STATE OF MINNESOTA. Minnesota Town Finances. Office of the State Auditor. Rebecca Otto State Auditor. 20 Revenues, Expenditures, and Debt

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1 STATE OF MINNESOTA Office of the State Auditor Rebecca Otto State Auditor Minnesota Town Finances 20 Revenues,, Debt

2 Description of the Office of the State Auditor The mission of the Office of the State Auditor is to oversee local government finances for Minnesota taxpayers by helping to ensure financial integrity accountability in local governmental financial activities. Through financial, compliance, special audits, the State Auditor oversees ensures that local government funds are used for the purposes intended by law that local governments hold themselves to the highest stards of financial accountability. The State Auditor performs approximately 150 financial compliance audits per year has oversight responsibilities for over 3,300 local units of government throughout the state. The office currently maintains five divisions: Audit Practice - conducts financial legal compliance audits of local governments; Information - collects analyzes financial information for cities, towns, counties, special districts; Legal/Special Investigations - provides legal analysis counsel to the Office responds to outside inquiries about Minnesota local government law as well as investigates allegations of misfeasance, malfeasance, nonfeasance in local government; Pension - monitors investment, financial, actuarial reporting for approximately 730 public pension funds; Tax Increment Financing - promotes compliance accountability in local governments use of tax increment financing through financial compliance audits. The State Auditor serves on the State Executive Council, State Board of Investment, L Exchange Board, Employees Retirement Association Board, Minnesota Housing Finance Agency, the Rural Finance Authority Board. Office of the State Auditor 525 Park Street, Suite 500 Saint Paul, Minnesota (651) state.auditor@osa.state.mn.us This document can be made available in alternative formats upon request. Call [voice] or [relay service] for assistance; or visit the Office of the State Auditor s web site:

3 Minnesota Town Finances 2010 Revenues,, Debt November 16, 2011 Information Division Office of the State Auditor State of Minnesota Deputy State Auditor Greg Hierlinger Staff David Kazeck, Supervisor John Jernberg, Research Analyst Christy John, Research Analyst Mark Albarado, Analyst Curt Koester, Analyst Jennifer Goble (Intern) Khanh Nguyen (Intern)

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5 TABLE OF CONTENTS Executive Summary...1 Scope...3 Overview al Revenues...5 al...9 Indebtedness...12 Towns Failing to Report...15 Economic Development Regions...17 Data Tables Revenues of Towns (Table 1)...22 of Towns (Table 2)...23 Classification of Revenues - al Funds Classification of Revenues (Table 3)...26 Classification of (Table 4)...85 Classification of Enterprise Funds Service Enterprises - Analysis of Enterprise Operations (Table 5) Analysis of Outsting Indebtedness Outsting Indebtedness of Towns (Table 6) Summary of Revenues by Economic Development Region Summary of Town Revenues by Economic Development Region (Table 7) Summary of Town by Economic Development Region (Table 8) Glossary...161

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7 Executive Summary Current Five-Year Trends In 2010, Minnesota towns reported total revenues of $261.2 million. This amount represents a 0.8 percent decrease from the total revenues reported in Since 2006, town revenues have increased 10.3 percent (pg. 6). An analysis of changes in revenues between shows that higher levels of tax revenues were offset by decreases in intergovernmental revenues, special assessments, charges for services, interest earnings (pg. 6). Minnesota towns reported total expenditures of $265.0 million in This amount represents an increase of 2.1 percent over the amount reported in Over the five-year period of 2006 to 2010, town expenditures increased 8.4 percent (pg. 9). Towns had debt service expenditures of $15.0 million in This amount represents a 3.4 percent increase in debt service expenditures from 2009 to Over the five-year period of 2006 to 2010, debt service expenditures increased 21.7 percent (pg. 11). outsting short- long-term indebtedness totaled $78.9 million in This represents a decrease of 2.8 percent from Outsting bonded indebtedness totaled $53.8 million in 2010, which was a decrease of 1.0 percent from the $54.4 million outsting in long-term debt totaled $24.5 million in 2010, which was a decrease of 5.8 percent from 2009 (pg. 13). Ten-Year Trends Since 2001, the share of total revenues derived from taxes has increased from 50.6 percent in 2001 to 72.8 percent in In contrast, the share of total revenues derived from intergovernmental sources has decreased from 35.1 percent in 2001 to 17.0 percent in 2010 (pg. 8). In constant dollars, town total revenues decreased 7.7 percent between (pg. 7). In constant dollars, town total expenditures decreased 5.0 percent between (pg. 11). 1

