HomeMy WebLinkAbout1944_VILLAGE OF EDINA_AUDIT REPORTBOARD OF WATER COMMISSIONERS
JOHN S. FINDLAN WILLIAM A. PARRANTO, President SEVERIN A. MORTINSON
WATER DEPARTMENT
LEONARD N. THOMPSON, CITY OF SAINT PAUL R. A. THUMA
General Manager Capital of Minnesota Supt. of Filtration
WILLIAM A. PARRANTO, Commissioner
BERNARD T. HOLLAND, Deputy Commissioner
October 16, 1946
Village Manager
Village of 'Edina
1801 W.5Pth St.
Edina, Minn.
Dear Sire
I am sending to you herewith the audit for the
Country Club District Service Company for the year ending
December 31, 1945. This report was in the hands of the
Board of Appraisers.
Yours very truly,
Leo rd N. Thompson
Gene al Manager
LNT -Hp
r ORToF 0AINT PAUL
LAND WATER AIR
Gateway to the Great Northwest THE CITY OF PURE DRINKING WATER
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Country Club District Service Company
TABLE OF CONTENTS
PAGES 1 TO 7 - Letter of Transmittal and Comments
PAGE 8 - Certificate
EXHIBIT A - Balance Sheet, as at December 31, 19"
EXHIBIT B - Analysis of Earned Surplus, for the year
ended December 31, 1944
EXHIBIT C - Profit and Loss Statement, for the year
ended December 31, 1944
SCHEDULE C-1 - Operating Costs and Expenses, for the
year ended December 31, 1944
SCHEDULE A--1 - Fixed Assets and Depreciation, for the
year ended December 31, 19"
AUSTIN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
ROANOKE BUILDING
MINNEAPOLIS
ALBERT B. AUSTIN, C.P.A.
Mr. Oscar Gaarden, President
Country Club District Service Company
Minneapolis l0, Minnesota
Dear Sirs
June 12, 1945
We have made an examination of the books and records of the COUNTRY
CLUB DISTRICT SERVICE COMPANY.. a Knnesota Corporation, MINNEAPOLIS, !MINNESOTA,
for the year ended December 31, 19440 and we are pleased to submit our report
in the following comments and in the Exhibita and Schedulec as listed in the
0 preceding Table of Contents.
HISTORICAL
A complete history of the e =parry ao Set forth in our report for the year
ended December 31., 1940, and nub.xquent dasta is inclu.dnd in our reports for the years
ended December 31, 1941, 1942, and 1943. Anyone interested in the history of the
company prior to the beginning of thYs ycar may rp.fer to these reports:.
* As stated in the previous report for the year ended December 31, 1942,
the Supreme Court of the State of Minnesota had handed doyen a decision which
was filed on January 2, 1943, in which the company was refused rental for hy-
drant service prior to March 25, 1939. The court also-held that a portion of
the neater *mine and storm sewers serving the lots sold Prior to October 1, 1935,
located in the Brown and Fairway sections of the Country Chub District was the
property of the village of Edina for the benefit of the lot openers. The decision
was so worded as to be not entirely clear, and therefore, the company and the
village could not agree upon its interpretation. There has been no change in this
�. situation dnring the current year, and as a result of this decision, the values as
stated.in this report do not necessarily represent the true values of the properties
of the company, and until such time as these values are definitely determined and
segregated, we have not disturbed the values as they appear on the books of the spa y.
THE PUBLICATION OF ANY CONDENSATION OR MODIFICATION OF STATEMENTS HEREIN CONTAINED OR THE USE OF OUR CERTIFICATE DETACHED
FROM ITS CONTEXT. OR THE USE OF OUR NAME IN CONNECTION WITH THE SALE OF SECURITIES OR OTHER PUBLICITY WILL NOT BE
SANCTIONED UNLESS FIRST SUBMITTED FOR OUR APPROVAL.
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Country Club District.Service Comyagy
Subsequent to the closing of the. year under review, but prior to the making
of this report, the company has instituted a new suit in the lover court to collect
fees for fire protection services rendered to the Village of Edina.. The case -has
not as yet been heard, and therefore we have no knowledge of what the outcome may
be.
