HomeMy WebLinkAbout2010-06-02 PACKET 02.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 6/2/10
PREPARED BY Finance Robin Roland
ORIGINATING DEPARTMENT STAFF AUTHOR
COUNCIL ACTION REQUEST
Motion to receive and accept the 2009 Comprehensive Annual Financial Report.
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Accept the 2009 Comprehensive Annual Financial Report.
BUDGET IMPLICATION
BUDGETED AMOUNT ACTUAL AMOUNT
SUPPORTING DOCUMENTS
❑ MEMO /LETTER:
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
® OTHER: Comprehensive Annual Financial Report, Required Auditor's communications.
ADMINISTRATORS COMMENTS
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City Administrator Date
COUNCIL ACTION TAKEN: []APPROVED ❑ DENIED OTHER
City of • .• Grove
Finance Department
TO: Honorable Mayor and City Council
Ryan Schroeder, City Administrator
FROM: Robin Roland, Finance Director
DATE: May 27, 2010
RE: Presentation of Comprehensive Annual Financial Report for 2009
Introduction
Craig Popenhagen and Brady Hoffman with the City's auditing firm, LarsonAllen LLP will be
at the meeting to present the 2009 Financial Statements.
A copy of the 2009 Comprehensive Annual Financial Report and the auditor's required
communications are included herein for your review. The Letter of Transmittal in the
Financial Statements (page 3) and the Management Discussion and Analysis (page 21)
summarize important data and give a good overview of the City's financial situation.
In addition, the statistical section (page 163) includes supplemental detailed information
and financial trends.
Action Requested
Following the presentation a motion to receive and accept the Comprehensive Annual
Financial Report is appropriate.
COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF COTTAGE GROVE
STATE OF MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2009
Prepared By:
Finance Department
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
ReferencePage Number
I. INTRODUCTORY SECTION
Letter of Transmittal3
Certificate of Achievement for Excellence in Financial Reporting11
Principal City Officials12
Organization Chart13
II. FINANCIAL SECTION
Independent Auditors' Report17
Management's Discussion and Analysis21
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net AssetsStatement 135
Statement of ActivitiesStatement 237
Fund Financial Statements:
Balance Sheet - Governmental FundsStatement 338
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental FundsStatement 440
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of ActivitiesStatement 542
Statement of Net Assets - Proprietary FundsStatement 643
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary FundsStatement 744
Statement of Cash Flows - Proprietary FundsStatement 848
Notes to Financial Statements53
Required Supplementary Information:
Budgetary Comparison Schedule - General FundStatement 990
Budgetary Comparison Schedule - Storm Water Maintenance FundStatement 1096
Budgetary Comparison Schedule - Note to RSI97
Funding Progress Schedule - Other Post Employment Health Care Benefits98
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
ReferencePage Number
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 11103
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental FundsStatement 12104
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 13106
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue FundsStatement 14108
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 15111
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service FundsStatement 16112
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 17114
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project FundsStatement 18116
FundBalanceNonmajorCapitalProjectFundsStatement18116
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Ice ArenaStatement 19118
Future Economic DevelopmentStatement 20119
Equipment ReplacementStatement 21120
Forfeiture/SeizureStatement 22121
Public Safety GrantsStatement 23122
RecyclingStatement 24123
Charitable GamblingStatement 25124
Celebration FundStatement 26125
Street SealcoatingStatement 27126
Internal Service Funds:
Combining Statement of Net AssetsStatement 28128
Combining Statement of Revenue, Expenses and Changes in Fund Net AssetsStatement 29129
Combining Statement of Cash FlowsStatement 30130
Component Unit:
Economic Development Authority:
Combining Balance Sheet - All Governmental Fund TypesStatement 31132
Combining Statement of Revenues, Expenditures and Changes
in Fund Balance - All Governmental Fund TypesStatement 32133
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
ReferencePage Number
Supplementary Financial Information:
Construction/Acquisition Costs:
Capital Projects FundsExhibit 1136
Combined Schedule of Bonded IndebtednessExhibit 2140
Debt Service Payments to MaturityExhibit 3142
Deferred Tax LeviesExhibit 4144
Subcombining Balance Sheet - Pavement Management Debt Service ScheduleExhibit 5146
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Pavement Management Debt Service ScheduleExhibit 6147
Subcombining Balance Sheet - Construction Revolving Capital Project ScheduleExhibit 7148
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Construction Revolving Capital Project ScheduleExhibit 8149
ConstructionRevolvingCapitalProjectScheduleExhibit8149
Subcombining Balance Sheet - Tax Increment Construction Revolving ScheduleExhibit 9150
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Tax Increment Construction Revolving ScheduleExhibit 10151
Subcombining Balance Sheet - TIF Debt Service Revolving ScheduleExhibit 11152
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
TIF Debt Service Revolving ScheduleExhibit 12153
Schedule of Sources and Uses of Public Funds:
Oakwood Heights District Number 1-1Exhibit 13154
Up North Plastics District Number 1-3Exhibit 14155
Cottages of Cottage Grove District Number 1-8Exhibit 15156
Renewal by Andersen District Number 1-9Exhibit 16157
Tax Increment District Number 1-10Exhibit 17158
Tax Increment District Number 1-12Exhibit 18159
Tax Increment District Number 1-13Exhibit 19160
Tax Increment District Number 1-14Exhibit 20161
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
ReferencePage Number
III. STATISTICAL SECTION
Net Assets by ComponentTable 1165
Changes in Net AssetsTable 2166
Fund Balances of Governmental FundsTable 3168
Changes in Fund Balances of Governmental FundsTable 4169
Assessed and Estimated Actual Value of Taxable PropertyTable 5170
Property Tax Rates - Direct and Overlapping GovernmentsTable 6171
Principal Property TaxpayersTable 7172
Property Tax Levies and Collections Table 8173
Ratios of Outstanding Debt by TypeTable 9174
Ratios of General Bonded Debt OutstandingTable 10175
Direct and Overlapping Governmental Activities DebtTable 11176
Legal Debt Margin InformationTable 12177
Demographic and Economic StatisticsTable 13178
Principal EmployersTable 14179
Full-time Equivalent City Government Employees by FunctionTable 15180
Operating Indicators by Function/ProgramTable 16181
Capital Asset Statistics by Function/ProgramTable 17182
I. INTRODUCTORY SECTION
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Letter of Transmittal
May 18, 2010
The Mayor and Council appoint a full-time City Administrator, who is responsible for overall
supervision of City operations.The City is structured into four major departments - Public
Safety, Public Works, Community Development, and Finance and Administration. The Council
also appoints members of the various citizens’ advisory boards.
The City provides a variety of municipal services. These include:
* Public Safety
- Police protection
- Fire protection
- Animal control
- Emergency response
- Cottage Grove EMS
* Public Works
- Street maintenance
- Fleet maintenance
- Street signing and striping
- Water and sewer utilities
- Street lighting
- Snow plowing
- Engineering
- Storm water
- Public improvements
* Community Development
- Building inspections
- Land planning
- Zoning administration
- Public improvements
- Historic preservation
* Parks and Recreation
- Parks maintenance
- Outdoor swimming pool
- Ice arena
- Golf course
- Recreational activities
* General Administration
- Legal
- City Clerk
- Economic development
- Personnel
- Finance & Administration
The Economic Development Authority (EDA) of the City of Cottage Grove is a separate legal
entity organized pursuant to Minnesota Statute 469. The EDA is included as a discretely
presented component unit. The EDA is considered a component unit because the Council
appoints the members of the government authority and because the EDA is in a relationship of
financial benefit or burden to the City.
The annual budget serves as the foundation for the City of Cottage Grove’s financial planning
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and control. The Council is required to adopt a final budget by no later than December 28 of
each year.
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Letter of Transmittal
May 18, 2010
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the City of
Cottage Grove operates.
Local economy
:Cottage Grove is in the southeast corner of the seven county metropolitan area.
The City continues in a steady growth pattern. Growth is consistent with the Utility Staging Plan
that encourages contiguous, orderly and cost-effective expansion of the utility system.
The population of Cottage Grove has increased from 833 in 1950 to 30,582 according to the
2000 census and is estimated at 34,213 for 2009. Most of the population of the City concentrates
in two age groups 0 - 19 years, 35.5% and 25 - 44 years, 34.4%. According to the 2000 census,
the average age is 32 years and the median family income was $65,825.
Major employers in the area include School District 833, 3M Company Cottage Grove plant, Up
North Plastics, Renewal by Andersen, Target, Cub Foods, Werner Electric, Menard’s, Rainbow
Foods, and Aggregate Industries. The City's commercial areas include four community shopping
centers and several restaurants.
The Economic Development function within the City works on the expansion and attraction of
business to Cottage Grove. In addition, Economic Development maintains an available property
list and a commercial and industrial development guide. Recently they have developed and
implemented a marketing campaign to attract and retain local businesses, and pursued retail
development opportunities.
Since 1998, the City has facilitated fourteen industrial projects and two expansions in the
Business Park totaling over 1 million square feet and over $54 million in market value. In 2001,
the City Council and EDA created the Gateway North District. The Gateway North District has
experienced significant enhancements since its creation. The total Gateway District commercial
market values have increased $80 million over this eight year period. The Gateway is now home
to over 700,000 square feet of retail offerings up from 500,000 square feet in 2002. However,
the City-wide building permit values for new commercial construction totaled only $250,000 in
2009, further reflecting the difficult economic times.
Major initiatives
: Initiatives for 2010 are outlined below:
Continue to expand Industrial Park by attracting new businesses.
Continue efforts in the redevelopment of the Norris Marketplace area.
Consider expansion/replacement of City Facilities including City Hall/Police Station and/or a
Community Center utilizing existing resources and exploring all manner of public/private
partnerships.
Continue planning for the next Metropolitan Utility Service Area (MUSA) expansion in the
Upper Ravine district - approximately 4,000 acres for future development.
Property taxes:
Net tax capacity” is the value used to calculate the tax rate. Simply put, the
“
property tax levy for the year divided by the city-wide Total Net Tax Capacity equals the Tax
Extension Rate. This Tax Extension Rate is the tax rate used to determine the property taxes
paid by each property owner. Overall property values have grown consistently over the past 10
years. The table below shows a reduction in net tax capacity for 2002 with a return to growth
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Letter of Transmittal
May 18, 2010
thereafter. This one year decrease resulted from significant changes in the State Property
Classification System (Class Rates) that took effect in 2002. The impact of this change is shown
on the following table:
For 2009, the total market value increased 2.4%, or $71.8 million. Of this increase, 32% was
appreciation of existing properties while 68% ($49 million) is attributed to new construction.
The following table shows the changes in valuations over the past several years:
The delinquency rate for property taxes remains low. Current tax collections were 98% of the
property tax levy during 2009. Total collections have consistently been above 95% since 1990.
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Letter of Transmittal
May 18, 2010
The allocation of property tax levy by purpose (urban property only) for the years payable 2002
to 2009 are:
The decrease in the tax extension rate since 2002 is reflective of the strong appreciation of
market values of existing properties in addition to new construction. Future reduction in the tax
rate will be challenging as a result of the decline in the valuation of residential housing stock
which began in late 2008.
In 1971 the legislature enacted the Fiscal Disparities law, which was not
Fiscal Disparities
:
implemented until 1975 because of a constitutional challenge. The law provides for the pooling
of 40 percent of all new commercial/ industrial property valuation or growth in the seven county
metropolitan area to be redistributed to the taxing jurisdictions according to population and
valuation per capita. The tax rate is higher or lower if the municipality in which the property is
located received more or less valuation from the metropolitan pool than is contributed by the
municipality. Over the past decade, the City of Cottage Grove has benefited significantly from
this legislation.
It is difficult to determine the future impact of the law in the City because of the complexity of
the formula and the regional scope of the legislation. The past impact on the taxable valuation is
as follows:
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Letter of Transmittal
May 18, 2010
Cash management
: Cottage Grove subscribes to the "pooled cash" concept of investing, which
means that all funds with cash balances participated in an investment pool. This pooled cash
concept provides for investing greater amounts of money at more favorable rates. Below is a
history of yields and investment earnings. The three-month Treasury bill is taken from historical
pricing from the Federal Reserve Website.
Treasury Bill
Three-MonthInvestmentInvestment
YearAverageYieldEarnings
20090.151.48$ 736,601
20081.284.311,933,219
20074.415.922,336,771
20064.874.501,654,851
20053.272.37883,608
20041.432.10686,078
20031.031.63508,457
20021.634.401,047,472
20013.477.121,625,056
20005.898.231,891,520
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CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2009
Elected Officials
Term Expires
Mayor:
Myron Bailey December 31, 2012
Council Members:
Mark Grossklaus December 31, 2010
Justin Olsen December 31, 2012
Jen Peterson December 31, 2012
Pat Rice December 31, 2010
Appointed Personnel
City Administrator Ryan Schroeder
Director of Finance Robin Roland
City Clerk Caron Stransky
Director of Planning and Community Development Howard Blin
Director of Public Safety Craig Woolery
Director of Public Works Les Burshten
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City of Cottage Grove
Organization Chart
Cottage Grove Citizens
Advisory
City Council
Commissions
City
City Administrator
Attorney
Community
Public SafetyPublic Works
AdministrationFinance
Development
Historic
Preservation
City Clerk/
AccountingPatrolEngineering
Elections
Building/Code
Streets
Inspections
Economic
Enterprise BillingInvestigations
Development
Fleet/Building
Maintenance
Public Safety
Planning
Human
Payroll
Programs
Resources
Utilities
Animal & Code
Community
Enforcement
Programs/MIS
Communications
Parks
Fire & Emergency
River Oaks
Management
Recreation/Ice
EMS/Medical
Services
Fire Inspections
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II. FINANCIAL SECTION
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Cottage Grove, we offer readers of the City of Cottage Grove’s
financial statements this narrative overview and analysis of the financial activities of the City for
the fiscal year ended December 31, 2009. We encourage readers to consider the information
presented here in conjunction with additional information that we have furnished in our letter of
transmittal, which can be found on pages 3 through 10 of this report.
Financial Highlights
The assets of the City of Cottage Grove exceeded its liabilities at the close of the most
recent fiscal year by $210,481,492 (net assets). Of this amount, $55,211,937
(unrestricted net assets) may be used to meet the government’s ongoing obligations to
citizens and creditors in accordance with the City's fund designations and fiscal policies.
The City’s total net assets increased by $4,300,828 over the previous year.
As of the close of the current fiscal year, the City of Cottage Grove’s governmental funds
reported combined ending fund balances of $41,742,521, an increase of $5,882,036
compared to the previous year. Approximately 81%, $34,054,253 is available for
spending at the government’s discretion (unreserved fund balance).
At the end of the current fiscal year the general fund balance of $9,131,585, included
$35,038 reserved and $9,096,547 unreserved - designated. The unreserved fund balance
represents approximately 79% of total general fund expenditures.
At the end of the current fiscal year, the City of Cottage Grove had total long-term debt
outstanding of $28,740,022, a decrease of $758,217 (2.5%) compared to the previous
year.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Cottage
Grove’s basic financial statements. The City’s basic financial statements comprise three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes
to the financial statements. This report also contains other supplementary information in
addition to the basic financial statements themselves.
Government-wide financial statements
. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Cottage Grove’s finances, in a
manner similar to a private-sector business.
The statement of net assets presents information on all of the City of Cottage Grove’s 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 of Cottage Grove is improving or deteriorating.
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Management’s Discussion and Analysis
(continued)
The statement of activities presents information on how the City’s 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 only result in cash flows in
future fiscal periods (e.g. uncollected taxes and earned but unused compensated absences).
Both of the government-wide financial statements distinguish functions of the City of Cottage
Grove that are principally supported by taxes and intergovernmental revenues (governmental
activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business-type activities). The governmental activities of the
City of Cottage Grove include general government, community development, public safety,
public works, and culture and recreation. The business-type activities of the City of Cottage
Grove include a golf course, street lighting, water and sewer, and an ambulance service.
The government-wide financial statements include not only the City of Cottage Grove itself
(known as the primary government), but also a legally separate EDA component unit for which
the City of Cottage Grove is financially accountable. Financial information for this component
unit is reported separately from the financial information presented for the primary government
itself.
The government-wide financial statements can be found on pages 35 through 37 of this report.
Fund financial statements
: A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Cottage Grove, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
Cottage Grove can be divided into two categories: governmental funds and proprietary funds.
Governmental funds
: Governmental 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 financial 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 for governmental funds with similar
information presented for governmental activities in the government-wide financial statement.
By doing so, readers may better understand the long-term impact of the City's near term financial
decisions. Both the governmental fund balance sheet and governmental fund statement of
revenues, expenditures, and change in fund balance provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
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Management’s Discussion and Analysis
(continued)
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
City’s ten individual major governmental funds. They are as follows:
General Fund
Storm Water Maintenance Fund —Special revenue fund
Closed Debt Fund —Debt service fund
Developer Financed Debt Service Revolving Fund —Debt service fund
Pavement Management Debt Service Fund —Debt service fund
MSA Construction Capital Project Fund —Capital project fund
Pavement Management Capital Project Fund —Capital project fund
Construction Revolving Capital Project Fund –Capital project fund
Tax Increment Construction Revolving Fund –Capital project fund
Ice Arena Expansion Construction Fund —Capital project fund
Data from the other 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 City of Cottage Grove adopts an annual appropriated budget for its general and special
revenue funds. A budgetary comparison statement has been provided for those funds to
demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 38 through 42 of this
report.
Proprietary funds
: The City of Cottage Grove maintains five enterprise funds and two internal
service funds as a part of its proprietary fund type. Enterprise funds are used to report the same
functions presented as business-type activities in the governmental-wide financial statements.
The City of Cottage Grove uses enterprise funds to account for its golf course operations, street
light operations, ambulance service, water operations, and sewer operations. Internal service
funds are an accounting device used to accumulate and allocate costs internally among the City
of Cottage Grove’s various functions. The City of Cottage Grove uses internal service funds to
account for its self insurance and fleet maintenance activity. Because both of these services
predominantly benefit governmental rather than business-type functions, they have been
included within governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for its golf course operations, street light operations, ambulance service, water
operations, and sewer operations, all of which are considered to be major funds of the City of
Cottage Grove. Conversely, both internal service funds are combined into a single, aggregated
presentation in the proprietary fund financial statements. Individual fund data for the internal
service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 43 through 51 of this
report.
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Management’s Discussion and Analysis
(continued)
Notes to the financial statements
: The notes provide additional information that is essential to
a full understanding of the data provided in the government–wide and fund financial statements.
The notes to the financial statements can be found on pages 53 through 87 of this report.
Other information:
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 on budgetary comparisons. Combining and individual fund
statements and schedules can be found on pages 103 through 133 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Cottage Grove, assets exceeded liabilities by $210,481,492, at
the close of the most recent fiscal year.
The largest portion of the City of Cottage Grove’s net assets ($146,842,004 or 70%) reflects its
investment in capital assets (e.g. land, buildings, machinery, and equipment) less any related debt
used to acquire those assets that is still outstanding. The City of Cottage Grove uses these capital
assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the City of Cottage Grove’s investment in its capital assets is 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.
An additional portion of the City’s net assets ($8,427,551 or 4%) represents resources that are
subject to external restrictions on how they may be used. The remaining balance of unrestricted
net assets, $55,211,937 may be used to meet the City’s ongoing obligations to citizens and
creditors.
At the end of the current fiscal year, the City of Cottage Grove is able to report positive balances
in all three categories of net assets; for the government as a whole, as well as for its separate
governmental and business-type activities. The same situation held true for the prior fiscal year.
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Management’s Discussion and Analysis
(continued)
The City’s net assets increased by $4,300,828.
Governmental Activities:
Governmental activities increased the City of Cottage Grove’s net
assets by $2,193,667, accounting for 51% of the total growth in net assets. Key elements of this
increase are as follows:
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Management’s Discussion and Analysis
(continued)
Grants and contributions not restricted to specific programs decreased 5% due to further
unallotment of the 2009 Market Value Homestead Credit aid in order to solve the State
budget crisis.
Capital grants and contributions in governmental activities decreased 52% because of the
continued decline in construction of new housing developments.
Charges for service in governmental activities remained static from 2008.
Investment revenue decreased 50% due to historically low interest rates.
Expenses from governmental activities in 2009 remained essentially the same as 2008
showing a decrease of $10,828 or 0.05%.
Net transfers totaling $1,134,566 were made between the governmental activities and the
business-type activities in 2009 compared to $3,459,013 in 2008. These transfers to the
business-type activities were for capital contributions of water mains, sewer mains, and
streets lights. The decline in construction of new housing developments noted above also
resulted in less infrastructure being constructed and therefore transferred to the business-
type activities.
Below are specific graphs which provide comparisons of the governmental activities revenues
and expenses:
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x/Ë444Ë444
x0Ë444Ë444
x1Ë444Ë444
x2Ë444Ë444
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x3Ë444Ë444
Zª
x
In each program area, program expenses exceeded program revenues with the exception of the
public works: construction. In the public works construction program area, program revenues
exceeded expenses by $421,634 which is attributed to the levying of special assessments for the
construction activities in new developments.
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Management’s Discussion and Analysis
(continued)
Governmental Activities -Expenses
Interest on Long-
Culture and
Term Debt
Recreation
8%
Public Works
14%
Construction
13%
General Government
10%
Public Works
Community
Operations
Development
18%
6%
Public Safety
31%
Business-Type Activities.
Business-type activities increased net assets by $2,107,161 with
$1,134,566 of this increase due to transfers from governmental activities for contributions of
capital assets. Below are graphs showing the business-type activities revenue and expense
comparisons before capital contributions and transfers:
Expenses and Program Revenues -
Business-Type Activities
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
ExpensesProgram revenues
Changes in net assets were positive for all segments of business-type activities except for the
Golf course which had a small decrease of net assets of $(43,192).
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Management’s Discussion and Analysis
(continued)
Financial Analysis of the Government's Funds
Governmental Funds
. The focus of the City of Cottage Grove’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 of Cottage Grove’s financing 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.