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9 Scope This report analyzes the financial operations of 1,716 towns in Minnesota that provided financial information to the Office of the State Auditor for the calendar year ended December 31, The data used in preparing this report include annual town financial reporting forms, audits by certified public accountants, financial statements prepared by the town clerk or clerk-treasurer, county auditors reports of indebtedness, Minnesota Department of Revenue records. 2 Data received from the Department of Revenue includes State-shared tax distributions, grants, aids, taxable valuations, tax levies. In 2010, there were 1,785 towns compared to 854 cities 87 counties. 3 The 2010 population estimates from the State Demographer show that 925,784 individuals reside in towns, representing about 17.5 percent of the State population. Town populations range from 10,949 in the Town of White Bear to 5 in the Town of Hangaard. Fifty-two percent of towns have a population of 300 or less. The data presented in this report reflect the activities of governmental funds enterprise funds. The governmental funds consist of the, Special Revenue, Capital Projects, Debt Service Funds. The enterprise funds are funds that report the financial operations of municipal public service enterprises, such as water or sewer utilities owned by the town. Tables 1 2 summarize the overall financial condition of Minnesota towns. More specifically, Table 1 displays governmental fund revenues, Table 2 shows governmental fund expenditures. Tables 3 4 present the data for governmental fund revenues expenditures by individual town. Table 5 lists public enterprise funds, Table 6 details outsting bonded, other long-term, short-term debt of each individual town as of December 31, long-term debt refers to liabilities such as long-term lease agreements, installment purchase contracts, notes. This report does not analyze unreserved fund balances. The majority of towns use a cash basis of accounting, with the remainder using a modified accrual basis of accounting. Those towns using a cash basis of accounting report a single cash balance for all governmental funds at the end of the fiscal year. Towns using a modified accrual basis of accounting report separate fund balances for all of their governmental funds denote the amounts that are reserved unreserved. Because of these differences among towns, a comparative analysis of unreserved fund balances is not appropriate. 1 While there were 1,785 Minnesota towns in 2010, a total of 69 towns failed to comply with the statutory reporting requirement. In the previous reporting period, 50 towns failed to comply with the reporting requirement. The difference in the number of towns from 2009 to 2010 may skew comparisons between the two years. 2 The underlying databases for Office of the State Auditor reports are available for downloading through the Office of the State Auditor s web site at 3 There was one fewer township in 2010, as Gr Rapids Township in Itasca County was annexed by the City of Gr Rapids in

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11 Overview al Revenues Principal Sources of Revenues The principal sources of revenues for towns in 2010 were: taxes (mainly property taxes); intergovernmental revenues (State, federal, county/local grants); special assessments; charges for services. 4 These sources of revenue accounted for 96.0 percent of town revenue in Figure 1 shows the components of revenue as a percent of total revenues in The share of total revenues derived from taxes increased from 70.4 percent in 2009 to 72.8 percent in Figure 1: 2010 Revenues $261,172,324 Interest Earnings 1.3% Federal 1.6% Revenues 2.1% Special Assessments 3.1% County/Local 1.1% Licenses Permits 0.6% for Services 3.2% State 14.3% Taxes 72.8% * Due to rounding, total does not equal 100 percent. 4 for services for water sewer enterprises are included as enterprise fund activities (Table 5, pg. 140). 5

12 Current Five-Year Trends In 2010, Minnesota towns reported total revenues of $261.2 million. This amount represents a 0.8 percent decrease from the total revenue reported in Since 2006, town revenues have increased 10.3 percent. An analysis of changes in revenues between shows that higher levels of tax revenues were offset by decreases in intergovernmental revenues, special assessments, charges for services, interest earnings. The percentage of town revenues derived from taxes has increased over this five-year period from 67.2 percent in 2006 to 72.8 percent in Figure 2 below shows the change in total revenues for towns over the five-year period. Figure 2: Revenues, Revenues (in Millions) $270 $260 $250 $240 $230 $220 $210 $ Between , tax revenues increased from $185.4 million to $190.1 million. This represents an increase of 2.6 percent. Since 2006, tax revenues have increased 19.5 percent compared to 10.3 percent for all revenues. From 2009 to 2010, intergovernmental revenues decreased 11.7 percent primarily due to a large decrease in federal grants. This changed the share of total revenues derived from intergovernmental revenues from 19.1 percent in 2009 to 17.0 percent in The primary cause for the decrease in federal grants was a spike in Federal Emergency Management Aid (FEMA) grants in 2009 a subsequent return to more normal levels in Several other categories of revenues showed decreases between including interest earnings (-18.2 percent), charges for services (-10.2 percent), special assessments (-5.4 percent), licenses permits (-0.6 percent). Figure 3 on the following page illustrates the five-year trend in federal state grants. The figure shows the decreasing percentage of town revenues derived from state grants the spike in federal grants in

13 Share of Revenues 20.0% 15.0% 10.0% 5.0% 0.0% Figure 3: Federal State as a Percent of Revenues, State Federal Ten-Year Trends Figure 4 illustrates a longer-term trend in total revenues in actual constant dollars. 5 As the chart shows, 2010 represents the first decrease in actual revenues over the ten-year period. Over the ten-year period of 2001 to 2010, total revenues in actual dollars increased 29.9 percent. In constant dollars, revenues decreased 7.7 percent over this ten-year period. The overall trend in constant dollars has been decreasing levels, except for an uptick in Figure 4: Change in Revenues in Actual Constant Dollars, Revenues (in Millions) $280 $260 $240 $220 $200 $180 $ Actual Dollars Constant Dollars 5 Constant dollars will refer to data adjusted for inflation using the Implicit Price Deflator for State Local s setting 2001 as the base year (N.I.P.A. Table 1.1.9, October 2011). 7

14 Figure 5 shows the three major components of revenues: taxes, intergovernmental revenues, charges for services. These components have historically been the primary sources of revenues. Since 2001, the share of total revenues derived from taxes has increased from 50.6 percent in 2001 to 72.8 percent in In contrast, the share of total revenues derived from intergovernmental sources has decreased from 35.1 percent in 2001 to 17.0 percent in The underlying data displayed in Figures 1 through 5 for the years 2001 through 2005 is from previous town finance reports. Data displayed for years 2006 through 2010 is in Table 1 on page % Figure 5: Primary Sources of Revenues as a Percent of Revenues, Percent of Revenues 70% 60% 50% 40% 30% 20% 10% 0% Taxes Intergovernmental Revenues for Services 6 Since 2006, water operations have been shown as enterprises. To make prior-year governmental fund data comparable to 2006 through 2010, charges related to governmental fund water operations have been removed from the years 2001 through

