ 100.00 % 736,772$ 100.00 % 88,764$

FY 2010 FY 2009

Revenues by Source

Governmental Funds

FY 2010 FY 2009

Governmental Funds

Expenditures by Function

(All dollar amounts are expressed in thousands unless otherwise indicated.)

General Fund—The General Fund is the general operating fund of the City. As of December 31, 2010, unreserved fund balance in the General Fund was $60,092, while total fund balance was $61,362. The fund balance of the City’s General Fund decreased by $6,905 during the current fiscal year. As a measure of the General Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. The following table provides changes in revenues by source from 2009 to 2010:

Increase/

(Decrease)

Percent Percent

Revenues by Source Amount of Total Amount of Total Amount

Taxes 198,020$ 53.69 % 194,622$ 50.25 % 3,398$ Licenses and permits 26,541 7.20 27,576 7.12 (1,035) Intergovernmental revenues 69,480 18.84 85,301 22.03 (15,821) Charges for services and sales 37,303 10.11 37,717 9.74 (414) Fines and forfeits 8,825 2.39 8,529 2.20 296 Special assessments 2,792 0.76 3,248 0.84 (456) Interest 1,844 0.50 1,087 0.28 757 Miscellaneous revenues 1,314 0.36 1,175 0.30 139 Total revenues 346,119$ 93.85 359,255$ 92.76 (13,136)$ Transfers in 22,673 6.15 28,036 7.24 (5,363)

Total revenues and other financing sources 368,792$ 100.00 % 387,291$ 100.00$ % (18,499)$

General Fund

Revenues By Source

2010 2009

In 2010, General Fund revenues and transfers have decreased by about 5% from the previous year. Some highlights included:

 Intergovernmental revenue decreased due to a decrease in Local Government Aid and the loss of Market Value Homestead Credit, both of which the City receives from the State of Minnesota.

 Licenses and permits are lower because fewer street use permits were issued. These are permits are related to construction.

The following table provides the changes in expenditures by function from 2009 to 2010:

Increase/

(Decrease)

Percent Percent

Expenditures by Function Amount of Total Amount of Total Amount

General government 58,766$ 15.64 % 55,023$ 14.92 % 3,743$ Public safety 214,301 57.04 213,932 58.02 369 Public works 44,642 11.88 41,191 11.17 3,451 Culture and recreation 6,747 1.80 7,750 2.10 (1,003) Health and family support 3,313 0.88 4,464 1.21 (1,151) Community & economic development 3,527 0.94 3,729 1.01 (202) Total expenditures 331,296 88.18 326,089 88.44 5,207 Transfers out 44,401 11.82 42,623 11.56 1,778

Total expenditures and other financing uses 375,697$ 100.00 % 368,712$ 100.00 % 6,985$

General Fund

Expenditures by Function

2010 2009

Overall, general fund expenditures increased by $6,985 or 1.9% from the previous year. There was an increase in Contingency fund expenditures to cover costs related to employees that were laid off at the end of 2009, and for a retirement incentive offered to police and fire department employees in 2010. Public works had to increased expenditures related to snow plowing, because of the record snowfall. All but $2 million of these expenditures were planned.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

General Fund Budgetary Highlights—The final budget for the City’s General Fund represents the original budget, any previously appropriated funds set aside for the purpose of honoring legally incurred obligations (prior year encumbrances and commitments), and any additional supplemental appropriations that may occur during the fiscal year. In 2010, the following were significant budget actions:

 The original General Fund appropriation for fiscal year 2010 was $372,002, which included projected transfers out of $39,738. The final appropriation was $377,318. General revenues and other resources were originally estimated at $372,203, which included projected transfers of $19,926. The final revenue estimate was $364,896 including transfers of $20,076.

 $11,700 of 2009 unspent appropriation was carried forward into 2010.  Significant budgetary variances between the final amended budget and the actual results included:

1) Tax revenues exceeded budgeted amounts by $1,188 due to increased delinquent tax collections. 2) License and permit revenues were below estimates due to the reduced number of street permits for

construction. This is a reflection of the current economy. 3) Fine and forfeit revenue was $1,005 below budget due to decreased fine collections in traffic enforcement. 4) Public works expenditures were $1,833 over budget, because the number of snow emergencies in 2010

was almost double the average. Current fiscal year revenue and expenditure budgets for the General Fund by major category or function are as follows:

General Fund Revenue Budget by Major Category

Transfers in 5.5%

Special assessments 0.7%

Licenses and permits 7.6%

Taxes 53.9%

Interest 0.4%

Miscellaneous revenues

0.4% Fines and forfeits

2.7%

Intergovernmental revenue 18.6%

Charges for services and sales

10.2%

(All dollar amounts are expressed in thousands unless otherwise indicated.)

General Fund Expenditure Budget by Function

Culture and Recreation 1.8%

Public Works 11.3%

Health and Welfare 0.9%

Transfers out 11.8%

General Government 16.4%

Public Safety 56.9%

Community & Economic Development

0.9%

Community Planning and Economic Development (CPED) Special Revenue Fund—The Community Planning & Economic Development (CPED) Special Revenue Fund accounts for governmental fund proceeds that are legally restricted to expenditures for specific purposes in a series of housing and economic development programs. The range of programs operated within this fund are created to increase the City’s economic competitiveness, to ensure an array of attractive housing choices, to support strong and diverse neighborhoods, and to preserve our historic structures. These programs are financed primarily through state and local grants, tax increment financing, and administrative fees collected from the issuance of housing and economic revenue bonds. A development account program provides loans and grants to outside organizations within the City to assist commercial and housing development. The program is capitalized with residual equities from development projects and UDAG repayments. The total revenues of the CPED Special Revenue fund in 2010 were $63,396, and 66% of the fund’s revenue was derived from property tax increment. The remaining revenue was derived from a variety of miscellaneous sources. Property tax increment revenue declined by $28,458 in 2010 as mature tax increment financing districts were decertified. There was a comparable decline in debt service transfers as debt supported by these districts was retired or refinanced. The expenditures for the fund in 2010 were $46,393. The fund’s expenditures are primarily for contractual services for the housing and economic programs operated within the fund and for the staff costs to monitor and deliver these programs. The level of current fund expenditures declined by 16% in 2010 as the fund had fewer resources available to meet the demands of existing programs. The fund’s transfers to other funds of $33,332 were primarily to provide resources for the debt service of obligations issued by the City for community development programs and to provide a $5,000 operating transfer for the City’s accelerated infrastructure program. At year-end the fund balance of the fund was $214,801. The unreserved portion of the fund balance at December 31, 2010 was $25,290. The remaining fund balance was reserved primarily for property held for development, encumbrances, or for specific development projects. Minneapolis Convention Center Special Revenue Fund—Operations of the Minneapolis Convention Center are reported as a Special Revenue Fund in the fund statements. The Convention Center activity is funded from local taxes and Convention Center operating revenues. Local Taxes from the Convention Center include: 0.5% citywide sales tax; 3% food and liquor tax applied to core downtown establishments; 3% citywide entertainment tax; 2.625% citywide lodging tax for motels and hotels with 50 units or more Overall tax proceeds for 2010 were nearly 12% above 2009 levels and nearly 2% under budget.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Minneapolis Convention Center Taxes

2010 2010 2009 Taxes Budget Actual Actual Sales and Use $ 30,237 $ 27,266 $ 26,470 Entertainment 11,753 13,175 9,071 Food 10,300 10,491 9,887 Liquor 3,966 4,586 3,769 Lodging 6,180 5,790 5,671 Total $ 62,436 $ 61,308 $ 54,868

The total revenues for the Convention Center in 2010 were $75,246 million and finished the year above 2009 levels by nearly 9% and under the 2010 budget by 4%. The revenue finishing under budget can be attributed to a decrease in operating and tax revenues as events scaled back on ancillary services, in addition to an overall lower than expected consumer spending level. For 2010, total expenditures finished the year nearly 15% over 2009 levels and 10% under budget. Overall, operating expenses remained consistent with 2009 expenses, but with some large 2010 projects, the Convention Center saw a significant increase to ongoing equipment and improvement which accounts for the increased total expenditures over 2009. The Convention Center had a large, unplanned project to the roof fireproofing which was repaired by year end. In addition to the Convention Center management cost containment initiatives, energy efficiency practices were continued, and the Convention Center realized savings in contractual services. Convention Center 2010 transfer to debt service was $19 million, which was nearly $4 million over 2009 levels and over $1 million under the 2010 budget. The 2010 fund balance ended the year at $40,009 million, which was $451 thousand better than budgeted. The 2010 ending fund balance decreased by over $8 million from 2009. Much of the decrease can be attributed to an increase in transfers of nearly $10 million. Permanent Improvement Capital Project Fund—The funding for the Permanent Improvement Fund is primarily from three sources. The first source includes bonds that are sold by the City of Minneapolis for capital projects. The second source is from the State of Minnesota and the third is Federal Funds. State and Federal revenues are primarily used for capital assets including bridges, streets, street lighting and traffic signals. The Permanent Improvement Fund is used to build infrastructure for the City including bridges, sidewalks, streets, traffic signals, street lights, and fund other capital projects. During 2010, $59,553 of capital outlay occurred which was a 25% decrease from 2009. The key assets constructed with these funds included:

 Bridges - $8,528

 Streets - $17,008

 Traffic Signals & Street Lighting - $9,100

 Bike Trails- $6,443

 Heritage Park (Near North) project - $2,205

 Property Service - $8,666

(All dollar amounts are expressed in thousands unless otherwise indicated.)

The fund balance increased from $18,377 in 2009 to $20,830, the increase was due to the transfer of funds from other funds and unspent bond proceeds. Additionally, revenues for the fund decreased from $43,705 in 2009 to $31,378 in 2010 due to decreased funding from state and federal sources for Capital Projects based on the Capital Projects’ funding sources. Development Debt Service Fund- Development Fund The Development Debt Service Fund is used to pay debt service on the City’s Convention Center, Target Center Arena and other economic development projects. Resources to pay debt service on the Convention Center come from several sales tax sources including a special one-half percent City-wide sales tax and three percent sales taxes on entertainment, restaurants, liquor and lodging in the downtown district. Target Center Arena debt is paid for with tax increments, entertainment taxes within the facility, property taxes and parking revenues. Economic development project debt is paid with tax increment collections specific to a stand-alone tax increment district or sometimes several tax increment districts are pooled to support a given project. At the end of 2010, the City had $331,805 of debt outstanding for the Convention Center, Target Center Arena and other development related projects. On December 30, 2009, the City issued $57,480 of refunding bonds for the Target Center Arena and on February 1, 2010, the City paid off $58,330 of outstanding bonds using the refunding proceeds and cash on hand. The $58,330 included $9,280 of economic development revenue bonds for the Target Center Arena which are reported in the Community Development Agency debt service fund. Also during 2010, the City issued $23,430 of additional refunding bonds for tax increment projects, the details of which can be found in Note 5 - Long Term Debt on page 64 During 2010, the City paid total debt service of $110,794 on the bonds included in the Development fund, of which $96,210 was principal repayment including refunded bonds paid. Special Assessment Debt Service Fund—The City of Minneapolis uses the Special Assessment Debt Service Fund to collect special assessments from residents and businesses for public improvements which are wholly or partially paid by the taxpayers. Special assessments are levied and collected each year via Hennepin County property tax statements as well as through voluntary prepayments and title company remittances upon sale of properties. These improvements are typically related to infrastructure items such as roadway, streetscape and street lighting projects and diseased tree removal on private property. At the end of 2010, the City had $47,806 of debt outstanding for special assessment improvements, including $6,350 of new bonds issued and $8,725 of refunding bonds issued during 2010. During 2010, the City received debt related assessment collections and interest earnings of $7,915 and paid total debt service of $20,313 on special assessment bonds, of which $17,965 was principal repayment including refunded bonds paid. Enterprise Funds—The City operates six enterprise funds: Sanitary Sewer, Stormwater, Water Works, Municipal Parking Solid Waste and Recycling, and Community Planning and Economic Development (CPED). Overall, the enterprise funds had a positive net asset of $757,399 at December 31, 2010. Total net assets for all enterprise funds increased by $32,329 during 2010. The following table summarizes the total assets, total liabilities, operating income, changes in net assets, and net asset balances for each of the enterprise funds, from 2009 to 2010:

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Sanitary Sewer Stormwater

Water Works

Municipal Parking

Solid Waste & Recycling CPED 2010 2009

Assets 112,635$ 290,369$ 302,985$ 321,523$ 30,023$ 143,625$ 1,201,160$ 1,128,843$

Liabilities 16,479 22,501 126,091 173,205 2,104 103,381 443,761 403,773

Operating Income(loss) 7,550 13,627 12,066 8,368 (273) 3,925 45,263 73,800

Changes in net assets 6,497 10,661 8,358 6,815 (29) 27 32,329 36,272

Net Assets 96,156$ 267,868$ 176,894$ 148,318$ 27,919$ 40,244$ 757,399$ 725,070$

Enterprise Funds

Key Balance Sheet Account Balances and Operating Activities

December 31, 2010

Total

Sanitary Sewer Fund—The Sanitary Sewer Fund accounts for the majority of the payments to the Metropolitan Council Environmental Services (MCES) for sewage interceptor and treatment services. It also accounts for the sanitary sewer maintenance and design. Overall, the net asset balance as of December 31, 2010 was $96,156. Stormwater Fund—The Stormwater Fund accounts for stormwater activities including the Combined Sewer Overflow (CSO) program. Overall, the net asset balance as of December 31, 2010 was $267,868. Solid Waste and Recycling Fund—The Solid Waste and Recycling Fund accounts for solid waste collection, disposal and recycling operations. The fund also includes “clean city” activities such as neighborhood clean sweeps, litter and graffiti removal, and litter control in the business districts. City crews provide approximately one-half of the solid waste collection services, while the remaining services are provided through contracts with private operators. The fund reported a decrease in net assets of $29 for 2010. The fund’s net asset balance at December 31, 2010 was $27,919. Water Works Fund—The Water Works Fund accounts for the operation and maintenance of a water delivery system for the City and several suburban city customers. The City sells water directly to the cities of Bloomington, Columbia Heights, Hilltop, Golden Valley, New Hope, Crystal, and Edina. Net assets increased $8,538 for the year, resulting in a net asset balance at December 31, 2010 of $176,894. Community Planning and Economic Development Enterprise Fund (CPED) —The CPED Enterprise Fund operates a series of business-type activities designed to enhance housing options and economic development within the City. Within this fund there are programs that provide low interest home mortgages financed through the sale of bonds. There is also a program in which revenue bonds are issued to finance economic development. The program obtains lease or loan agreements from developers to meet the debt service requirements of the financing. Revenue bonds in the amount of $43,000 were issued for the activities of this program in 2010. This fund also operates a river terminal facility. Substantially all operating revenues are derived from fees charged to the users of the services provided. The river terminal accounts for the investment in capital assets of the fund. Net assets increased by $27 during the year. Operating transfers in the amount of $398 in 2010 and $30,101 in 2009 were made from the resources generated by the programs of the CPED Enterprise Fund for the benefit of other development activities of the City. Municipal Parking Fund—The Municipal Parking Fund accounts for the operation and maintenance of parking ramps, lots, on-street parking meters, municipal impound lot, and traffic/parking control system. The net asset balance for December 31, 2010 was $148,318, which is an increase of $6,815 from 2009 balance. A parking fund revised financial plan is being developed due to successful parking initiatives, and financial efforts that included the sale of seven ramps, refinancing of debt, and parking system initiatives to increase revenues and decrease expenses.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Internal Service Funds—The City operates six internal service funds: Engineering Materials and Testing; Intergovernmental Services; Property Services; Equipment Services; Public Works Stores; and the Self Insurance. Internal service funds charge user fees to recover the cost of operations and accumulate equity for purposes of maintaining the on- going operations provided to the government. While the financial condition of the internal service funds continues to represent a financial challenge for the City, key measures taken in 2001 have resulted in improved financial performance. The financial condition of these funds had reached a low point at year-end 2000 when the combined net asset deficit had declined to ($54,407). Now at the end of 2010, the combined net assets in the internal service funds have improved to $70,872. The initial improvement resulted from a change in accounting principle and prior period adjustments of $17,555 in 2001, due to the implementation of GASB Statement No. 34. The restatement recognized assets previously unrecorded within the internal service funds. The remaining improvement of $107,724 can be credited to the deficit reduction plans that the managers of their respective funds implemented. Another milestone reached is that the six Internal Service Funds have a positive combined cash balance that continues to increase. The following table provides a summary of cash balances, total assets, total liabilities, operating income, changes in net asset and net asset balances for each of the internal service funds:

Eng. Materials & Testing

Intergovern- mental Services

Property Services

Equipment Services

Public Work Stores Self-Insurance

Total 2010

Total 2009

Cash $ 802 $ 8,438 $ 126 $ 8,235 $ 9 $ 41,245 $ 58,855 $ 28,804 Assets 823 61,676 33,794 60,010 4,558 43,377 204,238 187,353 Liabilities 89 44,773 7,803 29,402 1,334 49,965 133,366 131,657 Operating Income(Loss) 301 (7,669) (1,184) 1,656 53 (7,454) (14,297) (17,254) Changes in net assets 244 3,225 (1,219) 4,060 21 8,845 15,176 12,188 Net Assets $ 734 $ 16,903 $ 25,991 $ 30,608 $ 3,224 (6,588)$ $ 70,872 $ 55,696

December 31, 2010 Key Balance Sheet Account Balances and Operating Activities

Internal Service Funds

Engineering Materials and Testing Fund—This fund accounts for operations of the City’s Engineering Laboratory testing and inspection services along with the purchases of asphalt and ready-mix concrete. In 2003, the City Council took action to indefinitely discontinue operations of the asphalt plant. As a result, the Fund continues to account for the outside purchases of asphalt and ready-mix concrete. In 2009 and 2010, the fund earned operating incomes of $520 and $301, respectively, after sustaining operating losses of $115 and $29 for years 2008 and 2007. After a reduction to net assets of $168 in 2008, the fund increased net assets in 2009 by $462 and $244 in 2010 to achieve an ending net asset balance of $734. The fund maintains a positive cash balance, increasing the 2009 balance of $560 by $242 to achieve a 2010 ending balance of $802. Intergovernmental Services Fund—This fund accounts for information technology services, central mailing and printing services, and telecommunication operations. In 2003, the fund’s beginning net asset balance was restated by $7,866 to reflect corrections made to accurately present the fund’s capital assets, accumulated depreciation, and related liability amounts. This positive adjustment reduced the beginning net asset deficit from ($40,850) to ($32,984). The fund has recorded a total increase in net assets of $49,851 for years 2003 through 2010. The fund attained a positive net asset balance in 2008 of $4,868 and increased the balance by $12,035 to achieve an ending balance of $16,903 at year-end 2010. The updated long term financial plan forecast the fund to attain a net asset balance at year-end 2010 of 13,676. This fund has performed better than projected for the last six years. The actual cash balance at year-end 2010 is $8,438 compared to the projected cash balance of $1,241. The cash balance increased due to collection of $1,100 on the note receivable and prepayments totaling $6,312 for scheduled technology projects. In 2010, $4,560 of refunding bonds were issued to retire old debt and achieve a lower interest rate for current debt. In addition, bonds totaling $2,407 were issued as new debt to fund approved capital projects. Property Services Fund—The Property Service Fund is responsible for the management and maintenance of City owned real estate, including police precinct structures, fire stations, public works buildings, office buildings, parking structures and properties held for development purposes. The fund is not financially responsible for City Hall, the Convention Center, parking facilities, or Water and Park Board Buildings. The fund is responsible for energy management and internal security.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

quipment Services Fund—Equipment Services accounts for the City’s fleet of vehicles and related equipment and

he Fleet Services Division uses an activity based rate model to calculate equipment and labor rental rates charged to

ublic Works Stores Fund—This fund accounts for the centralized procurement, warehousing, and distribution of stocked

new inventory system was implemented in 2008 to integrate inventory transactions with the City’s new financial system

elf-Insurance Fund—The Self-Insurance Fund accounts for employee COBRA insurance benefits programs, occupational

APITAL ASSETS AND DEBT ADMINISTRATION

apital Asset—The City’s investment in capital assets for its governmental and business-type activities, as of December 31,

Included in this fund is the Radio Shop which maintains the City’s emergency communications network. Beginning in 2009, the Council approved a City-wide charge for City Hall rent. The Property Services Fund collects the rental charge and remits to the Municipal Building Commission. Ownership of some of the City’s properties is recorded as assets of this fund resulting in a depreciation expense. Currently, the Property Services Fund does not have rental and maintenance rates sufficient to fully recover depreciation, which results in an operating loss and a decrease to net assets each year. The fund incurred a total decrease to net assets of $4,237 from the 2003 ending net asset balance of $30,228 to the 2010 balance of $25,991. In 2010, net assets decreased $1,219, or 4.5%, from the 2009 ending balance of $27,210 resulting in a 2010 year- end balance of $25,991. E accessories. In addition, the fund manages the dispatch of City-owned and contractual equipment. A long term financial plan was developed for the fund in 2003 and the fund has progressively increased its net asset balance from $13,266 in 2004 to $30,608 in 2010. The fund reported an increase in net assets of $4,060 or 15.3% in 2010 from the ending balance of $26,548 in 2009. The 2010 net asset balance is tracking slightly ahead of the projected 2010 balance as determined in the updated long term financial plan. The 2010 ending cash balance is $8,235, an increase of $6,858 from the ending balance of $1,377 in 2009. The increase in cash is primarily due to a decrease in the acquisition of fleet vehicles and equipment. T customers based on actual expenses related to the vehicle and the replacement cost of the vehicle. A new financial subsystem was implemented in 2008 to account for the multitude of transactions related to the maintenance and repair of the vehicles in a more efficient manner. The long term financial plan for this fund eliminated the sale of bonds to support the equipment purchases in 2006. P inventory items, and the purchase of special goods and services for City departments. In addition, this fund stores an inventory of traffic signal components for assembly for Public Works-Transportation. For 2010, the fund reported a net asset increase of $21, raising the net asset balance from $3,203 in 2009 to $3,224 in 2010. The fund increased its cash balance from $4 reported in 2009 to $9 recorded at year-end 2010. In 2010, the fund significantly decreased the amount due to other funds by $735, or 46.8%, resulting in a 2010 balance of $835 compared to the 2009 balance of $1,570. A and involved several procedural changes for the recording of inventory. When inventory is received, the system requires that goods are “put-away” with an offsetting transaction that reduces the fund’s expenditures for materials. The cost of goods sold is no longer recorded. Revenue is recorded as an overhead charge based on the value of goods sold to each department. S health services, severance payments, tort liability program, workers’ compensation program, and the related administrative costs. With the implementation of the new financial system, benefit payments for medical, dental, long term disability and life insurance are paid directly from payroll and no longer pass through this fund. The net asset balance at year end 2010 is a deficit of ($6,588), an increase of $8,845 from the 2009 deficit of $(15,433). The cash balance increased from $26,509 in 2009 to $41,245 at year-end 2010. In 2003, a long term financial plan was implemented when the fund’s net asset balance was a deficit of ($40,983). The plan was updated in 2009 and predicted a net asset balance deficit of ($4,097) and an ending cash balance of $40,437. The performance of the fund over the past six years compared to the original long term financial plan resulted in a net asset balance that is ahead of plan and a cash balance that is significantly increased over the original forecast. C C 2010 was $1,971,019 (net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements, machinery and equipment, roads, highways, and bridges. The total increase in the City’s investment in capital assets for the current fiscal year was 2% (a 2% increase for governmental activities and a 1.7% increase for business-type activities).

(All dollar amounts are expressed in thousands unless otherwise indicated.)

The following table summarizes capital assets for governmental and business-type activities for 2010 and 2009:

Capital Assets (Net of depreciation) Governmental Business-Type Total 2010 2009 2010 2009 2010 2009 Land and easements $ 111,084 $ 111,084 $ 126,615 $ 126,521 $ 237,699 $ 237,605 Infrastructure 181,449 188,436 - - 181,449 188,436 Construction in progress 279,478 229,249 95,219 64,662 374,697 293,911 Buildings and structures 385,204 391,864 310,828 321,407 696,032 713,271 Public improvements 397 486 400,449 403,561 400,846 404,047 Machinery and equipment 39,569 43,489 6,682 8,038 46,251 51,527 Computer equipment 10,860 14,484 42 76 10,902 14,560 Software 23,136 28,256 4 6 23,140 28,262 Other capital outlay - - 3 4 3 4

Total $1,013,177 $1,007,348 $ 939,842 $ 924,275 $1,971,019 $1,931,623 Major capital asset transactions and events during the current fiscal year included:

 The renovation of Chicago Avenue.  Replacing the deck on the Camden Bridge.  Asphalt resurfacing of 25 miles of streets.

Additional information on the City’s capital assets can be found in Note 4 on pages 61-63 of this report. Long-term debt— As of December 31, 2010, the City had total long-term bonds and notes outstanding of $1,120,975 compared to $1,196,519 in the prior year. Of this amount, $716,211 related to governmental activities and $404,764 related to business activities. The City had $146,610 or 14.4% of the outstanding bonds in variable rate mode at year-end. In addition to bonded debt, the City had $100,561 of long-term revenue notes outstanding at December 31, 2010, of which $15,585 related to governmental activities and $84,976 related to business activities. The table below shows various classifications of the City’s long-term debt at December 31, 2010 and the amount of principal due in 2011.

Balance Balance Summary of Outstanding Bonds and Notes 1/1/2010 Additions Retirements 12/31/2010 Due in 2011

General Obligation (GO) Bonds and Notes: Property Tax Supported GO Bonds 241,155$ 31,652$ 36,237$ 236,570$ 14,405$ Self Supporting GO Bonds 219,540 6,245 28,005 197,780 11,830 Special Assessment GO Bonds 50,531 15,075 17,800 47,806 5,725 Tax Increment GO Bonds 200,865 23,430 84,465 139,830 11,575 Internal Service Fund Related GO Bonds 60,845 36,022 44,927 51,940 11,875 Enterprise Fund Related GO Bonds 238,882 24,181 39,200 223,863 24,756 Water Fund GO Notes 71,725 15,201 2,405 84,521 3,655 Total General Obligation Bonds and Notes 1,083,543 151,806 253,039 982,310 83,821

Revenue Bonds and Notes: Economic Development Revenue Bonds 35,980 - 9,280 26,700 710 Other Community Development Related Bonds 57,365 43,000 4,440 95,925 3,940 Revenue Notes 19,631 - 3,591 16,040 453 Total Outstanding Bonds and Notes 1,196,519$ 194,806$ 270,350$ 1,120,975$ 88,924$

The City maintained a “AAA” rating from Standard & Poor’s and Fitch Ratings and received a rating upgrade from “Aa1” to “Aaa” from Moody’s on April 19, 2010 for its general obligation debt in 2010. Additional information on the City’s Long term debt can be found in Note 5 on page 64 of this report.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

HISTORICAL AND LONG-TERM FINANCIAL PLANNING The Mayor and City Council continue to take a long-term view of the City’s finances. The following areas are those with the most significant future costs:

- The City’s long-term financial plans have been adopted for all three of the internal service funds (Equipment Services, Self-Insurance, and Intergovernmental Services) to increase net assets and to attain a positive cash balance. To meet the goals of the adopted long-term financial plans, transfers from the General Fund to all three funds are necessary.

- Like other jurisdictions, employee wages and benefits make up over 50 percent of the City’s General Fund expenses, increases to which are driven by rapid growth in healthcare costs. In 2011, health premiums increase is 0% due to implementation of a new contract. Also in 2011, for City positions, not including independent boards, growth in salary and wages were budgeted at 0% for bargaining units without settled labor contracts.

- In 2000, Minneapolis voters approved a levy to build a new Central Library and fund improvements to community libraries. Effective January 1, 2008, the Minneapolis Public Library System merged into the Hennepin County Library System. The County will be responsible for operating costs for the libraries in future years. Under the financial agreement, the City will issue debt as defined in the City’s adopted capital plan and will be responsible for a declining share of operations through 2017.

- In June of 2009, the Governor exercised his authority to “unallot” or unilaterally reduce various state appropriations. The appropriation directly impacting the City of Minneapolis is Local Government Aid (LGA). The City’s LGA was reduced by $8.5 million in 2009 and $21.3 million in 2010 as a result of these actions.

Increased pension costs associated with the City’s three closed pension plans – the Minneapolis Employee Retirement Fund (MERF), Minneapolis Fire Relief Association (MFRA), and Minneapolis Police Relief Association (MPRA) – continue to have a significant impact on the City’s budget. From 2006-2010, property tax supported contributions to the three closed funds totaled $80.4 million. For two of the plans, MFRA and MPRA, the City is responsible for making up for stock market underperformance of state law assumptions (6% investment return), increasing the liability by millions of dollars during economic downturns. Combined with legislatively approved changes, the City’s 2011 contribution is $15.5 million for the three closed pension plans. This amount would have been greater if the City had not prevailed in a lawsuit against the MFRA and MPRA. In 2010, the MERF fund became a division under the statewide Public Employees Retirement Association. The City is currently exploring merging the other two funds into the larger statewide plans, which will stabilize the funding of these plans due to the inclusion of new members and the additional time needed to recover from short-term market losses. The City issued $61,000 in bonds in 2002-03 due to a provision in state law, called the “liquidity trigger” which, upon an employee’s retirement, required the City to transfer enough money from the employee’s contributions and City funds from the active fund of MERF into the retired fund to pay the employee’s and his or her survivor’s entire expected retirement benefits. This provision was removed in 2007, which allowed State aid to function as originally intended – to fully fund the retired fund by 2020 – and to allow more time for investment returns to assist in financing these large payments. Before removal of the liquidity trigger, the expected City-only contribution from 2007 to 2022 was $101,000 (as calculated by the City’s consulting actuary). Eliminating the liquidity trigger decreased the City’s overall projected contribution to $56,600 over the same 16-year period – a $44,400 decrease. No additional bonds are expected to be issued for this fund. The MPRA’s pension costs will continue to increase due to the growth in payments made to beneficiaries, negative performance of the stock market as reflected in the actuarial assumptions and changes to the mortality table. Although the City issued a total of $53,300 in bonds in 2002-04 to finance these increases, no additional bonds are expected to be issued for this fund. The MFRA, although previously 100 percent funded, has experienced a reduction in its funding levels primarily due to negative performance of the stock market as reflected in the actuarial assumptions and changes to the mortality table. In 2005, the City resumed contributions to MFRA. The City issued $4.7 million in bonds in 2004 to cover these shortages. The MFRA’s pension costs are also increasing due to growth in payments made to beneficiaries. No additional bonds are expected to be issued for this fund.

(All dollar amounts are expressed in thousands unless otherwise indicated.)

Funding for physical infrastructure capital program totals for 2011-2015, including independent boards and commissions totals $593.67 million for all funding sources. The 2011 portion of this program is $113.94 million. Property tax supported net debt bonds help to leverage many funding sources in the five-year plan. Budget planning efforts conducted since 2003 collect all demands on the property tax into a ten-year projection. As part of this planning, the Council adopted a property tax revenue policy, effective in 2003, which limited the total annual increases for the City’s property tax revenue to a maximum of eight percent. Half of this increase was dedicated to the City’s debt payments for increased pension obligations, internal service fund deficits, and increased library capital projects as called for in a voter-approved referendum in 2000. The other half of the increase was for the increasing cost of providing existing services. This policy was also adopted by the City’s Board of Estimate and Taxation. Within the overall policy is a provision that limits the annual operating increase for the Minneapolis Park Board to four percent over the prior year. The 8-percent tax revenue policy was recommended through 2010 but during the 2010 budgeting process, the Mayor and City Council adopted the following replacement policy:

Those entities receiving Local Government Aid (LGA) will move to an activity-based approach with an annual adjustment after the base year equal to the projected percentage increase in the Current Service Level. The dollars available for the activities will be based on the sum of the LGA, total tax collections, and total General Fund revenues. The activities will exclude dollars transferred to other entities, including the following: For the Park Board, it will exclude the General Fund Overhead transfer to the City, the General Fund Administration Fee transfer to the City, and the costs of Park Board Capital Improvements funded from the Park Board levy. For the Municipal Building Commission (MBC), it will exclude the General Fund Overhead transfer to the City. For the City’s General Fund, it will exclude the General Fund Overhead not recovered from the Park Board, MBC, and others. It also excludes transfers to other funds including approved internal service fund workout plans, the Target Center Finance Plan, one-time capital project transfers, transfers to and from the pension management plan, and the transfer to Hennepin County per the Library Agreement.

