Welcome to the City of Blaine 2010 Corporate Report to the Community. This financial report is intended to demonstrate to Blaine residents

how the city efficiently turns tax dollars into quality city services. For the third time in a popular report to the community, the City

of Blaine is showing taxpayers the inner workings of the tax levy – taxpayer money at work. Inside this report, you will see how your tax dollar is divided in order to provide quality city services. You will also

learn that Blaine’s property tax rate ranks well compared to other Anoka County cities. Importantly, you will also learn that Blaine is in good hands financially, as evidenced

by recurring achievements of excellence in financial reporting. In the end, we hope this report offers you – a customer of the City of Blaine – a clearer understanding of your tax dollars at work.

During the past two years, the nation’s financial crisis has caused record numbers of foreclosures and mortgage defaults, resulting in unprecedented declines in property values and a shrinking tax base. The struggle of governing bodies to budget amid plummeting tax revenues has been felt at each level of government.

Blaine was initially impacted most seriously at a budget level by the state’s decision in 2008 to cut payments of the Market Value Homestead Credit. The difficulty of accounting for that major loss of revenue was compounded by a loss of tax base when both home and commercial/industrial market values began falling in 2008. In response, the city cut its budget $1.2 million from 2009 to 2010 and will cut another $150,000 from 2010 to 2011.

As a governmental unit, the city has been diligent in cutting expenditures while adhering to its primary goal of maintaining existing service levels during these difficult times. Indeed, as the monthly cost of city services for the average Blaine homeowner dropped from $49.75 in 2008 to $41.07 in 2010 (with a continued decline in 2011), service levels remained steady. Going into 2011, full-time city staff is down 5%, but residents will again suffer no loss of city services and see no increase in utility rates. The city’s belt remains tight heading into the new year.

In spite of the economy and the resulting reduced budget, the City of Blaine still has reinvested in the community. Again this year, $2 million was spent improving the city sewer system, which came with no additional tax assessment. The city also added two beautiful new parks using park dedication fees, monies collected during the development process and earmarked for parks and open space. Staff has begun the process of implementing a new Pavement Management Program to fulfill the commitment of providing roadways suitable for safe, functional and efficient travel. Roadways in Blaine also have benefitted from a strong partnership with Anoka County that has led to improvements like the current project on Radisson Road and future projects on Main Street and Lexington Avenue. These are all significant strategic investments important for the long-term future of the community.

Although the city has suffered alongside residents and businesses during this financial crisis, we have thus far weathered the storm and maintained city service levels by budgeting responsibly and facing tough financial decisions head on. Looking forward, we are likely in store for another troublesome budget year in 2012. For the city’s budget outlook to improve, property values must begin to stabilize and the private sector must begin to recover. Until that time, the City Council and I will work closely with staff to ensure your tax dollars continue to be efficiently turned into quality city services.

These trying economic times may continue to test us in the short term, but I believe our sustained reinvestment in the community and responsible budget practices will serve to strengthen us in the long term.

We look forward to continuing to serve you in 2011.

Corporate Reportt o t h e c o m m u n i t y

FISCAL YEAR ENDING DEC. 31, 2009 • BUDGET YEAR 2010

InsIde WeatherIng the stormmayor tom ryanPage 2

• Buying Quality Services• Tax Rate Comparison• Dividing Your Dollar• Finance Awards

Page 3• Operating Revenue Sources• Expenditures by Fund• The General Fund

Page 4• Capital Improvements• Community Development

truth In taxatIon hearIng dec. 16

The Truth in Taxation for the 2011 budget is scheduled for Thursday, Dec. 16 at 7:30 p.m. in the Blaine City Hall Council Chambers.

VIeW FInancIal reports onlIne

City of Blaine financial information is posted online. The 2010 Annual Budget, 2009 Comprehensive Annual Financial Report and an electronic copy of this Corporate Report to the Community are available at www.ci.blaine.mn.us by searching keyword finance . Budget information for 2011 will be posted online as it becomes available.