FINANCIAL POSITION
We are submitting as Exhibit A and supporting Schedule A-1. the Financial
Position,of the company in detail:as of December 31, 1944, subject however to the
preceding comments-under the caption *Historical,* and further comments in this
report. For your convenience, sae are submitting 3.n summarized form, this Balance
Sheet in comparison with the one.for Deeeg�ber 31, 1943, together with increases
and decreases as follows:
DECEMBER 310 DECEMBER 31, INCREASE
ASSETS .1944 - 19-43 DEMASE
Fixed Assets 4 163,368.:07 1720677.71 4009.64
Investments _ 256.24 256.24
Current Assets. - 13,167; 4 9,-751.20 3,416.54
Deferred Charges 39.60 61.20 21.60
TOTAL ASSETS 181 575.471 Z 1822746.35 1 170.
LIABILITIES AND NET WORTH
Fixed Liabilities 20,225.46..' 24,372.33 2,].43.87
Current Liabilities 3,$73.36 4345.03 469.17
Net Worth 157.471.09 156,028.99 1.642.10
TOTAL LIBBILITIES AND NET VORTH$ 181,575.41 A;18227 1.i70.0
Due to conditions brought about -by the war and the fact that there has
been practically no now construction during the year under review, there are no
substantial changes in.the Balance Sheet of the company.
The Surplus account, totalling 8138,771.09, is classified as follows;
Capital. Surplus 1179494.77
Contributions in aid of construction 14o676.53
Earned Surplus 6.599.79
1
Total- 138.771.49
For fall explanation of the Capital Surplus, please refer to our
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Country Club District Service Co y
report of December 31, 1940.
Contributions in aid of construction in the amount of $14,676.53
represents money contributed to the company for the extension of service facili-
ties that become the property of the company, and therefore are included in its
plant values.
The Earned Surplus totalling $6,599.79 is set forth in detail in Exhibit
By shish shows an increase over the previous year in the amount of $lp667.10, most
of which.has resulted from net profit for the year.
OPERATIONS
The Operations for the year ended December 31, 1944, are shown in detail
in Exhibit C and supporting Schedule 0--1, and shows a net profit of $1,671.43 after
providing for interest charges and depreciation. In arriving at these figures,
depreciation in the amount of $4,758.18 has been included. In order that you may
have a better understanding of the operatigns +cr the year, we submit a condensed
comparison for the current year and for the year ended De;Lmber 31, 1943, together
with increases and decreases in both amounts and percentages as follows:
YEAR ENDED
DECEMBER 31. 1944
% TO
AMOUNT SALES
YEAR ENDED
DECEMBER 31, 1943,
%M
AMOUNT SALES
INCREASE -Dt CRWE
% TO
AMOUNT SALES
SALES $19,332.33 100.00 $ 18,169.34 100.00 $ 1,162.99
OPERATING COSTS AND
EXPENSES:
Dater Purchased
for Resale
311.52
1.61
0 306.88
1.60
$ 4.64
.08
Power and Pumping
5405.90
30.03
5,254.88
28.92
551.02
1.11
Distribution Expense
4,656.50
24.09
4053.83
25.06
102.67
.97
Accounting and
Collection
3,342.86
17.2%` 3,F92.79
20.32
349.93
3.03
Administrative and
General
2,814.37
14.566
4.712.61
25.94
1,898.24
31.
TOTAL OPERATING COSTS
AND MENS96
16.931.15
87.58
2 i82520.99
101.93
1 1.589.84
14.35
NET PROFIT BEFORE INCOME
TAXES AND INTEREST
2,401.18
12.42
$ 353..65
--
1.33
$ 2,752.83
14.35
IACONE TAXES
_ _38.08
.20
-
-
1 38.08
.20-
2,363.10
12:22
351.65
1.93
$ 21.714.75
14.15
INTEREST
691.67
3.58
772.27
4.25
80.6o
.67
NET PROFIT OR LOSS
1.671.43
8.
