HomeMy WebLinkAbout2011-06-01 PACKET 02.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 6/1/11 w
PREPARED BY Finance Robin Roland
ORIGINATING DEPARTMENT STAFF AUTHOR
x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
COUNCIL ACTION REQUEST
Representatives from LarsonAllen will give a presentation on the 2010 Comprehensive Annual
Financial Report.
STAFF RECOMMENDATION
Motion to accept the 2010 Comprehensive Annual Financial Report.
BUDGET IMPLICATION
BUDGETED AMOUNT ACTUAL AMOUNT
SUPPORTING DOCUMENTS
❑ MEMO /LETTER: 5/25/11
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER: Comprehensive Annual Financial Report, Required Auditor's communications.
ADMINISTRATORS COMMENTS
1. "CityAdministrator Date
x x+ x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
TO:
FROM:
DATE:
RE:
City of Cottage Grove X11'1®
Finance Department
Honorable Mayor and City Council
Ryan Schroeder, City Administrator
Robin Roland, Finance Director
May 25, 2011
Presentation of Comprehensive Annual Financial Report for 2010
Introduction
Craig Popenhagen and Heidi Tatro with the City's auditing firm, LarsonAllen LLP will be at
the meeting to present the 2010 Financial Statements.
A copy of the 2010 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 167) 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.
are r Ilan
LLP
CPAs, Consultants & Advisors
www.tersonallon.com
REPORT ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and
Members of the City Council
City of Cottage Grove, Minnesota
We have audited the financial statements of the governmental activities, business -type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund information of
the City of Cottage Grove, Minnesota, as of and for the year ended December 31, 2010, which
collectively comprise the City's basic financial statements and have issued our report thereon dated
May 19, 2011.
We conducted our audit in accordance with U.S. generally accepted auditing standards, the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States, and the provisions of the Minnesota Legal Compliance Audit Guide for
Political Subdivisions, promulgated by the State Auditor pursuant to Minn. Statutes Section 6.65.
Accordingly, the audit included such tests of the accounting records and such other auditing procedures
as we considered necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions covers seven main categories
of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest,
public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing.
Our study included all of the listed categories.
The results of our tests indicate that for the items tested, the City complied with the material terms and
conditions of applicable legal provisions.
This report is intended solely for the information and use
and the Office of the Minnesota State Auditor and is no
anyone other than these specified parties.
of the City Council, management of the City,
t intended to be and should not be used by
1-4-P
LarsonAllen LLP
Minneapolis, Minnesota
May 19, 2011
An independent member of Nexia International
LarsonAlled
LLP
CPAs, Consultants & Advisors
www.tarsonalle n.corn
Honorable Mayor and
Members of the City Council.
City of Cottage Grove, Minnesota
We have audited the financial statements of the govemmental activities, the business -type activities, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of City of Cottage
Grove, Minnesota, (the City) for the year ended December 31, 2010, and have issued our report thereon dated
May 19, 2011. Professional standards require that we provide you with the following information related to our
audit.
Our responsibility under U.S. Generally Accepted Auditing Standards and Government Auditing Standards
As stated in our engagement Letter dated January 14, 2011, our responsibility, as described by professional
standards, is to express opinions about whether the financial statements prepared by management with your
oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting
principles. Our audit of the financial statements does not relieve you or management of your responsibilities.
As part of our audit, we considered the internal control of the City. Such considerations were solely for the
purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts,
and grants, however, the objective of our tests was not to provide an opinion on compliance with such provisions.
1. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that
the financial statements are free of material misstatement.
2. We are responsible for communicating significant matters related to the audit that are, in our professional
judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are
not required to design procedures specifically to identify such matters.
3. We are also responsible for communicating matters regarding the provisions of the Minnesota Legal
Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant Minnesota
Statute 6.65.
Other information in documents containing audited financial statements
Our audit opinion, the audited financial statements, and the notes to financial statements should only be used in
their entirety. Inclusion of the audited financial statements in a client prepared document, such as an annual
report, should be done only with our prior approval and review of the document. Our responsibility for other
information in documents containing the City's financial statements and our auditors' report does not extend
beyond the financial information identified in our auditors' report. We have no responsibility for determining
whether such other information is properly stated and do not have an obligation to perform any procedures to
corroborate other information contained in such documents. We are required by professional standards to read the
other information in order to identify material inconsistencies between the audited financial statements and other
information because the credibility of the audited financial statements and our report may be undermined by
material inconsistencies between the audited financial statements and other information.
An independent member of Nexia International
Inrea N Al 10 N AL
Honorable Mayor and
Members of the City Council
City of Cottage Grove
Page 2
Planned scope and timing of the audit
We performed the audit according to the planned scope and timing previously communicated to you in our
meeting about planning matters on February 16, 2011.
Significant audit findings
Qualitative aspects o /accounting practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by City of Cottage Grove are described in Note 1 to the financial statements. No new
accounting policies were adopted and the application of existing policies was not changed during 2010.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the proper
period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected. The most
sensitive estimates affecting the financial statements were the useful lives of capital assets, the valuation of
investments, the allowance for uncollectible accounts receivable, and the liability for insurance claims incurred
but not reported. Management's estimate of the useful lives of capital assets is based on authoritative guidance
and past experience. Management's estimate of the investments at fair value is based on published market values
at December 31, 2010. Management's estimate of the allowance for doubtful accounts is based on collection
history of ambulance billings and an analysis of the collectibility of individual accounts. Management's estimate
of claims incurred but not reported in the self - insurance fund is based on data reported to the City by the plan
administrator.
We evaluated the key factors and assumptions used to develop the above estimates in determining that it is
reasonable in relation to the financial statements taken as a whole.
Difficulties encountered in performing the audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and uncorrected misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are trivial, and communicate them to the appropriate level of management. The attached
schedule suunnarizes uncorrected misstatements of the financial statements. Management has determined that
their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. In
addition, none of the misstatements detected as a result of audit procedures and corrected by management were
material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to
the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during
the course of our audit.
Honorable Mayor and
Members of the City Council
City of Cottage Grove
Page 3
Management representations
We have requested certain representations from management that are included in the management representation
letter dated May 19, 2011.
Management consultations with other independent accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an
accounting principle to the City's financial statements or a determination of the type of auditors' opinion that may
be expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Other audit findings or issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
retention.
This information is intended solely for the use of the Members of the City Council and management of City of
Cottage Grove and is not intended to be and should not be used by anyone other than these specified parties.
LarsonAllen LLP
Minneapolis, Minnesota
May 19, 2011
CITY OF COTTAGE GROVE
SUMMARY OF PASSED ADJUSTMENTS
DECEMBER 31, 2010
q
Description
DR
CR
PROPRIETARY FUND AND BUSINESS -TYPE
1
610 Retained Earnings
$ 10,739
610 Water Sales
$ 10,739
Pass on adjusting for the impact of overstating water revenue
due to over-billing for deduct meter in the prior year.
$ 19,050
l $ 19,050
$ 10,739
$ 10,739
Account Description
DR
CR
PROPRIETARY FUND AND BUSINESS -TYPE
2
610 Retained Earnings
$ 19,050
610 Rental Income - Water Operating
$ 19,050
Pass on adjusting beginning net assets and revenue for rental
revenue received in 2009 for 2010.
$ 19,050
l $ 19,050
Lar n ll ri
LLY
CPAs, Consultants & Advisors
www.ta rson alten.corn
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
Members of the City Council
City of Cottage Grove, Minnesota
We have audited the financial statements of the governmental activities, business -type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund information of
the City of Cottage Grove, Minnesota as of and for the year ended December 31, 2010, which
collectively comprise the City's basic financial statements and have issued our report thereon dated
May 19, 2011. We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting
as a basis for designing our auditing procedures for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness
of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did
not identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses as defined above.
1 NTERN ATIO N AL
An independent member of Nexia International
Honorable Mayor and
Members of the City Council
City of Cottage Grove
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our test disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
This report is intended solely for the information and use of the City Council, management of the City,
and state and federal awarding entities and is not intended to be and should not be used by anyone
other than these specified parties.
LarsonAllen LLP
Minneapolis, Minnesota
May 19, 2011
r
• Unqualified (i.e. "clean ") opinion on the financial
statements
• No material weaknesses in internal controls
noted
• Minnesota legal compliance — no exceptions
noted
Government -wide Statements
ses,000,000
$55,000.X0 — --
1
i
2006 2007 2008 2006 2010
—o —CV filnveslmenu — a— EV.penxs — e— Erpentlehb Nel ASSes "'.,
PA
Financial Results (continued)
N
R esults Financial
General Fund Revenues
1a,00g009 :-
1z,66o,066 F
rveam^ i
— I
m.ao6.006
e,000.006 �--
6, 000, W,
i
n,ao3po0
—
2,000,006 '', --
I
200e
2001
2008
2009
2010
!]Miscellaneous
118,870
137,6337
105,642
66,3
51,491
vestment lnaome
251,648
330,244
256,330
100,841
65.279
D Fines and FoftU
231)21
223,63
224,807
192,169
201,559
rtCharges for 6mrvico
1,240 ,044
T 1,W3,520
1,006,.5
1, 1 5 1,096
1,158,85B
pis tergovernmenal
1,288,363
1,580,917
651,604
167,217
615033
�o Lcensas antl ParMffi
1,162,151
1,013,351
1,029,569
683,204
753,466
Icfrenchise Pees
325,414
-
-
-
o Property Taxes
8468,233
8,802239
9,191.928
9, 836,128
igt95,1W
N
R esults Financial
Financial Results (continued)
General Fund Revenues and Expenditures
$94,000000 —
$12,00,000
si0,900,000
$8,000,050 1F
$8,000,000
$4,000,000
$z 000,000
Revenues
$ Expentlhuraa
2001 2002 2003 2004 2005 2006 2007 2008 2009 2510
Financial Results (continued)
Fund Balance - General Fund
90,000,000 90.0%
9,000 on 8, 0.,
8.000,000 — -- -- 700i
7,000,000 — — — —
so
0,000,o00
E sa.o%
5,000,000 J
4 OM OW
oo/
3.000,000
2,000.000 — — — — — — — — — — 2CA °6
1 FurM Balance
9,050,000 -- __ _ _ __ _ __ ___ _ J 90.0°6 % of Annual
00 °o ExpentllNres
2009 2002 2003 2004 2W5 2008 20W 2008 2009 2010
4
Financial Results (continued)
Golf Course Fund
$300000
$250,000 x—
$200.000
$150.000
$100000
s5e,0 00
s
2005
Fin R esu l ts (co
Street Light Fund
$400,000 - --
$350,000 —
$30000
$250,000
$200,000
$150,300 —
$100,000 ,—
$50,000
2005
$(50,000(
6(1W,000)
OperaiinQ lnxme
(.oss7
Operarhg cash Flow
2005 2007 200$ 2000 2010
OperaGnq Inwma
(lass)
Ope�a0n9 CesM1
Flaw
2006 2007 20. 2009 2010
Financial Results (continued)
EMS Fund
$150,000 F
$50.000 �
zoos
$(50000) )—
$(150,00,)
Financial Results (continued)
Water Oneratina Fund
$1.3,0.0,0
$1.100.000
$90,,0,0
$7m ON
$599,,90
$300,000
$1N
$(,WON)
$(.WQWO)
2007 2007 NN 2o0a 2010
20 :0
Operating
In-me(LosS)
Operating OaSF
Flow
Operating lncame
( oss)
Operating Gash
Flow
I.
• Audit provides reasonable, but not absolute
assurance
• Accounting policies
• Significant accounting estimates
• Audit adjustments and uncorrected misstatements
• No disagreements or difficulties with management
7
• GASB No. 54 — Fund Balance Reporting
— Effective 2011
— Delegation of Authority
— Special Revenue Funds
• GASB No. 61 — Component Units
• GASB No. 62 - Codification
Craig Popenhagen, Principal
Ph. 612/397 -3087
cpopenhagen @larsonallen.com
Heidi Tatro, Manager
Ph. 612/397 -3123
htatro@larsonallen.com
1.1
H E S NIJ A I
FINANC.IAL REPOIRI I
A
MInancsola
Ycar F -juidcd
110
Dc�ccnlbcl-31, 2C,
Cover photo is the nature category winning entry from the 2010 City of Cottage Grove Photo Contest.
Photo was taken by Amanda Flandrich.
Cl Ioi
CITY OF COTTAGE GROVE
STATE OF MINNESOTA
l . i i
Prepared ]By:
Finance Department
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Certificate of Achievement for Excellence in Financial Reporting 12
Principal City Officials 13
Organization Chart 14
II. FINANCIAL SECTION
Independent Auditors' Report
17
Management's Discussion and Analysis
21
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Assets
Statement 1
35
Statement of Activities
Statement 2
37
Fund Financial Statements:
Balance Sheet - Governmental Funds
Statement 3
38
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds
Statement 4
40
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
Statement 5
42
Statement of Net Assets - Proprietary Funds
Statement 6
43
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary Funds
Statement 7
44
Statement of Cash Flows - Proprietary Funds
Statement 8
48
Notes to Financial Statements
53
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund
Statement 9
90
Budgetary Comparison Schedule - Note to RSI
96
Funding Progress Schedule - Other Post Employment Health Care Benefits
97
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 10 103
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 11 104
Subcombining Balance Sheet - Nonmajor Special Revenue Funds
Statement 12
106
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds
Statement 13
108
Subcoinbining Balance Sheet - Nonmajor Debt Service Funds
Statement 14
111
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds
Statement 15
112
Subcombining Balance Sheet - Nonmajor Capital Project Funds
Statement 16
114
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds
Statement 17
116
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Equipment Replacement
Statement 18
118
Recycling
Statement 19
119
Storm Water
Statement 20
120
Street Sealcoating
Statement 21
121
Forfeiture /Seizure
Statement 22
122
Ice Arena
Statement 23
123
Public Safety Grants
Statement 24
124
Charitable Gambling
Statement 25
125
Celebration Fund
Statement 26
126
Future Economic Development
Statement 27
127
Internal Service Funds:
Combining Statement of Net Assets
Statement 28
130
Combining Statement of Revenue, Expenses and Changes in Fund Net Assets
Statement 29
131
Combining Statement of Cash Flows
Statement 30
132
Component Unit:
Economic Development Authority:
Combining Balance Sheet - All Governmental Fund Types Statement 31 134
Combining Statement of Revenues, Expenditures and Changes
in Fund Balance - All Governmental Fund Types Statement 32 135
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Supplementary Financial Information:
Construction/Acquisition Costs:
Capital Projects Funds Exhibit 1 138
Combined Schedule of Bonded Indebtedness
Exhibit 2
142
Debt Service Payments to Maturity
Exhibit 3
144
Deferred Tax Levies
Exhibit 4
146
Subcombining Balance Sheet - Pavement Management Debt Service Schedule
Exhibit 5
148
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Pavement Management Debt Service Schedule
Exhibit 6
149
Subcombining Balance Sheet - Construction Revolving Capital Project Schedule
Exhibit 7
150
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance -
Construction Revolving Capital Project Schedule
Exhibit 8
151
Subcombining Balance Sheet - Tax Increment Construction Revolving Schedule
Exhibit 9
152
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Tax Increment Construction Revolving Schedule
Exhibit 10
153
Subcombining Balance Sheet - TIF Debt Service Revolving Schedule
Exhibit 11
154
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
TIF Debt Service Revolving Schedule
Exhibit 12
155
Schedule of Sources and Uses of Public Funds:
Oakwood Heights District Number 1 -1
Exhibit 13
156
Up North Plastics District Number 1 -3
Exhibit 14
157
Cottages of Cottage Grove District Number 1 -8
Exhibit 15
158
Renewal by Andersen District Number 1 -9
Exhibit 16
159
Tax Increment District Number 1 -10
Exhibit 17
160
Tax Increment District Number 1 -12
Exhibit 18
161
Tax Increment District Number 1 -13
Exhibit 19
162
Tax Increment District Number 1 -14
Exhibit 20
163
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference
Page Number
III. STATISTICAL SECTION
Net Assets by Component
Table 1
167
Changes in Net Assets
Table 2
168
Fund Balances of Governmental Funds
Table 3
170
Changes in Fund Balances of Governmental Funds
Table 4
171
Assessed and Estimated Actual Value of Taxable Property
Table 5
172
Property Tax Rates - Direct and Overlapping Governments
Table 6
173
Principal Property Taxpayers
Table 7
174
Property Tax Levies and Collections
Table 8
175
Ratios of Outstanding Debt by Type
Table 9
176
Ratios of General Bonded Debt Outstanding
Table 10
177
Direct and Overlapping Governmental Activities Debt
Table 11
178
Legal Debt Margin Information
Table 12
179
Demographic and Economic Statistics
Table 13
180
Principal Employers
Table 14
181
Full -time Equivalent City Government Employees by Function
Table 15
182
Operating Indicators by Function/Program
Table 16
183
Capital Asset Statistics by Function/Program
Table 17
184
City of
Cottage Grove
Minnesota
7516 80th Street South / Cottage Grove, Minnesota 55016-3195
www.cottage-grove.org
May 19, 2011
651-458-2800 Fax 651-458-2897
TDD 651-458-2880
To the Honorable Mayor, City Council, and Citizens of the City of Cottage Grove:
Mimiesota statutes require all cities to submit an annual audited financial statement to the Office
of the State Auditor. Pursuant to that requirement, we hereby issue the comprehensive annual
financial report of the City of Cottage Grove for the fiscal year ended December 31, 201
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based upon a comprehensive framework of internal control standards
that it has established for this purpose. Because the cost of internal control should not exceed
anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the
financial statements are free of any material misstatements.
LarsonAllen LLP, independent certified public accountants have issued an unqualified ("clean")
opinion on the City of Cottage Grove's financial statements for the year ended December 31,
2010. The independent auditors' report is located at the front of the financial section of this
report.
Management's discussion and analysis (MD&A) immediately follows the independent auditors'
report and provides a narrative introduction, overview, and analysis of the basic financial
statements. This letter of transmittal is designed to complement the MD&A and should be read
in conjunction with it.
Cottage Grove was organized as a village on July 13, 1965 and was incorporated as a city on
January 1, 1974. Cottage Grove is a suburban community located on the southern border of
Washington County. It is within the Seven County Metropolitan Region. The City currently
occupies 34.3 square miles of land and serves a population of 34,589.
Cottage Grove operates as a Statutory Plan A City under Minnesota law. The governing body,
consisting of the Mayor and four council members, is elected at large and on a non-partisan
basis. Terms of office are staggered four year terms, with elections held in each even-numbered
year.
EQUAL OPPORT NITY EMPLOYER
�1_
- 4 -
Letter of Transmittal
May 19, 2011
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
and control. The Council is required to adopt a final budget by no later than December 28 of
each year.
5
Letter of Transmittal
May 19, 2011
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 34,589 per the 2010 census. 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. The City-
wide building permit values for new commercial construction totaled $1.2 million in 2010, up
from $250,000 in 2009.
Long -term financial planning: The City places a high priority on planning for future growth.
Staff uses different long range revenue and expenditure models during the annual preparation of
a biennial budget plan for the General Fund, Special Revenue and Enterprise Funds.
Furthermore, Council and staff compile a five year Capital Improvement Plan (C11') which
addresses the future building and infrastructure projects necessary to address the new residential
and commercial property outlined in the City's 2030 Comprehensive Plan.
As part of the CIP, each capital project is analyzed to determine if sufficient funding exists for
the project and the longer term impact of each of the projects on the individual capital fund
balances.
- 6 -
Letter of Transmittal
May 19, 2011
Relevant Financial Policies: The City uses a variety of financial policies to guide its fiscal
actions and ensure its fiscal stability. For example, the Investment policy identifies which
investment vehicles City staff will use to maintain the safety of principal while maximizing the
return on the pooled cash in the City's possession. The policy seeks to minimize credit and
market risk by limiting the period of time any one investment may be held and/or by limiting the
quantity and variety of investments in accordance with those allowed by state statute.
Perhaps most relevant is the City's Fund Balance policy which identifies the required designated
amounts in the Fund Balance of the General Fund at fiscal year end. This policy requires that the
City retain and designate:
• 50% of the subsequent year's General Fund Property Tax Levy for cash flow
• 10% of the subsequent year's budgeted expenditures for contingencies
• an amount for compensated absences computed, special purposed revenues and budget
carryovers.
Once these items are designated in the fund balance, any excess revenues are transferred out to
the following funds for the following purposes:
• Closed Debt fund (35 %) for debt management
• Equipment replacement fund (25 %) for future equipment replacement
• Municipal building fund (15 %) for future municipal facility needs
• Pavement management fund (10 %) for future pavement management projects.
Since the adoption of the Fund Balance Policy in 2003, the General Fund has transferred more
than $4.6 million to these designated funds, assuring the continued financial stability of the
City's operations and reducing the reliance upon debt issuance and the resulting levies to fund
City projects.
Major initiatives: Initiatives for 2011 are outlined below:
• Proceed with the planning for and construction of the new Public Safety /City Hall facility
in the East Ravine.
• Consider recommendations of the Community Center Task Force on whether to construct
such a facility and how to finance it, including exploration of all manner of public /private
partnerships.
• Continue efforts in the redevelopment of the Norris Marketplace area.
• Continue to expand Industrial Park by attracting new businesses.
• 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
Letter of Transmittal
May 19, 2011
years. The table below shows a reduction in net tax capacity for 2002 with a return to growth
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:
Residential Homestead
Portion of Value of $75,000
$76,000 to 500,000
Over $500,000
Tax Capacity of:
$100,000 Home
$125,000 Home
$150,000 Home
$200,000 Home
Commercial
Value to $150,000
Value above $150,000
Tax Capacity of.
$750,000 Building
$1,000,000 Building
$2,500,000 Building
1998 Class
1999 Class
2000 & 2001
2002-2010
Rate
Rate
Class Rate
Class Rate
1.00%
1.00%
1.00%
1.00%
1.85%
1.70%
1.65%
1.00%
1.85%
1.70%
1.65%
1.25%
1,213
1,175
1,163
1,000
1,675
1,600
1,575
1,250
2,138
2,025
1,988
1,500
3,063
2,875
2,813
2,000
2.70%
2.45%
2.40%
1.50%
4.00%
3.50%
3.40%
2.00%
28,050
24,675
24,000
14,250
38,050
33,425
32,500
19,250
98,050
85,925
83,500
49,250
For 2010, the total market value decreased 4.38 %, or $134 million. Of this change, a decline of
5.38% was the devaluation of existing properties while an increase of 1% ($34 million) is
attributed to new construction. The following table shows the changes in valuations over the
past several years:
■
Estimated
Net
Year
Market
Percent
Tax
Percent
Payable
Value
Change
Capacity
Change
2001
$1,333,444,300
9.95%
$22,578,567
11.81%
2002
1,464,647,000
9.84%
17,911,660
(20.67 %)
2003
1,717,460,500
17.26%
21,118,262
17.90%
2004
1,941,381,700
13.04%
22,561,473
6.83%
2005
2,278,319,600
17.36%
26,315,736
16.64%
2006
2,588,151,800
13.60%
29,344,344
11.51%
2007
2,848,502,600
10.06%
32,824,288
11.86%
2008
2,986,391,700
4.84%
34,606,397
5.43%
2009
3,058,237,500
2.41%
35,932,471
3.83%
2010
2,924,191,800
(4.38 %)
34,558,053
(3.83 %)
■
Letter of Transmittal
May 19, 2011
The delinquency rate for property taxes remains low. Current tax collections were 98.6% of the
property tax levy during 2010. Total collections have consistently been above 95% since 1990.