C I T Y O F B L A I N E

tax dollars Buy QualIty serVIces

41¢ Anoka County 32¢ City of Blaine

22¢ Anoka-Hennepin School District

5¢ Other agencies

dIVIdIng your 2010 tax dollar

BlaIne’s loW tax rate compares FaVoraBly In anoka countyA comparison of the 2010 property tax rate of Anoka County cities with populations greater than 10,000 residents shows Blaine among the lowest. The low 29.51% property tax rate on a median-valued Blaine home pays $41.07 monthly for city services. A breakdown of the services purchased from property taxes is displayed in the checkbook example above.

The graphic at left shows the division of a dollar in property taxes paid by the typical Blaine homeowner; for each dollar paid, 32 cents go to city services.

The dollar amount of taxes owed is determined by market value, tax law and the levy. The tax levy for local governmental

entities is distributed across properties within each entity’s boundary using tax capacity, a function of assessed property value and property type.

A Blaine homeowner with a median-valued home pays $1,520.68 annually in property taxes, of which $492.83 ($41.07 monthly) goes toward city services. The remaining $1,027.85 goes to Anoka County, the school district and other taxing districts.

The City of Blaine continues to provide quality services to residents at an affordable price.

The checkbook graphic at left shows that the owner of a median-priced Blaine home paid $41.07 monthly for city services like police, fire and streets and parks maintenance in 2010. That number was determined by using the net property tax cost, which is calculated by subtracting all revenue sources other than property tax from departmental expenditures.

Water and sewer utilities are fee-based. The average Blaine homeowner uses 8,000 gallons per month; the average monthly cost for all utility services – water, sewer, stormwater and solid waste – is $40.

the medIan-Valued BlaIne home

The $41.07 amount used throughout this report as the average monthly cost of city services was determined using a median-valued home in Blaine with an Anoka County assessor’s market value, payable in 2010, of $189,200.

Minnesota state law, Chapter 156 of the Session Laws of 2005, requires that

“a city or county with a population of more than 15,000 must annually

notify its residents of the positions and base salaries of its three highest-paid employees.” For the City of Blaine, names, titles and salaries are: Clark Arneson, city manager – $139,728;

Joseph Huss, finance director –$119,483; and Bryan Schafer,

planning and economic development director – $118,572.

222010011102

11/10/08 167 94TH AVENUE NE 08/01/08-10/31/08

010-0110-00-01 11/30/08

173.04 173.04

MARK GAMES1223 FIRST STST PAUL PARK MN 55071-1712S550711712236S

1001

010-0110-00-01 167 94TH AVENUE NE 08/01/08-10/31/08

Water & Water Service Charge .00 0 0 0 0Sewer .00Taxable Garbage .00Untaxed Garbage (Recycling) .00Sales or SWM Tax .00State Water Testing Fee .00Stormwater Fee .00

Total Current Charges .00 Due By 11/30/08

After 11/30/08 Pay 173.04

Previous BalancePayments - Thank YouAdjustmentsPenaltiesBalance ForwardCurrent ChargesTotal Balance Due

Account Number 010-0110-00-01

173.04.00.00.00

173.04.00

173.04

Collection will be delayed one day for the following holidays:

Memorial Day - Monday, May 26, 2008Independence Day - Friday, July 4, 2008Labor Day - Monday, September 1, 2008Thanksgiving Day - Thursday, November 27, 2008Christmas Day - Thursday, December 25, 2008New Years Day - Thursday, January 1, 2009

21st Century Bank is now processing utility bill payments for the City of Blaine. As a serviceto Blaine residents, they will also accept payments in person at either of their Blaine locations:9380 Central Ave NE or 12301 Central Ave NE. At both locations, the lobby is open 9-5 Mon-Fri andthe drive thru is open 7:30 a.m. - 6:00 p.m. Mon-Fri and 8:30 a.m. - noon on Saturday.

Proof M

ode-P

DF/PReS

average HomeoWner1234 any StreetBlaine mn 55449

1234 Any Street10/10/10

AMOUNT DUE

DUE DATE

$40

Note: Utility bills are mailed quarterly and average $120 per bill. The numbers used are averages; individual households will vary.