At the end of the current fiscal year, the City of Cottage Grove’s governmental funds reported
combined ending fund balances of $41,742,521, an increase of $5,882,036. The increase is due
to the following factors:
Reduction in new infrastructure construction expenditures due to residential development
being at a virtual standstill in 2009.
The issuance of debt which financed prior year Pavement Management expenses.
The collection of prepayments on deferred special assessments which recovered prior
year construction expenses.
Approximately 81% of the fund balance ($34,054,253) constitutes unreserved fund balance,
which is available for spending at the City’s discretion. The remainder of fund balance is
reserved to indicate that it is not available for new spending because it has already been
committed:
1)$36,888 to liquidate prepaid items,
2)$4,404,116 to repay debt,
3)$627,264 for tax increment purposes, and
4)$2,620,000 for repayment of interfund loans.
The general fund is the chief operating fund of the City of Cottage Grove. At the end of the
current fiscal year, unreserved fund balance of the general fund was $9,096,547 while total fund
balance was $9,131,585. As a measure of the general fund’s liquidity, it may be useful to
compare total fund balance to total fund expenditures. Total fund balance represents 79% of
total general fund expenditures. The general fund balance increased by $305,788 during the
current fiscal year. Key factors in the general fund increase were increased property taxes levied
to offset other reduced revenue sources, decreased expenditures for operations and deferred
capital outlay expenditures.
The Storm Water Maintenance Fund increased by $12,145 in 2009 because fees that were
generated in 2009 exceeded those necessary to fund the 2009 storm water maintenance activities.
The Closed Debt Fund decreased by $346,700 because fund balance from the fund was used to
refund and close two outstanding bond funds.
The Developer Financed Debt Service Revolving Fund decreased by $36,792 due to the payment
of interest debt, without corresponding revenues in 2009.
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Management’s Discussion and Analysis
(continued)
The Pavement Management Debt Service Fund decreased by $832,868 because of the refunding
and refinancing of previous debt issued for pavement management.
The MSA Construction Fund increased by $91,419 because of special assessment collections
from previous years projects.
The Pavement Management Capital Project Fund increased by $3,623,630 due to bonds issued in
2009 to finance the 2008 Pavement Management project.
The Construction Revolving Fund, a capital project fund, increased by $1,567,790 because of the
receipt of special assessments received for construction activity in new developments. The City
will continue to receive future special assessment payments in this fund to cover the negative
fund balance.
The Tax Increment Construction Revolving Fund, a capital project fund, increased by $302,978
due to receipt of tax increment revenues which covered prior year expenditures.
The Ice Arena Expansion Construction Fund, a capital project fund, decreased by $38,074 and
was closed upon completion of the project.
Proprietary funds
: The City of Cottage Grove’s proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
The net assets in the respective proprietary funds are; golf course $415,660, street light
$6,532,042, Cottage Grove EMS $946,152, water operations $33,181,333, and sewer operations
$25,411,250. The increase (decrease) in net assets in the proprietary funds for 2009 was
$(43,192), $179,540, $157,367, $1,442,029, and $348,357, respectively. The City has increased
charges and made staffing changes over the past couple of years in the Cottage Grove Golf
Course fund to increase the financial position of the fund.
Budgetary Highlights
General Fund.
The General Fund original budget was revised early in 2009 due to an anticipated revenue
shortfall resulting from the State’s resolution of its own budget difficulties. Operational
expenditures were cut by $296,700 and $255,000 in property tax revenues were shifted from
future capital projects to current operations to fill the anticipated $ 570,000 intergovernmental
revenue shortage.
Later in 2009, a second adjustment to the budget had the following significant changes:
The intergovernmental revenue and fire services budgets were both reduced by $40,950
due to the reduction in the State Fire Aid payment resulting from the state recalculation
of commercial/industrial insurance liability tax. The aid payment is a pass through to the
Fire department’s relief association.
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Management’s Discussion and Analysis
(continued)
The charges for service and Community Development expense budgets were both
increased by $313,000 to reflect a payment from Aggregate Industries for the City to
coordinate an Environmental Impact Study on their behalf.
Transfers were amended to recognize transfers in the amount of $645,432 occurring as
part of the City’s fund balance designation policy.
The actual results were significantly different than the final budget amounts because of the
following:
Market value homestead credit revenue was $311,748 less than budgeted because of the
State unallotment.
Charges for services categories were $235,454 less than budgeted due to the lack of
development activity within the City in 2009. The City normally generates
administrative, finance and engineering charges from development occurring.
Investment income was $155,453 less than budgeted due to historically low interest rates.
Total expenditures were approximately $664,095 less than the final budgeted amounts in
all divisions. All departments realized additional budget savings due to decreased
operational spending.
Capital Asset and Debt Administration
Capital assets:
The City of Cottage Grove’s investment in capital assets for its governmental
and business-type activities as of December 31, 2009, amounts to $173,839,993 (net of
accumulated depreciation). This investment in capital assets includes land, buildings,
infrastructure, machinery and equipment.
There were no major capital asset events that occurred in 2009 due to the delay of capital
projects until more favorable economic conditions.
City of Cottage Grove's Capital Assets
(Net of Depreciation)
Governmental ActivitiesBusiness-type ActivitiesTotals Primary Government
200920082009200820092008
Land and Land improvements16,399,447$ $ 16,399,447$ 1,746,919$ 1,747,715$ 18,146,366$ 18,147,162
Construction in progress 905,348 2,979,679 905,348 2,979,679
- -
Buildings and structures 9,769,441 10,467,347 2,257,010 2,368,045 12,026,451 12,835,392
Equipment and furniture 575,748 504,838 575,748 504,838
- -
Machinery and equipment3,679,659 3,562,791 813,178 882,463 4,492,837 4,445,254
Other improvements 1,410,219 1,533,818 4,693,761 4,817,967 6,103,980 6,351,785
Infrastructure:
Streets 60,646,685 59,931,282 60,646,685 59,931,282
- -
Storm sewers 20,158,254 20,280,686 20,158,254 20,280,686
- -
Sidewalks/trails 3,827,479 3,772,664 3,827,479 3,772,664
- -
Water and sewer lines - 46,464,725 46,956,845 46,464,725
-46,956,845
Ending balance$ 117,372,280$119,432,552$ 56,467,713$ 56,280,915$ 173,839,993$ 175,713,467
Additional information on the City of Cottage Grove’s capital assets can be found in Note 5.
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Management’s Discussion and Analysis
(continued)
Long-term debt:
At the end of the current fiscal year, the City of Cottage Grove had total
long term debt outstanding of $28,740,022, a decrease of $758,217 (2.5%). $3,008,414
of the debt outstanding is due within one year. $12,005,000 of bonds payable is for
pavement management debt being repaid by a combination of special assessments and
property tax levies.
The City of Cottage Grove holds a general obligation debt rating of Aa1 from Moody’s (2010
Global Ratings Scale) and of AA+/Stable from Standard and Poor’s. According to S&P, Cottage
Grove has “a strong financial profile, anchored by a very strong general fund balance; and good
management practices that have contributed to the city’s ongoing financial health.”
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of
total Estimated Market Value. The current debt limitation for the City of Cottage Grove is
$85,402,125. Of that limit, $6,345,000 of the City's outstanding debt is counted within the
statutory limitation because all other debt is either wholly or partially repaid by revenues other
than general property tax levies.
Additional information on the City of Cottage Grove’s long-term debt can be found in Note 6.
Requests for information:
This financial report is designed to provide a general overview of
the City of Cottage Grove’s finances for all those with an interest in the government’s finances.
Questions concerning any of the information provided in this report or requests for additional
th
financial information should be addressed to Finance Director, 7516 South 80 Street, Cottage
Grove, Minnesota 55016.
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BASIC FINANCIAL STATEMENTS
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CITY OF COTTAGE GROVE, MINNESOTA
Statement 1
STATEMENT OF NET ASSETS
December 31, 2009
With Comparative Data as of December 31, 2008
Component Unit
Primary GovernmentTotalEconomicTotals
GovernmentalBusiness-TypePrimaryDevelopmentReporting Entity
Assets:ActivitiesActivitiesGovernmentAuthority20092008
Cash and investments$43,565,562$12,891,964$56,457,526$1,208,184$57,665,710$51,135,635
Accrued interest receivable259,043 - 259,043255,323514,366738,421
Due from other governmental units - net1,568,05214,5491,582,601 - 1,582,6011,291,267
Loan receivable from primary government - - - 900,000900,000900,000
Accounts receivable - net495,0231,260,1071,755,130 - 1,755,1301,952,174
Prepaid items143,061127,494270,5552,493273,048173,312
Delinquent property taxes receivable386,374 - 386,3743,299389,673325,964
Due from county314,905 - 314,905 -314,905157,199
Special assessments receivable6,393,090 - 6,393,090 - 6,393,0908,492,298
Inventories - at cost53,49277,446130,938 -130,938159,696
Internal balances326,958(326,958) - - - -
Deferred charges146,85620,824167,68061,700229,380172,023
Lease receivable - - - 6,345,0006,345,0006,500,000
Capital assets not being depreciated:
Land and land improvements 16,399,4471,712,29018,111,737 - 18,111,73718,111,737
Construction in progress 905,348 - 905,348 -905,3482,979,679
Capital assets (net of accumulated depreciation):
Land improvements -34,62934,629 -34,62935,425
Buildings and improvements9,769,4412,257,01012,026,451 - 12,026,45112,835,392
Equipment and furniture575,748 - 575,748 -575,748504,838
Machinery and equipment3,679,659813,1784,492,837 - 4,492,8374,445,254
Other improvements1,410,2194,693,7616,103,980 - 6,103,9806,351,785
Infrastructure84,632,41846,956,845131,589,263131,589,263130,449,357
Total assets171,024,69670,533,139241,557,8358,775,999250,333,834247,711,456
Liabilities:
Accounts payable701,540148,750850,2909,645859,935774,976
Salaries payable275,39837,360312,758338313,096614,182
Contractspayable348,063 - 348,063 -348,063990,763
Cotactspayabe38,06338,06338,063990,763
Due to other governmental units37,61732,47270,089 -70,08955,351
Deposits payable 60,32118,75079,071 -79,07167,632
Accrued interest payable389,710261,726651,43669,823721,259735,273
Unearned revenue44,899 - 44,899 -44,89943,400
Compensated absences payable:
Due within one year506,29688,841595,137 -595,137532,579
Due in more than one year176,98318,414195,397 -195,397241,169
Unamortized discount on bonds(60,150)(7,876)(68,026)(90,480)(158,506)(175,648)
Unamortized premium on bonds47,741 - 47,741 -47,74126,636
Other postemployment benefits:
Due in more than one year25,0766,13831,214 -31,21414,660
Loan payable to component unit:
Due in more than one year - 900,000900,000 -900,000900,000
Capital lease payable:
Due within one year239,1929,085248,277 -248,277246,556
Due in more than one year6,109,997 - 6,109,997 - 6,109,9976,358,275
Bonds payable:
Due within one year1,625,000540,0002,165,000235,0002,400,0002,125,000
Due in more than one year16,675,0001,820,00018,495,0006,110,00024,605,00025,580,000
Total liabilities27,202,6833,873,66031,076,3436,334,32637,410,66939,130,804
Net assets:
Invested in capital assets, net of related debt92,735,50054,106,504146,842,004 - 146,842,004147,957,488
Restricted for:
Debt service7,531,092254,1957,785,287542,8668,328,1538,200,414
Tax increment purposes627,264 - 627,264586,8961,214,160910,415
Capital improvements -15,00015,000 -15,00015,000
Unrestricted42,928,15712,283,78055,211,9371,311,91156,523,84851,497,335
Total net assets$143,822,013$66,659,479$210,481,492$2,441,673$212,923,165$208,580,652
The accompanying notes are an integral part of these basic financial statements. The accompanying notes are an integral part of these basic financial statements.
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CITY OF COTTAGE GROVE, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2009
With Comparative Data as of December 31, 2008
DeveloperPavementMSA
Storm WaterFinancedManagementConstruction
GeneralMaintenanceClosed DebtDebt ServiceDebt ServiceCapital Project
AssetsFundFundFundRevolving FundFundFund
Cash and investments$9,056,544$141,270$4,191,740$ - $4,404,116$1,584,226
Accrued interest receivable234,043 - - - - -
Interfund receivable - - 15,403 - - -
Interfund loan receivable - - 925,000 - - -
Due from other governmental units - net34,52140,000 - - - 1,402,141
Accounts receivable - net18,711102,382 - - - -
Prepaid items35,0381,500 - - - -
Delinquent property taxes receivable286,189 - 12,727 - 26,839 -
Due from county314,905 - - - - -
Special assessments receivable:
Deferred4,381 - 141,716792,4072,210,8431,136,060
Delinquent3,928 - 2,248287,38230,9723,934
Special deferred - - - - 11,55297,190
Total assets$9,988,260$285,152$5,288,834$1,079,789$6,684,322$4,223,551
Liabilities and Fund Balances
Liabilities:
Accounts payable$216,421$29,263$ - $ - $ - $5,173
Salaries payable254,1861,536 - - - -
Interfund payable - - - 15,403 - -
Contracts payable -66,574 - - - 32,010
Due to other governmental units34,857500 - - - -
Deposits payable13,913 - - - - -
Accrued interest payable - - - - - -
Interfund loan payable - - - - - -
Deferred revenue337,298 - 156,6911,079,7892,280,2062,429,325
Total liabilities856,67597,873156,6911,095,1922,280,2062,466,508
Fund balances (deficit):
Reserved for:
Prepaid items35,0381,500 - - - -
Debt retirement - - - - 4,404,116 -
Tax increment purposes - - - - - -
Long-term interfund loan receivable - - 1,045,000 - - -
Sealcoating in new developments - - - - - -
Unreserved:
Designated reported in:
General Fund9,096,547 - - - - -
Special Revenue Funds - 185,779 - - - -
Debt Service Funds - - 4,087,143 - - -
Capital Project Funds - - - - - 1,757,043
Undesignated reported in:
Debt Service Fund - - - (15,403) - -
Capital Project Funds - - - - - -
Total fund balances (deficit)9,131,585187,2795,132,143(15,403)4,404,1161,757,043
Total liabilities and fund balances$9,988,260$285,152$5,288,834$1,079,789$6,684,322$4,223,551
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
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Statement 3
PavementTax IncrementIce Arena
ManagementConstructionConstructionExpansionOtherTotals
Capital ProjectRevolving CapitalRevolvingConstructionGovernmentalGovernmental Funds
FundProject FundFundFundFunds20092008
$152,135$970,798$510,830$ - $20,057,079$41,068,738$36,445,059
- - - - 80,673314,716489,431
- - - - - 15,403 -
- - - - 1,575,0002,500,0008,017,128
- - - - 91,3901,568,0521,283,122
- - - - 372,287493,380564,095
- - - - 35036,8889,530
- - 40,414 - 20,205386,374323,012
- - - - - 314,905156,012
- 921,899 - - 627,1275,834,4338,122,227
- 31,894 - - 71,943432,301249,880
4,686 - - - 12,928126,356120,191
$156,821$1,924,591$551,244$0$22,908,982$53,091,546$55,779,687
$31,308$7,748$2,495$ - $256,756$549,164$472,864
- - - - 10,558266,280521,155
- - - - - 15,403 -
138,72259,927 - - 50,830348,063988,238
- - - - 2,26037,61716,234
- - - - 46,40860,32152,732
- - 55,673 - - 55,673 -
- 1,425,000575,000 - - 2,000,0007,817,128
4,686953,79340,414 - 734,3028,016,50410,050,851
174,7162,446,468673,58201,101,11411,349,02519,919,202
- - - - 35036,8889,530
- - - - - 4,404,1165,356,951
- - - - 627,264627,264410,636
- - - - 1,575,0002,620,0008,017,128
- - - - - - 149,355
- - - - - 9,096,5478,817,737
- - - - 5,872,4806,058,2595,494,321
- - - - - 4,087,1431,658,843
- - - - 13,732,77415,489,81712,102,492
- - - - - (15,403) -
(17,895)(521,877)(122,338) - - (662,110)(6,156,508)
(17,895)(521,877)(122,338)021,807,86841,742,52135,860,485
$156,821$1,924,591$551,244$0$22,908,982$53,091,546$55,779,687
Fund balance reported above$41,742,521$35,860,485
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 funds116,325,184118,367,446
Other long-term assets are not available to pay for current-period expenditures, and therefore,
are deferred in the funds7,971,60510,007,451
Long-term liabilities, including bonds payable, are not due and
payable in the current period and therefore are not reported in the funds.(25,547,493)(25,820,345)
Internal service funds are used by management to charge the cost of insurance to individual funds.
The assets and liabilities are included in the governmental statement of net assets3,330,1963,213,309
Net assets of governmental activities$143,822,013$141,628,346
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
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CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
DeveloperPavementMSA
Storm WaterFinancedManagementConstruction
GeneralMaintenanceClosed Debt Service Debt ServiceCapital Project
Revenues:FundFundDebt FundRevolving FundFundFund
General property taxes$9,936,126$ - $19,780$ - $1,217,371$ -
Franchise taxes - - - - - -
Aggregate taxes - - - - - -
Tax increment collections - - - - - -
Special assessments33,511 - - - 673,956204,647
Licenses and permits683,204 - - - - -
Direct charges to developers - - - - - -
Intergovernmental767,21743,700 - - - 249,719
Charges for services1,151,096645,855 - - - -
Fines and forfeits192,169 - - - - -
Investment earnings100,9471,91124,583 - 77,55023,313
Interest on interfund loan - - 206,000 - - -
Connection charges - - - - - -
Park dedication fees - - - - - -
Donations9,378 - - - - -
Miscellaneous56,9675,996 - - - -
Total revenues12,930,615 697,462 250,363 0 1,968,877 477,679
Expenditures:
Current:
General government1,620,421 - - 1209,023 -
Community development1,102,740 - - - - -
Public safety5,259,324 - - - - -
Public works1,930,332607,434 - - - 124,731
Culture and recreation1,459,612 - - - - -
Capital outlay:
GeneraGlt government1666116,661 - - - - -
l
Public safety107,265 - - - - -
Public works - - - - - -
Culture and recreation - - - - - -
Construction/acquisition costs -76,383 - - - 261,529
Debt service:
Principal retirement - - - - 3,210,000 -
Capital lease payment2,6001,300 - - - -
Debt issuance payment to component unit - - - - - -
Debt service reserve payment to component unit - - - - - -
Interest and fiscal charges400200 - 36,672474,907 -
Total expenditures11,499,355 685,317 036,792 3,693,930 386,260
Revenues over (under) expenditures1,431,26012,145 250,363 (36,792)(1,725,053)91,419
Other financing sources (uses):
Transfers in - - 290,472 - 860,091 -
Transfers out(1,125,472) - (887,535) - - -
Bonds issued - - - - - -
Refunding bonds issued - - - - 625,000 -
Capital lease issued - - - - - -
Premium on debt issued - - - - - -
Discount on debt issued - - - - (2,906) -
Principal retirement - refunding - - - - (590,000) -
Proceeds from the sale of capital assets - - - - - -
Total other financing sources (uses)(1,125,472)0 (597,063)0 892,185 0
Net increase (decrease) in fund balance305,78812,145 (346,700)(36,792)(832,868)91,419
Fund balance - January 18,825,797175,1345,478,843 21,389 5,236,984 1,665,624
Fund balance - December 31$9,131,585$187,279$5,132,143($15,403)$4,404,116$1,757,043
The accompanying notes are an integral part of these basic financial statements. The accompanying notes are an integral part of these basic financial statements.
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Statement 4
PavementTax IncrementIce Arena
Totals
ManagementConstructionConstructionExpansionOther
Capital ProjectRevolving CapitalRevolvingConstructionGovernmentalGovernmental Funds
FundProject FundFundFundFunds20092008
$ -$ -$ -$ -$571,871$11,745,148$11,533,333
- - - -399,568399,568396,173
- - - -24,23424,23413,489
- -659,377 -464,3971,123,774909,434
- 2,945,562 - -514,9054,372,5814,110,568
- - - - -683,2041,029,559
- - - -24,78624,78635,787
- - - -166,1821,226,8181,158,760
-17,273 - -816,0742,630,2982,328,913
- - - - -192,169224,807
7,05228,9006,0211,887236,082508,2461,412,432
- - - -252,001458,001361,341
- - - -201,463201,463148,434
- - - -64,58464,58421,707
- - -1,700408,716419,794478,597
- - - -191,281254,244226,510
7,052 2,991,735 665,398 3,587 4,336,144 24,328,912 24,389,844
- - - -130,1311,759,6951,978,714
- - - - - 1,102,740894,642
- - - -35,6795,295,0035,190,603
49,98649,078115,395 -599,8383,476,7943,358,927
- - - -563,4732,023,0852,036,414
- - - - 50,89167,552100,6425089167552100642
- - - - 177,589284,854251,134
- - - - 412,358412,35878,939
- - - - 91,04091,040239,385
262,8171,318,588 - 128,00586,8832,134,20514,333,569
- - - - 545,0003,755,0001,845,000
- - - - 155,000158,9003,627
- - - - - - 163,987
- - - - - - 514,893
243,324202,50055,673 - 626,4671,640,1431,158,708
556,127 1,570,166 171,068 128,005 3,474,349 22,201,369 32,149,184
(549,075)1,421,569 494,330 (124,418)861,795 2,127,543 (7,759,340)
500,000146,221 -86,3441,059,7962,942,9242,675,074
- -(191,352) -(738,565)(2,942,924)(2,309,809)
3,650,000 - - - - 3,650,0003,370,000
- - - - -625,000 -
- - - - - - 6,500,000
22,705 - - - -22,70527,946
- - - - -(2,906) -
- - - - -(590,000) -
- - - -49,69449,69443,175
4,172,705 146,221 (191,352)86,344 370,925 3,754,493 10,306,386
3,623,630 1,567,790 302,978 (38,074)1,232,720 5,882,036 2,547,046
(3,641,525)(2,089,667)(425,316)38,074 20,575,14835,860,48533,313,439
($17,895)($521,877)($122,338)$0$21,807,868$41,742,521$35,860,485
The accompanying notes are an integral part of these basic financial statements. The accompanying notes are an integral part of these basic financial statements.