Under the activity-based approach, the tax revenue percentage change for the City, the Park Board, and MBC may vary from year to year based on adjustments to LGA, total General Fund revenues, and adjustments to those items excluded from activities, as well as adjustments to the projected change in the Current Service Level. In January of 2003, the Mayor and City Council adopted a five-year financial direction and a commitment to long-term business planning. This direction established resource constraints within which departments were to prepare business plans for providing services with reductions in funding growth. The combination of reduced spending and limited growth in property tax revenue addressed the City’s existing challenges. The City adopted a two percent cap on annual wage increases for City contracts, which was replaced with a compensation philosophy in 2007. The compensation philosophy links salary increases to strategic workforce needs and does not anticipate pattern settlements. (Prior to the 2% wage policy, pattern settlements at the City took the form of the first contract settlement setting the percent increase for all other contract settlements). ECONOMIC FACTORS AND NEXT YEAR’S BUDGET Budget Outlook: The City’s future financial outlook is strong. The City has financial policies in place to help address funding pressures including personnel costs, pension obligations, and internal service fund debt. Since 2002, the City annually adopts a five- year financial direction. In 2011, for City positions, not including independent boards, growth in salary and wages are budgeted at 0% for two years for bargaining units without settled labor contract. Health insurance costs are budgeted to decrease from $60.7 million to $57.8 million. This estimate is based on changes and experience related to the current plan design and the competitive procurement processes. The anticipated health premium increase for in 2011 is 0% due to implementation of a new contract. The five-year financial direction includes an average 10% annual health insurance cost increase in 2012, 12% in 2013 and 16% thereafter. The City continues to proactively manage its pension liabilities. The City issued bonds in 2002-04 and used one-time funds to meet its pension obligations during those years. The 2011 budget includes $27.5 million in property tax for closed pension

(All dollar amounts are expressed in thousands unless otherwise indicated.)

fund expenses. The City estimates total closed fund pension obligations of approximately $643.1 million through 2028. Due to sound financial management, the City does not anticipate a need to bond for pension costs in 2011. Additionally, the City is in active litigation with two funds. An initial court order reduced City obligations by nearly $10 million in 2010. A final order related to further reduced City obligations has not been issued. Although the City continues to have a net deficit in one of its internal service funds, future budgets will continue to address this deficit through a Council-adopted a long-term financial plan. In order to create capacity in 2012, the General Fund will prepay $5.5 million in obligations to the Self Insurance Fund in 2011. There will be a postponement of 2012 obligations ($2.2 million) to the Fleet Services Fund and a partial prepayment of 2014 obligations ($1.2 million) in 2013.

Economic Outlook and Tax Trends Minneapolis has the highest concentration of commercial office buildings in the State of Minnesota and therefore is the largest contributor of revenue to the state general tax on a per city basis. Minneapolis’s commercial/industrial tax base is the $7.8 billion dollars, of which $4.04 billion resides in the Minneapolis Central Business District (CDB). Between January 2009 and January 2010 the Minneapolis CBD experienced a 12.2% reduction in the commercial tax base. The overall commercial property tax base for Minneapolis declined 9.6% from $7.0 billion dollars in 2009 to $6.3 billion in 2010. The Minneapolis real estate market will continue to work its way through the economic slowdown. Unlike real estate markets on either coast, none of Minneapolis’s real estate sectors has been dealt a devastating blow by the recession. While Minneapolis is not immune to the current economic crunch, it does not function within a vacuum. Minneapolis has yet to see a Class “A” office building, major apartment complex or retail development turn their keys over to the lender. This bodes well for Minneapolis’s diverse industries and a balanced economic market place, its focused commitment to sound fundamental investing and its long-term planning in capital and infrastructure. Downtown Office Space—Vacancy Rate:

Because of the importance of real estate taxes as a source of local government revenue, real estate statistics are an important economic gauge for municipalities. Several commercial real estate companies compile and report real estate statistics. Cassidy Turley reports on local real estate conditions quarterly. Cassidy Turley’s statistics indicate a slight decrease in vacancy rates in the Minneapolis CBD. Compared to the fourth quarter of 2009, the vacancy rate in the CBD has decreased from 19.4% to 17.5% in the fourth quarter of 2010.

Employment:

The unemployment rate for the City of Minneapolis as of February 2011 is 6.2% according to the Minnesota Department of Employment and Economic Development. This economic indicator compares favorably to the State of Minnesota (6.7%) and the national unemployment rate (8.9%).

REQUEST FOR INFORMATION

This financial report is designed to provide a general overview of the City of Minneapolis’ finances. Questions concerning any of the information provided in this report or the requests for additional financial information should be addressed to the City’s Finance Officer at The City of Minneapolis, 350 South Fifth Street, Minneapolis, Minnesota, 55415. The annual financial report is also available online at www.ci.minneapolis.mn.us.

http://www.ci.minneapolis.mn.us/

THIS PAGE IS INTENTIONALLY BLANK

STATEMENT OF NET ASSETS CITY OF MINNEAPOLIS, MINNESOTA December 31, 2010 (In Thousands)

Governmental Activities

Business-type Activities Total

Discrete Component Units Total

ASSETS Cash and cash equivalents 407,740$ 90,897$ 498,637$ 19,235$ 517,872$ Deposits with fiscal agents 243 - 243 - 243 Fund investments 10,056 - 10,056 - 10,056 Investments with trustees 3,219 52,995 56,214 - 56,214 Receivables (net) 71,411 29,450 100,861 10,821 111,682 Loans receivable from component unit 1,813 - 1,813 - 1,813 Due from primary government - - - 146 146 Due from other government agencies 44,737 300 45,037 789 45,826 Capital leases 180 3,535 3,715 - 3,715 Prepaids and other assets 1,314 - 1,314 344 1,658 Inventories 5,569 3,680 9,249 144 9,393 Internal Balances 18,144 (18,144) - - - Long-term portion of loans and notes receivable - 610 610 - 610 Long-term portion of loans due from component unit 6,063 - 6,063 - 6,063 Long-term portion of capital lease receivable 9,532 79,198 88,730 - 88,730 Long-term deferred charges 2,542 641 3,183 - 3,183 Properties held for resale 48,518 12 48,530 - 48,530 Capital assets:

Nondepreciable 390,562 221,834 612,396 114,817 727,213 Depreciable, net 640,615 718,008 1,358,623 192,473 1,551,096

Total assets 1,662,258$ 1,183,016$ 2,845,274$ 338,769$ 3,184,043$

LIABILITIES Accrued salaries and benefits 8,224$ 675$ 8,899$ 1,091$ 9,990$ Accounts payable 22,142 10,165 32,307 10,188 42,495 Interest payable 3,620 2,030 5,650 170 5,820 Unpaid claims payable - - - 6,071 6,071 Loans payable to primary government - - - 1,813 1,813 Due to component unit 146 - 146 - 146 Due to other governmental agencies 596 230 826 1 827 Unearned revenue 19,809 861 20,670 130 20,800 Deposits held for others 5,377 7,342 12,719 - 12,719 Long-term interest payable - 7,846 7,846 - 7,846 Compensated absences:

Due within one year 15,948 548 16,496 2,987 19,483 Due beyond one year 16,613 1,280 17,893 1,563 19,456

Other postemployment benefits - due beyond one year 10,283 1,561 11,844 1,797 13,641 Long -term portion of loan payable

to primary government - - - 6,063 6,063 Long-term liabilities:

Due within one year 65,801 32,495 98,296 1,517 99,813 Due beyond one year 713,634 378,718 1,092,352 4,686 1,097,038

Total liabilities 882,193 443,751 1,325,944 38,077 1,364,021

NET ASSETS Invested in capital assets, net of related debt 631,808 634,686 1,266,494 301,419 1,567,913 Restricted: Debt service 60,814 34,674 95,488 - 95,488 Community & economic development - - - 2 2 Unrestricted 87,443 69,905 157,348 (729) 156,619

Total net assets 780,065 739,265 1,519,330 300,692 1,820,022

Total liabilities and net assets 1,662,258$ 1,183,016$ 2,845,274$ 338,769$ 3,184,043$

The notes to the financial statements are an integral part of this statement.

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GOVERNMENTAL FUNDS CITY OF MINNEAPOLIS, MINNESOTA BALANCE SHEET December 31, 2010 (In Thousands)

Community Planning

and Economic Convention Permanent Special Non-Major General Development Center Improvement Development Assessment Governmental Total

ASSETS Cash and cash equivalents 62,893$ 167,190$ 21,079$ 21,194$ 74$ 8,821$ 67,634$ 348,885$ Deposits with fiscal agents - - - - - - 243 243 Fund investments - 10,056 - - - - - 10,056 Investments with trustees - - - - - - 3,219 3,219 Receivables: Accounts - net 4,285 547 6,719 1,965 - - 879 14,395

Taxes 3,870 103 - 40 - - 908 4,921 Special assessments 835 - - 3,449 - 37,043 1,375 42,702 Intergovernmental 3,171 462 - 17,662 - - 23,008 44,303 Notes - - - - - - 104 104 Loans - 7,671 - - - - - 7,671

Loans due from component unit - - 7,876 - - - - 7,876 Accrued interest 535 551 105 76 1 32 185 1,485

Due from other funds 1,739 17 - - - - 12,127 13,883 Advances to other funds 864 10 9,250 - - - - 10,124 Land held for development - 38,548 - - - - 9,537 48,085 Prepaid items 22 98 - - - - - 120

Total assets 78,214$ 225,253$ 45,029$ 44,386$ 75$ 45,896$ 119,219$ 558,072$

LIABILITIES and FUND BALANCES

Liabilities: Salaries payable 6,448$ 109$ 280$ 166$ -$ -$ 438$ 7,441$ Accounts payable 3,421 1,646 3,253 2,399 21 38 6,057 16,835 Intergovernmental payable 501 2 10 - - - 47 560 Due to other funds 27 - - - - - 13,856 13,883 Due to component units - - - - - - 146 146 Deposits held for others 3,225 675 1,477 - - - - 5,377 Deferred Revenue - unavailable 3,230 7,774 - 20,991 - 36,971 1,818 70,784 Deferred Revenue - unearned - 246 - - - - 7,666 7,912

Total liabilities 16,852 10,452 5,020 23,556 21 37,009 30,028 122,938

Fund balances: Reserved for:

Land held for development - 38,548 - - - - 9,537 48,085 Specific development projects - 132,223 - - - - - 132,223 Street/highway projects - - - 806 - - - 806 Encumbrances 384 10,961 94 - - - 8 11,447 Prepaid items 22 98 - - - - - 120 Loans - 7,671 7,876 - - - - 15,547 Advances 864 10 9,250 - - - - 10,124 Pension liability - - - - - - 10,092 10,092

Unreserved, reported in General Fund 60,092 - - - - - - 60,092 Special Revenue Fund - 25,290 22,789 - - - 17,681 65,760 Debt Service Fund - - - - 54 8,887 51,873 60,814 Capital Project Fund - - - 20,024 - - - 20,024

Total fund balances 61,362 214,801 40,009 20,830 54 8,887 89,191 435,134

Total liabilities and fund balances 78,214$ 225,253$ 45,029$ 44,386$ 75$ 45,896$ 119,219$ 558,072$

The notes to the financial statements are an integral part of this statement.

Reconciliation of the Governmental Funds Balance Sheet to the CITY OF MINNEAPOLIS, MINNESOTA Government-Wide Statement of Net Assets - Governmental Activities December 31, 2010 (In Thousands)

Fund balances - total governmental funds 435,134$

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.

Non-Depreciable 354,858 Depreciable 1,069,369 Accumulated Depreciation (523,050) 901,177

Capital Lease Receivable for parking ramp 9,712

Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the governmental funds, primarily deferred special assessments. 70,784

Internal service funds are used by management to charge the costs of engineering materials and testing, intergovernmental services, property services, permanent improvement equipment, public works stores, and, self-insurance. 70,872

Receivable from business-type funds for internal service fund activity 18,134

Accruals to record an accounts receivable allowance, interest receivable on loans and notes, and an adjustment to loans and notes receivable balances. (6,557)

Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the governmental funds.

Bonds and Notes Payable and any related unamortized premiums/discounts (675,597) Other post employment benefits payable (9,011) Operating and Capital leases payable (86) Bond Interest Payable (3,477) Compensated Absences (31,020) (719,191)

Net assets of governmental activities 780,065$

The notes to the financial statements are an integral part of this statement.

GOVERNMENTAL FUNDS CITY OF MINNEAPOLIS, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Fiscal Year Ended December 31, 2010 (In Thousands)

Community Planning

and Economic Convention Permanent Special Nonmajor General Development Center Improvement Development Assessment Governmental Total REVENUES:

Taxes 198,020$ 41,844$ 61,308$ 1,690$ -$ -$ 41,094$ 343,956$ Licenses and permits 26,541 - - 278 - - 2,482 29,301 Intergovernmental revenues 69,480 180 - 23,376 - - 96,474 189,510 Charges for services and sales 37,303 9,057 4,500 3,203 - - 2,713 56,776 Fines and forfeits 8,825 - - - - - 1,109 9,934 Special assessments 2,792 - - 1,503 - 7,822 11,732 23,849 Interest 1,844 2,776 744 113 - 93 699 6,269 Miscellaneous revenues 1,314 9,539 8,694 1,215 298 - 14,306 35,366

Total revenues 346,119 63,396 75,246 31,378 298 7,915 170,609 694,961

EXPENDITURES: Current:

General government 58,766 - - 1,002 - - 12,978 72,746 Public safety 214,301 - - - - - 44,206 258,507 Public works 44,642 - - - - - 5,523 50,165 Culture and recreation 6,747 - - 7,061 - - - 13,808 Health and welfare 3,313 - - - - - 10,509 13,822 Community & economic development 3,527 45,287 39,633 - - - 57,635 146,082

Capital outlay - 1,106 - 59,553 - - - 60,659 Debt Service:

Principal retirement - - - - 96,210 17,965 65,067 179,242 Interest and fiscal charges - - - - 14,584 2,348 13,573 30,505

Total expenditures 331,296 46,393 39,633 67,616 110,794 20,313 209,491 825,536

Excess (deficiency) of revenues over (under) expenditures 14,823 17,003 35,613 (36,238) (110,496) (12,398) (38,882) (130,575)

OTHER FINANCING SOURCES (USES): Transfers from other funds 22,673 1,904 1,000 14,683 36,531 789 37,523 115,103 Transfers to other funds (44,401) (33,332) (45,228) (2,275) (8,569) (15) (5,838) (139,658) Bonds issued - - - 24,687 - - - 24,687 Premium (Discount) - - - 1,596 253 330 986 3,165 Refunding bonds issued - - - - 23,430 8,725 19,560 51,715

Total other financing sources (uses) (21,728) (31,428) (44,228) 38,691 51,645 9,829 52,231 55,012

Net change in fund balances (6,905) (14,425) (8,615) 2,453 (58,851) (2,569) 13,349 (75,563)

Fund balances - January 1 68,267 229,226 48,624 18,377 58,905 11,456 75,842 510,697

Fund balances - December 31 61,362$ 214,801$ 40,009$ 20,830$ 54$ 8,887$ 89,191$ 435,134$

The notes to the financial statements are an integral part of this statement.

Reconciliation of the Statement of Revenues, Expenditures, CITY OF MINNEAPOLIS, MINNESOTA and Changes in Fund Balances of Governmental Funds to the Statement of Activities - Governmental Activities For the Fiscal Year Ended December 31, 2010 (In Thousands)

Net increase (decrease) in fund balances - total governmental funds (75,563)$

Amounts reported for governmental activities in the statement of activities are different because:

Interest receivable is not recorded within the fund level statements. (148)

Internal service funds are used by management to charge the costs of certain activities to individual funds. The net expense of certain activities of the internal service funds is reported with governmental activities with amounts related to business type activities shown as an internal balance.

15,176

Transfers from business-type funds for internal service fund activity 140

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Expenditures for general capital assets, infrastructure, and other related capital assets: 59,745 Less loss on retirement of capital assets (54) Less current year depreciation (26,170)

Revenues and expenses in the statement of activities that do not provide current financial resources are not reported as revenues and expenses in the funds. 10,703

Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets:

Bonds Principal Payments 179,242 Bond Proceeds (79,567) 99,675

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds:

Change in accrued interest payable 4,353 Change in other post employment benefits payable (2,568) Change in compensated absences (2,886) (1,101)

Increase (decrease) in net assets of governmental activities 82,403$

The notes to the financial statements are an integral part of this statement.

PROPRIETARY FUNDS CITY OF MINNEAPOLIS, MINNESOTA STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

Governmental Activities

Community Solid Waste Planning Internal

Sanitary Water Municipal and and Economic Service Sewer Stormwater Works Parking Recycling Development Total Funds

ASSETS Current assets:

Cash and cash equivalents 16,651$ 26,160$ 13,227$ 12,781$ 21,924$ 154$ 90,897$ 58,855$ Investments with trustees - - - - - 52,995 52,995 - Receivables:

Accounts - net 3,659 3,227 4,407 3,481 2,858 37 17,669 133 Special assessments: -

Current 96 342 672 1 146 - 1,257 - Delinquent 6 104 227 7 4 - 348 - Deferred - 88 787 8,699 1 - 9,575 -

Intergovernmental - 290 - - 10 - 300 434 Loans - - - - - 150 150 - Notes - - - - - 405 405 6,557 Accrued interest - - - - - 46 46 -

Capital leases - - - - - 3,535 3,535 - Due from other funds - - - - - - - 835 Inventories - - 2,289 - 1,391 - 3,680 5,569 Properties held for resale - - - - - 12 12 433 Prepaid items - - - - - - - 1,194

Total current assets 20,412 30,211 21,609 24,969 26,334 57,334 180,869 74,010

Long-term assets: Receivables:

Loans - - - - - 610 610 - Capital leases - - - - - 79,198 79,198 - Deferred charges 16 16 30 579 - - 641 228 Capital assets:

Nondepreciable Land, leaseholds and easements 1 7,211 2,993 112,452 110 3,848 126,615 23,303 Construction in progress 14,904 10,896 66,018 3,401 - - 95,219 12,401 Depreciable Buildings and structures - - 186,262 278,199 2,047 12,743 479,251 55,649 Less accumulated depreciation - - (55,401) (100,884) (2,030) (10,108) (168,423) (26,952) Public improvements 132,106 336,103 142,315 456 - - 610,980 3,056 Less accumulated depreciation (54,812) (94,092) (61,525) (102) - - (210,531) (2,793) Machinery and equipment 1,182 1,405 2,227 4,566 12,536 393 22,309 80,136 Less accumulated depreciation (1,174) (1,381) (1,576) (2,129) (8,974) (393) (15,627) (48,580) Computer equipment 10 193 316 1,041 178 - 1,738 60,775 Less accumulated depreciation (10) (193) (287) (1,028) (178) - (1,696) (50,044) Software - 1,488 1,856 130 955 - 4,429 45,280 Less accumulated depreciation - (1,488) (1,852) (130) (955) - (4,425) (22,231) Other capital outlay - - 19 15 - - 34 50 Less accumulated depreciation - - (19) (12) - - (31) (50)

Total long-term assets 92,223 260,158 281,376 296,554 3,689 86,291 1,020,291 130,228

Total assets 112,635$ 290,369$ 302,985$ 321,523$ 30,023$ 143,625$ 1,201,160$ 204,238$

Business-type Activities - Enterprise Funds

The notes to the financial statements are an integral part of this statement.

PROPRIETARY FUNDS CITY OF MINNEAPOLIS, MINNESOTA STATEMENT OF NET ASSETS (Continued) December 31, 2010 (In Thousands)

Governmental Activities

Community Solid Waste Planning Internal

Sanitary Water Municipal and and Economic Service Sewer Stormwater Works Parking Recycling Development Total Funds

LIABILITIES Current liabilities:

Salaries payable 67$ 103$ 313$ 100$ 92$ -$ 675$ 783$ Accounts payable 761 280 5,082 2,842 1,184 16 10,165 5,307 Intergovernmental payable 13 - 80 50 87 - 230 36 Due to other funds - - - - - - - 835 Deposits held for others 19 307 - 1,344 4 5,668 7,342 - Advances from other funds - - - - - 10 10 - Interest payable 55 60 901 575 - 439 2,030 143 Unearned revenue - - - - - 861 861 11,897 Bonds payable-current portion 3,100 4,785 2,251 14,620 - 3,940 28,696 11,875 Notes payable-current portion - - 3,655 - - 144 3,799 - Compensated assets payable-current portion 45 83 255 49 114 2 548 463

Total current liabilities 4,060 5,618 12,537 19,580 1,481 11,080 54,356 31,339

Long-term liabilities: Interest payable - 2,155 3,329 2,362 - - 7,846 - Bonds payable 11,400 13,486 26,521 147,700 - 91,985 291,092 40,065 Unamortized premium (discounts) 814 774 1,548 3,313 - - 6,449 2,206 Advances from other funds - - - - - - - 10,114 Notes payable - - 80,866 - - 311 81,177 - Compensated absences payable 104 194 596 115 266 5 1,280 1,078 Other postemployment benefits 101 274 694 135 357 - 1,561 1,272 Unpaid claims payable - - - - - - - 47,292

Total long-term liabilities 12,419 16,883 113,554 153,625 623 92,301 389,405 102,027

Total liabilities 16,479 22,501 126,091 173,205 2,104 103,381 443,761 133,366

NET ASSETS Invested in capital assets, net of related debt 81,069 244,580 168,351 130,514 3,689 6,483 634,686 76,873 Restricted - debt service - - - - - 34,674 34,674 - Unrestricted 15,087 23,288 8,543 17,804 24,230 (913) 88,039 (6,001)

Total net assets 96,156 267,868 176,894 148,318 27,919 40,244 757,399 70,872

Total liabilities and net assets 112,635$ 290,369$ 302,985$ 321,523$ 30,023$ 143,625$ 1,201,160$ 204,238$

Net assets - total enterprise funds 757,399$

(18,134)

Net assets of business-type activites 739,265$

Some amounts reported for business-type activities in the statement of net assets are different because certain internal service fund assets and liabilities are included with business-type activities.

Business-type Activities - Enterprise Funds

The notes to the financial statements are an integral part of this statement.

PROPRIETARY FUNDS CITY OF MINNEAPOLIS, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the Fiscal Year Ended December 31, 2010 (In Thousands)

Governmental Activities

Community Solid Waste Planning Internal

Sanitary Water Municipal and and Economic Service Sewer Stormwater Works Parking Recycling Development Total Funds Operating revenues:

Licenses and permits -$ -$ 1$ 292$ -$ -$ 293$ -$ Intergovernmental revenues - 231 - - - - 231 - Charges for services and sales 49,277 37,798 65,650 57,948 29,638 2,429 242,740 76,593 Special assessments 90 1,008 1,757 - 616 - 3,471 - Interest - - - - - 3,997 3,997 - Rents and commissions - - - 3 - - 3 34,806

Total operating revenues 49,367 39,037 67,408 58,243 30,254 6,426 250,735 111,399

Operating expenses: Personnel costs 3,126 6,048 20,501 4,164 9,787 11 43,637 41,714 Contractual services 7,576 12,323 16,938 36,939 17,265 2,143 93,184 47,497 Materials, supplies, services and other 29,963 3,213 10,237 1,996 2,640 - 48,049 16,264 Rent - - 148 - - - 148 1,556 Depreciation 1,152 3,826 7,518 6,776 835 347 20,454 18,665

Total operating expenses 41,817 25,410 55,342 49,875 30,527 2,501 205,472 125,696

Operating income (loss) 7,550 13,627 12,066 8,368 (273) 3,925 45,263 (14,297)

Non-operating revenues (expenses): Intergovernmental - 838 - - 899 - 1,737 - Interest revenue - - - - - 271 271 - Interest expense (547) (863) (3,420) (5,961) - (3,971) (14,762) (2,561) Gain (loss) on disposal of capital assets - - - - - - - 91 Special assessments - - - 65 - - 65 - Other revenues - 28 4 8 - - 40 5,888

Total non-operating revenues (expenses) (547) 3 (3,416) (5,888) 899 (3,700) (12,649) 3,418

Income (loss) before contributions and transfe 7,003 13,630 8,650 2,480 626 225 32,614 (10,879)

Capital contributions - - 1,215 - - - 1,215 - Transfers in (out):

Transfers from other funds 319 342 - 14,777 196 200 15,834 28,186 Transfers to other funds (825) (3,311) (1,507) (10,442) (851) (398) (17,334) (2,131)

Total transfers (506) (2,969) (1,507) 4,335 (655) (198) (1,500) 26,055

Change in net assets 6,497 10,661 8,358 6,815 (29) 27 32,329 15,176

Net assets - January 1 89,659 257,207 168,536 141,503 27,948 40,217 55,696

Net assets - December 31 96,156$ 267,868$ 176,894$ 148,318$ 27,919$ 40,244$ 70,872$

Some amounts reported for business-type activities in the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities. (140)

Change in net assets of business-type activities 32,189$

The notes to the financial statements are an integral part of this statement.

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STATEMENT OF FIDUCIARY NET ASSETS CITY OF MINNEAPOLIS, MINNESOTA FIDUCIARY FUNDS December 31, 2010 (In Thousands)

Agency

Funds ASSETS Cash and cash equivalents 2,524$ Receivables: Accounts-net 2,133

Total assets 4,657$

LIABILITIES Accounts payable 2,586$ Intergovernmental payable 1,949 Deposits held for others 122

Total liabilities 4,657$

The notes to the financial statements are an integral part of this statement.

COMBINING STATEMENT OF NET ASSETS CITY OF MINNEAPOLIS, MINNESOTA DISCRETE COMPONENT UNITS December 31, 2010 (In Thousands)

Municipal Building Meet Total Discrete

Park Board Commission Minneapolis Component Units ASSETS

Cash and investments 16,912$ 1,326$ 997$ 19,235$ Receivables (net) 10,702 - 119 10,821 Due from primary government 146 - - 146 Due from other government agencies - 789 - 789 Prepaids and other assets 287 - 57 344 Inventories 144 - - 144 Capital assets:

Nondepreciable 96,726 18,091 - 114,817 Depreciable, net 180,604 11,374 495 192,473

Total assets 305,521$ 31,580$ 1,668$ 338,769$

LIABILITIES Accrued salaries and benefits 713$ 76$ 302$ 1,091$ Accounts payable 9,304 671 213 10,188 Interest payable 72 - 98 170 Unpaid claims payable 6,071 - - 6,071 Loans payable to primary government - - 1,813 1,813 Due to other governmental agencies - 1 - 1 Unearned revenue - - 130 130 Compensated absences:

Due within one year 2,906 81 - 2,987 Due beyond one year 1,373 190 - 1,563

Other postemployment benefits - due beyond one year 1,661 136 - 1,797 Long -term portion of loan payable -

Due to primary government - - 6,063 6,063 Long-term liabilities:

Due within one year 1,366 - 151 1,517 Due beyond one year 4,483 - 203 4,686

Total liabilities 27,949 1,155 8,973 38,077

NET ASSETS Invested in capital assets, net of related debt 271,481 29,465 473 301,419 Restricted - - 2 2 Unrestricted 6,091 960 (7,780) (729)

Total net assets 277,572 30,425 (7,305) 300,692

Total liabilities and net assets 305,521$ 31,580$ 1,668$ 338,769$

The notes to the financial statements are an integral part of this statement.

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THIS PAGE IS INTENTIONALLY BLANK

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of Minneapolis (City) have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below.

A - REPORTING ENTITY

The City is a municipal corporation governed by a Mayor-Council form of government. It was incorporated in 1867, and it adopted a Charter on November 2, 1920. The Mayor and 13 City Council Members from individual wards are elected for terms of four years without limit on the number of terms that may be served. The Mayor and City Council are jointly responsible for the annual preparation of a budget and a five-year capital improvement program. The Mayor has veto power, which the Council may override with a vote of nine members. The City employs a Finance Officer who is charged with maintaining and supervising the various accounts and funds of the City as well as several boards and commissions. As required by GAAP, the basic financial statements present the reporting entity which 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 exclusion could cause the City's basic financial statements to be misleading or incomplete.

BLENDED COMPONENT UNIT

The following component unit has been presented as a blended component unit because the component unit's governing body is substantially the same as the governing body of the City, or the component unit provides services almost entirely to the primary government.

 Board of Estimate and Taxation

The Board of Estimate and Taxation (BET) is established under Chapter 15 of the City Charter. It is composed of seven members, two of whom are elected by voters of the City. The Mayor, or the Mayor's appointee, the President of the City Council, and the Chair of the City Council's Ways and Means/Budget Committee are ex-officio members of the board. The Minneapolis Park and Recreation Board annually selects one of its members to serve on the Board of Estimate and Taxation. By action of the City Council, or such other governing board of a department requesting the sale of bonds, the Board of Estimate and Taxation may vote to incur indebtedness and issue and sell bonds and pledge the full faith and credit of the City for payment of principal and interest. The Board of Estimate and Taxation also establishes the maximum property tax levies for most City funds and maintains responsibility for the internal audit function for the City including boards and commissions that are component units of the City.

DISCRETELY PRESENTED COMPONENT UNITS The component unit column in the government-wide financial statements includes the financial data of the City's other component units. The units are reported in a separate column to emphasize that they are legally separate from the City but are included because the primary government is financially accountable and is able to impose its will on the organizations. These units subscribe to the accounting policies and procedures of the primary government.

 Minneapolis Park and Recreation Board

The Minneapolis Park and Recreation Board (Park Board) was established according to Chapter 16 of the City Charter. The nine-member board is elected by the voters of the City and is responsible for developing and maintaining parkland and parkways as well as planting and maintaining the City's boulevard trees. The Mayor recommends the tax levies and budget for the Park Board, and the City Council and Mayor approve the allocation of the state’s local government aid for Park Board operations. All Park Board actions are submitted to the Mayor and a mayoral veto may be overridden by a vote of two thirds

 Minneapolis Park and Recreation Board (continued)

of the members of the Park Board. The Board of Estimate and Taxation approves the maximum property tax levy for the Park Board, and the full faith and credit of the City secure debt issued for Park Board projects. The City Finance Officer acts as Treasurer of the Park Board. Complete financial statements for the Park Board can be obtained from the Minneapolis Park and Recreation Board at 2117 West River Road, Minneapolis, Minnesota, 55411.

 Municipal Building Commission

The Municipal Building Commission (MBC) is an organization established January 4, 1904, by the State of Minnesota, to operate and maintain the City Hall/County Court House Building, which was erected pursuant to Chapter 395 of the Special Laws of 1887. The four commissioners are, the Chairman of the Hennepin County Board of Commissioners, the Mayor of the City of Minneapolis, an appointee of the Hennepin County Board, and an appointee of the Minneapolis City Council. The Mayor recommends the tax levy and budget for the City's share of the MBC's operations and the City Council and Mayor approve the allocation of the state’s local governmental aid to the MBC. The MBC does not issue separate financial statements.

 Meet Minneapolis

Greater Minneapolis Convention and Visitors Association was incorporated on July 29, 1987. Greater Minneapolis Convention and Visitors Association (d.b.a. Meet Minneapolis) and its subsidiary, Internet Destination Sales System, Inc. (hereinafter collectively the “Association”) comprise the reporting entity for Meet Minneapolis. The Association was organized to promote the City of Minneapolis (the City) as a major destination for conventions and visitor travel, and to achieve maximum utilization of the Minneapolis Convention Center. Toward this purpose, the Association receives funding through annual contracts with the City and the state of Minnesota. The Association is a nonprofit corporation under Section 501 (c) (6) of the Internal Revenue Code. Complete financial statements for Meet Minneapolis and Subsidiary can be obtained from Meet Minneapolis at 250 Marquette Avenue South, Suite 1300, Minneapolis, Minnesota 55401.