9/1/10 - 10/1/10

PAY TOthe order of

2010

memo

dollarsAverage Homeowner

Blaine, MN

January 1, 2010

City of Blaine

Forty-one and 82/100

$ 41.07

Average Homeowner

monthly city services

Safety Services

Public Services

Debt Services

Administrative Services

Finance & Information Services

Community Development

$11.07$18.93

$1.38

$4.19

$2.90

$2.60

11/10/10

The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Blaine for its

Comprehensive Annual Financial Report for the year ended Dec. 31, 2008, the 26th consecutive year the city has received this prestigious award. In order to be awarded a Certificate of Achievement,

the city published an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfied both generally accepted accounting principles and applicable legal requirements. A certificate of achievement is valid for a one-year period. The city believes its current Comprehensive Annual Financial Report meets the program’s requirements and is awaiting word from the GFOA about earning a 27th consecutive certificate.

In 2010, the City of Blaine’s bond rating improved to Aa1 after recalibration by Moody’s Investors Service. The rating indicates well-managed financial operations and healthy reserves as key strengths of the city.

8

cIty earns FInancIal aWards

Columbia HeightsEast Bethel

AnokaLino Lakes

RamseyAndover

Coon RapidsFridleyBlaine

Ham Lake10% 20% 30% 40%

city property tax rate0% 50%

TOTAL

$41.07

general FundTotaling $23,694,629, or approximately 58% of the total 2010 budget, the General Fund is the primary fund of the city’s day-to-day operations and is funded primarily by property taxes, fees and licenses and charges for services.

2009 ExpEnditurEs nEt propErty tax*2010 budgEt

Finance $1,937,791 $2,129,163 $2.60Finance encompasses the city’s financial management and billing services in addition to information services.

community Development

$1,630,651 $1,536,332 $1.38Community Development ensures quality development is achieved in Blaine through professional planning and inspection services.

SBm Fire Department

$1,358,573 $1,364,474 $2.96The City of Blaine partners with two communities to form the Spring Lake Park-Blaine-Mounds View Fire Department, which provides emergency response as well as fire prevention and education services.

aDminiStration $1,021,479 $1,204,958 $1.86Administration includes the offices of the City Manager and City Clerk, as well as Human Resources and Communications.

other Financing uSeS

$475,000 --- ---This unbudgeted expense comes from excess year-end reserve generated in the General Fund that is transferred for capital purchases. The $475,000 expenditure in 2009 represents undesignated reserve on hand at the end of 2008.

* Net property tax is the portion of the levy allocated to these services each month.

SaFety ServiceS

$8,674,447 $9,030,184 $15.97Safety Services ensures public safety in Blaine through the efforts of the Police Department and Community Standards.

puBlic ServiceS

$8,472,160 $7,904,813 $11.07Public Services includes all Public Works, Engineering, Geographic Information Services and Parks and Recreation functions, essentially managing and maintaining Blaine’s infrastructure and parkland while fostering recreational and educational opportunities for residents.

legiSlative $549,217 $524,705 $1.04Legislative includes the City Council, advisory commissions and legal services. Blaine is governed by six elected council members and a mayor. City Council appoints residents to advisory commissions. Legal advises city departments, City Council and advisory commissions.

Blaine is able to keep its property tax rate low by maximizing other sources of funding. In diversifying revenue, the city is in a strong position to withstand varying economic conditions.

2010operatIng reVenue sources

Property TaxesFees & ChargesLicenses & PermitsIntergovernmentalInterest EarningsBond ProceedsFines & ForfeitsFranchise FeesOther Financing SourcesSale of Fixed AssetsCharitable GamblingMiscellaneoustotal revenues

$17,184,56016,215,6501,493,015

943,000805,800500,000322,500178,07087,00040,00032,5002,500

$37,804,595*

These funds represent the city’s budgeted expenditures. General Fund is detailed below. Utility Fund revenue comes from user fees and pays for operational maintenance and capital improvements. Capital Equipment Fund supplies the fixed assets of general city operations. Special Revenue Funds are from charitable gambling proceeds and cable television franchise fees. Charitable gambling proceeds support various non-profit groups.