The allocation of property tax levy by purpose (urban property only) for the years payable 2003
to 2010 are:
Tax Extension Rates
Purpose
2003
2004
2005 2006 2007
2008
2009
2010
General Fund
36.927
38.002
34.298 33.316 32.022
31.548
30.825
31.780
Debt Service
5.150
5.655
4.872 4.609 3.791
3.641
3.807
3.635
Total Tax Rate
42.077
43.657
39.170 37.925 35.813
35.189
34.632
35.415
The decrease in the tax extension rate since 2003 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.
Fiscal Disparities: In 1971 the legislature enacted the Fiscal Disparities law, which was not
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:
Net Tax Capacity
Fiscal Disparity Fiscal Disparity
Year Contribution Distribution
GUUl
2002
2003
2004
2005
2006
2007
2008
2009
2010
$1,222,871
806,541
818,898
1,435,738
1,258,492
1,488,657
1,219,985
1,730,706
1,864,101
2,239,913
$4,587,177
2,898,642
3,140,504
3,240,755
3,404,249
3,606,971
4,115,941
4,842,028
5,486,540
5,830,239
— 9 —
Tax Capacity
Adjustment
$3,364,306
2,092,101
2,321,606
1,805,017
2,145,757
2,118,314
2,895,956
3,111,322
3,622,439
3,590,326
Letter of Transmittal
May 19, 2011
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.
— 10 —
Treasury Bill
Three -Month
Investment
Investment
Year
Averas4e
Yield
Earnings
2010
0.14
0.94
$ 518,608
2009
0.15
1.48
736,601
2008
1.28
4.31
1,933,219
2007
4.41
5.92
2,336,771
2006
4.87
4.50
1,654,851
2005
3.27
2.37
883,608
2004
1.43
2.10
686,078
2003
1.03
1.63
508,457
2002
1.63
4.40
1,047,472
2001
3.47
7.12
1,625,056
— 10 —
Letter of Transmittal
May 19, 2011
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Cottage Grove for its Comprehensive Annual Financial Report for the year ended December 31,
2009. This was the eighteenth consecutive year that the City has achieved this prestigious
award. In order to receive a Certificate of Achievement, a government must publish an easily
readable and efficiently organized Comprehensive Annual Financial Report. This report must
satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to GFOA to determine its eligibility for another
certificate.
I would like to express my appreciation to all finance and administrative services department
staff without whose dedication and assistance the preparation of this report would not be
possible. Further recognition goes to the Mayor, City Council members and City Administrator
for their leadership and support of responsible financial policy which guides our operation.
Respectfully Submitted,
CITY OF COTTAGE GROVE, MINNESOTA
Robin Roland
Finance Director
11 -
MIMIME
Presented to
City of • .• Grov;
My
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2009
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
— 12 —
CITTOF COTTAGE GROVE, MINNESOTA
PRINCIPAL
lfecernber 31, 2010
Elected Officials
Mayor:
Myron Bailey
Term Expires
Council Members:
Mark Grossklaus
Justin Olsen
Jen Peterson
Pat Rice
Appointed Personnel
City Administrator
Director of Finance
City Clerk
Director of Planning and Community Development
Director of Public Safety
Director of Public Works
December 31, 2012
December 31, 2010
December 31, 2012
December 31, 2012
December 31, 2010
Ryan Schroeder
Robin Roland
Caron Stransky
Howard Blin
Craig Woolery
Les Burshten
13
L"J City of Cottage Grove
Organization Ch 7
Cottage Grove
Citizens
City Council
City Administrator
Community Administration Finance Public Safety
Development
Economic
City Clerk/Elections
Accounting
Patrol
Development
Planning
Human Resources
Enterprise Billing
=1nestga�ws
U ommunity
Public Safety
Building /Code
Programs/
programs
Inspections
Communications
Payroll
Animal & Code
Historic
Enforcement
Preservation
River Oaks
MIS
Fire & Emergency
Management
EMS /Medical
Services
Fire Inspections
Updated 2011
Advisory
Commissions
City
Attorney
Parks and I Public Works
Recreation
Parks i I i Engineering
Recreation I I I Streets
Ice Arena Fleet/Building
Maintenance
Forestry Utilities
— 14 —
15
- 16 -
LLP
CPAs, Consultants & Advisors
Honorable Mayor and
Members o[ the City Council
City of Cottage Grove, Minnesota
We have audited the accompanying financial statements of the governmental. activities, the
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
iofhoou1ioo of the City of Cottage Grove, Minnesota as of and for the year ended December 31" 2010, which
collectively comprise the City's basic financial otuteouezda as listed in the table of contents. Tbcen financial
atut000cu1a are the responsibility of the City's management. Our responsibility is to express opinions on these
fin000iuJ statements based on our audit. The prior ycar summarized comparative information has been derived
from the City's 2009 financial statements and, Lu our report dated May 18, 2010, we expressed unqualified
oPboioum on the zcaPe»dvo financial ututomco1u of the governmental activities, the business-type activities, the
discretely presented component unit, each major fund,mnd the aggregate remaining fund information.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the atuoduzda
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards zcgoizo that we plan and perform the audit to oh1uiu zeusnnub]c assurance
about whether the financial statements are free o[ material misstatement. An audit includes examining, on u800t
huain, evidence supporting the amounts and dixo|omnzem in the financial utatcouecdm. An audit also includes
assessing the accounting principles used and significant estimates made hymanagement, os well aa evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the governmental activities, the business-type activities, the discretely presented component unit, each
major fund, and the aggregate remaining fund information of the City of Cottage (}rove, MioomooLa as of
December 3l,20l0, and the respective changes iofiuouoia| position and cash flows, where applicable, thereof for
the year then ended io conformity with 0.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated May lq,20l|,000ur
consideration ofthe City of Cottage Grove, Minnesota's io1croul control over financial reporting and oo our tests
of its compliance with certain ynnviaiooe of laws, regulations, contracts, and grant ugzeeozezda and other matters.
The purpose of that report io to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide ao opinion onthe internal control over financial
reporting or on compliance. That report is an integral part of an audit perfon in accordance with Government
Auditing Standards and should be considered in assessing the roauko of our audit.
^o independent member ofwexiuInternational
6
Honorable Mayor and
Members of the City Council
City of Cottage Grove
The management's discussion and analysis, budgetary comparison information and funding progress schedule as
listed in the table of contents are not u required part of the basic financial statements but are supplemental
information required by U.S. generally accepted accounting principles. We have applied certain limited
procedures, which consisted principally of inquires of management regarding the methods of measurement and
presentation of the required supplementary iofbonudoo. 8ovvovoc, we did not audit the information and coprcam
no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Cottage Grove`obasic financial statements. The introductory section, combining ' ond
individual fatzd statements and schedules, the supplementary finumobd information and the atabodou] section are
presented for purposes of additional uouh/uio and are not a required pmt of the basic financial statements. The
nornbiniu4 and individual fund mtu1cozeo10 and schedules, and the supplementary financial information have been
subjected tothe auditing procedures applied in the audit of the basic Onauoiu| atadoznoots and, in our opinion, are
fairly stated ioall material rcopcoLa in relation to the basic fiouooiu| etutcmou1u taken as uvvbn)c. The introductory
000tiuu and statistical section have not been subjected to the audit procedures applied in the audit of the basic
financial mtatcmco1a and, accordingly, we express no opinion onthem.
Minneapolis, Minnesota
May 19, 2011
m
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, 2010. 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 11 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 $213,073,924 (net assets). Of this amount, $58,242,556
(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 $2,592,432 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 $43,461,566, an increase of $1,719,045
compared to the previous year. Approximately 79% or $34,442,327 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 $9,139,140, included
$33,905 reserved and $9,105,235 unreserved - designated. The unreserved fund balance
represents approximately 73.6% 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 $26,338,465, a decrease of $2,381,272 (8.3 %) 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.
- 21 -
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 eared 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.
22
Management's Discussion and Analysis (continued)
Information is presented separately in the governmental fund balance sheet and in the
govermmental fund statement of revenues, expenditures, and changes in fund balance for the
City's seven individual major governmental funds. They are as follows:
• General Fund
• Municipal Building and Service Center Fund – Capital project fund
• MSA Construction Capital Project Fund — Capital project fund
• Closed Debt Fund —Debt service fund
• Pavement Management Debt Service Fund —Debt service fund
• Pavement Management Capital Project Fund - Capital project fund
• Construction Revolving Capital Project Fund – Capital project fund
Data from the other govenunental 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.
23
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 132 of this report.
Government -wide Financial Analvsis
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 $213,073,924, at
the close of the most recent fiscal year.
The largest portion of the City of Cottage Grove's net assets ($148,664,120 or 69 %) 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.
Governmental Activities
2010
2009
City of Cottage Grove Net Assets
Business -Type Activities
2010 2009
Total Primary Government
2010 2009
Current and other assets
$53,718,567
$53,652,416
$14,774,644
$14,065,426
$68,493,211
$67,717,842
Capital assets
117,566,728
117,372,280
55,684,219
56,467,713
173,250,947
173,839,993
Total assets
171,285,295
171,024,696
70,458,863
70,533,139
241,744,158
241,557,835
Long -term liabilities
outstanding
15,657,023
22,987,056
2,384,356
2,744,552
18,041,379
25,731,608
Other liabilities
9,579,735
4,215,627
1,049,120
1,129,108
10,628,855
5,344,735
Total liabilities
25,236,758
27,202,683
3,433,476
3,873,660
28,670,234
31,076,343
Net assets:
Invested in capital assets,
net of related debt
94,794,079
92,735,500
53,870,041
54,106,504
148,664,120
146,842,004
Restricted
8,196,697
8,158,356
325,685
269,195
8,522,382
8,427,551
Unrestricted
43,057,761
42,928,157
12,829,661
12,283,780
55,887,422
55,211,937
Total net assets
$146,048,537
$143,822,013
$67,025,387
$66,659,479
$213,073,924
$210,481,492
An additional portion of the City's net assets ($8,522,38 2
subject to external restrictions on how they may be used.
net assets, $55,887,422 may be used to meet the City'
creditors.
or 4 %) represents resources that are
The remaining balance of unrestricted
City's
ongoing obligations to citizens and
24
Management's Discussion and Analysis (continued)
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.
The City's net assets increased by $2,592,432.
Governmental Activities: Governmental activities increased the City of Cottage Grove's net
assets by $2,226,524 accounting for 86% of the total growth in net assets. Key elements of this
increase are as follows:
— 25
2010
2009
2010
2009
2010
2009
Revenues:
Program revenues:
Charges for services
$3,455,202
$3,207,746
$7,509,302
$7,659,700
$10,964,504
$10,867,446
Operating grants and contributions
1,210,249
1,192,559
-
1,210,249
1,192,559
Capital grants and contributions
2,464,782
2,941,206
165,266
2,630,048
2,941,206
General revenues:
Property taxes
11,427,029
11,808,510
-
11,427,029
11,808,510
Other taxes
1,801,359
1,547,596
1,801,359
1,547,596
Grants and contributions not
restricted to specific programs
27,050
202,751
-
-
27,050
202,751
Unrestricted investment earnings
502,721
998,846
119,772
176,619
622,493
1,175,465
Gain on sale of capital assets
23,872
4,227
-
-
23,872
4,227
Total revenues
20,912,264
21,903,441
7,794,340
7,836,319
28,706,604
29,739,760
Expenses:
General government
Regular operations
2,125,407
1,868,582
-
-
2,125,407
1,868,582
Community development
1,140,456
1,106,256
-
1,140,456
1,106,256
Public safety
5,888,224
5,724,450
-
5,888,224
5,724,450
Public works:
Regular operations
3,364,115
3,267,455
-
3,364,115
3,267,455
Construction
2,547,078
2,384,980
-
2,547,078
2,384,980
Culture and recreation
2,992,620
2,674,781
-
2,992,620
2,674,781
Interest on long -term debt
1,056,110
1,548,704
-
-
1,056,110
1,548,704
Golf course
-
-
1,447,849
1,553,921
1,447,849
1,553,921
Street lights
534,206
508,615
534,206
508,615
Cottage Grove EMS
-
975,560
920,991
975,560
920,991
Water operating
1,891,752
1,801,070
1,891,752
1,801,070
Sewer operating
-
-
2,150,795
2,079,127
2,150,795
2,079,127
Total expenses
19,114,010
18,575,208
7,000,162
6,863,724
26,114,172
25,438,932
Increase in net assets before transfers
1,798,254
3,328,233
794,178
972,595
2,592,432
4,300,828
Transfers
428,270
(1,134,566)
(428,270)
1,134,566
-
-
Increase in net assets
2,226,524
2,193,667
365,908
2,107,161
2,592,432
4,300,828
Net assets - January 1
143,822,013
141,628,346
66,659,479
64,552,318
210,481,492
206,180,664
Net assets - December 31
$146,048,537
$143,822,013
$67,025,387
$66,659,479
$213,073,924
$210,481,492
— 25
Management's Discussion and Analysis (continued)
• Grants and contributions not restricted to specific programs decreased 86% from 2009
due to the total unallotment of the 2010 Market Value Homestead Credit aid in order to
solve the State budget crisis.
• Capital grants and contributions in governmental activities decreased 16% because of the
reduced construction activities related to reduced development activity.
• Charges for service in governmental activities remained static from 2009.
• Investment revenue decreased 49% due to continued low interest rates.
• Expenses from governmental activities in 2010 increased $538,802 or 2.9% due to
required contractual increases.
• Net transfers totaling $428,270 were made between the governmental activities and the
business -type activities in 2010 compared to $1,134,566 in 2009. These transfers to the
governmental activities were for administrative fees.
Below are specific graphs which provide comparisons of the governmental activities revenues
and expenses:
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
c`¢ �w c`acw as � ° �5 \o c a\o ae w
Q
aa� e� ° ��` Q �5`� t e�� e yw °c
\ �o Qo �5 C o q et a
� °t
Q
■ Revenue
■ Expense
In each program area, program expenses exceeded program revenues.
— 26 —
Management's Discussion and Analysis (continued)
Governmental Activities - Expenses
Interest on Long -
Culture and
Term Debt
Recreation
5%
Public Works 16%
Construction
13%
General Government
11%
Community
Public Works
Development
Operations
6%
I'%
Public Safety
31%
Business -Type Activities. Business -type activities increased net assets by $365,908 despite
decreased revenues in all divisions except the Golf Course and Sewer operating fund. Below are
graphs showing the business -type activities revenue and expense comparisons.
Expenses and Program Revenues -
Business -Type Activities
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
wS 5 � ds
GL °, wS�' y �ro` Sro a�
. 60
■Expenses ■ Program revenues
Changes in net assets were positive for all segments of business -type activities except for Street
lights which had small decrease of net assets of ($40,044).
— 27 —
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 $43,461,566, an increase of $1,719,045. The increase is due
to the following factors:
• Reduction in new infrastructure construction expenditures due to residential
development's continued virtual standstill in 2010.
• The collection of prepayments on deferred special assessments which recovered prior
year construction expenses.
Approximately 79% of the fund balance ($34,442,327) 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) $35,178 to liquidate prepaid items,
2) $4,650,393 to repay debt,
3) $1,191,170 for tax increment purposes,
4) $2,875,000 for repayment of interfund loans, and
5) $267,498 for assets for resale.
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 $9,105,235 while total fund
balance was $9,139,140. 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 74% of
total general fund expenditures. The general fund balance increased by $7,555 during the current
fiscal year. Key factors in the general fund increase were increased property taxes levied to
offset other reduced revenue sources, carefully controlled expenditures for operations and
deferred capital outlay expenditures.
The Municipal Building Fund increased $70,842 due to revenues from cell phone tower rental
fees, transfers resulting from the City's fund balance policy and the initial professional service
expenditures for the Public Safety /City Hall project.
The MSA Construction Fund decreased by $53,508 because of land acquisition costs related to
the settlement of a special assessment objection from a previous year's project.
28
Management's Discussion and Analysis (continued)
The Closed Debt Fund increased by $244,534 due to investment income, interfund loan interest,
special assessment revenues and transfers into the fund resulting from the City's fund balance
policy.
The Pavement Management Debt Service Fund decreased by $84,683 because of the repayment
of debt issued for pavement management.
The Pavement Management Capital Project Fund decreased by $884,346 due to the 2010
Pavement Management project expenditures.
The Construction Revolving Fund, a capital project fund, increased by $167,364 because of the
receipt of special assessments received for previous construction activity in new developments.
The City will continue to receive future special assessment payments in this fund to cover the
negative fund balance.
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 $529,053, street light
$6,465,613, Cottage Grove EMS $981,737, water operations $33,489,276, and sewer operations
$25,371,147. The increase (decrease) in net assets in the proprietary funds for 2010 was
$113,393, ($66,429), $35,585, $307,943, and ($40,103), 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 Hi2hli2hts
General Fund.
The General Fund original budget was revised to reflect the following significant changes:
• The intergovernmental revenue and public safety salary budgets were reduced by
$27,100 due to the movement of the Byrne -Jag grant revenues and expenditures to the
Public Safety Grants special revenue fund.
• The intergovernmental revenue and fire services budgets were both reduced by $14,000
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.
• The intergovernmental revenue and forestry budgets were increased by $68,700 to
account for the forest protection grant (addressing the Emerald Ash Borer problem).
• The charges for service and Community Development expense budgets were both
increased by $300,000 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 $251,770 occurring as
part of the City's fund balance designation policy.
29
Management's Discussion and Analysis (continued)
The actual results were significantly different than the final budget amounts because of the
following:
• Charges for services categories were $84,742 less than budgeted due to the lack of
development activity within the City in 2010. The City normally generates
administrative, finance and engineering charges from development occurring.
• Fines revenues were $69,441 less than budgeted due to reduced revenues passed through
to the City from the state and county.
• Investment income was $20,279 more than budgeted due to the collection of more
interest than had been budgeted at historically low interest rates.
• Total expenditures were approximately $398,154 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, 2010, amounts to $173,250,947 (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 2010 due to the delay of capital
projects until more favorable economic conditions.
City of Cottage Grove's Capital Assets
(Net of Depreciation)
Governmental Activities Business -type Activities Totals Primary Government
?m n Mn9 )m n Mno
Land and Land improvements
Construction in progress
Buildings and improvements
Equipment and furniture
Machinery and equipment
Other improvements
Infrastructure:
Streets
Storm sewers
Sidewalks /trails
Water and sewer lines
Ending balance
$ 16,399,447
$ 16,399,447
$ 1,746,123
$ 1,746,919
$ 18,145,570
$ 18,146,366
1,358,079
905,348
202,856
-
1,560,935
905,348
9,533,153
9,769,441
2,146,131
2,257,010
11,679,284
12,026,451
461,892
575,748
-
-
461,892
575,748
3,833,905
3,679,659
857,126
813,178
4,691,031
4,492,837
1,361,816
1,410,219
4,601,949
4,693,761
5,963,765
6,103,980
61,016,169
60,646,685
-
-
61,016,169
60,646,685
19,864,862
20,158,254
19,864,862
20,158,254
3,737,405
3,827,479
-
-
3,737,405
3,827,479
-
-
46,130,034
46,956,845
46,130,034
46,956,845
$ 117,566,728
$ 117,372,280
$ 55,684,219
$ 56,467,713
$ 173,250,947
$ 173,839,993
Additional information on the City of Cottage Grove's capital assets can be found in Note 5.
— 30 —
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 $26,338,465, a decrease of $2,381,272 (8.3 %). $8,315,259 of
the debt outstanding is due within one year. $10,885,000 of bonds payable is for pavement
management debt being repaid by a combination of special assessments and property tax
levies.
City of Cottage Grove's Outstanding Debt
Governmental activitites:
Bonds payable, net
Capital lease payable
Other postemployment benefits
Compensated absences
Total governmental activities
Business -type activities:
Bonds payable, net
Loan payable to component unit
Capital lease payable
Other postemployment benefits
Compensated absences
Total business -type activities
Total primary government
2010 2009
$ 16,662,649 $
18,287,591
6,110,000
6,349,189
35,764
25,076
706,097
683,279
23,514,510
25,345,135
1,814,178 2,352,124
900,000 900,000
-
9,085
8,544
6,138
101,233
107,255
2,823,955
3,374,602
$ 26,338,465 $
28,719,737
The City of Cottage Grove holds a general obligation debt rating of Aal 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
$81,615,754. Of that limit, $6,110,000 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
financial information should be addressed to Finance Director, 7516 South 80` Street, Cottage
Grove, Minnesota 55016.
— 31
32
BASIC FINANCIAL STATEMENTS
- 33 -
34
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF NET ASSETS Statement 1
December 31, 2010
With Comparative Data as of December 31, 2009
Capital assets not being depreciated:
310,685
7,316,212
547,787
Component Unit
8,328,153
1,191,170
Land and land improvements
Primary
Government
Total
Economic
Totals
18,111,737
Construction in progress
Governmental
Business -Type
Primary
Development
Reporting Entity
Assets:
Activities
Activities
Government
Authority
2010
2009
Cash and investments
$45,426,464
$13,796,407
$59,222,871
$816,521
$60,039,392
$57,665,710
Accrued interest receivable
183,467
9,533,153
183,467
151,473
334,940
514,366
Due from other governmental units - net
1,261,811
296
1,262,107
-
1,262,107
1,582,601
Loan receivable from primary government
-
-
-
900,000
900,000
900,000
Accounts receivable- net
530,624
1,255,133
1,785,757
-
1,785,757
1,755,130
Prepaid items
139,722
140,944
280,666
1,440
282,106
273,048
Delinquent property taxes receivable
357,179
-
357,179
3,068
360,247
389,673
Due from county
67,219
67,219
-
67,219
314,905
Special assessments receivable
4,775,341
-
4,775,341
778,110
4,775,341
6,393,090
Inventories - at cost
65,062
77,366
142,428
357,258
142,428
130,938
Internal balances
511,439
(511,439)
-
-
-
-
Deferred charges
132,741
15,937
148,678
58,509
207,187
229,380
Lease receivable
-
-
-
6,110,000
6,110,000
6,345,000
Properties held for resale
267,498
-
267,498
421,298
688,796
-
Capital assets not being depreciated:
310,685
7,316,212
547,787
7,863,999
8,328,153
1,191,170
Land and land improvements
16,399,447
1,712,290
18,111,737
1,214,160
18,111,737
18,111,737
Construction in progress
1,358,079
202,856
1,560,935
43,057,761
1,560,935
905,348
Capital assets (net of accumulated depreciation):
57,114,561
56,523,848
$146,048,537
$67,025,387
$213,073,924
$2,368,265
Land improvements
-
33,833
33,833
33,833
34,629
Buildings and improvements
9,533,153
2,146,131
11,679,284
11,679,284
12,026,451
Equipment and furniture
461,892
-
461,892
461,892
575,748
Machinery and equipment
3,833,905
857,126
4,691,031
4,691,031
4,492,837
Other improvements
1,361,816
4,601,949
5,963,765
-
5,963,765
6,103,980
Infrastructure
84,618,436
46,130,034
130,748,470
130,748,470
131,589,263
Total assets
171,285,295
70,458,863
241,744,158
8,462,309
250,206,467
250,333,834
Liabilities:
Accounts payable
676,118
101,992
778,110
2,371
780,481
859,935
Salaries payable
315,003
42,255
357,258
-
357,258
313,096
Contracts payable
108,564
95,151
203,715
203,715
348,063
Due to other governmental units
48,048
32,421
80,469
80,469
70,089
Deposits payable
181,499
202,472
383,971
-
383,971
79,071
Accrued interest payable
330,502
135,230
465,732
67,473
533,205
721,259
Unearned revenue
62,514
-
62,514
-
62,514
44,899
Compensated absences payable:
Due within one year
489,838
85,421
575,259
575,259
595,137
Due in more than one year
216,259
15,812
232,071
232,071
195,397
Other postemployment benefits:
Due in more than one year
35,764
8,544
44,308
44,308
31,214
Loan payable to component unit:
Due in more than one year
-
900,000
900,000
900,000
900,000
Capital lease payable:
Due within one year
245,000
-
245,000
245,000
248,277
Due in more than one year
5,865,000
-
5,865,000
-
5,865,000
6,109,997
Bonds payable (net of unamortized premiums and discounts):
Due within one year
7,135,000
360,000
7,495,000
159,200
7,654,200
2,400,000
Due in more than one year
9,527,649
1,454,178
10,981,827
5,865,000
16,846,827
24,494,235
Total liabilities
25,236,758
3,433,476
28,670,234
6,094,044
34,764,278
37,410,669
Net assets:
Invested in capital assets, net of related debt
Restricted for:
Debt service
Tax increment purposes
Capital improvements
Unrestricted
Total net assets
94,794,079 53,870,041 148,664,120 - 148,664,120 146,842,004
7,005,527
310,685
7,316,212
547,787
7,863,999
8,328,153
1,191,170
-
1,191,170
593,339
1,784,509
1,214,160
-
15,000
15,000
-
15,000
15,000
43,057,761
12,829,661
55,887,422
1,227,139
57,114,561
56,523,848
$146,048,537
$67,025,387
$213,073,924
$2,368,265
$215,442,189
$212,923,165
The accompanying notes are an integral part of these basic financial statements.