RELATED ORGANIZATIONS

The City's officials are also responsible for appointing members of the boards of other organizations, but the City's accountability for these organizations does not extend beyond making the appointments. The following organizations are related organizations, which have not been included in the reporting entity:  Metropolitan Sports Facilities Commission

The Metropolitan Sports Facilities Commission (Commission) is an appointed commission established under 1977 Minnesota laws. Of the seven members of the Commission, the City of Minneapolis appoints six. The Commissioners serve four-year terms and removal is for cause only. The primary responsibility of the Commission is to serve as owners, operators, and landlords of the Hubert H. Humphrey Metrodome Sports Facility in Minneapolis. The major tenant of the Metrodome Sports Facility are the Minnesota Vikings. Complete financial statements for the Commission can be obtained from the Metropolitan Sports Facilities Commission at 900 South Fifth Street, Minneapolis, Minnesota, 55415-1903.

 Minneapolis Public Housing Authority

The Minneapolis Public Housing Authority (MPHA) is the public agency responsible for administering public housing and Section 8 rental assistance programs for eligible individuals and families in Minneapolis. A nine- member Board of Commissioners governs MPHA. The Mayor of Minneapolis appoints the Board Chairperson and four Commissioners; four Commissioners (one of whom must be a public housing family development resident) are appointed by the City Council.

 Minneapolis Public Housing Authority (continued)

The mission of the MPHA is to provide well-managed high-quality housing for eligible families and individuals; to increase the supply of affordable rental housing; and to assist public housing residents in realizing goals of economic independence and self-sufficiency. Complete financial statements for the MPHA can be obtained from the Minneapolis Public Housing Authority at 1001 Washington Avenue North, Minneapolis, Minnesota, 55401-1043.

JOINT VENTURES

The City is a participant in several joint ventures in which it retains an ongoing financial interest or an ongoing financial responsibility.  Minneapolis/Saint Paul Housing Finance Board

The Minneapolis/Saint Paul Housing Finance Board was established in accordance with a Joint Powers Agreement entered into between the Housing and Redevelopment Authority of the City of Saint Paul and the City of Minneapolis and accepted by both cities under State of Minnesota laws. The City of Minneapolis oversight responsibility of the Board is limited to its governing body's ability to appoint only three of the six members of the Board. The territorial jurisdiction of the Board extends beyond the corporate limits of the City of Minneapolis. The percentage share of the City in the Board's assets, liabilities and equity cannot be determined at fiscal year-end. Complete financial statements for the Minneapolis/Saint Paul Housing Finance Board can be obtained from the City of Minneapolis CPED office at Suite 700, Crown Roller Mill, 105 Fifth Avenue South, Minneapolis, Minnesota 55401-2534.

 Minneapolis Neighborhood Revitalization Program Policy Board The Minneapolis Neighborhood Revitalization Program Policy Board (NRP) was established in accordance with a Joint Powers Agreement entered into between the Hennepin County Board of Commissioners, the Board of Directors of Special School District No. 1, the Park Board, and the Mayor and City Council under authority of State of Minnesota laws. The NRP is composed of 20 members and includes public officials as well as representatives of neighborhood and community interest organizations.

The majority of members are persons other than the representatives of the jurisdictions, which entered into the Joint Powers Agreement. The percentage of each jurisdiction's share in the NRP’s assets, liabilities, and equity cannot be determined at fiscal year-end. Complete financial statements for the NRP can be obtained from the Minneapolis Neighborhood Revitalization Program Policy Board at Suite 425, Crown Roller Mill, 105 Fifth Avenue South, Minneapolis, Minnesota, 55401-2585.

 Minneapolis Youth Coordinating Board

The Minneapolis Youth Coordinating Board (YCB) was established in accordance with a Joint Powers Agreement entered into between the Hennepin County Board of Commissioners, the Board of Directors of Special School District No. 1, the Park Board, the Mayor and the City Council under authority of State of Minnesota laws. The YCB, which numbers 10 in size, includes the Mayor, two members each from the Hennepin County Board of Commissioners and the Board of Directors of Special School District No. 1, two representatives from the City Council, one member from the Park Board, the Hennepin County Attorney, and a Judge assigned by the Chief Judge of the District Court. The percentage of each jurisdiction's share in the YCB’s assets, liabilities, and equity cannot be determined at fiscal year-end. Complete financial statements for the YCB can be obtained from the Minneapolis Youth Coordinating Board at the Towle Building, 330 2nd Avenue South, Room 540, Minneapolis, Minnesota 55401.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B – BASIS OF PRESENTATION GOVERNMENT-WIDE FINANCIAL STATEMENTS The statement of net assets and statement of activities display information about the primary government (the City) and its component units using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider, if any, have been met. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between governmental and business-type activities of the City and between the City and its discretely presented component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent on fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function, and therefore, are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods and services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues not classified as program revenues, including all taxes, are presented as general revenues. 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 FINANCIAL STATEMENTS

The accounts of the City are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The fund financial statements provide information about the City’s funds. Funds are classified into three categories: Governmental, Proprietary, and Fiduciary, each category is divided into separate fund types. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as non-major funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. GOVERNMENTAL FUNDS All governmental funds are reported using the current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. 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. Tax revenues are recognized in the year for which the taxes are levied. Property tax levies are approved and certified to the County in December prior to the year collectible. The County acts as a collection agency. Such tax levies constitute a lien on the property on January 1st of the year collectible. Taxes are payable to the County in two installments by the fifteenth day of May and the fifteenth day of October. City property taxes are recognized as revenues when they become measurable and available to finance expenditures of the current period.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES B – BASIS OF PRESENTATION GOVERNMENTAL FUNDS (continued) Major revenues that are determined to be susceptible to accrual include property taxes, special assessments, grants-in-aid, intergovernmental revenues, rentals, and Intra-city charges. Interest on investments, short-term notes and loans receivable are accrued; interest on special assessments receivable is not accrued. Major revenues that are determined not to be susceptible to accrual because they are not available soon enough to pay liabilities of the current period or are not objectively measurable include delinquent property taxes and assessments, licenses, permits, fines and forfeitures. Governmental fund expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-term debt which is recognized when due. Compensated absences, which include accumulated unpaid vacation, compensatory time and severance pay, are not payable from expendable available financial resources, except to the extent there are available resources in the Self-Insurance Internal Service Fund for vested severance pay. Compensated absences are considered expenditures when paid to employees. The accounting and reporting treatment applied to the assets and liabilities associated with a fund are determined by its measurement focus. All governmental funds are accounted for on a spending, or "financial flow,” measurement focus. This means that only current assets and current liabilities, as defined by GAAP, are generally included on the balance sheets. Reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, governmental funds are said to present a summary of sources and uses of "available spendable resources" during a period. Special reporting treatments are also applied to governmental fund inventories to indicate that the inventories do not represent "available spendable resources," even though they are a component of net current assets. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non-current liabilities. Since they do not affect net current assets, long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the government-wide statement of net assets and statement of activities. The City reports the following major governmental funds:  General Fund

The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. For the City, the General Fund includes such activities as public safety, public works, health and welfare, and general government administration.

 Special Revenue Fund - Community Planning and Economic Development This fund is used to account for the activities of the Department of Community Planning and Economic Development (CPED). CPED is responsible for promoting the City’s planning and community development goals in the areas of housing development, economic development, community planning, development services, workforce development and strategic partnerships.

 Special Revenue Fund - Convention Center

This fund is used to account for the ownership, maintenance and operations of the Minneapolis Convention Center, along with the proceeds of local sales and use taxes.

 Capital Project Fund - Permanent Improvement This fund is used to account for capital acquisition, construction and improvement projects including bridge construction, sidewalk construction, street construction, the Heritage Park Project, infrastructure projects, and many information and technology system projects.

 Debt Service Fund - Development

This fund is used primarily to account for debt of projects supported by property tax increments, transfers of sales tax revenues from the Convention Center Special Revenue Fund for related debt, and a state grant relating to the completion of the Convention Center.

 Debt Service Fund - Special Assessment

This fund is used to account for debt supported by special assessments including Park Diseased Tree debt.

PROPRIETARY FUNDS

Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned. Unbilled utility service receivables are recorded at year-end. Expenses are recognized when they are incurred. Compensated absences are considered expenses when they are incurred. In accordance with GASB Statement No. 20-Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting, the City has chosen not to apply accounting standards issued by the Financial Accounting Standards Board after November 30, 1989, to its proprietary funds. All proprietary funds are accounted for on an economic resources management focus. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on the balance sheets. Their reported net assets are categorized as invested in capital assets net of related debt, restricted, and unrestricted. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. Depreciation of all exhaustible capital assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is reported on proprietary fund balance sheets. Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project against interest earned on invested proceeds over the same period. 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 business operations. The principal operating revenues of the City’s enterprise and internal service funds are charges to customers for sales and services. Operating expenses for the City’s enterprise funds and internal service 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.

Enterprise funds are used to account for operations: (a) that are financed and operated in a manner similar to private business enterprises--where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City reports the following major enterprise funds:

 Sanitary Sewer Fund This fund is used to account for sewage fees collected from customers connected to the City’s sanitary sewer system and for all expenses of operating this system.

 Stormwater Fund

This fund is used to account for storm water fees collected from customers, and for City street cleaning and other storm water management activities.

 Water Works Fund This fund is used to account for the operation, maintenance, and construction projects related to the water delivery system. This fund also accounts for the operations related to the billings for water, sewage, and solid waste fees.

 Municipal Parking Fund This fund is used to account for the operation, maintenance, and construction of the City’s parking facilities as well as on-street parking and the Municipal Impound Lot.

 Solid Waste and Recycling Fund

This fund is used to account for the revenues and expenses for solid waste collection, disposal and recycling activities.

 Community Planning and Economic Development Fund This fund is used to account for the enterprise fund activities of the Department of Community Planning and Economic Development.

NON-MAJOR FUNDS

The City reports the following non-major governmental funds: Special Revenue Funds: Debt Service Funds: Arena Reserve Community Planning and Economic Development Board of Estimate and Taxation General Debt Service HUD Consolidated Plan Convention Facilities Reserve Downtown Improvement District Employee Retirement Grants- Federal Grants- Other Police

 Internal Service Funds Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governments, on a cost-reimbursement basis. The internal service funds used by the City include: Engineering Materials & Testing – This fund is used to account for operations of the City’s paving products

laboratory. Intergovernmental Services – This fund is used to account for information technology service, central mailing

and printing services, and the City’s telecommunication operations.

Property Services – This fund is used to account for the physical management and maintenance of various City buildings, except for the City Hall/County Court House building.

Equipment Services – This fund is used to account for the ownership and operation of various equipment and

vehicles. The fund operates as a rental agent to various departments to support the construction and maintenance of city infrastructure, fire protection services, and police services.

Public Works Stores – This fund is used to account for centralized procurement, warehousing, and distribution

of stocked inventory items, as well as the purchase of special goods and services. Self-Insurance – This fund is used to account for employee benefit programs and administrative costs,

occupational health services and severance payments to employees who have retired or resigned, a tort liability program and a workers’ compensation program.

 Agency Funds Financial statements of agency funds, which are used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds, are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds assets, liabilities, and net assets are included in the fiduciary statement of net assets.  The Minneapolis Agency – Used to account for collection and remittance of funds to other governments and

agencies.

 The Skyway Debt Service Agency – Used to account for the collection and payment of funds related to the debt service for the skyway system.

 The Youth Coordinating Board Agency – Used to account for cash deposited with the City.

 The Neighborhood Revitalization Program Board – Used to account for cash deposited with the City.

 The Minneapolis Public Housing Authority Agency – Used to account for cash deposited with the City.

 The Joint Board Agency – Used to account for cash deposited with the City.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C – BUDGETS Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the general and special revenue funds. The 2009 process for the 2010 budget involved the following:

January - March City department heads presented annual work plans and accomplishments to Executive Committee; referred then to relevant Policy Committee for review and file. Finance Department presented preliminary year-end budget status report to Ways and Means/Budget Committee.

March - April Capital Improvement Budget Development – Capital improvement proposals were reviewed by the Budget Coordination Unit, the City Planning Commission and the Capital Long-Range Improvement Committee (CLIC).

April - June Operating Budget Development – Departments prepared department operating budget requests; “Current Service Level Budgets” reflected current year costs of providing the same level of service as provided in the prior year, and proposals which described policy and organizational changes with financial implications.

June - August

The Mayor held departmental hearings to review operating budgets and met with representatives from CLIC in preparation of finalizing the capital budget recommendation. The Mayor prepared and submitted a budget framework to the City Council no later than August 15, including a recommendation on annual property tax levy amounts.

September – October

The Board of Estimate and Taxation set the maximum property tax levy for the City, Municipal Building Commission, Public Housing Authority, and Park Board by September 15, as required by state law.

November – December

“Truth in Taxation” property tax statements mailed by the County to property owners indicating the maximum amount of property taxes that the owner will be required to pay.

December

“Truth in Taxation” public hearings held. The City Council adopted a final budget and tax levy.

The legal level of budgetary control is at the department level within a fund. The City Coordinator’s Office and the Public Works Department are considered to be legal levels of budgetary control within a fund even though budgetary data is presented at the level of the Departments within the Coordinator’s Office and the Divisions within the Public Works Department. Budgetary amendments at the department/fund level must be approved by the City Council. Appropriations lapse at year-end. Purchase orders, contracts, and other commitments are recorded as encumbrances, which reserve appropriation authority. This accounting practice is an extension of formal budgetary integration in the general and special revenue funds. Encumbrances outstanding at year-end are reported as reservations of fund balance and do not represent GAAP expenditures.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C – BUDGETS (continued) Supplemental budget revisions were made during the course of the year and the effects of these revisions are summarized below:

Expenditure Budget at

beginning of year

Changes during year

Expenditure Budget at

end of year

General 332,264$ 556$ 332,820$ CPED Special Revenue 46,799 80,652 127,451 Convention Center Special Revenue 45,222 (1,500) 43,722 Arena Reserve Special Revenue 1,935 1,758 3,693 Board of Estimate and Taxation Special Revenue 345 (150) 195 HUD Consolidated Plan Special Revenue 19,810 13,329 33,139

Employee Retirement Special Revenue 14,231 7,940 22,171 Grants – Federal Special Revenue 19,932 37,450 57,382 Grants – Other Special Revenue 13,672 12,807 26,479 Police Special Revenue 3,275 806 4,081

TOTAL 497,485$ 153,648$ 651,133$

D – NON-CURRENT GOVERNMENTAL ASSETS/LIABILITIES

GASB Statement No. 34 eliminates the presentation of account groups, but provides for these records to be maintained and incorporates the information into the Governmental Activities column in the government-wide Statement of Net Assets.

E - DEPOSITS AND INVESTMENTS

The City's cash and cash equivalents are considered to be cash on hand, demand deposits and investments with original maturities of three months or less from the date of purchase. The City maintains a general portfolio which is a pool of investments covering pooled cash and cash equivalents for the primary government as well as the discretely presented component units of the Municipal Building Commission and the Park and Recreation Board. The City has contracted with investment management firms for management of some of these investments. The City also, from time to time, invests non- pooled cash within individual funds, which are reported as fund investments. All investments are reported at fair value. Investment earnings in the investment pool, net of daily amortization of premiums and discounts, are calculated monthly and allocated to participating funds based on each fund’s share of equity (positive or negative) in the investment pool. Some funds, such as debt service funds, retain their monthly allocation of investment earnings while other funds, which are not required to retain their allocated interest, pass the interest on to either the City General Fund or to the Community Planning and Economic Development Special Revenue Fund. Also, periodically the City distributes investment earnings from its General Fund to various projects below the fund level, as may be required, on the basis of the calculated average daily cash balance of the project and the average yield of the City’s general portfolio.

F - INVENTORIES OF MATERIALS AND SUPPLIES

Depending on the nature of the item, inventories are valued using the moving average valuation method or using the last price of the item purchased. Also, and depending on the nature of the item or the fund in which the inventory is recorded, the costs of inventories are recorded as expenses/expenditures when purchased, or when consumed rather than when purchased. Governmental fund inventories are recorded as expenditures at the time the inventory is consumed. Reported inventories of governmental funds are equally offset by a fund balance reservation to indicate that portion of fund balance not available for future appropriation. Inventory recorded in the proprietary funds is expensed as the supplies and materials are consumed.

G - LOANS RECEIVABLE

Loans receivable recorded in the governmental funds consist of business loans using funds provided through state and federal grants and loan recaptures. The loans have been collateralized and call for periodic payments of principal and interest. Loans receivable recorded in the enterprise funds consist primarily of low interest home improvement and home mortgage loans, which are secured by either a first or second mortgage. Interest on loans is recorded where applicable. Several developers under various financial arrangements have agreed to pay back development loans only if certain events occur. Because the likelihood of these events occurring is unknown, these loans are not presented in the accompanying financial statements. These loans include redevelopment agreements, neighborhood economic, commercial, and housing development loans, and second mortgages on rehabilitated homes. Some of these loans may be forgiven for continued owner occupancy, the attainment of certain employment goals, or the continuation of specified services.

H – CAPITAL ASSETS

Capital assets (including infrastructure) are recorded at historical cost or at estimated historical cost if actual historical cost is not available. Infrastructure assets acquired prior to December 31, 1980 are included. Contributed capital assets are valued at their estimated fair market value on the date contributed. Capital assets include infrastructure (e.g. roads, bridges, water/sewer, and lighting systems), land, buildings, improvements, and equipment. The City defines capital assets as assets with an individual cost of more than $5; or $35 per group of assets by year for bike paths, street signage, street lighting and traffic signals; and $100 per group of assets for parking meters. Capital assets used in operations are depreciated or amortized (assets under capital leases) using the straight-line method over the lesser of the capital lease period or their estimated useful lives in the government-wide statements and proprietary funds. As of 2008 the City is no longer using salvage values, and will depreciate assets to zero. The estimated useful lives are as follows: Infrastructure 15 to 100 years Structures and Improvements 25 to 50 years Equipment 5 to 15 years Public Improvements 20 to 40 years Maintenance and repairs are charged to operations when incurred. Betterments and major improvements, which significantly increase values, change capacities or extend useful lives, are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.

I – COMPENSATED ABSENCES

The City accrues compensated absences (annual and sick leave benefits) when vested. The current portions of the governmental funds’ compensated absences liabilities are recorded as other liabilities in the Self-Insurance Internal Service Fund. The non-current portions are recorded in the government-wide financial statements and represent a reconciling item between the fund and government-wide presentation. The City typically liquidates the liability for compensated absences to the fund where employees’ salaries were originally charged.

J – INTERFUND TRANSACTIONS

Interfund transactions are reflected as loans, services provided, reimbursements or transfers. Loans are reported as receivables or payables where appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., current portion of interfund loans) or “advances to/from other funds” (i.e. non current portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances.” Advances to other funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not available financial resources. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements occur when a fund incurs costs that are eventually repaid through charges to the benefiting fund. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

K - PROPERTIES HELD FOR RESALE - ENTERPRISE FUNDS

Properties held for resale in the Community Planning and Economic Development Enterprise Fund have been obtained as a result of repossessions in default situations. Repossessed properties are held solely to be re-marketed as part of the ongoing operations of the programs. They are valued at the outstanding principal balance of the related bonds, which is not in excess of the realizable value; or are valued at the amount of the related loan balance at the time of default plus subsequent improvement costs.

L - DEBT SERVICE AND REQUIREMENTS

The debt service funds service all long-term obligations with the exception of bonds payable recorded within the proprietary funds. Some general long-term debt obligations are serviced in part by Council approved transfers from enterprise funds. Minnesota State Law requires agencies issuing general obligation bonds to certify an irrevocable tax levy to the County Auditor covering annual principal and interest requirements plus 5% (deducting, in certain cases, estimated tax increments and certain other revenue) at the time bonds are issued. The annual tax levy can be reduced by an amount equal to the issuing agency's annual certification of funds on hand.

M - ESTIMATES

The preparation of basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 2 - DEPOSITS AND INVESTMENTS Deposits and investments appear in the financial statements consistent with the following analysis:

Deposits, per book (3,209)$ Investments 590,061 Imprest cash held by City 57 Total 586,909$

Primary Government: Cash and cash equivalents 498,637$ Cash in Agency Funds 2,524 Deposits with fiscal agents 243 Fund investments 10,056 Investments with trustees 56,214 Total primary government 567,674$

Discretely Presented Component Units: Park and Recreation Board: Cash and cash equivalents 16,912

Municipal Building Commission: Cash and cash equivalents 1,326

Meet Minneapolis Cash and cash equivalents 997 Total 586,909$

A. Deposits

Minnesota Statutes Chapter 118A and the City Charter require the city to collateralize deposits at designated depositories. The City Finance Officer has arranged for the Federal Reserve Bank of Minneapolis to act as the City's agent in the safekeeping of securities as collateral. The bank balances at the City’s designated depositories as of December 31, 2010, totaled $8,774. The market value of securities pledged for the City and held at the Federal Reserve Bank for safekeeping as of December 31, 2010 totaled $16,467. Custodial Credit Risk

Custodial credit risk is the risk that in the event of a financial institution failure, the City’s deposits may not be returned to it. The City’s policy is to have its designated depositories comply with Minnesota Statutes Chapter 118A to pledge allowable securities to collateralize the City’s deposits. At December 31, 2010, the City was not exposed to custodial credit risk.

B. Investments

In accordance with Minnesota Statutes Chapter 118A, and with the City Charter, the City invested in (1) direct, guaranteed or insured obligations of the U.S. Treasury, (2) shares of an investment company (with restrictions), (3) general obligations of government jurisdictions (with restrictions), (4) bankers acceptances, (5) commercial paper, (6) guaranteed investment contracts (with restrictions) and (7) repurchase agreements (with restrictions).

The City and its investment management firms will exercise extreme caution in the use of derivative instruments, keeping abreast of future information on risk management issues and will consider derivatives only when a sufficient understanding of the products and expertise to manage them has been developed and analyzed. Any derivatives will also be required to pass the stress testing requirements of Minnesota Statutes Chapter 118A.

Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an investment. The City has no formal policy specifically related to interest rate risk. The City minimizes its exposure to interest rate risk by investing in both shorter and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time, taking into account the City’s investment risk constraints, cash flow characteristics of the portfolio, and prudent investment principles. The following table presents the City of Minneapolis’ investment balances at December 31, 2010, and information relating to interest rate risks:

Investment Type

Weighted

Average Maturity (Years)

Carrying

(Fair) Value

U.S. Federal Agency obligations 1.6 $ 192,327 U.S. Treasury obligations 1.5 133,722 U.S. Mortgage obligations 1.6 31,325 Municipal bonds 0.5 18,039 Commercial paper 0.1 73,488 Corporate securities 0.4 450 Guaranteed investment contracts 0.1 842 Mutual funds 0.1 137,423 Negotiable certificates of deposit 0.1 2,445 Portfolio Weighted Average Maturity 1.0 Total investments $ 590,061 Deposits per book (3,209) Imprest cash 57 Total cash and investments $ 586,909

Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. It is the City’s policy to invest only in securities that meet the ratings requirements set by state statute Chapter 118A.04 as follows:

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 2 - DEPOSITS AND INVESTMENTS

B. Investments

Credit Risk (continued) “INVESTMENTS. Subdivision 1. What may be invested. Any public funds, not presently needed for other purposes or restricted for other purposes, may be invested in the manner and subject to the conditions provided for in this section. Subd. 2. United States securities. Public funds may be invested in governmental bonds, notes, bills, mortgages (excluding high-risk mortgage-backed securities), and other securities, which are direct obligations or are guaranteed or insured issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress. Subd. 3. State and local securities. Funds may be invested in the following: (1) any security which is a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service; (2) any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; and (3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the state of Minnesota and is rated "A" or better by a national bond rating agency. Subd. 4. Commercial papers. Funds may be invested in commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less. Subd. 5. Time deposits. Funds may be invested in time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States banks.” At December 31, 2010, the City’s investments were rated by Moody’s and Standard & Poor’s as follows:

Investment Type Standard & Poor’s Moody’s U.S. Federal agency obligations AAA $ 185,563 Aaa $ 185,563 Not available - Not available 514 Not rated 6,764 Not rated 6,250

Total U.S. Federal agency obligations $ 192,327 $ 192,327 U.S. Treasury obligations AAA $ 133,722 Aaa $ 133,722 U.S. Agency Mortgage obligations Agency $ 31,325 Agency $ 31,325 Municipal bonds AAA $ 5,122 Aaa $ 3,744 AA+ 3,106 Aa1 4,861 AA 2,380 Aa2 3,989 AA- 1,341 Aa3 2,407 A+ 1,181 A1 712 A- 548 A2 - BBB+ - Baa1 427 Not available 2,218 Not available 647 Not rated 2,143 Not rated 1,252 Total Municipal bonds $ 18,039 $ 18,039

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 2 - DEPOSITS AND INVESTMENTS

B. Investments

Credit Risk (continued)

Investment Type Standard & Poor’s Moody’s

Commercial paper

A-1+ $ 50,492 P-1 $ 65,989 A-1 22,996 Not available 7,499 Total Commercial paper $ 73,488 $ 73,488

Corporate securities Not rated $ 450 Not rated $ 450 Guaranteed investment contracts Not rated $ 842 Not rated $ 842 Mutual funds AAAmG $ 137,423 Aaa $ 137,423 Negotiable certificates of deposit Not rated $ 2,445 Not rated $ 2,445 Total $ 590,061 $ 590,061

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City’s policy is to comply with Minnesota Statutes Chapter 118A and it uses a third party financial institution for safekeeping of securities. Concentration of Credit Risk The concentration of credit risk is the risk of loss that may be caused by the City’s investment in a single issuer. It is the City’s policy to diversify its investment portfolio. Assets held shall be diversified to eliminate the risk of loss resulting from over-concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. Portfolio maturities are to be staggered in a way that avoids undue concentration of assets in a specific maturity sector. Maturities shall be selected which provide for stability of income and reasonable liquidity. At December 31, 2010, investments in any one issuer that represent 5 percent or more of the City’s investments are as follows:

Issuer Reported Amount

U.S. Federal Agency obligations $ 192,327 U.S. Department of the Treasury 133,722 U.S. Agency Mortgage obligations 31,325

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 2 - DEPOSITS AND INVESTMENTS B. Investments (continued)

Investment derivative instruments: At December 31, 2010, one of the City’s Investment Managers held four “to-be-announced” (TBA) Fannie Mae mortgage-backed securities. These securities are investments within the general cash pool of the City. The change in the fair value of these securities would flow through to the City’s funds participating in the cash pool and reported in interest earnings on the fund’s statement of activities. The fair value would be reported with the fund’s cash on the statement of net assets. Generally, the risks associated with investments apply to derivatives. The change in fair value during FY 2010, the fair value at December 31, 2010, and the notional amount of these investments is shown below.

Changes in Fair Value Fair Value at

during FY 2010 31-Dec-10 Notional Amount

Governmental Activities $ 11 $ 2,850 $ 2,787 Business-Type Activities 2 635 621 Discrete Component Units: Minneapolis Park and Recreation Board 1 118 116 Municipal Building Commission - 9 9 Fiduciary Funds - 18 17 Total $ 14 $ 3,630 $ 3,550

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 3 – RECEIVABLES Receivables at year-end for the City’s major individual governmental and enterprise funds and non-major and internal service funds in the aggregate, including applicable allowances for uncollectible amounts are as follows:

Special Non-major Internal Total General Convention Permanent Development Assessment Governmental Service Governmental

Governmental Activities Fund CPED Center Improvement Debt Service Debt Service Funds Funds Activities Accounts 5,130$ 547$ 7,000$ 2,230$ -$ -$ 879$ 210$ 15,996$ Taxes 3,870 103 - 40 - - 908 - 4,921 Special assessments 835 - - 3,449 - 37,043 1,375 - 42,702 Intergovernmental 3,171 462 - 17,662 - - 23,008 434 44,737 Loans - 7,671 - - - - - - 7,671 Loans due from component unit - - 1,813 - - - - - 1,813 Notes - - - - - - 104 6,557 6,661 Interest 535 551 105 76 1 32 185 - 1,485 Gross receivables 13,541 9,334 8,918 23,457 1 37,075 26,459 7,201 125,986 Less: Allowance for uncollectibles (845) - (281) (265) - - - (77) (1,468) Total receivables (due within one year) 12,696$ 9,334$ 8,637$ 23,192$ 1$ 37,075$ 26,459$ 7,124$ 124,518$

Long-term portion of loans and notes receivable -$ -$ 6,063$ -$ -$ -$ -$ -$ 6,063$

Total Sanitary Municipal Solid Waste Business-type

Business-type Activities Sewer Stormwater Water Works Parking and Recycling CPED Activities Accounts 3,660$ 3,228$ 4,850$ 3,573$ 2,858$ 37$ 18,206$ Special assessments 102 534 1,686 8,707 151 - 11,180 Intergovernmental - 290 - - 10 - 300 Loans - - - - - 150 150 Notes - - - - - 405 405 Interest - - - - - 46 46 Gross receivables 3,762 4,052 6,536 12,280 3,019 638 30,287 Less: Allowance for uncollectibles (1) (1) (443) (92) - - (537) Total receivables (due within one year) 3,761$ 4,051$ 6,093$ 12,188$ 3,019$ 638$ 29,750$

Long-term portion of loans and notes receivable -$ -$ -$ -$ -$ 610$ 610$

Governmental activities: In 2002 the City issued $10,100 in Self-Supporting General Obligation bonds to provide funding for the Minneapolis Library Board to build a parking ramp. The City has entered into an agreement with the Minneapolis Library Board. The agreement was in the form of a capitalized lease. The capitalized lease agreement continues under the Minneapolis Library Board’s successor, Hennepin County Library. The annual lease payments approximate the principal and interest requirements on the outstanding bonds. The leases are capitalized in an amount equal to the principal of the related bonds. The lease agreement includes a bargain purchase option exercisable at the end of the lease term.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 3 – RECEIVABLES (continued) The future payment requirements for these agreements are as follows:

Capitalized Lease

Scheduled Lease Payments: 2011 624$ 2012 642 2013 664 2014 684 2015 714 2016-2020 3,953 2021-2025 4,677 2026-2028 3,210 Subtotal 15,168 Less: Interest over lease term (5,456)

Total Principal 9,712

Less: Current Portion 180

Noncurrent Portion 9,532$

Business-type activities: According to the Basic Resolution and Indenture of the General Agency Reserve Fund System (GARFS) within the CPED Enterprise Fund, agreements are to be formed with developers receiving funds for construction. Such agreements are in the form of capitalized leases or notes receivable. The annual lease and loan payments approximate the principal and interest requirements on the outstanding bonds. The leases are capitalized in an amount equal to the principal of the related bonds, net of any unexpended construction fund proceeds. Each lease agreement includes a bargain purchase option exercisable at the end of the lease term. In addition, the leased property may be purchased at various anniversaries during the lease term at amounts at least equal to the outstanding principal amount of the underlying bonds. In the event developers are unable to continue with lease and loan payments, the City takes possession of the developed property.