2.123.92
2 7
1 .82
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Country Club Disrtrict Service Cow
It Will be noted from the foregoing comparison that there vas a decided
increase in,revenue and a decrea®e'in operating costs over the previous year,
which accounts for the substantial'gain -in the'net profit for the year. Income
taxes provided for -'the current year represent teams to the State of - Minnesota, as
a carry -over of losses from a previous year eliminated Federal income tax. The
operating profit for the year before provieion for income taxes and interest shows
an increase of $2,752.83 over the previous year.
CO NTS ON BALANCE SHEET
FI XED ASSETS:
We are showing the fixed assets in summarized form on the.Balance Sheet,
Exhibit A, and in still further detail in Schedule A -1. New expenditures during
the year amounted to $x.54, all being additions to the eater distribution system
and meters. Depreciation to the extant of Uv75848 i is been taken into operating
expenses. The Fixed Assets ,of the comp=y are pledged "to the St. Paul Fire and
Marine.Insurance Company for a loan in the original amount of 620,000.00 with a
present balance of 613,000.00 bearing interest at 5 %:. The interest is payable on
May 1 and. November, 1 of each .year,; and the principal. is payable at the .rate of .
611,000,00 per year on November 1, up to November.1, 1951,'and the balance of
66,.000.00 remaining at that tim& is payable on November 1,.1952..
During the past, the company had extended.service into the'newly develop-
ed subdivisions and agreements were made for the promoters of these subdivisions
to furnish the money for the.extending.of the water mains without interest. The
company agreed to repay these advances by returning to the subdividers one -half
of the revenue received from the users of these mains until paid. €or, but in no
event are repayments made'for a period to.exceed ten years.
The company now has.advances for construction repayable out of revenue
as of December 31,. 1944° as follows:
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Country Club District Service Company
ADVANCED BY THORPE BROS., INC.
Tooddale Section
Brucewood Addition
Arden Avenue Extension
Portion of East Sunnyslope
ADVANCED BY WHITE INVEST M0T COMPANY
Hidden Valley
Total
3,865.69
2,]13.26
100.82
1,288.83
859.86
8,2280-
6
Of these advances, the one made by Thorpe Bros. for the Wooddale section
with a present balance of 63,865.69 is repayable by diverting to Thorpe Bros. one-
half of the revenue received from this section up to March 31, 19481, and the mount
remaining unpaid, if any, at that date becomes payable in full by the company to
Thorpe Bros. The other advances are payable only by the diversion of 50% of the
revenues from the subdivisions for the first ten years, unless they are fully paid
up prior to that time, and any balance remaining at the and of ten years becomes a
contribution to the company in aid of construction.
In addition to the above amounts referred to, the company has received
contributions in aid of construction for specific; eat msions which certain cus-
tomers wanted. These contributions were outright gifts to the company in order to
secure water service, and we have taken them in as part of the surplus. The
extensions covered by these contributions become the property of the company and
are included in their fixed assets.
CURRENT ASSETS s
The Cash in Bank in the amount of 010,301.24 is deposited with the
Northwestern National Bank of Minneapolis, and we have reconciled this amount and
verified the balance by direct correspondence. We have also made a detailed check
of all deposits and withdrawals from the bank and found them to be properly record -.
ed and in order.
The Accounts Receivable in the amount of #2,255.14 have been classified
on the Balance Sheet as to their nature. We have made a detailed check of these
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Country Club District Service Company
accounts and have reviewed the methods used to handle them and found them to be
in good order. However, we did not verify the balances by direct correspondence
with the debtors.
The Inventories amounting to $611..36 are classified on the Balance Sheet.
We were not present when the inventories were taken, but we have examined the re-
cords of the company with regard to these inventories, and they appear to be proper.
Certain of the meters Were listed as secondhand but were carried at a much reduced
cost so that the values appeared to be conservative.
FIXED LIABILITIES:
The company negotiated a first mortgage loan on its operating properties
as of November 1, 1937, with the St. Paul Fire and Marine Insurance Company in the
total amount of $20,000.00, bearing interest at 5 %. which interest is payable on
May 1 and November 1 of each year. The principal is payable $1,000.00 annually
up to November 1, 1951, and the remsini.ng 66,000.00 becomes due and payable on
November 1, 1952• The present unpaid balance of this mortgage is $13,000.00, and
of this amount we have shown $1.,000.00 among the Current Liabilities as it becomes
due on November 1, 1945• The balance of Fixed Liabilities totalling $8 ,228.46
is made up of advances for construction, which is repayable out of revenues over a
period of years as explained in a previous paragraph.