35
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37
CITY OF COTTAGE GROVE, MINNESOTA
BALANCESHEET
GOVERNMENTALFUNDS
December 31, 2010
With Comparative Data as of December 31, 2009
Special assessments receivable:
Deferred
Delinquent
Special deferred
Property held for resale
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Salaries payable
Interfund payable
Contracts payable
Due to other governmental units
Deposits payable
Accrued interest payable
Interfund loan payable
Deferred revenue
Total liabilities
Fund balances (deficit):
Reserved for:
Prepaid items
Debt retirement
Tax increment purposes
Long -term interfund loan receivable
Assets for resale
Unreserved:
Designated reported in:
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Undesignated reported in:
Debt Service Fund
Capital Project Funds
Total fund balances (deficit)
Total liabilities and fund balances
18,518
-
Muncipal
MSA
4,141
-
3,236
Building
Construction
12,928
100,849
General
Capital Project
Capital Project
Closed Debt
Assets
Fund
Fund
Fund
Fund
Cash and investments
$9,367,127
$4,493,220
$1,628,832
$4,726,677
Accrued interest receivable
163,467
-
-
18,710
Interfund receivable
-
-
-
-
Interfund loan receivable
-
-
-
650,000
Due from other governmental units -net
49,209
-
1,192,141
-
Accounts receivable - net
53,058
-
-
-
Prepaid items
33,905
-
_
-
Delinquent property taxes receivable
277,699
3,135
267,498
7,190
Due from county
67,219
-
-
-
Special assessments receivable:
Deferred
Delinquent
Special deferred
Property held for resale
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Salaries payable
Interfund payable
Contracts payable
Due to other governmental units
Deposits payable
Accrued interest payable
Interfund loan payable
Deferred revenue
Total liabilities
Fund balances (deficit):
Reserved for:
Prepaid items
Debt retirement
Tax increment purposes
Long -term interfund loan receivable
Assets for resale
Unreserved:
Designated reported in:
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Undesignated reported in:
Debt Service Fund
Capital Project Funds
Total fund balances (deficit)
Total liabilities and fund balances
18,518
-
779,088
107,119
4,141
-
3,236
2,611
-
12,928
100,849
-
-
-
267,498
-
$10,034,343
$4,509,283
$3,971,644
$5,493,597
$148,184
$55,202
$172,795
$ -
288,758
-
-
-
-
18,710
20,000
44,816
-
-
-
79,687
-
333,758
43,777
2,075,314
116,920
895,203
117,689
2,268,109
116,920
33,905
-
-
-
_
-
650,000
-
267,498
-
9,105,235
-
-
-
4,726,677
-
4,391,594
1,436,037
-
9,139,140 4,391,594
$10,034,343 $4,509,283
1,l VJ,JJJ
$3,971 $5,493,597
The accompanying notes are an integral part of these basic financial statements.
a
Statement 3
Pavement
Pavement
Construction
993,302
4,571,076
5,834,433
Management
Management
Revolving
Other
Totals
432,301
Debt Service
Capital Project
Capital Project
Governmental
Governmental Funds
Fund
Fund
Fund
Funds
2010
2009
$4,320,278
$63,870
$308,509
$17,962,929
$42,871,442
$41,068,738
$53,091,546
-
-
20,000
183,467
314,716
$6,075
$158,635
$549,201
-
-
15,403
-
17,861
-
2,225,000
2,875,000
2,500,000
-
-
-
20,461
1,261,811
1,568,052
6,947
-
-
470,412
523,470
493,380
-
-
-
1,273
35,178
36,888
26,655
-
-
42,500
357,179
386,374
-
-
-
-
67,219
314,905
1,914,499
362,104
396,446
993,302
4,571,076
5,834,433
36,067
-
19,776
2,058
67,889
432,301
12,045
10,554
-
-
136,376
126,356
-
-
116,325,184
Other long -term assets are not available to pay for current -period expenditures, and therefore,
267,498
-
$6,309,544
$436,528
$724,731
$21,737,935
$53,217,605
$53,091,546
payable in the current period and therefore are not reported in the funds_
(23,679,737)
(25,547,493)
$845
$7,465
$6,075
$158,635
$549,201
$549,164
-
-
-
17,861
306,619
266,280
-
-
-
-
15,403
8,646
6,947
54,261
108,564
348,063
-
-
3,165
47,981
37,617
101,812
181,499
60,321
-
-
-
-
55,673
-
950,000
650,000
575,000
2,175,000
2,000,000
1,989,266
372,658
416,222
1,039,260
6,387,175
8,016,504
1,990,111
1,338,769
1,079,244
1,949,994
9,756,039
11,349,025
-
-
-
1,273
35,178
36,888
4,319,433
-
330,960
4,650,393
4,404,116
-
-
1,1.91,170
1,191,170
627,264
-
-
2,225,000
2,875,000
2,620,000
-
267,498
-
-
9,105,235
9,096,547
6,366,077
6,366,077
6,058,259
-
4,726,677
4,087,143
9,673,461
15,501,092
15,489,817
(15,403)
(902,241) (354,513) -
(1,256,754)
(662,110)
4,319,433 (902,241) (354,513) 19,787,941
43,461,566
41,742,521
$6,309,544 $436,528 $724,731 $21,737,935
$53,217,605
$53,091,546
Fund balance reported above
$43,461,566
$41,742,521
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 fiords
116,546,893
116,325,184
Other long -term assets are not available to pay for current -period expenditures, and therefore,
are deferred in the funds
6,324,661
7,971,605
Long -term liabilities, including bonds payable, are not due and
payable in the current period and therefore are not reported in the funds_
(23,679,737)
(25,547,493)
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 assets
3,395,154
3,330,196
Net assets of governmental activities
$146,048,537
$143,822,013
The accompanying notes are an integral part of these basic financial statements.
0
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Expenditures:
Municipal
MSA
Current:
Building
Construction
General government
General
Capital Project
Capital Project
Closed
Revenues:
Fund
Fund
Fund
Debt Fund
General property taxes
$10,195,797
$2,528
$ -
$5,798
Franchise taxes
-
-
-
-
Aggregate taxes
-
-
-
-
Tax increment collections
-
-
-
Special assessments
5,156
-
184,131
44,383
Licenses and permits
753,468
-
-
-
Direct charges to developers
-
-
-
-
Intergovernmental
675,033
-
162,844
-
Charges for services
1,158,858
-
-
-
Fines and forfeits
201,559
-
-
-
Investment earnings
65,279
39,535
12,943
38,248
Interest on interfund loan
-
-
-
55,500
Connection charges
-
-
-
-
Park dedication fees
-
-
-
3,065
Donations
23,446
-
-
-
Miscellaneous
22,885
147,579
-
-
Total revenues
13,101,481
189,642
359,918
143,929
Expenditures:
Current:
General government
1,813,159
144,520
-
3,065
Community development
1,132,127
-
-
-
Public safety
5,461,747
-
-
Public works
2,084,605
-
14,007
-
Culture and recreation
1,705,394
-
-
-
Capital outlay:
General government
40,693
18,710
-
-
Community development
-
-
_
Public safety
102,017
-
-
Public works
14,663
-
433,896
-
Culture and recreation
51,526
-
-
Debt service:
Principal retirement
-
Capital lease payment
2,792
-
-
-
Interest and fiscal charges
208
-
-
-
Total expenditures
12,408,931
163,230
447,903
3,065
Revenues over (under) expenditures
692,550
26,412
(87,985)
140,864
Other financing sources (uses):
Transfers in
3,820
44,430
34,477
103,670
Transfers out
(688,815)
-
-
-
Bonds issued
-
-
-
-
Refunding bonds issued
-
-
-
-
Premium on debt issued
-
-
-
-
Discount on debt issued
-
-
-
-
Principal retirement - refunding
-
-
-
-
Proceeds from the sale of capital assets
-
-
-
-
Total other financing sources (uses)
(684,995)
44,430
34,477
103,670
Net increase (decrease) in fund balance
7,555
70,842
(53,508)
244,534
Fund balance - January 1
9,131,585
4,320,752
1,757,043
5,132,143
Fund balance - December 31
$9,139,140
$4,391,594
$1,703,535
$5,376,677
The accompanying notes are an integral part
of these basic financial
statements.
- 40 -
Statement 4
Pavement
Pavement
Construction
505,000
1,625,000
3,755,000
Management
Management
Revolving
Other
Totals
158,900
Debt Service
Capital Project
Capital Project
Governmental
Governmental Funds
Fund
Fund
Fund
Funds
2010
2009
$1,008,971
$ -
$ -
$243,130
$11,456,224
$11,745,148
2,127,543
517,391
517,391
399,568
886,726
1,233,938
2,942,924
30,554
30,554
24,234
_
_
-
1,253,414
1,253,414
1,123,774
453,227
231,457
1,069,628
911,972
2,899,954
4,372,581
-
_
-
-
753,468
683,204
_
-
50,047
-
50,047
24,786
_
-
-
328,908
1,166,785
1,226,818
_
-
(590,000)
1,509,570
2,668,428
2,630,298
71,506
_
_
-
201,559
192,169
32,669
-
10,282
151,717
350,673
508,246
_
_
_
74,500
130,000
458,001
17,536,654
41,742,521
-
439,238
439,238
201,463
$19,787,941
$43,461,566
-
145,640
145,640
64,584
notes are an integral part of these basic financial statements.
-
378,692
402,138
419,794
_
_
-
37,207
207,671
254,244
1,494,867
231,457
1,129,957
6,021,933
22,673,184
24,328,912
10,269
_
-
100,702
2,071,715
1,759,695
_
_
1,132,127
1,102,740
_
_
-
31,560
5,493,307
5,295,003
_
75,761
51,413
1,410,882
3,636,668
3,476,794
_
-
-
625,515
2,330,909
2,023,085
_
_
-
17,874
77,277
67,552
_
_
-
23,840
23,840
-
_
-
28,064
130,081
284,854
_
1,172,469
480,680
566,248
2,667,956
2,546,563
_
_
-
432,663
484,189
91,040
1,120,000
-
-
505,000
1,625,000
3,755,000
_
_
-
236,397
239,189
158,900
449,281
-
85,500
566,156
1,101,145
1,640,143
1,579,550
1,248,230
617,593
4,544,901
21,013,403
22,201,369
(84,683)
(1,016,773)
512,364
1,477,032
1,659,781
2,127,543
_
132,427
28,388
886,726
1,233,938
2,942,924
_
_
(373,388)
(183,977)
(1,246,180)
(2,942,924)
-
3,650,000
_
-
-
625,000
_
_
-
22,705
-
_
_
-
(2,906)
_
_
-
(590,000)
_
_
-
71,506
71,506
49,694
0
132,427
(345,000)
774,255
59,264
3,754,493
(84,683)
(884,346)
167,364
2,251,287
1,719,045
5,882,036
4,404,116
(17,895)
(521,877)
17,536,654
41,742,521
35,860,485
$4,319,433
($902,241)
($354,513)
$19,787,941
$43,461,566
$41,742,521
The accompanying
notes are an integral part of these basic financial statements.
- 41 -
CITY OF COTTAGE GROVE, MINNESOTA
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, 2010
With Comparative Data for the Year Ended December 31, 2009
Statement 5
2010 2009
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) $1,719,045 $5,882,036
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. (78,678) (499,125)
The effect of various miscellaneous transactions involving capital assets is to decrease net assets
(i.e. sales, and trade-ins). (3,755) (13,120)
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. 298,830 34,149
Revenues in the statement of activities that do not provide current financial resources (1,646,944) (2,035,846)
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
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. 1,850,016 266,308
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. 64,958 116,887
Transfer out of governmental capital assets contributed to Enterprise Funds. (20,366) (1,564,166)
Transfer in of governmental capital assets contributed by Enterprise Funds. 25,678 -
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. 17,740 6,544
Change in net assets of governmental activities (page 37) $2,226,524 $2,193,667
The accompanying notes are an integral part of these basic financial statements.
42
CITY OF COTTAGE GROVE, MINNESOTA
7,403
26,339
10,789
50,377
7,084
101,992
STATEMENT OF NET ASSETS
Salaries payable
12,557
1,024
11,368
15,591
1,715
Statement 6
PROPRIETARY FUNDS
Contracts payable
29,131
-
-
23,828
42,192
95,151
December 31, 2010
Due to other governmental units
959
559
5,101
17,427
8,375
32,421
67
Deposits payable
Business -Type Activities - Enterprise Funds
-
Governmental
191,272
-
202,472
Accrued interest payable
112,905
Total
Activities -
22,325
Golf Course
Street Light
Cottage Grove
Water
Sewer
Enterprise
Internal
25,299
Fund
Fund
EMS Fund
Operating
Operating
Funds
Service Funds
Assets:
-
-
-
Bonds payable - current portion
190,000
-
Current assets:
-
360,000
Total current liabilities
388,827
34,292
45,751
Cash and investments
$52,631
$2,829,458
$365,667
$5,478,137
$5,070,514
$13,796,407
$2,555,022
Due from other governmental units -net
-
-
296
-
-
296
4,754
Accounts receivable:
2,721
15,812
18,263
Other postemployment benefits
3,061
266
2,853
Customers
608
86,060
306,541
246,106
357,381
996,088
-
Certified to County
-
-
-
116,499
120,089
236,588
-
Other
155
-
4,874
17,428
-
22,457
7,154
Prepaid items
11,112
360
3,144
126,328
140,944
104,544
Inventories - at cost
20,144
57,222
Total noncurrent liabilities
-
77,366
65,062
Total current assets
84,042
2,973,100
677,378
5,861,314
5,674,312
15,270,146
2,731,782
Noncurrent assets:
73,282
4,133,476
167,902
Net assets:
Deferred charges
1,760
-
-
14,177
-
15,937
357,717
Capital assets:
19,770,117
53,870,041
1,019,835
Restricted:
Land and land improvements
1,387,290
364,803
310,685
1,752,093
424,665
Buildings and improvements
-
-
-
3,960,580
-
3,960,580
928,870
Machinery and equipment
850,403
55,725
671,782
1,015,666
323,673
2,917,249
150,628
Other improvements
2,666,498
5,254,985
-
-
-
7,921,483
-
Water and sewer lines
-
-
$3,583,715
34,116,749
24,115,592
58,232,341
of net assets are
Construction in progress
41,331
-
119,333
42,192
202,856
-
Total capital assets
4,945,522
5,310,710
671,782
39,577,131
24,481,457
74,986,602
1,504,163
Less: Accumulated depreciation
(2,311,524)
(1,783,639)
(314,065)
(10,181,815)
(4,711,340)
(19,302,383)
(484,328)
Net capital assets
2,633,998
3,527,071
357,717
29,395,316
19,770,117
55,684,219
1,019,835
Total noncurrent assets
2,635,758
3,527,071
357,717
29,409,493
19,770,117
55,700,156
1,019,835
Total assets
2,719,800
6,500,171
1,035,095
35,270,807
25,444,429
70,970,302
3,751,617
Liabilities:
Current liabilities
Accounts payable
7,403
26,339
10,789
50,377
7,084
101,992
126,917
Salaries payable
12,557
1,024
11,368
15,591
1,715
42,255
8,384
Contracts payable
29,131
-
-
23,828
42,192
95,151
-
Due to other governmental units
959
559
5,101
17,427
8,375
32,421
67
Deposits payable
11,200
-
-
191,272
-
202,472
Accrued interest payable
112,905
-
-
22,325
-
135,230
-
Compensated absences payable
24,672
6,370
18,493
25,299
10,587
85,421
13,160
Capital lease payable
-
-
-
-
-
-
Bonds payable - current portion
190,000
-
170,000
-
360,000
Total current liabilities
388,827
34,292
45,751
516,119
69,953
1,054,942
148,528
Noncurrent liabilities:
Compensated absences payable
5,231
-
4,754
3,106
2,721
15,812
18,263
Other postemployment benefits
3,061
266
2,853
1,756
608
8,544
1,111
Interfund loan payable
700,000
-
-
-
-
700,000
-
Loan payable to component unit
900,000
-
900,000
-
Bonds payable (net of unamortized
premiums and discounts)
193,628
-
-
1,260,550
-
1,454,178
Total noncurrent liabilities
1,801,920
266
7,607
1,265,412
3,329
3,078,534
19,374
Total liabilities
2,190,747
34,558
53,358
1,781,531
73,282
4,133,476
167,902
Net assets:
Invested in capital assets, net of related
debt 2,250,370
3,527,071
357,717
27,964,766
19,770,117
53,870,041
1,019,835
Restricted:
Debt service
310,685
-
-
-
-
310,685
-
Capital improvements
15,000
-
-
-
-
15,000
-
Unrestricted
(2,047,002)
2,938,542
624,020
5,524,510
5,601,030
12,641,100
2,563,880
Total net assets
$529,053
$6,465,613
$981,737
$33,489,276
$25,371,147
66,836,826
$3,583,715
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.
188,561
$67,025,387
The accompanying notes are an integral part of these basic financial statements.
- 43 -
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For The Year Ended December 31, 2010
Operating revenues:
Charges for services - user fees
Water meter/ street light material sales
Insurance refwids and reimbursements
Total operating revenues
Operating expenses:
Operating and maintenance:
Personal services
Commodities
Commodities - items for resale
Contractual services
Disposal:
Contractual services - MCES
Administrative and general:
Personal services
Commodities
Contractual services
Other charges- administrative charge
Depreciation
Total operating expenses
Operating income (loss)
Business -Type Activities - Enterprise Funds
Golf Course
Fund
Street Light Cottage Grove
Fund EMS Fund
$1,508,314 $480,499
$1,024,553
1,508,314 480,499 1,024,553
511,345 66,213 724,406
120,445 44,744 81,288
227,072 - -
143,056 305,472 121,742
170,195 -
5,998 -
107,214 -
49,200 42,500
164,285 118,519
1,498,810 577,448
9,504 (96,949)
The accompanying notes are an integral part of these basic financial statements.
52,500
52,389
1,032,325
(7,772)
— 44
Statement 7
Page 1 of 2
Governmental
Total Activities -
Water Sewer Enterprise Internal
Operating Operating Funds Service Funds
$1,733,715
19,547
1,753,262
$2,199,684 $6,946,765 $2,261,101
19,547 -
- - 70,232
2,199,684 6,966,312 2,331,333
401,028
74,640
1,777, 632
312,145
97,245
10,273
353,995
450,554
4,775
-
23 1,847
-
448,462
58,988
1,077,720
67,149
-
1,463,765
1,463,765
-
38,291
30,147
238,633
1,142,682
78
80
6,156
-
90,440
90,272
287,926
244,299
152,000
170,000
466,200
-
756,776
424,014
1,515,983
32,549
1,989,095
2,322,179
7,419,857
2,249,378
(235,833)
(122,495)
(453,545)
81,955
The accompanying notes are an integral part of these basic financial statements.
— 45 —
CITE' OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS (CONTINUED)
PROPRIETARY FUNDS
For The Year Ended December 31, 2010
Nonoperating revenues (expenses):
Federal Grant
Investment earnings
Interest on interfund loan
Rent
Asset contribution to governmental funds
Miscellaneous
Debt service:
Interest
Paying agent fees
Bond issuance costs
Total nonoperating revenues (expenses)
Income (loss) before
contributions and transfers
Capital contributions
Transfer from Special Revenue Fund
Transfer from Enterprise Fund
Transfer from Internal Service Fund
Transfer to General Fund
Transfer to Enterprise Funds
Total transfers
Change in net assets
Business -Type Activities - Enterprise Funds
Golf Course
Street Light
Cottage Grove
Fund
Fund
EMS Fund
$ -
$ -
$32,107
-
25,857
4,221
-
-
(4,851)
8,034
13,663
12,293
66,750
-
-
(605)
-
-
(3,311)
-
-
70,868
39,520
43,770
80,372
(57,429)
35,998
18,021
-
2,345
15,000
-
-
-
-
(2,758)
-
(9,000)
-
15,000
(9,000)
(2,758)
113,393
(66,429)
35,585
Net assets - January 1 415,660 6,532,042 946,152
Net assets - December 31 $529,053 $6,465,613 $981,737
Adjustment to reflect the consolidation of internal service fund activities related to enterprise fiends
Change in net assets of business -type activities (page 37)
The accompanying notes are an integral part of these basic financial statements.
Statement 7
Page 2 of 2
Governmental
Total Activities -
Water Sewer Enterprise Internal
Operating Operating Funds Service Funds
$ -
$ -
$32,107
$ -
45,050
44,644
1 19,772
22,048
358,308
-
358,308
-
(20,827)
-
(25,678)
-
49,506
2,329
85,825
7,474
(56,532)
-
10,218
-
-
-
(605)
-
(1,576)
-
(4,887)
-
373,929
46,973
575,060
29,522
138,096
(75,522)
121,515
111,477
100,647
64,619
185,632
-
-
-
15,000
-
38,200
-
38,200
-
31,000
-
31,000
-
-
-
(2,758)
-
-
(29,200)
(38,200)
(31,000)
69,200
(29,200)
43,242
(31,000)
307,943
(40,103)
350,389
80,477
33,181,333
25,411,250
3,503,238
$33,489,276
$25
$3,583,715
15,519
$ 365,908
The accompanying notes are an integral part of these basic financial statements.