Capitalized Notes Leases Receivable

Scheduled Lease Payments: 2011 8,793$ 417$ 2012 9,002 - 2013 8,846 - 2014 8,847 - 2015 8,717 - 2016-2020 40,405 - 2021-2025 31,237 - 2026-2030 24,730 - 2031-2035 21,064 - 2036-2040 13,196 - Subtotal 174,837 417 Less: Interest over lease term (79,317) (12)

Total Principal 95,520 405 Less: Unexpended construction funds (12,787) -

Net Capitalized Leases and Notes receivable 82,733 405 Less: Current Portion (3,535) (405)

Noncurrent Portion 79,198$ -$

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 4 – CAPITAL ASSETS

Capital asset activity for the year ended December 31, 2010 was as follows:

Balance Balance January 1, 2010 Additions Retirements December 31, 2010

Governmental activities Capital assets, not being depreciated

Land and easements 111,084$ -$ -$ 111,084$ Construction in progress 229,249 59,109 (8,880) 279,478

Total capital assets, not being depreciated 340,333 59,109 (8,880) 390,562

Capital assets, being depreciated Infrastructure 532,944 7,320 - 540,264 Buildings and structures 547,634 4,120 - 551,754 Public improvements 6,140 - - 6,140 Machinery and equipment 107,197 5,083 (3,681) 108,599 Computer equipment 62,014 395 (6) 62,403 Software 43,874 1,949 - 45,823 Other capital outlay 51 - - 51

Total capital assets, being depreciated 1,299,854 18,867 (3,687) 1,315,034

Less accumulated depreciation for: Infrastructure (344,508) (14,307) - (358,815) Buildings and structures (155,770) (10,780) - (166,550) Public improvements (5,654) (89) - (5,743) Machinery and equipment (63,708) (8,571) 3,249 (69,030) Computer equipment (47,530) (4,019) 6 (51,543) Software (15,618) (7,069) - (22,687) Other capital outlay (51) - - (51)

Total accumulated depreciation (632,839) (44,835) 3,255 (674,419)

Total capital assets, being depreciated, net 667,015 (25,968) (432) 640,615

Governmental activities capital assets, net 1,007,348$ 33,141$ (9,312)$ 1,031,177$

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 4 – CAPITAL ASSETS (continued)

Balance Balance January 1, 2010 Additions Retirements December 31, 2010

Business-type Activities Capital assets, not being depreciated Land and easements 126,521$ 94$ -$ 126,615$ Construction in progress 64,662 30,557 - 95,219

Total capital assets, not being depreciated 191,183 30,651 - 221,834

Capital assets, being depreciated Buildings and structures 479,251 - - 479,251 Public improvements 605,978 5,002 - 610,980 Machinery and equipment 21,941 368 - 22,309 Computer equipment 1,738 - - 1,738 Software 4,429 - - 4,429 Capital outlay 34 - - 34

Total capital assets, being depreciated 1,113,371 5,370 - 1,118,741

Less accumulated depreciation for: Buildings and structures (157,844) (10,579) - (168,423) Public improvements (202,417) (8,114) - (210,531) Machinery and equipment (13,903) (1,724) - (15,627) Computer equipment (1,662) (34) - (1,696) Software (4,423) (2) - (4,425) Other capital outlay (30) (1) - (31)

Total accumulated depreciation (380,279) (20,454) - (400,733)

Total capital assets, being depreciated, net 733,092 (15,084) - 718,008

Business-type activities capital assets, net 924,275$ 15,567$ -$ 939,842$

Depreciation expense was charged to governmental functions as follows:

General government $ 63 Public Safety 1,504 Pubic Works 13,477 Health and Welfare 11 Community Development 11,115 Depreciation on capital assets held in the City’s internal service fund is charged to the various functions based on their usage of assets. 18,665

Total depreciation expense – governmental functions $ 44,835

Depreciation expense was charged to the business-type functions as follows: Sanitary Sewer $ 1,152

Stormwater 3,826 Water Works 7,518

Municipal Parking 6,776 Solid Waste and Recycling 835 Economic Development 347 Total depreciation expense – business-type functions $20,454

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 4 – CAPITAL ASSETS (continued) Construction in Progress Construction in progress for the governmental activities represents work in the following areas:

Property Services $ 39,044 Convention Center 2,962 Traffic Signals & Lighting 16,322 Bicycle Trail 16,284 Street Construction 120,770 Bridge Construction 8,799 Heritage Park 62,896 Equipment Services 243 Property Services 17 Business Information Services 12,141 Total CIP for Governmental Activities $279,478

Construction in progress for the business-type activities represents work in the following areas: Sewers – Sanitary $ 14,904 Sewers – Stormwater 10,896 Water 66,018 Parking 3,401

Total CIP for Business-type Activities $ 95,219 Capital Project Commitments For the year 2011, the City of Minneapolis made Capital Project Commitments for the following: Property Services $ 2,074 Sewer Construction 21,550 Street Construction 33,892 Bridge Construction 26,735 Sidewalk Construction 2,880 Street Lighting 1,200 Traffic Signals 6,210 Bicycle Trails 100 Non-Departmental 7,602 Information Technology 1,000 Water 9,000 Parking 1,700 Total Capital Project Commitments $113,943 Discretely Presented Component Unit Activity for the Minneapolis Park and Recreation Board for the year ended December 31, 2010, was as follows:

Balance Balance January 1, 2010 Addit ions Ret irement s December 31, 2010

Capit al asset s, not being depreciat ed 80,779$ 17,890$ (1,943)$ 96,726$ Capit al asset s, being depreciat ed, net 187,246 (6,600) (42) 180,604

268,025$ 11,290$ (1,985)$ 277,330$

Depreciat ion expense charged 10,789$

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 5 - LONG-TERM DEBT The City’s full faith, credit and taxing power are pledged to pay general obligation debt principal and interest. Property Tax Supported General Obligation Bonds Various issues of general obligation (GO) bonds are recorded in the Governmental Funds and are backed by the full faith and credit of the City. Annual property tax levies are used to pay debt service on these bonds. Self- Supporting General Obligation Bonds Self-supporting bonds issued by the City are recorded in the Enterprise Funds, Internal Service Funds or Governmental Funds. While these bonds are backed by the full faith and credit of the City, they are payable from revenue derived from the function for which they were issued. General Obligation Improvement Bonds Improvement bonds are recorded in the Governmental Funds and are payable from special assessments levied and collected for local improvements and are backed by the full faith and credit of the City. The general credit of the City is obligated only to the extent that liens foreclosed against properties involved in special assessment districts are insufficient to retire outstanding bonds. Tax Increment General Obligation Bonds Tax increment bonds are payable primarily from the increase in property taxes resulting from replacing older improvements with new or remodeled improvements. These bonds are recorded in the Governmental Funds and are also backed by the full faith and credit of the City. Revenue Bonds and Notes Revenue bonds and notes are recorded in the Enterprise Funds or Governmental Funds. These bonds and notes are payable solely from revenues of the respective Enterprise Funds or tax increment districts. In addition, the City has pledged one-half percent of tax capacity to secure payment of bond principal and interest on all bonds issued after May 22, 1987, for the General Agency Reserve Fund System (GARFS) bonds within the Community Planning and Economic Development (CPED) Agency Enterprise Fund. Sinking Fund Provisions Sinking fund provisions on certain general obligation bonds require sufficient deposits on or before October 1st of each year to pay all principal and interest amounts coming due on such bonds for the remainder of the current year, and during all of the following year. If this provision is not met, a general tax levy will be made for the balance required. Minnesota State Laws generally require initial tax levies for general obligation bonds to be at least five percent in excess of the bond and interest maturities less estimated pledged assessments and revenues. The initial tax levies cannot be repealed and can only be modified as they relate to current levies and then only upon certification to the Director of Property Taxation that funds are available to pay current maturities in whole or in part. For Tax Increment Revenue Refunding Bonds, a separate sinking fund has been provided. These bonds are special limited obligations of the City payable from tax increments and investment earnings in the sinking fund. The City is required to have a reserve in the sinking fund equal to the lesser of maximum principal and interest due on the bonds in any succeeding bond year or 125 percent of average principal and interest due on the bonds in the succeeding bond years. In addition, the Municipal Bond Insurance Association insures payment of principal and interest on the bonds. 2010 Bond Sales and Refunding Transactions In 2010, the City of Minneapolis issued bonds & notes totaling $194,806. Of this amount, $98,355 was issued to refund existing debt. Below are details of the 2010 debt issuances.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 5 - LONG-TERM DEBT (continued) In May 2010, the City issued $32,300 of General Obligation Various Purpose Bonds, Series 2010. The bonds were issued for a variety of public works infrastructure improvements, park, library, municipal building commission, technology and sewer, water and parking ramp improvements. The bonds were issued in fixed rate mode and had interest rates ranging from 2.00% to 5.00% and a final maturity date of December 1, 2017. In May 2010, the City also issued $74,925 of General Obligation Refunding Bonds, Series 2010 to advance refund eight series of general obligation bonds on the call dates of December 1, 2010 and December 1, 2011. The eight series of bonds refunded and outstanding amounts included $10,325 of General Obligation Parking Ramp Bonds, Series 2000A, $2,700 of General Obligation Tax Increment Bonds, Series 2000, $10,400 of General Obligation Various Purpose Bonds, Series 2002, $3,380 of General Obligation Improvement Bonds, Series 2002, $18,660 of General Obligation Various Purpose Bonds, Series 2003, $3,375 of General Obligation Improvement Bonds, Series 2003, $26,115 of General Obligation Various Purpose Bonds, Series 2001, and $4,710 of General Obligation Improvement Bonds, Series 2001. The proceeds along with funds on hand were provided to a trustee on June 24, 2010 to purchase escrowed securities to advance refund the total outstanding balance of $79,665 for the eight series of bonds. This refunding resulted in combined net present value savings of $9,196. The Series 2010 refunding bonds were issued in fixed rate mode and had interest rates ranging from 3.00% - 4.00% and a final maturity date of December 1, 2026. In May 2010, the City also issued $14,900 of Taxable General Obligation Tax Increment Refunding Bonds (West Side Milling), Series 2010. The proceeds along with funds on hand were provided to a trustee on June 24, 2010 to purchase escrowed securities to advance refund the outstanding balance of $14,495 of Taxable General Obligation Refunding Bonds, Series 2001A on the call date of February 1, 2011. As a result of this transaction, the City realized net present value savings of $2,032 and the refunding bonds have taxable interest rates ranging from 2.00% - 4.40% and a final maturity date of March 1, 2023. In May 2010, the City also issued $8,530 of General Obligation Tax Increment Refunding Bonds, Series 2010 to refund the outstanding General Obligation Tax Increment Refunding Bonds (Laurel Village), Series 2003 and outstanding General Obligation Tax-Exempt Bonds, Series 2001C. A portion of the proceeds along with funds on hand were used on June 25, 2010 to prepay the remaining Series 2003 Laurel Village bonds which became callable on March 1, 2010. As a result of this transaction, the City realized net present value savings of $357 and the Laurel Village related refunding bonds have interest rates ranging from 2.00% - 2.50% and a final maturity date of March 1, 2015. The remaining portion of proceeds along with funds on hand were used to purchase escrowed securities to advance refund the outstanding balance of $4,235 of General Obligation Tax-Exempt Bonds, Series 2001C on February 1, 2011 related to the Humboldt Greenway project. As a result of this refunding, the City realized net present value savings of $421 and the refunding bonds have interest rates ranging from 2.00% - 4.00% and a final maturity date of March 1, 2030. In June 2010, CPED, through the GARFS enterprise fund, issued $18,000 of Taxable Limited Tax Supported Development Revenue Bonds, Common Bond Fund Series 2010-1 for Open Systems International, Inc. to provide permanent financing for the purchase of property at 4101 Arrowhead Drive in Medina, Minnesota and for the construction of a 100,000 square foot manufacturing facility. The bonds were issued in fixed rate mode and had interest rates ranging from 2.29% to 6.60% and a final maturity date of June 1, 2040. In November 2010, the City issued $5,950 of General Obligation Improvement Bonds, Series 2010. The bonds were issued for a variety of special assessment projects including areaway removals, alleys and street paving projects. The bonds were issued in fixed rate mode and had interest rates ranging from 2.00% to 4.00% and a final maturity date of December 1, 2025.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 5 - LONG-TERM DEBT (continued) In December 2010, CPED, through the GARFS enterprise fund, issued $23,070 of Limited Tax Supported Development Revenue Bonds, Common Bond Fund Series 2010-2A and $1,930 of Taxable Limited Tax Supported Development Revenue Bonds, Common Bond Fund Series 2010-2B for Open Access Technology International, Inc. to provide permanent financing for the purchase, renovations and equipping of the former Honeywell Research facility at 3660 Technology Drive in Minneapolis, Minnesota for use as the headquarters of Open Access Technology International, Inc. The first series was $23,070 of tax-exempt Recovery Zone Facility Bonds, Series 2010-2A issued in fixed rate mode with interest rates ranging from 3.00% to 6.25% and a final maturity date of December 1, 2040. The second series was $1,930 of taxable revenue bonds, Series 2010-2B issued in fixed rate mode with interest rates ranging from 1.25% to 3.00% and a final maturity date of December 1, 2013. 2010 Notes Issued In March 2010, the City issued a $7,055 General Obligation Water Revenue Note to the Minnesota Public Facilities Authority (PFA) to finance a portion of work on the City’s Drinking Water Ultra-Filtration project. This is the sixth note issued to the PFA for water treatment improvements as part of a federally sponsored below market financing program related to the Safe Drinking Water Act. As of December 31, 2010, the City received proceeds of $5,990 from this note. The subsidized interest rate for this new note is 1.00% with a final maturity date of August 20, 2021. Also during 2010, the City received proceeds of $9,211 on the fifth note with the PFA which was used to finance a new filter press project at the Fridley Water Plant. This fifth note provides for total proceeds of $21,960 and has an interest rate of 2.688% and a final maturity date of August 20, 2027. At December 31, 2010, the outstanding debt balance of the six general obligation notes in this program was $84,521. Discrete Component Unit Debt Due to current debt issuance policies, the City issues debt on behalf of the Minneapolis Park & Recreation Board and the Municipal Building Commission and previously issued debt for the Minneapolis Library Board. The Minneapolis Public Library System was merged into the Hennepin County Library System on January 1, 2008. As of December 31, 2010, $116,684 of the outstanding governmental debt is related to activities of these discretely presented component units and is reported within the debt balances of the primary government. Of this balance, $108,650 is related to library improvements transferred to the Hennepin County Library System. The capital assets purchased with funds obtained from this debt issuance are held by the respective discrete component units and are reported with their capital assets on the Statement of Net Assets, with the exception of the library assets now held by Hennepin County.

Amounts Balance Balance Due Within

Governmental activities: 1/1/2010 Additions Retirements 12/31/2010 One Year Bonds and Notes Property Tax Supported GO Bonds 241,155$ 31,652$ 36,237$ 236,570$ 14,405$ Self Supporting GO Bonds 219,540 6,245 28,005 197,780 11,830 GO Improvement Bonds 50,531 15,075 17,800 47,806 5,725 Tax Increment GO Bonds 200,865 23,430 84,465 139,830 11,575 Revenue Bonds 35,980 - 9,280 26,700 710 Revenue Notes 19,040 - 3,455 15,585 309 Internal Service Fund Related GO Bonds 60,845 36,022 44,927 51,940 11,875 Total Governmental Bonds and Notes 827,956 112,424 224,169 716,211 56,429

Other Long-term Liabilities Operating Lease Payable 78 9 1 86 - Contracts Payable 8 - 8 - - Unpaid Claims Payable 42,513 14,151 9,372 47,292 9,372 Unamortized Premium (Discount) 16,276 4,655 5,085 15,846 - Compensated Absences 30,439 19,990 17,868 32,561 15,948 Other Post-Employment Benefits 7,358 2,925 - 10,283 - Total Other Long-term Liabilities 96,672 41,730 32,334 106,068 25,320

Total Long-term Liabilities Governmental 924,628 154,154 256,503 822,279 81,749

Business-type activities: Bonds and Notes Stormwater Fund GO Bonds 21,176 2,440 5,345 18,271 4,785 Sanitary Sewer GO Bonds 13,700 3,650 2,850 14,500 3,100 Water Fund GO Bonds 28,646 3,366 3,240 28,772 2,251 Water Fund GO Note 71,725 15,201 2,405 84,521 3,655 Municipal Parking Fund GO Bonds 175,360 14,725 27,765 162,320 14,620 CPED Related Non GO Fund General Agency Reserve Fund System 57,365 43,000 4,440 95,925 3,940 Revenue Notes 591 - 136 455 144 Total Bonds and Notes 368,563 82,382 46,181 404,764 32,495

Other Long-term Liabilities Compensated Absences 2,527 1,604 2,303 1,828 548 Other Post-Employment Benefits 1,115 446 - 1,561 - Total Other Long-term Liabilities 3,642 2,050 2,303 3,389 548

Total Long-term Liabilities Business-type 372,205 84,432 48,484 408,153 33,043

Total Long-term Liabilities $ 1,296,833 $ 238,586 $ 304,987 $ 1,230,432 $ 114,792

For governmental activities, debt service is generally paid from Debt Service Funds, claims and judgments are generally liquidated by the General Fund or the Self-Insurance Internal Service Fund and compensated absences are generally liquidated by the General Fund or Convention Center Special Revenue Fund.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 5 - LONG-TERM DEBT (continued) Amortization of Outstanding Governmental City Debt As of December 31, 2010, annual debt service requirements for Governmental activities to maturity are as follows: Governmental Activities – Non-Proprietary

Year Ending Bonds Notes Dec 31: Principal Interest Principal Interest

2011 $ 44,245 $ 29,336 $ 309 $ 324 2012 43,595 27,545 581 308 2013 47,481 25,672 310 276 2014 44,121 23,751 330 260 2015 43,986 22,001 360 241

2016 - 2020 226,994 82,764 2,185 910 2021 - 2025 136,269 34,764 2,310 274 2026 - 2030 61,340 7,711 - - 2031 - 2032 655 27 9,200 -

$ 648,686 $ 253,571 $ 15,585 $ 2,593

Total Governmental Year Ending Internal Service Fund Bonds Activity Bonds & Notes

Dec 31: Principal Interest Principal Interest

2011 $ 11,875 $ 1,704 $ 56,429 $ 31,364 2012 12,160 1,318 56,336 29,171 2013 3,735 918 51,526 26,866 2014 3,750 783 48,201 24,794 2015 3,525 649 47,871 22,891

2016 - 2020 16,895 1,313 246,074 84,987 2021 - 2025 - - 138,579 35,038 2026 - 2030 - - 61,340 7,711 2030 - 2032 - - 9,855 27

$ 51,940 $ 6,685 $ 716,211 $ 262,849

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 5 - LONG-TERM DEBT (continued) Amortization of Outstanding Business-type City Debt As of December 31, 2010, annual debt service requirements for Business-type activities to maturity are as follows: Year Ending Bonds Notes Total Total

Dec 31: Principal Interest Principal Interest Principal Interest

2011 $ 28,697 $ 16,566 $ 3,799 $ 2,227 $ 32,496 $ 18,793 2012 29,455 15,916 3,703 2,127 33,158 18,043 2013 24,795 14,893 3,892 2,031 28,687 16,924 2014 20,225 13,977 3,891 1,930 24,116 15,907 2015 16,980 12,277 4,360 1,829 21,340 14,106

2016 - 2020 61,761 43,515 35,090 7,064 96,851 50,579 2021 - 2025 67,120 29,962 28,620 2,266 95,740 32,228 2026 - 2030 35,465 15,521 1,621 43 37,086 15,564 2031 - 2035 24,855 7,134 - - 24,855 7,134

2036 - 2040 10,435 1,863 - - 10,435 1,863 Total $ 319,788 $ 171,624 $ 84,976 $ 19,517 $ 404,764 $ 191,141

Discretely Presented Component Unit Activity for the Minneapolis Park and Recreation Board for the year ended December 31, 2010, was as follows:

Balance Balance Amounts due January 1, 2010 Additions Retirements December 31, 2010 Within one year

Notes payable 588$ 5,300$ 39$ 5,849$ 1,366$ Compensated absences 4,201 2,429 2,351 4,279 2,906 Postemployment benefits 1,221 971 531 1,661 - Total 6,010$ 8,700$ 2,921$ 11,789$ 4,272$

Year Ending

December 31: Principal Interest

2011 1,366$ 171$ 2012 1,368 133 2013 1,370 95 2014 1,372 56 2015 50 18

2016-2021 323 50 Total 5,849$ 523$

NOTE 6 – INDUSTRIAL, COMMERCIAL, AND HOUSING REVENUE BONDS AND NOTES As of December 31, 2010, outstanding industrial, commercial, and housing revenue bonds and notes approximated $2,423 million. The bonds are payable solely from revenues of the respective enterprises and do not constitute an indebtedness of the City. They are not a charge against the City’s general credit or taxing power.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 7 – PRIOR YEAR DEFEASANCE In prior years, the City defeased certain general obligation bonds and self supporting revenue bonds by placing the proceeds of the refunding issues with a trustee who maintains special escrow accounts invested in securities of the U.S. Government and its Agencies. The maturities of these investments coincide with the principal and interest payment dates of the refunded bonds and have been certified to be sufficient to pay all principal and interest on the bonds when due as required by applicable laws. Accordingly, the original refunded bonds have been eliminated and the new advance refunding bonds added to the appropriate financial statements. The City remains contingently liable to pay the refunded bonds. The outstanding balance of the extinguished debt as of December 31, 2010 is $63,605 including $47,195 for an advance refunding transaction completed in 2010. NOTE 8 – DEMAND BONDS General Obligation Demand Bonds The City has issued General Obligation demand bonds maturing serially through December 1, 2033, in the original issue amounts of $88,400, $80,000, $10,610, $57,000, $15,985, $16,100, $16,400, and $4,250. The bonds were issued pursuant to resolutions adopted by the City Council and the proceeds were used to finance a portion of the cost of constructing certain local improvements.

The remaining redemption schedule for these bonds is as follows:

Year Amount 2011 $ 735 2012 900 2013 595 2014 1,780 2015 2,170 2016 21,225 2017 21,540 2018 21,590 2019 1,590 2020 1,360 2021 1,750 2022 2,095 2023 1,920 2024 1,010 2025 3,945 2026 10,365 2027 11,020 2028 11,790 2029 10,445 2030 9,490 2031 2,985 2032 3,210 2033 3,100 Total $ 146,610

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 8 – DEMAND BONDS General Obligation Demand Bonds (continued) The bonds are subject to purchase on demand of the holder at a price equal to principal plus accrued interest on delivery to the City's Remarketing agent. The Remarketing agent is authorized to use their best effort to sell the repurchased bonds at a price equal to 100 percent of the principal amount by adjusting the interest rate. These demand bonds are backed by the full faith, credit and taxing power of the City and are included in long-term debt. Under irrevocable Standby Bond Purchase Agreements issued by Dexia Credit Local, acting through its New York branch, the trustee is entitled to draw an amount sufficient to pay the purchase price of bonds delivered to it. The letters of credit are for the original sale amount and are subject to extension with the agreement of the Bank. They carry a rate equal to the Federal Funds rate plus one-half of one percent per annum with respect to amounts advanced. The expiration dates for the Standby Bond Purchase Agreements are October 31, 2012. The City has the option to convert all of the bonds from a variable interest rate to a fixed interest rate by giving written notice to Dexia Credit Local, the Tender Agent, the Remarketing Agent and the Trustee. The conversion date must be on a business day not less than 15 days from the date of the written notice. NOTE 9 – LEASES Operating Leases The City of Minneapolis leases office space, equipment and right of ways for its operations. The lease for office space expires in the year 2016 and the office space lease payments were $1,257 in 2010. The future minimum lease payments for operating leases are as follows:

Government Business Type Activity Activity Amount Amount

Year 2011 707$ -$ 2012 817 - 2013 776 - 2014 776 - 2015 777 - 2016 - 2020 524 - Total minimum lease payments 4,377$ -$

Operating leases with scheduled rent increases The City leases office space for various operations. The leases contain scheduled rent increases with terms varying from five to seventeen years. The operating lease transactions are measured on a straight-line basis over the lease term per GASB Statement No. 13-Accounting for Operating Leases with Scheduled Rent Increases. Application of the straight-line basis to the total lease expenditures of $2,374 over the lease terms results in a total annual lease amount of $221.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 9 – LEASES Operating leases with scheduled rent increases (continued) For 2010 the amount of lease expenditures is as follows:

Amount Operating leases 226$ Straight Line Basis (5)

Total expenditures 221$

The future minimum lease expenditures for operating leases with scheduled rent increases are as follows:

Government Business Type Activity Activity

Year Amount Amount 2011 153$ 72$ 2012 132 73 2013 138 73 2014 144 74 2015 52 75 2016 - 2020 181 310 Total minimum lease payments 800$ 677$

NOTE 10 – INTERFUND TRANSACTIONS Interfund Receivables/Payables The composition of interfund balances as of December 31, 2010 are as follows: Due to/from other funds:

Receivable Fund Payable Fund Amount General Fund Non major Governmental Funds 1,739$

CPED Special Revenue Fund Non major Governmental Funds 17

Non major Governmental Funds General Fund 27 Non major Governmental Funds 12,100

Internal Service Funds Internal Service Funds 835 Total 14,718$

Interfund balances are either due to timing differences or to the elimination of negative cash balances within the various funds. All interfund balances are expected to be repaid within one year. Advances to/from other funds: Receivable Fund Payable Fund Amount CPED Special Revenue Fund CPED Enterpris e Fund 10$ Convention Center Special Revenue Fund Internal Service Funds 9,250 General Fund Internal Service Funds 864

Total 10,124$

Advances to other funds are to provide working capital for general operations of the other fund.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 10 – INTERFUND TRANSACTIONS (continued) Transfers Transfers are indicative of funding for capital projects, lease payments or debt service, subsidies of various City operations and re-allocations of special revenues. The following schedule briefly summarizes the City’s transfer activity: Fu n d Tran sfe rre d To Fu n d Tran sfe rre d From Total Tran sfe rs In

Gove rn m e n tal Fu n ds:

General Fund CP ED Special Revenue Fund 150$ Convent ion Cent er Fund 12,718 Non-Major Government al Funds 1,286 Municipal P arking Fund 7,819 Solid Wast e & Recycling Fund 700 22,673

CP ED Special Revenue Fund General Fund 6 Non-Major Government al Funds 1,500 CP ED Ent erprise Fund 398 1,904

Convent ion Cent er Fund Non-Major Government al Funds 1,000 1,000

P ermanent Improvement Fund General Fund 5,800 CP ED Special Revenue Fund 5,000 Int ernal Service Funds 807 Sanit ary Sewer Fund 250 St ormwat er Fund 2,826 14,683

Development Debt Service Fund CP ED Special Revenue Fund 17,494 Convent ion Cent er Fund 19,037 36,531

Special Assesment Debt Service Fund CP ED Special Revenue Fund 169 P ermanent Improvement Fund 620 789

Non-Major Government al Funds General Fund 11,750 CP ED Special Revenue Fund 7,086 Convent ion Cent er Fund 1,929 Development Debt Service Fund 8,569 Special Assesment Debt Service Fund 15 P ermanent Improvement Fund 1,655 Sanit ary Sewer Fund 575 St ormwat er Fund 485 Wat er Works Fund 1,507 Municipal P arking Fund 2,477 Solid Wast e & Recycling Fund 151 Int ernal Service Funds 1,324 37,523

Total Gove rn m e n tal Fu n ds 115,103$

Proprietary Funds:

Business Type Activities

Sanitary Sewer Fund Non-Major Governmental Funds 319$ 319$

Stormwater Fund Non-Major Governmental Funds 342 342

Municipal Parking Fund CPED Special Revenue Fund 3,233 Convention Center Fund 11,544 14,777

Solid Waste & Recycling Fund General Fund 50 Municipal Parking Fund 146 196

CPED Enterprise Fund CPED Special Revenue Fund 200 200

Total Business Type Activities 15,834$

Governmental Type Activities

Internal Service Funds General Fund 26,795 Non-Major Governmental Funds 1,391 28,186

Total Governmental Type Activities 28,186$

Transfers are made throughout the year between various funds. The majority of the transfers are funding the repayment of debt in the Development Debt and the General Debt Service Funds, transfers to Internal Service Funds for intergovernmental services and transfers to pass through grant resources between funds. Other significant transfers are to support economic development projects and capital projects.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 11 – NET ASSETS/FUND BALANCES The government-wide and business-type activities fund financial statements use a net asset presentation. Net assets are categorized as invested in capital assets (net of related debt), restricted and unrestricted.

 Invested in capital assets, net of related debt – This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

 Restricted net assets – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

 Unrestricted net assets – This category represents net assets of the City, not restricted for any project or other purpose. In the fund financial statements, reserves segregate portions of fund balance that are either not available or have been earmarked for specific purposes. The various reserves are established by actions of the City Council and management and can be increased, reduced, or eliminated by similar actions. As of December 31, 2010, reservations of fund balance are described below: Reservations

 Loans and Advances – to reflect the amount due from other funds that are long-term in nature. Such amounts do not represent available spendable resources.

 Land held for development – a segregation of fund balance to indicate that land held for development does not represent available spendable resources.

 Specific development projects – to indicate that a portion of fund balance is reserved for specific development projects that are restricted by state law.

 Encumbrances – to reflect the outstanding contractual obligations for which goods and services have not been received.

 Prepaid items – to reflect the portion of assets, which do not represent available spendable resources.  Pension Liability – to reflect that a portion of fund balance is reserved for pension liabilities.