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CITY OF COTTAGE GROVE, MINNESOTA
Statement 5
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
20092008
Amounts reported for governmental activities in the
statement of activities (page 37) are different because:
Net changes in fund balances - total governmental funds (page 41)$5,882,036$2,547,046
Governmental funds report capital outlays 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. This is the amount by which capital outlays
exceeded depreciation in the current period.(499,125)11,784,926
The effect of various miscellaneous transactions involving capital assets is to decrease net assets
(i.e. sales, and trade-ins).(13,120)(58,634)
Donations of capital assets increase net assets in the statement of activities, but do not
appear in the governmental funds because they are not financial resources.34,14925,142
Revenues in the statement of activities that do not provide current financial resources(2,035,846)1,606,980
are not reported as revenues in the funds.
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources
to governmental funds, while the repayment of the principal of long-term debt consumes
thecurrentfinancialresourcesofgovernmentalfundsNeithertransactionhoweverhae currennanca resources o governmenauns.eerransacon,owever,
thtfiilftlfdNithttihha
any effect on net assets. This amount is the net effect of these differences in the treatment
of long-term debt and related items.266,308(7,899,516)
Internal service funds are used by management to charge the cost of insurance
to individual funds. This amount is net revenue attributable to governmental activities.116,88736,835
Transfer out of governmental capital assets contributed to Enterprise Funds.(1,564,166)(4,249,078)
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.6,544(176,722)
Change in net assets of governmental activities (page 37)$2,193,667$3,616,979
The accompanying notes are an integral part of these basic financial statements. The accompanying notes are an integral part of these basic financial statements.
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CITY OF COTTAGE GROVE, MINNESOTA
Statement 6
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2009
Business-Type Activities - Enterprise FundsGovernmental
TotalActivities -
Golf CourseStreet LightCottage GroveWaterSewerEnterpriseInternal
FundFundEMS FundOperatingOperatingFundsService Funds
Assets:
Current assets:
Cash and investments$158,174$2,845,749$383,131$4,683,752$4,821,158$12,891,964$2,496,824
Due from other governmental unit2,269 - 12,280 - - 14,549 -
Accounts receivable:
Customers - 100,726354,166281,109317,0031,053,004 -
Certified to County - - - 94,33299,120193,452 -
Other2,9769,346922407 - 13,6511,643
Prepaid items3,810 - - 1,704121,980127,494106,173
Inventories - at cost20,22457,222 - - - 77,44653,492
Total current assets187,453 3,013,043 750,499 5,061,304 5,359,261 14,371,560 2,658,132
Noncurrent assets:
Deferred charges5,071 - - 15,753 - 20,824 -
Capital assets:
Land and land improvements1,387,290 - - 364,803 - 1,752,093424,665
Buildings and improvements - - - 3,960,580 - 3,960,580928,870
Machinery and equipment838,06555,725508,6541,003,703323,6732,729,820166,363
Other improvements2,609,8785,194,437 - - - 7,804,315 -
Water and sewer lines - - - 34,016,10224,050,97258,067,074 -
Total capital assets4,835,233 5,250,162 508,654 39,345,188 24,374,645 74,313,882 1,519,898
Less: Accumulated depreciation(2,152,922)(1,686,412)(267,236)(9,452,273)(4,287,326)(17,846,169)(472,802)
Net capital assets2,682,3113,563,750241,41829,892,91520,087,31956,467,7131,047,096
Total noncurrent assets2,687,3823,563,750241,41829,908,66820,087,31956,488,5371,047,096
Total assets2,874,8356,576,793991,91734,969,97225,446,58070,860,0973,705,228
Liabilities:
Current liabilities:
Accounts payableAbl1340413,40436,17714,78872,56111,820148,750152,37636177147887256111820148750152376
Salaries payable13,5292,8617,52911,8771,56437,3609,118
Due to other governmental units2,6571,1691,23821,4555,95332,472 -
Deposits payable10,750 - - 8,000 - 18,750 -
Accrued interest payable227,226 - - 34,500 - 261,726 -
Compensated absences payable 28,8624,35617,28827,20511,13088,84117,626
Capital lease payable9,085 - - - - 9,085 -
Bonds payable - current portion365,000 - - 175,000 - 540,000 -
Total current liabilities670,513 44,563 40,843 350,598 30,467 1,136,984 179,120
Noncurrent liabilities:
Compensated absences payable 4,347 - 2,9366,7624,36918,41422,096
Unamortized discount on bonds payable (2,909) - - (4,967) - (7,876) -
Other postemployment benefits2,2241881,9861,2464946,138774
Interfund loan payable 500,000 - - - - 500,000 -
Loan payable to component unit900,000 - - - - 900,000 -
Bonds payable - noncurrent portion385,000 - - 1,435,000 - 1,820,000 -
Total noncurrent liabilities1,788,6621884,9221,438,0414,8633,236,67622,870
Total liabilities2,459,17544,75145,7651,788,63935,3304,373,660201,990
Net assets:
Invested in capital assets, net of related debt1,926,1353,563,750241,41828,287,88220,087,31954,106,5041,047,096
Restricted:
Debt service254,195 - - - - 254,195 -
Capital improvements15,000 - - - - 15,000 -
Unrestricted(1,779,670)2,968,292704,7344,893,4515,323,93112,110,7382,456,142
Total net assets$415,660$6,532,042$946,152$33,181,333$25,411,25066,486,437$3,503,238
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.173,042
$66,659,479
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìí ó
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 2009
Business-Type Activities - Enterprise Funds
Golf CourseStreet LightCottage Grove
FundFundEMS Fund
Operating revenues:
Charges for services - user fees$1,563,399$590,239$1,007,615
Water meter/ street light material sales - - -
Insurance refunds and reimbursements - - -
Total operating revenues1,563,399590,239 1,007,615
Operating expenses:
Operating and maintenance:
Personal services493,23756,204691,145
Commodities109,98319,18183,071
Commodities - items for resale230,48025,432 -
Contractual services147,271292,577111,442
Disposal:
Contractual services - MCES - - -
Administrative and general:
Personal services166,400 - -
Commodities6,011 - -
Contractual services107,625 - -
Other charges- administrative charge49,20041,90052,500
Depreciation166,357116,64841,295
Total operating expenses1,476,564551,942979,453
Operating income (loss)86,83538,29728,162
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìì ó
Statement 7
Page 1 of 2
Governmental
TotalActivities -
WaterSewerEnterpriseInternal
OperatingOperatingFundsService Funds
$2,197,866$1,934,536$7,293,655$2,104,479
27,885 - 27,885 -
- - - 80,081
2,225,751 1,934,536 7,321,540 2,184,560
399,99899,9561,740,540309,805
77,3179,796299,348387,559
19,137 - 275,049 -
352,698127,5101,031,49840,942
- 1,322,0371,322,037 -
39,50029,699235,5991,004,932
1761766,363 -
89,14986,523283,297277,204
150,000167,000460,600 -
758,877407,5741,490,75130,996
1,886,852 2,250,271 7,145,082 2,051,438
338,899 (315,735)176,458 133,122
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìë ó
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS (CONTINUED)
PROPRIETARY FUNDS
For The Year Ended December 31, 2009
Business-Type Activities - Enterprise Funds
Golf CourseStreet LightCottage Grove
FundFundEMS Fund
Nonoperating revenues (expenses):
Federal Grant$ - $ - $107,578
Investment earnings1,32738,4635,872
Interest on interfund loan - - -
Rent - - -
Miscellaneous -6,46415,755
Debt service:
Interest(125,540) - -
Paying agent fees(1,637) - -
Bond issuance costs(4,177) - -
Total nonoperating revenues (expenses)(130,027)44,927129,205
Income (loss) before
contributions and transfers(43,192)83,224157,367
Capital contributions -105,316 -
Transfer from Enterprise Fund - - -
Transfer from Internal Service Fund - - -
Transfer to Enterprise Funds -(9,000) -
Total transfers0(9,000)0
Change in net assets(43,192)179,540157,367
Net assets - January 1458,8526,352,502788,785
Net assets - December 31$415,660$6,532,042$946,152
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
Change in net assets of business-type activities (page 37)
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìê ó
Statement 7
Page 2 of 2
Governmental
TotalActivities -
WaterSewerEnterpriseInternal
OperatingOperatingFundsService Funds
$ - $ - $107,578$ -
53,50060,957160,11932,599
- 16,50016,500 -
186,181 - 186,181 -
16,8065,37644,4015,226
(69,113) - (194,653) -
(431) - (2,068) -
(1,404) - (5,581) -
185,539 82,833 312,477 37,825
524,438(232,902)488,935170,947
848,391610,4591,564,166 -
38,200 -38,200 -
31,000 -31,000 -
-(29,200)(38,200)(31,000)
69,200 (29,200)31,000 (31,000)
1,442,029 348,357 2,084,101 139,947
31,739,30425,062,8933,363,291
$33,181,333$25,411,250$3,503,238
23,060
$2,107,161
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìé ó
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2009
Business-Type Activities - Enterprise Funds
Golf CourseStreet LightCottage Grove
FundFundEMS Fund
Cash flows from operating activities:
Receipts from customers and users$1,558,004$576,902$973,297
Receipts from interfund services provided - - -
Receipts from insurance refunds and reimbursements - - -
Payment to suppliers(638,638)(360,656)(248,510)
Payment to employees(668,082)(58,723)(703,894)
Miscellaneous revenue - 6,46415,755
Net cash flows from operating activities251,284163,98736,648
Cash flows from noncapital financing activities:
Transfers in - - -
Transfers out - (9,000) -
Net cash flows from
noncapital financing activities0(9,000)0
Cash flows from capital and related
financingactivities:nancng acves:
fiitiiti
Acquisition of capital assets - - (5,805)
Rent - - -
Interest paid on debt(52,982) - -
Paying agent fees(1,637) - -
Principal paid on debt(432,657) - -
Net cash flows from capital
and related financing activities(487,276)0(5,805)
Cash flows from investing activities:
Investment earnings1,32738,4635,872
Interest on interfund loan - - -
Payment received on interfund loan - - -
Net cash flows from investing activities1,32738,4635,872
Net increase (decrease) in cash and cash equivalents(234,665)193,45036,715
Cash and cash equivalents - January 1392,8392,652,299346,416
Cash and cash equivalents - December 31$158,174 $2,845,749 $383,131
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìè ó
Statement 8
Page 1 of 2
Governmental
TotalActivities -
WaterSewerEnterpriseInternal
OperatingOperatingFundsService Funds
$2,329,386$1,999,168$7,436,757$ -
- - - 2,104,479
- - -80,081
(678,627)(1,729,635)(3,656,066)(759,397)
(446,788)(132,177)(2,009,664)(1,328,616)
16,8065,37644,4015,226
1,220,777142,7321,815,428101,773
69,200 -69,200 -
-(29,200)(38,200)(31,000)
69,200(29,200)31,000(31,000)
- -(5,805)(12,986)
186,181 -186,181 -
(71,440) -(124,422) -
(431) -(2,068) -
(130,000) -(562,657) -
(15,690)0(508,771)(12,986)
53,50060,957160,11932,599
-16,50016,500 -
-300,000300,000 -
53,500377,457476,61932,599
1,327,787490,9891,814,27690,386
3,355,9654,330,16911,077,6882,406,438
$4,683,752 $4,821,158 $12,891,964 $2,496,824
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ìç ó
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF CASH FLOWS (CONTINUED)
PROPRIETARY FUNDS
For The Year Ended December 31, 2009
Business-Type Activities - Enterprise Funds
Golf CourseStreet LightCottage Grove
FundFundEMS Fund
Reconciliation of operating income/(loss) to net cash
provided by operating activities:
Operating income (loss) $86,835$38,297$28,162
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation166,357116,64841,295
Miscellaneous revenue - 6,46415,755
Changes in assets and liabilities:
Decrease (increase) in receivables(5,245)(13,337)(34,318)
Decrease (increase) in prepaid items1,551350 -
Decrease (increase) in inventory7,97925,432 -
Decrease in payables(6,193)(9,867)(14,246)
Total adjustments164,449 125,690 8,486
Net cash flows from operating activities$251,284$163,987$36,648
Noncashinvestingcapitalandfinancingactivities:oncasnvestng, capta annancng actvtes:
Nhiiildfiiiii
Capital asset contributions from government$ - $105,316$ -
Refunding bond transaction - - -
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ëð ó
Statement 8
Page 2 of 2
Governmental
TotalActivities -
WaterSewerEnterpriseInternal
OperatingOperatingFundsService Funds
$338,899($315,735)$176,458$133,122
758,877407,5741,490,75130,996
16,8065,37644,4015,226
107,78064,632119,512413
1,600(10,410)(6,909)(62,976)
- -33,411(4,653)
(3,185)(8,705)(42,196)(355)
881,878 458,467 1,638,970 (31,349)
$1,220,777$142,732$1,815,428$101,773
$848,391$610,459$1,564,166$ -
1,205,000 - 1,205,000 -
The accompanying notes are an integral part of these basic financial statements.The accompanying notes are an integral part of these basic financial statements.
ó ëï ó
ó ëî ó
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-
The City of Cottage Grove was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of
government. The governing body consists of a five member City Council elected by voters of the City.
The financial statements of the City of Cottage Grove have been prepared in conformity with U.S. generally accepted
accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The
following is a summary of the significant accounting policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity include
those of the City of Cottage Grove (the primary government) and its component unit. The component unit discussed
below is included in the City’s reporting entity because of the significance of its operational and financial
relationship with the City.
COMPONENT UNIT
The Economic Development Authority (EDA) is considered a component unit of the City because the Council
appoints the members of the governing authority and because the EDA is in a relationship of financial benefit or
burden to the City. It is governed by a board which is made up of two City council members and five other
members. The EDA provides services to the City and to potential future business owners within the City. The
financial position and results of operations of the EDA component unit is discretely presented in the primary
government’s basic financial statements. The EDA is reported in a separate column to emphasize that it is legally
separate from the City. The component unit activity is reported on the modified accrual basis of accounting.
Separate financial statements are not prepared for the EDA.
B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net
assets) report information on all of the activities of the primary government and its component unit. For the most
part, the effect of interfund activity has been removed from these statements. 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 and charges for support.
In the government-wide statement of net assets, both the governmental and business-type activities columns: (a) are
presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which
recognizes all long-term assets and receivables as well as long-term debt and obligations. The City’s net assets are
reported in three parts: (1) invested in capital assets, net of related debt; (2) restricted net assets; and (3) unrestricted
net assets. The City first utilizes restricted resources to finance qualifying activities.
The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type
activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or business-type activity. Program revenues include 1) charges to customers or applicants who purchase,
use, or directly benefit from goods, services, or privileges provided by a given function or business-type activity and
2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular
function or business-type activity. Taxes and other items not included among program revenues are reported instead
asgeneral revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements.
ó ëí ó
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the proprietary fund statements. 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 have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues,
except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal
period. Reimbursement grants are considered available if they are collected within one year of the end of the current
fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences, and claims and
judgments, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with
the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of
the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be
measurable and available only when cash is received by the government.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
TheStorm Water Maintenance Fund accounts for customer storm water service charges which are used to
finance storm water maintenance activities.
TheClosed Debt Fund accounts for the accumulation of residual resources from debt funds that have been
closed as the associated debt has been satisfied.
The Developer Financed Debt Service Revolving Fund accounts for debt service payments repaid primarily
from special assessments collected from new developments within the City.
ThePavement Management Debt Service Fund accounts for debt service payments used to finance the City’s
various pavement management projects. Revenue is accumulated from both special assessments and property
taxes.
TheMSA Construction Capital Project Fund accounts for projects related to Municipal State Aids.
ThePavement Management Capital Project Fund accounts for pavement management construction projects.
TheConstruction Revolving Capital Project Fund accounts for new development construction projects that are
financed by developers.
TheTax Increment Construction Revolving Fund accounts for construction projects that are financed with tax
increments.
TheIce Arena Expansion Construction Fund accounts for the construction of the ice arena expansion.
ó ëì ó
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
The government reports the following major proprietary funds:
The Golf Course Fund accounts for the City's eighteen hole golf course and banquet facility.
The Street Light Fund accounts for customer street light and service charges which are used to finance street
light operating expenses.
The Cottage Grove EMS Fund accounts for the operation of the Cottage Grove ambulance service that serves
the cities of Cottage Grove, Newport, Saint Paul Park, and Grey Cloud Island.
The Water Operating fund accounts for customer water service charges which are used to finance water
operating expenses.
The Sewer Operating fund accounts for customer sewer service charges which are used to finance sewer
operating expenses.
Additionally, the government reports the following fund type:
Internal service funds account for the City’s self-insurance and fleet maintenance services provided to other
departments of the government on a cost reimbursement basis.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are
followed in both the government-wide and proprietary-fund financial statements to the extent that those standards do
not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have
the option of following subsequent private-sector guidance for their business-type activities and enterprise funds,
subject to this same limitation. The government has elected not to follow subsequent private-sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or
expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are
similarly treated when they involve other funds of the City of Cottage Grove. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special
assessments. Internally dedicated resources are reported as general revenues rather than as program revenues.
Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the water, sewer, ambulance,
golf course, and street light enterprise funds are charges to customers for sales and services. The ambulance fund
operating revenues are net of write off’s mandated by various government agencies (including Medicare and
Medicaid). Operating expenses for enterprise 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.
When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to
use restricted resources first, then unrestricted resources as they are needed.
ó ëë ó
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
D.BUDGETS
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual appropriated
budgets are adopted for the General and Special Revenue Funds.
Budgeted amounts are reported as originally adopted, and as amended by the City Council. Individual amendments
were not material in relation to the original appropriations which were adjusted. Budgeted expenditure
appropriations can be carried forward to the next budget year subject to City Council approval.
E.LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing
the following January 1. The operating budget includes proposed expenditures and the means of financing
them.
2. The City Council reviews the proposed budget and makes appropriate changes.
3. Public hearings are conducted to obtain taxpayer comments.
4. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by
each department based upon detailed budget estimates for individual expenditure accounts.
5. The City Administrator is authorized to transfer appropriations within any department budget up to $1,000.
Additional interdepartmental or interfund appropriations and deletions are authorized by the City Council with
expenditure reductions, fund (contingency) reserves or additional revenues.
6. Formal budgetary integration is employed as a management control device during the year for the General
Fund, Special Revenue Funds, certain Capital Project Funds, Enterprise Funds and the Internal Service Fund.
The General Fund and Special Revenue Funds are the only funds with legally adopted annual budgets.
7. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt
Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user
charges. These debt service and budget amounts represent general obligation bond indenture provisions and net
income for operation and capital maintenance and are not reflected in the financial statements.
8. A capital improvement program is reviewed annually by the City Council for the Capital Project Funds.
However, appropriations for major projects are not adopted until the actual bid award of the improvement. The
appropriations are not reflected in the financial statements.
9. Expenditures may not legally exceed budgeted appropriations at the total fund level. The legal level of
budgetary control is at the expenditure category level (i.e., personal services, commodities, contractual services
and capital outlay) within each activity. All amounts over budget have been approved by the City Council
through the disbursement approval process.
10. The City Council may authorize transfers of budgeted amounts between City funds.
ó ëê ó
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
The following is a listing of expenditure categories that exceed budget appropriations for non-major funds:
ActualOver Budget
Final Budget
Nonmajor Funds:
Ice Arena Fund:
Culture and recreation:
Personal services $ 254,800 $ 272,587 $ 17,787
Commodities 38,000 46,475 8,475
Contractual services 202,500 244,079 41,579
Capital outlay 10,000 22,061 12,061
Future Economic Development:
General government:
Contractual services 30,000 41,958 11,958
Equipment Replacement Fund:
General government:
Capital outlay -50,891 50,891
Public Safety:
Capital outlay 28,000 92,389 64,389
Public Works:
Capital outlay 358,400 412,358 53,958
Forfeiture fund:
Public safety:
Contractual services 14,000 26,051 12,051
Capital outlay -85,200 85,200
Recycling:
Public works:
Contractual services 11,500 21,069 9,569
Celebration Fund:
General government:
Commodities -220 220
Contractual services 6,000 15,950 9,950
Street Sealcoating Fund:
Public Works:
Commodities 20,000 23,828 3,828
F. CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the extent available in authorized
investments. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the
cash and investment pool.
The City provides temporary advances to funds that have insufficient cash balances by means of an advance from
another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the
deficit, until adequate resources are received.
Investments are stated at fair value, based upon quoted market prices as of the balance sheet date.
For purposes of the statement of cash flows for the proprietary funds, cash equivalents are considered to be all
highly liquid investments with a maturity of three months or less when purchased. All of the cash and investments
allocated to the proprietary funds have original maturities of 90 days or less. Therefore, the entire balances in such
funds are considered cash equivalents.
ó ëé ó
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
G. RECEIVABLES AND PAYABLES
During the course of operations, numerous transactions occur between individual funds for goods provided or
services rendered. Short-term interfund loans are classified as “interfund receivables/payables.” All short-term
interfund receivables and payables at December 31, 2009 are planned to be eliminated in 2010. Long-term interfund
loans are classified as “interfund loan receivable/payable.” Any residual balances outstanding between the
governmental activities and business-type activities are reported in the government-wide financial statements as
“internal balances.”
Interfund loan receivables, as reported in the fund financial statements, are offset by a fund balance reserve account
in applicable governmental funds to indicate that they are not available for appropriation and are not expendable
available financial resources.