47
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2010
Cash flows from operating activities:
Receipts from customers and users
Receipts from interfund services provided
Receipts from insurance refunds and reimbursements
Payment to suppliers
Payment to employees
Miscellaneous revenue
Net cash flows from operating activities
Cash flows from noncapital financing activities:
Proceeds of interfund loan
Transfers in
Transfers out
Net cash flows from
noncapital financing activities
Cash flows from capital and related
financing activities:
Acquisition of capital assets
Rent
Interest paid on debt
Paying agent fees
Principal paid on debt
Net cash flows from capital
and related financing activities
Cash flows from investing activities:
Investment earnings
Interest on interfund loan
Payment received on interfund loan
Net cash flows from investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents - January I
Cash and cash equivalents - December 31
Business -Type Activities - Enterprise Funds
Golf Course
Street Light
Cottage Grove
Fund
Fund
EMS Fund
$1,513,854
$504,511
$1,080,210
(638,775)
(403,524)
(255,666)
(684,981)
(65,958)
(716,677)
8,034
13,663
12,293
198,132
48,692
120,160
200,000
15,000
(9,000) (2,758)
215,000 (9,000) (2,758)
(97,951) (81,840) (139,087)
(46,034) - -
(605) - -
(374,085) - -
(518,675) (81,840) (139,087)
0
(105,543)
25,857 4,221
25,857 4,221
(16,291) (17,464)
158,174 2,845,749 383,131
$52,631 $2,829,458 $365,667
The accompanying notes are an integral part of these basic financial statements.
48
Statement 8
Page 1 of 2
(179,367)
(42,193) (540,438) (5,288)
358,308
Governmental
(68,180)
- (114,214) -
Total
Activities -
Water
Sewer
Enterprise
Internal
Operating
Operating
Funds
Service Funds
$1,932,349
$2,138,337
$7,169,261
$ -
-
-
-
2,261,101
-
-
-
70,232
(796,824)
(1,757,848)
(3,852,637)
(792,538)
(440,657)
(106,713)
(2,014,986)
(1,473,831)
49,506
2,329
85,825
7,474
744,374
276, 105
1,387,463
72,438
-
-
200,000
-
69,200
-
84,200
-
-
(29,200)
(40,958)
(31,000)
69,200
(29,200)
243,242
(31,000)
(179,367)
(42,193) (540,438) (5,288)
358,308
- 358,308 -
(68,180)
- (114,214) -
-
- (605) -
(175,000)
- (549,085) -
(64,239) (42,193)
45,050
45,050
846,034 (5,288)
44,644 119,772 22,048
44,644 119,772 22,048
794,385 249,356 904,443 58,198
4,683,752 4,821,158 12,891,964 2,496,824
$5,478,137 $5,070,514 $13,796,407 $2,555,022
The accompanying notes are an integral part of these basic financial statements.
49
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF CASH FLOWS (CONTINUED)
PROPRIETARY FUNDS
For The Year Ended December 31, 2010
Reconciliation of operating income /(loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation
Miscellaneous revenue
Changes in assets and liabilities:
Decrease (increase) in receivables
Decrease (increase) in prepaid items
Decrease (increase) in inventory
Decrease in payables
Total adjustments
Business -Type Activities - Enterprise Funds
Golf Course
Fund
Street Light Cottage Grove
Fund EMS Fund
Net cash flows from operating activities
Noncash investing, capital and financing activities:
Capital asset contributions from government
Capital asset contributions from developers
Capital asset contribution to governmental funds
$9,504
($96,949)
($7,772)
164,285
118,519
52,389
8,034
13,663
12,293
5,090
24,012
55,657
(7,302)
(360)
-
80
-
-
18,441
(10,193)
7,593
188,628
145,641
127,932
$198,132
$48,692
$120,160
$18,021
$ -
$2,345
(4,851)
The accompanying notes are an integral part of these basic financial statements.
50
Statement 8
Page 2 of 2
Water Sewer
Operating Operating
Total
Enterprise
Funds
Governmental
Activities -
Internal
Service Funds
($235,833)
($122,495)
($453,545)
$81,955
756,776
424,014
1,515,983
32,549
49,506
2,329
85,825
7,474
(4,185)
(61,347)
19,227
(5,511)
(1,440)
(4,348)
(13,450)
1,629
-
-
80
(11,570)
179,550
37,952
233,343
(34,088)
980,207
398,600
1,841,008
(9,517)
$744,374
$276,105
$1,387,463
$72,438
$ -
$ -
$20,366
$ -
100,647
64,619
165,266
-
(20,827)
-
(25,678)
-
The accompanying notes are an integral part of these basic financial statements.
— 51 —
- 52 -
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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
as general 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.
53
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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 eared 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.
The Municipal Building Capital Project Fund accounts for the accumulation of resources and construction or
remodeling costs of municipal buildings and facilities.
The MSA Construction Capital Project Fund accounts for projects related to Municipal State Aids.
The Closed Debt Fund accounts for the accumulation of residual resources from debt funds that have been
closed as the associated debt has been satisfied.
The Pavement 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.
The Pavement Management Capital Project Fund accounts for pavement management construction projects.
The Construction Revolving Capital Project Fund accounts for new development construction projects that are
financed by developers.
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.
— 54 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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 non - operating 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 offs 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 non -
operating 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.
1' a
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.
55
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
E. LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
L 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.
— 56 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
The following is a listing of expenditure categories that exceed budget appropriations for non -major funds:
Nonmajor Funds:
Equipment Replacement Fund:
Public works:
Contractual services
Capital outlay
Recycling:
Public works:
Commodities
Contractual services
Storm Water Maintenance Fund:
Public works:
Personal services
Capital outlay
Principal retirement
Interest and fiscal charges
Street Sealcoating Fund:
Public works:
Commodities
Forfeiture /Seizure fund:
Public safety:
Commodities
Ice Arena Fund:
Culture and recreation:
Personal services
Commodities
Contractual services
Capital outlay
Public Safety Grants Fund:
Public safety:
Personal services
Celebration Fund:
General government:
Contractual services
Future Economic Development:
General government:
Commodities
Contractual services
Final Budget Actual Over Budget
$-
$90
$90
356,900
369,648
12,748
-
280
280
13,150
14,145
995
202,400
207,141
4,741
14,000
30,737
16,737
-
1,397
1,397
-
103
103
19,250
21,974
2,724
500
2,160
1,660
268,500
291,618
23,118
35,600
50,348
14,748
236,800
266,341
29,541
107,000
273,604
166,604
15,900
16,291
391
-
1,872
1,872
-
13,198
13,198
30,000
46,775
16,775
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.
- 57 -
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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.
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, 2010 are planned to be eliminated in 2011. 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.
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
58
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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
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, 2010 were $277,000.
59
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
M. PROPERTIES HELD FOR RESALE
Property is acquired by the City for redevelopment purposes and subsequent resale. Properties held for resale is
reported as an asset at the lower of cost or estimated fair value. Fair value estimates have been based on estimated
realizable sales proceeds net of selling expenses.
N. 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.
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, 2010, 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
Streets
50
Storm sewers
50
Sidewalks
50
Trails
20
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.
I III 1 1 1' IIIU
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.
60 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
P. 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.
Q. 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.
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.
R. 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.
S. 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.
T. 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.
U. 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.
61
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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 $(23,679,737)
difference are as follows:
Bonds payable
Capital leases payable
Accrued interest payable
Compensated absences payable
Other post employment benefits
Unamortized bond issuance costs
Unamortized premium on bonds
Unamortized discount on bonds
Net adjustment to reduce fund balance - total
governmental funds to arrive at net assets -
governmental activities
(16,675,000)
(6,110,000)
(330,502)
(674,674)
(34,653)
132,741
53,900
(41,549)
$ (23,679,737)
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 $(78,678) difference are as follows:
Capital outlay
Constiuction/acquisition costs
Depreciation expense
Net adjustment to increase net changes in fund
balances - total governmental funds to arrive at
changes in net assets of governmental activities
$ 873,085
2,510,258
(3,462,021)
(78,678)
62
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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 $(1,646,944)
difference are as follows:
General property taxes deferred revenue:
At December 31, 2009
At December 31, 2010
Special assesments deferred revenue:
At December 31, 2009
At December 31, 2010
Grant deferred revenue:
At December 31, 2009
At December 31, 2010
Net adjustments to increase net changes in fund balances -
total governmental funds to arrive at changes in net
assets of governmental activities
$ (386,374)
357,179
(6,393,090)
4,775,341
(1,192,141)
1,192,141
$ (1,646,944)
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 govenirnental funds." Neither transaction, however, has any effect on net assets.
The details of this $1,850,016 difference are as follows:
Principal repayments:
General obligation debt $ 1,625,000
Capital lease 239,189
Amortization of deferred discounts,
premiums, and issuance costs (14,173)
Net adjustments to increase net changes in
fund balances - total governmental funds
to arrive at changes in net assets of
governmental activities $
1,850,016
— 63 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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 $17,740 difference are as follows:
Compensated absences:
At December 31, 2009
At December 31, 2010
Accrued interest:
At December 31, 2009
At December 31, 2010
Other post employment benefits
At December 31, 2009
At December 31, 2010
Net adjustment to increase net changes in
fund balances - total governmental funds to
arrive at changes in net assets of
governmental activities
Note 3 DEPOSITS AND INVESTMENTS
$ 643,557
(674,674)
389,710
(330,502)
24,302
(34,653)
$ 17,740
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."
Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank, failure, the City will
not be able to recover its deposits. 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, 2010, all of the deposits were insured or collateralized by securities held by
the City or its agent in the City's name.
In accordance with Minnesota Statutes, the City maintains deposits at financial institutions which are authorized by
the City Council. Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral.
The market value of collateral pledged must equal 11.0% 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.
— 64 —
CITE' OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
B. INVESTMENTS
Minnesota Statutes and the City's investment policy authorize the City to invest in the following:
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) General Obligations of the State of Minnesota or any of its municipalities as follow:
1) general obligation of any state or local government with taxing powers which is rated "A" or
better by a national bond rating service;
2) 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) general obligation of the Minnesota Housing Finance Agency rated "A" or better by a national
bond rating agency.
c) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
d) Commercial paper of the highest quality (A1, P1), and maturing in 270 days or less.
e) Repurchase agreements from national or state 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.
f) Certificates of Deposit collateralized by FDIC or FSLIC insurance. Deposits exceeding $250,000
insurance shall be covered by a surety bond or collateralized with U.S. Treasury or agency securities
computed at market value which shall be at least 10% more than the amount of each deposit in excess of
the insured portions. All collateral shall be assigned to the City from the depository.
g) Shares of mutual funds holdings pursuant to M.S. 118A.04. The City participates in the Minnesota
Municipal Money Market Fund (4M Fund) whereby, the fair market value of the position in the pool is the
same as the value of the pool shares owned.
Interest rate risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The City's formal investment policy limits investment maturities as a means of managing its exposure to
fair value losses arising from increasing interest rates. The policy also states that no more than 25% of total
investments should extend beyond five years and in no circumstance should any extend beyond ten years.
Investment type
U.S. Agencies
Federal Home Loan Bank
Fannie Mae - FNMA
Fannie Mae - FHLMC
Federal Farm Credit Bank
Municipal Obligations
Negotiable CD's
Total Investments
Total Fair
Market Value
$12,198,736
10,458,815
5,495,405
999,962
1,583,285
19,320,213
$50,056,416
Investment maturities in Years
Less than 1 1 –5 More than 5
Credit Risk
Money Markets
Deposits
Petty Cash and Change
Total Cash and Investments
NR indicates "not rated"
N/A indicates "not applicable
9,406,542
565,260
11,174
S 60,039,392
$1,006,860
145,400
10,768,487
$1 1, 9 20,747
$9,666,911
$1,524,965
5,509,330
4,949,485
4,490,3 85
1,005,020
999,962
-
478,865
959,020
8,551,726
-
$29,697,179
$8,438,490
Rating Agency
AAA/Aaa
S &P/Moody's
AAA/Aaa
S &P /Moody's
AAA/Aaa
S &P/Moody's
AAA/Aaa
S &P/Moody's
AA/Aa
S &P/Moody's
NR
N/A
— 65
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Custodial Credit Risk — For an investment, custodial credit risk is the risk that, in the event of failure of the
depository financial institution, 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, 2010, the investment balances were fully covered by
insurance for each brokerage firm.
Credit Risk — Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. As indicated previously, Minnesota statute requires Commercial paper to be of the highest quality (Al,
P1) and municipal general obligations need an "A" rating or better.
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:
Type
Federal Home Loan Bank - FHLB
Fannie Mae - FNMA
Freddie Mac - FHLMC
Amount Percent
$ 12,198,736 24%
10,458,815 21%
5,495,405 11%
— 66 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Note 4 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2010 are as follows:
$ 22,659 $ - $
Special
Delinquent
Certified
12,928 -
27,714
Assessment
Property
to
-
2,075,314
Receivable
Taxes
County
Total
Primary government:
1,962,611 -
-
1,989,266
-
Major funds:
-
372,658
-
416,222 -
General Fund
$ 17,971
$ 123,300
$ -
$ 141,271
Municipal Building Capital Project Fund
12,928
1,400
-
14,328
MSA Construction Capital Project Fund
860,193
-
-
860,193
Closed Debt Fund
100,603
3,200
-
103,803
Pavement Management Debt Service Fund
1,879,390
11,800
-
1,891,190
Pavement Management Capital Project Fund
372,658
-
-
372,658
Construction Revolving Capital Project Fund
319,169
-
-
319,169
Nonmajor funds
908,872
4,800
-
913,672
Major Business -Type funds:
Water Operating fund
-
-
50,624
50,624
Sewer Operating fund
-
-
52,787
52,787
Total primary government
4,471,784
144,500
103,411
4,719,695
Component unit:
Economic Development Authority
-
1,400
-
1,400
Total reporting entity
$ 4,471,784
$ 145,900
$ 103,411
$ 4,721,095
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:
Unavailable Unearned
Property Special Miscellaneous
Taxes Assessments MSA funding Fees Total
Primary government:
Major funds:
General Fund
Muncipal Building Capital Project Fund
MSA Construction Capital Project Fund
Closed Debt Fund
Pavement Management Debt Service Fund
Pavement Management Capital Project Fund
Construction Revolving Capital Project Fund
Nonmajor funds
Total primary government
Component unit
Economic Development Authority
Total reporting entity
$ 277,699
$ 22,659 $ - $
33,400
$ 333,758
3,135
12,928 -
27,714
43,777
-
883,173 1,192,141
-
2,075,314
7,190
109,730 -
-
116,920
26,655
1,962,611 -
-
1,989,266
-
372,658 -
-
372,658
-
416,222 -
-
416,222
42,500
995,360 -
1,400
1,039,260
357,179
4,775,341 1,192,141
62,514
6,387,175
3,068
- -
-
3,068
$ 360,247
$ 4,775,341 $ 1,192,141 $
62,514
$ 6,390,243
67
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Note 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2010 was as follows:
$20,366 (net book value) of capital assets were contributed to business -type activities in 2010. $25,678 (net book value) of
capital assets were received from business -type activities in 2010.
— 68 —
Beginning
Ending
Balance
Increases
Decreases
Transfers
Balance
Primary Government
Governmental activities:
Capital assets, not being depreciated:
Land
$ 16,399,447
$
$ -
$ -
$ 16,399,447
Construction in progress
905,348
2,510,258
(2,057,527)
-
1,358,079
Total capital assets, not being depreciated
17,304,795
2,510,258
(2,057,527)
-
17,757,526
Capital assets, being depreciated:
Buildings and improvements
19,143,606
362,391
(108,427)
-
19,397,570
Equipment and furniture
1,213,561
60,060
(29,793)
-
1,243,828
Machinery and equipment
7,754,563
721,832
(386,272)
(3,272)
8,086,851
Other improvements
3,563,167
80,927
(5,669)
-
3,638,425
Infrastructure:
Streets
72,497,050
1,837,803
-
-
74,334,853
Storm sewers
24,162,443
191,775
-
-
24,354,218
Sidewalks /trails
4,268,137
-
-
-
4,268,137
Total capital assets being depreciated
132,602,527
3,254,788
(530,161)
(3,272)
135,323,882
Less accumulated depreciation for:
Buildings and improvements
9,374,165
598,679
(108,427)
-
9,864,417
Equipment and furniture
637,813
167,415
(23,292)
-
781,936
Machinery and equipment
4,074,904
555,586
(368,960)
(8,584)
4,252,946
Other improvements
2,152,948
129,330
(5,669)
-
2,276,609
Infrastructure:
Streets
11,850,365
1,468,319
-
-
13,318,684
Storm sewers
4,004,189
485,167
-
4,489,356
Sidewalks /trails
440,658
90,074
-
-
530,732
Total accumulated depreciation
32,535,042
3,494,570
(506,348)
(8,584)
35,514,680
Total capital assets, being depreciated, net
100,067,485
(239,782)
(23,813)
5,312
99,809,202
Governmental activities capital assets, net
$ 117,372,280
$ 2,270,476
$ (2,081,340)
$ 5,312
$ 117,566,728
$20,366 (net book value) of capital assets were contributed to business -type activities in 2010. $25,678 (net book value) of
capital assets were received from business -type activities in 2010.
— 68 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Primary Government
Business -type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Land improvements
Buildings and improvements
Machinery and equipment
Other improvements
Water and sewer lines
Total capital assets, being depreciated
Less accumulated depreciation for:
Land improvements
Buildings and structures
Machinery and equipment
Other improvements
Water and sewer lines
Total accumulated depreciation
Total capital assets being depreciated - net
Business -type activities capital assets - net
Beginning
Balance Increases Decreases
$ 1,712,290 $ - $
- 202,856
1,712,290 202,856
Ending
Transfers Balance
$ - $ 1,712,290
202,856
1,915,146
39,803
-
-
-
39,803
3,960,580
-
-
-
3,960,580
2,729,821
231,220
(47,064)
3,272
2,917,249
7,804,315
138,460
(21,292)
-
7,921,483
58,067,074
165,267
-
-
58,232,341
72,601,593
534,947
(68,356)
3,272
73,071,456
5,174
796
-
-
5,970
1,703,570
110,879
-
-
1,814,449
1,916,643
181,958
(47,062)
8,584
2,060,123
3,110,554
230,272
(21,292)
-
3,319,534
11,110,229
992,078
-
-
12,102,307
17,846,170
1,515,983
(68,354)
8,584
19,302,383
54,755,423
(981,036)
(2)
(5,312)
53,769,073
$ 56,467,713 $
(778,180)
$ (2)
$ (5,312)
$ 55,684,219
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government
$ 64,275
Community development
6,025
Public safety
448,486
Public works
2,324,356
Culture and recreation
651,428
Total depreciation expense governmental activities
$ 3,494,570
Business -type activities:
Golf course
$ 164,285
Street lights
118,519
Cottage Grove EMS
52,389
Water operating
756,776
Sewer operating
424,014
Total depreciation expense - business -type activities
$ 1,515,983
— 69 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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, 2010, the governmental long -term debt of the financial
reporting entity consisted of the following:
Final
Interest Issue Maturity Original Payable
Rate Date Date Issue 12/31/2010
Primary government:
GOVERNMENTAL ACTIVITIES
General Obligation Tax Increment Bonds:
GO Tax Increment Bonds of 2004A 3.0 -4.65% 7/1/2004 2/1/2024 $ 1,405,000 $ 1,170,000
GO Tax Increment Bonds of 2004B 4.5 -5.75% 7/1/2004 2/1/2021 1,775,000 1,660,000
Total General Obligation Tax Increment Bonds 3,180,000 2,830,000
Special Assessment Bonds with Government Commitment
GO Improvement Bonds of 2002B
3.0 -4.15%
GO Improvement Refunding Bonds of 2002C
2.5 -3.3%
GO Improvement Bonds of 2003B
2.0- 4.125%
GO Improvement Bonds of 2008A
3.5 -3.6%
GO Improvement Bonds of 2009A
2.5 -4.3%
GO Improvement Refunding Bonds of 2009C
2.0 -3.0%
Total Special Assessment Bonds
2/1/2019
Bond premium/discount (net)
2,960,000
Total Governmental Activities Bonds
2/1/2024
Capital lease payable - EDA component unit
Other postemployment benefits
Compensated absences payable
Total City indebtedness - governmental activities
10/2/2002
2/1/2011
4,185,000
2,930,000
10/2/2002
2/1/2012
3,625,000
1,140,000
3/1/2003
2/1/2011
4,065,000
2,935,000
6/11/2008
2/1/2019
3,370,000
2,960,000
4/16/2009
2/1/2024
3,650,000
3,295,000
4/16/2009
12/1/2015
625,000
585,000
Loan payable - EDA component unit
2.00%
19,520,000
13, 845,000
Other postemployment benefits
-
(12,351)
Compensated absences payable
22,700,000
16,662,649
Total City indebtedness - business type activities
6,500,000
6,110,000
-
35,764
-
706,097
29,200,000
23,514,510
BUSINESS TYPE ACTIVITIES
Revenue bonds:
GO Water /Sewer Revenue Bonds of 1997A
4.3 -5.1%
5/21/1997
2/1/2013
Golf Course Revenue Bonds of 1999F
5.0 -5.6%
12/1/1999
2/1/2012
GO Water Revenue Refunding Bonds of 2009B
2.5 -4%
4/16/2009
2/1/2020
Bond premium/discount (net)
400,000
-
8,544
Total Revenue Bonds
Loan payable - EDA component unit
2.00%
12/31/2004
12/31/2020
Loan payable - EDA component unit
2.00%
12/31/2007
12/31/2022
Other postemployment benefits
Compensated absences payable
Total City indebtedness - business type activities
Total City indebtedness - primary government
Component Unit: EDA:
Lease - Purchase Revenue Bonds of 2008E 4.0 -4.90% 6/11/2008
1,475,000
330,000
1,100,000
385,000
1,205,000
1,105,000
-
(5,822)
3,780,000
1,814,178
500,000
500,000
400,000
400,000
-
8,544
4,b2SU,VVU L,25L }, 7�J
$ 33,880,000 $ 26,338,465
4/1/2028 $ 6,500,000 $ 6,110,000
70 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Annual debt service requirements to maturity for general obligation bonds are as follows:
Tax Increment Bonds
Year Ending Governmen Activities
December 31 Principal
Interest Principal Interest
2011
$ 40,000
$ 143,083
$ 7,095,000
$ 368,329
2012
55,000
140,899
1,280,000
215,789
2013
135,000
136,287
695,000
184,152
2014
150,000
129,182
845,000
161,466
2015
170,000
121,114
675,000
137,529
2016
190,000
111,847
480,000
115,316
2017
210,000
101,310
495,000
98,253
2018
235,000
89,358
510,000
80,377
2019
260,000
75,805
525,000
61,245
2020
285,000
60,727
240,000
46,525
2021
280,000
45,221
245,000
36,825
2022
255,000
31,872
250,000
26,800
2023
275,000
19,810
255,000
16,320
2024
290,000
6,743
255,000
5,483
Total
$ 2,830,000
$ 1,213,258
$ 13,845,000
$ 1,554,409
Revenue Bonds
Revenue Bonds
Year Ending
Business -Type Activities
Component Unit
December 31
Principal
Interest
Principal
Interest
2011
$ 360,000
$ 66,625
$ 245,000
$ 264,992
2012
420,000
48,402
250,000
255,092
2013
230,000
33,691
260,000
244,892
2014
105,000
27,300
270,000
234,292
2015
105,000
24,150
280,000
223,292
2016
110,000
20,650
290,000
211,892
2017
115,000
16,712
300,000
199,942
2018
120,000
12,450
310,000
187,360
2019
125,000
7,700
320,000
174,288
2020
130,000
2,600
335,000
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
Total
$ 1,820,000
$ 260,280
$ 6,110,000
$ 2,814,700
It is not practicable to determine the specific year for payment of long -term accrued compensated absences.