2010 Budgeted expendItures By Fund

*The difference between 2010 revenues and expenditures is for planned expenditure of reserves in funds other than the general fund.

C O R P O R A T E R E P O R T

$23,694,62916,529,390

591,710222,670

$41,038,399*

General FundUtility Enterprise FundCapital Equipment FundSpecial Revenue Fundstotal expenditures

FeedBack

aBout thIs reportcapItal projects

Suggestions and comments can be directed to City manager Clark arneson at carneson@ci.blaine.mn.us or 763-785-6120.

Corporate Reportt o t h e c o m m u n i t y

the City Council presents this report to display the performance of Blaine’s city government.

Mayortom ryan763-757-3390tryan@ci.blaine.mn.us

CounCilMeMbersmike Bourke763-784-1986mbourke@ci.blaine.mn.usDave Clark763-754-7643dclark@ci.blaine.mn.usruss Herbst763-784-6143rherbst@ci.blaine.mn.usWes Hovland763-228-1117whovland@ci.blaine.mn.usKathy Kolb763-757-6887kkolb@ci.blaine.mn.usDick Swanson763-370-2557dswanson@ci.blaine.mn.us

City ManagerClark arneson763-785-6120carneson@ci.blaine.mn.us

the City of Blaine reports yearly its financial position and activity in a Comprehensive Annual Financial Report (CaFr), which is prepared in accordance with generally accepted accounting principles. the Corporate Report to the Community summarizes the most important and relevant information from the 2009 CAFR and 2010 Annual Budget.

the City of Blaine Corporate Report to the Community is not audited. this is the third year financial information has been presented to residents in this format.

As part of its commitment to providing quality services to residents, the City of Blaine has identified significant capital projects to provide the infrastructure necessary to meet current and future service demands. Details of some major projects from 2010 are provided.

communIty deVelopmentNew home construction has slowed considerably across the country. However, Blaine has fared much better than most cities in terms of housing permits issued

and units constructed in the past two years. In fact, the city ranked second among Twin Cities suburbs in 2009 with 283 units built. Through nine months of 2010, Blaine ranks second in Minnesota in housing permits issued. Clearly, Blaine remains an attractive place to reside.

From a commercial/industrial perspective, new development ground to a halt nationally as the national economy regressed. Nevertheless, Blaine has seen 60,000 square feet of new construction to date this year, with more than a dozen new businesses opening in existing space. The city views itself as well-suited for a quick recovery once the national economy improves.

PuBliC WorKS ColD Storage

ParKS anD trailSTwo new city parks that opened in 2010 have significantly enhanced the Blaine’s athletic and recreational amenities. The 7.7-acre Lakeside Commons Park boasts a 45,000-square-foot sand beach, swimming area, beach house, boathouse, splash pad, playground, picnic pavilion and recreational trails. The park was constructed for about $1.65 million and was funded through park dedication

fees, which are collected through the development process and are statutorily dedicated to the development and construction of park and open space areas.The Lakes Athletic Complex is a 22-acre multi-functional park that contains four tennis courts, basketball court, two baseball fields and two multi-use season fields for soccer, lacrosse and football. The complex was built for just under $1 million and, like Lakeside Commons Park, was funded through park dedication fees.

SeWer SyStem imProvementSFor the second consecutive year, the city devoted $2 million to improving the city’s aging sewer system through a technique known as slip lining. The process extends the life of the city’s sewer pipe by reinforcing deteriorated or damaged pipe by creating a seamless, jointless “pipe within a pipe,” a procedure that is done without digging up streets and neighborhoods. This investment in the community will last more than 50 years, and has been done without assessment.

A 30,000-square-foot cold storage building is currently under construction for Public Works equipment. When factored with the expanded Public Works facility, which was opened in 2009, the buildings will serve the city’s public services demands at full build out of Blaine.