Property taxes, special assessments, and ambulance receivables have been reported net of estimated uncollectible
accounts. (see Note 1 H, I and L) Because utility bills are considered liens on property, no estimated uncollectible
amounts are established. Uncollectible amounts are not material for other receivables and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of
each year for collection in the following year. The County is responsible for billing and collecting all property taxes
for itself, the City, the local school district and other taxing authorities. Such taxes become a lien on January 1 and
are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15
and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30
of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2
of the same year. Delinquent collections for November and December are received the following January. The City
has no ability to enforce payment of property taxes by property owners. The County possesses this authority.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes
are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of
the current period. In practice, current and delinquent taxes and State credits received by the City in July, December
and January are recognized as revenue for the current year. Taxes collected by the County by December 31
(remitted to the City the following January) and taxes and credits not received at year-end are classified as
delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in
January is fully offset by deferred revenue because they are not available to finance current expenditures.
I. SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment
improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term
of years usually consistent with the term of the related bond issue. Collection of annual installments (including
interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to
(and often do) prepay future installments without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full
payment is made or the amount is determined to be excessive by the City Council or court action. If special
assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
forfeited properties are allocated first to the County’s costs of administering all tax forfeit properties. Pursuant to
State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural
or seasonal recreational land in which event the property is subject to such sale after five years.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City
Council. Uncollectible special assessments are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
Revenue from special assessments is recognized by the City when it becomes measurable and available to finance
expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the
City are recognized as revenue for the current year. Special assessments that are collected by the County by
December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All
remaining delinquent, deferred and special deferred assessments receivable in governmental funds are completely
offset by deferred revenues.
J. INVENTORIES
GOVERNMENTAL FUNDS
The original cost of materials and supplies has been recorded as expenditures at the time of purchase. These funds
do not maintain material amounts of inventories.
PROPRIETARY FUNDS
Inventories of the proprietary funds are stated at cost, which approximates market, using the first-in, first-out (FIFO)
method.
K. PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items
in both government-wide and fund financial statements.
L. ALLOWANCE FOR UNCOLLECTIBLE
The City directly bills individuals for ambulance services. The City reserves an amount as uncollectible based on
historical collection rates. The amounts of the estimated uncollectible ambulance billings to individuals as of
December 31, 2009 were $270,000.
M. CAPITAL ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks,
and similar items), are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements. Infrastructure assets have been capitalized retroactively to 1980. Capital
assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not
rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated
historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the
date of donation.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets
lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred
during the construction phase of capital assets of business-type activities is included as part of the capitalized value
of the assets constructed. For the year ended December 31, 2009, no interest was capitalized in connection with
construction in progress.
Capital assets not being depreciated include land and construction in progress. Property, plant and equipment of the
primary government, as well as the component units, is depreciated using the straight-line method over the
following estimated useful lives:
Assets Years
Buildings and improvements 20-50
Equipment and furniture 3-10
Machinery and equipments 5-20
Other improvements 5-20
Streets50
Storm sewers 50
Sidewalks 50
Trails20
Street lights 50
Water and sewer lines 50
Capital assets of the water and sewer utility operations include the water distribution system and sewage collection
system. These systems have been wholly (or substantially) financed by non-operating funds (special assessments,
general taxes, federal and state grants, and other sources) and contributed to the sewer and water operating funds.
City policy is to finance these assets by the sources indicated rather than by user charges. Accordingly, the water
and sewer user rates are not established at levels sufficient to cover depreciation on these assets.
N. MARKET VALUE HOMESTEAD CREDIT (MVHC)
Property taxes on homestead property (as defined by State Statutes) are partially reduced by MVHC. This credit is
paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit through
installments each year. The credit is recognized as revenue by the City at the time of collection.
O. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All
vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability
for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee
resignations and retirements. In accordance with the provisions of GASB 16, Accounting for Compensated
Absences, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. However, a
liability is recognized for that portion of accumulating sick leave benefits that is vested as severance pay.
P. LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term
debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-
type activities, or proprietary fund type statement of net assets. Bond premiums and discounts are deferred and
amortized over the life of the bonds. Bond issuance costs are reported as deferred charges and amortized over the
term of the related debt.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
Q. FUND EQUITY
In the fund financial statements, governmental funds report reservations of fund balance for amounts not
appropriable for expenditure or legally segregated for specific use. Designated fund balances represent tentative
plans for future use of financial resources.
R. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that
constitute reimbursements to a fund for expenditures/expenses initially made from it are properly applicable to
another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of
expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or
payable which offsets the movement of cash between funds. All other interfund transactions are reported as
transfers.
S.USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. generally accepted accounting principles (GAAP)
requires management to make estimates that affect the amounts reported in the financial statements during the
reporting period. Actual results could differ from such estimates.
T.COMPARATIVE DATA
Summarized comparative data for the prior year has been presented only for certain sections of the accompanying
financial statements in order to provide an understanding of the changes in the City’s financial position and
operations.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS
The governmental fund balance sheet includes a reconciliation between fund balance – total governmental
funds and net assets – governmental activities as reported in the government-wide statement of net assets. One
element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and
payable in the current period and therefore are not reported in the funds.” The details of this $(25,547,493)
difference are as follows:
B.EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between net changes in fund balances – total governmental funds and changes in net assets of
governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains that “governmental funds report capital outlays 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.” The details of this $(499,125) difference are as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Another element of that reconciliation states that “revenues on the statement of activities that do not provide
current financial resources are not reported as revenues in the funds.” The details of this $(2,035,846)
difference are as follows:
General property taxes deferred revenue:
At December 31, 2008$ (323,012)
At December 31, 2009386,374
Special assesments deferred revenue:
At December 31, 2008(8,492,298)
At December 31, 20096,393,090
Grant deferred revenue:
At December 31, 20081,192,141
At December 31, 2009(1,192,141)
Net adjustments to increase net changes in fund balances -
total governmental funds to arrive at changes in net
assets of governmental activities$(2,035,846)
Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides
current financial resources to governmental funds, while the repayment of the long-term debt consumes the
current financial resources of governmental funds.” Neither transaction, however, has any effect on net assets.
The details of this $266,308 difference are as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Another element of that reconciliation states that “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.” The details of this $6,544 difference are as follows:
Note 3 DEPOSITS AND INVESTMENTS
DEPOSITS
A.
The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this
pool is displayed on the statement of net assets and balance sheets as “Cash and Investments.” In accordance with
Minnesota Statutes, the City maintains deposits at financial institutions which are authorized by the City Council.
Custodial Credit Risk – Custodial credit risk for deposits is the risk that in the event of a bank failure, the City’s
deposits may not be returned to it. Neither the City nor the Cottage Grove Economic Development Authority, a
discretely presented component unit, has a deposit policy for custodial credit risk –deposits beyond the requirements
of state statutes. As of December 31, 2009, all of the deposits were insured or collateralized by securities held by
the City or its agent in the City’s name.
Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The market value
of collateral pledged must equal 110% of the deposits not covered by insurance or corporate surety bonds.
Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency;
general obligations of a state or local government rated “A” or better; revenue obligations of a state or local
government rated “AA” or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and
time deposits insured by a federal agency. Minnesota statutes require securities pledged as collateral be held in
safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust departments of a
commercial bank or other financial institution not owned or controlled by the depository.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
B. INVESTMENTS
The City may also invest idle funds as authorized by Minnesota Statutes as follows:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or
organizations created by an act of congress, excluding mortgage-backed securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose
only investments are in securities described in (a) above, general obligation tax-exempt securities, or
repurchase or reverse repurchase agreements.
c) Obligations of the State of Minnesota or any of its municipalities as follows:
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.
d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest
quality, and maturing in 270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System
with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the
Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a
depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091,
subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6.
h) Guaranteed investment contracts guaranteed by United States commercial banks or domestic branches of
foreign banks or United States insurance companies if similar debt obligations of the issuer or the collateral
pledged by the issuer is in the top two rating categories
Interest rate risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes
in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a
combination of shorter term and longer term investments and by timing cash flows from maturities to meet cash
requirements for ongoing operations. In accordance with its investment policy, the City manages its exposure to
declines in fair values by structuring the portfolio so that investments mature to meet cash flow requirements for
operations thereby avoiding the need to sell securities prior to maturity. Information about the sensitivity of the fair
values of the City’s investments to market interest rate risk fluctuations is provided by the following table that
shows the distribution of the City’s investments by maturity and a reconciliation to the Government-wide
statements:
Total Fair Investment maturities in Years
Investment type Market Value Less than 1 1 – 5 More than 5
U.S. Agencies $ 31,467,461 $ 2,037,430 $ 29,430,031 $ -
Municipal Obligations 763,522 135,332 628,190 -
Negotiable CD’s 15,142,202 11,317,737 3,824,465 -
Total Investments $ 47,373,185 $ 13,490,499 $ 33,882,686 $ -
Money Markets 9,941,217
Deposits 336,697
Petty Cash and Change 8,611
Total Cash and Investments $ 57,665,710
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of failure of the
counterparty, the city will not be able to recover the value of its investment or collateral securities that are in the
possession of an outside party. The City’s investment policy requires that insurance of all balances be held with
each investment account. As of December 31, 2009, the investment balances were fully covered by insurance for
each brokerage firm.
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. The City’s investment policy does not further limit its investment options beyond State Statute. The
following chart summarizes year-end ratings for the City’s investments as rated by Moody’s Investors Service:
Credit Quality Rating
Type S&P/Moody’s Amount
Government Agencies AAA/Aaa $ 31,467,461
Municipal Obligations AA/Aa 763,522
Total $ 32,230,983
Concentration of Credit Risk –
The City’s investment policy places no limit on the amount that may be invested in any one issuer. The following is
a list of investments by issuer which individually comprise more than 5 percent of the City’s total investments:
TypeAmountPercent
Federal Home Loan Bank - FHLB$ 13,539,95428%
Fannie Mae - FNMA 3,987,6158%
Freddie Mac - FHLMC 12,942,91227%
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 4 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2009 are as follows:
Special DelinquentCertified
AssessmentPropertyto
ReceivableTaxesCountyTotal
Primary government:
Major funds:
General Fund$167,900$ 171,996-$
$ 4,096
Closed Debt Fund-
7,500 - 7,500
Developer Financed Debt Service Revolving Fund805,216
- - 8 05,216
Pavement Management Debt Service Fund2,340,114 15,800
- 2,355,914
MSA Construction Capital Project Fund1,222,948
- - 1,222,948
Construction Revolving Capital Project Fund828,930
- - 8 28,930
Nonmajor funds613,013
11,800 - 6 24,813
Major Business-Type funds:
Water Operating fund --133,750
1 33,750
Sewer Operating fund --142,801
1 42,801
Total primary government6,293,868
5,814,317 2 03,000 2 76,551
Component unit:
Economic Development Authority-
1,900 - 1,900
Total reporting entity$ 204,9005,814,317$ $6,295,768
$ 276,551
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be
available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with
resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of
deferred revenue and unearned revenue reported in the governmental funds were as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2009 was as follows:
$1,564,166 of capital assets in construction in progress were contributed to business-type activities in 2009.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government$ 122,020
Community development 4,592
Public safety 473,921
Public works 2,246,610
Culture and recreation 672,988
Total depreciation expense - governmental activities$ 3,520,131
Business-type activities:
Golf course$ 166,358
Street lights 116,647
Cottage Grove EMS 41,295
Water operating 758,877
Sewer operating 407,574
Total depreciation expense before transfer 1,490,751
Plus: Accumulated depreciated on transferred asset 28,360
Total depreciation expense before - business-type activities$ 1,519,111
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
NOTE 6 LONG-TERM DEBT
A.GENERAL OBLIGATION DEBT
The City issues general obligation bonds to provide funds for the acquisition and construction of major capital
improvements. The City issues special assessment bonds to finance various improvements and will be repaid
primarily from special assessments levied on the properties benefiting from the improvements. The reporting
entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to
be repaid from business-type activities. As of December 31, 2009, the governmental long-term debt of the financial
reporting entity consisted of the following:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Annual debt service requirements to maturity for general obligation bonds are as follows:
Tax Increment BondsSpecial Assessment Bonds
Year Ending
Governmental ActivitiesGovernmental Activities
December 31PrincipalInterestPrincipalInterest
2010$95,000$145,896$1,530,000$ 560,345
201140,000143,0821,645,000 474,489
201255,000140,8991,585,000 422,829
2013135,000136,287980,000 380,849
2014150,000129,1821,135,000 347,770
2015170,000121,1141,565,000 301,593
2016190,000111,8471,400,000 244,650
2017210,000101,3101,470,000 190,391
2018235,00089,3581,495,000 133,302
2019260,00075,8051,325,000 77,789
2020285,00060,727240,000 46,525
2021280,00045,221245,000 36,825
2022255,00031,872250,000 26,800
2023275,00019,810255,000 16,320
2024290,0006,743255,000 5,483
Total2,925,000$$1,359,153$15,375,000$ 3,265,960
Revenue BondsRevenue Bonds
Year EndingBusiness-Type ActivitiesComponent Unit
December 31PrincipalInterestPrincipalInterest
2010$540,000$98,945$235,000$ 274,592
2011360,00066,625245,000 264,992
2012420,00048,402250,000 255,092
2013230,00033,691260,000 244,892
2014105,00027,300270,000 234,292
2015105,00024,150280,000 223,292
2016110,00020,650290,000 211,892
2017115,00016,712300,000 199,942
2018120,00012,450310,000 187,360
2019125,0007,700320,000 174,288
2020130,0002,600335,000 160,697
2021--350,000 145,871
2022--365,000 129,601
2023--380,000 112,370
2024--395,000 94,252
2025--410,000 75,233
2026--430,000 55,176
2027--450,000 33,943
2028--470,000 11,515
Total2,360,000$$359,225$6,345,000$ 3,089,292
It is not practicable to determine the specific year for payment of long-term accrued compensated absences.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Current Refunding
On April 16, 2009 the City issued $625,000 General Obligation Improvement Refunding Bonds, Series 2009C with an
average interest rate of 2.86% for an advance crossover refunding of the 2010-2015 maturities of the City’s $1,210,000
Series 2000A bonds. The average interest rate on the 2000A bonds was 5.185%. The net proceeds of $622,094 (after
payment of $19,183 of issuance costs and an underwriters discount of $2,906) plus an additional $130,000 were placed in
escrow and were used to retire all outstanding principal of the refunded bonds on December 1, 2009. This refunding
reduced total debt service over the six year period by $182,948 or $159,210 when discounted to present value.
On that same date, the City issued $1,205,000 General Obligation Water Revenue Refunding Bonds, Series 2009B with an
average interest rate of 3.42% for a current refunding of the 2010-2020 maturities of the City’s $1,690,000 Series 1999E
bonds. The average interest rate on the 1999E bonds was 5.64%. Net proceeds of $1,211,320 were used to retire all
outstanding principal of the refunded bonds on May 1, 2009. This refunding reduced total debt service over the eleven
year period by $144,387 or $119,245 when discounted to present value.
B.LOANS PAYABLE
The City (primary government) has also entered into a loan agreement with the EDA (component unit) for financing
operations for the Golf Course. The original amount of the loan issued in 2004 was $500,000 at 5.5% interest. An
additional loan was issued in 2007 for $400,000 at 6.0% interest
Annual debt service requirements to maturity for loans payable are as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
C.CHANGES IN LONG-TERM LIABLITIES
Long-term liability activity for the year ended December 31, 2009, was as follows:
For the governmental activities, capital leases, other postemployment benefits and compensated absences are
generally liquidated by the general fund.
All long-term bonded indebtedness outstanding at December 31, 2009 is backed by the full faith and credit of the
City, including special assessment and revenue bond issues. Delinquent assessments receivable at December 31,
2009 totaled $432,301.
D. CAPITAL LEASES
The City entered into an installment contract with the EDA (a component unit) to advance refund the $2,600,000
Public Project Revenue Bonds of 1990 whereby the City reimburses the debt service requirements to the EDA on
the $2,330,000 Golf Course Revenue Refunding of 1994 through the installment contract. The City has eliminated
the asset and liability resulting from this capital lease arrangement in the EDA’s financial statements to avoid double
counting of assets and liabilities.
The City has entered into a lease agreement for the purchase of a Feacon mower. In addition, the City entered into
lease agreements for the purchase of a beverage cart, 75 golf carts, and a mower for the Golf Course Enterprise
Fund. These lease agreements qualify as capital leases for accounting purposes, and therefore, have been recorded
at the present value of the future minimum lease payments as of the inception date. The final payment on the
beverage cart and golf carts was made in 2009.
In 2008, the City entered into a lease-purchase agreement with the EDA (a component unit) to finance the expansion
of the ice arena. Per the agreement, the EDA issued $6,500,000 of revenue bonds and the proceeds were used by the
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
City to finance the expansion. The lease qualifies as a capital lease for accounting purposes, and therefore, the
construction costs have been capitalized in the primary government.
The assets acquired through capital leases are as follows:
Governmental Golf Course
ActivitiesEnterprise Fund
Asset:
$ 6,768,415 $ -
Building and improvements
Machinery and equipment 19,595239,758
Less: accumulated depreciation(345,279)(141,326)
$6,442,731$ 98,432
The following is a schedule of future minimum lease payments under the capital leases:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 7 LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from
property taxes. The limitation was 3 % of market value in 2008 and 2009. The City of Cottage Grove's legal debt margin for
2009 and 2008 is computed as follows:
Note 8 PENSION PLANS
A. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) - DEFINED BENEFIT
Plan Description
All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund
(PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement
plans. These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356.
PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by
Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police
officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF.
PERA 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 PERA's 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 10
years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is
1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under 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 PEPFF members, the annuity accrual rate is 3.0 percent for each year of
service. For all PERF members and PEPFF 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 equals 90. Normal retirement age is 55 for
PEPFF members and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is
the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989.
A reduced retirement annuity is available to eligible members seeking early retirement.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
There are different types of annuities available to members upon retirement. A single-life annuity is a lifetime
annuity that ceases upon the death of the retiree- no survivor annuity is payable. There are also various types of
joint and survivor annuity options available which will be payable over joint lives. Members may also leave their
contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement
age. Refunds of contributions are available at any time to members who leave public service, but before retirement
benefits begin.
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 receiving them yet are
bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required supplementary
, by writing to
information for PERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org
PERA, at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026.
Funding Policy
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. PERF Basic Plan members and Coordinated Plan members were required to
contribute 9.10% and 6.00%, respectively, of their annual covered salary in 2009. PEPFF members were required to
contribute 9.4% of their annual covered salary in 2009. The City of Cottage Grove is required to contribute the
following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 6.75% for Coordinated
Plan PERF members, and 14.1% for PEPFF members. The City’s contributions to the Public Employees Retirement
Fund for the years ending December 31, 2009, 2008 and 2007 were $315,436, $293,906, and $279,584 respectively.
The City’s contributions to the Public Employees Police & Fire Fund for the years ending December 31, 2009, 2008
and 2007 were $474,141, $414,012 and $350,930 respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by state statute.
B. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) - DEFINED CONTRIBUTION
Plan Description
Five council members of the City of Cottage Grove are covered by the defined contribution pension plan (PEDCP),
a multiple-employer deferred compensation plan administered by the Public Employees Retirement Association of
Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all
contributions by or on behalf of employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative
expenses. Minnesota Statutes, Chapter 353D.03, specifies the employee and employer contribution rates for those
qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5
percent of salary which is matched by the elected official's employer. Employer and employee contributions are
combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental
Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and twenty-five
hundredths of one percent of the assets in each member's account annually.
Total contributions made by the City during fiscal year 2009 were:
Amount Percentage of Covered Payroll Required
EmployerEmployeesEmployer Rates
Employees
PEDCP $1,478 $1,478 5.00% 5.00% 5.00%
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
C. COTTAGE GROVE FIRE RELIEF ASSOCIATION
Plan Description
The Volunteer Firefighters of the City of Cottage Grove are members of the Cottage Grove Volunteer Fire Relief
Association. The Cottage Grove Volunteer Fire Relief Association is the administrator of a single employer defined
benefit pension plan established to provide benefits for members of the Cottage Grove Fire Department. The plan is
established and administered in accordance with Minnesota Statute, Chapter 69.
The Relief Association provides retirement benefits as well as disability benefits to members, and benefits to
survivors upon death of eligible members. Benefits are established in accordance with State Statute, and vest after
ten years of credited service. The defined retirement benefits are based on a member’s years of service. Benefit
provisions can be amended by the Relief Association within the parameters provided by State Statutes.
The Relief Association issues a publicly available financial report that include financial statements and required
supplementary information. The report may be obtained by writing to Cottage Grove Volunteer Fire Relief
th
Association, 8641 80 Street South, Cottage Grove, MN 55016.
Funding Policy
Minnesota StatutesChapter 69.772 sets the minimum contribution requirement for the City of Cottage Grove and
State Aid on an annual basis. These statutes are established and amended by the state legislature. The Association
is comprised of volunteers; therefore, members have no contribution requirements. The City’s annual pension cost
for the current year and related information for the plan is as follows:
Three-Year Trend Information
Percentage of APC Net Pension
Year EndingAnnual Pension CostcontributedObligation
12/31/2006 $190,627 100% $ -
12/31/2007 160,369 100% -
12/31/2008 134,771 100% -
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Schedule of Funding Progress
Actuarial Actuarial Actuarial (Unfunded) /
Funding
Valuation Value of Accrued Assets in Excess
DateAssetsLiability (AAL)of AAL (UAAL)Ratio
12/31/2006 $1,719,251 $1,357,421 $361,830 126.66%
12/31/2007 1,850,496 1,593,755 256,741 116.11%
12/31/2008 1,430,617 1,487,078 ($56,461) 96.2%
The amount received from the State of Minnesota in Fire Relief Aid, $134,771, and then contributed to the Cottage
Grove Fire Relief Association is included as a revenue and expenditure, respectively, in the General Fund.
Note 9 INTERFUND LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2009 are as follows:
Interfund receivable and payable balances are used for temporary cash deficits.
There were interfund loan receivable and payable balances at December 31, 2009 of:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
The City uses interfund loans when possible to finance construction activities in order to avoid costs associated with issuing
bonds. These loans are for this purpose.