CURPZIT LIABILITIES:
The Accounts Parable are classified as follows:
Refund of Construction Advances 1,143.87
Income Tag withheld on wages 262.75
Miscellaneous 2-7..00
Total lo422.62
There were no trade accounts unpaid as of the end of the year. The
refund of construction advances are the payments due out of revenues to subdividers
for the period ended December 319 1944, as explained in a previous paragraph. We
have made an analysis of this account and found it to be correct.
We are showing a list of accrued taxes in the amount of $1,332.90.' These
taxes are all applicable to 1944, payable in 1945• The accrued interest payable in
7—
Country flub District Service Company
the amount-of'$108-34 is the amount of interest accrued to December 319, 1944, . on
the mortgage loan to the St. Paul Fire and Marine Insurance Company. The notes
payable-in the amount of.$l,,000.00 is the current portion of the mortgage loan
which is due on November 1,, 1945.
NET WORTH3.
The particulars of Net Worth are set forth on the Balance Sheet,, Exhibit
Al, and the changes in Earned Surplus are set forth in Exhibit B. Net.Worth is
subject to revision to give effect to the Supreme Court decision as discussed
elsewhere in this report. All of-the capital stock outstanding is held by
Mr. Oscar Gaarden. Thelpr6ferred stock provides for 6% annual cumulative dividends,
and these-dividends are six years in arrears,, which makes stotal of $36.00 per
share, or 04,320.00-in all. The Surplus account has been clasnified'on the Bal-
ance Sheet and totals $138,771.09. These classifications are explained in a pre-
viou,& paragraph..
We found that the company -keepp-,7ary-accurate and complete records so
that full information on all of the activitice is readily available*
We wish-to express our appreciation-of the courtesies extended and the
cooperation afforded us during the'course of this engagement.
Respectful.1y submitted,,,
�71
ALBERT B. AUSTIN, C.P.A.
AUSTIN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
ROANOKE BUILDING
MINNEAPOLIS
CERTIFICATE
We have made an examination of the Balance Sheet of the COUNTRY CLUB
DISTRICT SERVICE COMPANY, MIN EAPOLIS, MINNESOTA, as at December 31, 1944, and
of the Statement of Income and Surplus for the calendar year ended December 31,
1944. In connection therewith, we have examined or tested accounting records
of the company and other supporting evidence and obtained information and ex-
planations from officers of tho company, but wo did not make a detailed audit
of the transactions.
In our opinion, based upon such examination and subject to the.comments
6 contained in this report, the accompemying Ba:Lance Sheet and related Statement
of Income and Surplus fairly present, in accordance with accepted principles of
accounting consistently maintained by the COUNTRY CLUB DISTRICT SERVICE COMPANY
during the calendar year under review, its position at December 31, 1944, and
the results of the operations for the year.
Respectfully submitted,
Certified Public Accountants
June l2 s 1945
THE PUBLICATION OF ANY CONDENSATION OR MODIFICATION OF STATEMENTS HEREIN CONTAINED OR THE USE OF OUR CERTIFICATE DETACHED
FROM ITS CONTEXT, OR THE USE OF OUR NAME IN CONNECTION WITH THE SALE OF SECURITIES OR OTHER PUBLICITY WILL NOT BE
SANCTIONED UNLESS FIRST SUBMITTED FOR OUR APPROVAL.
Exhibit A
J ASSETS VET AORTH
a FIXED ASSETS: Note A — Schedule A-1
Land
Wells, Building, Tank, Distributioi
System, Toole and Equipment
Least Accumulated Depreciation
(Including $29,178.19 Accrue,
at date of appraisal)
13,000.00
TOTAL FIXED ASSETS (NE'
1.000.00
$ 12,000.00
The above valuations were based on
as of January 1j.' 1937, plus subs
The above assets are pledged to sei
$ 3,865.69
originally $20,000.00, now $13,1
.� 6,362.77
8,228.46
CIIRRE�iT ASSETS:
Cash on Hand and in Banks
. Accounts Receivable -
Pater
Construction Contributions
Miscellaneous
$ 1,1.43.87.