Special Assessment Bonds
Governmental Activities
- 71 -
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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. The EDA elected to reduce the interest rate on
both loans to 2% retroactive to the dates of the initial loans. This adjustment was made effective with 2010
operations.
Annual debt service requirements to maturity for loans payable are as follows:
72
Primary Government
Business -type Activities
Loan Payable
Year Ending
EDA Component Unit
December 31
Principal
Interest
2013
$ 50,000
$ 18,000
2014
50,000
17,000
2015
50,000
16,000
2016
50,000
15,000
2017
50,000
14,000
2018
75,000
13,000
2019
150,000
11,500
2020
175,000
8,500
2021
185,000
5,000
2022
65,000
1,300
Total
$ 900,000
$ 119,300
72
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
C. CHANGES IN LONG -TERM LIABLITIES
Long -term liability activity for the year ended December 31, 2010, was as follows:
Component Unit:
Revenue bonds $ 6,345,000 $ - $ (235,000) $ 6,110,000 $ 245,000
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, 2010 is backed by the full faith and credit of the
City, including special assessment and revenue bond issues. Delinquent assessments receivable at December 31,
2010 totaled $67,889.
On November 3, 2010 City Council authorized calling the remaining outstanding balances of the GO Improvements
Bonds 2002B and 2003B in advance of their original maturities. The bonds were called and paid in full on February
1, 2011.
73
Beginning
Ending
Due Within
Balance
Additions
Reductions
Balance
One Year
Primary Government:
Governmental activities:
Bonds payable:
General obligation bonds
$ 2,925,000
$ -
$ (95,000)
$ 2,830,000
$ 40,000
Special assessment bonds
15,375,000
-
(1,530,000)
13,845,000
7,095,000
Bond premium/discount (net)
(12,409)
-
58
(12,351)
-
Total bonds payable
18,287,591
-
(1,624,942)
16,662,649
7,135,000
Capital lease payable -EDA component unit
6,349,189
-
(239,189)
6,110,000
245,000
Other postemployment benefits
25,076
10,688
-
35,764
-
Compensated absences payable
683,279
710,710
(687,892)
706,097
489,838
Total government activities
25,345,135
721,398
(2,552,023)
23,514,510
7,869,838
Business -type activities:
Bonds payable:
Revenue bonds
2,360,000
-
(540,000)
1,820,000
360,000
Bond premium/discount (net)
(7,876)
-
2,054
(5,822)
-
Total bonds payable
2,352,124
-
(537,946)
1,814,178
360,000
Loans payable
900,000
-
-
900,000
-
Capital lease payable
9,085
-
(9,085)
-
-
Other postemployment benefits
6,138
2,406
-
8,544
-
Compensated absences payable
107,255
123,950
(129,972)
101,233
85,421
Total business -type activities
3,374,602
126,356
(677,003)
2,823,955
445,421
Total primary government
$ 28,719,737
$ 847,754
$ (3,229,026)
$ 26,338,465
$ 8,315,259
Component Unit:
Revenue bonds $ 6,345,000 $ - $ (235,000) $ 6,110,000 $ 245,000
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, 2010 is backed by the full faith and credit of the
City, including special assessment and revenue bond issues. Delinquent assessments receivable at December 31,
2010 totaled $67,889.
On November 3, 2010 City Council authorized calling the remaining outstanding balances of the GO Improvements
Bonds 2002B and 2003B in advance of their original maturities. The bonds were called and paid in full on February
1, 2011.
73
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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.
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
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:
Asset:
Building and improvements
Less: accumulated depreciation
Governmental
Activities
$ 6,922,658
(564,570)
$ 6,358,088
The following is a schedule of future minimum lease payments under the capital lease:
Governmental
Activities
Year
Ice Arena Expansion
2011
$ 509,992
2012
505,092
2013
504,892
2014
504,292
2015
503,292
2016 -2020
2,489,179
2021 -2025
2,457,327
2026 -2028
1,450,634
Total minimum lease payments
Less amount
representing interest
Present value of minimum
lease payments
8,924,700
2,814,700
$ 6,110,000
— 74 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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 2009 and 2010. The City of Cottage Grove's legal debt margin for
2010 and 2009 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 General Employees
Retirement Fund (GERF) 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.
GERF 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 GERF 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.
75
December 31,
December 31,
2010
2009
Market Value (after fiscal disparities)
$2,924,191,800
$3,058,237,500
Debt Limit
87,725,754
91,747,125
Amount of debt applicable to debt limit:
Total bonded debt
$24,605,000
$27,005,000
Less: Special assessment bonds
(13,845,000)
(15,375,000)
Proprietary bonds
(1,820,000)
(2,360,000)
Tax increment bonds
(2,830,000)
(2,925,000)
Total debt applicable to debt limit
$6,110,000
$6,345,000
Legal debt margin
$ 81,615,754
$ 85,402,125
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 General Employees
Retirement Fund (GERF) 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.
GERF 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 GERF 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.
75
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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
information for GERF and PEPFF. That report may be obtained on the Internet at www.=era.org by writing to
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. GERF Basic Plan members and Coordinated Plan members were required to
contribute 9.10% and 6.00 %, respectively, of their annual covered salary in 2010. PEPFF members were required to
contribute 9.4% of their annual covered salary in 2010. The City of Cottage Grove is required to contribute the
following percentages of annual covered payroll: 11.78% for Basic Plan GERF members, 7.00% for Coordinated
Plan GERF members, and 14.1% for PEPFF members. The City's contributions to the Public Employees
Retirement Fund for the years ending December 31, 2010, 2009 and 2008 were $323,174, $315,436, and $293,906,
respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ending December
31, 2010, 2009 and 2008 were $474,280, $474,141, and $414,012 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 Describtion
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 2010 were:
Amount Percentage of Covered Payroll Required
Employ Employer Employees Employer Rates
PEDCP $1,478 $1,478 5.00% 5.00% 5.00%
a
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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
Association, 8641 80' Street South, Cottage Grove, MN 55016.
Funding Policy
Minnesota Statutes Chapter 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:
Annual pension cost
$115,330
Contributions made:
City
$3,841
State aid
$115,330
Actuarial valuation date
12/31/2009
Actuarial cost method
Entry age normal
Amortization method
Level dollar Closed
Remaining amortization period:
Normal cost
20 years
Prior service cost
10 years
Asset valuation method
Market
Actuarial assumptions:
Investment rate of return
5%
Projected salary increases
N/A
Inflation rate
N/A
Cost of living adjustments
None
Three -Year Trend Information
Percentage of APC Net Pension
Year Ending Annual Pension Cost contributed Obligation
12/31/2007 $160,369 100% $ -
12/31/2008 134,771 100% -
12/31/2009 115,330 100% -
— 77 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Schedule of Funding Progress
Actuarial
Actuarial
Actuarial
(Unfunded) /
Valuation
Value of
Accrued
Assets in Excess
Funding
Date
Assets
Liability (AAL)
of AAL (UAAL)
Ratio
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%
12/31/2009
1,572,743
1,455,674
117,069
108.04%
The amount received from the State of Minnesota in Fire Relief Aid, $115,330, 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
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.
The interfund loan receivable and payable balances at December 31, 2010 were:
Fund
Major Governmental Funds:
Closed Debt Fund
Pavement Management Capital Project Fund
Construction Revolving Capital Project Fund
Nonmajor Governmental Funds
Major Business -Type Funds:
Golf Course Enterprise Fund
Total
Receivable Payable
$ 650,000 $ -
- 950,000
- 650,000
2,225,000 575,000
- 700,000
$ 2,875,000 $ 2,875,000
— 78
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Interfund transfers:
Transfer out
Transfer in:
General Fund
Municipal Building Fund
MSA Construction Capital
Project Fund
Closed Debt Fund
Pavement Management Capital
Project Fund
Construction Revolving Capital
Project Fund
Nonmajor Govern. Funds
Golf Course Fund
Water Operating Fund
Total transfers
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by
another fund. All transfers in 2010 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:
Transfers In:
General
Fund
Transfers out:
Golf Course Fund
Street Light Fund
Cottage Grove EMS Fund
Water Operating Fund
Sewer Operating Fund
Total
$ 49,200
42,500
52,500
152,000
170,000
$ 466,200
- 79 -
Construction
Major Business Type Fund
Revolving
Nonmajor
Street
Cottage Grove
Sewer
Internal
General
Capital Project
Govern.
Light
EMS
Operating
Service
Fund
Fund
Funds
Fund
Fund
Fund
Fund
Total
$ -
$ -
$ 1,062
$ -
$ 2,758
$
$ -
$ 3,820
44,430
-
-
-
-
-
44,430
-
-
34,477
-
-
-
34,477
103,670
-
-
-
-
-
103,670
29,620
-
102,807
-
132,427
-
-
28,388
-
-
28,388
511,095
373,388
2,243
-
-
886,726
-
-
15,000
-
-
-
15,000
-
-
-
9,000
-
29,200
31,000
69,200
$ 688,815
$ 373,388
$ 183,977
$ 9,000
$ 2,758
$ 29,200
$ 31,000
$ 1,318,138
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by
another fund. All transfers in 2010 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:
Transfers In:
General
Fund
Transfers out:
Golf Course Fund
Street Light Fund
Cottage Grove EMS Fund
Water Operating Fund
Sewer Operating Fund
Total
$ 49,200
42,500
52,500
152,000
170,000
$ 466,200
- 79 -
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Note 10 TAX INCREMENT DISTRICTS
The City of Cottage Grove is the administering authority for the following Tax Increment Financing Districts:
Cottages of
Note 11 DEFICIT FUND BALANCES /NET ASSETS
The City has deficit fund balances /net assets at December 31, 2010 as follows:
Fund
Major Governmental Funds:
Pavement Management Capital Project Fund
Construction Revolving Capital Project Fund
Note 12 CONTINGENCIES
A. RISK MANAGEMENT
Amount The deficit fund balances will be resolved through
$ 902,241 Future bonding
354,513 Future special assessments and developer charges
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.
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
Oakwood
Up North Plastics
Cottage Grove
Industrial Park
Gateway North
Industrial Park
Industrial Park
Heights #1 -1
#1 -3
#1 -8
#1 -10
District #1 -12
#1 -13
#1 -14
Type of District
Housing
Redevelop
Housing
Econ. Develop.
Redevelop
Econ. Develop.
Econ. Develop.
Chapter
472A
472A
469.174
469.174
469.174
469.174
469.174
Established
1985
1985
1991
2000
2001
2005
2007
District Duration
25 years
25 years
25 years
9 years
25 years
9 years
9 years
Current tax capacity
$
23,496
$
170,584
$ 34,360
$ 359,050
$ 1,001,529
$ 177,062
$ 131,250
Original tax capacity
(76)
(62,250)
(1,268)
(14,929)
(238,966)
(23,310)
(5,226)
Captured tax capacity
$
23,420
$
108,334
$ 33,092
$ 344,121
$ 762,563
$ 153,752
$ 126,024
Tax capacity retained by City
$
23,420
$
108,334
$ 33,092
$ 344,121
$ 762,563
$ 153,752
$ 126,024
Tax capacity shared with other
jurisdictions
-
-
-
126,540
-
55,558
46,343
Total
$
23,420
$
108,334
$ 33,092
$ 217,581
$ 762,563
$ 98,194
$ 79,681
Debt issued
$
525,000
$
510,000
$ -
$ -
$ 3,000,000
$
$ -
Amount redeemed
(525,000)
(510,000)
(170,000)
Debt outstanding
$
-
$
-
$ -
$
$ 2,830,000
$
$
Note 11 DEFICIT FUND BALANCES /NET ASSETS
The City has deficit fund balances /net assets at December 31, 2010 as follows:
Fund
Major Governmental Funds:
Pavement Management Capital Project Fund
Construction Revolving Capital Project Fund
Note 12 CONTINGENCIES
A. RISK MANAGEMENT
Amount The deficit fund balances will be resolved through
$ 902,241 Future bonding
354,513 Future special assessments and developer charges
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.
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
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
to a $10,000 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
(amlual 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 $47,349 reported
in the Fund at December 31, 2010 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:
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, 2010.
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.
— 81 —
Begirming
Claims and
End
of Year
Changes in
Claim
of Year
Year
Liability
Estimates
Payments
Liability
2010
$ 67,176
$ 25,751
$ (45,578)
$ 47,349
2009
59,995
52,372
(45,191)
67,176
2008
60,302
133,250
(133,557)
59,995
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, 2010.
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.
— 81 —
CITE' OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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, 2010
and 2009. Future scheduled tax levies for all bonds outstanding at December 31, 2010 totaled $6,997,146.
— 82 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Note 14 DESIGNATIONS RESERVATIONS AND RESTRICTIONS
At December 31, 2010 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, 2010 are shown on the various balance sheets
as segregation of the fund equity. A summary of such designations is as follows:
December 31, 2010 December 31, 2009
Primary Government:
Major funds:
General Fund:
Reserved for prepaid items
Designated for cash flow reserves
Designated for compensated absences
Designated for potential MVHC reduction
Designated for contingencies
Designated for specific programs
Municipal Building Capital Project Fund
Designated for capital improvements
MSA Construction Capital Project Fund
Reserved for asset for resale
Designated for capital improvements
Closed Debt Fund:
Reserved for long -term interfund loan receivable
Designated for debt retirement
Pavement Management Debt Service Fund:
Reserved for debt retirement
Nonmajor funds:
Special Revenue Funds:
Reserved for prepaid items
Reserved for long -term interfund loan receivable
Reserved for sealcoating in new developments
Designated for ice arena
Designated for equipment replacement
Designated for public safety department
Designated for finance department
Designated for MIS department
Designated for recreation programs
Designated for development district #1
Designated for storm water maintenance
Designated for forfeiture and seizure
Designated for recycling program
Designated for charitable gambling
Designated for community events
Designated for sealcoating & resurfacing
Debt Service Funds:
Reserved for debt retirement
Reserved for tax increment purposes
33,905
5,172,550
706,097
975,256
1,304,750
946,582
4,391,594
267,498
1,436,037
650,000
4,726,677
4,319,433
1,273
1,275,000
532,067
2,724,260
141,061
101,226
10,442
15,000
2,149,980
309,566
44,354
82,235
3,052
251,834
330,960
861,241
35,038
5,106,650
623,345
927,760
1,278,945
1 ,159,847
4,320,752
1,757,043
1,045,000
4,087,143
4,404,116
1,850
1,075,000
642,952
2,607,924
134,800
119,100
10,442
15,000
1,962,200
185,779
53,631
85,406
5,335
7,661
228,029
627,264
83
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Designations, reservations, and restrictions continued:
Nonmaj or Funds continued:
Capital Projects Funds:
Reserved for tax increment purposes
$ 329,929
$ -
Reserved for long -term interfund loan receivable
950,000
500,000
Designated for pavement management
481,412
1,398,132
Designated for tree mitigation
198,614
214,108
Designated for capital improvements
8,993,435
7,799,782
Major Enterprise Funds:
Restricted for future debt service
310,685
254,195
Restricted for capital improvements
15,000
15,000
Total - Primary Government
45,043,005
42,689,229
Component Unit:
Reserved for long -term loan receivable
900,000
900,000
Reserved for long -term capital lease receivable
6,110,000
6,345,000
Reserved for tax increment purposes
593,339
586,896
Reserved for debt service reserve
547,787
542,866
Reserved for assets for resale
421,298
-
Designated for EDA loan program
-
256,432
Total Reporting Entity
$ 53,615,429
$ 51,320,423
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.
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, 2010 there were
approximately 116 active participants and 2 retired participants receiving benefits from the City's health plans.
1 •!
The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2010, the City contributed $6,704 to
the plan.
84
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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:
Annual required Contribution
$ 20,261
Interest on Net OPEB Obligation
1,249
Adjustment to Annual Required Contribution
(1,714)
Annual OPEB Cost (Expense)
19,796
Contributions Made
(6,702)
Increase in Net OPEB Obligation
13,094
Net OPEB Obligation- Beginning of Year
31,214
Net OPEB Obligation- End of Year
$ 44,308
The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB
obligation for 2010:
As of January 1, 2011, the most recent actuarial valuation date, the City's unfunded actuarial accrued
liability (UAAL) was $108,298. The annual payroll for active employees covered by the plan in the
actuarial valuation was $8,887,000 for a ratio of UAAL to covered payroll of 1.2 %.
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.
— 85 —
Percentage
Fiscal
Annual
of Annual
Net
Year
OPEB
OPEB Cost
OPEB
Ended
Cost
Contributed
Obligation
12/31/2010
19,796
33.9%
$ 44,308
12/31/2009
20,016
17.3%
31,214
12/31/2008
20,261
27.6%
14,660
As of January 1, 2011, the most recent actuarial valuation date, the City's unfunded actuarial accrued
liability (UAAL) was $108,298. The annual payroll for active employees covered by the plan in the
actuarial valuation was $8,887,000 for a ratio of UAAL to covered payroll of 1.2 %.
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.
— 85 —
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
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, 2010 was 27 years.
Note 16 OPERATING LEASES
The City leases land for the golf course under an operating lease. The lease expired on April 30, 2010 with the
option to extend the term for three additional terms of five years each. The lease was extended for an additional five
years. 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 2010,
$12 was paid under this lease arrangement.
The City leases six copiers under an operating lease. Total costs for these leases were $17,456 for the year ended
December 31, 2010. Future minimum annual lease payments at December 31, 2010 are as follows:
Golf
Year Ended Course
December 31 Land Copiers
2011 $ - $16,304
2012 - 8,742
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:
a
Independent
Cottage Grove
Year Ended
School District
Athletic
December 31
833
Association
2011
$ 120,000
$ 400,000
2012
112,125
400,000
2013
104,250
400,000
2014
104,250
400,000
2015
104,250
400,000
2016 -2020
521,250
2,000,000
2021 -2025
521,250
2,000,000
2026 -2029
417,000
1,519,000
a
CITY OF COTTAGE GROVE, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Note 17 COMMITTED CONTRACTS
At December 31, 2010, the City had commitments of $192,223 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, 2010, a series of Industrial Revenue Bonds were outstanding.
Bond
Environmental Control Revenue Bonds -3M
Industrial Revenue Bonds - Allina Health Systems
Industrial Revenue Bonds- Advance Corporation
Commercial Development Revenue Note -HSI
Commercial Development Revenue Note -ESR, Inc.
Commercial Development Revenue Note -ESR, Inc.
Subordinate Senior Housing Revenue Bonds -PHS
Subordinate Senior Housing Revenue Bonds -PHS
Variable Rate Revenue Bonds- Allina Health System
*Per original conduit debt bond schedule
Note 1.9 PROPERTIES HELD FOR RESALE
The City purchased land in 2010 to be resold to a future industrial occupant in the City's industrial park. The
occupant is not known at this time.
The Economic Development Authority purchased a property in 2010 to be resold in 2011 to the South Washington
Watershed District.
— 87 —
Original Issue
Issue Date
Amount
12/31/10 Balance*
Maturity Date
08/01/1982
$5,600,000
Not available
08/01/2012
08/05/1998
4,100,000
Not available
08/05/2018
04/30/2001
3,500,000
$2,635,000
04/01/2021
12/22/2004
935,000
727,174
12/01/2024
11/22/2005
76,500
51,479
11/22/2025
05/19/2005
853,000
713,777
12/19/2025
12/01/2006
21,105,000
21,105,000
12/01/2046
12/01/2006
8,075,000
8,075,000
12/01/2046
11/01/2009
6,100,000
6,100,000
11/15/2022
$50,344,500
X9.407.430
*Per original conduit debt bond schedule
Note 1.9 PROPERTIES HELD FOR RESALE
The City purchased land in 2010 to be resold to a future industrial occupant in the City's industrial park. The
occupant is not known at this time.
The Economic Development Authority purchased a property in 2010 to be resold in 2011 to the South Washington
Watershed District.