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by
another fund. All transfers in 2009 were considered to be routine in nature. Additionally, administrative fees paid by the Golf
Course, Street Light, Cottage Grove EMS, Water Operating, and Sewer Operating Funds to the General Fund have been
reclassified as transfers on the government-wide statement of activities as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 10 TAX INCREMENT DISTRICTS
The City of Cottage Grove is the administering authority for the following Tax Increment Financing Districts:
Cottages ofGateway
OakwoodUp NorthCottage Renewal byIndustrialNorthIndustrialIndustrial
HeightsPlasticsGroveAndersenParkDistrictParkPark
#1-1#1-3#1-8#1-9#1-10#1-12#1-13#1-14
Type of DistrictHousingRedevelop.HousingEconomic Economic Redevelop.Economic Economic
Develop.Develop.Develop.Develop.
Chapter472A472A469.174469.174469.174469.174469.174469.174
Established19851985199119982000200120052007
District duration25 years25 years25 years8 years9 years25 years9 years9 years
Current tax capacity$23,496$ 17,953
$ 170,584$ 3 4,360$ 1 75,510$ 319,904$ 611,126$ 133,742
Original tax capacity(76)(1,268)(7,305)(230,548) (7,439)
(62,250) (5,326) (5,869)
Captured tax capacity$23,420$ 10,514
$ 108,334$ 3 3,092$ 1 70,184$ 312,599$ 380,578$ 127,873
Tax capacity retained by City23,420$$ 10,514
$ 108,334$ 3 3,092$ 1 70,184$ 312,599$ 380,578$ 127,873
Tax capacity shared with
other jurisdictions
-100,562
- -57,283 - 42,940 -
Total$ 10,514
$ 23,420$ 108,334$ 3 3,092$ 1 12,901$ 212,037$ 380,578$ 84,933
Debt issued$ 510,000-$ -$ -
$ 525,000$ $ 1 ,315,000$ -$ 3,000,000
Amounts redeemed(525,000)(475,000) (1,315,000)- (110,000)- -
-
Debt outstanding -$ --$ -$ -
$ $ 35,000$ -$ $ 2,890,000
Note 11 DEFICIT FUND BALANCES/NET ASSETS
The City has deficit fund balances/net assets at December 31, 2009 as follows:
The deficit fund balances will be resolved through
FundAmount
Major Governmental Funds:
Developer Financed Debt Service Revolving Fund$ 1 5,403Future special assessments and developer charges
Pavement Management Capital Project Fund
1 7,895Future bonding
Construction Revolving Capital Project Fund
5 21,877Future special assessments and developer charges
Tax Increment Construction Revolving Future tax increment collections122,338
Note 12 CONTINGENCIES
A.RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and
omissions and natural disasters for which the City carries commercial insurance policies. The City retains risk for
the deductible portions of the insurance policies. The amount of these deductibles is considered immaterial to the
financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance
coverage for any of the past three fiscal years.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Workers compensation coverage is provided through a pooled self-insurance program through the League of
Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to
supplemental assessments as deemed necessary by the LMCIT. The LMCIT reinsures through Worker’s
Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is subject
to a $5,000 medical expense deductible. The City’s premiums are determined after loss experience is known. The
amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid.
Property and casualty insurance coverage is provided through a pooled self-insurance program through LMCIT. The
City pays an annual premium to the LMCIT. The City is subject to supplemental assessments as deemed necessary
by the LMCIT.
The City established a Self Insurance Fund in 1986 to account for and finance its uninsured risks of loss related to
torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural
disasters. Under this program, the Self Insurance Fund provides coverage for losses up to $50,000 for each claim
(annual aggregate is $100,000). The City purchases commercial insurance for claims in excess of coverage
provided by the Fund and for any risk of loss not covered. Settled claims have not exceeded the commercial
coverage in any of the past three fiscal years.
This fund is presented as an internal service fund type. All funds of the City participate in the program and make
payments to the Self Insurance Fund based on historical cost information. The claims liability of $67,176 reported
in the Fund at December 31, 2009 is based on the requirements of Governmental Accounting Standards Board
Statement Number 10, which requires that a liability for claims be reported if information prior to the issuance of the
financial statements indicates that it is probable that a liability has been incurred at the date of the financial
statements and the amount of the loss can be reasonably estimated.
Changes in the fund's claims liability amounts were as follows:
BeginningClaims andEnd
of YearChanges inClaimof Year
YearLiabilityEstimatesPaymentsLiability
2009$ 59,995$ 52,372$ (45,191)$ 67,176
200860,302 133,250 (133,557) 59,995
2007176,667 (27,372) (88,993) 60,302
B.LITIGATION
The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a
defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney,
remotely recoverable by plaintiffs.
C.FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental agencies in the form of grants. The
disbursement of funds received under these programs generally requires compliance with the terms and conditions
specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting
from such audits could become a liability of the applicable fund. However, in the opinion of management, any such
disallowed claims will not have a material effect on any of the financial statements of the individual fund types
included herein or on the overall financial position of the City at December 31, 2009.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
D.TAX INCREMENTS
The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA).
Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has
indicated that they are not aware of any instances of noncompliance which would have a material effect on the
financial statements.
Note 13 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT
General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues
sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting
properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual
amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these
taxes over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided
alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment
of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2009
and 2008. Future scheduled tax levies for all bonds outstanding at December 31, 2009 totaled $10,425,693.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 14 DESIGNATIONS, RESERVATIONS, AND RESTRICTIONS
At December 31, 2008 the City had designated and reserved portions of its various fund equities through legal restriction and
City Council authorization. Major fund equity appropriations at December 31, 2009 are shown on the various balance sheets
as segregation of the fund equity. A summary of such designations is as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 15 OTHER POSTEMPLOYMENT BENEFIT PLAN
At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting
and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City engaged an actuary to
determine the City’s liability for postemployment healthcare benefits other than pensions as of January 1, 2008.
A.
PLAN DESCRIPTION
The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees,
who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both
themselves and their eligible dependent(s) under the City’s health benefits program until age 65. Pursuant to the
provisions of the plan, retirees are required to pay the total premium cost. As of December 31, 2009 there were
approximately 116 active participants and 3 retired participants receiving benefits from the City’s health plans.
B.
FUNDING POLICY
The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2009, the City contributed $3,462 to
the plan.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
C.
ANNUAL OPEB COST AND NET OPEB OBLIGATION
The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required
contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.
The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year
and amortize any un-funded actuarial liabilities over a period not to exceed thirty years. The following table shows
the components of the City’s annual OPEB cost for the year, the amount actually paid from the plan, and changes in
the City’s net OPEB obligation:
The City’s annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB
obligation for 2009:
Percentage
FiscalAnnualof AnnualNet
YearOPEBOPEB CostOPEB
EndedCostContributedObligation
12/31/200920,016$ 17.3%31,214$
12/31/200820,261$ 27.6%14,660$
D.
FUNDED STATUS AND FUNDED PROGRESS
As of January 1, 2008, the most recent actuarial valuation date, the City’s unfunded actuarial accrued
liability (UAAL) was $146,597. The annual payroll for active employees covered by the plan in the
actuarial valuation was $8,750,900 for a ratio of UAAL to covered payroll of 1.7%.
Actuarial valuations of an ongoing plan 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 healthcare cost trends. 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.
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
E.
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 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 and the actuarial value of assets,
consistent with the long-term perspective of the calculations.
In the January 1, 2008 actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumptions included a 4% investment rate of return (net of administrative expenses), which is a
blended rate of the expected long-term investment returns on plan assets and on the employer’s own
investments calculated based on the funded level of the plan at the valuation date. The initial healthcare
trend rate was 9%, reduced by decrements to an ultimate rate of 5% after nine years. The UAAL is being
amortized as a level percentage of projected payrolls on an open basis. The remaining amortization period
at December 31, 2009 was 28 years.
Note 16 OPERATING LEASES
The City leases land for the golf course under an operating lease. The lease expires on April 30, 2010 with the
option to extend the term for three additional terms of five years each. The lease calls for monthly lease payments
of $1,247 for the first five years and from that point payments will be based on fair market value per acre. This lease
was amended during 1996 to require that the monthly lease payments remain at $1,247 for lease years 6 through 10
(1995 to 2000). The lease was amended again in 1999 to require that the monthly lease payments equal $1 per
month for the remaining term of the lease agreement. In 2009, $12 was paid under this lease arrangement.
The City leases six copiers under an operating lease. Total costs for these leases were $19,050 for the year ended
December 31, 2009. Future minimum annual lease payments at December 31, 2009 are as follows:
The City entered into two operating leases during 2007 for the leasing of ice time for the Ice Arena with
Independent School District 833 and the Cottage Grove Athletic Association. The lease payments began in 2008
when the new ice arena expansion project opened. The future minimum annual lease payments that the City will
receive are as follows:
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CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 17 COMMITTED CONTRACTS
At December 31, 2009, the City had commitments of $126,812 for uncompleted construction contracts.
Note 18 CONDUIT DEBT OBLIGATIONS
The City has issued Industrial Revenue Bonds to provide financial assistance to private sector entities for the
acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest.
The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage
loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served
by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds
are not reported as liabilities in the accompanying financial statements.
As of December 31, 2009, a series of Industrial Revenue Bonds were outstanding.
Original Issue
BondIssue DateAmount12/31/09 Balance*Maturity Date
Environmental Control Revenue Bonds-3M 08/01/1982 $5,600,000 Not available 08/01/2012
Industrial Revenue Bonds-Allina Health Systems08/05/1998 4,100,000 Not available 08/05/2018
Industrial Revenue Bonds-Advance Corporation 04/30/2001 3,500,000 $2,765,000 04/01/2021
Commercial Development Revenue Note-HSI 12/22/2004 935,000 765,333 12/01/2024
Commercial Development Revenue Note-ESR, Inc. 11/22/2005 76,500 54,889 11/22/2025
Commercial Development Revenue Note-ESR, Inc. 05/19/2005 853,000 745,659 12/19/2025
Subordinate Senior Housing Revenue Bonds-PHS12/01/2006 21,105,000 21,105,000 12/01/2046
Subordinate Senior Housing Revenue Bonds-PHS12/01/2006 8,075,000 8,075,000 12/01/2046
Variable Rate Revenue Bonds-Allina Health System 11/01/2009 6,100,000 6,100,00011/15/2022
$50,344,500 $39,610,881
*Per original conduit debt bond schedule
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF COTTAGE GROVE, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 1 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget - 2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenue:
General property taxes:
Current and delinquent$9,689,449$9,944,949$9,936,126($8,823)$9,187,828
Aggregate taxes - - - - 13,489
Special Assessments - - 33,51133,511 -
Licenses and permits:
General government111,700111,700117,3915,691103,647
Community development515,500515,500528,33812,838886,571
Public safety34,60034,60034,270(330)36,761
Public works - - 3,2053,2052,580
Total licenses and permits661,800661,800683,20421,4041,029,559
Intergovernmental:
Federal:
Safe and sober- public safety16,00016,00018,8142,81415,981
Ballistic vest grant - public safety - - 5,1815,1812,826
State:
Market value homestead credit493,051493,051181,303(311,748)241,281
MSA maintenance - public works39,00039,00042,2103,21042,210
PERA aid21,45021,45021,448(2)21,448
Fire relief aid - public safety160,000119,050119,050 - 136,771
Police relief aid - public safety260,000260,000248,105(11,895)260,807
Other - public safety21,20021,20017,978(3,222)17,176
py,,,(,),
Other - public works - - - - 2,000
Local:
DARE program - public safety89,50089,50089,500 - 89,500
Narcotics officer program - public safety3,2503,2503,231(19)4,085
Other - public safety - - 4,2014,2013,900
Other - public works - - 2,3072,3071,993
Other - culture and recreation18,50018,50013,889(4,611)17,626
Total intergovernmental1,121,9511,081,001767,217(313,784)857,604
Charges for services:
Administration charges - general government:
Construction funds50,00050,00025,286(24,714)29,020
Enterprise funds489,600489,600489,600 - 484,400
Finance charges - construction - general government75,00075,00037,929(37,071)43,531
Investment charge - general government60,00060,00022,098(37,902)57,997
Engineering charges - construction - public works100,000100,00014,842(85,158)58,041
Other - general government150150446296572
Other - community development12,300325,300323,831(1,469)69,580
Other - public safety57,30073,30055,278(18,022)78,281
Other - public works68,00068,00023,736(44,264)24,744
Other - culture and recreation145,200145,200158,05012,850160,421
Total charges for services1,057,5501,386,5501,151,096(235,454)1,006,587
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CITY OF COTTAGE GROVE, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 2 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget - 2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Fines and forfeits - public safety$226,000$226,000$192,169($33,831)$224,807
Investment earnings256,400256,400100,947(155,453)256,338
Donations:
Donations - general government5,0005,000845(4,155)1,650
Donations - public safety7,0007,0002,010(4,990)7,682
Donations - culture and recreation12,00012,0006,523(5,477)10,271
Total donations24,00024,0009,378(14,622)19,603
Miscellaneous:
Other - general government20,25020,2503,373(16,877)4,351
Other - community development - - 2842843,649
Other - public safety10,80014,80017,1452,34523,197
Other - public works - - 21,16421,16421,984
Other - culture and recreation10,90010,90015,0014,10120,369
Total miscellaneous41,95045,95056,96711,01773,550
Total revenues13,079,10013,626,65012,930,615(696,035)12,669,365
Expenditures:
Current:
General government:
Mayor and city council:
Personal services39,50039,50039,28121939,853
Commodities4004001,978(1,578)447
Contractual services35,09035,09035,373(283)42,498
Total mayor and city council 74,99074,990 (1,642)76,632 82,798
Administrative:
Personal services228,400227,100255,898(28,798)261,385
Commodities1,6001,6003581,242714
Contractual services2,6602,6601,0781,5821,519
Total administrative232,660231,360257,334(25,974)263,618
Finance:
Personal services369,600367,700334,71832,982350,841
Commodities2,5002,5001,4641,0361,744
Contractual services29,60029,60033,284(3,684)23,149
Total finance401,700399,800369,46630,334375,734
Management information systems:
Personal services85,50085,50085,540(40)81,685
Commodities60,45041,15020,17820,97235,050
Contractual services51,10045,10036,0179,08343,928
Capital outlay37,30036,60010,88425,71656,448
Total management information systems234,350208,350152,61955,731217,111
ó çï ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 3 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget - 2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures: (continued)
General government: (continued)
Personnel:
Personal services$98,200$97,400$87,225$10,175$66,991
Commodities60060091509490
Contractual services8,2608,2608,306(46)3,498
Total personnel107,060106,26095,62210,63870,979
Assessing service:
Contractual services136,500136,500137,942(1,442)131,183
City clerk/elections:
Personal services168,400140,500117,96122,539157,975
Commodities2,5502,5501,0631,4873,150
Contractual services22,94519,94511,3818,56416,613
Total City clerk/elections193,895162,995130,40532,590177,738
Legal:
Contractual services190,000190,000180,2219,779161,623
Community and employee programs:
Personal services - - 2,050(2,050)3,725
Commodities1,0001,00018581599
Contractual services63,38053,38033,83419,54654,618
Total community and employee programs64,38054,38036,06918,31158,442
Governmentbuildings:
Governmentbuildings:
Personal services14,20014,1008,0336,06716,288
Commodities13,00013,0008,6534,34716,096
Contractual services210,985210,985173,39837,587212,601
Capital outlay - - 5,777(5,777) -
Total government buildings238,185238,085195,86142,224244,985
Historic preservation:
Personal services9,6009,4004,1835,2175,103
Commodities5,0005,0003134,687916
Contractual services5050415(365)356
Capital outlay3,000 - - - -
Total historic preservation17,65014,4504,9119,5396,375
Total general government1,891,3701,817,1701,637,082180,0881,790,586
Community development:
Community development:
Personal services767,300761,000757,0543,946752,369
Commodities8,1008,1007,34875211,362
Contractual services41,190347,890338,3389,552130,911
Total community development816,5901,116,9901,102,74014,250894,642
ó çî ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 4 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget - 2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures: (continued)
Public safety:
Police protection:
Personal services$4,110,900$4,085,400$3,969,192$116,208$3,856,414
Commodities229,900229,900183,60346,297227,544
Contractual services278,500278,500239,98138,519215,067
Capital outlay108,640108,640107,2651,375239,669
Total police protection4,727,9404,702,4404,500,041202,3994,538,694
Fire protection:
Personal services418,000416,200378,36137,839372,317
Commodities71,45071,45069,4252,02566,764
Contractual services193,300185,300162,10123,199172,500
Total fire protection682,750672,950609,88763,063611,581
Fire relief:
Contractual services 163,000122,050122,921(871)140,322
Civil defense:
Personal services27,00027,00023,5693,43123,850
Commodities200200536(336)70
Contractual services11,69021,49018,8052,6856,811
Total civil defense38,89048,69042,9105,78030,731
Animal control:
Personalservices16700,16700,14698,2002,20137,
Personalservices167001670014698200220137
Commodities5,4005,4005,1322684,024
Contractual services71,46061,46071,000(9,540)52,187
Total animal control93,56083,56090,830(7,270)76,348
Total public safety5,706,1405,629,6905,366,589263,1015,397,676
Public works:
Public works administration:
Personal services239,050238,350246,758(8,408)231,295
Commodities16,70016,70015,1801,52021,488
Contractual services106,400106,400118,906(12,506)122,936
Capital outlay7,5007,500 - 7,500 -
Total public works administration369,650368,950380,844(11,894)375,719
Engineering:
Personal services116,900108,40064,25844,14279,818
Commodities1,5001,5007467541,349
Contractual services44,60054,40067,914(13,514)28,011
Total engineering163,000164,300132,91831,382109,178
ó çí ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 5 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget - 2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures: (continued)
Public works:
Streets:
Personal services$502,500$499,200$483,857$15,343$476,223
Commodities168,300168,300114,48253,818228,133
Contractual services279,100279,100233,60545,495257,771
Total streets949,900946,600831,944114,656962,127
Snow and ice control:
Personal services171,200169,400150,75618,644192,678
Commodities127,200127,200143,683(16,483)167,379
Contractual services129,300129,300124,6274,673114,178
Total snow and ice control427,700425,900419,0666,834474,235
Street signs/striping:
Personal services107,500106,60088,72517,87581,545
Commodities44,00044,00040,7073,29324,221
Contractual services43,50043,50036,1287,37246,179
Total street signs/striping195,000194,100165,56028,540151,945
Total public works2,105,2502,099,8501,930,332169,5182,073,204
Culture and recreation:
Forestry:
Forestry:
Personal services64,30038,50054,542(16,042)92,242
Commodities12,30012,3009,1383,1626,364
Contractual services123,800113,80071,32042,48091,855
Total forestry200,400164,600135,00029,600190,461
Municipal pool:
Commodities9,2009,2009,236(36)7,399
Contractual services55,75055,75058,639(2,889)66,854
Capital outlay - - - - 10,784
Total municipal pool64,95064,95067,875(2,925)85,037
Recreation programs:
Personal services260,600246,800228,32718,473243,248
Commodities9,7009,7009,01768311,912
Contractual services76,60076,60081,671(5,071)81,316
Total recreation programs346,900333,100319,01514,085336,476
ó çì ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 6 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget - 2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures: (continued)
Culture and recreation: (continued)
Parks maintenance:
Personal services$543,600$539,800$534,140$5,660$504,598
Commodities141,200141,200138,7032,497128,425
Contractual services253,100253,100264,879(11,779)280,481
Capital outlay151,000 - - - 44,183
Total parks maintenance1,088,900934,100937,722(3,622)957,687
Total culture and recreation1,701,1501,496,7501,459,61237,1381,569,661
Total current expenditures12,220,50012,160,45011,496,355664,09511,725,769
Debt service:
Capital lease payment2,6002,6002,600 - 2,418
Interest400400400 - 586
Total debt service3,0003,0003,000 - 3,004
Total expenditures12,223,50012,163,45011,499,355664,09511,728,773
Revenues over (under) expenditures855,6001,463,2001,431,260(31,940)940,592
Other financing sources (uses):
Transfer to Special Revenue Fund(420,040)(627,520)(627,520) - (425,167)
Transfer to Debt Service Fund - (290,472)(290,472) - (11,377)
Transfer to Capital Project Fund(60,000)(207,480)(207,480) - (68,127)
Total other financing sources (uses):(480,040)(1,125,472)(1,125,472) - (504,671)
Net increase (decrease) in fund balance$375,560$337,728305,788($31,940)435,921
Fund balance - January 18,825,7978,389,876
Fund balance - December 31$9,131,585$8,825,797
ó çë ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 10
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - STORM WATER MAINTENANCE FUND
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted Amounts
ActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenue:
Intergovernmental:
Local:
Other - public works$ - $ - $43,700$43,700$ -
Charges for services - user fees636,400636,400645,8559,455640,639
Investment earnings4,9004,9001,911(2,989)10,005
Miscellaneous - - 5,9965,996 -
Total revenue641,300641,300697,46256,162650,644
Expenditures:
Current:
Public works:
Personal services204,300203,300246,661(43,361)169,116
Commodities67,55067,55035,07832,47221,839
Contractual services316,200316,200296,69519,505230,868
Other charges - administrative charge29,00029,00029,000 -28,600
Construction/acquisition costs - - 76,383(76,383)235,384
Debt Service:
Capital lease payment - - 1,300(1,300)1,209
Interest and fiscal charges - - 200(200)293
Interestandfiscalcharges200(200)293
Total expenditures617,050616,050685,317(69,267)687,309
Revenue over (under) expenditures24,25025,25012,145(13,105)(36,665)
Other financing sources (uses):
Transfer to capital project fund - - - - (21,034)
Net increase (decrease) in fund balance$24,250$25,25012,145 ($13,105)(57,699)
Fund balance - January 1175,134232,833
Fund balance - December 31$187,279$175,134
ó çê ó
NOTE TO RSI
December 31, 2009
Note A LEGAL COMPLIANCE – BUDGETS
The General Fund and Storm Water Maintenance Fund budget are legally adopted on a basis consistent with accounting
principles generally accepted in the United States of America. The legal level of budgetary control is at the department level
for both budgets. The following is a listing of expenditures that exceeded budget appropriations.