NOTE 12 – RESTRICTED NET ASSETS – GOVERNMENTAL ACTIVITIES Certain net assets are classified on the statement of net assets as restricted because their use is limited. The Governmental activities report restricted net assets for amounts that are not available for operations or are legally restricted by outside parties for use for a specific purpose. As of December 31, 2010, the Governmental activities restricted net assets are as follows: Debt service $ 60,814 NOTE 13 – RESTRICTED NET ASSETS – BUSINESS TYPE ACTIVITIES Certain net assets are classified on the statement of net assets as restricted because their use is limited. The Business-type activities report restricted net assets for amounts that are not available for operations or are legally restricted by outside parties for use for a specific purpose. As of December 31, 2010, the Business-type restricted net assets are as follows: Debt service $ 34,674

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 14 - DEFICIT BALANCES The following fund has a deficit net asset balance as of December 31, 2010: Internal Service Funds

Self-Insurance $(6,588)

The City intends to fund the actuarially determined liability in the Self Insurance Internal Service Fund by maintaining a cash reserve equal to the claims liability plus 10% of the annual department operating budgets within the fund. In 2003, the City adopted a long-term financial plan to increase the cash reserve and achieve a net asset balance that does not fall below zero. For fiscal year 2010, the cash reserve of $41,245 is increased by $14,736 from the 2009 balance of $26,509. The 2010 net assets in the Self-Insurance Fund increased $8,845 from the 2009 deficit balance of ($15,433). NOTE 15 - DEFINED BENEFIT PENSION PLAN – STATEWIDE PUBLIC EMPLOYEES RETIREMENT

ASSOCIATION Plan Description All firefighters and police officers hired after June 15, 1980, and other full-time and certain part-time employees of the City hired after June 30, 1978, except employees covered under the CPED Defined Contribution Plan, are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota. The Public Employees Retirement Association administers the General Employees Retirement Fund and the Public Employees Police and Fire Fund, which are cost sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes chapters 353 and 356. The police officers and firefighters are covered by the Public Employees Police and Fire Fund. All other full-time and certain part-time employees covered by the defined benefit pension plans administered by the Public Employees Retirement Association are members of the General Employees Retirement Fund. General Employees Retirement Fund members of the City belong to the Coordinated Plan and are covered by Social Security. The Public Employees Retirement Association provides retirement benefits as well as disability benefits to members and benefits to survivors upon death of eligible members. Benefits are established by State Statute and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first ten years of service and 2.7 percent for each remaining year. For a Coordinated Plan member, the annuity accrual rate is 1.2 percent of average salary for each of the first ten years and 1.7 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For the Public Employees Police and Fire Fund members, the annuity accrual rate is 3.0 percent for each year of service. For all Public Employees Police and Fire Fund members and General Employees Retirement Fund members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduced retirement annuity is also available to eligible members seeking early retirement.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 15 - DEFINED BENEFIT PENSION PLAN – STATEWIDE PUBLIC EMPLOYEES RETIREMENT

ASSOCIATION Plan Description (continued) The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time they last terminated public service. The Public Employees Retirement Association issues a publicly available financial report that includes financial statements and required supplementary information for the General Employees Retirement Fund and the Public Employees Police and Fire Fund. That report may be obtained on the Internet at www.mnpera.org, by writing to Public Employees Retirement Association, 60 Empire Drive, Suite 200, Saint Paul, Minnesota 55103-2088, or by calling (651) 296-7460 or 1-800-652- 9026. Funding Policy Pension benefits are funded from member and employer contributions and income from the investment of fund assets. Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. General Employees Retirement Fund Coordinated Plan members were required to contribute 6.0 percent of their annual covered salary in 2010. Public Employees Police and Fire Fund members were required to contribute 9.4 percent of their annual covered salary in 2010. The City is required to contribute the following percentages of annual covered payroll: General Employees Retirement Fund Coordinated Plan members 6.75 % Public Employees Police and Fire Fund 14.10 % The City contributions for the years ending December 31, 2008, 2009, and 2010 for the General Employees Retirement Fund and the Public Employees Police and Fire Fund were:

2010 2009 2008 General Employees Retirement Fund $ 8,986 $ 9,327 $ 8,781 Public Employees Police and Fire Fund $ 13,884 $ 13,867 $ 12,243 These contribution amounts are equal to the contractually required contributions for each year as set by state statute.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 16 - DEFINED BENEFIT PENSION PLAN - MULTIPLE EMPLOYER MINNEAPOLIS EMPLOYEES RETIREMENT FUND Plan Description All full-time City employees hired on or before June 30, 1978, other than firefighters, and police officers, are covered by the Minneapolis Employees Retirement Fund (MERF), a defined benefit pension plan which is a cost-sharing, multiple-employer retirement plan. This plan is administered in accordance with Minnesota Statutes Chapter 422A. The MERF pension plan provides pension benefits, deferred annuity, and death and disability benefits as set by state statute. Members are eligible for service retirement either:

1) With 30 or more years of service at any age; or 2) At age 60 with three or more years of service; or 3) At age 65 with one year of service; or 4) With 20 or more years of service at age 55 under the Two Dollar Bill method of retirement (money purchase

plan), if a MERF member prior to June 28, 1973. The MERF provides a number of retirement options from which the member may choose. The maximum benefit one may receive is a retirement allowance payable throughout life. Participants may receive lesser retirement allowances if they choose payments for a guaranteed number of years, request a certain percent or dollar amount of their retirement allowances to go to a beneficiary or if they chose to provide for a certain amount to be paid out upon death. The benefit amount for all options, except the money purchase plan, is calculated based on the average of the highest five years salary within the last ten years of employment and years of creditable service at the date of retirement. The member will receive a benefit amount equal to 2 percent of that average salary for each of the first ten years of service, and 2.5 percent of that salary for each year over ten years of service. A monthly retirement benefit is available to employees who have under three years of service in the MERF, but only when these years, combined with service in other Minnesota statewide retirement systems, total three or more years. A monthly retirement benefit is also available to employees who have less then three years of combined allowable service in any of the qualifying funds, provided the employee works until age 65. Employees who leave public service before retirement and before age 60 may receive a refund of all personal contributions, with interest, except for the survivor benefit contribution, which is the equivalent of a non-refundable term insurance premium. Employees who leave public service after age 60 may not withdraw personal contributions with interest unless they have worked under three years and do not qualify for monthly retirement benefits. Pension provisions include death benefits for a beneficiary or surviving spouse, and disability benefits for a disabled employee, as defined by the fund. The MERF issues a publicly available financial report that includes financial statements and required supplementary information for the MERF. This report may be obtained by writing to MERF, 706 – Second Avenue South, #800, Minneapolis, Minnesota 55402, or by calling (612) 335-5950.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 16 - DEFINED BENEFIT PENSION PLAN - MULTIPLE EMPLOYER MINNEAPOLIS EMPLOYEES RETIREMENT FUND (continued) Funding Policy Minnesota Statutes Chapter 422A sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. Employees contribute 9.25% of salary into the Deposit Accumulation Reserve and .50% of salary (subject to annual adjustment) into the Survivor Benefits Reserve. Employers, including the City contribute any excess of normal cost contributions of 10.09% of salary. The unfunded actuarial liability is funded partially by payments each year of 2.68% of salary plus $3,900 from all employers. MERF has a target date of June 30, 2020 to fully amortize the unfunded liability. The City levies taxes to finance the employer’s share of pension costs for the General Fund. The City's contributions for the years ended June 30, 2008, 2009, and 2010 for the MERF were:

2008 $5,824 2009 $4,740 2010 $4,145

These contribution amounts are equal to the contractually required contributions for each year as set by state statute. NOTE 17 - DEFINED BENEFIT PENSION PLAN - SINGLE EMPLOYER MINNEAPOLIS FIREFIGHTER’S RELIEF ASSOCIATION MINNEAPOLIS POLICE RELIEF ASSOCIATION Plan Description Firefighters and police officers hired prior to June 15, 1980, are members of their respective relief associations. Each Association is the administrator of a single-employer defined benefit pension plan. The Minneapolis Firefighter’s Relief Association (MFRA) was established November 24, 1886. It operates under the provisions its bylaws and Minnesota State Law. The Minneapolis Police Relief Association (MPRA) was established on August 23, 1905, and it operates under the provisions of Minnesota Statutes, sections 423B.01-.18 and 69.80. Each member who is at least 50 years of age and has five years of service with the Minneapolis Fire Department or the Minneapolis Police Department is eligible to receive a service pension, monthly, for the remainder of the member's life. All benefits are based on a plan of a number of units. A unit is 1/80th of the maximum current monthly salary of a first grade firefighter (MFRA) or a first grade patrol officer (MPRA). Pensions are based on current Minneapolis Fire Department payroll or Minneapolis Police Department payroll and are fully escalated for all persons receiving a pension benefit. Each vested MFRA member also receives a lump sum amount, at the time of separation, from the MFRA's General Fund based on the number of years the member has belonged to the MFRA. A member is entitled to disability benefits in conformity with the provisions applicable to the association and the circumstances of the disability, not to exceed 41 units (MFRA) or 34 units (MPRA). Death benefits for a beneficiary or surviving spouse are also available. The MFRA issues a publicly available financial report that includes financial statements and required supplementary information for the MFRA. The most recent report, dated December 31, 2009 may be obtained by writing to the Minneapolis Firefighter’s Relief Association at 2021 East Hennepin Avenue, Suite 360, Minneapolis, Minnesota 55413. The MPRA issues a publicly available financial report that includes financial statements and required supplementary information for the MPRA. The most recent report, dated December 31, 2009, may be obtained by writing to the Minneapolis Police Relief Association, 10 - Second Street Northeast, Suite 103, Minneapolis, Minnesota, 55413.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 17 - DEFINED BENEFIT PENSION PLAN - SINGLE EMPLOYER MINNEAPOLIS FIREFIGHTER’S RELIEF ASSOCIATION MINNEAPOLIS POLICE RELIEF ASSOCIATION (continued) Funding Policy Authority for contributions to the MFRA and the MPRA pension plans is established by Minnesota Statutes, section 69.77 and may be amended only by the Minnesota State Legislature. The MFRA and the MPRA funding policies provide for contributions from the City, the State of Minnesota, and active plan members. City contributions are actuarially determined and requires full funding of the MFRA's accrued liability with a 15-year amortization of any unfunded liabilities and full funding of the MPRA's accrued liability by the year 2020. The City contributed $4,123 to MFRA and $5,506 to MPRA for the fiscal year ended December 31, 2009. Employees under these plans contribute annually an amount equal to eight percent of the maximum first grade firefighter's salary or eight percent of the maximum top grade patrol officer's salary from which pension benefits are determined. The State of Minnesota annually contributes two percent fire premium insurance aid and the amortization state aid to the MFRA and two percent peace officers' state aid to the MPRA. The City's annual pension cost for the fiscal year ended December 31, 2009, and related information for each plan is as follows:

MFRA MPRA Contributions made $ 4,123 $ 5,506 Actuarial valuation date 12/31/2009 12/31/2009 Actuarial cost method Entry Age Normal Cost Entry Age Normal Cost Amortization method Level Percentage of Payroll Level Percentage of Payroll Remaining amortization period 15 years, closed 15 years, closed Asset valuation method Book value plus the average Book value plus the average

unrealized gain for the last unrealized gain for the last three years minus excess three years minus excess investment income as investment income as defined by state law. defined by state law.

Actuarial assumptions: Investment rate of return 6% per annum 6% per annum Projected salary increases: 4% per annum 4% per annum

Inflation NA NA Cost-of-living adjustments NA NA

Three-Year Trend Information: Annual Percentage Net

Year Pension of APC Pension Ending Cost (APC) Contributed (%) Obligation

MFRA 2007 $ 4,290 100 - 2008 $ 4,750 100 - 2009 $ 4,123 100 -

MPRA 2007 $ 6,814 100 - 2008 $ 5,811 100 - 2009 $ 5,506 100 -

MFRA : Ann ual

A ctu arial Covered UAA L as a Actu ari al Accru ed Payrol l Percentage

Actu ari al Val ue of Li ab ili ty (A AL) Un fu nd ed Fu nd ed (P reviou s of Covered Valu ation Plan A ssets --En try Age AAL (UAAL) R atio (%) F iscal Y ear) Payroll (%)

Date (a) (b) (b - a) (a/b ) ( c ) ((b - a)/c) 2007 270,096$ 291,078$ 20,982$ 92.8 2,236$ 938.4 2008 237,401$ 280,312$ 42,911$ 84.7 2,325$ 1845.6 2009 201,087$ 254,317$ 53,231$ 79.1 1,896$ 2807.2

MPRA : Ann ual

A ctu arial Covered UAA L as a Actu ari al Accru ed Payrol l Percentage

Actu ari al Val ue of Li ab ili ty (A AL) Un fu nd ed Fu nd ed (P reviou s of Covered Valu ation Plan A ssets --En try Age AAL (UAAL) R atio (%) F iscal Y ear) Payroll (%)

Date (a) (b) (b - a) (a/b ) ( c ) ((b - a)/c) 2007 376,466$ 428,281$ 51,815$ 87.9 1,186$ 4368.9 2008 324,723$ 506,949$ 182,226$ 64.1 1,249$ 1458.9 2009 277,847$ 415,484$ 137,637$ 66.9 923$ 1491.2

NOTE 18 - DEFINED CONTRIBUTION PLAN – CPED Plan Description Qualified CPED employees belong to a defined contribution pension plan administered by Union Central Life Insurance Company. A permanent employee becomes a participant in the plan on April 1 or October 1, following completion of his or her probationary period and after attaining age 20 1/2. Benefits and contribution requirements are established and can be amended by the City of Minneapolis City Council. All provisions are within limitations established by Minnesota Statutes. The payroll for employees covered by the CPED's defined contribution plan for the year ended December 31, 2010, was $2,497 and the CPED's total payroll was $9,973.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 18 - DEFINED CONTRIBUTION PLAN – CPED (continued) Contributions Required and Made The City of Minneapolis and CPED employee participants are each required to contribute five percent of the participants' annual compensation to an investment fund administered by Union Central Life Insurance Company, which will provide retirement benefits under a Money Purchase Plan. Participants are vested at the rate of 20 percent per year, for the employer's share of the contribution, and are 100 percent vested immediately for their individual contribution. The City and CPED employee participants contributed $138 and $127 respectively to the plan during the year, which amounts represented 5.53% and 5.1% respectively of the covered payroll. NOTE 19 – POSTEMPLOYMENT HEALTHCARE PLAN Plan Description The City provides a single-employer defined benefit healthcare plan to eligible retirees and their spouses. The plan offers medical and dental coverage. Medical coverage is administered by Medica. Dental coverage is administered through the Delta Dental Plan of Minnesota. The City is self-insured for dental coverage. Retirees pay 100 % of the blended active/retiree premium rate, in accordance with Minnesota Statutes Chapt. 471.61, subd. 2b. It is the City’s policy to periodically review its medical and dental coverage, and to obtain requests for proposals in order to provide the most favorable benefits and premiums for City employees and retirees. There is no separate, audited GAAP-basis postemployment benefit plan report available. Funding Policy Retirees and their spouses contribute to the healthcare plan at the same rate as City employees. This results in the retirees receiving an implicit rate subsidy. Contribution requirements are established by the City, based on the contract terms with Medica and Delta Dental. The required contributions are based on projected pay-as-you-go financing requirements. For fiscal year 2010, the City contributed $4,041 to the plan. As of January 1, 2010, there were approximately 1,018 retirees receiving health benefits from the City’s health plan. Annual OPEB Cost and Net OPEB Obligation The City’s annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the City (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost of the year, the amount actually contributed to the plan, and changes in the City’s net OPEB obligation to the plan.

Annual required contribution $ 7,397 Interest on net OPEB obligation 339 Adjustment to annual required contribution (324) Annual OPEB cost (expense) 7,412 Contributions made 4,041 Increase in net OPEB obligation 3,371

Net OPEB obligation – beginning of year 8,473 Net OPEB obligation – end of year $ 11,844

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 19 – POSTEMPLOYMENT HEALTHCARE PLAN Annual OPEB Cost and Net OPEB Obligation (continued) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010, 2009, and 2008 was as follows:

Fiscal Year

Ended

Annual

OPEB Cost

Percentage Of Annual OPEB Cost Contributed

Net OPEB Obligation

12/31/2010 $ 7,412 54.6% $ 11,844 12/31/2009 7,428 51.0% 8,473 12/31/2008 6,028 56.6% 4,830

Funded Status and Funding Progress As of January 1, 2009, the most recent actuarial valuation date, the City had no assets deposited to fund the plan. The actuarial accrued liability for benefits was $75,901 and the actuarial value of assets was $-0-, resulting in an unfunded actuarial accrued liability (UAAL) of $75,901. The covered payroll (annual payroll of active employees covered by the plan) was $374,550, and the ratio of the UAAL to the covered payroll was 20%. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long-term perspective of the calculations. In the January 1, 2009, actuarial valuation, the entry age normal cost method was used. The actuarial assumptions included a 4.0% discount rate, which is based on the investment yield expected to finance benefits depending on whether the plan is funded in a separate trust (about 7% to 8.5%, long-term, similar to a pension plan) or unfunded (3.5% to 5%, shorter term, based on City’s general assets). The City currently does not plan to prefund for this benefit. At the actuarial valuation date, the annual healthcare cost trend rate was calculated to be 10% initially, reduced incrementally to an ultimate rate of 5% after eight years. Both rates included a 3% inflation assumption. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The original amortization period was 30 years, as of January 1, 2010, 27 years remain.

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) NOTE 20 - VACATION, SEVERANCE, SICK AND COMPENSATORY TIME PAY Depending on the terms of their collective bargaining contract, or the policies applicable to their classification, employees may accumulate up to 50 days vacation. Sick leave may be accumulated indefinitely by employees. Also, employees have the option of being paid once a year for current unused sick leave accumulated over a minimum base of 60 days or, under certain circumstances, CPED employees may be allowed to have unused sick leave converted to vacation and added to their vacation balance. Payments are based on a sliding scale ranging from 50 percent to 100 percent depending on the base level attained. In addition, under certain circumstances, employees leaving City employment may qualify to receive payment for 50 percent of their unused sick leave at their current rate of pay. Employees, depending on their classification, and subject to prior approval of their supervisor, may earn compensatory time in lieu of paid overtime. Policies are in effect which are designed to place constraints on the amount of compensatory time an employee may accumulate. NOTE 21 - RISK MANAGEMENT & CLAIMS The City is self insured and exposed to a variety of risks related to liability claims; theft of, damage to, and destruction of assets, bodily injuries, and accidents. The City is self-insured for workers' compensation, general liability, and re- employment. Claims under $25 and unrepresented are handled by Risk Management & Claims. Claims represented and over $25 are handled by the City Attorneys’ Office. The workers' compensation program includes the BET and all City departments. The Park Board and MBC maintained their own workers' compensation programs. The City, CPED, and the BET are self-insured for general liability. The MBC, and the Park Board maintain their separate liability programs. The City, including all discrete and blended component units of government, also maintains a self-funded dental plan for covered employees. The claims liability of $47,292 million is reported in the Self-Insurance Internal Service Fund at December 31, 2010, is based on the requirements of GASB Statement No. 10-Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, and covers the exposures of workers' compensation, liability, dental and re-employment. An actuarial study completed December 31, 2009 for claim exposure and settlements payments, forecast that the claims liability at December 31, 2010 would be $47,292 million, an increase of $4,779 million from the liability amount of $42,513 at December 31, 2009. Per State Statute, the City purchases excess insurance for its workers' compensation program from the Workers’ Compensation Reinsurance Association (WCRA) and supports the State’s regulation authority through payments in the Special Compensation Fund (SCF). The WCRA reimburses members for individual claim losses exceeding the City’s retention limit. Reimbursements by the Second Injury Fund come through the SCF. Workers' compensation coverage is governed by State of Minnesota statutes. Claims liabilities are reported when it is probable that a loss has occurred and the amount of the loss can reasonably be estimated. Liabilities include an amount for estimated claims administration expenses and an amount for claims that have been incurred but are not reported (IBNR). Dental coverage is based on plan design and includes Delta Dental PPO coverage of up to $1.5 or Delta Dental Premier coverage of up to $1 per person annually. Based on an actuarial review of the dental plan, it has been determined that the premium rates charged to departments are sufficient to cover projected dental claims. Changes in the claims liabilities during fiscal 2009 and 2010 are:

2010 Liability balance – January 1 $ 31,773 $ 42,513 Current year claims and changes in estimates 22,550 14,151 Claim payments (11,810) (9,372) Liability balance – December 31 $ 42,513 $ 47,292

2009

NOTES TO THE FINANCIAL STATEMENTS CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

NOTE 22 – CLEANUP OF HAZARDOUS MATERIALS Properties owned by the City of Minneapolis may have certain contingent liabilities associated with them due to potential contamination from hazardous material or difficulty in securing vacant structures located on them. It is not expected that these contingencies will have a material effect on the financial statements of the City. Any of these related costs that are incurred during City project construction are charged to the project that incurs them, and are capitalized when the project is completed. NOTE 23 – OTHER COMMTIMENTS AND CONTINGENCIES Amounts received or receivable from grantors, principally the federal and state governments are subject to regulatory requirements and adjustments by the grantor agencies. Any disallowed claims, including amounts previously recognized by the City as revenue, would constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantors cannot be determined at this time. City officials expect such amounts, if any, to be immaterial. In connection with the normal conduct of its affairs, the City is involved in various claims and litigations pending against the City involving claims for monetary damages. Except as follows, these pending cases are not unusual in number and amount.

 The City settled a lawsuit alleging breach of contract on April 29, 2011. The City settled with Pall Corporation for $3.2 million.

 The City is a defendant in three cases that allege wrongful death, as a result of police misconduct.

 A notice of claim has been filed against the city by one of the major corporations arising from damage to property

caused by water infiltration due to a water main break. NOTE 24 – SUBSEQUENT EVENTS The City has issued the following Bonds since December 31, 2010. In March 2011, the City issued $33,800 of General Obligation Convention Center Refunding Bonds, Series 2011 and $71,250 of Taxable General Obligation Convention Center Refunding Bonds, Series 2011. A portion of the proceeds from these refunding bonds along with funds on hand will be used on April 14, 2011 to complete a current refunding of the remaining maturities of the General Obligation Convention Center Bonds, Series 2002 in the amount of $80,900 and the General Obligation Convention Center Bonds, Series 2002A in the amount of $9,785. The remaining proceeds will be used on May 2, 2011 to prepay a portion of the variable rate General Obligation Convention Center Bonds, Series 1999 in the amount of $8,650 and a portion of the variable rate General Obligation Convention Center Bonds, Series 2000 in the amount of $8,000. As a result of these refunding transactions, the City will realize an estimated combined net present value savings of $11,043. For purposes of the net present value savings calculation, the City used estimated variable interest rates for 2011 and budgeted rates of 5.00% for the future years and used the actual fixed rates in effect for the 2002 bond series. The $33,800 tax-exempt Series 2011 refunding bonds were issued with 3.00% interest coupons and maturities from 12/1/11 to 12/1/2017. The $71,250 taxable Series 2011 refunding bonds had interest rates ranging from 3.25% - 3.80% and maturities from 12/1/2018 to 12/1/2020.

THIS PAGE IS INTENTIONALLY BLANK

GENERAL FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes 202,031$ 196,832$ 198,020$ 1,188$ 194,622$ Licenses and permits 28,902 27,559 26,541 (1,018) 27,576 Intergovernmental revenues 71,382 68,045 69,480 1,435 85,301 Charges for services and sales 34,711 37,120 37,303 183 37,717 Fines and forfeits 9,830 9,830 8,825 (1,005) 8,529 Special assessments 2,545 2,485 2,792 307 3,248 Interest 1,503 1,503 1,844 341 1,087 Miscellaneous revenues 1,373 1,446 1,314 (132) 1,175 Total revenues 352,277 344,820 346,119 1,299 359,255

CURRENT EXPENDITURES: Current: General government: Mayor 1,482 1,531 1,493 38 1,500 Council & Clerk 6,341 6,281 5,908 373 6,201 Assessor 3,986 4,146 3,933 213 3,826 Attorney 7,731 7,809 7,498 311 7,521 Civil rights 2,029 2,035 2,269 (234) 2,715 Clerk-Elections and registration 1,268 1,284 1,190 94 1,470 Coordinator 1,411 1,451 1,348 103 1,650 Coordinator - 311 3,020 3,146 3,072 74 - Coordinator-Communications 2,424 2,429 2,382 47 2,484 Coordinator-Finance 19,253 19,740 19,462 278 19,189 Coordinator-Human resources 5,788 6,074 5,805 269 6,190 Coordinator-Intergovernmental relations 1,564 1,376 1,244 132 1,453 Coordinator-Neighborhood and community relations 1,286 1,501 1,104 397 181 Internal audit 200 320 212 108 - Contingency 6,574 2,574 1,846 728 643 Total general government 64,357 61,697 58,766 2,931 55,023

Public safety: Regulatory services and Emergency preparedness 37,157 36,471 36,475 (4) 34,754 Fire 53,767 54,417 53,805 612 52,286 Police 123,619 123,826 124,021 (195) 126,892 Total public safety 214,543 214,714 214,301 413 213,932

Public works: Administration 2,689 2,685 2,589 96 2,571 Engineering design 1,973 1,973 1,846 127 1,461 Field services 23,351 26,259 28,297 (2,038) 25,601 Transportation and special projects 11,692 11,892 11,910 (18) 11,483 Solid waste - - - - 75 Total public works 39,705 42,809 44,642 (1,833) 41,191

Culture and recreation - Library 6,721 6,747 6,747 - 7,750

Health and welfare - Health and family support 3,389 3,319 3,313 6 4,464

Community & economic development 3,549 3,534 3,527 7 3,729

Total expenditures 332,264 332,820 331,296 1,524 326,089

Excess (deficiency) of revenues over (under) expenditures 20,013 12,000 14,823 2,823 33,166

OTHER FINANCING SOURCES (USES): Transfers from other funds 19,926 20,076 22,673 2,597 28,036 Transfers to other funds (39,738) (44,498) (44,401) 97 (42,623) Total other financing sources (uses) (19,812) (24,422) (21,728) 2,694 (14,587)

Net change in fund balance 201 (12,422) (6,905) 5,517 18,579

Fund balance - January 1 68,267 68,267 68,267 - 49,688

Fund balance - December 31 68,468$ 55,845$ 61,362$ 5,517$ 68,267$

The notes to the required supplementary information are an integral part of this statement.

Budgeted Amounts

COMMUNITY PLANNING AND ECONOMIC DEVELOPMENT CITY OF MINNEAPOLIS, MINNESOTA SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes: Property tax increment 48,380$ 48,380$ 41,844$ (6,536)$ 70,302$

Intergovernmental revenues: State grants and shared revenues 2,000 2,000 177 (1,823) 37 County grants - - 3 3 160 Other local grants - - - - 611

Total intergovernmental revenues 2,000 2,000 180 (1,820) 808

Charges for services and sales 6,732 6,732 9,057 2,325 9,725 Interest 447 447 2,776 2,329 3,663 Miscellaneous revenues: Rents and commissions 4,356 4,356 5,128 772 4,771 Sale of land 1,231 1,231 1,010 (221) 690 Loan recapture 3,085 3,085 3,265 180 3,490 Other 30 30 136 106 857

Total miscellaneous revenues 8,702 8,702 9,539 837 9,808

Total revenues 66,261 66,261 63,396 (2,865) 94,306

EXPENDITURES: Current:

Community & economic development 46,799 127,451 45,287 82,164 50,378 Capital Outlay - - 1,106 (1,106) 4,530

Total expenditures 46,799 127,451 46,393 81,058 54,908

Excess (deficiency) of revenues over (under) expenditures 19,462 (61,190) 17,003 78,193 39,398

OTHER FINANCING SOURCES (USES): Transfers from other funds 5,146 5,367 1,904 (3,463) 30,585 Transfers to other funds (37,311) (37,311) (33,332) 3,979 (62,920)

Total other financing sources (uses) (32,165) (31,944) (31,428) 516 (32,335)

Net change in fund balance (12,703) (93,134) (14,425) 78,709 7,063

Fund balance - January 1 229,226 229,226 229,226 - 222,163

Fund balance - December 31 216,523$ 136,092$ 214,801$ 78,709$ 229,226$

The notes to the required supplementary information are an integral part of this statement.

Budgeted Amounts

CONVENTION CENTER SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes: Sales and use tax 30,237$ 30,237$ 27,266$ (2,971)$ 26,470$ Entertainment tax 11,753 11,753 13,175 1,422 9,071 Food tax 10,300 10,300 10,491 191 9,887 Liquor tax 3,966 3,966 4,586 620 3,769 Lodging tax 6,180 6,180 5,790 (390) 5,671

Total taxes 62,436 62,436 61,308 (1,128) 54,868

Charges for services and sales 5,585 5,585 4,500 (1,085) 4,583 Interest 1,153 1,153 744 (409) 836 Miscellaneous revenues: Rents and commissions 6,432 6,432 6,203 (229) 6,410 Private contributions - - - - 75 Privileges 2,750 2,750 2,163 (587) 2,367 Other 20 20 328 308 192

Total miscellaneous revenues 9,202 9,202 8,694 (508) 9,044

Total revenues 78,376 78,376 75,246 (3,130) 69,331

CURRENT EXPENDITURES: Community & economic development 45,222 43,722 39,633 4,089 34,574

Excess (deficiency) of revenues over (under) expenditures 33,154 34,654 35,613 959 34,757

OTHER FINANCING SOURCES (USES): Transfers from other funds 1,000 1,000 1,000 - 1,000 Transfers to other funds (42,263) (44,720) (45,228) (508) (35,440)

Total other financing sources (uses) (41,263) (43,720) (44,228) (508) (34,440)

Net change in fund balance (8,109) (9,066) (8,615) 451 317

Fund balance - January 1 48,624 48,624 48,624 - 48,307

Fund balance - December 31 40,515$ 39,558$ 40,009$ 451$ 48,624$

The notes to the required supplementary information are an integral part of this statement.

Budgeted Amount

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION CITY OF MINNEAPOLIS, MINNESOTA For the fiscal year ended December 31, 2010 (Dollar amounts Expressed in Thousands)

NOTE 1 – BUDGETS Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the general and special revenue funds. NOTE 2 – POSTEMPLOYMENT BENEFITS PLAN

Schedule of Funding Progress

Actuarial Valuation

Date

Actuarial Value of Assets

(a)

Actuarial Accrued Liability

(AAL) – Entry Age

(b)

Unfunded

AAL (UAAL)

(b-a)

Funded Ratio (a/b)

Covered Payroll

(c)

UAAL as a Percentage of

Covered Payroll ((b-a)/c)

1/1/2007 $ - $ 61,251 $ 61,251 0.0% $ 288,996 21.2% 1/1/2008 $ - $ 61,198 $ 61,198 0.0% $ 383,114 16.0% 1/1/2009 $ - $ 72,210 $ 72,210 0.0% $ 401,097 18.0% 1/1/2010 $ - $ 75,901 $ 75,901 0.0% $ 374,550 20.0%

Non-Major Special Revenue Funds Arena Reserve – This fund is a holding fund for various finance plan revenues to be used for future costs relating to the acquisition and capital maintenance of the downtown sports, entertainment and health complex. Board of Estimate and Taxation – This fund is used to account for the operations of the Board of Estimate and Taxation which issues and sells bonds, and establishes the maximum levies for the City, its Boards and Commissions. HUD Consolidated Plan – This fund (previously reported as the Community Development Block Grant Fund) accounts for federal formula-based grants received from the U.S. Department of Housing & Urban Development’s Community Planning and Development Office. Convention Facilities Reserve – This fund accounts for the ownership, maintenance, and operation of the Minneapolis Convention Center and the proceeds of the local sales and use taxes. Downtown Improvement District – This fund accounts for the special assessments that are collected to fund the downtown improvement district. Employee Retirement – This fund is used to account for the activities of the three closed retirement funds of the City including the Minneapolis Employees Retirement Fund, the Minneapolis Firefighter’s Relief Association and the Minneapolis Police Relief Association. Grants – Federal – This fund is used to account for all federal grants, except for those included in the HUD Consolidated Plan Fund. Grants-Other – This fund is used to account for grants received from the State of Minnesota, Hennepin County, local governmental units and private sources. Police – This fund is used to account for the revenues and expenditures related to federal and state administrative forfeitures, lawful gambling, and the automated pawn system. Non-Major Debt Service Funds Community Planning and Economic Development – This fund is used to account for the debt service activity of Community Planning and Economic Development. It includes the Arena Acquisition Project (Target Center) Series A and B bonds, Tax Increment Bonds of 1990, debt of the Orpheum Theatre project and tax Increment Revenue Notes. General Debt Service – This fund is used to account for General Obligation Bonds supported by a property tax levy, Business Information System debt supported by the General Fund, Great River Road, and Edison Hockey Bonds, Community Health, Excel Revenue and Section 108 HUD Notes.