— 87 —
a
a
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Statement 9
Page 1 of 6
Variance with
2010 Final Budget - 2009
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenue:
General property taxes:
Current and delinquent
Special Assessments
Licenses and permits:
General government
Community development
Public safety
Public works
Total licenses and permits
Intergovernmental:
Federal:
Misc public safety grants
Safe and sober- public safety
Ballistic vest grant - public safety
Homeland security - public safety
Misc grant - general government
State:
Market value homestead credit
MSA maintenance - public works
PERA aid
Fire relief aid - public safety
Police relief aid - public safety
Forest protection grant - parks and recreation
Other - public safety
Local:
DARE program - public safety
Narcotics officer program - public safety
Other - public safety
Other - public works
Other - culture and recreation
Total intergovernmental
Charges for services:
Administration charges - general government:
Construction funds
Enterprise funds
Finance charges construction - general government
Investment charge - general government
Engineering charges - construction - public works
Other - general government
Other- community development
Other - public safety
Other - public works
Other - culture and recreation
Total charges for services
$10,213,300
$10,213,300
$10,195,797
($17,503)
$9,936,126
-
-
5,156
5,156
33,511
111,950
111,950
114,435
2,485
117,391
525,500
525,500
609,092
83,592
528,338
37,600
37,600
28,501
(9,099)
34,270
-
-
1,440
1,440
3,205
675,050
675,050
753,468
78,418
683,204
27,100
-
-
-
-
18,000
18,000
20,239
2,239
18,814
-
-
5,996
5,996
5,181
-
5,353
5,353
-
-
130
130
-
-
-
5,602
5,602
181,303
39,000
39,000
42,609
3,609
42,210
21,450
21,450
21,448
(2)
21,448
140,000
126,000
126,005
5
119,050
262,000
262,000
254,806
(7,194)
248,105
-
68,700
68,794
94
-
18,500
18,500
18,444
(56)
17,978
72,700
72,700
75,000
2,300
89,500
3,500
3,500
6,606
3,106
3,231
-
4,275
5,087
812
4,201
-
-
1,911
1,911
2,307
19,800
19,800
17,003
(2,797)
13,889
622,050
653,925
675,033
21,108
767,217
25,000
25,000
7,260
(17,740)
25,286
495,600
495,600
495,600
-
489,600
37,500
37,500
10,889
(26,611)
37,929
10,400
10,400
15,558
5,158
22,098
50,000
50,000
14,810
(35,190)
14,842
150
35,750
36,601
851
446
15,300
324,200
335,186
10,986
323,831
63,150
63,150
73,375
10,225
55,278
35,000
35,000
32,983
(2,017)
23,736
180,000
167,000
136,596
(30,404)
158,050
912,100
1,243,600
1,158,858
(84,742)
1,151,096
- 90 -
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Fines and forfeits - public safety
Investment earnings
Donations:
Donations - general government
Donations - public safety
Donations - culture and recreation
Total donations
Miscellaneous:
Other - general government
Other - community development
Other - public safety
Other - public works
Other - culture and recreation
Total miscellaneous
Total revenues
Expenditures:
Current:
General government:
Mayor and city council:
Personal services
Commodities
Contractual services
Total mayor and city council
Administrative:
Personal services
Commodities
Contractual services
Total administrative
Finance:
Personal services
Commodities
Contractual services
Total finance
Management information systems:
Personal services
Commodities
Contractual services
Capital outlay
Total management information systems
40,050
450
34,080
74,580
238,100
800
1,960
240,860
379,000
2,500
26,950
408,450
87,600
43,450
66,890
14,900
212,840
Statement 9
Page 2 of 6
40,050
39,281
769
Variance with
601
(151)
94,680
2010
Final Budget -
2009
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
$271,000
$271,000
$201,559
($69,441)
$192,169
45,000
45,000
65,279
20,279
I00,947
-
-
5,850
5,850
845
3,000
3,000
10,056
7,056
2,010
8,000
8,000
7,540
(460)
6,523
11,000
11,000
23,446
12,446
9,378
16,750
16,750
3,799
(12,951)
3,373
-
-
-
-
284
12,600
12,600
11,846
(754)
17,145
-
-
-
-
21,164
10,600
10,600
7,240
(3,360)
15,001
39,950
39,950
22,885
(17,065)
56,967
12,789,450
13,152,825
13,101,481
(51,344)
12,930,615
40,050
450
34,080
74,580
238,100
800
1,960
240,860
379,000
2,500
26,950
408,450
87,600
43,450
66,890
14,900
212,840
Statement 9
Page 2 of 6
40,050
39,281
769
450
601
(151)
94,680
96,946
(2,266)
135,180
136,828
(1,648)
238,100
261,805
(23,705)
800
311
489
1,960
1,536
424
240,860
263,652
(22,792)
379,000
403,276
(24,276)
2,500
1,956
544
26,950
16,665
10,285
408,450
421,897
(13,447)
87,600
43,450
66,890
48,550
87,622
41,393
38,548
40,693
(22)
2,057
28,342
7,857
38,234
246,490
208,256
39,281
1,978
35,373
76,632
255,898
358
1,078
257,334
334,718
1,464
33,284
369,466
85,540
20,178
36,017
10,884
152,619
- 91 -
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Expenditures: (continued)
General government: (continued)
Personnel:
Personal services
Commodities
Contractual services
Total personnel
Assessing service:
Contractual services
City clerk/elections:
Personal services
Commodities
Contractual services
Total City clerk/elections
Legal:
Contractual services
Community and employee programs:
Personal services
Commodities
Contractual services
Total community and employee programs
Government buildings:
Personal services
Commodities
Contractual services
Capital outlay
Total government buildings
Historic preservation:
Personal services
Commodities
Contractual services
Total historic preservation
Total general government
Community development:
Community development:
Personal services
Commodities
Contractual services
Total community development
Statement 9
Page 3 of 6
92
Variance with
2010
Final Budget -
2009
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
$131,300
$131,300
$85,884
$45,416
$87,225
400
400
11
389
91
7,100
7,100
8,074
(974)
8,306
138,800
138,800
93,969
44,831
95,622
145,000
145,000
137,105
7,895
137,942
168,200
172,700
157,828
14,872
117,961
2,400
3,950
1,412
2,538
1,063
12,375
13,530
10,597
2,933
11,381
182,975
190,180
169,837
20,343
130,405
175,200
175,200
173,431
1,769
180,221
2,500
2,500
2,225
275
2,050
600
600
309
291
185
63,400
63,400
45,110
18,290
33,834
66,500
66,500
47,644
18,856
36,069
14,200
14,200
6,163
8,037
8,033
11,900
11,900
8,928
2,972
8,653
193,940
193,940
182,296
11,644
173 ,3 98
-
-
-
-
5,777
220,040
220,040
197,387
22,653
195,861
9,700
9,700
3,846
5,854
4,183
-
-
-
-
313
1,050
1,050
-
1,050
415
10,750
10,750
3,846
6,904
4,911
1,875,995
1,977,450
1,853,852
123,598
1,637,082
778,200
778,200
774,617
3,583
757,054
10,400
10,400
7,239
3,161
7,348
41,700
350,600
350,271
329
338,338
830,300
1,139,200
1,132,127
7,073
1,102,740
92
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Statement 9
Page 4 of 6
Variance with
2010
Final Budget -
2009
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
Expenditures: (continued)
Public safety:
Police protection:
Personal services
$4,141,500
$4,126,500
$4,100,148
$26,352
$3,969,192
Commodities
249,300
249,300
236,813
12,487
183,603
Contractual services
270,500
270,500
252,007
18,493
239,981
Capital outlay
116,400
116,400
102,017
14,383
107,265
Total police protection
4,777,700
4,762,700
4,690,985
71,715
4,500,041
Fire protection:
Personal services
428,600
428,600
380,221
48,379
378,361
Commodities
69,950
69,950
66,108
3,842
69,425
Contractual services
191,550
191,550
185,982
5,568
162,101
Total fire protection
690,100
690,100
632,311
57,789
609,887
Fire relief:
Contractual services
144,400
130,400
130,351
49
122,921
Civil defense:
Personal services
27,200
27,200
25,680
1,520
23,569
Commodities
200
4,475
4,398
77
536
Contractual services
11,650
11,650
9,990
1,660
18,805
Total civil defense
39,050
43,325
40,068
3,257
42,910
Animal control:
Personal services
16,700
16,700
10,192
6,508
14,698
Commodities
5,700
5,700
2,676
3,024
5,132
Contractual services
59,150
59,150
57,181
1,969
71,000
Total animal control
81,550
81,550
70,049
11,501
90,830
Total public safety
5,732,800
5,708,075
5,563,764
144,311
5,366,589
Public works:
Public works administration:
Personal services
251,060
251,060
246,085
4,975
246,758
Commodities
19,300
19,300
16,540
2,760
15,180
Contractual services
116,000
116,000
123,364
(7,364)
118,906
Total public works administration
386,360
386,360
385,989
371
380,844
Engineering:
Personal services
114,000
114,000
93,879
20,121
64,258
Commodities
1,400
1,400
755
645
746
Contractual services
28,900
28,900
16,266
12,634
67,914
Total engineering
144,300
144,300
1 10,900
33,400
132,918
93
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
Page 5 of 6
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Variance with
2010
Final Budget -
2009
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
Expenditures: (continued)
Public works:
Streets:
Personal services
$503,700
$503,700
$500,621
$3,079
$483,857
Commodities
183,000
183,000
174,143
8,857
114,482
Contractual services
283,000
287,700
231,153
56,547
233,605
Capital outlay
6,300
6,300
7,332
(1,032)
-
Total streets
976,000
980,700
913,249
67,451
831,944
Snow and ice control:
Personal services
172,200
172,200
211,709
(39,509)
150,756
Commodities
166,300
1.66,300
199,281
(32,981)
143,683
Contractual services
121,800
121,800
105,617
16,183
124,627
Capital outlay
18,200
18,200
7,331
10,869
-
Total snow and ice control
478,500
478,500
523,938
(45,438)
419,066
Street signs /striping:
Personal services
108,200
108,200
89,380
18,820
88,725
Commodities
34,200
34,200
33,606
594
40,707
Contractual services
43,600
51,300
42,206
9,094
36,128
Total street signs /striping
186,000
1.93,700
165,192
28,508
165,560
Total public works
2,171,160
2,183,560
2,099,268
84,292
1,930,332
Culture and recreation:
Forestry:
Personal services
64,500
69,300
80,735
(11,435)
54,542
Commodities
129,950
129,950
127,980
1,970
9,138
Contractual services
158,250
199,600
181,142
18,458
71,320
Total forestry
352,700
398,850
389,857
8,993
135,000
Municipal pool:
Commodities
9,200
9,200
7,983
1,217
9,236
Contractual services
55,850
55,850
61,499
(5,649)
58,639
Total municipal pool
65,050
65,050
69,482
(4,432)
67,875
Recreation programs:
Personal services
235,600
235,600
228,945
6,655
228,327
Commodities
11,050
11,050
11,296
(246)
9,017
Contractual services
76,800
76,800
63,380
13,420
81,671
Total recreation programs
323,450
323,450
303,621
19,829
319,015
- 94 -
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Statement 9
Page 6 of 6
Variance with
2010 Final Budget - 2009
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Expenditures: (continued)
Culture and recreation: (continued)
Parks maintenance:
Personal services
Commodities
Contractual services
Capital outlay
Total parks maintenance
Total culture and recreation
Total current expenditures
Debt service:
Capital lease payment
Interest
Total debt service
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer from Enterprise Fund
Transfer from Special Revenue Fund
Transfer to Special Revenue Fund
Transfer to Debt Service Fund
Transfer to Capital Project Fund
Total other financing sources (uses):
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
$545,450
$545,450
$527,465
$17,985
$534,140
144,525
1.44,525
147,575
(3,050)
138,703
247,375
272,175
267,394
4,781
264,879
21,700
49,300
51,526
(2,226)
-
959,050
1,011,450
993,960
17,490
937,722
1,700,250
1,798,800
1,756,920
41,880
1,459,612
12,310,505
12,807,085
12,405,931
401,154
11,496,355
-
-
2,792
(2,792)
2,600
-
-
208
(208)
400
0
0
3,000
(3,000)
3,000
12,310,505
12,807,085
12,408,931
398,154
11,499,355
478,945
345,740
692,550
346,810
1,431,260
-
-
2,758
2,758
-
-
1,062
1,062
-
(419,145)
(493,195)
(493,195)
-
(627,520)
(103,670)
(103,670)
(290,472)
(17,900)
(91,950)
(91,950)
-
(207,480)
(437,045)
(688,815)
(684,995)
3,820
(1,125,472)
$41,900
($343,075)
7,555
$350,630
305,788
9,131,585
$9,139,140
8,825,797
$9,131,585
- 95 -
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
NOTE TO RSI
December 31, 2010
Note A LEGAL COMPLIANCE - BUDGETS
The General Fund is 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.
Final Budget
Actual
Over Budget
General Fund
General government:
Mayor and city council:
Commodities
$450
$601
$151
Contractual services
94,680
96,946
2,266
Administrative:
Personal services
238,100
261,805
23,705
Finance:
Personal services
379,000
403,276
24,276
Management information services:
Personal services
87,600
87,622
22
Personnel:
Contractual services
7,100
8,074
974
Public works:
Public works administration:
Contractual services
116,000
123,364
7,364
Streets:
Capital outlay
6,300
7,332
1,032
Snow and ice control:
Personal services
172,200
211,709
39,509
Commodities
166,300
199,281
32,981
Culture and recreation:
Forestry:
Personal services
69,300
80,735
11,435
Municipal pool:
Contractual services
55,850
61,499
5,649
Recreation programs:
Commodities
11,050
11,296
246
Parks maintenance:
Commodities
144,525
147,575
3,050
Capital outlay
49,300
51,526
2,226
Debt service:
Capital lease payment
-
2,792
2,792
Interest
-
208
208
- 96
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
FUNDING PROGRESS SCHEDULE
OTHER POST EMPLOYMENT HEALTH CARE BENEFITS
December 31, 2010
Unfunded Funded
Covered
Actuarial
Payroll
Actuarial
Accrued
Actuarial
Value of
Liability
Valuation
Assets
(AAL)
Date
(a)
(b)
1/1/2008
$ -
$ 146,597
1/1/2011
-
108,298
Unfunded Funded
Covered
AAL Ratio
Payroll
(b -a) (alb)
(c)
$ 146,597 -
$ 8,750,900
108,298 -
8,887,000
UAAL as a
Percentage
of Covered
Payroll
((b -a) /c)
1.7%
1.2%
— 97 —
- 98 -
..
- 100 -
- 101 -
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.
ley-1 1 1VIVIIIIN MI- 1 19111MINUMI
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).
102
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2010
With Comparative Data as of December 31, 2009
Assets
Cash and investments
Accrued interest receivable
Interfund loan receivable
Due from other governmental units - net
Accounts receivable - net
Prepaid items
Delinquent property taxes receivable
Special assessments receivable:
Deferred
Delinquent
Special deferred
Total assets
Liabilities and Fund Balance
Liabilities:
Accounts payable
Salaries payable
Interfund payable
Contracts payable
Due to other governmental units
Deposits payable
Accrued interest payable
Interfund loan payable
Deferred revenue
Total liabilities
Fund balance:
Reserved
Unreserved:
Designated
Undesignated
Total fund balance
Total liabilities and fund balance
Special Debt Capital
Revenue Service Project
Statement 10
Totals
Nonmajor
Governmental Funds
11rn n ')nno
$6,001,974
$1,192,708 $10,768,247
$17,962,929
$16,391,124
20,000
- -
20,000
80,673
1,275,000
- 950,000
2,225,000
1,575,000
20,461
- -
20,461
131,390
470,412
- -
470,412
471,972
1,273
- -
1,273
1,850
6,355
- 36,145
42,500
55,070
47,528
579,448 366,326
993,302
1,419,534
-
- 2,058
2,058
359,325
$7,843,003
$1,772,156 $12,122,776
$21,737,935
$20,485,938
$72,611
$507
$85,517
$158,635
$288,514
17,861
-
-
17,861
12,094
-
-
-
-
15,403
48,233
-
6,028
54,261
117,404
3,165
-
-
3,165
2,760
3,500
-
98,312
101,812
46,408
-
-
-
-
55,673
-
-
575,000
575,000
575,000
55,283
579,448
404,529
1,039,260
1,836,028
200,653
579,955
1,169,386
1,949,994
2,949,284
1,276,273
1,192,201
1,279,929
3,748,403
2,204,114
6,366,077
-
9,673,461
16,039,538
15,470,281
-
-
-
-
(137,741)
7,642,350
1,192,201
10,953,390
19,787,941
17,536,654
$7,843,003
$1,772,156
$12,122,776
$21,737,935
$20,485,938
103
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Special
Debt
Capital
Revenue
Service
Project
$239,379
$
$3,751
517,391
-
-
30,554
-
-
-
472,518
780,896
20,278
578,521
313,173
328,908
-
-
1,509,570
-
-
55,899
6,233
89,585
44,500
-
30,000
-
-
439,238
-
-
145,640
378,692
-
-
37,207
-
-
3,162,378
1,057,272
1,802,283
Revenues:
General property taxes
Franchise taxes
Aggregate taxes
Tax increment collections
Special assessments
Direct charges to developers
Intergovernmental
Charges for services
Investment earnings
Interest on interfund loan
Connection charges
Park dedication fees
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Culture and recreation
Capital outlay:
General government
Community development
Public safety
Public works
Culture and recreation
Debt service:
Principal retirement
Capital lease payment
Interest and fiscal charges
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses
Statement 11
Totals
Nonmajor
Governmental Funds
2010
2009
$243,130
$564,644
517,391
399,568
30,554
24,234
1,253,414
1,123,774
911,972
514,905
-
24,786
328,908
209,882
1,509,570
1,461,929
151,717
186,568
74,500
252,001
439,238
201,463
145,640
64,584
378,692
408,716
37,207
63,966
6,021,933
5,501,020
67,845
7,336
25,521
100,702
67,023
31,560
-
-
31,560
35,679
1,048,546
-
362,336
1,410,882
1,322,667
608,307
-
17,208
625,515
563,473
17,874
-
-
17,874
50,891
23,840
-
1,163,706
23,840
-
28,064
-
-
28,064
177,589
400,385
-
165,863
566,248
575,624
351,736
-
80,927
432,663
91,040
-
295,000
210,000
505,000
545,000
236,397
-
-
236,397
156,300
274,695
174,596
116,865
566,156
719,012
3,089,249
476,932
978,720
4,544,901
4,304,298
73,129
580,340
823,563
1,477,032
1,196,722
Transfers in
518,195
-
368,531
886,726
935,308
Transfers out
(155,589)
-
(28,388)
(183,977)
(929,917)
Proceeds from the sale of capital assets
71,506
-
-
71,506
49,694
Total other financing sources (uses)
434,112
0
340,143
774,255
55,085
Net increase (decrease) in fund balance
507,241
580,340
1,163,706
2,251,287
1,251,807
Fund balance - January 1
7,135,109
611,861
9,789,684
17,536,654
16,284,847
Fund balance - December 31
$7,642,350
$1,192,201
$10,953,390
$19,787,941
$17,536,654
- 104 -
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:
Equipment Replacement Fund - Established to accumulate monies for the
replacement of capital equipment.
Recyclin - Established to account for recycling advertising, promotion, and
capital expenditures.
Storm Water Maintenance — Established to account for the receipt of storm water
fees to be used for storm water maintenance activities.
Street Sealcoating — Established to account for the receipt of franchise fees to be
used for sealcoating activities.
Forfeiture /Seizure - Established to account for Police Department proceeds from
property seized under MS 609.53.
Ice Arena Fund - Established to account for operating the City's ice arena.
Public Safety Grants — Established to account for revenues and expenditures of
public safety grants.
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.
Future Economic Development Fund — Established to account for the receipt and
use of monies for economic development purposes.
- 105
- 106
Storm
Equipment
Water
Street
Forfeiture/
Replacement
Recycling
Maintenance
Sealcoating
Seizure
Assets
Cash and investments
$2,985,728
$83,600
$236,398
$101,633
$48,981
Accrued interest receivable
-
-
-
-
-
Interfund loan receivable
-
-
-
-
Due from other governmental units - net
-
-
-
16,874
-
Accounts receivable - net
-
-
106,344
133,327
-
Prepaid items
-
-
360
-
-
Delinquent property taxes receivable
21
-
-
-
-
Special assessments receivable:
Deferred
-
-
-
-
'
Total assets
$2,985,749
$83,600
$343,102
$251,834
$48,981
Liabilities and Fund Balance
Liabilities:
Accounts payable
$ -
$300
$21,882
$ -
$4,627
Salaries payable
-
65
5,159
-
-
Contracts payable
-
-
5,618
-
Due to other governmental units
-
-
517
-
-
Deposits payable
-
-
-
-
'
Deferred revenue
21
-
-
-
-
Totalliabilities
21
365
33,176
0
4,627
Fund balance:
Reserved for:
Prepaid items
-
-
360
-
-
Long -term interfund loan receivable
-
-
-
-
-
Unreserved:
Designated for ice arena
-
-
-
-
Designated for equipment replacement
2,724,260
-
-
-
-
Designated for public safety department
134,800
-
-
-
-
Designated for finance department
101,226
-
-
-
-
Designated for MIS department
10,442
-
-
-
-
Designated for recreation programs
15,000
-
-
-
-
Designated for development district #1
-
-
-
-
-
Designated for storm water activities
-
-
309,566
-
-
Designated for forfeiture and seizure
-
-
-
-
44,354
Designated for recycling program
-
83,235
-
-
-
Designated for charitable gambling
-
-
-
-
-
Designated for community events
-
-
-
Designated for Sealcoating & resurfacing
-
-
-
251,834
-
Total fund balance
2,985,728
83,235
309,926
251,834
44,354
Total liabilities and fund balance
$2,985,749
$83,600
$343,102
$251,834
$48,981
- 106
Statement 12
_
_
_
Totals
47,528
63,370
$643,327
Future
Nonmajor
$0 $3,476,706
Ice
Public Safety Charitable Celebration
Economic
Special Revenue Funds
Arena
Grants Gambling Fund
Development
2010
2009
$405,339
$3,065 $3,052 $ -
$2,134,178
$6,001,974
$5,733,733
_
_ _ _
20,000
20,000
80,673
_
_ _ -
1,275,000
1,275,000
1,075,000
-
3,587 - -
-
20,461
131,390
230,741
- - -
-
470,412
436,065
913
- - -
-
1,273
1,850
6,334
- -
-
6,355
6,423
_
_
_
_ 47,528
47,528
63,370
$643,327
$6,652
$3,052
$0 $3,476,706
$7,843,003
$7,528,504
$41,604
$ -
$ -
$ - $4,198
$72,611
$215,361
12,246
391
-
- -
17,861
12,094
42,615
-
-
- -
48,233
91,288
2.648
-
-
- -
3,165
2,760
3,500
-
-
-
3,500
-
7,734
-
47,528
55,283
71,892
110,347
391
0
0 51,726
200,653
393,395
913
-
-
- -
1,273
1,850
_
_
_
- 1,275,000
1,275,000
1,075,000
532,067
-
-
- -
532,067
642,952
_
_
_
_ -
2,724,260
2,607,924
-
6.261
-
- -
141,061
134,800
-
101,226
119,100
_
10,442
10,442
_
15,000
15,000
2,149,980
2,149,980
1,962,200
-
309,566
185,779
_
44,354
53,631
_
_ _
83,235
85,406
-
-
3,052
- -
3,052
5,335
_
_
_ _
_
7,661
_
_
-
_ -
251,834
228,029
532,980
6,261
3,052
0 3,424,980
7,642,350
7,135,109
$643,327
$6,652
$3,052
$0 $3,476,706
$7,843,003
$7,528,504
- 107 -
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
- 108 -
Storm
Equipment
Water
Street
Forfeiture/
Replacement
Recycling
Maintenance
Sealcoating
Seizure
Revenues:
General property taxes
$17
$ -
$ -
$ -
$ -
Franchise taxes
-
-
-
517,391
-
Aggregate taxes
-
-
-
30,554
-
Special assessments:
Current
-
-
-
-
-
Intergovernmental:
Federal:
Bryne JAG grant - public safety
-
-
-
-
-
Local:
Washington County - public works
-
53,150
-
-
-
School district - parks and recreation
-
-
-
-
-
Other - public works
-
-
80,625
-
-
Charges for services
-
-
641,685
11,944
-
Investment earnings
26,392
818
1,863
1,466
567
Interest on interfund loan
-
-
-
-
-
Donations
-
-
-
-
-
Miscellaneous
-
5
-
-
30,425
Total revenues
26,409
53,973
724,173
561,355
30,992
Expenditures:
Current:
General government
-
-
-
-
-
Public safety
-
-
-
-
15,269
Public works
90
56,144
454,762
537,550
-
Culture and recreation
-
-
-
-
-
Capital outlay:
General government
17,874
-
-
-
-
Community development
23,840
-
-
-
-
Public safety
28,064
-
-
-
-
Public works
369,648
-
30,737
-
-
Culture and recreation
78,132
-
-
-
-
Debt service:
Principal retirement
-
-
1,397
-
-
Interest and fiscal charges
-
-
103
-
-
Total expenditures
517,648
56,144
486,999
537,550
15,269
Revenues over(under)expenditures
(491,239)
(2,171)
237,174
23,805
15,723
Other financing sources (uses):
Transfer from General Fund
493,195
-
-
-
-
Transfer from Special Revenue Fund
25,000
-
-
-
-
Transfer to General Fund
-
-
-
-
-
Transfer to Special Revenue Fund
-
-
-
(25,000)
Transfer to Capital Project Fund
-
-
(114,527)
-
-
Transfer to Enterprise Fund
-
-
-
-
-
Proceeds from the sale of capital assets
71,506
-
-
-
Total other financing sources (uses)
589,701
0
(114,527)
0
(25,000)
Net increase (decrease) in fund balance
98,462
(2,171)
122,647
23,805
(9,277)
Fund balance - January 1
2,887,266
85,406
187,279
228,029
53,631
Fund balance - December 31
$2,985,728
$83,235
$309,926
$251,834
$44,354
- 108 -
Statement 13
Future
Ice Public Safety Charitable Celebration Economic
Arena Grants Gambling Fund Development
$239,362 $ - $ - $ - $
20,278
Totals
Nonmaj or
Special Revenue Funds
2010 2009
$239,379 $228,255
517,391 399,568
30,554 24,234
20,278 22,026
-
15,933
-
-
-
15,933
5,324
-
-
-
-
-
53,150
52,406
179,200
-
-
-
-
179,200
57,000
-
-
-
-
-
80,625
95,152
855,941
-
-
-
-
1,509,570
1,461,929
6,678
13
38
7
18,057
55,899
78,937
-
-
-
-
44,500
44,500
80,673
-
-
3,679
-
375,013
378,692
408,716
-
-
-
1,872
4,905
37,207
63,966
1,281,181
15,946
3,717
1,879
462,753
3,162,378
2,978,186
-
-
6,000
1,872
59,973
67,845
62,820
-
16,291
-
-
-
31,560
35,679
-
-
-
-
-
1,048,546
1,158,066
608,307
-
-
-
-
608,307
563,141
-
-
-
-
-
17,874
50,891
-
-
-
-
-
23,840
-
-
-
-
-
-
28,064
177,589
-
-
-
-
-
400,385
488,741
273,604
-
-
-
-
351,736
91,040
235,000
-
-
-
-
236,397
156,300
274,592
-
-
-
-
274,695
369,826
1,391,503
16,291
6,000
1,872
59,973
3,089,249
3,154,093
(110,322)
(345)
(2,283)
7
402,780
73,129
(175,907)
-
-
-
-
-
493,195
627,520
-
-
-
-
-
25,000
6,000
-
-
-
(1,062)
-
(1,062)
-
-
-
-
-
-
(25,000)
(6,000)
-
-
-
-
-
(114,527)
(86,344)
-
-
-
-
(15,000)
(15,000)
-
-
-
-
-
-
71,506
49,694
0
0
0
(1,062)
(15,000)
434,112
590,870
(110,322)
(345)
(2,283)
(1,055)
387,780
507,241
414,963
643,302
6,606
5,335
1,055
3,037,200
7,135,109
6,720,146
$532,980
$6,261
$3,052
$ -
$3,424,980
$7,642,350
$7,135,109
NONMA3OR 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:
Improvement Bonds
Tax Increment Bonds
Delveloper Financed Revolving — (2008A Improvements Bonds) are repaid from special
assessments collected from new developments within the City.