15 al Principal for towns include current expenditures capital outlays for roads bridges, general government, fire, all other public safety, all other expenditures. 7 Debt service principal interest payments are also included in total expenditures for towns. Figure 6 displays the categories of expenditures for The road bridge expenditures category, which is the primary service provided by town government, is almost three times the size of the next largest category. Figure 6: in 2010 $264,957,847 Debt Service 5.7% Fire 12.1% 5.6% 1.9% 18.9% 55.9% * Due to rounding, total does not equal 100 percent. Current Five-Year Trends Minnesota towns reported total expenditures of $265.0 million in This amount represents an increase of 2.1 percent over the amount reported in Of total expenditures, $213.2 million (80.5 percent) was allocated to current expenditures, $36.7 million (13.9 percent) to capital outlay, $15.0 million (5.7 percent) to debt service payments. 8 Over the five-year period of 2006 to 2010, town expenditures increased 8.4 percent. Figure 7 on the following page illustrates total expenditures over the five-year period. 7 Current expenditures capital outlays for water sewer enterprises are included as enterprise fund activities (Table 5, pg. 140). 8 Due to the effects of rounding, the summed total of the rounded numbers may not be the same as the actual total rounded. 9

16 Figure 7: Town, (in Millions) $280 $260 $240 $220 $200 $ for roads bridges totaled $148.0 million in Of this total, $123.9 million was allocated to current expenditures (maintenance, snowplowing, lighting, engineering, administration) $24.1 million to capital outlays (road construction purchase of equipment). Figure 8 provides a comparison of the percent of total expenditures allocated to general government, fire, roads bridges spending during the years 2006 through % Figure 8: Categories of as a Percent of, % 40% 30% 20% 10% 0% s s Fire 10

17 Capital Outlays Capital outlays are expenditures used for the acquisition or construction of capital assets, such as buildings roads. Capital assets have lives extending beyond a single reporting period. Town capital outlays totaled $36.7 million in This amount represents a decrease of 6.9 percent from 2009 a decrease of 4.0 percent from The largest category of capital outlays for towns was roads bridges. Capital outlay expenditures for roads bridges decreased 11.7 percent between comprised 65.7 percent of total capital outlay spending in Debt Service Debt service expenditures are the principal interest payments on outsting indebtedness. Towns had debt service expenditures of $15.0 million in This amount represents a 3.4 percent increase in debt service expenditures from 2009 to Over the five-year period of 2006 to 2010, debt service expenditures increased 21.7 percent. Ten-Year Trends Figure 9 shows the change in total expenditures in actual constant dollars from 2001 to Over this period, total expenditures in actual dollars increased all years except In constant dollars, town total expenditures decreased 5.0 percent between $270 Figure 9: Growth in in Actual Constant Dollars, (in Millions) $250 $230 $210 $190 $ Actual Dollars Constant Dollars 11

18 Primary Categories of Figure 10 illustrates the ten-year trend in current expenditures, capital outlays, debt service as a percent of total expenditures from 2001 to The chart shows that current expenditures are the primary expenditure for towns. In addition, the chart suggests that the share of total expenditures allocated to current expenditures has been increasing. The underlying data displayed in Figures 6 through 10 for the years 2001 through 2005 can be found in the town finance reports for previous years. Data displayed in these figures for years 2006 through 2010 is in Table 2 on page % 80% 70% 60% 50% 40% 30% 20% 10% 0% Figure 10: Components of as a Percent of, Current Capital Outlays Debt Service Indebtedness Current Five-Year Trends Towns incur long-term debt through the issuance of bonds notes, certificates of indebtedness, tax anticipation certificates. Long-term lease agreements are also classified as long-term debt. Towns generally may borrow to finance capital projects purchases. The amount of outsting debt affects the amount available for current expenditures because towns must have sufficient funds available to make principal interest payments to service the debt. 12

19 outsting short- long-term indebtedness totaled $78.9 million in This represents a decrease of 2.8 percent from Outsting bonded indebtedness totaled $53.8 million in 2010, which was a decrease of 1.0 percent from the $54.4 million outsting in long-term debt totaled $24.5 million in 2010, which was a decrease of 5.8 percent from In addition, towns reported $515,291 in short-term indebtedness in 2010, which was a decrease of 30.4 percent from Figure 11 provides a summary of bonds outsting, classified by type of bond, for years 2006 through $35 $30 Figure 11: Outsting Bonded Indebtedness, Bonds (in Millions) $25 $20 $15 $10 $5 $ Special Assessments Obligation Ten-Year Trends Outsting long-term debt has fluctuated considerably over the ten-year period. Figure 12 on the follwing page illustrates outsting long-term debt, which includes total bonded indebtedness other long-term debt in actual constant dollars for the years 2001 through

20 Figure 12: Outsting Long-Term Debt in Actual Constant Dollars, Ousting Long-Term Debt (in Millions) $90 $85 $80 $75 $70 $65 $60 $55 $50 $ Actual Dollars Constant Dollars Figure 13 displays outsting long-term debt as a percent of total revenues for the years 2001 to As Figure 13 shows, outsting long-term debt as a percent of total revenues has not shown a consistent trend. The highest percent was in 2002 when it reached 36.7 percent, while the lowest level was in 2010 when it fell to 30.0 percent. The underlying data displayed in Figures for the years 2001 through 2009 can be found in the town finance reports for previous years. Data displayed in these figures for 2010 is in Table 6 on page % 37% 35% 33% 31% 29% 27% 25% Figure 13: Ousting Long-Term Debt as a Percent of Revenues,