ActualOver Budget
Final Budget
General Fund
General government:
Mayor and city council:
Commodities $400$1,978 $1,578
Contractual services 35,090 35,373 283
Administrative:
Personal services 227,100 255,898 28,798
Finance:
Contractual services 29,600 33,284 3,684
Management information services:
Personal services 85,500 85,540 40
Personnel:
Contractual services 8,260 8,306 46
Assessing service:
Contractual services 136,500 137,942 1,442
Community and employee programs:
Personal services -2,050 2,050
Government buildings:
Capital outlay -5,777 5,777
Historic preservation:
Contractual services 50415365
Public safety:
Fire relief:
Contractual services 122,050 122,921 871
Civil defense:
Commodities 200536336
Animal control:
Contractual services 61,460 71,000 9,540
Public works:
Public works administration:
Personal services 238,350 246,758 8,408
Contractual services 106,400 118,906 12,506
Engineering:
Contractual services 54,400 67,914 13,514
Snow and ice control:
Commodities 127,200 143,683 16,483
Culture and recreation:
Forestry:
Contractual services 38,500 54,542 16,042
Municipalpool:
Commodities 9,200 9,236 36
Contractual services 55,750 58,639 2,889
Recreation programs:
Contractual services 76,600 81,671 5,071
Parksmaintenance:
Contractual services 253,100 264,879 11,779
Storm Water Maintenance Fund
Publicworks
Personal services 203,300 246,661 43,361
Construction/acquisition costs -76,383 76,383
Debt service -1,500 1,500
ó çé ó
OTHER POST EMPLOYMENT HEALTH CARE BENEFITS
December 31, 2009
ActuarialUAAL as a
Actuarial Accrued Percentage
ActuarialValue of Liability Unfunded FundedCovered of Covered
ValuationAssets (AAL) AALRatio Payroll Payroll
Date(a) (b) (b-a) (a/b) (c ) ((b-a)/c)
1/1/2008 $ - $ 146,597 $ 146,597 - $ 8,750,900 1.7%
ó çè ó
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
ó çç ó
ó ïðð ó
NONMAJOR GOVERNMENTAL FUNDS
ó ïðï ó
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources that
are legally restricted to expenditures for specified purposes.
DEBT SERVICE FUNDS
The Debt Service Funds are used to account for the accumulation of resources for, and
payment of, interest, principal and related costs on general long-term debt.
CAPITAL PROJECT FUNDS
The Capital Project Funds account for financial resources to be used for the acquisition or
construction of major capital facilities (other than those financed by Proprietary Funds).
ó ïðî ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 11
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2009
With Comparative Data as of December 31, 2008
Totals
Nonmajor
SpecialDebtCapitalGovernmental Funds
RevenueServiceProject20092008
Assets
Cash and investments$5,592,463$627,264$13,837,352$20,057,079$16,139,870
Accrued interest receivable80,673 - - 80,673 -
Interfund loan receivable1,075,000 - 500,0001,575,0004,197,128
Due from other governmental units - net91,390 - - 91,39063,199
Accounts receivable - net333,683 - 38,604372,287394,831
Prepaid items350 - - 3501,120
Delinquent property taxes receivable6,423 - 13,78220,20535,985
Due from county - - - - 16,926
Special assessments receivable:
Deferred63,370 - 563,757627,1271,034,294
Delinquent - - 71,94371,94326,388
Special deferred - - 12,92812,92812,928
Total assets$7,243,352$627,264$15,038,366$22,908,982$21,922,669
Liabilities and Fund Balance
Liabilities:
Accounts payable$186,098$ - $70,658$256,756$77,571
Salariespayable10558, - - --10558,22585,
Salariespayable105581055822585
Contracts payable24,714 - 26,11650,83075,064
Due to other governmental units2,260 - - 2,2601,759
Deposits payable - - 46,40846,40838,819
Interfund loan payable - - - - 22,128
Deferred revenue71,892 - 662,410734,3021,109,595
Total liabilities295,522 0805,592 1,101,114 1,347,521
Fund balance:
Reserved 1,075,350 627,264 500,000 2,202,614 4,856,817
Unreserved:
Designated 5,872,480 - 13,732,774 19,605,254 15,718,331
Total fund balance 6,947,830 627,264 14,232,774 21,807,868 20,575,148
Total liabilities and fund balance$7,243,352$627,264$15,038,366$22,908,982$21,922,669
ó ïðí ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 12
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Totals
Nonmajor
Special DebtCapitalGovernmental Funds
Revenues:RevenueServiceProject20092008
General property taxes$228,255$135,553$208,063$571,871$1,380,031
Franchise taxes399,568 - - 399,568396,173
Aggregate taxes24,234 - - 24,234 -
Tax increment collections - 464,397 - 464,397232,005
Special assessments22,026 - 492,879514,905491,597
Direct charges to developers - - 24,78624,78626,114
Intergovernmental166,182 - - 166,182125,877
Charges for services 816,074 - - 816,074681,687
Investment earnings77,0265,165153,891236,082663,968
Interest on interfund loan80,673 - 171,328252,001122,656
Connection charges - - 201,463201,463148,434
Park dedication fees - - 64,58464,58421,707
Donations 408,716 - - 408,716409,309
Miscellaneous57,970 - 133,311191,281152,723
Total revenues2,280,724605,1151,450,3054,336,1444,852,281
Expenditures:
Current:
General government62,8203,33863,973130,131244,576
Public safety35,679 - - 35,67932,596
Public works550,632 - 49,206599,838520,183
Culture and recreation563,141 - 332563,473480,842
Capital outlay:
General government50,891 - - 50,89144,194
Public safety177,589 - - 177,58911,465
Public works412,358 - - 412,35878,939
Culture and recreation91,040 - - 91,040176,894
Construction/acquisition costs - - 86,88386,8831,710,625
Debt service:
Principal retirement - 545,000 - 545,000515,000
Capital lease payment155,000 - - 155,000 -
Interest and fiscal charges369,626157,52399,318626,467276,877
Total expenditures2,468,776705,861299,7123,474,3494,092,191
Revenues over (under) expenditures(188,052)(100,746)1,150,593861,795760,090
Other financing sources (uses):
Transfers in633,520218,796207,4801,059,7961,345,157
Transfers out(92,344) - (646,221)(738,565)(509,000)
Bonds issued - - - - 2,450,000
Premium on debt issued - - - - 20,317
Proceeds from the sale of capital assets49,694 - - 49,69443,175
Total other financing sources (uses)590,870218,796(438,741)370,9253,349,649
Net increase in fund balance402,818118,050711,8521,232,7204,109,739
Fund balance - January 16,545,012509,21413,520,92220,575,14816,465,409
Fund balance - December 31$6,947,830$627,264$14,232,774$21,807,868$20,575,148
ó ïðì ó
NONMAJOR SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources that
are legally restricted to expenditures for particular purposes. The City maintained the
following Special Revenue Funds during the year:
Ice Arena Fund - Established to account for operating the City's ice arena.
Future Economic Development Fund – Established to account for the receipt and
use of monies for economic development purposes.
Equipment Replacement Fund - Established to accumulate monies for the
replacement of capital equipment.
Forfeiture/Seizure - Established to account for Police Department proceeds from
property seized under MS 609.53.
Public Safety Grants – Established to account for revenues and expenditures of
public safety grants.
Recycling - Established to account for recycling advertising, promotion, and
capital expenditures.
Charitable Gambling – Established to account for the 3% tax on charitable
gambling operations.
Celebration Fund – Established to account for the receipt and use of monies for
community activities such as the Great Grove Get Together.
Street Sealcoating – Established to account for the receipt of franchise fees to be
used for sealcoating activities.
ó ïðë ó
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2009
With Comparative Data as of December 31, 2008
Future
IceEconomicEquipmentForfeiture/
ArenaDevelopmentReplacementSeizure
Assets
Cash and investments$556,181$1,781,527$2,991,641$55,632
Accrued interest receivable - 80,673 - -
Interfund loan receivable - 1,075,000 - -
Due from other governmental units - net20,081 - 51,452 -
Accounts receivable - net133,412100,000 - -
Prepaid items350 - - -
Delinquent property taxes receivable6,386 - 37 -
Due from county - - - -
Special assessments receivable:
Deferred - 63,370 - -
Total assets$716,410 $3,100,570 $3,043,130 $55,632
Liabilities and Fund Balance
Liabilities:
Accounts payable$27,911$ - $155,827$1,760
Salaries payable9,979 - - -
Contracts payable24,714 - - -
Due to other governmental units2,019 - - 241
Deposits payable - - - -
Deferred revenue8,48563,37037 -
Total liabilities73,10863,370155,8642,001
Fund balance:
Reserved for:
Prepaid items350 - - -
Long-term interfund loan receivable - 1,075,000 - -
Sealcoating in new developments - - - -
Unreserved:
Designated for ice arena642,952 - - -
Designated for equipment replacement - - 2,607,924 -
Designated for public safety department - - 134,800 -
Designated for finance department - - 119,100 -
Designated for MIS department - - 10,442 -
Designated for recreation programs - - 15,000 -
Designated for development district #1 - 1,962,200 - -
Designated for forfeiture and seizure - - - 53,631
Designated for recycling program - - - -
Designated for charitable gambling - - - -
Designated for community events - - - -
Designated for sealcoating & resurfacing - - - -
Total fund balance643,3023,037,2002,887,26653,631
Total liabilities and fund balance$716,410 $3,100,570 $3,043,130 $55,632
ó ïðê ó
Statement 13
Totals
Nonmajor
Public SafetyCharitableCelebrationStreetSpecial Revenue Funds
GrantsRecyclingGamblingFundSealcoating20092008
$1,861$86,006$5,335$1,055$113,225$5,592,463$5,133,373
- - - - - 80,673 -
- - - - - 1,075,0001,075,000
5,324 - - - 14,53391,39054,599
- - - - 100,271333,683342,248
- - - - - 3501,120
- - - - - 6,4235,437
- - - - - - 2,437
- - - - - 63,37079,213
$7,185 $86,006 $5,335 $1,055 $228,029 $7,243,352 $6,693,427
$ - $600$ - $ - $ - $186,098$35,521
579 - - - - 10,55822,585
- - - - - 24,714 -
- - - - - 2,2601,759
- - - - - - 3,900
- - - - - 71,89284,650
579600000295,522148,415
- - - - - 3501,120
- - - - - 1,075,0001,075,000
- - - - - - 149,355
- - - - - 642,952731,715
- - - - - 2,607,9242,422,603
- - - - - 134,800134,800
- - - - - 119,100170,000
- - - - - 10,44210,442
- - - - - 15,00015,000
- - - - - 1,962,2001,472,421
- - - - - 53,631116,610
- 85,406 - - - 85,40686,964
- - 5,335 - - 5,33510,849
6,606 - - 1,055 - 7,6616,218
- - - - 228,029228,029141,915
6,60685,4065,3351,055228,0296,947,8306,545,012
$7,185 $86,006 $5,335 $1,055 $228,029 $7,243,352 $6,693,427
ó ïðé ó
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES
,
EXPENDITURES AND CHANGES IN FUND BALANC
E
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 200
9
With Comparative Data for the Year Ended December 31, 200
8
Future
IceEconomicEquipmentForfeiture/Public Safety
ArenaDevelopmentReplacementSeizureGrants
Revenues:
General property taxes$228,207$ - $48$ - $ -
Franchise taxes - - - - -
Aggregate taxes - - - - -
Special assessments:
Current - 22,026 - - -
Intergovernmental:
Federal:
Bryne JAG grant - public safety - - - - 5,324
State:
Market value homestead credit - - - - -
Local:
Washington County - public works - - - - -
School district - parks and recreation57,000 - - - -
Other - public works - - 51,452 - -
Charges for services806,07410,000 - - -
Investment earnings10,80023,86337,36479712
Interest on interfund loan - 80,673 - - -
Donations3,680395,000 - - -
Miscellaneous878175 - 50,989 -
Total revenues1,106,639531,73788,86451,7865,336
Expenditures:
p
Current:
General government - 41,958 - - -
Public safety - - - 29,5656,114
Public works - - - - -
Culture and recreation563,141 - - - -
Capital outlay:
General government - - 50,891 - -
Public safety - - 92,38985,200 -
Public works - - 412,358 - -
Culture and recreation22,061 - 68,979 - -
Construction/acquisition costs - - - - -
Debt service:
Capital lease payment155,000 - - - -
Interest and fiscal charges369,626 - - - -
Total expenditures1,109,82841,958624,617114,7656,114
Revenues over (under) expenditures(3,189)489,779(535,753)(62,979)(778)
Other financing sources (uses):
Transfer from General Fund - - 620,480 - 7,040
Transfer from Special Revenue Fund - - - - -
Transfer from Debt Service Fund - - - - -
Transfer from Capital Project Fund - - - - -
Transfer to Special Revenue Fund - - - - -
Transfer to Capital Project Fund(86,344) - - - -
Proceeds from the sale of capital assets - - 49,694 - -
Total other financing sources (uses)(86,344)0670,17407,040
Net increase (decrease) in fund balance(89,533)489,779134,421(62,979)6,262
Fund balance - January 1732,8352,547,4212,752,845116,610344
Fund balance - December 31$643,302$3,037,200$2,887,266$53,631$6,606
ó ïðè ó
Statement 14
Totals
Nonmajor
CharitableCelebrationStreetSpecial Revenue Funds
RecyclingGamblingFundSealcoating20092008
$ - $ - $ - $ - $228,255$218,210
- - - 399,568399,568396,173
- - - 24,23424,234 -
- - - - 22,026 -
- - - - 5,324 -
- - - - - 5,769
52,406 - - - 52,40652,406
- - - - 57,00028,500
- - - - 51,452 -
- - - - 816,074681,687
1,302142222,72477,026233,348
- - - - 80,673 -
-5,0365,000 - 408,716409,309
5,599 - 329 - 57,97050,160
59,3075,1785,351426,5262,280,7242,075,562
-4,69216,170 - 62,820169,677
- - - - 35,67932,596
60,865 - - 489,767550,632447,774
- - - - 563,141445,043
- - - - 50,89113,777
- - - - 177,58911,465
- - - - 412,35878,939
- - - - 91,040143,349
- - - - - 44,155
- - - - 155,000 -
- - - - 369,626 -
60,8654,69216,170489,7672,468,7761,386,775
(1,558)486(10,819)(63,241)(188,052)688,787
- - - - 627,520425,167
- - 6,000 - 6,0009,000
- - - - - 35,274
- - - - - 207,589
- (6,000) - - (6,000)(9,000)
- - - - (86,344)(500,000)
- - - - 49,69443,175
0(6,000)6,0000590,870211,205
(1,558)(5,514)(4,819)(63,241)402,818899,992
86,96410,8495,874291,2706,545,0125,645,020
$85,406$5,335$1,055$228,029$6,947,830$6,545,012
ó ïðç ó
NONMAJOR DEBT SERVICE FUNDS
The Debt Service Funds are used to account for the accumulation of resources for, and
payment of, interest, principal and related costs on long-term debt.
The City's Debt Service Funds account for two types of bonded indebtedness:
• Tax Increment Bonds
• Improvement Bonds
Capital Improvement of 2004C – used to account for the accumulation of resources from the
property tax levy for the payment of fire station debt.
– (1985 Tax Increment Bonds, 2004A Tax Increment Refunding Bonds(TIF
Tax Increment
1-3), 1999 Tax Exempt Tax Increment Bonds, 2004A Tax Exempt Increment Bonds(TIF 1-
12), and 2004B Taxable Increment Bonds) are repaid primarily from incremental taxes.
ó ïïð ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 15
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2009
With Comparative Data as of December 31, 2008
Totals
Nonmajor
Capital
ImprovementTax IncrementDebt Service Funds
of 2004CFunds20092008
Assets
Cash and investments$ - $627,264$627,264$505,840
Delinquent property taxes receivable - - - 7,327
Due from county - - - 3,374
Total assets$0$627,264$627,264$516,541
Liabilities and Fund Balance
Liabilities:
Deferred revenue$ - $ - $ - $7,327
Total liabilities0007,327
Fund balance:
Reserved for debt retirement - - - 98,578
Reserved for tax increment purposes - 627,264627,264410,636
Total fund balance0627,264627,264509,214
Total liabilities and fund balance$0$627,264$627,264$516,541
ó ïïï ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 16
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Totals
CapitalTaxNonmajor
ImprovementIncrementDebt Service Funds
of 2004CFunds20092008
Revenues:
General property taxes:
Current and delinquent$135,553$ - $135,553$263,679
Tax increment collections - 464,397464,397232,005
Intergovernmental:
State:
Market value homestead credit - - - 6,917
Investment earnings -5,1655,16519,526
Total revenues 135,553 469,562 605,115 522,127
Expenditures:
Current:
General government:
Contractual services 2,750 588 3,338 481
Debt service:
Principal retirement 255,000 290,000 545,000 515,000
Interest anIttdfilhsca carges3825,51536985,15752357,51789217,
dfilh3821369812318921
Total expenditures261,575 444,286 705,861 694,402
Revenues over (under) expenditures (126,022) 25,276 (100,746) (172,275)
Other financing sources:
Transfer from Capital Project Funds 27,444 191,352 218,796 100,000
Total other financing sources 27,444 191,352 218,796 100,000
Net increase (decrease) in fund balance (98,578) 216,628 118,050 (72,275)
Fund balance - January 1 98,578 410,636 509,214 581,489
Fund balance - December 31$0$627,264$627,264$509,214
ó ïïî ó
NONMAJOR CAPITAL PROJECT FUNDS
Capital Project Funds are used to account for the acquisition and construction of major
capital facilities other than those financed by Proprietary Funds and Trust Funds.
Park Trust – to account for capital projects in the municipal parks.
Municipal Building and Service Center - to account for City Hall improvements.
Gateway District Improvements – to account for improvements in the Gateway District that
are non-TIF.
Completed Construction - to account for the various surpluses (deficits) of other Special
Assessment Construction Funds.
Future Projects - to account for the preliminary expenditures of projects which do not have a
source of financing.
Future Storm Sewer Improvements - to collect storm sewer area charges which are
designated for future construction.
Water Connection and Area Charge - to account for water connection and area charges.
Sewer Connection and Area Charge - to account for sewer connection and area charges.