GOVERNMENTAL FUNDS CITY OF MINNEAPOLIS, MINNESOTA BALANCE SHEET - NONMAJOR FUNDS December 31, 2010 (In Thousands)

Total Nonmajor

Special Revenue Debt Service Governmental ASSETS

Cash and cash equivalents 19,306$ 48,328$ 67,634$ Deposits with fiscal agents 243 - 243 Investments with trustees 1 3,218 3,219 Receivables: Accounts - net 879 - 879

Taxes 238 670 908 Special assessments 1,375 - 1,375 Intergovernmental 23,008 - 23,008 Notes 104 - 104 Accrued interest 41 144 185

Due from other funds 12,127 - 12,127 Land held for development 9,537 - 9,537

Total assets 66,859$ 52,360$ 119,219$

LIABILITIES and

FUND BALANCES

Liabilities:

Salaries payable 438$ -$ 438$ Accounts payable 6,039 18 6,057 Intergovernmental payable 47 - 47 Due to other funds 13,856 - 13,856 Due to component units 146 - 146 Deferred Revenue - unavailable 1,349 469 1,818 Deferred Revenue - unearned 7,666 - 7,666

Total liabilities 29,541 487 30,028

Fund balances:

Reserved for: Reserved Land held for development 9,537 - 9,537 Encumbrances 8 - 8 Pension liability 10,092 - 10,092

Unreserved Designated for debt service - 51,873 51,873 Unreserved, reported in: Special Revenue Fund 17,681 - 17,681

Total fund balances 37,318 51,873 89,191

Total liabilities and fund balances 66,859$ 52,360$ 119,219$

GOVERNMENTAL FUNDS CITY OF MINNEAPOLIS, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR FUNDS For the Fiscal Year Ended December 31, 2010 (In Thousands)

Total

Nonmajor

Special Revenue Debt Service Governmental

REVENUES:

Taxes 15,749$ 25,345$ 41,094$

Licenses and permits 2,482 - 2,482

Intergovernmental revenues 96,451 23 96,474

Charges for services and sales 2,713 - 2,713

Fines and forfeits 1,109 - 1,109

Special assessments 11,732 - 11,732

Interest 290 409 699

Miscellaneous revenues 3,015 11,291 14,306

Total revenues 133,541 37,068 170,609

EXPENDITURES:

Current:

General government 12,978 -

12,978

Public safety 44,206 - 44,206

Public works 5,523 - 5,523

Health and welfare 10,509 - 10,509

Community & economic development 57,635 - 57,635

Debt Service:

Principal retirement - 65,067 65,067

Interest and fiscal charges - 13,573 13,573

Total expenditures 130,851 78,640 209,491

Excess (deficiency) of revenues

over (under) expenditures 2,690 (41,572) (38,882)

OTHER FINANCING SOURCES (USES):

Transfers from other funds 4,267 33,256 37,523

Transfers to other funds (2,947) (2,891) (5,838)

Premium (discount) - 986 986

Refunding bonds issued - 19,560 19,560

Total other financing sources (uses) 1,320 50,911 52,231

Net change in fund balance 4,010 9,339 13,349

Fund balances - January 1 33,308 42,534 75,842

Fund balances - December 31 37,318$ 51,873$ 89,191$

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DEBT SERVICE FUNDS CITY OF MINNEAPOLIS, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR FUNDS DECEMBER 31, 2010 (In Thousands)

Community Planning and General

Economic Debt 2010 2009 Development Service Total Total

ASSETS Cash and cash equivalents 195$ 48,133$ 48,328$ 37,957$ Investments with trustees 3,218 - 3,218 4,134 Receivables: Accounts - net - - - 2 Taxes: Current - 153 153 207 Delinquent - 517 517 448 Accrued Interest 4 140 144 177

Total assets 3,417$ 48,943$ 52,360$ 42,925$

LIABILITIES AND FUND BALANCES Liabilities: Accounts payable -$ 18$ 18$ 15$ Deferred revenue - unavailable - 469 469 376

Total liabilities - 487 487 391

Fund balances: Unreserved: Designated for debt service 3,417 48,456 51,873 42,534

Total liabilities and fund balances 3,417$ 48,943$ 52,360$ 42,925$

DEBT SERVICE FUNDS CITY OF MINNEAPOLIS, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR FUNDS For the Fiscal Year Ended December 31, 2010 (In Thousands)

Community Planning and General

Economic Debt 2010 2009 Development Service Total Total REVENUES: Taxes: General property tax -$ 23,171$ 23,171$ 27,788$ Fiscal disparities - 2,174 2,174 2,917

Total taxes - 25,345 25,345 30,705

Intergovernmental revenues - 23 23 592 Interest 5 404 409 701 Miscellaneous revenues: Rents and commissions - 10,412 10,412 653 Other - 879 879 8,165

Total miscellaneous revenues - 11,291 11,291 8,818

Total revenues 5 37,063 37,068 40,816

EXPENDITURES: Principal retirement on bonds 9,280 52,332 61,612 45,732 Principal retirement on notes 2,750 705 3,455 3,251 Interest and fiscal charges 2,242 11,331 13,573 39,759

Total expenditures 14,272 64,368 78,640 88,742

Excess (deficiency) of revenues over (under) expenditures (14,267) (27,305) (41,572) (47,926)

OTHER FINANCING SOURCES (USES): Transfers from other funds 14,856 18,400 33,256 46,802 Transfers to other funds (1,500) (1,391) (2,891) (2,803) Premium (Discount) - 986 986 - Refunding bonds issued - 19,560 19,560 -

Total other financing sources (uses) 13,356 37,555 50,911 43,999

Net change in fund balances (911) 10,250 9,339 (3,927)

Fund balances - January 1 4,328 38,206 42,534 46,461

Fund balances - December 31 3,417$ 48,456$ 51,873$ 42,534$

ARENA RESERVE SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Interest -$ -$ 14$ 14$ -$

CURRENT EXPENDITURES: General government - - - - 10 Community & economic development 1,935 3,693 1,766 1,927 -

Total expenditures 1,935 3,693 1,766 1,927 10

Excess (deficiency) of revenues over (under) expenditures (1,935) (3,693) (1,752) 1,941 (10)

OTHER FINANCING SOURCES (USES): Transfers from other funds 3,833 3,833 3,039 (794) 3,696 Transfers to other funds - - - - (5,325)

Total other financing sources (uses) 3,833 3,833 3,039 (794) (1,629)

Net change in fund balance 1,898 140 1,287 1,147 (1,639)

Fund balance - January 1 10 10 10 - 1,649

Fund balance - December 31 1,908$ 150$ 1,297$ 1,147$ 10$

Budgeted Amounts

BOARD OF ESTIMATE AND TAXATION SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes: General property tax 265$ 265$ 233$ (32)$ 218$ Fiscal disparities - - 37 37 34

Total taxes 265 265 270 5 252

Intergovernmental revenues: State grants and shared revenues - - - - 7

Miscellaneous revenues: Other - - 6 6 -

Total revenues 265 265 276 11 259

CURRENT EXPENDITURES:

General government 345 195 171 24 297

Excess (deficiency) of revenues over (under) expenditures (80) 70 105 35 (38)

OTHER FINANCING SOURCES (USES): Transfers from other funds 80 80 78 (2) 94 Transfers to other funds - (150) (149) 1 -

Total other financing sources (uses) 80 (70) (71) (1) 94

Net change in fund balance - - 34 34 56

Fund balance - January 1 261 261 261 - 205

Fund balance - December 31 261$ 261$ 295$ 34$ 261$

Budgeted Amount

HUD CONSOLIDATED PLAN CITY OF MINNEAPOLIS, MINNESOTA SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Intergovernmental revenues: Federal grantor agencies 19,210$ 19,210$ 30,762$ 11,552$ 16,616$ Charges for services and sales 300 300 6 (294) 872 Special assessments - - 91 91 376 Interest - - 154 154 34 Miscellaneous revenues: Other 600 600 220 (380) 231

Total revenues 20,110 20,110 31,233 11,123 18,129

CURRENT EXPENDITURES: General government 2,164 2,782 2,687 95 2,239 Public safety 2,500 3,609 2,518 1,091 1,351 Public works - 385 254 131 87 Health and welfare 1,049 2,005 1,416 589 1,123 Community & economic development 14,097 24,358 23,974 384 12,599

Total expenditures 19,810 33,139 30,849 2,290 17,399

Excess (deficiency) of revenues over (under) expenditures 300 (13,029) 384 13,413 730

OTHER FINANCING SOURCES (USES): Transfers to other funds - - - - (1)

Net change in fund balance 300 (13,029) 384 13,413 729

Fund balance - January 1 6,050 6,050 6,050 - 5,321

Fund balance - December 31 6,350$ (6,979)$ 6,434$ 13,413$ 6,050$

Budgeted Amounts

100

CONVENTION FACILITIES RESERVE SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

OTHER FINANCING SOURCES (USES): Transfers from other funds 1,150$ 1,150$ 1,150$ -$ 1,150$ Transfers to other funds (1,000) (1,000) (1,000) - (1,000)

Total other financing sources (uses) 150 150 150 - 150

Net change in fund balance 150 150 150 - 150

Fund balance - January 1 5,950 5,950 5,950 - 5,800

Fund balance - December 31 6,100$ 6,100$ 6,100$ -$ 5,950$

Budgeted Amounts

101

DOWNTOWN IMPROVEMENT DISTRICT SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Special assessments 5,789$ 5,789$ 6,407$ 618$ 1,199$ Miscellaneous revenues: Other - - 199 199 1,417

Total revenues 5,789 5,789 6,606 817 2,616

CURRENT EXPENDITURES: General government 5,789 5,789 5,755 34 2,885

Net change in fund balance - - 851 851 (269)

Fund balance - January 1 (269) (269) (269) - -

Fund balance - December 31 (269)$ (269)$ 582$ 851$ (269)$

Budgeted Amounts

102

EMPLOYEE RETIREMENT SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes: General property tax 4,806$ 4,806$ 13,196$ 8,390$ 6,026$ Property tax increment - - 22 22 9 Fiscal disparities - - 2,092 2,092 936 Other taxes - - 2 2 -

Total taxes 4,806 4,806 15,312 10,506 6,971

Intergovernmental revenues: State grants and shared revenues 5,578 5,578 4,744 (834) 4,530 Fines and forfeits - - - - 330 Interest - - 117 117 171 Miscellaneous revenues: Other 1,382 1,382 1,433 51 1,770

Total revenues 11,766 11,766 21,606 9,840 13,772

CURRENT EXPENDITURES: General government 14,231 3,532 3,532 - 3,327 Public safety - 18,639 18,639 - 8,679

Total expenditures 14,231 22,171 22,171 - 12,006

Excess (deficiency) of revenues over (under) expenditures (2,465) (10,405) (565) 9,840 1,766

OTHER FINANCING SOURCES (USES): Transfers to other funds (308) (308) (308) - (508)

Net change in fund balance (2,773) (10,713) (873) 9,840 1,258

Fund balance - January 1 10,965 10,965 10,965 - 9,707

Fund balance - December 31 8,192$ 252$ 10,092$ 9,840$ 10,965$

Budgeted Amounts

103

GRANTS - FEDERAL SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Intergovernmental revenues: Federal grantor agencies 20,015$ 54,015$ 39,673$ (14,342)$ 23,529$ Charges for services and sales - - - - 307 Interest - - 5 5 10 Miscellaneous revenues: Loan recapture - - 17 17 51 Other - - - - 33

Total miscellaneous revenues - - 17 17 84

Total revenues 20,015 54,015 39,695 (14,320) 23,930

CURRENT EXPENDITURES: General government 626 959 587 372 430 Public safety 10,490 14,232 10,748 3,484 9,541 Public works - 3,613 4,019 (406) 2,215 Health and welfare 3,360 6,655 4,250 2,405 4,641 Community & economic development 5,456 31,923 18,699 13,224 6,700

Total expenditures 19,932 57,382 38,303 19,079 23,527

Excess (deficiency) of revenues over (under) expenditures 83 (3,367) 1,392 4,759 403

OTHER FINANCING SOURCES (USES): Transfers to other funds (55) (55) (790) (735) (99)

Net change in fund balance 28 (3,422) 602 4,024 304

Fund balance - January 1 304 304 304 - -

Fund balance - December 31 332$ (3,118)$ 906$ 4,024$ 304$

Budgeted Amounts

104

GRANTS - OTHER SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes: Other taxes 20$ 20$ 23$ 3$ 61$ Licenses and Permits 612 1,956 1,577 (379) 464 Intergovernmental revenues: State grants and shared revenues 8,589 14,918 18,742 3,824 11,884 Other local grants 232 1,079 2,530 1,451 1,763

Total intergovernmental revenues 8,821 15,997 21,272 5,275 13,647

Charges for services 470 649 719 70 629 Fines and forfeits 15 15 220 205 177 Special assessments 3,894 3,894 5,234 1,340 6,349 Interest - - - - 3 Miscellaneous revenues: Private contributions 872 1,325 1,059 (266) 1,074 Other 48 48 69 21 33

Total miscellaneous revenues 920 1,373 1,128 (245) 1,107

Total revenues 14,752 23,904 30,173 6,269 22,437

CURRENT EXPENDITURES: General government 35 371 246 125 99 Public safety 6,651 10,044 8,639 1,405 5,230 Public works - 2,000 1,250 750 2 Health and welfare 4,486 4,897 4,843 54 3,725 Community & economic development 2,500 9,167 13,196 (4,029) 7,404

Total expenditures 13,672 26,479 28,174 (1,695) 16,460

Excess (deficiency) of revenues over (under) expenditures 1,080 (2,575) 1,999 4,574 5,977

OTHER FINANCING SOURCES (USES): Transfers to other funds (700) (700) (700) - (700)

Net change in fund balance 380 (3,275) 1,299 4,574 5,277

Fund balance - January 1 8,587 8,587 8,587 - 3,310

Fund balance - December 31 8,967$ 5,312$ 9,886$ 4,574$ 8,587$

Budgeted Amounts

105

POLICE SPECIAL REVENUE FUND CITY OF MINNEAPOLIS, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Fiscal Year Ended December 31, 2010 (In Thousands)

2010

2009 Original Final Actual Variance Actual

REVENUES: Taxes: Lawful gambling 122$ 122$ 144$ 22$ 142$ Licenses and permits 541 541 905 364 974 Intergovernmental revenues: State grants and shared revenues - - - - 7 Charges for services and sales 2,153 2,872 1,988 (884) 1,907 Fines and forfeits 416 416 889 473 585 Miscellaneous revenues: Other - - 12 12 58

Total revenues 3,232 3,951 3,938 (13) 3,673

CURRENT EXPENDITURES: Public safety 3,275 4,081 3,662 419 3,328

Net change in fund balance (43) (130) 276 406 345

Fund balance - January 1 1,450 1,450 1,450 - 1,105

Fund balance - December 31 1,407$ 1,320$ 1,726$ 406$ 1,450$

Budgeted Amounts

106

INTERNAL SERVICE FUNDS CITY OF MINNEAPOLIS, MINNESOTA COMBINING STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

Engineering Inter- Materials & governmental Property Equipment Public Works Self- 2010 2009

Testing Services Services Services Stores Insurance Total Total ASSETS Current assets: Cash and cash equivalents 802$ 8,438$ 126$ 8,235$ 9$ 41,245$ 58,855$ 28,804$ Receivables: Accounts - net 9 2 86 20 1 15 133 178 Intergovernmental - - - 252 - 182 434 384 Notes - 6,557 - - - - 6,557 7,604 Due from other funds - - - - - 835 835 4,184 Inventories - - 14 1,007 4,548 - 5,569 5,810 Properties held for resale - - - - - 433 433 433 Prepaid items - 527 - - - 667 1,194 147

Total current assets 811 15,524 226 9,514 4,558 43,377 74,010 47,544

Long-term assets:

Deferred charges - 75 33 120 - - 228 117 Capital assets:

Land, leaseholds and easements - - 21,117 2,186 - - 23,303 23,303 Construction in progress - 12,141 17 243 - - 12,401 7,855 Buildings and structures - - 25,588 30,061 - - 55,649 55,649 Less accumulated depreciation - - (20,316) (6,636) - - (26,952) (26,076) Public improvements - - 2,726 330 - - 3,056 3,056 Less accumulated depreciation - - (2,590) (203) - - (2,793) (2,731) Machinery and equipment 287 1,652 12,586 65,479 132 - 80,136 81,068 Less accumulated depreciation (275) (1,496) (5,593) (41,084) (132) - (48,580) (44,884) Computer equipment 61 60,508 162 37 7 - 60,775 60,380 Less accumulated depreciation (61) (49,777) (162) (37) (7) - (50,044) (46,080) Software - 45,263 8 - 9 - 45,280 43,360 Less accumulated depreciation - (22,214) (8) - (9) - (22,231) (15,208) Other capital outlay 15 - 21 - 14 - 50 50 Less accumulated depreciation (15) - (21) - (14) - (50) (50)

Total long-term assets 12 46,152 33,568 50,496 - - 130,228 139,809

Total assets 823$ 61,676$ 33,794$ 60,010$ 4,558$ 43,377$ 204,238$ 187,353$

LIABILITIES AND NET ASSETS Current liabilities: Salaries payable 14$ 134$ 153$ 265$ 13$ 204$ 783$ 1,135$ Accounts payable 18 1,180 598 1,264 413 1,834 5,307 3,162 Intergovernmental payable - 7 9 2 18 - 36 22 Due to other funds - - - - 835 - 835 2,548 Interest payable - 57 16 70 - - 143 212 Unearned revenue 1 11,739 - - - 157 11,897 5,854 Bonds payable-current portion - 9,025 695 2,155 - - 11,875 11,305 Compensated absences payable- current portion 9 99 92 172 8 83 463 691

Total current liabilities 42 22,241 1,563 3,928 1,287 2,278 31,339 24,929

Long-term liabilities: Bonds payable - 11,055 5,475 23,535 - - 40,065 49,540 Unamortized premium (discounts) - 894 285 1,027 - - 2,206 2,032 Advances from other funds - 10,114 - - - - 10,114 10,114 Compensated absences payable 21 230 215 400 19 193 1,078 1,614 Other postemployment benefits 26 239 265 512 28 202 1,272 915 Unpaid claims payable - - - - - 47,292 47,292 42,513

Total long-term liabilities 47 22,532 6,240 25,474 47 47,687 102,027 106,728

Total liabilities 89 44,773 7,803 29,402 1,334 49,965 133,366 131,657

Net Assets: Invested in capital assets, net of related debt 12 26,122 27,080 23,659 - - 76,873 76,815 Unrestricted 722 (9,219) (1,089) 6,949 3,224 (6,588) (6,001) (21,119)

Total net assets 734 16,903 25,991 30,608 3,224 (6,588) 70,872 55,696

Total liabilities and net assets 823$ 61,676$ 33,794$ 60,010$ 4,558$ 43,377$ 204,238$ 187,353$

107

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INTERNAL SERVICE FUNDS CITY OF MINNEAPOLIS, MINNESOTA COMBINING STATEMENT OF CASH FLOWS For the Fiscal Year Ended December 31, 2010 (In Thousands)

Engineering Inter- Public Materials and governmental Property Equipment Works Self- 2010 2009

Testing Services Services Services Stores Insurance Total Total Cash flows from operating activities: Cash received from customers and users 1,556$ 38,476$ 18,962$ 33,603$ 1,246$ 26,307$ 120,150$ 117,642$ Payments to suppliers (489) (22,084) (10,726) (10,572) (464) (16,580) (60,915) (69,156) Payments to employees (768) (7,097) (7,860) (14,712) (745) (11,290) (42,472) (44,269) Other non-operating revenue - - 122 136 1 5,629 5,888 5,843

Net Cash Provided (used) by operating Activities 299 9,295 498 8,455 38 4,066 22,651 10,060

Cash flows from non-capital financing activities:

Transfers from other funds - 12,245 951 4,180 - 10,810 28,186 27,865 Transfers to other funds (57) (395) (925) (581) (33) (140) (2,131) (1,113) Net cash provided (used) by non-capital financing activities (57) 11,850 26 3,599 (33) 10,670 26,055 26,752

Cash flows from capital and related financing activities Bonds issued - 2,407 - 22,230 - - 24,637 1,115 Refunding bonds issued - 4,560 6,825 - - - 11,385 16,800 Principal paid on bonds - (13,127) (7,480) (24,320) - - (44,927) (28,735) Interest paid on bonds - (1,222) (356) (2,313) - - (3,891) (3,405) Premium (discount) - 355 303 833 - - 1,491 852 Acquisition and construction of capital assets - (7,276) (10) (1,688) - - (8,974) (11,953) Bond issuance costs - (25) - (107) - - (132) (60) Proceeds from sale of capital assets - (78) (33) 169 - - 58 325 Net cash provided (used) by capital and related financing activities - (14,406) (751) (5,196) - - (20,353) (25,061)

Net increase (decrease) in cash and cash equivalents 242 6,739 (227) 6,858 5 14,736 28,353 11,751

Cash and cash equivalents, beginning of year 560 1,699 353 1,377 4 26,509 30,502 17,053

Cash and cash equivalents, end of year 802$ 8,438$ 126$ 8,235$ 9$ 41,245$ 58,855$ 28,804$

Reconciliation of operating cash provided (used) Operating income (loss) 301$ Adjustment to reconcile provided (used) Depreciation 10 Accounts receivable (9) Intergovernmental receivable - Notes receivable - Inventories - Property held for resale - Prepaid items - Due from other funds - Salaries payable (4) Accounts payable 3 Due to other funds - Intergovernmental payable - Unearned revenue 1 Compensated absences payable (10) Other postemployment benefits 7 Unpaid claims - Damages/Losses recovered - Other non-operating revenue - Net cash provided (used) by operating activities 299$ income to net by operating activities (7,669)$ (1,184)$ 1,656$ 53$ (7,454)$ (14,297)$ (17,254)$ change in net assets to net cash by operating activities: 11,044 1,140 6,471 - - 18,665 15,714 58 (69) 34 30 1 45 (539) 51 106 (248) - 41 (50) (123) 1,047 - - - - 1,047 - - 4 (62) 298 - 240 1,225 - - - - - - (433) (527) - - - (520) (1,047) (104) - - - - 1,651 1,651 (685) (106) (66) (94) (7) (75) (352) (508) 330 501 632 401 278 2,145 (5,318) (916) - - (735) (62) (1,713) 68 2 4 2 6 - 14 (7) 6,042 - - - - 6,043 1,040 (125) (130) (225) (17) (257) (764) 7 64 70 153 8 55 357 382 - - - - 4,779 4,779 10,740 - - - - - - 12 - 122 136 1 5,629 5,888 5,843 9,295$ 498$ 8,455$ 38$ 4,066$ 22,651$ 10,060$

Non-cash investing, capital and financing activities: Gain (Loss) on disposal of capital assets -$ -$ -$ -$ -$ -$ -$ (40)$

109

ENGINEERING MATERIALS AND TESTING CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

2010 2009 ASSETS Current assets: Cash and cash equivalents 802$ 560$ Receivables: Accounts - net 9 -

Total current assets 811 560

Capital assets: Machinery and equipment 287 286 Less accumulated depreciation (275) (264) Computer equipment 61 61 Less accumulated depreciation (61) (61) Other capital outlay 15 15 Less accumulated depreciation (15) (15)

Total capital assets 12 22

Total assets 823$ 582$

LIABILITIES AND FUND EQUITY Current liabilities: Salaries payable 14$ 18$ Accounts payable 18 15 Unearned revenue 1 - Compensated absences payable-current portion 9 12

Total current liabilities 42 45

Long-term liabilities: Compensated absences payable 21 28 Other postemployment benefits 26 19

Total long-term liabilities 47 47

Total liabilities 89 92

Net Assets Invested in capital assets, net of related debt 12 22 Unrestricted 722 468

Total net assets 734 490

Total liabilities and net assets 823$ 582$

110

ENGINEERING MATERIALS AND TESTING CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Operating revenues: Charges for services and sales 1,563$ 1,590$

Operating expenses: Personnel costs 761 748 Contractual services 383 212 Materials, supplies, services and other 102 36 Rent 6 61 Depreciation 10 13

Total operating expenses 1,262 1,070

Operating income (loss) 301 520

Transfers in (out): Transfers to other funds (57) (58)

Change in net assets 244 462

Net assets - January 1 490 28

Net assets - December 31 734$ 490$

111

ENGINEERING MATERIALS AND TESTING CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF CASH FLOWS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Cash flows from operating activities: Cash received from customers and users 1,556$ 1,675$ Payments to suppliers (489) (303) Payments to employees (768) (757)

Net Cash Provided (used) by operating activities 299 615

Cash flows from non-capital financing activities: Transfers to other funds (57) (58)

Net increase (decrease) in cash and cash equivalents 242 557

Cash and cash equivalents, beginning of year 560 3

Cash and cash equivalents, end of year 802$ 560$

Reconciliation of operating income to net cash provided (used) by operating activities

Operating income (loss) 301$ 520$ Adjustment to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation 10 13 Accounts receivable (9) 214 Salaries payable (4) (17) Accounts payable 3 9 Due to other funds - (130) Intergovernmental payable - (1) Unearned revenue 1 - Compensated absences payable (10) - Other postemployment benefits 7 7

Net cash provided (used) by operating activities 299$ 615$

112

INTERGOVERNMENTAL SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

2010 2009 ASSETS Current assets: Cash and cash equivalents 8,438$ 1,699$ Receivables: Accounts - net 2 60 Intergovernmental - 51 Notes 6,557 7,604 Prepaid items 527 -

Total current assets 15,524 9,414

Deferred charges 75 77 Capital assets: Construction in progress 12,141 7,116 Machinery and equipment 1,652 1,828 Less accumulated depreciation (1,496) (1,551) Computer equipment 60,508 60,113 Less accumulated depreciation (49,777) (45,813) Software 45,263 43,343 Less accumulated depreciation (22,214) (15,191)

Total capital assets 46,077 49,845

Total assets 61,676$ 59,336$

LIABILITIES AND NET ASSETS Current liabilities: Salaries payable 134$ 240$ Accounts payable 1,180 850 Intergovernmental payable 7 5 Due to other funds - 916 Interest payable 57 78 Unearned revenue 11,739 5,697 Bonds payable-current portion 9,025 8,560 Compensated absences payable-current portion 99 136

Total current liabilities 22,241 16,482

Long-term liabilities: Bonds payable 11,055 17,680 Unamortized premium (discounts) 894 889 Advances from other funds 10,114 10,114 Compensated absences payable 230 318 Other postemployment benefits 239 175

Total long-term liabilities 22,532 29,176

Total liabilities 44,773 45,658

Net Assets: Invested in capital assets, net of related debt 26,122 22,716 Unrestricted (9,219) (9,038)

Total net assets 16,903 13,678

Total liabilities and net assets 61,676$ 59,336$

113

INTERGOVERNMENTAL SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Operating revenues: Charges for services and sales 31,275$ 32,258$

Operating expenses: Personnel costs 6,930 7,735 Contractual services 19,063 19,884 Materials, supplies, services and other 1,685 1,498 Rent 222 163 Depreciation 11,044 8,380

Total operating expenses 38,944 37,660

Operating income (loss) (7,669) (5,402)

Non-operating revenues (expenses): Interest expense (878) (1,527) Gain (loss) on disposal of capital assets (78) (99)

Total non-operating revenues (expenses) (956) (1,626)

Income (loss) before transfers (8,625) (7,028)

Transfers in (out): Transfers from other funds 12,245 16,115 Transfers to other funds (395) (277)

Total transfers 11,850 15,838

Change in net assets 3,225 8,810

Net assets - January 1 13,678 4,868

Net assets - December 31 16,903$ 13,678$

114

INTERGOVERNMENTAL SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF CASH FLOWS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Cash flows from operating activities: Cash received from customers and users 38,476$ 32,634$ Payments to suppliers (22,084) (24,980) Payments to employees (7,097) (7,739)

Net Cash Provided (used) by operating activities 9,295 (85)

Cash flows from non-capital financing activities: Transfers from other funds 12,245 16,115 Transfers to other funds (395) (277)

Net cash provided (used) by non-capital financing activities 11,850 15,838

Cash Flows from capital and related financing activities Bonds issued 2,407 1,115 Refunding bonds issued 4,560 16,800 Principal paid on bonds (13,127) (26,090) Interest paid on bonds (1,222) (1,691) Premium (discount) 355 852 Acquisition and construction of capital assets (7,276) (6,098) Bond issuance costs (25) (60) Proceeds from sale of capital assets (78) 6

Net cash provided (used) by capital and related financing activities (14,406) (15,166)

Net increase (decrease) in cash and cash equivalents 6,739 587

Cash and cash equivalents, beginning of year 1,699 1,112

Cash and cash equivalents, end of year 8,438$ 1,699$

Reconciliation of operating income to net cash provided (used) by operating activities

Operating income (loss) (7,669)$ (5,402)$ Adjustment to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation 11,044 8,380 Accounts receivable 58 (16) Notes Receivable 1,047 (706) Intergovernmental receivable 51 11 Prepaid items (527) 20 Salaries payable (106) (108) Accounts payable 330 (4,372) Due to other funds (916) 916 Intergovernmental payable 2 - Unearned revenue 6,042 1,088 Compensated absences payable (125) 35 Other postemployment benefits 64 69

Net cash provided (used) by operating activities 9,295$ (85)$

Non-cash investing, capital and financing activities: (Loss) on disposal of capital assets -$ (99)$

115

PROPERTY SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

2010 2009 ASSETS Current assets: Cash and cash equivalents 126$ 353$ Receivables: Accounts - net 86 17 Intergovernmental - 106 Inventories 14 19

Total current assets 226 495

Deferred charges 33 8 Capital assets: Land, leaseholds and easements 21,117 21,117 Construction in progress 17 7 Buildings and structures 25,588 25,588 Less accumulated depreciation (20,316) (20,043) Public improvements 2,726 2,726 Less accumulated depreciation (2,590) (2,547) Machinery and equipment 12,586 12,586 Less accumulated depreciation (5,593) (4,770) Computer equipment 162 162 Less accumulated depreciation (162) (162) Software 8 8 Less accumulated depreciation (8) (8) Other capital outlay 21 21 Less accumulated depreciation (21) (21)

Total capital assets 33,535 34,664

Total assets 33,794$ 35,167$

LIABILITIES AND NET ASSETS Current liabilities: Salaries payable 153$ 219$ Accounts payable 598 97 Intergovernmental payable 9 5 Interest payable 16 24 Bonds payable-current portion 695 655 Compensated absences payable-current portion 92 131

Total current liabilities 1,563 1,131

Long-term liabilities: Bonds payable 5,475 6,170 Unamortized premium (discounts) 285 155 Compensated absences payable 215 306 Other postemployment benefits 265 195

Total long-term liabilities 6,240 6,826

Total liabilities 7,803 7,957

Net Assets: Invested in capital assets, net of related debt 27,080 27,685 Unrestricted (1,089) (475)

Total net assets 25,991 27,210

Total liabilities and net assets 33,794$ 35,167$

116

PROPERTY SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Operating revenues: Charges for services and sales 6,493$ 8,227$ Rents and commissions 12,428 12,669

Total operating revenues 18,921 20,896

Operating expenses: Personnel costs 7,734 8,079 Contractual services 10,052 10,839 Materials, supplies, services and other 1,179 1,508 Depreciation 1,140 1,156

Total operating expenses 20,105 21,582

Operating income (loss) (1,184) (686)

Non-operating revenues (expenses): Interest expense (183) (287) Other revenues 122 189

Total non-operating revenues (expenses) (61) (98)

Income (loss) before transfers (1,245) (784)

Transfers in (out): Transfers from other funds 951 655 Transfers to other funds (925) (97)

Total transfers 26 558

Change in net assets (1,219) (226)

Net assets - January 1 27,210 27,436

Net assets - December 31 25,991$ 27,210$

117

PROPERTY SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF CASH FLOWS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Cash flows from operating activities: Cash received from customers and users 18,962$ 20,844$ Payments to suppliers (10,726) (12,390) Payments to employees (7,860) (8,142) Other non-operating revenue 122 189

Net Cash Provided (used) by operating activities 498 501

Cash flows from non-capital financing activities: Transfers from other funds 951 655 Transfers to other funds (925) (97)

Net cash provided (used) by non-capital financing activities 26 558

Cash Flows from capital and related financing activities Refunding bonds issued 6,825 - Principal paid on bonds (7,480) (590) Interest paid on bonds (356) (307) Acquisition and construction of capital assets (10) (401) Premium (discount) 303 - Bond issuance costs (33) -

Net cash provided (used) by capital and related financing activities (751) (1,298)

Net increase (decrease) in cash and cash equivalents (227) (239)

Cash and cash equivalents, beginning of year 353 592

Cash and cash equivalents, end of year 126$ 353$

Reconciliation of operating income to net cash provided (used) by operating activities Operating income (loss) (1,184)$ (686)$ Adjustment to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation 1,140 1,156 Accounts receivable (69) 1 Intergovernmental receivable 106 (106) Inventories 4 408 Due from other funds - 60 Salaries payable (66) (118) Accounts payable 501 (451) Intergovernmental payable 4 (7) Compensated absences payable (130) (21) Other postemployment benefits 70 76 Other non-operating revenues 122 189

Net cash provided (used) by operating activities 498$ 501$

118

EQUIPMENT SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

2010 2009 ASSETS Current assets: Cash and cash equivalents 8,235$ 1,377$ Receivables: Accounts - net 20 54 Intergovernmental 252 4 Inventories 1,007 945

Total current assets 9,514 2,380

Deferred charges 120 32 Capital assets: Land, leaseholds and easements 2,186 2,186 Construction in progress 243 732 Buildings and structures 30,061 30,061 Less accumulated depreciation (6,636) (6,033) Public improvements 330 330 Less accumulated depreciation (203) (184) Machinery and equipment 65,479 66,236 Less accumulated depreciation (41,084) (38,167) Computer equipment 37 37 Less accumulated depreciation (37) (37)

Total capital assets 50,376 55,161

Total assets 60,010$ 57,573$

LIABILITIES AND NET ASSETS Current liabilities: Salaries payable 265$ 359$ Accounts payable 1,264 632 Intergovernmental payable 2 - Interest payable 70 110 Bonds payable-current portion 2,155 2,090 Compensated absences payable-current portion 172 239

Total current liabilities 3,928 3,430

Long-term liabilities: Bonds payable 23,535 25,690 Unamortized premium (discounts) 1,027 988 Compensated absences payable 400 558 Other postemployment benefits 512 359

Total long-term liabilities 25,474 27,595

Total liabilities 29,402 31,025

Net Assets: Invested in capital assets, net of related debt 23,659 26,392 Unrestricted 6,949 156

Total net assets 30,608 26,548

Total liabilities and net assets 60,010$ 57,573$

119

EQUIPMENT SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Operating revenues: Charges for services and sales 11,436$ 10,882$ Rents and commissions 22,378 20,781

Total operating revenues 33,814 31,663

Operating expenses: Personnel costs 14,547 14,727 Contractual services 3,226 3,525 Materials, supplies, services and other 6,811 5,955 Rent 1,103 1,072 Depreciation 6,471 6,165

Total operating expenses 32,158 31,444

Operating income (loss) 1,656 219

Non-operating revenues (expenses): Interest expense (1,500) (1,311) Gain (loss) on disposal of capital assets 169 59 Damages/losses recovered - 12 Other revenues 136 107

Total non-operating revenues (expenses) (1,195) (1,133)

Income (loss) before transfers 461 (914)