Inventories —
262.75
Meters
2+7.00
$ 1,433.62
�scellaneous
i
1.00
TOTAL CURRENT ASSETS
108.34
DEFERRED CHARGES&
$ 1,224.48
Unexpired Insurance
56.25
e
14.09
38.08
1032.90
NOTE A — In a Minnesota Supreme Court
January 2, 1943, the court 1
1,2000.00
serving the lots in the Brw.
Club District gold prior to
3,875,86
the village of Edina for the
the decision is not clear, a
definitely determined and s4
values as they appear on tho
as stated in this report do
values of the properties of
$ 302000.00
installed prior to the preso
—
and all additions and instaj
in the capital accounts and,
$ 12,000.00
6.700.00
18,700.E
$
NOTE B — Accumulated dividends on Pre!
share or a total of $4020.0C
$ 117,494.77
R
14,676.53
6,599.79
138,771.09
157,471.09
TOTAL ASSETS 181,575.11
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Mthibit B
Country Club District Service Company
ANALYSIS OF EARNED SURPLUS
For the.Year Ended December 31, 1944
BALANCE PER AUDIT REPORT, DECEMER 31, 1943 $-4,932.69
AM
Net Profit for Year 1.671.43
6,6o4.12
DEDUCT:
Adjustment of Sewer Accounts Receivable 4:33
TOTAL EARNED SURPLUS, PER EMMIT A 6 . 27
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Exhibit C
Country Club District Service Company
PROFIT AND LOSS STATOWT
For the Year Ended December 311, 19"
OPERATING REVENUES:
Sales and Services to Customers 19,325.67
Miscellaneous Revenues (Net) 6.66
GROSS REVENUES 19,332.33
OPERATING COSTS AND EXPENSES: — Schedule C-1
Wafter Purchased for Resalo 311.52
Power and Pumping 5,805.90
Distribution Expenses 4,656.50
Accounting and Collection 3,342.86
Administrative and General. 2.811..37
TOT& OPERATING COSTS AND EXPMSW 16.931:15
NET OPERATING INCOME 2,1401.18
PROVISION FOR IECOME TAXES:
Minnesota 38.08
2,363.10
INTEREST CHARGES 691.67
NET PROFIT TO =QIT B 1067i.Aa
Provision for Depreciation Included Above 4.7'8.18
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Schedule C-1
Country Clnb District Service Company
OP�,TING COSTS AND BgPENSES
For the Y ®ar Eaded December 31, 1944
�PATF� PIiRCHASBD FOR IlESALB .
• _ POD AND FUB11'ING
•. Power Purchased
'Operating Labor
.- Depreciation
� F,9ca1 Taxes
Suppl�.es and B�penasa
Ysintenance
� TOTAL Pam AND Pi1�iPIIdG
"� >
DISrRIBIITIOti F.�'BNSESt
�, Depreciation
,. ffiaintenance of �fa,ins
Serrice,ou Consumers F�re�isea
Operatics of Distribut�.on L3aea
TOTAL DISTRIDIITiO?� B�'BI!3S�S
l�CCO�TING AND COT,LECTIJPit
i ffieter Reading
.. " - �tiacellaaeous
� -: Billing and Accaunting
TOgA� AeeOII�rING ,SND COLLECTION
ADffiIIVIST�TIYE AND GENLR�Ls
�' � Saleri.es end Gages
H[iscellaueone
,, —Legal S®rvicea
�- Insurance
_ � Office Supplies -and Expenses
., ; — Federal Capital Stock Tax
., — Payroll Tess
Depreciation on Office Equipment
TOTAL ADffiINISTAATI9i's AND GIIdEAAL
TOTAL OPEiiATING COSTS AND F�PEftSFAS -
Per Exhibit C
� 311.52
� 2,532,92
586.SO ,
1, 046. �
1,224.48
166.00
250.00
� 3, 694.63
81.51
600.63
.279.73
� 2Ci0.I0'
$79.01
2.263:75
� 1, 594..50
21.75 /
1,000.00
?1.60
6.00
11,2.50
40.47
17.55
5,805.90
4,656.50
3,342.86
2.814.37
� 16.931x15
,;, --
�i; =��;
�t�s�
r'�'
��.