ó ïïí ó
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2009
With Comparative Data as of December 31, 2008
Municipal
Building andGateway
ParkServiceDistrictCompleted
TrustCenterImprovementsConstruction
Assets
Cash and investments$695,626$4,318,055$78,078$1,441,539
Interfund loan receivable - - - -
Due from other governmental units - - - -
Accounts receivable - net -2,697 - 24,786
Delinquent property taxes receivable -5,549 - 107
Due from county - - - -
Special assessments receivable:
Deferred - - 150,96862,883
Delinquent - - - 696
Special deferred - 12,928 - -
Total assets$695,626$4,339,229$229,046$1,530,011
Liabilities and Fund Balance
Liabilities:
Accounts payable$ - $ - $ - $ -
Contracts payable - - - -
py
Deposits payable - - - -
Interfund loan payable - - - -
Deferred revenue - 18,477150,96863,686
Total liabilities018,477150,96863,686
Fund balance:
Reserved for:
Long-term interfund loan receivable - - - -
Unreserved:
Designated for pavement management - - - -
Designated for tree mitigation - - - -
Designated for capital improvements695,6264,320,75278,0781,466,325
Total fund balance695,6264,320,75278,0781,466,325
Total liabilities and fund balance$695,626$4,339,229$229,046$1,530,011
ó ïïì ó
Statement 17
Totals
FutureWaterSewerNonmajor
FutureStorm SewerConnectionConnectionCapital Project Funds
ProjectsImprovementsand Areaand Area20092008
$1,884,982$2,581,928$1,724,218$1,112,926$13,837,352$10,500,657
- - 500,000 - 500,0003,122,128
- - - - - 8,600
11,121 - - - 38,60452,583
8,03591 - - 13,78223,221
- - - - - 11,115
14,851145,00280,169109,884563,757955,081
- 16,88420,35134,01271,94326,388
- - - - 12,92812,928
$1,918,989$2,743,905$2,324,738$1,256,822$15,038,366$14,712,701
$ - $70,658$ - $ - $70,658$42,050
- 26,116 - - 26,11675,064
,,,
46,408 - - - 46,40834,919
- - - - - 22,128
22,886161,977100,520143,896662,4101,017,618
69,294258,751100,520143,896805,5921,191,779
- - 500,000 - 500,0003,122,128
1,398,132 - - - 1,398,132152,260
214,108 - - - 214,108236,174
237,4552,485,1541,724,2181,112,92612,120,53410,010,360
1,849,6952,485,1542,224,2181,112,92614,232,77413,520,922
$1,918,989$2,743,905$2,324,738$1,256,822$15,038,366$14,712,701
ó ïïë ó
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Municipal
Building andGateway
ParkServiceDistrict Completed
TrustCenterImprovementsConstruction
Revenues:
General property taxes$ - $7,227$ - $139
Special assessments:
Current11,998 - 61,00917,723
Delinquent - - - 363
Prepayments on deferred - - - 1,100
Penalties - - - 85
Direct charges to developers - - - 24,786
Intergovernmental:
State:
Market value homestead credit - - - -
Other - - - -
Investment earnings8,88357,44643220,113
Interest on interfund loan - - - -
Connection charges - - - -
Park dedication fees64,584 - - -
Miscellaneous - 133,311 - -
Totalrevenues85465,197984,61441,64309,
Totalrevenues854651979846144164309
Expenditures:
Current:
General government - 63,22815730
Public works - - - -
Culture and recreation332 - - -
Capital outlay:
General government - - - -
Culture and recreation - - - -
Construction costs:
Contractor - - - -
Engineer - - - -
Other - - - -
Debt service:
Interest - - - 1,328
Total expenditures33263,228152,058
Revenues over (under) expenditures85,133134,75661,42662,251
Other financing sources (uses):
Transfer from General Fund - 124,488 - -
Transfer from Debt Service Fund - - - -
Transfer to Capital Project Fund - - - -
Bonds issued - - - -
Premium on debt issued - - - -
Total other financing sources (uses)0124,48800
Net increase (decrease) in fund balance85,133259,24461,42662,251
Fund balance - January 1610,4934,061,50816,6521,404,074
Fund balance - December 31$695,626$4,320,752$78,078$1,466,325
ó ïïê ó
Statement 18
Totals
Nonmajor
FutureWaterSewer
Future Storm SewerConnectionConnectionCapital Project Funds
ProjectsImprovementsand Areaand Area20092008
$200,578$119$ - $ - $208,063$898,142
8,576153,18347,96528,490328,944374,157
- 14,3284,9532,81422,4583,996
3,12671,99320,54439,973136,736111,480
- 3,0191,0445934,7411,964
- - - - 24,78626,114
- - - - - 23,685
- - - - - 8,600
8,07533,3329,49916,111153,891411,094
80,000 - 91,328 - 171,328122,656
- 71,88594,96834,610201,463148,434
- - - - 64,58421,707
- - - - 133,311102,563
300355,347859,270301,122591,1450305,,2254592,,
30035534785927030112259114503052254592
- - - - 63,97374,418
22,08626,905 - 21549,20672,409
- - - - 33235,799
- - - - - 30,417
- - - - - 33,545
- 21,716 - - 21,7161,334,304
- 56,9353,434 - 60,369260,003
- 4,798 - - 4,79872,163
- - - 97,99099,31897,956
22,086110,3543,43498,205299,7122,011,014
278,269237,505266,86724,3861,150,593243,578
82,992 - - - 207,48068,127
- - - - - 500,000
(500,000) - (146,221) - (646,221) -
- - - - - 2,450,000
- - - - - 20,317
(417,008)0(146,221)0(438,741)3,038,444
(138,739)237,505120,64624,386711,8523,282,022
1,988,4342,247,6492,103,5721,088,54013,520,92210,238,900
$1,849,695$2,485,154$2,224,218$1,112,926$14,232,774$13,520,922
ó ïïé ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 19
SPECIAL REVENUE FUND - ICE ARENA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
General property taxes:
Current and delinquent$228,700$228,700$228,207($493)$218,001
Intergovernmental:
State:
Market value homestead credit11,30011,300 - (11,300)5,769
Local:
Recreation agreement57,00057,00057,000 - 28,500
Charges for services - culture and recreation767,000767,000806,07439,074595,749
Investment earnings11,40011,40010,800(600)19,153
Donations - culture and recreation - - 3,6803,680900
Miscellaneous - culture and recreation - - 8788783,402
Total revenues1,075,400 1,075,400 1,106,639 31,239 871,474
Expenditures:
Culture and recreation:
Cultureandrecreation:
Current:
Personal services255,400254,800272,587(17,787)224,126
Commodities38,00038,00046,475(8,475)38,270
Contractual services202,500202,500244,079(41,579)182,647
Capital outlay10,00010,00022,061(12,061)91,423
Debt Service:
Capital lease payment155,000155,000155,000 - -
Interest and fiscal charges392,000392,000369,62622,374 -
Total expenditures1,052,900 1,052,300 1,109,828 (57,528)536,466
Revenues over (under) expenditures22,50023,100(3,189)(26,289)335,008
Other financing sources (uses):
Transfer to Capital Project Fund - - (86,344)(86,344) -
Net increase (decrease) in fund balance$22,500$23,100(89,533)($112,633) -
Fund balance - January 1732,835397,827
Fund balance - December 31$643,302 $732,835
ó ïïè ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 20
SPECIAL REVENUE FUND - FUTURE ECONOMIC DEVELOPMENT
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Special assessments:
Current$ - $ - $22,026$22,026$ -
Charges for services - general government - - 10,00010,00015,017
Investment earnings77,00077,00023,863(53,137)107,061
Interest on interfund loan - - 80,67380,673 -
Donations - general government - - 395,000395,000395,000
Miscellaneous - general government - - 175175175
Total revenues77,00077,000531,737454,737517,253
Expenditures:
General government:
Current:
Personal services - - - - 12,760
Contractual services30,00030,00041,958(11,958)141,814
Land---- 13,777,
Land----13777
Capital outlay - - - - -
Construction/acquisition costs400,000400,000 - 400,00044,155
Total expenditures430,000 430,000 41,958 388,042 212,506
Revenues over (under) expenditures(353,000)(353,000)489,779842,779304,747
Other financing sources (uses):
Transfer from Capital Project Fund - - - - 60,934
Transfer to Capital Project Fund - - - - (500,000)
Total other financing sources (uses)0000 (439,066)
Net increase (decrease) in fund balance($353,000)($353,000)489,779 $842,779(134,319)
Fund balance - January 12,547,4212,681,740
Fund balance - December 31$3,037,200 $2,547,421
ó ïïç ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 21
SPECIAL REVENUE FUND - EQUIPMENT REPLACEMENT
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
General property taxes:
Current and delinquent $ - $ - $48$48$209
Intergovernmental:
Local:
Cost-share agreement deicing equipment - 51,40051,45252 -
Investment earnings60,00060,00037,364(22,636)97,316
Total revenues60,000111,40088,864(22,536)97,525
Expenditures:
General government:
Capital outlay - - 50,891(50,891) -
Public safety:
Capital outlay28,00028,00092,389(64,389)11,465
Public works:
Current:
Contractual service - - - - 661
Capitaloutlay307000,358400,412358,(53958),78939,
Capitaloutlay307000358400412358(53958)78939
Culture and recreation:
Capital outlay110,000110,00068,97941,02151,926
Total expenditures445,000 496,400 624,617 (128,217)142,991
Revenues over (under) expenditures(385,000)(385,000)(535,753)(150,753)(45,466)
Other financing sources (uses):
Transfer from General Fund413,000620,480620,480 - 418,127
Proceeds from the sale of capital assets - - 49,69449,69443,175
Total other financing sources (uses)413,000 620,480 670,174 49,694 461,302
Net increase (decrease) in fund balance$28,000 $235,480 134,421 ($101,059)415,836
Fund balance - January 12,752,8452,337,009
Fund balance - December 31$2,887,266$2,752,845
ó ïîð ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 22
SPECIAL REVENUE FUND - FORFEITURE/SEIZURE
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Investment earnings$2,400$2,400$797($1,603)$3,925
Forfeiture - public safety40,00040,00050,98910,98946,558
Total revenues42,40042,40051,7869,38650,483
Expenditures:
Public safety:
Current:
Personal services2,3002,300 - 2,300798
Commodities12,50012,5003,5148,98613,072
Contractual services14,00014,00026,051(12,051)11,917
Capital outlay - - 85,200(85,200) -
Total expenditures28,80028,800114,765(85,965)25,787
Revenues over (under) expenditures$13,600$13,600(62,979)($76,579)24,696
Fund balance - January 1116,61091,914
Fund balance - December 31$53,631$116,610
ó ïîï ó
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - PUBLIC SAFETY GRANTSStatement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Intergovernmental:
Federal:
Byrne JAG Grant - public safety$ - $ - $5,324$5,324$ -
Investment earnings - - 1212 -
Total revenues005,3365,3360
Expenditures:
Public safety:
Current:
Personal services7,0407,0406,1149266,809
Total expenditures7,0407,0406,1149266,809
Revenues over (under) expenditures(7,040)(7,040)(778)4,410(6,809)
Other financing sources (uses):
Transfer from General Fund7,0407,0407,040 - 7,040
Net increase (decrease) in fund balance$0$06,262$4,410 231
Fund balance - January 1344113
Fund balance - December 31$6,606$344
ó ïîî ó
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - RECYCLING Statement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Intergovernmental:
Local:
Washington County recycling grant - public works$52,400$52,400$52,406 $6 $52,406
Investment earnings - - 1,3021,3023,123
Miscellaneous - public works - - 5,5995,59920
Total revenues52,40052,40059,307 6,907 55,549
Expenditures:
Public works:
Current:
Personal services40,90040,30039,79650437,762
Commodities - - - - 73
Contractual services11,50011,50021,069 (9,569)11,878
Total expenditures52,40051,80060,865 (9,065)49,713
Revenues over (under) expenditures$0$600(1,558)($2,158)5,836
Fund balance - January 186,96481,128
Fund balance - December 31$85,406$86,964
ó ïîí ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 25
SPECIAL REVENUE FUND - CHARITABLE GAMBLING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Investment earnings$ - $ - $142$142$409
Donations - general government8,0008,0005,036(2,964)5,609
Total revenues8,0008,0005,178(2,822)6,018
Expenditures:
General government:
Current:
Contractual2,0006,0004,6921,3083,000
Total expenditures2,0006,0004,6921,3083,000
Revenues over (under) expenditures6,0002,000486(1,514)3,018
Other financing sources (uses):
Transfer to Special Revenue Fund(6,000)(6,000)(6,000) - (9,000)
Net increase (decrease) in fund balance$0($4,000)(5,514)($1,514)(5,982)
Fund balance - January 110,84916,831
Fund balance - December 31$5,335$10,849
ó ïîì ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 26
SPECIAL REVENUE FUND - CELEBRATION FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Investment earnings$ - $ - $22$22$297
Donations - general government - - 5,0005,0007,800
Miscellaneous - general government - - 3293295
Total revenues005,3515,3518,102
Expenditures:
General government:
Current:
Commodities - - 220(220)49
Contractual6,0006,00015,950(9,950)12,054
Total expenditures6,0006,00016,170(10,170)12,103
Revenues over (under) expenditures(6,000)(6,000)(10,819)(4,819)(4,001)
Other financing sources (uses):
Otherfinancingsources(uses):
Transfer from Special Revenue Fund6,0006,0006,000 - 9,000
Net increase (decrease) in fund balance$0$0(4,819)($4,819)4,999
Fund balance - January 15,874875
Fund balance - December 31$1,055$5,874
ó ïîë ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 27
SPECIAL REVENUE FUND - STREET SEALCOATING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Variance with
2009Final Budget-2008
Budgeted Amounts
ActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Franchise taxes$465,000$465,000$399,568($65,432)$396,173
Aggregate taxes - - 24,23424,234 -
Charges for services:
Public works - - - - 70,921
Investment earnings - - 2,7242,7242,064
Total revenues465,000465,000426,526(38,474)469,158
Expenditures:
Public Works:
Current:
Commodities20,00020,00023,828(3,828)16,208
Contractual524,200524,200465,93958,261381,192
Total expenditures544,200544,200489,76754,433397,400
Revenues over (under) expenditures(79,200)(79,200)(63,241)15,95971,758
Other financing sources (uses):
TransferfromDebtServiceFundranserromeervceun - - - - 35274,
TffDbtSiFd35274
Transfer from Capital Project Fund - - - - 146,655
Total other financing sources (uses)0000181,929
Net increase (decrease) in fund balance($79,200)($79,200)(63,241)$15,959 253,687
Fund balance - January 1291,27037,583
Fund balance - December 31$228,029$291,270
ó ïîê ó
INTERNAL SERVICE
Self Insurance Fund - Established to provide self insurance for the City and its
officers, employees and agents for claims in excess of standard deductibles and to
account for the City flexible spending program and purchase of insurance.
Fleet Maintenance Fund – Established to account for costs related to repair and
maintenance of City equipment and vehicles. Revenues received from
departments are based on level of service performed.
ó ïîé ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 28
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
December 31, 2009
With Comparative Data as of December 31, 2008
Totals
SelfFleet
Internal Service Funds
InsuranceMaintenance20092008
Assets:
Current assets:
Cash and investments$2,169,119$327,705$2,496,824$2,406,438
Accounts receivable -1,6431,6432,056
Prepaid items105,523650106,17343,197
Inventory -53,49253,49248,839
Total current assets2,274,642383,4902,658,1322,500,530
Noncurrent assets:
Capital assets:
Land -424,665424,665424,665
Buildings and improvements -928,870928,870928,870
Machinery and equipment -166,363166,363153,377
Total capital assets01,519,8981,519,8981,506,912
Less accumulated depreciation -(472,802)(472,802)(441,806)
Total noncurrent assets01,047,096 1,047,096 1,065,106
Total assets2,274,6421,430,5863,705,2283,565,636
Liabilities:
Current liabilities:
Accounts payable4,48149,46453,94547,565
Health care benefits payable31,255 -31,25538,532
Unpaid claims67,176 -67,17659,995
Salaries payable -9,1189,11817,037
Due to other governmental units - - -37
Compensated absences payable -17,62617,62617,150
Total current liabilities102,91276,208179,120180,316
Noncurrent liabilities:
Compensated absences -22,09622,09621,671
Other post employment benefits -774774358
Total noncurrent liabilities022,87022,87022,029
Total liabilities102,91299,078201,990202,345
Net assets:
Invested in capital assets, net of related debt - 1,047,0961,047,0961,065,106
Unrestricted2,171,730284,4122,456,1422,298,185
Total net assets$2,171,730 $1,331,508 $3,503,238 $3,363,291
ó ïîè ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 29
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Totals
SelfFleetInternal Service Funds
InsuranceMaintenance20092008
Operating revenues:
Charges for services:
User fees$ - $813,479$813,479$904,784
Employee benefits1,081,792 - 1,081,792956,000
Property insurance209,208 -209,208197,600
Insurance refunds and reimbursements80,081 -80,08159,059
Total operating revenues1,371,081813,4792,184,5602,117,443
Operating expenses:
Operation and maintenance:
Personal services -309,805309,805299,174
Commodities -387,559387,559492,598
Contractual services -40,94240,94264,807
Depreciation -30,99630,99628,700
Total operation and maintenance 0769,302769,302885,279
Administrative and general:
Personal insurance benefits1,004,932 - 1,004,932929,732
Contractual services194,052 -194,052205,370
Claims83,152 -83,152133,250
Totaladministrativeandgeneral1,282,136,,01,282,136,,1,268,352,,
Totaladministrativeandgeneral1282136012821361268352
Total operating expenses1,282,136769,3022,051,4382,153,631
Operating income88,94544,177133,122(36,188)
Nonoperating revenues:
Investment earnings28,4804,11932,59990,275
Miscellaneous -5,2265,2265,587
Total nonoperating revenues28,4809,34537,82595,862
Income before transfers117,42553,522170,94759,674
Transfers:
Transfer to Enterprise Fund -(31,000)(31,000)(31,000)
Change in net assets117,42522,522139,94728,674
Net assets - January 12,054,3051,308,9863,363,2913,334,617
Net assets - December 31 $2,171,730$1,331,508$3,503,238$3,363,291
ó ïîç ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 30
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Totals
SelfFleetInternal Service Funds
InsuranceMaintenance20092008
Cash flows from operating activities:
Receipts from interfund services provided$1,291,000$813,479$2,104,479$2,058,384
Receipts from insurance refunds and reimbursements80,081 -80,08159,059
Payment to suppliers(339,474)(419,923)(759,397)(834,921)
Payment to employees(1,012,209)(316,407)(1,328,616)(1,218,963)
Miscellaneous revenue -5,2265,2265,587
Net cash flows from operating activities19,39882,375101,77369,146
Cash flows from noncapital financing activities:
Transfer to Enterprise Fund -(31,000)(31,000)(31,000)
Cash flows from capital and related
financing activities:
Acquisition of capital assets -(12,986)(12,986)(25,433)
Cash flows from investing activities:
Investment income28,4804,11932,59990,275
Net increase in cash and cash equivalents47,87842,50890,386102,988
Cash and cash equivalents - January 12,121,241285,1972,406,4382,303,450
Cash and cash equivalents - December 31$2,169,119$327,705 $2,496,824 $2,406,438
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income $88,945$44,177$133,122($36,188)
Adjustments to reconcile operating income
to net cash flows from operating activities:
Depreciation -30,99630,99628,700
Miscellaneous revenue -5,2265,2265,587
Changes in assets and liabilities:
Decrease (increase) in receivables -4134138,560
Decrease (increase) in prepaid items(62,976) - (62,976)50,525
Decrease (increase) in inventory -(4,653)(4,653)15,329
Increase (decrease) in payables(6,571)6,216(355)(3,367)
Total adjustments(69,547)38,198 (31,349)105,334
Net cash flows from operating activities$19,398$82,375$101,773$69,146
ó ïíð ó
ECONOMIC DEVELOPMENT AUTHORITY
COMPONENT UNIT
Established to account for the receipt and use of monies for economic purposes.
ó ïíï ó
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET - ALL GOVERNMENTAL FUND TYPESStatement 31
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31, 2009
With Comparative Data as of December 31, 2008
Totals
Economic Development Authority
SpecialDebtComponent Unit
RevenueService20092008
Assets
Cash and investments$665,318$542,866$1,208,184$1,206,450
Accrued interest receivable185,500 -185,500134,000
Loan receivable from primary government900,000 -900,000900,000
Capital lease receivable from primary government - 6,345,0006,345,0006,500,000
Prepaid items2,493 -2,493 -
Delinquent property taxes receivable3,299 -3,2992,952
Due from county - - -1,187
Total assets$1,756,610$6,887,866$8,644,476$8,744,589
Liabilities and Fund Balance
Liabilities:
Accounts payable$9,645$ -$9,645$3,880
Salaries payable338 -338770
Due to other governmental units - - -2
Deferred revenue3,299 -3,2992,952
Total liabilities13,282013,2827,604
Fund balance:
Reserved for long-term loan receivable900,000 -900,000900,000
Reserved for long-term capital lease receivable - 6,345,0006,345,0006,500,000
Reserved for tax increment purposes586,896 -586,896499,779
Reserved for debt service reserve -542,866542,866535,337
Unreserved:
Designated for EDA activities256,432 -256,432301,869
Total fund balance1,743,328 6,887,866 8,631,194 8,736,985
Total liabilities and fund balance$1,756,610$6,887,866$8,644,476$8,744,589
Fund balance reported above$8,631,194
Other long-term assets, including property taxes receivable, are not available to pay for current-
period expenditures, and therefore, are deferred in the funds.
3,299
Long-term liabilities, including bonds payable, bond discounts and unamortized bond issuance costs,
are not due and payable in the current period and therefore are not reported in the funds.