21 Towns Failing to Report Out of 1,785 towns in Minnesota in 2010, 69 failed to comply with the statutory reporting requirement. The chart below shows the number of towns that have not reported their financial information to the Office of the State Auditor, as required by law, in each of the previous five years. Number of Towns Failing to Report, Year # of Towns The list below indentifies the towns that have not reported their financial information to the Office of the State Auditor, as required by law (county names are in parentheses). Aastad (Otter Tail) Antrim (Watonwan) Aurora (Steele) Beaulieu (Mahnomen) Beaver (Roseau) Beaver Falls (Renville) Belgium (Polk) Bray (Pennington) Bristol (Fillmore) Bull Moose (Cass) Burbank (Kiyohi) Byron (Waseca) Cordova (Le Sueur) Cottonwood (Brown) Dale (Cottonwood) Deer (Roseau) Dewey (Roseau) Drammen (Lincoln) Eagle Point (Marshall) Effington (Otter Tail) Featherstone (Goodhue) Fisher (Polk) Friendship (Yellow Medicine) Geneva (Freeborn) Goodridge (Pennington) Green Lake (Kiyohi) Hersey (Nobles) Holy Cross (Clay) 15

22 Johnson (Polk) Kelso (Sibley) Kratka (Pennington) Kurtz (Clay) Lake (Roseau) Langhei (Pope) Laona (Roseau) Lessor (Polk) Lisbon (Yellow Medicine) Logan (Grant) McGregor (Aitkin) McKinley (Cass) Melrose (Stearns) Merton (Steele) Minneota (Jackson) Moose Park (Itasca) Mound (Rock) Nidaros (Otter Tail) North Germany (Wadena) Orrock (Sherburne) Pleasant Prairie (Martin) Pohlitz (Roseau) Poppleton (Kittson) Providence (Lac qui Parle) Remer (Cass) Rosendale (Watonwan) Shelby (Blue Earth) Skelton (Carlton) Sturgeon (St. Louis) Sugar Bush (Beltrami) Sundown (Redwood) Tegner (Kittson) Turner (Aitkin) Tynsid (Polk) Waukenabo (Aitkin) Whitefield (Kiyohi) Windsor (Traverse) Worthington (Nobles) Wyanett (Isanti) Zion (Stearns) Palmyra (Renville) 16

23 Economic Development Regions Minnesota has 13 economic development regions. The following section summarizes town financial information by economic development region. revenues, total expenditures, total debt service are summarized on a regional basis. The underlying data for this section is in Tables 7 8 (pages ). The map on page 20 shows the location of each economic development region. Metro Area (7-County Twin Cities) There are 43 towns in this region. revenues in this region decreased 3.0 percent totaled $25.6 million in 2010, accounting for 9.8 percent of total town revenues. expenditures in this region increased 0.4 percent to $26.2 million, accounting for 9.9 percent of total town expenditures. Debt service in this region increased 41.8 percent totaled $4.0 million, accounting for 26.6 percent of total town debt service. The large increase in debt service is attributable to Hassan Township in Hennepin County which reported a $2.1 million bond principal payment. Arrowhead There are 181 towns in this region. revenues in this region decreased 4.7 percent totaled $31.9 million in 2010, accounting for 12.2 percent of total town revenues. expenditures increased 5.5 percent totaled $33.1 million, accounting for 12.5 percent of total town expenditures. Debt service in this region decreased 5.8 percent totaled $2.1 million, accounting for 14.2 percent of total town debt service. Central There are 74 towns in this region. revenues in this region increased 0.7 percent totaled $27.6 million, accounting for 10.6 percent of total town revenues. expenditures in this region increased 1.0 percent to a total of $28.7 million, accounting for 10.8 percent of total town expenditures. Debt service in this region increased 30.4 percent totaled $2.0 million, accounting for 13.4 percent of total town debt service. East Central There are 87 towns in this region. revenues in this region decreased 2.5 percent totaled $18.1 million, accounting for 6.9 percent of total town revenues. expenditures in this region decreased by 6.4 percent totaled $17.0 million, accounting for 6.4 percent of total town expenditures. Debt service in this region decreased 24.8 percent totaled $967,599, accounting for 6.4 percent of total town debt service. 17

24 Headwaters There are 108 towns in this region. revenues in this region decreased 1.4 percent to $10.6 million, accounting for 4.1 percent of total town revenues. expenditures in this region decreased 5.2 percent to $9.3 million, accounting for 3.5 percent of total town expenditures. Debt service in this region increased 14.4 percent totaled $136,621, accounting for 0.9 percent of total town debt service. North Central There are 151 towns in this region. revenues in this region increased 5.6 percent totaled $23.1 million, accounting for 8.8 percent of total town revenues. expenditures in this region increased 3.7 percent totaled $21.5 million, accounting for 8.1 percent of total town expenditures. Debt service in this region decreased by 28.7 percent totaled $1.0 million, accounting for 6.9 percent of total town debt service. Northwest There are 223 towns in this region. revenues in this region decreased by 10.6 percent totaled $12.6 million, accounting for 4.8 percent of total town revenues. expenditures in this region decreased 10.2 percent totaled $12.0 million, accounting for 4.5 percent of total town expenditures. Debt service in this region decreased 61.4 percent totaled $40,676, accounting for 0.3 percent of total town debt service. South Central There are 147 towns in this region. revenues in this region increased by 5.5 percent totaled $16.8 million, accounting for 6.4 percent of total town revenues. expenditures in this region increased 12.4 percent totaled $18.0 million, accounting for 6.8 percent of total town expenditures. Debt service in this region increased by 14.7 percent totaled $929,675, accounting for 6.2 percent of total town debt service. Southeast There are 194 towns in this region. revenues in this region increased 1.0 percent totaled $33.7 million, accounting for 12.9 percent of total town revenues. expenditures in this region increased 3.4 percent totaled $33.9 million, accounting for 12.8 percent of total town expenditures. Debt service in this region increased 2.8 percent totaled $959,639, accounting for 6.4 percent of total town debt service. 18