Transfers in (out): Transfers from other funds 4,180 4,180 Transfers to other funds (581) (502)

Total transfers 3,599 3,678

Change in net assets 4,060 2,764

Net assets - January 1 26,548 23,784

Net assets - December 31 30,608$ 26,548$

120

EQUIPMENT SERVICES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF CASH FLOWS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Cash flows from operating activities: Cash received from customers and users 33,603$ 31,673$ Payments to suppliers (10,572) (10,706) Payments to employees (14,712) (14,789) Other non-operating revenues 136 107

Net Cash Provided (used) by operating activities 8,455 6,285

Cash flows from non-capital financing activities: Transfers from other funds 4,180 4,180 Transfers to other funds (581) (502)

Net cash provided (used) by non-capital financing activities 3,599 3,678

Cash Flows from capital and related financing activities Bonds issued 22,230 - Principal paid on bonds (24,320) (2,055) Interest paid on bonds (2,313) (1,407) Premium (discount) 833 - Acquisition and construction of capital assets (1,688) (5,454) Bond issuance costs (107) - Proceeds from sale of capital assets 169 319

Net cash provided (used) by capital and related financing activities (5,196) (8,597)

Net increase (decrease) in cash and cash equivalents 6,858 1,366

Cash and cash equivalents, beginning of year 1,377 11

Cash and cash equivalents, end of year 8,235$ 1,377$

Reconciliation of operating income to net cash provided (used) by operating activities

Operating income (loss) 1,656$ 219$ Adjustment to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation 6,471 6,165 Accounts receivable 34 (3) Intergovernmental receivable (248) 7 Inventories (62) 242 Salaries payable (94) (232) Accounts payable 632 (336) Due to other funds - (60) Intergovernmental payable 2 (6) Compensated absences payable (225) 6 Other postemployment benefits 153 164 Damages/Losses recovered - 12 Other non-operating revenues 136 107

Net cash provided (used) by operating activities 8,455$ 6,285$

Non-cash investing, capital and financing activities: (Loss) on disposal of capital assets -$ 59$

121

PUBLIC WORKS STORES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

2010 2009 ASSETS Current assets: Cash and cash equivalents 9$ 4$ Receivables: Accounts - net 1 31 Inventories 4,548 4,846

Total current assets 4,558 4,881

Capital assets: Machinery and equipment 132 132 Less accumulated depreciation (132) (132) Computer equipment 7 7 Less accumulated depreciation (7) (7) Software 9 9 Less accumulated depreciation (9) (9) Other capital outlay 14 14 Less accumulated depreciation (14) (14)

Total capital assets - -

Total assets 4,558$ 4,881$

LIABILITIES AND NET ASSETS Current liabilities: Salaries payable 13$ 20$ Accounts payable 413 12 Intergovernmental payable 18 12 Due to other funds 835 1,570 Compensated absences payable-current portion 8 13

Total current liabilities 1,287 1,627

Long-term liabilities: Compensated absences payable 19 31 Other postemployment benefits 28 20

Total long-term liabilities 47 51

Total liabilities 1,334 1,678

Net Assets: Unrestricted 3,224 3,203

Total liabilities and net assets 4,558$ 4,881$

122

PUBLIC WORKS STORES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Operating revenues: Charges for services and sales 1,211$ 1,555$

Operating expenses: Personnel costs 730 811 Contractual services 333 308 Materials, supplies, services and other 52 55 Rent 43 34

Total operating expenses 1,158 1,208

Operating income (loss) 53 347

Non-operating revenues (expenses): Other revenues 1 5

Income (loss) before transfers 54 352

Transfers in (out): Transfers to other funds (33) (34)

Change in net assets 21 318

Net assets - January 1 3,203 2,885

Net assets - December 31 3,224$ 3,203$

123

PUBLIC WORKS STORES CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF CASH FLOWS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Cash flows from operating activities: Cash received from customers and users 1,246$ 1,548$ Payments to suppliers (464) (703) Payments to employees (745) (818) Other non-operating revenue 1 5

Net Cash Provided (used) by operating activities 38 32

Cash flows from non-capital financing activities: Transfers to other funds (33) (34)

Net increase (decrease) in cash and cash equivalents 5 (2)

Cash and cash equivalents, beginning of year 4 6

Cash and cash equivalents, end of year 9$ 4$

Reconciliation of operating income to net cash provided (used) by operating activities

Operating income (loss) 53$ 347$ Adjustment to reconcile change in net assets to net cash provided (used) by operating activities: Accounts receivable 30 (18) Intergovernmental Receivable - 4 Inventories 298 575 Salaries payable (7) (16) Accounts payable 401 (161) Due to other funds (735) (720) Intergovernmental payable 6 7 Compensated absences payable (17) 1 Other postemployment benefits 8 8 Other non-operating revenues 1 5

Net cash provided (used) by operating activities 38$ 32$

124

SELF-INSURANCE CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF NET ASSETS December 31, 2010 (In Thousands)

2010 2009 ASSETS Current assets: Cash and cash equivalents 41,245$ 26,509$ Receivables: Accounts - net 15 16 Intergovernmental 182 223 Due from other funds 835 2,486 Properties held for resale 433 433 Prepaid items 667 147

Total current assets 43,377 29,814

Total assets 43,377$ 29,814$

LIABILITIES AND NET ASSETS Current liabilities: Salaries payable 204$ 279$ Accounts payable 1,834 1,556 Due to other funds - 62 Unearned revenue 157 157 Compensated absences payable-current portion 83 160

Total current liabilities 2,278 2,214

Long-term liabilities: Compensated absences payable 193 373 Other postemployment benefits 202 147 Unpaid claims payable 47,292 42,513

Total long-term liabilities 47,687 43,033

Total liabilities 49,965 45,247

Net Assets: Unrestricted (6,588) (15,433)

Total liabilities and net assets 43,377$ 29,814$

125

SELF-INSURANCE CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Operating revenues: Charges for services and sales 24,615$ 30,110$

Operating expenses: Personnel costs 11,012 12,050 Contractual services 14,440 18,409 Materials, supplies, services and other 6,435 11,596 Rent 182 307

Total operating expenses 32,069 42,362

Operating income (loss) (7,454) (12,252)

Non-operating revenues (expenses): Other revenues 5,629 5,542

Income (loss) before transfers (1,825) (6,710)

Transfers in (out): Transfers from other funds 10,810 6,915 Transfers to other funds (140) (145)

Total transfers 10,670 6,770

Change in net assets 8,845 60

Net assets - January 1 (15,433) (15,493)

Net assets - December 31 (6,588)$ (15,433)$

126

SELF-INSURANCE CITY OF MINNEAPOLIS, MINNESOTA INTERNAL SERVICE FUND STATEMENT OF CASH FLOWS For the fiscal year ended December 31, 2010 (In Thousands)

2010 2009 Cash flows from operating activities: Cash received from customers and users 26,307$ 29,948$ Payments to suppliers (16,580) (20,074) Payments to employees (11,290) (12,024) Other non-operating revenue 5,629 5,542

Net Cash Provided (used) by operating Activities 4,066 3,392

Cash flows from non-capital financing activities: Transfers from other funds 10,810 6,915 Transfers to other funds (140) (145)

Net cash provided (used) by non-capital financing activities 10,670 6,770

Net increase (decrease) in cash and cash equivalents 14,736 10,162

Cash and cash equivalents, beginning of year 26,509 16,347

Cash and cash equivalents, end of year 41,245$ 26,509$

Reconciliation of operating income to net cash provided (used) by operating activities

Operating income (loss) (7,454)$ (12,252)$ Adjustment to reconcile change in net assets to net cash provided (used) by operating activities: Accounts receivable 1 (10) Intergovernmental Receivable 41 (39) Property held for resale - (433) Prepaid items (520) (124) Due from other funds 1,651 (66) Salaries payable (75) (17) Accounts payable 278 (7) Due to other funds (62) 62 Unearned revenue - (48) Compensated absences payable (257) (14) Other postemployment benefits 55 58 Unpaid claims 4,779 10,740 Other non-operating revenues 5,629 5,542

Net cash provided (used) by operating activities 4,066$ 3,392$

127

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128

FIDUCIARY FUNDS CITY OF MINNEAPOLIS, MINNESOTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the fiscal year ended December 31, 2010 (In Thousands)

Balance Balance January 1, December 31,

2010 Additions Deductions 2010 MINNEAPOLIS AGENCY Assets: Cash and cash equivalents 39$ 100,764$ 100,772$ 31$ Receivables: Accounts-net 2,361 1,379 2,471 1,269

Total assets 2,400 102,143 103,243 1,300

Liabilities: Intergovernmental payable 2,400 1,300 2,400 1,300

SKYWAY DEBT SERVICE Assets: Cash and cash equivalents 122 - - 122

Liabilities: Deposits held for others 122 - - 122

YOUTH COORDINATING BOARD Assets: Cash and cash equivalents 2,113 9,574 10,134 1,553 Receivables: Accounts-net 618 706 1,233 91

Total assets 2,731 10,280 11,367 1,644

Liabilities: Accounts payable 2,731 10,280 11,367 1,644

NEIGBORHOOD REVITALIZATION PROGRAM BOARD Assets: Cash and cash equivalents 994 1,394 1,699 689 Receivables: Accounts-net 41 55 5 91

Total assets 1,035 1,449 1,704 780

Liabilities: Accounts payable 1,035 1,449 1,704 780

MINNEAPOLIS PUBLIC HOUSING AUTHORITY Assets: Cash and cash equivalents 956 23,089 24,010 35 Receivables: Accounts-net 1,559 614 1,559 614

Total assets 2,515 23,703 25,569 649

Liabilities: Accounts payable 1,415 - 1,415 - Intergovernmental payable 1,100 649 1,100 649

Total liabilities 2,515 649 2,515 649

129

FIDUCIARY FUNDS CITY OF MINNEAPOLIS, MINNESOTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS (Continued) For the fiscal year ended December 31, 2010 (In Thousands)

Balance Balance

January 1, December 31, 2010 Additions Deductions 2010

JOINT BOARD Assets: Cash and cash equivalents 126 43 75 94 Receivables: Accounts-net 65 3 - 68

Total assets 191 46 75 162

Liabilities: Accounts payable 191 46 75 162

TOTAL ALL AGENCY FUNDS Assets: Cash and cash equivalents 4,350 134,864 136,690 2,524 Receivables: Accounts-net 4,644 2,757 5,268 2,133

Total assets 8,994 137,621 141,958 4,657

Liabilities: Accounts payable 5,372 11,775 14,561 2,586 Intergovernmental payable 3,500 1,949 3,500 1,949 Deposits held for others 122 - - 122

Total liabilities 8,994$ 13,724$ 18,061$ 4,657$

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42 0,

90 7

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138

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139

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CITY OF MINNEAPOLIS, MINNESOTA

ALL FUND TYPES

For the fiscal year ended December 31, 2010 (In Thousands)

Federal Grantor Federal Pass-Through Agency CFDA Grant Program Title Number

U.S. Department of Treasury Passed Through Minnesota Housing Finance Agency Tax Credit Exchange 1602 Program Funds - ARRA Not Assigned $ 2,559

U.S. Department of Housing and Urban Development Direct Community Development Block Grants/Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants 14.218 $ 22,814 Community Development Block Grants/Entitlement Grants - ARRA 14.253 1,478 Emergency Shelter Grants Program 14.231 670 HOME Investment Partnerships Program 14.239 3,596 Housing Opportunities for Persons with AIDS (HOPWA) 14.241 933 Empowerment Zones Program 14.244 450 Neighborhood Stabilization Program - ARRA 14.256 529 Homelessness Prevention and Rapid Re-Housing Program - ARRA 14.257 1,675 Healthy Homes Demonstration Grants 14.901 948 Lead Technical Studies Grants 14.902 105

Passed Through Minnesota Housing Finance Agency Community Development Block Grants/States Program and Non-Entitlement Grants in Hawaii 14.228 4,325 Tax Credit Assistance Program - ARRA 14.258 2,432

Passed Through Hennepin County Lead Based Paint Hazard Control in Privately-Owned Housing 14.900 61 Lead Hazard Reduction Demonstration Grant Program 14.905 719

Total U.S. Department of Housing and Urban Development $ 40,735

U.S. Department of the Interior - National Park Service Passed Through Minnesota Historical Society Historic Preservation Fund Grants-In-Aid 15.904 $ 23

U.S. Department of Justice Direct National Institute of Justice Research, Evaluation, and Development Project Grants 16.560 $ 154 Grants to Encourage Arrest Policies and Enforcement of Protection Orders 16.590 404 Public Safety Partnership and Community Policing Grants Cluster Public Safety Partnership and Community Policing Grants 16.710 197 Public Safety Partnership and Community Policing Grants - ARRA 16.710 873 Gang Resistance Education and Training 16.737 96 Edward Byrne Memorial Competitive Grant Program - ARRA 16.808 168

Expenditures

The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.

140

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CITY OF MINNEAPOLIS, MINNESOTA

ALL FUND TYPES

For the fiscal year ended December 31, 2010 (In Thousands)

Federal Grantor Federal Pass-Through Agency CFDA Grant Program Title Number Expenditures

U.S. Department of Justice (Continued) Passed Through Minnesota Department of Public Safety Juvenile Justice and Delinquency Prevention-Allocation to States 16.540 41 Enforcing Underage Drinking Laws Program 16.727 4 Edward Byrne Memorial Justice Assistance Grant (JAG) Program/Grants to States and Territories - ARRA 16.803 246

Passed Through the City of St. Paul Missing Children's Assistance 16.543 15

Passed Through Fox Valley Technical College Edward Byrne Memorial State and Local Law Enforcement Assistance Discretionary Grants Program 16.580 108

Passed Through Hennepin County Edward Byrne Memorial Justice Assistance (JAG) Grant Program 16.738 518 Edward Byrne Memorial Justice Assistance Grant (JAG) Program/Grants to Units of Local Government - ARRA 16.804 562

Total U.S. Department of Justice $ 3,386

U.S. Department of Labor Direct Workforce Investment Act Pilots, Demonstrations, and Research Projects 17.261 $ 35 Program of Competitive Grants for Worker Training and Placement in High Growth and Emerging Industry Sectors - ARRA 17.275 1,404

Passed Through Minnesota Department of Employment and Economic Development Workforce Investment Act (WIA) Cluster WIA - Adult Program 17.258 654 WIA - Adult Program - ARRA 17.258 615 WIA - Youth Activities 17.259 1,141 WIA - Youth Activities - ARRA 17.259 667 WIA - Dislocated Workers 17.260 1,255 WIA - Dislocated Workers - ARRA 17.260 673

Total U.S. Department of Labor $ 6,444

The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.

141

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CITY OF MINNEAPOLIS, MINNESOTA

ALL FUND TYPES

For the fiscal year ended December 31, 2010 (In Thousands)

Federal Grantor Federal Pass-Through Agency CFDA Grant Program Title Number Expenditures

U.S. Department of Transportation Passed Through Metropolitan Council Federal Transit Cluster Federal Transit Capital Investment Grants 20.500 $ 1,360 Federal Transit Formula Grants 20.507 295

Passed Through Metropolitan Council Highway Planning and Construction 20.205 3

Passed Through Minnesota Department of Transportation Highway Planning and Construction Cluster Highway Planning and Construction 20.205 10,331 Highway Planning and Construction - ARRA 20.205 6,140

Passed Through Minnesota Department of Public Safety Highway Safety Cluster State and Community Highway Safety 20.600 13 Occupant Protection Incentive Grants 20.602 10 Safety Belt Performance Grants 20.609 3 Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 47

Total U.S. Department of Transportation $ 18,202

Equal Employment Opportunity Commission Direct Employment Discrimination - State and Local Fair Employment Practices Agency Contracts 30.002 $ 129

U.S. Environmental Protection Agency Direct Congressionally Mandated Projects 66.202 $ 661 Brownfields Assessment and Cleanup Cooperative Agreements 66.818 3

Passed Through Minnesota Public Facilities Authority Capitalization Grants for Drinking Water Cluster Capitalization Grants for Drinking Water State Revolving Funds 66.468 10,907 Capitalization Grants for Drinking Water State Revolving Funds - ARRA 66.468 2,197

Total U.S. Environmental Protection Agency $ 13,768

U.S. Department of Energy Direct Energy Efficiency and Conservation Block Grant Program (EECBG) - ARRA 81.128 $ 1,133

Passed Through Minnesota Department of Commerce State Energy Program - ARRA 81.041 12

Total U.S. Department of Energy $ 1,145

The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.

142

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CITY OF MINNEAPOLIS, MINNESOTA

ALL FUND TYPES

For the fiscal year ended December 31, 2010 (In Thousands)

Federal Grantor Federal Pass-Through Agency CFDA Grant Program Title Number Expenditures

U.S. Department of Health and Human Services Direct Maternal and Child Health Federal Consolidated Programs 93.110 $ 171 Healthy Start Initiative 93.926 857

Passed Through Hennepin County Temporary Assistance for Needy Families (TANF) 93.558 438

Passed Through Minnesota Department of Employment and Economic Development Temporary Assistance for Needy Families (TANF) - ARRA 93.558 441

Passed Through Minnesota Department of Health Public Health Emergency Preparedness 93.069 518 Childhood Lead Poisoning Prevention Projects-State and Local Childhood Lead Poisoining Prevention and Surveillance of Blood Lead Levels in Children 93.197 2 Centers for Disease Control and Prevention Investigations and Technical Assistance 93.283 412 Temporary Assistance for Needy Families (TANF) 93.558 855 Immunization - ARRA 93.712 17 Prevention and Wellness - Communities Putting Prevention to Work Funding Opportunities Announcement (FOA) - ARRA 93.724 163 Maternal and Child Health Services Block Grant to the States 93.994 843

Passed Through the University of Minnesota Innovations in Applied Public Health Research 93.061 1 National Community Centers of Excellence in Women's Health 93.290 1

Total U.S. Department of Health and Human Services $ 4,719

U.S. Department of Homeland Security Direct Assistance to Firefighters Grant 97.044 $ 120 Port Security Grant Program 97.056 1,443

Passed Through Minnesota Department of Public Safety Emergency Management Performance Grants 97.042 30 Port Security Grant Program 97.056 46 Homeland Security Grant Program 97.067 4,183 Buffer Zone Protection Program (BZPP) 97.078 132

Total U.S. Department of Homeland Security $ 5,954

Total Federal Awards $ 97,064

The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.

143

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CITY OF MINNEAPOLIS, MINNESOTA

For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands) 1. Reporting Entity The Schedule of Expenditures of Federal Awards presents the activities of federal award programs expended by the

City of Minneapolis. The City’s reporting entity is defined in Note 1 to basic financial statements. This schedule does not include $962 in federal awards expended by the Minneapolis Park and Recreation Board component unit, which had a separate single audit.

2. Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Minneapolis under programs of the federal government for the year ended December 31, 2010. The information in this schedule is presented in accordance with the requirements of Office of Management and Budget (OMB) Circular A- 133, Audits of States, Local Governments, and Non-Profit Organizations. Because the schedule presents only a selected portion of the operations of the City of Minneapolis, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the City of Minneapolis.

3. Summary of Significant Accounting Policies

Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass- through grant numbers were not assigned by the pass-through agencies.

4. Subrecipients

Of the expenditures presented in the schedule, the City of Minneapolis provided federal awards to subrecipients as follows:

CFDA

Number

Program Name

Amount Provided to

Subrecipients

14.218 Community Development Block Grants/Entitlement Grants $ 4,436 14.218 Community Development Block Grants/Entitlement Grants

– ARRA

41 14.241 Housing Opportunities for Persons with AIDS (HOPWA) 907 14.244 Empowerment Zones Program 449 14.257 Homelessness Prevention and Rapid Re-Housing Program -

ARRA

1,627 14.900 Lead Based Paint Hazard Control in Privately-Owned

Housing

49 14.905 Lead Hazard Reduction Demonstration Grant Program 59 15.904 Historic Preservation Fund Grants-In-Aid 23 16.590 Grants to Encourage Arrest Policies and Enforcement of

Protection Orders

166 16.540 Juvenile Justice and Delinquency Prevention Allocation to

the States

144

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CITY OF MINNEAPOLIS, MINNESOTA

For the fiscal year ended December 31, 2010 (Dollar Amounts Expressed in Thousands)

4. Subrecipients (Continued)

CFDA

Number

Program Name

Amount Provided to

Subrecipients

17.261 Workforce Investment Act Pilots, Demonstrations, and Research Projects

17.275 Program of Competitive Grants for Worker Training and Placement in High Growth and Emerging Industry Sectors - ARRA

755 17.258 Workforce Investment Act - Adult Program 375 17.258 Workforce Investment Act - Adult Program - ARRA 595 17.259 Workforce Investment Act - Youth Activities 794 17.259 Workforce Investment Act - Youth Activities - ARRA 585 17.260 Workforce Investment Act - Dislocated Workers 737 17.260 Workforce Investment Act - Dislocated Workers - ARRA 213 20.507 Federal Transit Formula Grants 295 81.128 Energy Efficiency and Conservation Block Grant Program

(EECBG) - ARRA

715 93.926 Healthy Start Initiative 380 93.558 Temporary Assistance for Needy Families (TANF) 305 93.558 Temporary Assistance for Needy Families (TANF) 441 93.069 Public Health Emergency Preparedness 38 93.283 Centers for Disease Control and Prevention Investigations

and Technical Assistance

45 93.558 Temporary Assistance for Needy Families (TANF) 780 93.724 Prevention and Wellness – Communities Putting Prevention

to Work Funding Opportunities Announcement (FOA) - ARRA

34 93.994 Maternal and Child Health Services Block Grant to the

States

486

Total $ 15,404 5. American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 (ARRA) requires recipients to clearly distinguish ARRA funds from non-ARRA funding. In the schedule, ARRA funds are denoted by the addition of ARRA to the program name.

145

MUNICIPAL BUILDING COMMISSION CITY OF MINNEAPOLIS, MINNESOTA BALANCE SHEET December 31, 2010 (In Thousands)

Capital General Projects

Fund Fund Total ASSETS

Cash and cash equivalents 1,138$ 188$ 1,326$ Receivables: Intergovernmental 526 263 789

Total assets 1,664$ 451$ 2,115$

LIABILITIES and FUND BALANCES Liabilities:

Salaries payable 76$ -$ 76$ Accounts payable 459 212 671 Intergovernmental payable 1 - 1 Deferred revenue - 99 99

Total liabilities 536 311 847

Fund balances: Reserved for:

Encumbrances 9 - 9 Unreserved, reported in

General Fund 1,119 - 1,119 Capital Project Fund - 140 140

Total fund balances 1,128 140 1,268

Total liabilities and fund balances 1,664$ 451$ 2,115$

146

MUNICIPAL BUILDING COMMISSION CITY OF MINNEAPOLIS, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the fiscal year ended December 31, 2010 (In Thousands)

Capital General Projects

Fund Fund Total REVENUES:

Intergovernmental revenues 146$ -$ 146$ Charges for services and sales 7,998 1,754 9,752 Miscellaneous revenues 170 1,005 1,175

Total revenues 8,314 2,759 11,073

EXPENDITURES: Current:

General government 8,150 - 8,150 Capital outlay - 3,004 3,004

Total expenditures 8,150 3,004 11,154

Net change in fund balance 164 (245) (81)

Fund balances - January 1 964 385 1,349

Fund balances - December 31 1,128$ 140$ 1,268$

147

THIS PAGE IS INTENTIONALLY BLANK

148

STATISTICAL SECTION

This part of the City of Minneapolis Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

Contents Page

Financial Trends 1 - 1 These tables contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity These tables contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.

Debt Capacity These tables present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.

Operation Information These tables contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.

149

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150

Schedule 2 City of Minneapolis Changes in Net Assets (In Thousands) Last 8 Fiscal Years

2003 2004 2005 2006 2007 2008 2009 2010 Expenses Governmental activities:

General government 123,139$ 75,530$ 68,095$ 67,780$ 57,519$ 79,609$ 72,276$ 120,378$ Public safety 168,976 202,334 215,366 221,160 226,050 232,210 244,134 263,806 Public works 68,296 20,691 28,909 52,267 80,315 50,523 94,752 73,848 Culture and recreation 26,346 49,968 48,744 15,851 5,279 29,607 13,483 13,861 Health and welfare 23,502 9,905 13,502 14,572 14,325 13,028 14,164 14,240 Community and economic development 107,061 105,676 133,037 116,369 118,066 122,936 110,344 146,439 Interest on long-term debt 44,014 56,283 34,383 89,147 40,691 36,405 28,753 26,152

Total govermental activities expenses 561,334$ 520,387$ 542,036$ 577,146$ 542,245$ 564,318$ 577,906$ 658,724$

Business-type activities: Sanitary sewer 56,746 53,690 26,880 36,710 37,696 38,057 32,892 35,233 Stormwater - - 25,898 23,815 24,459 24,027 24,856 26,273 Solid waste and recycling 23,568 26,007 24,500 26,554 26,570 26,514 23,641 27,804 Water works 46,757 50,683 46,292 53,209 52,983 56,310 51,751 55,980 Community and economic development 14,962 18,551 24,517 9,035 6,446 6,367 6,860 6,472 Municipal parking 62,832 67,195 56,676 60,097 58,714 50,833 51,929 49,920

Total business-type activities expenses 204,865$ 216,126$ 204,763$ 209,420$ 206,868$ 202,108$ 191,929$ 201,682$

Total primary government expenses 766,199$ 736,513$ 746,799$ 786,566$ 749,113$ 766,426$ 769,835$ 860,406$

Program Revenues Governmental activities:

Charges for services: General government 48,345$ 18,036$ 19,805$ 28,320$ 30,490$ 45,882$ 6,060$ 69,827$ Public saftey 6,498 36,073 38,002 43,889 34,486 37,525 42,511 41,805 Public works 4,419 2,059 5,169 8,461 10,239 11,670 22,112 22,567 Health and welfare 712 449 536 528 500 524 452 14 Community and economic development 7,915 35,243 44,447 35,595 30,169 30,470 29,416 27,601 Culture and recreation - - - - 2,252 - - -

Operating grants and contributions 65,751 52,288 85,301 68,894 84,926 100,095 92,775 118,118 Capital grants and contributions 19,793 35,637 13,858 18,717 19,174 13,136 26,928 28,198

Total governmental activities program revenues 153,433$ 179,785$ 207,118$ 204,404$ 212,236$ 239,302$ 220,254$ 308,130$

Business-type activities: Charges for services:

Sanitary sewer 59,834$ 64,132$ 33,756$ 37,968$ 40,369$ 40,787$ 43,949$ 49,358$ Stormwater - - 31,336 30,209 32,205 35,109 39,418 39,903 Solid waste and recycling 27,071 28,396 29,443 28,546 7,917 29,626 30,411 31,152 Water works 55,903 58,669 60,118 59,541 29,193 61,088 67,539 67,408 Community and economic development 10,791 13,838 12,125 7,483 60,152 7,698 31,820 6,426 Municipal parking 51,859 55,274 55,300 57,884 60,625 52,564 52,507 58,316

Operating grants and contributions 1,537 - - 13,553 1,737 2,641 - - Capital grants and contributions - - - - - - 1,826 1,215

Total business-type activities program revenues 206,995$ 220,309$ 222,078$ 235,184$ 232,198$ 229,513$ 267,470$ 253,778$

Total primary government program revenues 360,428$ 400,094$ 429,196$ 439,588$ 444,434$ 468,815$ 487,724$ 561,908$

Net (Expenses) Revenue Governmental activities (407,901)$ (340,602)$ (334,918)$ (372,742)$ (330,009)$ (325,016)$ (357,652)$ (350,594)$ Business-type activities 2,130 4,183 17,315 25,764 25,330 27,405 75,541 52,096$

Total primary government net expense (405,771)$ (336,419)$ (317,603)$ (346,978)$ (304,679)$ (297,611)$ (282,111)$ (298,498)$

General Revenues and Other Changes in Net Assets Governmental activities:

Taxes General property tax and fiscal disparities 109,340$ 124,485$ 131,261$ 145,073$ 159,878$ 184,985$ 263,776$ 217,519$ Property tax increment 67,506 64,118 64,044 71,556 77,979 82,686 13,440 42,117 Franchise fees 24,083 25,112 27,702 29,026 29,548 31,705 28,053 27,855 Convention center taxes 48,908 52,169 55,064 56,725 60,065 60,480 54,868 61,307 Other taxes 341 273 228 188 215 183 202 42

Local government aid - unrestricted 88,818 81,722 65,921 81,626 70,712 60,702 70,540 56,578 Grants and contributions not restricted to programs 2,689 - - 9 8 7 - - Unrestricted interest and investment earnings 14,251 6,152 13,510 14,407 17,574 13,121 6,843 5,961 Sale of land - - - - - - - - Other 20,500 1,028 1,144 2,862 2,715 1,287 10,239 1,440 Gain on sale of capital asets - 3 - - - - - - Transfers 7,308 8,544 19,291 416 5,023 4,250 45,365 20,178

Total governmental activities 383,744$ 363,606$ 378,165$ 401,888$ 423,717$ 439,406$ 493,326$ 432,997$

Business-type activities: Unrestricted interest and investment earnings 2,181$ 1,236$ 1,359$ 1,542$ 1,924$ 1,487$ 4,126$ 271$ Other 4,724 2,270 1,580 2,039 3,187 1,479 88 - Gain on sale of capital asets 62 - 2 - 30,725 565 - - Transfers (7,308) (8,544) (19,291) (416) (5,023) (4,250) (45,365) (20,178)

Total business-type activities (341)$ (5,038)$ (16,350)$ 3,165$ 30,813$ (719)$ (41,151)$ (19,907)$

Total primary government 383,403$ 358,568$ 361,815$ 405,053$ 454,530$ 438,687$ 452,175$ 413,090$

Changes in Net Assets Governmental activities (24,157)$ 23,004$ 43,247$ 29,146$ 93,708$ 114,390$ 135,674$ 82,403$ Business-type activities 1,789 (855) 965 28,929 56,143 26,686 34,390 32,189 Total primary government (22,368)$ 22,149$ 44,212$ 58,075$ 149,851$ 141,076$ 170,064$ 114,592$

Notes: The City began to report begininning 2003, the implementation of GASB 34

December 31, 2010

(UNAUDITED)

Fiscal Year

151

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155

Schedule 7 City of Minneapolis Principal Property Tax Payers Current Year and Nine Years Ago

December 31, 2010

2001 Percentage Percentage

of Total of Total Taxable City Taxable Taxable City Taxable Assessed Assessed Assessed Assessed

Taxpayer Value Rank Value Value Rank Value

Northern States Power 303,867$ 1 2.20% 165,326$ 2 1.81%

Target Corporation 256,110 2 2.01% 158,100 6 1.65%

MB Mpls. 8th St LLC 209,300 3 1.65% - - -

Minneapolis 225 Holdings LLC 208,400 4 1.64% - - -

NWC Limited Partnership 188,800 5 1.48% 173,800 1 1.92%

First Minneapolis - Hines 159,600 6 1.26% 152,300 5 1.68%

Wells Operating Partnership LP 157,000 7 1.23% - - -

City Center Associates 146,100 8 1.18% 124,000 7 1.48%

Fifth Street Owner Corp. 139,900 9 1.10% - - -

American Express Financial Corp. 137,874 10 1.06% - - -

601 Second Avenue Ltd. Partnership - - - 162,000 3 1.79%

Eighth Street - - - 153,000 4 1.69%

Property Minnesota One LLC - - - 128,600 8 1.42%

Byte Investment Partnership - - - 126,381 9 1.24%

CPP 800 Nicollet Mall LLC - - - 114,800 10 1.12%

Total 1,906,951$ 14.81% 1,458,307$ 15.80%

Source: Bond Issue Report 5/14/10 and 10/25/2001

(UNAUDITED)

(in thousands of dollars)

2010

156

S ch

ed u

le 8

C it

y o

f M

in n

ea p

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s P

ro p

er ty

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x L

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16 3,

75 1

16 1,

18 8

98 .4

3% 19

16 1,

20 7

98 .4

20 02

14 6,

85 2

14 4,

38 6

98 .3

2% (1

02 )