(6,192,820)
Net assets of component unit (page 35)$2,441,673
ó ïíî ó
CITY OF COTTAGE GROVE, MINNESOTA
Statement 32
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
For The Year Ended December 31, 2009
With Comparative Data for the Year Ended December 31, 2008
Totals
Economic Development Authority
SpecialDebtComponent Unit
RevenueService20092008
Revenues:
General property taxes:
Current and delinquent$113,325$ - $113,325$101,681
Intergovernmental:
Market value homestead credit - - -2,659
Direct charge to primary government for debt issuance - - -163,987
Direct charge to primary government for debt service reserve - - -514,893
Charges for service30,000 - 30,00030,000
Investment earnings8,2587,52915,78742,097
Interest on loan to primary government51,500369,626421,12654,116
Miscellaneous7,700 - 7,70010,380
Total revenues210,783377,155587,938919,813
Expenditures:
General government:
Current:
Personal services70,132 - 70,13253,129
Commodities5,536 - 5,5361,729
Contractual services93,435 - 93,43588,311
Debt service:
Principal retirement - 155,000155,000 -
Interest and fiscal charges - 369,626369,626 -
TotaTtldit expentures169103,5246265,693729,7143169,
ldi1691032462669329143169
Revenues over (under) expenditures41,680(147,471)(105,791)776,644
Other financing sources (uses):
Transfer in - 6,500,0006,500,000 -
Transfer out(6,500,000) - (6,500,000) -
Bonds issued - - - 6,500,000
Discount on debt issued - - -(97,500)
Total other financing sources (uses)(6,500,000)6,500,00006,402,500
Net increase (decrease) in fund balance(6,458,320)6,352,529(105,791)7,179,144
Fund balance - January 18,201,648 535,337 8,736,9851,557,841
Fund balance - December 31$1,743,328$6,887,866$8,631,194$8,736,985
Net increase (decrease) in fund balance reported above($105,791)
Revenues in the statement of activities that do not report current financial resources are not
reported as revenues in the funds:
Property taxes deferred revenue347
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources
to governmental funds, while the repayment of the principal of long-term debt consumes
the current financial resources of governmental funds. Neither transaction, however, has
any effect on net assets. This amount is the net effect of these differences in the treatment
of long-term debt and related items:
Amortization of deferred discounts and issuance costs(7,871)
Principal repayments155,000
Change in net assets of component unit (page 37)$41,685
ó ïíí ó
ó ïíì ó
SUPPLEMENTARY FINANCIAL INFORMATION
ó ïíë ó
CITY OF COTTAGE GROVE, MINNESOTA
CONSTRUCTION/ACQUISITION COSTS
CAPITAL PROJECT FUNDS
December 31, 2009
Construction/Acquisition Costs
FundLand Legal,
No.DescriptionsContractorEngineerAcquisitionFiscal
FUNDED BY USER FEES:
230LP-3 Storm Sewer$66,574$298$ - $ -
Total Fund 23066,57429800
526Ice Arena Expansion5,651,8281,001,460 - -
Ice Arena Expansion Additional Costs91,40335,487 - -
Total Fund 5265,743,2311,036,94700
510FUNDED BY FUTURE DEVELOPMENT:
Jamaica/Military Realignment - 97,885 - -
Total Fund 510097,88500
520FUNDED BY MSA:
Jamaica Avenue Roundabout2,645,072860,888 - -
Jamaica Avenue Roundabout additional costs(23,503) - - -
Ravine Parkway, Phase 2 - 25,908 - -
Lehigh/Highway 95 Improvements240,189120,328 - 405
Total Fund 5202,861,7581,007,1240405
FUNDED BY SPECIAL ASSESSMENT BONDS:
560Pavement Management:
2008 Pavement Management4,164,971646,120 - -
Total Fund 5604,164,971646,12000
5632004 Improvements:
Timber Ridge 6th1,414,104344,112 - -
Pine Summit 6th712,967116,943 - -
Pine Summit 7th894,279172,177 - -
Pine Arbor 2nd341,83780,469 - -
Summerhill Crossing508,611107,697 - -
2005 Trail Improvements87,83928,060 - -
Total Fund 5633,959,637849,45800
5642005 Improvements:
Mississippi Dunes Phase 21,163,376221,175 - -
Pinecliff 1st1,487,763312,111 - -
Total Fund 5642,651,139533,28600
ó ïíê ó
Exhibit 1
Page 1 of 2
Construction/Acquisition CostsExpended
ROW/Total Prior
EasementOtherCosts2009Years
$ -$9,511$76,383$76,383$ -
09,51176,38376,3830
-115,1276,768,415* - 6,768,415
-1,115128,005128,005 -
0116,2426,896,420128,0056,768,415
-7,008104,893 -104,893
07,008104,8930104,893
-67,3233,573,283* - 3,573,283
- -(23,503)(23,503) -
-83526,743 -26,743
11,60610,030382,558285,03297,526
11,60678,1883,959,081261,5293,697,552
-69,9344,881,025*262,8174,618,208
069,9344,881,025262,8174,618,208
-186,4581,944,674*464,8001,479,874
-83,059912,969* - 912,969
-114,4431,180,899* - 1,180,899
-37,799460,105* - 460,105
-65,021681,329*3,112678,217
-109116,008* - 116,008
0486,8895,295,984467,9124,828,072
-132,6621,517,213*351,3521,165,861
-160,4981,960,372* - 1,960,372
0293,1603,477,585351,3523,126,233
ó ïíé ó
CITY OF COTTAGE GROVE, MINNESOTA
CAPITAL PROJECT FUNDS
CONSTRUCTION/ACQUISITION COSTS
December 31, 2009
Construction/Acquisition Costs
FundLand Legal,
No.DescriptionsContractorEngineerAcquisitionFiscal
FUNDED BY SPECIAL ASSESSMENT BONDS: (continued)
5652006 Improvements:
Pinecliff 2nd$1,265,337$253,441$ - $ -
Pinecliff 2nd additional costs - 32,541 - -
Silverwood1,545,234323,593 - -
Pine Arbor 3rd317,67460,918 - -
103rd Street Street Improvements - - - -
CP Rail/Lyman Lumber1,153,269264,030 - -
Total Fund 5654,281,514934,52300
5662007 Improvements:
Southpoint Ridge651,343307,224 - -
VFW Utility22,0716,075 - -
The Preserve at CG554,908144,174 - -
Everwood117,05877,574 - -
Total Fund 5661,345,380535,04700
FUNDED BY PARK TRUST FUNDS:
570Hamlet Park North - 27,741 - -
Trunk Fund Oversizing48,204 - - -
Total Fund 57048,20427,74100
FUNDED BY AREA FUNDS:
575TrunkFundOversizingCapitalize694202, - - - ---
575TrunkFundOversizingCapitalize694202
White Pines Water Main172,51950,439 - -
Total Fund 575866,72150,43900
580Trunk Fund Oversizing 212,317 - - -
Total Fund 580212,317000
585Gateway Storm Pond - 60,013 - -
Hamlet Pond Phase 38,96728,463 - -
Hamlet Pond Phase 3 additional costs21,71549,667 - -
Trunk Fund Oversizing127,912 - - -
Total Fund 585158,594138,14300
Totals$26,360,040$5,857,011$0$405
Less: Completed construction*
Work in progress - December 31, 2009
ó ïíè ó
Exhibit 1
Page 2 of 2
Construction/Acquisition CostsExpended
ROW/Total Prior
EasementOtherCosts2009Years
$ - $147,116$1,665,894*$ - $1,665,894
- (2,860)29,68121,4698,212
- 192,0502,060,877*402,3661,658,511
- 35,096413,688*(74)413,762
- - - (12,731)12,731
- 164,9071,582,206*(5,246)1,587,452
0536,3095,752,346405,7845,346,562
- 116,4741,075,041*32,3201,042,721
- 1,19729,343* - 29,343
- 97,304796,386*61,947734,439
- 22,983217,615*(727)218,342
0237,9582,118,38593,5402,024,845
- - 27,741 - 27,741
- - 48,204* - 48,204
0075,945075,945
-- --694202,* --694202,
694202*694202
-7,845230,803*3,434227,369
07,845925,0053,434921,571
- -212,317* - 212,317
00212,3170212,317
-19,69579,70810,31069,398
-5,07842,508* - 42,508
-1,75773,13973,139 -
- -127,912* - 127,912
026,530323,26783,449239,818
$11,606$1,869,574$34,098,636$2,134,205$31,964,431
33,193,288
$905,348
ó ïíç ó
CITY OF COTTAGE GROVE, MINNESOTA
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
December 31, 2009
InterestFinal
RateDatedPayment
Primary Government
General Obligation Bonds:
$1,015,000 Tax Increment Bonds of 1999C3.75-4.15%2/11/19998/1/2009
$1,405,000 Tax Increment Bonds of 2004A3.0-4.65%7/1/20042/1/2024
$1,775,000 Tax Increment Bonds of 2004B4.5-5.75%7/1/20042/1/2021
$1,145,000 Capital Improvement Bonds of 2004C3.0%7/1/20042/1/2009
Total General Obligation Bonds
Special Assessment Debt:
Improvement Bonds of 1998A4.35-4.7%6/1/19988/20/2009
Improvement Bonds of 2000A4.3-5.25%8/1/200012/1/2009
Improvement Bonds of 2002B3.0-4.15%10/2/20022/1/2019
Improvement Refunding Bonds of 2002C2.5-3.3%10/2/20022/1/2012
Improvement Bonds of 2003B2.0-4.125%3/1/20032/1/2019
Improvement Bonds of 2008A3.50-3.60%6/11/20082/1/2019
Improvement Bonds of 2009A2.50-4.30%4/16/20092/1/2024
Improvement Refunding Bonds of 2009C2.00-3.00%4/16/200912/1/2015
TotalSpecialAssessmentDebtwithGovernmentalCommitmentoapecassessmene wovernmenaommmen
TtlSilAtDbtithGtlCitt
Proprietary Fund Bonds:
Golf Course Revenue Refunding Bonds of 19944.2-5.0%2/10/19942/1/2010
Sewer and Water Revenue Bonds 1997A4.3-5.1%5/21/19972/1/2013
Water Revenue Bonds of 1999E4.25-5.6%12/1/19995/1/2009
Golf Course Revenue Bonds of 1999F5.0-5.6%12/1/19992/1/2012
Water Revenue Refunding Bonds of 2009B2.50-4.0%4/16/20092/1/2020
Total Proprietary Fund Bonds
Total Bonded Indebtedness - Primary Government
Component Unit - EDA
$6,500,000 Ice Arena Lease Rev Bonds of 2008B4.0%-4.90%6/11/20084/1/2028
Total Component Unit - EDA
Total Bonded Indebtedness - Reporting Entity
ó ïìð ó
Exhibit 2
AuthorizedPrincipal Due Interest Due
And IssuedRetiredOutstandingIn 2010In 2010
$1,015,000$1,015,000$ -$ -$ -
1,405,000180,0001,225,00055,00053,204
1,775,00075,0001,700,00040,00092,692
1,145,0001,145,000 - - -
5,340,0002,415,0002,925,00095,000145,896
3,940,0003,940,000 - - -
1,210,0001,210,000 - - -
4,185,0001,040,0003,145,000215,000116,209
3,625,0002,185,0001,440,000300,00041,730
4,065,000920,0003,145,000210,000116,657
3,370,000 -3,370,000410,000111,065
3,650,000 -3,650,000355,000158,022
625,000 -625,00040,00016,663
24670000,,9295000,,15375000,,1530000,,560346,
246700009295000153750001530000560346
2,330,0002,095,000235,000235,0005,875
1,475,0001,070,000405,00075,00018,742
1,690,0001,690,000 - - -
1,100,000585,000515,000130,00024,880
1,205,000 -1,205,000100,00049,448
7,800,0005,440,0002,360,000540,00098,945
37,810,00017,150,00020,660,0002,165,000805,187
6,500,000155,0006,345,000235,000274,593
6,500,000155,0006,345,000235,000274,593
$44,310,000$17,305,000$27,005,000$2,400,000$1,079,780
ó ïìï ó
ó ïìî ó
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 13
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
OAKWOOD HEIGHTS - DISTRICT NUMBER 1-1
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Bond proceeds$1,375,000$518,876$ - $856,124
Loan proceeds1,375,000 - - 1,375,000
Refunding bond proceeds1,375,000 - - 1,375,000
Current property taxes received - 2,671 - (2,671)
Tax increment received5,710,068492,12522,3975,195,546
Direct charges to developer401,501501,222 - (99,721)
Transfers1,375,000 - - 1,375,000
Interest on investments21,000205,0913,846(187,937)
Total sources of funds11,632,5691,719,98526,2439,886,341
Uses of funds:
Land acquisition1,594,000102,273 - 1,491,727
Construction costs2,290,887 - - 2,290,887
Bond payments:
Bondpayments:
Principal1,375,000525,000 - 850,000
Interest 1,583,832349,250 - 1,234,582
Loan payments:
Principal1,375,000 - - 1,375,000
Interest 500,000 - - 500,000
Refunding bond payments:
Principal1,375,000 - - 1,375,000
Administrative costs112,45026,05722586,168
Bond discount51,400 - - 51,400
Transfer to other funds1,375,000423,886 - 951,114
Bonding costs -25,126 - (25,126)
Total uses of funds11,632,5691,451,59222510,180,752
Funds remaining (or deficit)$0$268,393$26,018($294,411)
ó ïëì ó
CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 14
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
UP NORTH PLASTICS - DISTRICT NUMBER 1-3
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Bond proceeds$1,350,000$905,344$ - $444,656
Loan proceeds1,350,000352,803 - 997,197
Refunding bond proceeds1,350,000 - - 1,350,000
Tax increment received1,345,5001,318,782103,604(76,886)
Interest on investments21,00085,313507(64,820)
Interfund transfer1,350,000 - - 1,350,000
Total sources of funds6,766,500 2,662,242 104,111 4,000,147
Uses of funds:
Land acquisition - 304,413 - (304,413)
Construction costs588,000 - - 588,000
Bond payments:
Principal1,350,000545,00030,000775,000
Interest 364,000413,8881,750(51,638)
Loan payments:
Loanpayments:
Principal1,350,000352,803 - 997,197
Interest 286,000272,399 - 13,601
Refunding bond payments:
Principal1,350,000 - - 1,350,000
Payment to refund bond escrow agent - 337,425 - (337,425)
Administrative costs120,00016,591220103,189
Bond discount7,600 - - 7,600
Transfers1,350,000 - - 1,350,000
Refund tax increment - 372,804 - (372,804)
Bonding costs -10,936 - (10,936)
Total uses of funds6,765,600 2,626,259 31,970 4,107,371
Funds remaining (or deficit)$900 $35,983 $72,141 ($107,224)
Note: The property owner received a tax abatement for 2002 & 2007, resulting from a property valuation appeal.
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 15
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
COTTAGES OF COTTAGE GROVE - DISTRICT NUMBER 1-8
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Tax increment received$825,000$561,858$31,648$231,494
Interest on investments - 15,1772,271(17,448)
Total sources of funds825,000577,03533,919214,046
Uses of funds:
Construction costs750,000419,791 - 330,209
Administrative costs75,0002,97722071,803
Total uses of funds825,000422,768220402,012
Funds remaining (or deficit)$0$154,267$33,699($187,966)
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 16
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
RENEWAL BY ANDERSEN - DISTRICT NUMBER 1-9
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Bond proceeds$2,000,000$1,303,360$ - $696,640
Tax increment received3,776,0151,271,459 - 2,504,556
Real estate sales1 - - 1
Interest on investments5,000168,7813,225(167,006)
Local contribution377,225 - - 377,225
Transfer in from other funds785,000 - - 785,000
Total sources of funds6,943,2412,743,6003,2254,196,416
Uses of funds:
Land/building acquisition1,394,000501,194 - 892,806
Construction costs823,000396,634104,882321,484
Bond payments:
Principal2,000,0001,105,000210,000685,000
Interest 633,000366,3674,357262,276
Loan payments:
Loanpayments:
Principal785,000 - - 785,000
Interest 298,000 - - 298,000
Administrative costs387,04058,008383328,649
Total uses of funds6,320,0402,427,203319,6223,573,215
Funds remaining (or deficit)$623,201$316,397($316,397)$623,201
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 17
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
DISTRICT NUMBER 1-10
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Bond proceeds$11,000,000$ - $ - $11,000,000
Loan proceeds11,000,000 - - 11,000,000
Tax increment received7,632,1721,054,453269,9906,307,729
Market Value Credit -TIF - 79 - (79)
Real estate sales4,300,0001,306,791 - 2,993,209
Developer contribution - 8,000 - (8,000)
Interest on invested funds230,000 - - 230,000
Local contribution250,000 - - 250,000
Grant250,000 - - 250,000
Applicant fees - 145,700 - (145,700)
Transfer in from other funds11,000,000 - - 11,000,000
Total sources of funds45,662,1722,515,023269,99042,877,159
Uses of funds:
Land/building acquisition6,,200,,0001,,445,,331 - 4 ,,754,,669
Land/buildingacquisition620000014453314754669
Construction costs3,943,000972,383 - 2,970,617
Bond payments:
Principal11,000,000 - - 11,000,000
Interest 868,546 - - 868,546
Loan payments:
Principal11,000,000 - - 11,000,000
Interest 868,546 - - 868,546
Administrative costs782,080102,329800678,951
Miscellaneous - refunds - 140,700 - (140,700)
Transfer out to other funds11,000,000 - - 11,000,000
Total uses of funds45,662,1722,660,74380043,000,629
Funds remaining (or deficit)$0($145,720)$269,190($123,470)
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 18
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
DISTRICT NUMBER 1-12
December 31, 2009
Accounted
CurrentFor inCurrentAmount
BudgetPrior YearsYearRemaining
Sources of funds:
Bond proceeds$23,400,000$3,000,000$ - $20,400,000
Loan proceeds7,800,000 - - 7,800,000
Tax increment received28,300,0001,599,367568,39626,132,237
Direct charges to developer -153,635 -(153,635)
Land sale1,700,0001,604,000 -96,000
Transfer in7,800,000455,719 - 7,344,281
Market value credit - TIF -106 -(106)
Community development block grant400,000 - -400,000
Interest on invested funds500,000100,5251,337398,138
Other -23,020 -(23,020)
Total sources of funds69,900,0006,936,372569,73362,393,895
Uses of funds:
Land/building acquisition5,000,0002,564,657 - 2,435,343
Construction costs9,,000,,0003,,101,,4882,,4645,,896,,048
Constructioncosts9000000310148824645896048
Bond payments:
Principal23,400,00060,00050,00023,290,000
Interest 13,748,000463,911147,59113,136,498
Loan payments:
Principal7,800,000 - - 7,800,000
Interest - 150,939 - (150,939)
Administrative costs2,830,000216,4124,4462,609,142
Discount on debt issued - 36,812 - (36,812)
Transfer out to other funds7,800,000 - - 7,800,000
Other322,000316,531 - 5,469
Total uses of funds69,900,000 6,910,750204,50162,784,749
Funds remaining (or deficit)$0$25,622$365,232($390,854)
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 19
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
DISTRICT 1-13
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Tax increment received$7,100,000$120,895$85,158$6,893,947
Interest on investments1,000,000 - - 1,000,000
Land sales17,025,000918,746 - 16,106,254
Developer contribution -4,000 - (4,000)
Bond proceeds20,000,000 - - 20,000,000
Loan proceeds20,000,000 - - 20,000,000
Transfers in20,000,000 - - 20,000,000
Total sources of funds 85,125,0001,043,64185,15883,996,201
Uses of funds:
Land/building acquisition12,000,000619,999 - 11,380,001
Site Improvements/preparation1,000,00027,494 - 972,506
Public utilities3,400,000 - - 3,400,000
Streets1,700,000454,396 - 1,245,604
Other public improvements6,,000,,000 - - 6 ,,000,,000
Otherpublicimprovements60000006000000
Bond payments:
Principal20,000,000 - - 20,000,000
Interest477,000 - - 477,000
Loan payments:
Principal20,000,000 - - 20,000,000
Interest477,000 - - 477,000
Administrative costs71,00041,8241,86327,313
Transfers out20,000,000 - - 20,000,000
Total uses of funds85,125,0001,143,7131,86383,979,424
Funds remaining (or deficit)$0($100,072)$83,295$16,777
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CITY OF COTTAGE GROVE, MINNESOTA
Exhibit 20
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
DISTRICT 1-14
December 31, 2009
Accounted
CurrentFor inCurrent Amount
BudgetPrior YearsYearRemaining
Sources of funds:
Tax increment received$1,110,000$9,969$45,581$1,054,450
Interest on investments20,000 - - 20,000
Developer contribution -2,000 - (2,000)
Bond proceeds1,115,000 - - 1,115,000
Loan proceeds2,230,000575,000 - 1,655,000
Transfers in1,115,000 - - 1,115,000
Total sources of funds 5,590,000586,96945,5814,957,450
Uses of funds:
Site Improvements/preparation130,000505,225 - (375,225)
Public utilities525,00060,501 - 464,499
Bond payments:
Principal1,115,000 - - 1,115,000
Interest182,500 - - 182,500
Loan payments:
Loanpayments:
Principal2,230,000 - - 2,230,000
Interest182,500 - 55,673126,827
Administrative costs110,00015,79348093,727
Transfers out1,115,000 - - 1,115,000
Total uses of funds5,590,000581,51956,1534,952,328
Funds remaining (or deficit)$0$5,450($10,572)$5,122
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III. STATISTICAL SECTION (UNAUDITED)
This part of the City of Cottage Grove’s 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.
Financial Trends
These schedules contain trend information to help the reader understand how the
government’s financial performance and well-being have changed over time.
Table 1 – Net Assets by Component
Table 2 – Changes in Net Assets
Table 3 – Fund Balances of Governmental Funds
Table 4 – Changes in Fund Balances of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the government’s most
significant local revenue source, property taxes.
Table 5 – Assessed and Estimated Actual Value of Taxable Property
Table 6 – Property Tax Rates Direct and Overlapping Governments
Table 7 – Principal Property Taxpayers
Table 8 – Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the
government’s current levels of outstanding debt and the government’s ability to issue
additional debt in the future.
Table 9 – Ratios of Outstanding Deby by Type
Table 10 – Ratios of General Bonded Deby Outstanding
Table 11 – Direct and Overlapping Governmental Activities Debt
Table 12 – Legal Debt Margin Information
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the government’s financial activities take place.
Table 13 – Demographic and Economic Statistics
Table 14 – Prinicipal Employers
Operating Information
These schedules contain service and infrastructure data to help the reader understand how
the information in the government’s financial report relates to the services the government
provides and activties it performs.
Table 15 – Full-time Equivalent City Government Employees by Function
Table 16 – Operating Indicators by Function/Program
Table 17 – Capital Assets Statistics by Function/Program
Sources: Unless otherwise noted, the information in these schedules is derivded from the
comprehensive annual financial reports for the relevant year.
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CITY OF COTTAGE GROVE, MINNESOTA
Table 11
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
As of December 31, 2009
City of Cottage Grove
% of DebtShare of
Net DebtApplicableOverlapping
Outstandingto CityDebt
Overlapping:
Washington County $ 120,760,00011.9390%$ 14,417,524
School Districts
ISD No. 200 (Hastings) 39,310,0001.6525% 649,598
ISD No. 833 (South Wash. County) 288,760,00032.4545% 93,715,681
Metro Council 157,950,0000.9629% 1,520,901
Total Overlapping 110,303,703
City of Cottage Grove Direct Debt$ 27,705,000100.00% 27,705,000
Total Direct and Overlapping Debt:$634,485,000$ 138,008,703
Source: Washington County. Percentage of debt applicable is calculated by dividing portion of tax capactiy
of the authority that lies in City of Cottage Grove divided by the total tax capacity that lies in Washington County.
Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by
the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident,
and therefore responsible for repaying the debt, of each overlapping government.
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CITY OF COTTAGE GROVE, MINNESOTA
Table 13
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Per
Capita
FiscalPersonalPersonalSchoolUnemployment
YearPopulation(1)Income (2)Income (2)Enrollment (3)Rate (2)
200030,582 1,125,234,108 36,794 15,3432.37%
200130,753 1,167,506,892 37,964 15,4012.96%
200230,984 1,190,777,088 38,432 15,6523.68%
200331,437 1,250,469,549 39,777 15,7444.10%
200431,774 1,355,319,970 42,655 16,0884.04%
200533,179 1,427,659,191 43,029 16,4003.51%
200633,529 1,521,780,723 45,387 16,4673.49%
200733,788 1,610,234,716 47,65716,8053.94%
200834,017 1,653,804,489 48,61716,8005.01%
200934,213 1,646,794,793 48,13416,7957.51%
Sources:
(1) City of Cottage Grove Community Development Department for 2009. Metropolitan Council.
(2) Washington County data from Bureau of Economic Analysis.
(3) Indepdendent School District No. 833 including Valley Crossing School.
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CITY OF COTTAGE GROVE, MINNESOTA
Table 14
PRINCIPAL EMPLOYERS
Current year and nine years ago
20092000
PercentagePercentage
of Total of Total
TaxpayerEmployeesRankEmploymentEmployeesRankEmployment
School District 8331,081117%992118%
3M Cottage Grove 695211%829215%
Up North Plastics Inc28034%22044%
Renewal by Andersen25044%25034%
Target21253%15093%
Cub Foods20863%18673%
Menard's20073%20054%
City of Cottage Grove17583%17083%
Allied Systems11892%130102%
Werner Electric110102%0%
Commercial Carriers0%20054%
Total3,32953%3,32759%
Sources:
(1) 2009 list is from www.mnpro.com (Minnesota Community Profile)
(2) The 2000 information is from the City of Cottage Grove Bond Issue Summary
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