25 Southwest There are 163 towns in this region. revenues in this region increased 6.6 percent totaled $12.2 million, accounting for 4.7 percent of total town revenues. expenditures in this region increased by 28.4 percent totaled $14.6 million, accounting for 5.5 percent of total town expenditures. Debt service in this region decreased 28.6 percent totaled $208,954, accounting for 1.4 percent of total town debt service. Southwest Central There are 82 towns in this region. revenues in this region decreased 1.1 percent totaled $12.1 million, accounting for 4.6 percent of total town revenues. expenditures in this region increased 12.6 percent totaled $13.0 million, accounting for 4.9 percent of total town expenditures. Debt service in this region decreased 15.4 percent totaled $408,945, accounting for 2.7 percent of total town debt service. Upper Southwest There are 94 towns in this region. revenues in this region increased 1.1 percent totaled $6.6 million, accounting for 2.5 percent of total town revenues. expenditures in this region increased by 0.8 percent totaled $6.9 million, accounting for 2.6 percent of total town expenditures. Debt service in this region decreased 14.2 percent totaled $10,212, accounting for 0.1 percent of total town debt service. West Central There are 238 towns in this region. revenues in this region decreased 2.8 percent totaled $30.4 million, accounting for 11.7 percent of total town revenues. expenditures in this region decreased by 7.0 percent totaled $31.0 million, accounting for 11.6 percent of total town expenditures. Debt service in this region decreased 9.5 percent totaled $2.2 million, accounting for 14.4 percent of total town debt service. 19

26 Economic Development Regions Region 1 Region 2 Region 3 Region 4 Region 6W Region 5 Region 7W Region 6E Region 7E Region 11 Economic Regions 1... Northwest 2... Headwaters 3... Arrowhead 4... West Central 5... North Central 6E... Southwest Central 6W... Upper Southwest 7E... East Central 7W... Central 8... Southwest 9... South Central Southeast County Twin Cities Region 8 Region 9 Region 10 Graphic by the Office of the State Auditor. 20

27 DATA TABLES

28 Table 1 Revenues of Towns For the Years Ended December 31, 2006 Through Year 5 Year Percent Percent Change Change Population 952, , , , , % -2.8% Number of Towns 1,789 1,788 1,787 1,786 1, % -0.2% Taxable Tax Capacity $1,110,103,135 $1,104,528,105 $1,398,387,416 $1,496,602,056 $1,618,537, % 45.8% Tax Levy $169,522,991 $179,040,176 $190,225,149 $198,831,267 $203,451, % 20.0% REVENUES Amount % Amount % Amount % Amount % Amount % % % Taxes $159,080, % $164,233, % $173,647, % $185,366, % $190,119, % 2.6% 19.5% Special Assessments $9,146, % 8,322, % 8,559, % 8,437, % 7,979, % -5.4% -12.8% Licenses Permits 3,342, % 2,422, % 2,012, % 1,511, % 1,501, % -0.6% -55.1% Intergovernmental Revenues Federal 2,692, % 4,116, % 5,008, % 8,707, % 4,188, % -51.9% 55.6% State 37,384, % 36,532, % 38,772, % 38,803, % 37,378, % -3.7% 0.0% County Highway 755, % 643, % 717, % 170, % 267, % 56.9% -64.5% 1,078, % 1,018, % 1,161, % 1,409, % 1,208, % -14.3% 12.0% Local Unit 473, % 584, % 697, % 1,127, % 1,302, % 15.6% 175.4% TOTAL INTERGOVERNMENTAL REVENUES $42,385, % $42,896, % $46,357, % $50,219, % $44,346, % -11.7% 4.6% for Services 8,984, % 9,405, % 8,939, % 9,318, % 8,370, % -10.2% -6.8% Interest Earnings 6,038, % 7,368, % 5,708, % 3,999, % 3,270, % -18.2% -45.8% Revenues 7,815, % 7,657, % 5,982, % 4,392, % 5,583, % 27.1% -28.6% TOTAL REVENUES $236,794, % $242,304, % $251,206, % $263,245, % $261,172, % -0.8% 10.3% OTHER FINANCING SOURCES Borrowing 11,781,735 15,719,424 7,651,036 9,268,116 11,107, % -5.7% In 16,130,675 12,635,864 13,561,354 11,512,242 15,079, % -6.5% TOTAL REVENUES AND OTHER SOURCES $264,707,362 $270,659,701 $272,418,992 $284,025,649 $287,359, % 8.6% 22