4, 28

.2 5%

20 03

15 8,

81 9

15 6,

55 0

98 .5

7% 68

15 7,

23 0

99 .0

20 04

17 6,

06 6

17 3,

56 5

98 .5

8% 35

17 3,

92 4

98 .7

20 05

19 0,

37 5

18 7,

27 1

98 .3

7% 1,

40 8

18 8,

67 9

99 .1

20 06

20 5,

83 0

20 1,

79 4

98 .0

4% 1,

56 2

20 3,

35 6

98 .8

20 07

22 2,

52 3

21 7,

84 1

97 .9

0% 3,

21 2

22 1,

05 3

99 .3

20 08

24 0,

55 3

23 4,

73 6

97 .5

8% 3,

95 6

23 8,

69 1

99 .2

20 09

24 5,

00 3

23 9,

06 0

97 .5

7% 5,

08 8

24 4,

14 8

99 .6

20 10

26 4,

80 5

25 2,

58 6

95 .3

9% 4,

97 3

25 7,

55 9

97 .2

So ur

ce :

M in

ne ap

ol is

F in

an ce

D ep

ar tm

en t -

C on

tr ol

le r D

iv is

io n

(i n

t h

o u

sa n

d s

o f

d o ll

a rs

)

C ol

le ct

io ns

w ith

in th

D ec

em b

er 3

1 ,

2 0 1 0

(U N

A U

D IT

E D

)

T ot

al C

ol le

ct io

ns to

D at

e Fi

sc al

Y ea

r o f t

he L

ev y

157

S ch

ed u

le 9

it y o

f M

in n

ea p

o li

R a ti

o s

o f

O u

ts ta

n d

in g

D eb

t b

y T

y p

e L

a st

T en

F is

ca l

Y ea

rs (i

n th

ou sa

nd s

of d

ol la

rs , e

xc ep

t p er

c ap

ita )

D ec

em be

r 3 1,

2 01

G en

er al

G en

er al

T ot

Pe rc

en ta

Fi sc

al O

bl ig

at io

n R

ev en

ue N

ot es

O bl

ig at

io n

R ev

en ue

N ot

es Pr

im ar

y of

P er

so na

l Pe

r Y

ea r

B on

ds B

on ds

Pa ya

bl e

B on

ds &

N ot

es B

on ds

Pa ya

bl e

G ov

er nm

en t

In co

m e

(1 )

C ap

ita (1

)

20 01

75 6,

50 0

10 3,

72 6

32 ,4

88 $

7, 67

2 $

10 2,

76 5

7, 40

6 $

1, 42

0, 55

7 $

15 .4

5% 3,

71 4

02 73

8, 37

,6 43

49 ,0

0, 64

91 ,8

50 2

35 4,

14 5

.7 8%

3, 53

20 03

85 7,

35 8

77 ,1

,4 22

39 0,

13 5

,1 17

1, 24

1, 45

6, 38

16 .3

2% 3,

81 0

04 89

1, 67

,6 82

41 ,9

7, 28

71 ,3

15 5

48 8,

18 3

.9 9%

3, 89

20 05

86 5,

01 1

67 ,0

,2 52

41 0,

26 3

,6 31

1, 05

1, 44

6, 29

15 .3

6% 3,

73 0

20 06

81 7,

77 1

65 ,7

,7 09

39 6,

01 9

,9 85

95 0

1, 36

5, 19

14 .5

0% 3,

52 1

20 07

77 7,

38 5

56 ,3

,7 35

36 8,

33 5

,6 95

83 7

1, 28

9, 29

12 .1

0% 3,

32 3

20 08

75 5,

94 6

45 ,6

,2 91

33 8,

18 8

,7 30

71 8

1, 22

3, 52

11 .4

8% 3,

15 3

20 09

77 2,

93 6

35 ,9

,0 40

31 0,

60 7

,3 65

59 1

1, 19

6, 51

10 .8

7% 3,

06 7

20 10

67 3,

92 6

26 ,7

,5 85

30 8,

38 3

,9 25

45 5

1, 12

0, 97

12 .1

9% 2,

93 0

N o te

D et

ai ls

re ga

rd in

g th

e ci

ty 's

ou ts

ta nd

in g

de bt

c an

b e

fo un

d in

th e

no te

s to

th e

fi na

nc ia

l s ta

te m

en ts

. (1

) S ee

S ch

ed ul

e 14

fo r p

er so

na l i

nc om

e an

d po

pu la

tio n

da ta

So ur

ce :

M in

ne ap

ol is

F in

an ce

D ep

ar tm

en t -

C ap

ita l a

nd D

eb t M

an ag

em en

t (U N

A U

D IT

E D

)

G ov

er nm

en ta

l A ct

iv iti

es B

us in

es s-

ty pe

A ct

iv iti

158

S ch

ed u

le 1

0 C

it y

o f

M in

n ea

p o

li s

R a

ti o

s O

f N

et G

en er

a l

B o

n d

ed D

eb t

O u

ts ta

n d

in g

L a

st T

en F

is ca

l Y

ea rs

(i n

th ou

sa nd

s of

d ol

la rs

, e xc

ep t p

er c

ap ita

) D

ec em

be r 3

1, 2

01 0

ov er

nm en

ta l

B us

in es

s- ty

pe Pe

rc en

ta ge

o f

en er

al G

en er

al L

es s

A ss

et s

T ot

al T

ax ab

Fi sc

al O

bl ig

at io

n O

bl ig

at io

n R

es er

ve d

fo r

A ss

es se

d V

al ue

Pe r

Y ea

r B

on ds

B on

ds &

N ot

es D

eb t S

er vi

ce T

ot al

of P

ro pe

rt y

(1 )

C ap

ita (2

)

20 01

75 6,

50 0

41 7,

67 2

33 ,0

59 $

1, 14

1, 11

3 $

5. 89

% 2,

98 4

20 02

73 8,

37 9

38 0,

64 5

32 ,4

1, 08

6, 57

4. 69

% 2,

83 9

20 03

85 7,

35 8

39 0,

13 5

34 ,4

1, 21

3, 04

4. 69

% 3,

17 3

20 04

89 1,

67 8

40 7,

28 0

35 ,7

1, 26

3, 20

4. 43

% 3,

30 3

20 05

86 5,

01 1

41 0,

26 3

27 ,7

1, 24

7, 57

4. 01

% 3,

21 8

20 06

81 7,

77 1

39 6,

01 9

30 ,9

1, 18

2, 81

3. 40

% 3,

05 1

20 07

77 7,

38 5

36 8,

33 5

36 ,5

1, 10

9, 16

2. 99

% 2,

85 9

20 08

75 5,

94 6

33 8,

18 8

40 ,1

1, 05

3, 93

2. 73

% 2,

70 1

20 09

77 2,

93 6

31 0,

60 7

10 8,

56 7

97 4,

97 6

2. 56

% 2,

56 9

20 10

67 3,

92 6

30 8,

38 3

57 ,3

92 4,

91 2

2. 50

% 2,

41 8

N o

te s:

D et

ai ls

re ga

rd in

g th

e ci

ty 's

ou ts

ta nd

in g

de bt

c an

b e

fo un

d in

th e

no te

s to

th e

fi na

nc ia

l s ta

te m

en ts

. (1

) S ee

S ch

ed ul

e 5

fo r p

ro pe

rt y

va lu

e da

ta .

A ss

es se

d va

lu e

us ed

is c

on si

st an

t w ith

v al

ua tio

ns o

n th

e le

ga l d

eb t m

ar gi

n sc

he du

le .

(2 ) P

op ul

at io

n da

ta c

an b

e fo

un d

in S

ch ed

ul e

14 .

So ur

ce :

M in

ne ap

ol is

F in

an ce

D ep

ar tm

en t -

C ap

ita l a

nd D

eb t M

an ag

em en

(U N

A U

D IT

E D

)

N et

G en

er al

B on

de d

D eb

t O ut

st an

di ng

159

S ch

ed u

le 1

1 C

it y o

f M

in n

ea p

o li

s D

ir ec

t a n

d O

v er

la p

p in

g G

o v er

n m

en ta

l A

ct iv

it ie

s D

eb t

(i n

th ou

sa nd

s of

d ol

la rs

) D

ec em

be r 3

1, 2

01 0

N et

G en

er al

E st

im at

ed O

bl ig

at io

n E

st im

at ed

ar e

of G

ov er

nm en

ta l D

eb t

Pe rc

en ta

ge D

ir ec

t a nd

G ov

er nm

en ta

l U ni

t O

ut st

an di

ng (1

) A

pp lic

ab le

(2 )

O ve

rl ap

pi ng

D eb

C ity

o f M

in ne

ap ol

is -

D ir

ec t D

eb t

37 9,

83 0

(3 )

10 0.

00 %

37 9,

83 0

O ve

rl ap

pi ng

D eb

pe ci

al S

ch oo

l D is

tr ic

t N o.

1 23

8, 23

0. 00

% 23

8, 23

en ne

pi n

C ou

nt y

68 3,

93 4

(4 )

25 .5

5% 17

4, 74

H en

ne pi

n C

ou nt

y R

eg io

na l R

ai lr

oa d

A ut

ho ri

ty 39

,5 71

.5 5%

10 ,1

et ro

po lit

an C

ou nc

il 18

1, 07

.7 8%

19 ,5

Su bt

ot al

, O

ve rl

ap pi

ng D

eb t

44 2,

61 3

T ot

al D

ir ec

t a nd

O ve

rl ap

pi ng

D eb

t 82

2, 44

3 $

N o te

D et

ai ls

re ga

rd in

g th

e ci

ty 's

ou ts

ta nd

in g

de bt

c an

b e

fo un

d in

th e

no te

s to

th e

fi na

nc ia

l s ta

te m

en ts

. (1

) T hi

s ta

bl e

re pr

es en

ts th

e ne

t g ov

er nm

en ta

l d eb

t o f t

he C

ity o

f M in

ne ap

ol is

a nd

o ve

rl ap

pi ng

ju ri

sd ic

tio ns

o n

a ne

t d eb

t b as

is .

T hi

s pr

es en

ta tio

n sh

ow s

th e

to ta

l p ro

pe rt

y ta

x su

pp or

te d

de bt

b ur

de n

of th

e ge

ne ra

l t ax

pa ye

rs o

f t he

C ity

. (2

) T he

e st

im at

ed p

er ce

nt ag

e ap

pl ic

ab le

is d

et er

m in

ed b

y H

en ne

pi n

C ou

nt y

an d

re pr

es en

ts th

e ta

x ca

pa ci

ty o

f t he

C ity

in re

la tio

n to

th e

ta x

ca pa

ci ty

o f t

he o

ve rl

ap pi

ng ju

ri sd

ic tio

ns a

s ca

lc ul

at ed

b y

H en

ne pi

n C

ou nt

y. (3

) T ot

al e

xc lu

de s

$1 97

,7 80

o f s

el f s

up po

rt in

g de

bt , $

47 ,8

06 o

f s pe

ci al

a ss

es sm

en t d

eb t a

nd a

ll go

ve rn

m en

ta l a

ct iv

ity re

ve nu

e bo

nd s

an d

no te

s w

hi ch

a re

n ot

p ri

nc ip

al ly

p ai

d by

th e

ge ne

ra l t

ax pa

ye r b

as e.

) E xc

lu de

s su

bu rb

an li

br ar

y bo

nd s

fo r w

hi ch

M in

ne ap

ol is

ta xp

ay er

s ar

e no

t o bl

ig at

ed .

So ur

ce s:

in ne

ap ol

is F

in an

ce D

ep ar

tm en

t - C

ap ita

l a nd

D eb

t M an

ag em

en t

M in

ne ap

ol is

P ub

lic S

ch oo

l D is

tr ic

t 1 H

en ne

pi n

C ou

nt y

M E

T C

ou nc

il R

ep or

t o f O

ut st

an di

ng In

de bt

ed ne

(U N

A U

D IT

E D

)

160

S ch

ed u

le 1

C it

y o

f M

in n

ea p

o li

L eg

a l

D eb

t M

a rg

in I

n fo

rm a ti

o n

L a

st T

en F

is ca

l Y

ea rs

(i n

th ou

sa nd

s of

d ol

la rs

) D

ec em

be r 3

1, 2

01 0

Fi sc

al Y

ea r

01 20

02 20

03 20

04 20

05 20

06 20

07 20

08 20

09 20

D eb

t L im

it $7

84 ,0

51 $8

75 ,2

04 $9

67 ,2

10 $1

,0 54

,7 80

$1 ,1

82 ,7

94 $1

,1 59

,7 28

$1 ,2

53 ,0

51 $1

,3 06

,1 94

$1 ,2

82 ,7

97 $1

,2 54

,2 06

T ot

al n

et d

eb t a

pp lic

ab le

to li

m it

14 6,

91 1

19 3,

63 9

31 9,

43 6

36 2,

73 9

36 9,

84 2

33 9,

71 2

31 3,

12 9

30 2,

77 2

27 0,

62 9

24 6,

97 9

L eg

al d

eb t m

ar gi

n $6

37 ,1

40 $6

81 ,5

65 $6

47 ,7

74 $6

92 ,0

41 $8

12 ,9

52 $8

20 ,0

16 $9

39 ,9

22 $1

,0 03

,4 22

$1 ,0

12 ,1

68 $1

,0 07

,2 27

T ot

al n

et d

eb t a

pp lic

ab le

to li

m it

18 .7

4% 22

.1 3%

33 .0

3% 34

.3 9%

31 .2

7% 29

.2 9%

24 .9

9% 23

.1 8%

21 .1

0% 19

.6 9%

as a

p er

ce nt

ag e

of d

eb t l

im it

L eg

a l

D eb

t M

a rg

in C

a lc

u la

ti o n

f o r

F is

ca l

Y ea

r 2 0 1 0

R ea

l P ro

pe rt

y (2

01 0

A ss

es se

d M

ar ke

t V al

ue )

$3 6,

68 8,

59 4

Pe rs

on al

P ro

pe rt

y (2

01 0

A ss

es se

d M

ar ke

t V al

ue )

36 8,

66 0

A dj

us tm

en t f

or E

xe m

pt P

er so

na l P

ro pe

rt y

(1 96

6 M

ar ke

t V al

ue )

29 8,

03 0

A dj

us tm

en t f

or N

et F

is ca

l D is

pa ri

tie s

(C on

tr ib

ut io

n) /D

is tr

ib ut

io n

27 0,

91 0

ot al

2 01

0 A

ss es

se d

M ar

ke t V

al ue

,6 26

,1 94

D eb

t L im

it (3

-1 /3

% o

f M ar

ke t V

al ue

A pp

lic ab

le to

D eb

t L im

it) 1,

25 4,

20 6

D eb

t a pp

lic ab

le to

li m

it:

G en

er al

O bl

ig at

io n

B on

ds S

ub je

ct to

D eb

t L im

it. 29

5, 43

L es

s: A

ss et

s in

G en

er al

D eb

t S er

vi ce

F un

-4 8,

45 6

T ot

al N

et D

eb t A

pp lic

ab le

to L

im it

24 6,

97 9

L eg

al D

eb t M

ar gi

n $1

,0 07

,2 27

So ur

ce :

M in

ne ap

ol is

F in

an ce

D ep

ar tm

en t -

C ap

ita l a

nd D

eb t M

an ag

em en

(U N

A U

D IT

E D

)

161

S ch

ed u

le 1

3 C

it y

o f

M in

n ea

p o

li s

P le

d g

ed -R

ev en

u e

C o

v er

a g

e L

a st

T en

F is

ca l

Y ea

rs (i

n th

ou sa

nd s

of d

ol la

rs )

D ec

em be

r 3 1,

2 01

W A

T E

R W

O R

K S

B O

N D

N et

R ev

en ue

Fi sc

al O

pe ra

tin g

O pe

ra tin

g A

va ila

bl e

fo r

D eb

t S er

vi ce

R eq

ui re

m en

ts Y

ea r

R ev

en ue

(1 )

E xp

en se

s (2

) D

eb t S

er vi

ce Pr

in ci

pa l

In te

re st

T ot

al C

ov er

ag e

20 01

55 ,3

85 $

,1 54

18 ,2

31 $

87 9

39 2

,2 71

1. 49

20 02

57 ,3

,1 61

17 ,2

,1 92

2, 79

15 ,9

20 03

62 ,5

81 40

,1 78

22 ,4

,7 59

2, 83

15 ,5

20 04

63 ,4

49 46

,2 05

17 ,2

,9 30

3, 22

15 ,1

20 05

61 ,9

46 44

,1 16

17 ,8

,8 19

4, 07

14 ,8

20 06

64 ,7

86 46

,7 04

18 ,0

65 9

4, 37

13 ,0

20 07

66 ,4

39 44

,8 38

21 ,6

41 9

4, 48

12 ,9

20 08

64 ,1

30 47

,2 08

16 ,9

93 0

3, 40

10 ,3

20 09

67 ,5

75 47

,1 95

20 ,3

6, 07

6 3,

65 6

9, 73

20 10

67 ,1

29 47

,5 07

19 ,6

5, 64

6 3,

87 2

9, 51

N o

te s:

(1 ) O

pe ra

tin g

re ve

nu e

in cl

ud es

fe es

fo r s

er vi

ce s

an d

ot he

r n on

-o pe

ra tin

g re

ve nu

es a

va ila

bl e

fo r d

eb t s

er vi

ce .

(2 ) O

pe ra

tin g

ex pe

ns es

a re

e xc

lu si

ve o

f d ep

re ci

at io

So ur

ce : M

in ne

ap ol

is F

in an

ce D

ep ar

tm en

t - C

ap ita

l a nd

D eb

t M an

ag em

en t

(U N

A U

D IT

E D

)

162

S ch

ed u

le 1

3 C

it y

o f

M in

n ea

p o

li s

(C on

tin ue

d) P

le d

g ed

-R ev

en u

e C

o v

er a

g e

L a st

T en

F is

ca l

Y ea

rs (i

n th

ou sa

nd s

of d

ol la

rs )

D ec

em be

r 3 1,

2 01

D eb

t S er

vi ce

N et

R ev

en ue

Fi sc

al O

pe ra

tin g

O pe

ra tin

g T

ra ns

fe rs

A va

ila bl

e fo

r D

eb t S

er vi

ce R

eq ui

re m

en ts

Y ea

r R

ev en

ue (1

) E

xp en

se s

(2 )

(3 ) (

4) D

eb t S

er vi

ce Pr

in ci

pa l

In te

re st

T ot

al C

ov er

ag e

20 01

56 ,8

89 $

,2 27

8, 75

7 $

30 ,4

19 $

,3 29

12 ,7

34 $

,0 63

0. 69

20 02

55 ,0

,4 62

8, 23

27 ,7

,4 39

13 ,2

,6 44

1. 04

20 03

53 ,4

,5 07

13 ,9

,8 36

10 ,1

,6 16

22 ,7

20 04

55 ,6

,4 09

13 ,9

,1 88

11 ,4

,2 26

24 ,6

20 05

55 ,6

,5 35

13 ,4

,5 39

12 ,8

,1 27

24 ,9

20 06

58 ,3

,4 31

16 ,8

,7 34

14 ,1

,1 86

27 ,3

20 07

60 ,5

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in cl

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a re

e xc

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) C on

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C en

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ca pi

ta liz

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(U N

A U

D IT

E D

)

M U

N IC

IP A

L P

A R

K IN

G B

O N

D S

163

S ch

ed u

le 1

3 C

it y

o f

M in

n ea

p o

li s

(C on

tin ue

d) P

le d

g ed

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en u

e C

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g e

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st T

en F

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l Y

ea rs

(i n

th ou

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la rs

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ec em

be r 3

1, 2

01 0

SA N

IT A

R Y

S E

W E

R B

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N et

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en ue

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al O

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tin g

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g A

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t S er

vi ce

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ui re

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ts Y

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(1 )

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eb t S

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in ci

pa l

In te

re st

T ot

al C

ov er

ag e

20 01

20 02

20 03

20 04

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(3 )

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80 0

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55 1

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N o

te s:

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tin g

re ve

nu e

in cl

ud es

fe es

fo r s

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an d

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va ila

bl e

fo r d

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ce .

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pe ra

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) I n

20 05

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lly , t

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or th

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s to

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fi rs

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in 2

00 6.

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ce : M

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(U N

A U

D IT

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)

164

S ch

ed u

le 1

3 C

it y

o f

M in

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(C on

tin ue

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20 10

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18 ,2

34 5

40 5

75 0

2. 70

N o

te s:

(1 ) O

pe ra

tin g

re ve

nu e

in cl

ud es

fe es

fo r s

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r n on

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ra tin

g re

ve nu

es a

va ila

bl e

fo r d

eb t s

er vi

ce .

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pe ra

tin g

ex pe

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a re

e xc

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f d ep

re ci

at io

n. (3

) I n

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, t he

S ew

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nd w

as s

pl it

in to

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fu nd

s - S

to rm

w at

er a

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an ita

ry S

ew er

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is to

ri ca

lly , t

he d

eb t f

or th

s ew

er fu

nd h

as b

ee n

pr im

ar ily

fo r s

to rm

w at

er re

la te

d is

su es

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ce : M

in ne

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t M an

ag em

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(U N

A U

D IT

E D

)

165

Schedule 14 City of Minneapolis Demographic and Economic Statistics Last 10 Fiscal Years

Annual average Aggregate Per Capita Median School Unemployment

Year Population (1) Income (3) Income Age (4) Enrollment (5) Rate (6)

2001 382,446 9,194,419,953$ 24,041$ 32.1 47,824 3.9%

2002 382,700 8,069,589,052 21,086 32.0 45,651 4.9%

2003 382,295 8,924,153,419 23,344 33.4 42,900 5.2%

2004 382,400 8,759,647,300 22,907 33.9 40,051 5.0%

2005 387,711 9,417,158,500 24,289 32.1 37,865 4.2%

2006 387,970 10,144,150,100 27,487 33.6 36,428 3.8%

2007 388,020 10,656,131,500 30,343 35.3 34,570 4.2%

2008 390,131 11,006,550,500 30,825 34.2 33,789 5.1%

2009 379,499 9,196,353,584 29,249 32.1 33,584 7.4%

2010 382,578 N/A N/A N/A 33,995 6.6%

Sources: (1) Population 2001-2009 - Metropolitan Council, Population 2010 US Census (2) Population and aggregate income for 2001-2009 - US Census of Population and Housing-American Community Survey began counting population in group totals as part the total population estimates in 2006. (3) Aggregate income (for population 15+) - US Census Bureau - American Community Survey (4) Median age - US Census Bureau - American Community Survey (5) School enrollment - Minneapolis School System (6) Annual average unemployment rate - Minnesota Department of Employment and Economic Development

Notes: 1) The Metropolitan Council adopts the 2000 population figure from Census. For consistency purposes to calculate per capita income, 2000 population and aggregate income data are from the Census of Population. 2) ACS only counts population in households; it excludes population in group quarters such as student dormitories, jail, convents and other institutions. Definitions: Total Income is the sum of the amounts reported separately for wages, salary, commissions, bonuses, or tips; self-employment income from own non-farm or farm businesses, including proprietorships and partnerships; interest, dividends, net rental income, royalty income, or income from estates and trusts; Social Security or Railroad Retirement income; Supplemental Security Income (SSI); any public assistance or welfare payments from the state or local welfare office; retirement, survivor, or disability pensions; and any other sources of income received regularly such as Veterans' (VA) payments, unemployment compensation, child support or alimony.

Per capita income is an average obtained by dividing aggregate income by the population 15 years old or older in an area.

December 31, 2010

(UNAUDITED)

166

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168

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171

THIS PAGE IS INTENTIONALLY BLANK

172

2 - Cover page.pdf

Cover Page

3 - Introductory Section.pdf

How to Use this Document
Elected Officials & Dept. Heads
budget principles
City of Minneapolis org chart
GFOA award
2010 Transmittal letter.pdf

Form of Government and Organization

City Council
Mayor
The Mayor is responsible for a variety of leadership duties, including: appointing representatives to a variety of agencies and commissions, nominating department head candidates for Executive Committee and Council approval, proposing the annual operating and capital budgets, and reviewing, approving, or vetoing all Council actions.

TOC.pdf

TABLE OF CONTENTS
TABLE OF CONTENTS

4 - Financial Section.pdf

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

5 - Managements Discussion & Analysis.pdf

CITY OF MINNEAPOLIS

MANAGEMENT’S DISCUSSION AND ANALYSIS

REQUIRED SUPPLEMENTARY INFORMATION

FINANCIAL HIGHLIGHTS
OVERVIEW OF THE FINANCIAL STATEMENTS

Water Works Fund—The Water Works Fund accounts for the operation and maintenance of a water delivery system for the City and several suburban city customers. The City sells water directly to the cities of Bloomington, Columbia Heights, Hilltop, Golden Valley, New Hope, Crystal, and Edina. Net assets increased $8,538 for the year, resulting in a net asset balance at December 31, 2010 of $176,894.
Equipment Services Fund—Equipment Services accounts for the City’s fleet of vehicles and related equipment and accessories. In addition, the fund manages the dispatch of City-owned and contractual equipment. A long term financial plan was developed for the fund in 2003 and the fund has progressively increased its net asset balance from $13,266 in 2004 to $30,608 in 2010. The fund reported an increase in net assets of $4,060 or 15.3% in 2010 from the ending balance of $26,548 in 2009. The 2010 net asset balance is tracking slightly ahead of the projected 2010 balance as determined in the updated long term financial plan. The 2010 ending cash balance is $8,235, an increase of $6,858 from the ending balance of $1,377 in 2009. The increase in cash is primarily due to a decrease in the acquisition of fleet vehicles and equipment.

CAPITAL ASSETS AND DEBT ADMINISTRATION

HISTORICAL AND LONG-TERM FINANCIAL PLANNING

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

REQUEST FOR INFORMATION

6 - Basic Financial Statements.pdf

Statement of Activities
Statement of Net Assets.pdf

Statement of Net Assets

Governmental Funds Balance Sheet.pdf

Governmental Balance Sheet

Reconciliation Statement of Net Assets.pdf

Recon - Net Assets

Governmental Funds Stmt Rev Exp Chngs FB.pdf

Governmental Stmt of Changes

Reconciliation Statement of Activities.pdf

Recon - Activities

Proprietary Funds Stmt of Net Assets.pdf

Enterprise Balance Sheet

Proprietary Funds Stmt Rev Exp Chngs in NA.pdf

Enterprise Changes in RE

Proprietary Funds Stmt of Cash Flows.pdf

Enterprise CF

Proprietary Funds Stmt of Cash Flows pg 2.pdf

Enterprise CF

Stmt of Fiduciary Net Assets.pdf

Net Assets Total

Discrete Component Units Combining Stmt of Net Assets.pdf

DCU Combining SNA

Discrete Component Units Combining Stmt of Activities.pdf

DCU Combining SOA

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

7 - Notes to the Financial Statements.pdf

Custodial Credit Risk
Construction in Progress

Reservations

Funding Policy

Coordinated Plan members 6.75 %
Public Employees Police and Fire Fund 14.10 %

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

8 - Required Supplementary Information.pdf

NOTE 1 – BUDGETS
NOTE 2 – POSTEMPLOYMENT BENEFITS PLAN
General Fund Budget to Actual.pdf

CPED SR Budget to Actual.pdf

Community Development SRF

Convention Center SR Budget to Actual.pdf

Convention Center SRF

Notes to the required supplementary information.pdf

NOTE 1 – BUDGETS
NOTE 2 – POSTEMPLOYMENT BENEFITS PLAN

9 - Other Supplementary information.pdf

Non-Major Special Revenue Funds

Grants-Other – This fund is used to account for grants received from the State of Minnesota, Hennepin County, local governmental units and private sources.

Non Major Governmental Funds Balance Sheet.pdf

Summary Nonmajor BS

NonMajor Governmental Funds Stmt Rev Exp Chngs FB.pdf

Summary Nonmajor Stmt of Chg

Special Revenue Funds Combining Balance Sheet.pdf

Special Revenue Funds Combining Rev Exp Chngs FB.pdf

Debt Service Combining BS.pdf

Debt Service Combining Stmt Rev Exp Chngs FB.pdf

Non-major Spec Rev individual Budget to Actual.pdf

Arena Reserve SRF
Board of Estimate and Tax SRF
HUD Consolidated Plan SRF
Con. Facilities Reserve SRF
Dntwn Improve Dist SRF
Employee Retirement SRF
Grants - Federal SRF
Grants-Other SRF
Police SRF

Internal Service Funds Combining Stmt of Net Assets.pdf

Internal Service Funds Combining Stmt Rev Exp Chngs NA.pdf

Combined Statement of Changes

Internal Service Funds Combining Stmt Cash Flows.pdf

Internal Service Funds Individual Stmt of Net Assets.pdf

Equipment Services
Engineering Materials & Testing
Intergovernmental Services
Property Services
Public Works Stores
Self-Insurance

Combining Stmt of Fiduciary Net Assets.pdf

Net Assets Combining

Fiduciary Funds Combining Stmt of Chngs.pdf

Statement of changes Combining

Schedule of Governmental Activity Bonds and Notes.pdf

Government Type

Schedule of Business-Type Activity Bonds and Notes.pdf

Business Type

MBC Balance Sheet.pdf

MBC Balance Sheet in 000$

MBC Stmt Rev Exp Chngs FB.pdf

MBC Stmt of Change in 000$

2010 SEFA.pdf

Sch of Fedl Awards

2010 Notes to the Schedule of Expenditures of Federal Awards.pdf

2. Basis of Presentation

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

10 - Statistical Section (Unaudited).pdf

Sheet1
Schedule 11 - Direct and overlapping gov activities debt.pdf

Table 11

Schedule 10 - Ratios of Net General Bonded Debt Outstanding.pdf

Table 10

Schedule 9 - Ratios of Outstanding Debt by Type.pdf

Table 9

Schedule 8 - Property Tax Levies & Collection.pdf

Sheet1

Schedule 7 - Principle Property Tax Payers.pdf

Sheet1

Schedule 6 - Direct Overlapping Property Tax Rates.pdf

final schedule

Schedule 5 - Assessed Value Est Act Value of Tax Prop.pdf

Schedule 5

Schedule 4 - Change in Fd Balance.pdf

Sheet1

Schedule 3 - Fund Balance.pdf

Sheet1

Schedule 2 - Chg in Net Assets.pdf

Sheet1

Schedule 12 - Legal Debt Margin Information.pdf

Legal Debt Margin

Schedule 2 - Chg in Net Assets.pdf

Sheet1

Schedule 3 - Fund Balance.pdf

Sheet1

Schedule 4 - Change in Fd Balance.pdf

Sheet1

Schedule 5 - Assessed Value Est Act Value of Tax Prop.pdf

Schedule 5

Schedule 6 - Direct Overlapping Property Tax Rates.pdf

final schedule

Schedule 7 - Principle Property Tax Payers.pdf

Sheet1

Schedule 8 - Property Tax Levies & Collection.pdf

Sheet1

Schedule 11 - Direct and overlapping gov activities debt.pdf

Table 11

Schedule 10 - Ratios of Net General Bonded Debt Outstanding.pdf

Table 10

Schedule 9 - Ratios of Outstanding Debt by Type.pdf

Table 9

Schedule 12 - Legal Debt Margin Information.pdf

Legal Debt Margin

Schedule 10 - Ratios of Net General Bonded Debt Outstanding.pdf

Table 10

Schedule 11 - Direct and overlapping gov activities debt.pdf

Table 11

Schedule 13 - Pledged-revenue coverage Water Works.pdf

WtrWorks

Schedule 13 - Pledged-revenue coverage Parking.pdf

Schedule 13 - Pledged-revenue coverage Sanitary Sewer.pdf

SanSwr

Schedule 13 - Pledged-revenue coverageStormwater.pdf

StmWtr

Schedule 14 - Demographic Econ Stat.pdf

Sheet1

Schedule 15 - Principal Employers.pdf

Sheet1

Schedule 17 - Operating Indicators by Function.pdf

Green

Schedule 16 - FTE by Function.pdf

Green

Schedule 18 - Capital Assets Statistics by Function.pdf

Sheet1

Schedule 15 - Principal Employers.pdf

Sheet1

Schedule 16 - FTE by Function.pdf

Green

Blank page.pdf

for the fiscal year ended December 31, 2002

Finance Department

Statistcal Section Introduction.pdf

Sheet1

Statistcal Section Introduction.pdf

Sheet1