�,��
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TOTALS, PER EgHIBIT A 4 234.295.07
- ASSETS
BALANCE
BALANCE
BALANCE
1 1
;ADDITIONS --
DEDUCTIONS 12-31-_"'
WATER DIVISION
DEWCTIONS
I2-
Land
$ 3, 000: (?G?
`
"000.00
Building-
2,109.40
- -
- - 29109.40
well #1.
2,578.27
-
- - 2;578.27
Well #2
1,950.00
1 2/3%
211.25
kevated.Tank and Piping
10,053:34
- -
- - 109053.34
Pumping Equipment
8,709.2$
-
- 8.9709.28
Water Distribution System 121,'282066
399.10
- - 121 ,581.76
= - -
3,274.13
1-2/3%
49.44
2,021.93
- -
/
4%
TOTAL WATER. DIVISION
14 ..582.9:
49"0,
150.031.49
SEffER DIVISIONS
34.46'7.87
3pO2O.O2.
Sanitary .Seger System
\� $-- 51, 522.79--- F -;�-
$ - - 51, 522.79
Storm Suer System
$- - -
$ 16 0925-95
9
32479.68
TOTAL'SEKER DIVISION
$ .83.602.47
-
- $ 83.b02.47
MISCELLANEOUS:
26015i. '
19079-95
L
Tools and Equipment
$ 485.61
$ - -
$` - - $ .- 485,61
Office Furniture and Equipment 175.50
- -
- 175.50
'89.20
TOTAL VISCELLANSOUS
661.11
106.75
661.11
TOTALS
# 233.84 6.53
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J 611,168,82
1 4x758.19-,
TOTALS, PER EgHIBIT A 4 234.295.07
NOTE A - The above assets mortgaged to the St. Paul Fire and Marine Insurance Company to secure
a loan bearing.interest at 5% in an original amount of $20,00.0.00, now $139000.00.: ::
NOTE B The. values 'as . shown above are... subject to amendments to give effect to the .Supreme Court
decision as referred to elsewhere in this report.
65,927.00
Schedule Al
DEPRECIATED.
VALUE
3,000.00
1,388,04
2,191.53
1,706,25
3,733e97-
5,435.15
95,039.87
48:79
112,543.60
$ 34,596.94
20,980.01
'8 5�,57b.85
$ 178.87
68:75
$ 247.62
$ 168.368.07
DE'P- RECIATI0N
BALANCE
BALANCE
.RATA
1 1;44,
DEWCTIONS
I2-
4%
636.98
8408
:. _ -
721.36
1 2/3%
343.77
'42.97
- -
386.74
1 2/3%
211.25
32.50
- -
243.75
4%'
5,.917.24
40243
- -
6,319.37
5%
2,838,67
435.46
= - -
3,274.13
1-2/3%
24,519.96
2,021.93
- -
26041.89
4%
.65
- -
:65
34.46'7.87
3pO2O.O2.
2�
150'$95.49
$ 1,9030-46
$- - -
$ 16 0925-95
9
10.458.08
641.55,
= -
11.099. b7
26015i. '
19079-95
L
280025.62'
10%
258.18
$ 48.56
- _
.: 306.74
10
'89.20
17.55
- -
106.75
37 8.
9 66.0
.
J 611,168,82
1 4x758.19-,
NOTE A - The above assets mortgaged to the St. Paul Fire and Marine Insurance Company to secure
a loan bearing.interest at 5% in an original amount of $20,00.0.00, now $139000.00.: ::
NOTE B The. values 'as . shown above are... subject to amendments to give effect to the .Supreme Court
decision as referred to elsewhere in this report.
65,927.00
Schedule Al
DEPRECIATED.
VALUE
3,000.00
1,388,04
2,191.53
1,706,25
3,733e97-
5,435.15
95,039.87
48:79
112,543.60
$ 34,596.94
20,980.01
'8 5�,57b.85
$ 178.87
68:75
$ 247.62
$ 168.368.07