29 Table 2 of Towns For the Years Ended December 31, 2006 Through 2010 EXPENDITURES 10, 11 1 Year 5 Year Percent Percent Amount % Amount % Amount % Amount % Amount % Change Change Current $43,224, % $40,455, % $44,658, % $42,373, % $44,271, % 4.5% 2.4% Capital Outlay 5,956, % 5,753, % 4,491, % 4,365, % 5,721, % 31.1% -3.9% 12 49,180, % 46,208, % 49,149, % 46,739, % 49,992, % 7.0% 1.7% Fire Current 24,856, % 25,487, % 26,585, % 28,218, % 28,432, % 0.8% 14.4% Capital Outlay 3,672, % 3,080, % 3,208, % 3,977, % 3,659, % -8.0% -0.4% 28,529, % 28,567, % 29,794, % 32,195, % 32,092, % -0.3% 12.5% 13 Current 4,336, % 5,051, % 4,709, % 5,293, % 4,656, % -12.0% 7.4% Capital Outlay 109, % 98, % 163, % 367, % 376, % 2.2% 243.0% 4,446, % 5,150, % 4,873, % 5,661, % 5,033, % -11.1% 13.2% Current 107,105, % 106,644, % 111,947, % 116,957, % 123,871, % 5.9% 15.7% Capital Outlay 26,316, % 24,016, % 23,317, % 27,290, % 24,107, % -11.7% -8.4% 133,421, % 130,660, % 135,264, % 144,247, % 147,979, % 2.6% 10.9% Current 14,366, % 12,722, % 12,350, % 12,771, % 11,976, % -6.2% -16.6% Capital Outlay 2,178, % 6,873, % 4,849, % 3,425, % 2,851, % -16.7% 30.9% 16,544, % 19,596, % 17,199, % 16,196, % 14,828, % -8.4% -10.4% TOTAL CURRENT EXPENDITURES $193,888, % $190,361, % $200,251, % $205,613, % $213,209, % 3.7% 10.0% TOTAL CAPITAL OUTLAY $38,233, % $39,821, % $36,030, % $39,426, % $36,716, % -6.9% -4.0% DEBT SERVICE Principal Payments 10,367, % 10,548, % 11,722, % 12,219, % 12,326, % 0.9% 18.9% Interest Fiscal 1,980, % 2,021, % 2,377, % 2,324, % 2,706, % 16.4% 36.6% Debt Service 12,347, % 12,570, % 14,100, % 14,543, % 15,032, % 3.4% 21.7% TOTAL EXPENDITURES $244,470, % $242,753, % $250,382, % $259,583, % $264,957, % 2.1% 8.4% OTHER FINANCING USES Out 15,787,788 12,849,693 13,497,830 12,427,627 15,926, % 0.9% TOTAL EXPENDITURES AND OTHER FINANCING USES $260,258,013 $255,603,268 $263,880,159 $272,011,562 $280,883, % 7.9% 10 for water sewer are shown as enterprise fund activities in Table 5 on page Data for " " is included in the " " category in Table 2. In Tables 4 8, " " appears as a separate category. 12 percentages may not equal the sum of the percentages above due to rounding. 13 Data for "Fire" " " displayed in Table 2 is included in " " in Tables

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31 CLASSIFICATION OF REVENUES AND EXPENDITURES GOVERNMENTAL FUNDS

32 Table 3 Classification of Revenues Taxable Tax Name of Town [footnote] Capacity AITKIN COUNTY - (Arrowhead Region) Tax Levy Payable 2010 Taxes Special Assessments Licenses Permits Federal Intergovernmental Revenues State County Local Unit for Services Interest Earnings Revenues Revenues Borrowing Sources In Revenues & Sources AITKIN 1,297, , , , , ,490 15, , ,660 13, ,727 BALL BLUFF 419, ,997 93, , ,524 10,788 3,609 41, , , ,599 BALSAM 82,803 6,101 5, , , , ,661 BEAVER 168,702 42,002 42, , , , ,000 61,393 CLARK 206,386 35,600 29, , , ,814 52, ,675 CORNISH 178,979 28,311 31, , , , , , ,303 FARM ISLAND 3,327, , , , ,477 5,312 1, , ,554 FLEMING 1,167, , ,829 12, , , , , , ,128 GLEN 1,305, , ,145 4, , ,459 3,778 11, , , ,540 HAUGEN 423,258 35,998 43, , , ,510 54, ,105 HAZELTON 2,550, , , , ,498 10, , , ,905 HILL LAKE 655,125 87,996 82, , ,711 2,150 3, , ,723 IDUN 365,640 64,400 58, , , , ,937 JEVNE 595,374 98,505 90, , , ,888 1, , ,968 KIMBERLY 366,277 65,711 59, , ,628 1,697 1, , ,416 86,172 LAKESIDE 1,493, , , , ,242 1,014 1,031 1, , , ,304 LEE 99,607 9,937 9, , , , ,477 LIBBY 280,149 19,855 18, , , , ,657 LOGAN 283,646 56,741 60, , ,847 3, , , ,556 MACVILLE 209,167 25,500 24, , ,229 1, , ,953 MALMO 834,337 89,038 83, , , ,869 99, ,128 MCGREGOR [1] 128,463 24, MILLWARD 140,541 14,250 14, ,521 5, , , , ,522 MORRISON 252,756 42,279 37, , , , ,000 61,430 NORDLAND 2,311, , , , ,540 4,660 2, , ,700 PLINY 154,616 14,764 12, , , , , ,967 RICE RIVER 248,921 58,999 54, , ,446 1, , ,934 SALO 129,451 18,200 19, , , , , ,136 SEAVEY 133,353 18,000 21, , , , ,674 SHAMROCK 5,146, , , , ,237 10,681 13,345 1, , ,806 SPALDING 295,099 38,448 35,463 1, , ,409 2, , ,283 SPENCER 607, ,802 90, , ,181 4, , , ,808 TURNER [1] 641,395 63, VERDON 118,189 20,979 17, , , , ,000 34,990 26