Tax Increment — (1985 Tax Increment Bonds, 2004A Tax Increment Refunding Bonds(TIF
1 -3), 2004A Tax Exempt Increment Bonds(TIF 1 -12), and 2004B Taxable Increment Bonds)
are repaid primarily from incremental taxes.
110
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2010
With Comparative Data as of December 31, 2009
Statement 14
Totals
Assets
Cash and investments
Special assessments receivable:
Deferred
Delinquent
Total assets
Liabilities and Fund Balance
Liabilities:
Accounts payable
Interfund payable
Deferred revenue
Total liabilities
Fund balance:
Reserved for debt retirement
Reserved for tax increment purposes
Total fund balance
Total liabilities and fund balance
Developer
Nonmajor
Financed
Tax Increment
Debt Service Funds
Revolving Funds
Funds
2010
2009
$331,129
$861,579
$1,192,708
$627,264
579,448
-
579,448
792,407
-
-
-
287,382
$910,577
$861,579
$1,772,156
$1,707,053
$169
$338
$507
$ -
-
-
-
15,403
579,448
-
579,448
$1,079,789
579,617
338
579,955
1,095,192
330,960
-
330,960
(15,403)
-
861,241
861,241
627,264
330,960
861,241
1,192,201
611,861
$910,577
$861,579
$1,772,156
$1,707,053
111 —
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2010 .
With Comparative Data for the Year Ended December 31, 2009
Statement 15
Expenditures:
Current:
General government:
Contractual services
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer from Capital Project Funds
Total other financing sources
3,458
3,878
7,336
Totals
200,000
Developer
Tax
Nonmaj or
28,700
Financed
Increment
Debt Service Funds
232,158
Revolving Funds
Funds
2010 2009
Revenues:
346,363
General property taxes:
580,340
(137,538)
Current and delinquent
$
$ -
$ - $135,553
Tax increment collections
-
472,518
472,518 464,397
Special assessments:
Current
253,570
-
253,570 -
Delinquent
287,383
-
287,383 -
Prepayments on deferred
14,858
-
14,858 -
Penalties
22,710
-
22,710 -
Investment earnings
-
6,233
6,233 5,165
Total revenues
578,521
478,751
1,057,272 605,115
Expenditures:
Current:
General government:
Contractual services
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer from Capital Project Funds
Total other financing sources
3,458
3,878
7,336
3,458
200,000
95,000
295,000
545,000
28,700
145,896
174,596
194,195
232,158
244,774
476,932
742,653
346,363
233,977
580,340
(137,538)
0
218,796
0 0 218,796
Net increase (decrease) in fund balance
346,363
233,977
580,340
81,258
Fund balance - January 1
(15,403)
627,264
611,861
530,603
Fund balance - December 31
$330,960
$861,241
$1,192,201
$611,861
- 112 -
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.
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.
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.
Tax Increment Construction Revolving Fund - to account for construction projects that are
financed with tax increments.
Gateway District Improvements — to account for improvements in the Gateway District that
are non -TIF.
113
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2010
With Comparative Data as of December 31, 2009
— 114 —
Future
Water
Sewer
Park
Storm Sewer
Connection
Connection
Trust
Improvements
and Area
and Area
Assets
Cash and investments
$830,756
$2,647,632
$2,462,444
$965,788
Interfund loan receivable
-
-
-
-
Accounts receivable - net
-
-
-
-
Delinquent property taxes receivable
-
51
-
-
Special assessments receivable:
Deferred
-
73,559
51,886
75,609
Delinquent
-
398
138
78
Total assets
$830,756
$2,721,640
$2,514,468
$1,041,475
Liabilities and Fund Balance
Liabilities:
Accounts payable
$80,928
$2,511
$ -
$90
Contracts payable
-
6,028
-
-
Deposits payable
-
-
-
-
Accrued interest payable
-
-
-
-
Interfund loan payable
-
-
-
-
Deferred revenue
-
74,008
52,024
75,687
Total liabilities
80,928
82,547
52,024
75,777
Fund balance:
Reserved for:
Tax increment purposes
-
-
-
-
Long -term interfund loan receivable
-
-
-
-
Unreserved:
Designated for pavement management
-
-
-
-
Designated for tree mitigation
-
-
-
-
Designated for capital improvements
749,828
2,639,093
2,462,444
965,698
Undesignated
-
-
-
-
Total fund balance
749,828
2,639,093
2,462,444
965,698
Total liabilities and fund balance
$830,756
$2,721,640
$2,514,468
$1,041,475
— 114 —
Statement 16
Tax Increment Totals
Construction Gateway Nonmajor
Completed Future Revolving District Capital Project Funds
Construction Projects Fund Improvements 2010 2009
$1,699,519 $1,118,803 $906,687 $136,618 $10,768,247 $10,030,127
950,000 - - 950,000 500,000
- - - - 35,907
60 4,539 31,495 - 36,145 48,647
50,307 11,138 - 103,827 366,326 563,757
1,444 - - - 2,058 71,943
$1,751,330 $2,084,480 $938,182 $240,445 $12,122,776 $11,250,381
$80
$150
$1,758
$ -
$85,517
$73,153
-
-
-
-
6,028
26,116
-
98,312
-
-
98,312
46,408
-
-
-
-
-
55,673
-
-
575,000
-
575,000
575,000
51,811
15,677
31,495
103,827
404,529
684,347
51,891
114,139
608,253
103,827
1,169,386
1,460,697
-
-
329,929
-
329,929
-
-
950,000
-
-
950,000
500,000
-
481,412
-
-
481,412
1,398,132
-
198,614
-
-
198,614
214,108
1,699,439
340,315
-
136,618
8,993,435
7,799,782
-
-
-
-
-
(122,338)
1,699,439
1,970,341
329,929
136,618
10,953,390
9,789,684
$1,751,330
$2,084,480
$938,182
$240,445
$12,122,776
$11,250,381
115
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, 2010
With Comparative Data for the Year Ended December 31, 2009
116 -
Future
Water
Sewer
Park
Storm Sewer
Connection
Connection
Trust
Improvements
and Area
and Area
Revenues:
General property taxes
$ -
$42
$ -
$ -
Tax increment collections
-
-
-
-
Special assessments:
Current
-
69,982
31,578
39,092
Delinquent
-
16,486
20,213
33,934
Prepayments on deferred
-
11,611
2,317
2,874
Penalties
-
1,744
1,750
2,768
Direct charges to developers
-
-
-
-
Investment earnings
6,697
22,454
16,064
8,226
Interest on interfund loan
-
-
30,000
-
Connection charges
-
232,475
136,304
70,459
Park dedication fees
145,640
-
-
-
Total revenues
152,337
354,794
238,226
157,353
Expenditures:
Current:
General government
-
-
-
-
Public works
-
34,992
-
12,216
Culture and recreation
17,208
-
-
-
Capital outlay:
Public works
-
165,863
-
-
Culture and recreation
80,927
-
-
-
Debt service:
Principal retirement
-
-
-
210,000
Interest and fiscal charges
-
-
-
82,365
Total expenditures
98,135
200,855
0
304,581
Revenues over (under) expenditures
54,202
153,939
238,226
(147,228)
Other financing sources (uses):
Transfer from General Fund
-
-
-
-
Transfer from Capital Project Fund
-
-
-
-
Transfer to Debt Service Fund
-
-
-
-
Transfer to Capital Project Fund
-
-
-
°
Total other financing sources (uses)
0
0
0
0
Net increase (decrease) in fund balance
54,202
153,939
238,226
(147,228)
Fund balance - January 1
695,626
2,485,154
2,224,218
1,112,926
Fund balance - December 31
$749,828
$2,639,093
$2,462,444
$965,698
116 -
Statement 17
Tax Increment
Construction
Completed Future Revolving
Construction Projects Fund
Totals
Gateway Nonmaj or
District Capital Project Funds
Improvements 2010 2009
$49
$3,660
$ -
$ -
$3,751
$200,836
-
-
780,896
-
780,896
659,377
15,744
4,752
-
57,710
218,858
328,944
487
-
-
-
71,120
22,458
-
-
-
-
16,802
136,736
131
-
-
-
6,393
4,741
-
-
-
24,786
13,103
16,708
5,485
848
89,585
102,466
-
-
-
-
30,000
171,328
-
-
-
-
439,238
201,463
-
-
-
-
145,640
64,584
29,514
25,120
786,381
58,558
1,802,283
1,917,719
25,503
-
-
18
25,521
745
-
15,514
299,614
-
362,336
164,601
-
-
-
-
17,208
332
-
-
-
-
165,863
86,883
-
-
-
-
80,927
-
-
-
-
-
210,000
-
-
-
34,500
-
116,865
154,991
25,503
15,514
334,114
18
978,720
407,552
4,011
9,606
452,267
58,540
823,563
1,510,167
-
29,620
-
-
29,620
257,491
81,420
-
-
338,911
(28,388)
-
-
-
(28,388)
229,103
111,040
0
0
340,143
233,114
120,646
452,267
58,540
1,163,706
1,466,325
1,849,695
(122,338)
78,078
9,789,684
$1,699,439
$1,970,341
$329,929
$136,618
$10,953,390
82,992
(191,352)
(646,221)
(754,581)
755,586
9,034,098
$9,789,684
117 -
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - EQUIPMENT REPLACEMENT
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Statement 18
Budgeted Amounts
Original Final
Revenues:
General property taxes:
Current and delinquent
Intergovernmental:
Local:
Cost -share agreement deicing equipment
Investment earnings
Total revenues
Expenditures:
General government:
Capital outlay
Community development:
Capital outlay
Public safety:
Capital outlay
Public works:
Current:
Contractual services
Capital outlay
Culture and recreation:
Capital outlay
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer from General Fund
Transfer from Special Revenue Fund
Proceeds from the sale of capital assets
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
Variance with
2010 Final Budget- 2009
Actual Positive Actual
Amounts (Negative) Amounts
$ - $ - $17 $17 $48
51,452
27,500 27,500 26,392 (1,108) 37,364
27,500 27,500 26,409 (1,091) 88,864
-
18,000
17,874
126
50,891
-
26,500
23,840
2,660
-
30,000
30,000
28,064
1,936
92,389
-
-
90
(90)
-
320,000
356,900
369,648
(12,748)
412,358
105,500
79,000
78,132
868
68,979
455,500
510,400
517,648
(7,248)
624,617
(428,000)
(482,900)
(491,239)
(8,339)
(535,753)
419,145
493,195
493,195
-
620,480
-
-
25,000
25,000
-
-
36,900
71,506
34,606
49,694
419,145
530,095
589,701
59,606
670,174
($8,855)
$47,195
98,462
$51,267
134,421
2,887,266 2,752,845
$2,985,728 $2,887,266
118
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - RECYCLING Statement 19
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Variance with
2010 Final Budget- 2009
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenues:
Intergovernmental:
Local:
Washington County recycling grant - public works
Investment earnings
Miscellaneous - public works
Total revenues
Expenditures:
Public works:
Current:
Personal services
Commodities
Contractual services
Total expenditures
Revenues over (under) expenditures
Fund balance - January 1
Fund balance - December 31
$52,400 $52,400 $53,150
$750
$52,406
- - 818
818
1,302
- - 5
5
5,599
52,400 52,400 53,973
1,573
59,307
41,900
41,900
41,719
181
39,796
-
-
280
(280)
-
13,150
13,150
14,145
(995)
21,069
55,050
55,050
56,144
(1,094)
60,865
($2,650)
($2,650)
(2,171)
$479
(1,558)
85,406
$83,235
86,964
$85,406
a
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - STORM WATER MAINTENANCE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Statement 20
Revenue:
Intergovernmental:
Local:
Other - public works
Charges for services
Investment earnings
Miscellaneous
Total revenue
Expenditures:
Public works:
Current:
Personal services
Commodities
Contractual services
Other charges - administrative charge
Capital outlay
Debt Service:
Principal retirement
Interest and fiscal charges
Total expenditures
Revenue over (under) expenditures
Other financing sources (uses):
Transfer to Capital Project Fund
Net increase (decrease) in fund balance
Fund balance - January I
Fund balance - December 31
202,400
202,400
Variance with
(4,741)
246,661
2010
Final Budget-
2009
Budgeted Amounts
Actual
Positive
Actual
Original Final
Amounts
(Negative)
Amounts
$ - $ -
$80,625
$80,625
$43,700
648,000 648,000
641,685
(6,315)
645,855
1,500 1,500
1,863
363
1,911
- -
-
-
5,996
649,500 649,500
724,173
74,673
697,462
202,400
202,400
207, 141
(4,741)
246,661
59,500
59,500
27,984
31,516
35,078
303,325
303,325
190,237
113,088
296,695
29,400
29,400
29,400
-
29,000
14,000
14,000
30,737
(16,737)
76,383
-
-
1,397
(1,397)
1,300
-
-
103
(103)
200
608,625
608,625
486,999
121,626
685,317
40,875
40,875
237,174
196,299
12,145
-
-
(114,527)
114,527
-
$40,875
$40,875
122,647
$310,826
12,145
187,279
$309,926
175,134
$187,279
- 120 -
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - STREET SEALCOATING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Revenues:
Franchise taxes
Aggregate taxes
Charges for services:
Public works
Investment earnings
Total revenues
Expenditures:
Public Works:
Current:
Commodities
Contractual
Total expenditures
Revenues over (under) expenditures
Fund balance - January 1
Fund balance - December 31
Statement 21
19,250
19,250
21,974
Variance with
23,828
588,950
588,950
2010
Final Budget-
2009
Budgeted Amounts
Actual.
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
$525,100
$525,100
$517,391
($7,709)
$399,568
70,000
70,000
30,554
(39,446)
24,234
-
-
11,944
11,944
-
-
-
1,466
1,466
2,724
595,100
595,100
561,355
(33,745)
426,526
19,250
19,250
21,974
(2,724)
23,828
588,950
588,950
515,576
73,374
465,939
608,200
608,200
537,550
70,650
489,767
($13,100)
($13,100)
23,805
$36,905
(63,241)
228,029 291,270
$251,834 $228,029
- 121 -
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - FORFEITURE /SEIZURE Statement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Budgeted Amounts
Revenues:
Investment earnings
Miscellaneous
Total revenues
Expenditures:
Public safety:
Current:
Personal services
Commodities
Contractual services
Capital outlay
Total expenditures
Revenues over (under) expenditures
Original
Final
2009
$4,000
$4,000
42,000
42,000
46,000
46,000
Variance with
2010
Final Budget-
2009
Actual
Positive
Actual
Amounts
(Negative)
Amounts
$567
($3,433)
$797
30,425
(11,575)
50,989
30,992
(15,008)
51,786
1,200
1,200
-
500
500
2,160
13,200
13,200
13,109
14,900
14,900
15,269
31,100
31,100
15,723
Other financing sources (uses):
Transfer to Special Revenue Fund
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
1,200
(1,660)
91
(369)
( 15,377)
3,514
26,051
85,200
1 14,765
(62,979)
(25,000 ) (25,000) (25,000) - -
$6,100 $6,100 (9,277) ($15,377) (62,979)
53,631 116,610
$44,354 $53,631
- 122 -
Revenues:
General property taxes:
Current and delinquent
Intergovernmental:
Local:
School
Recreation agreement
Charges for services
Investment earnings
Donations - culture and recreation
Miscellaneous - culture and recreation
Total revenues
Expenditures:
Culture and recreation:
Current:
Personal services
Commodities
Contractual services
Capital outlay
Debt Service:
Principal retirement
Interest and fiscal charges
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer to Capital Project Fund
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
Budgeted Amounts
Original Final
Variance with
2010 Final Budget- 2009
Actual Positive Actual
Amounts (Negative) Amounts
$240,000
$240,000
$239,362
($638)
$228,207
-
-
122,200
122,200
-
-
-
57,000
57,000
57,000
866,000
866,000
855,941
(10,059)
806,074
6,000
6,000
6,678
678
10,800
-
-
-
-
3,680
-
-
_
-
878
1,112,000
1,112,000
1,281,181
169,181
1,106,639
268,500
268,500
291,618
(23,118)
272,587
35,600
35,600
50,348
(14,748)
46,475
236,800
236,800
266,341
(29,541)
244,079
107,000
107,000
273,604
(166,604)
22,061
235,000
235,000
235,000
-
155,000
275,000
275,000
274,592
408
369,626
1,157,900
1,157,900
1,391,503
(233,603)
1,109,828
(45,900)
(45,900)
(110,322)
(64,422)
(3,189)
($45,900) ($45,900)
- 123 -
(86,344)
(110,322) ($64,422) (89,533)
643,302
$532,980
732,835
$643,302
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - PUBLIC SAFETY GRANTS Statement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Variance with
2010 Final Budget- 2009
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenues:
Intergovernmental:
Federal:
Byrne JAG Grant - public safety
Investment earnings
Total revenues
Expenditures:
Public safety:
Current:
Personal services
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer from General Fund
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
$ - $15,900 $15,933
- 13
0 15,900 15,946
$33 $5,324
13 12
46 5,336
- 15,900
16,291
(391)
6,114
0 15,900
16,291
(391)
6,114
0 0
345
437
(778)
$0 $0
- - 7,040
(345) $437 6,262
6,606 344
$6,261 $6,606
124
Revenues:
Investment earnings
Donations
Total revenues
Expenditures:
General government:
Current:
Contractual
Total expenditures
Revenues over (under) expenditures
6,000 6,000 6,000 - 4,692
6,000 6,000 6,000 0 4,692
- - (2,283) (2,283) 486
Other financing sources (uses):
Transfer to Special Revenue Fund - -
Net increase (decrease) in fund balance $0 $0
Fund balance - January 1
Fund balance - December 31
125
(6,000)
(2,283) ($2,283) (5,514)
5,335 10,849
$3,052 $5,335
Variance with
2010
Final Budget-
2009
Budgeted Amounts
Actual
Positive
Actual
Original Final
Amounts
(Negative)
Amounts
$ - $ -
$38
$38
$142
6,000 6,000
3,679
(2,321)
5,036
6,000 6,000
3,717
(2,283)
5,178
6,000 6,000 6,000 - 4,692
6,000 6,000 6,000 0 4,692
- - (2,283) (2,283) 486
Other financing sources (uses):
Transfer to Special Revenue Fund - -
Net increase (decrease) in fund balance $0 $0
Fund balance - January 1
Fund balance - December 31
125
(6,000)
(2,283) ($2,283) (5,514)
5,335 10,849
$3,052 $5,335
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - CELEBRATION FUND
220
Statement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
15,950
0 0 1,872
(1,872)
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
_ 7
7
(10,819)
For The Year Ended December 31, 2010
_
6,000
With Comparative Data for the Year Ended December 31, 2009
(1,062)
-
0 0 (1,062)
(1,062)
6,000
Variance with
($1,055)
(4,819)
2010
Final Budget-
2009
Budgeted Amounts
Actual
Positive
Actual
Original Final
Amounts
(Negative)
Amounts
Revenues:
Investment earnings $ - $ -
$7
$7
$22
Donations - -
-
-
5,000
Miscellaneous - -
1,872
1,872
329
Total revenues 0 0
1,879
1,879
5,351
Expenditures:
General government:
Current:
Commodities
Contractual
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer from Special Revenue Fund
Transfer to General Fund
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
-
220
- 1,872
(1,872)
15,950
0 0 1,872
(1,872)
16,170
_ 7
7
(10,819)
_
6,000
- - (1,062)
(1,062)
-
0 0 (1,062)
(1,062)
6,000
$0 $0 (1,055)
($1,055)
(4,819)
1,055
$0
5,874
$1,055
E
Revenues:
Special assessments:
Current
Charges for services
Investment earnings
Interest on interfund loan
Donations
Miscellaneous
Total revenues
Expenditures:
General government:
Current:
Commodities
Contractual services
Construction /acquisition costs
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer to Enterprise Fund
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
Budgeted Amounts
Original Final
77,000
77,000
77,000
77,000
30,000
400,000
430,000
(353,000)
($353,000)
30,000
400,000
430,000
(353,000)
2010
Actual
Amounts
$20,278
18,057
44,500
375,013
4,905
462,753
13,198
46,775
59,973
402,780
(15,000)
($353,000) 387,780
127
3,037,200
$3,424,980
Variance with
Final Budget -
Positive
(Negative)
$20,278
(58,943)
44,500
375,013
4,905
385,753
(13,198)
(16,775)
400,000
370,027
755,780
(15,000)
$740,780
2009
Actual
$22,026
10,000
23,863
80,673
395,000
175
531,737
41,958
41,958
489,779
489,779
2,547,421
$3,037,200
128
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.