33 Table 3 Classification of Revenues Name of Town [footnote] Taxable Tax Capacity Tax Levy Payable 2010 Taxes Special Assessments Licenses Permits Federal Intergovernmental Revenues State County Local Unit for Services Interest Earnings Revenues Revenues Borrowing Sources In Revenues & Sources WAGNER 873,032 68,499 65, , ,618 1, , , ,002 WAUKENABO [1] 965,412 81, WEALTHWOOD 809,148 71,399 60, ,247 1, , , ,771 WHITE PINE 49,962 3,750 3, ,874 4, , , ,001 WILLIAMS 269,107 33,700 34, , , , ,000 76,809 WORKMAN 733,067 64,988 55,037 2, , , ,819 1,800 69, ,065 County $30,319,810 $3,529,582 $3,167,841 $535,956 $220 $ --- $523,572 $11,221 $870 $535,663 $84,758 $52,282 $87,883 $4,464,603 $263,660 $204,100 $4,932,363 ANOKA COUNTY - (7-County Twin Cities Region) LINWOOD 5,953,015 1,218,803 1,314, , ,916 15,092 19, ,431 49,850 16,469 9,058 1,563, ,000 1,613,201 County $5,953,015 $1,218,803 $1,314,974 $ --- $61,419 $ --- $76,916 $15,092 $19,423 $111,431 $49,850 $16,469 $9,058 $1,563,201 $ --- $50,000 $1,613,201 BECKER COUNTY - (West Central Region) ATLANTA 279,614 96,999 95, , , , , ,368 AUDUBON 949, , ,682 42, ,327 2, ,741 14, , ,543 BURLINGTON 1,447, , , , , ,267 3, , ,686 CALLAWAY 281,761 40,000 36, , , , ,481 CARSONVILLE 311, ,601 94, ,400 42, ,987 64,833 1,164 20, , , ,813 CORMORANT 3,491, , , , , ,530 9,938 1,642 6, , ,649 CUBA 408,329 64,999 57, , , , , ,498 DETROIT [2] 2,986, , EAGLE VIEW 505,153 41,000 32,597 1, , ,365 15, , ,986 ERIE 2,034, , , , , ,868 1, , , ,729 EVERGREEN 342,578 84,001 56, ,907 1, ,608 11, , , ,651 FOREST 891,358 62,499 63, , , , ,958 GREEN VALLEY 491,671 78,578 75, , , , , ,783 HAMDEN 331,080 81,498 71, , , , , ,508 HEIGHT OF LAND 1,084, , , , ,788 3, , ,170 HOLMESVILLE 807, , , , , , , ,093 LAKE EUNICE 3,813, , ,440 14, , ,176 26, , , , ,776 LAKE PARK 575, , , , , , , ,152 LAKE VIEW 4,494, , , ,945 30,437 32,410 7, ,761 5,952 3, , ,994 MAPLE GROVE 688,005 48,500 47, , , , , ,952 OSAGE 1,171, , , , , , ,890 4,004 1,616 70, , , , ,415 PINE POINT 227,918 76,000 71, , ,095 5, , ,962 27

34 Table 3 Classification of Revenues Name of Town [footnote] Taxable Tax Capacity Tax Levy Payable 2010 Taxes Special Assessments Licenses Permits Federal Intergovernmental Revenues State County Local Unit for Services Interest Earnings Revenues Revenues Borrowing Sources In Revenues & Sources RICEVILLE 256,728 49,003 50, , ,825 22, , ,395 RICHWOOD 666,243 84,900 80, , , , ,832 ROUND LAKE 719,380 59,219 89, , , , ,891 RUNEBERG 423, ,752 95, , , , , ,243 SAVANNAH 534,437 40,957 41, , , , ,568 SHELL LAKE 702,211 69,001 61, , ,807 1, , ,138 SILVER LEAF 405,972 48,853 39, , , , ,158 SPRING CREEK 236,705 42,651 43, , , , ,317 SPRUCE GROVE 353,796 70,761 58, ,646 1,089 2,222 34, , ,287 SUGAR BUSH 771,015 73,797 67, , , ,630 94, ,554 TOAD LAKE 700, , , , , , , ,624 TWO INLETS 637,766 69,501 73, ,546 1, , , , ,814 WALWORTH 285,479 59,997 61, , , , ,556 WHITE EARTH 247,469 44,279 37, , , , ,203 WOLF LAKE 261,129 71,506 66, , , , ,750 County $34,817,297 $4,461,568 $3,871,759 $163,503 $4,071 $39,841 $790,714 $16,304 $88,868 $935,727 $164,827 $29,489 $119,787 $5,289,163 $171,620 $670,714 $6,131,497 BELTRAMI COUNTY - (Headwaters Region) ALASKA 280,671 42,999 29, ,254 1, , ,332 BATTLE 46,036 2,834 2, , , , ,802 BEMIDJI 2,031, , ,268 5,320 1, , , , , ,743 BENVILLE 78,133 14,892 14, ,789 1, , , ,904 BIRCH 114,714 10,936 10, , , , ,619 BUZZLE 320,156 29,301 29, , , ,253 46, ,481 CORMANT 172,829 10,000 10, , , , ,700 21,995 DURAND 213,550 30,999 29, , , , ,115 ECKLES 968, , , , , , , ,331 FROHN 1,445, , , , , , ,796 GRANT VALLEY 1,427, , ,209 13, , , ,147 5, , ,271 HAGALI 401,907 44,997 43, , , , ,736 HAMRE 50,373 2,750 2, ,352 5, , , ,943 HINES 533,118 55,998 49, , , , ,478 HORNET 176,822 19,850 16, , , , ,602 JONES 176,773 18,001 17, ,453 1, , , ,686 KELLIHER 115,792 8,901 7, , , , ,230 28

35 Table 3 Classification of Revenues Name of Town [footnote] Taxable Tax Capacity Tax Levy Payable 2010 Taxes Special Assessments Licenses Permits Federal Intergovernmental Revenues State County Local Unit for Services Interest Earnings Revenues Revenues Borrowing Sources In Revenues & Sources LAMMERS 761, , , , ,187 3, , ,600 LANGOR 174,020 22,899 28, , , , ,405 LEE 45,246 8,236 4, ,652 9, ,959 1, , ,464 LIBERTY 524,205 61,998 54, , , , ,280 MAPLE RIDGE 126,687 18,000 15, , , , ,584 MINNIE 51,667 6,900 6, ,216 7, , , ,851 MOOSE LAKE 330,794 35,015 35, , , , ,323 NEBISH 245,625 32,999 32, , , , ,629 NORTHERN 3,960, , ,120 58,800 4, , ,584 5,004 7,634 2, , ,108 O'BRIEN 123,659 8,054 6, , ,686 8, , ,446 PORT HOPE 618, , , , , , , ,549 QUIRING 89,953 6,547 6, , ,324 1, , ,994 ROOSEVELT 262,053 44,101 44, , ,363 1, , ,532 SHOOKS 178,640 13,002 11, , , , ,000 22,061 SHOTLEY 268,974 21,612 22, ,428 2, , , ,425 SPRUCE GROVE 45,608 2,638 2, ,264 1, , , ,286 STEENERSON 45,159 6,230 7, , , , ,268 SUGAR BUSH [1] 169,602 35, SUMMIT 212,840 27,501 27, , , ,473 37, ,764 TAYLOR 177,384 12,501 12, ,472 4, , , ,500 28,326 TEN LAKE 1,162, , , ,458 4,573 11, , ,046 3, , ,075 TURTLE LAKE 1,767, , , , ,388 1, , , ,108 TURTLE RIVER 1,439, , ,449 20, , ,477 4,182 1, , , ,943 WASKISH 348,822 44,000 51,652 5, ,856 7,300 20, ,306 2,727 2,117 8,178 99, ,596 WOODROW 113,465 11,052 9, , , , ,019 County $21,797,801 $3,372,613 $3,151,203 $103,610 $15,959 $15,850 $593,417 $48,947 $4,474 $662,688 $95,959 $25,904 $89,908 $4,145,231 $ --- $35,469 $4,180,700 BENTON COUNTY - (Central Region) ALBERTA 712, , , , ,263 5, , ,520 GILMANTON 883, , , , , , ,001 GLENDORADO 827,105 93,008 86, , ,021 3, , ,089 GRAHAM 646,605 79,002 70, , , , ,582 GRANITE LEDGE 711,410 63,999 53, ,739 1, ,291 1, , ,345 LANGOLA 1,172, , ,396 39, , , ,208 66, , ,858 MAYHEW LAKE 877, ,995 99, , , , , ,770 29

36 Table 3 Classification of Revenues Name of Town [footnote] Taxable Tax Capacity Tax Levy Payable 2010 Taxes Special Assessments Licenses Permits Federal Intergovernmental Revenues State County Local Unit for Services Interest Earnings Revenues Revenues Borrowing Sources In Revenues & Sources MAYWOOD 845,879 94,975 80, , , , , ,533 MINDEN 2,376, , , , , ,003 21, , ,664 SAUK RAPIDS 614,701 54,499 59, , , , , ,000 72,354 ST. GEORGE 1,128, , , , ,255 1, , , , ,626 WATAB 2,950, , , , , ,629 4,634 1,063 24, , , ,364 County $13,748,109 $1,664,785 $1,491,882 $40,602 $28,032 $ --- $253,666 $1,552 $ --- $255,218 $16,989 $13,711 $113,778 $1,960,212 $333,662 $37,832 $2,331,706 BIG STONE COUNTY - (Upper Southwest Region) AKRON 434,248 39,601 37, ,598 19, , , ,023 ALMOND 353,947 31,693 26, , , , ,393 ARTICHOKE 360,365 22,363 21, ,717 12, , , ,136 BIG STONE 554,439 36,005 33, , ,562 1, , ,347 BROWNS VALLEY 564,212 40,003 44, ,857 13, , , , ,000 87,887 FOSTER 540,941 45,104 45, , , , ,607 GRACEVILLE 399,070 43,004 39, ,909 11, , , ,401 MALTA 374,722 34,002 32, ,669 8, , , ,218 MOONSHINE 483,241 45,004 40, , , , ,194 ODESSA 305,422 21,013 38, , , , ,461 ORTONVILLE 157,635 10,000 32, , , , ,278 OTREY 321,953 15,921 15, , , , ,069 PRIOR 773,704 52,065 49, , , , ,853 TOQUA 369,054 27,502 26, ,510 9, ,037 1,523 1, , ,524 County $5,992,953 $463,280 $481,609 $ --- $ --- $49,416 $180,356 $564 $ --- $230,336 $3,281 $6,131 $1,034 $722,391 $ --- $15,000 $737,391 BLUE EARTH COUNTY - (South Central Region) BEAUFORD 937,116 89,980 84, , , , , ,168 BUTTERNUT VALLEY 889,287 54,400 51, , , , ,157 CAMBRIA 502,924 49,999 47, ,423 6, , ,274 69, ,961 CERESCO 806,571 69,962 66, , , , ,151 DANVILLE 809,385 65,292 65, ,982 10, , , ,421 DECORIA 1,630, , ,570 32, ,763 31, , , , ,421 GARDEN CITY 1,170, , , , , , , ,091 JAMESTOWN 1,334, , ,175 19, , , , , ,677 JUDSON 1,207,917 69,966 68, ,171 12, , , ,468 LE RAY 1,432, , , , , , , ,518 30