- 129 -
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
December 31, 2010
With Comparative Data as of December 31, 2009
6,424
52,197
58,621
Statement 28
Health care benefits payable
20,947
-
Totals
31,255
Unpaid claims
Self
Fleet
Internal Service Funds
67,176
Insurance
Maintenance
2010
2009
Assets:
Due to other governmental units
-
67
67
Current assets:
Compensated absences payable
-
13,160
13,160
Cash and investments
$2,256,110
$298,912
$2,555,022
$2,496,824
Accounts receivable
5,256
1,898
7,154
1,643
Prepaid items
103,894
650
104,544
106,173
Inventory- at cost
-
65,062
65,062
53,492
Total current assets
2,365,260
366,522
2,731,782
2,658,132
Noncurrent assets:
Total liabilities
75,242
92,660
167,902
Capital assets:
Net assets:
Land
-
424,665
424,665
424,665
Buildings and improvements
-
928,870
928,870
928,870
Machinery and equipment
-
150,628
150,628
166,363
Total capital assets
0
1,504,163
1,504,163
1,519,898
Less: Accumulated depreciation
-
(484,328)
(484,328)
(472,802)
Total noncurrent assets
0
1,019,835
1,019,835
1,047,096
Total assets
2,365,260
1,386,357
3,751,617
3,705,228
Liabilities:
Current liabilities:
Accounts payable
6,424
52,197
58,621
53,945
Health care benefits payable
20,947
-
20,947
31,255
Unpaid claims
47,349
-
47,349
67,176
Salaries payable
522
7,862
8,384
9,118
Due to other governmental units
-
67
67
-
Compensated absences payable
-
13,160
13,160
17,626
Total current liabilities
75,242
73,286
148,528
179,120
Noncurrent liabilities:
Compensated absences payable
-
18,263
18,263
22,096
Other post employment benefits
-
1,111
1,111
774
Total noncurrent liabilities
0
19,374
19,374
22,870
Total liabilities
75,242
92,660
167,902
201,990
Net assets:
Invested in capital assets, net of related debt
-
1,019,835
1,019,835
1,047,096
Unrestricted
2,290,018
273,862
2,563,880
2,456,142
Total net assets
$2,290,018
$1,293,697
$3,583,715
$3,503,238
- 130 -
CITY OF COTTAGE GROVE, MINNESOTA
INTERNAL SERVICE FUNDS Statement 29
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Operating revenues:
Charges for services:
User fees
Employee benefits
Property insurance
Insurance refunds and reimbursements
Total operating revenues
Operating expenses:
Operation and maintenance:
Personal services
Commodities
Contractual services
Total operation and maintenance
Administrative and general:
Personal insurance benefits
Contractual services
Claims
Total administrative and general
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating revenues:
Investment earnings
Miscellaneous
Total nonoperating revenues
Income before transfers
Transfers:
Transfer to Enterprise Fund
Change in net assets
Net assets - January I
Net assets - December 31
Self Fleet
Insurance Maintenance
1,202,050
213,700
70,232
1,485,982
$845,351
Totals
Internal Service Funds
2010
$845,351
1,202,050
213,700
70,232
2,331,333
2009
$813,479
1,081,792
209,208
80,081
2,184,560
-
312,145
312,145
309,805
-
450,554
450,554
387,559
-
67,149
67,149
40,942
0
829,848
829,848
738,306
1,142,682
-
1,142,682
1,004,932
196,021
-
196,021
194,052
48,278
-
48,278
83,152
1,386,981
0
1,386,981
1,282,136
-
32,549
32,549
30,996
1,386,981
862,397
2,249,378
2,051,438
99,001
(17,046)
81,955
133,122
19,287
2,761
22,048
32,599
-
7,474
7,474
5,226
19,287
10,235
29,522
37,825
118,288
(6,811)
111,477
170,947
118,288
2, 171,730
$2,290,018
(31,000)
(37,811)
1,331,508
$1,293,697
(31,000)
80,477
3,503,238
$3,583,715
(31,000)
139,947
3,363,291
$3,503,238
131
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS Statement 30
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2010
With Comparative Data for the Year Ended December 31, 2009
Cash flows from operating activities:
Receipts from interfund services provided
Receipts from insurance refunds and reimbursements
Payment to suppliers
Payment to employees
Miscellaneous revenue
Net cash flows from operating activities
Cash flows from noncapital financing activities:
Transfer to Enterprise Fund
Cash flows from capital and related
financing activities:
Acquisition of capital assets
Cash flows from investing activities:
Investment income
Net increase in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income
to net cash flows from operating activities:
Depreciation
Miscellaneous revenue
Changes in assets and liabilities:
Decrease (increase) in receivables
Decrease (increase) in prepaid items
Decrease (increase) in inventory
Increase (decrease) in payables
Total adjustments
Net cash flows from operating activities
Self Fleet
Insurance Maintenance
Totals
Internal Service Funds
2010 200
$1,415,750
$845,351
$2,261,101
$2,104,479
70,232
-
70,232
80,081
(265,810)
(526,728)
(792,538)
(759,397)
(1,152,468)
(321,363)
(1,473,831)
(1,328,616)
-
7,474
7,474
5,226
67,704
4,734
72,438
101,773
(27,670)
(6,418)
-
(31,000)
(31,000)
(31,000)
(9,517)
-
(5,288)
(5,288)
(12,986)
$101,773
19,287
2,761
22,048
32,599
86,991
(28,793)
58,198
90,386
2,169,119
327,705
2,496,824
2,406,438
$2,256,110
$298,912
$2,555,022
$2,496,824
$99,001
($17,046)
$81,955
$133,122
-
32,549
32,549
30,996
-
7,474
7,474
5,226
(5,256)
(255)
(5,511)
413
1,629
-
1,629
(62,976)
-
(11,570)
(11,570)
(4,653)
(27,670)
(6,418)
(34,088)
(355)
(31,297)
21,780
(9,517)
(31,349)
$67,704
$4,734
$72,438
$101,773
132
ECONOMIC DEVELOPMENT AUTHORITY
COMPONENT UNIT
Established to account for the receipt and use of monies for economic purposes.
- 133
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET - ALL GOVERNMENTAL FUND TYPES
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31, 2010
With Comparative Data as of December 31, 2009
Statement 31
Assets
Cash and investments
Accrued interest receivable
Loan receivable from primary government
Capital lease receivable from primary government
Prepaid items
Delinquent property taxes receivable
Property held for resale
Total assets
Liabilities and Fund Balance
Liabilities:
Accounts payable
Salaries payable
Due to other governmental units
Deferred revenue
Total liabilities
Fund balance:
Reserved for long -term loan receivable
Reserved for long -term capital lease receivable
Reserved for tax increment purposes
Reserved for debt service reserve
Reserved for assets for resale
Unreserved:
Designated for EDA activities
Total fund balance
Total liabilities and fund balance
Fund balance reported above
Totals
Economic Development Authority
Special Debt Component Unit
Revenue Service 2010 2009
$268,734
$547,787
$816,521
$1,208,184
84,000
-
84,000
185,500
900,000
-
900,000
900,000
-
6,110,000
6,110,000
6,345,000
1,440
-
1,440
2,493
3,068
3,068
3,299
421,298
-
421,298
-
$1,678,540
$6
$8,336,327
$8,644,476
$2,371
$ -
$2,371
$9,645
-
-
338
3,068
3,068
3,299
5,439
0
5,439
13,282
900,000
-
900,000
900,000
-
6,110,000
6,110,000
6,345,000
593,339
-
593,339
586,896
-
547,787
547,787
542,866
421,298
-
421,298
-
(241,536)
-
(241,536)
256,432
1,673,101
7657,787
8,330,888
8,631,194
$1,678,540
$6,657,787
$8,336,327
$8,644,476
Other long -term assets, including property taxes receivable, are not available to pay for current - period
expenditures, and therefore, are deferred in the funds.
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.
Net assets of component unit (page 35)
- 134 -
$8,330,888
3,068
(5,965,691)
$2,368,265
CITY OF COTTAGE GROVE, MINNESOTA
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, 2010
With Comparative Data for the Year Ended December 31, 2009
Revenues:
General property taxes:
Current and delinquent
Charges for service
Investment earnings
Interest on loan to primary government
Miscellaneous
Total revenues
Expenditures:
General government:
Current:
Personal services
Commodities
Contractual services
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance - January 1
Statement 32
Totals
Economic Development Authority
Special Debt Component Unit
„ -------- _ Irmo
$105,936 $ -
$105,936
$113,325
30,000 -
30,000
30,000
5,638 4,921
10,559
15,787
(101,500) 274,592
173,092
421,126
7,060 -
7,060
7,700
47,134 279,513
326,647
587,938
61,976 61,976 70,132
21,524 21,524 5,536
33,861 33,861 93,435
235,000 235,000 155,000
- 274,592 274,592 369,626
117,361 509,592 626,953 693,729
(70,227) (230,079) (300,306) (105,791)
0 0
(70,227) (230,079)
6,500,000
(6,500,000)
0 0
(300,306) (105,791)
1,743,328 6,887,866 8,631,194 8,736,985
Fund balance - December 31 $1,673,101 $6,657,787
$8,330,888 $8,631,194
Net decrease in fund balance reported above
($300,306)
Revenues in the statement of activities that do not report current financial resources are not
reported as revenues in the funds:
Property taxes deferred revenue
(231)
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 repayments
235,000
Change in net assets of component unit (page 37)
($73,408)
135
IN
137
CITY OF COTTAGE GROVE, MINNESOTA
CONSTRUCTION /ACQUISITION COSTS
CAPITAL PROJECT FUNDS
December 31, 2010
565 2006 Improvements
Pinecliff 2nd
1,265,337
Construction /Acquisition Costs
Fund
347,339
64,174 -
Silverwood
Land
No.
Descriptions
Contractor
Engineer
Acquisition
1,153,269
FUNDED BY USER FEES:
Total Fund 565
4,649,162
966,774 0
235
LP -3 Storm Sewer
$70,130
$2,813
$ -
307,224 -
Total Fund 230
70,130
2,813
0
250/526
Ice Arena Expansion
5,759,119
1,036,947
-
Total Fund 566
Ice Arena Sign
40,800
11,706
-
Ice Arena Team Room Addition
109,492
7,240
-
Total Fund 250/526
5,909,411
1,055,893
0
510
FUNDED BY FUTURE DEVELOPMENT:
Jamaica/Military Realignment
-
97,885
-
Total Fund 510
0
97,885
0
520
FUNDED BY MSA:
Jamaica Avenue Roundabout
2,645,072
860,888
-
Jamaica Avenue Roundabout additional costs
-
(23,503)
-
Ravine Parkway, Phase 2
-
25,908
-
Lehigh/Highway 95 Improvements
265,141
120,982
-
West Point Douglas at TH61
-
112
-
Ravine Parkway, Phase 2
-
147,358
-
Total Fund 520
2,910,213
1,244,400
0
FUNDED BY SPECIAL ASSESSMENT BONDS:
560
Pavement Management:
2010 Pavement Management
864,557
259,972
-
Total Fund 560
864,557
259,972
0
563
2004 Improvements:
Timber Ridge 6th final streets
19,481
743
-
Total Fund 563
19,481
743
0
564
2005 Improvements:
Mississippi Dunes 2nd final streets
25,969
541
-
Total Fund 564
25,969
541
0
565 2006 Improvements
Pinecliff 2nd
1,265,337
253,441 -
Pinecliff2nd additional costs /streets
347,339
64,174 -
Silverwood
1,565,543
324,211 -
Pine Arbor 3rd
317,674
60,918 -
CP Rail /Lyman Lumber
1,153,269
264,030 -
Total Fund 565
4,649,162
966,774 0
566 2007 Improvements:
Southpoint Ridge
651,343
307,224 -
VFW Utility
22,071
6,075 -
The Preserve at CG
554,908
144,174 -
Everwood
117,058
77,574 -
Total Fund 566
1,345,380
535,047 0
138
Exhibit I
Page 1 of 2
139
Construction/Acquisition Costs
Expended
Legal,
ROW/
Total
Prior
Fiscal
Easement
Other
Costs
2010
Years
$9,511
$82,454
* $6,071
$76,383
0
0
9,511
82,454
6,071
76,383
-
116,242
6,912,308
* 15,888
6,896,420
-
-
-
52,506
52,506
-
-
-
66,153
182,885
* 182,885
-
0
0
182,395
7,147,699
251,279
6,896,420
-
-
7,008
104,893
-
104,893
0
0
7,008
104,893
0
104,893
-
-
67,323
3,573,283
* -
3,573,283
128,371
-
104,868
128,371
(23,503)
-
835
26,743
-
26,743
405
11,606
10,030
408,164
* 25,606
382,558
-
-
13,308
126,075
126,075
-
-
-
6,486
153,844
153,844
-
405
139,977
97,982
4,392,977
433,896
3,959,081
-
25,539
22,401
1,172,469
* 1,172,469
-
0
25,539
22,401
1,172,469
1,172,469
0
-
-
-
20,224
* 20,224
-
0
0
0
20,224
20,224
0
-
-
-
26,510
* 26,510
-
0
0
0
26,510
26,510
0
-
-
147,116
1,665,894
* -
1,665,894
-
-
31,186
442,699
413,019
29,680
-
-
192,050
2,081,804
* 20,927
2,060,877
-
-
35,096
413,688
* -
413,688
-
-
164,907
1,582,206
* -
1,582,206
0
0
570,355
6,186,291
433,946
5,752,345
-
-
116,474
1,075,041
* -
1,075,041
-
-
1,197
29,343
* -
29,343
-
-
97,304
796,386
* -
796,386
-
-
22,983
217,61.5
* -
217,615
0
0
237,958
2,118,385
0
2,118,385
139
CITY OF COTTAGE GROVE, MINNESOTA
CAPITAL PROJECT FUNDS
CONSTRUCTION /ACQUISITION COSTS
December 31, 2010
Fund
$27,741
No.
Descriptions
-
FUNDED BY PARK TRUST FUNDS:
570
Hamlet Park North
0
Trunk Fund Oversizing
Total Fund 570
-
FUNDED BY AREA FUNDS:
575
Trunk Fund Oversizing Capitalize
0
Total Fund 575
580
Trunk Fund Oversizing Capitalize
157,820
Total Fund 580
585
Gateway Storm Pond
62,157
Hamlet Pond Phase 3
8,967
Hamlet Pond Phase 3 additional costs
-
Trunk Fund Oversizing
77,307
Total Fund 585
29,175
Totals
-
Less: Completed construction*
167,927
Work in progress - December 31, 2010
Construction /Acquisition Costs
Land
Contractor Engineer Acquisition
$ -
$27,741
$ -
8,346
-
-
8,346
27,741
0
420,996
-
-
420,996
0
0
157,820
-
-
157,820
0
0
-
62,157
-
8,967
28,463
-
151,787
77,307
-
29,175
-
-
189,929
167,927
0
$16,571,394
$4,359,736
$0
— 140 —
Exhibit 1
Page 2 of 2
Construction /Acquisition Costs Expended
Legal. ROW/ Total Prior
- 141 -
$27,741
$ -
$27,741
-
-
-
8,346 *
-
8,346
0
0
0
36,087
0
36,087
-
-
-
420,996 *
-
420,996
0
0
0
420,996
0
420,996
-
-
-
157,820 *
-
157,820
0
0
0
157,820
0
157,820
-
-
19,695
81,852
2,144
79,708
-
-
5,078
42,508 *
-
42,508
-
-
7,764
236,858
163,719
73,139
-
-
29,175 *
-
29,175
0
0
32,537
390,393
165,863
224,530
$405
$165,516
$1,160,147
$22,257,198
$2,510,258
$19,746,940
20,899,119
$1,358,079
- 141 -
CITY OF COTTAGE GROVE, MINNESOTA
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
December 31, 2010
Total Bonded Indebtedness - Primary Government
Component Unit - EDA
$6,500,000 Ice Arena Lease Rev Bonds of 2008B 4.0% -4.90% 6/11/2008 4/1/2028
Total Component Unit - EDA
Total Bonded Indebtedness - Reporting Entity
142 —
Interest
Final
Rate
Dated
Payment
Primary Government
General Obligation Bonds:
$1,405,000 Tax Increment Bonds of 2004A
3.0 -4.65%
7/1/2004
2/1/2024
$1,775,000 Tax Increment Bonds of 2004B
4.5 -5.75%
7/1/2004
2/1/2021
Total General Obligation Bonds
Special Assessment Debt:
Improvement Bonds of 2002B
3.0 -4.15%
10/2/2002
2/1/2011
Improvement Refunding Bonds of 2002C
2.5 -3.3%
10/2/2002
2/1/2012
Improvement Bonds of 2003B
2.0- 4.125%
3/1/2003
2/1/2011
Improvement Bonds of 2008A
3.50 -3.60%
6/11/2008
2/1/2019
Improvement Bonds of 2009A
2.50 -4.30%
4/16/2009
2/1/2024
Improvement Refunding Bonds of 2009C
2.00 -3.00%
4/16/2009
12/1/2015
Total Special Assessment Debt with Governmental Commitment
Proprietary Fund Bonds:
Sewer and Water Revenue Bonds 1997A
4.3 -5.1%
5/21/1997
2/1/2013
Golf Course Revenue Bonds of 1999F
5.0 -5.6%
12/1/1999
2/1/2012
Water Revenue Refunding Bonds of 2009B
2.50 -4.0%
4/16/2009
2/1/2020
Total Proprietary Fund Bonds
Total Bonded Indebtedness - Primary Government
Component Unit - EDA
$6,500,000 Ice Arena Lease Rev Bonds of 2008B 4.0% -4.90% 6/11/2008 4/1/2028
Total Component Unit - EDA
Total Bonded Indebtedness - Reporting Entity
142 —
Exhibit 2
Authorized
And Issued
$1,405,000
1,775,000
3,180,000
4,185,000
3,625,000
4,065,000
3,370,000
3,650,000
625,000
19,520,000
1,475,000
1,100,000
1,205,000
3,780,000
26,480,000
6,500,000
6,500,000
$32,980,000
Retired
$235,000
115,000
350,000
1,255,000
2,485,000
1,130,000
410,000
355,000
40,000
5,675,000
1,145,000
715,000
100,000
1,960,000
7,985,000
390,000
390,000
$8,375,000
Outstanding
$1,170,000
1,660,000
2,830,000
2,930,000
1,140,000
2,935,000
2,960,000
3,295,000
585,000
13,845,000
330,000
385,000
1,105,000
1,820,000
18,495,000
6,110,000
6,110,000
$24,605,000
Principal Due
In 2011
$10,000
30,000
40,000
2,930,000
540,000
2,935,000
400,000
230,000
60,000
7,095,000
75,000
190,000
95,000
360,000
7,495,000
245,000
245,000
$7,740,000
Interest Due
In 2011
$52,140
90,943
143,083
56,411
28,440
56,701
96,890
114,025
15,862
368,329
14,918
16,145
35,562
66,625
578,037
264,992
264,992
$843,029
- 143 -
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Uses of funds:
Land acquisition
1,594,000
Accounted
- 1,491,727
Construction costs
2,290,887
Current
For in
Current
Amount
Budget
Prior Years
Year
Remaining
- 850,000
Interest
Sources of funds:
349,250
- 1,234,582
Loan payments:
Bond proceeds
$1,375,000
$518,876
$ -
$856,124
Loan proceeds
1,375,000
-
-
1,375,000
Refunding bond proceeds
1,375,000
-
-
1,375,000
Current property taxes received
-
2,671
-
(2,671)
Tax increment received
5,710,068
514,522
23,182
5,172,364
Direct charges to developer
401,501
501,222
-
(99,721)
Transfers
1,375,000
-
-
1,375,000
Interest on investments
21,000
208,937
2,724
(190,661)
$294,411
Total sources of funds
11,632,569
1,746,228
25,906
9,860,435
Uses of funds:
Land acquisition
1,594,000
102,273
- 1,491,727
Construction costs
2,290,887
-
- 2,290,887
Bond payments:
Principal
1,375,000
525,000
- 850,000
Interest
1,583,832
349,250
- 1,234,582
Loan payments:
Principal
1,375,000
-
- 1,375,000
Interest
500,000
-
- 500,000
Refunding bond payments:
Principal
1 ,375,000
-
- 1,375,000
Administrative costs
112,450
26,282
233 85,935
Bond discount
51,400
-
- 51,400
Transfer to other funds
1,375,000
423,886
- 951,114
Bonding costs
-
25,126
- (25,126)
Total uses of funds
11,632,569
1,451,817
233 10,180,519
Funds remaining (or deficit)
$0
$294,411
$25,673 ($320,084)
156 —
Sources of funds:
Bond proceeds
Loan proceeds
Refunding bond proceeds
Tax increment received
Interest on investments
Interfund transfer
Total sources of funds
Uses of funds:
Land acquisition
Construction costs
Bond payments:
Principal
Interest
Loan payments:
Principal
Interest
Refunding bond payments:
Principal
Payment to refund bond escrow agent
Administrative costs
Bond discount
Transfers
Refund tax increment
Bonding costs
Total uses of funds 6,765,600 2,658,229 35,870 4,071,501
Funds remaining (or deficit) $900 $108,124 $72,293 ($179,517)
Note: The property owner received a tax abatement for 2002 & 2007, resulting from a property valuation appeal.
- 157 -
Accounted
Current
For in
Current
Amount
Budget
Prior Years
Year
Remaining
$1,350,000
$905,344
$ -
$444,656
1,350,000
352,803
-
997,197
1,350,000
-
-
1,350,000
1,345,500
1,422,386
107,231
(184,117)
21,000
85,820
932
(65,752)
1,350,000
-
-
1,350,000
6,766,500
2,766,353
108,163
3,891,984
-
304,413
-
(304,413)
588,000
-
-
588,000
1,350,000
575,000
35,000
740,000
364,000
415,638
650
(52,288)
1,350,000
352,803
-
997,197
286,000
272,399
-
13,601
1,350,000
-
-
1,350,000
-
337,425
-
(337,425)
120,000
16,811
220
102,969
7,600
-
-
7,600
1,350,000
-
-
1,350,000
-
372,804
-
(372,804)
-
10,936
-
(10,936)
Total uses of funds 6,765,600 2,658,229 35,870 4,071,501
Funds remaining (or deficit) $900 $108,124 $72,293 ($179,517)
Note: The property owner received a tax abatement for 2002 & 2007, resulting from a property valuation appeal.
- 157 -
CITY OF COTTAGE GROVE, MINNESOTA
Sources of funds:
Tax increment received $825,000 $593,506 $32,756 $198,738
Interest on investments - 17,448 1,783 (19,231)
Total sources of funds 825,000 610,954 34,539 179,507
Uses of funds:
Construction costs
750,000
419,791
- 330,209
Administrative costs
75,000
3,197
220 71,583
Total uses of funds
825,000
422,988
220 401,792
Funds remaining (or deficit)
$0
$187,966
$34,319 ($222,285)
— 158 —
Accounted
Current For in Current Amount
Budget Prior Years Year Remaining
Sources of funds:
Bond proceeds
$2,000,000
$1,303,360 $
- $696,640
Tax increment received
3,776,015
1
- 2,504,556
Real estate sales
1
-
- 1
Interest on investments
5,000
172,006
- (167,006)
Local contribution
377,225
-
- 377,225
Transfer in from other funds
785,000
-
- 785,000
Total sources of funds
6,943,241
2,746,825
0 4,196,416
Uses of funds:
Land/building acquisition
1,394,000
501,194
- 892,806
Construction costs
823,000
501,516
- 321,484
Bond payments:
Principal
2,000,000
1,315,000
- 685,000
Interest
633,000
370,724
- 262,276
Loan payments:
Principal
785,000
-
- 785,000
Interest
298,000
-
- 298,000
Administrative costs
387,040
58,391
- 328,649
Total uses of fiends
6,320,040
2,746,825
0 3,573,215
Funds remaining (or deficit)
$623,201
$0
$0 $623,201
— 159 —
CITE' OF COTTAGE GROVE, MINNESOTA
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR A TAX INCREMENT FINANCING DISTRICT
DISTRICT NUMBER 1 -10
December 31, 2010
Exhibit 17
Uses of funds:
Accounted
Land/building acquisition
Current
For in
Current
Amount
Construction costs
Budget
Prior Years
Year
Remaining
Sources of funds:
Bond proceeds
$11,000,000
$ -
$ -
$11,000,000
Loan proceeds
11,000,000
-
-
11,000,000
Tax increment received
7,632,172
1,324,443
155,167
6,152,562
Market Value Credit -TIF
-
79
-
(79)
Real estate sales
4,300,000
1,306,791
-
2,993,209
Developer contribution
-
8,000
-
(8,000)
Interest on invested funds
230,000
-
1,557
228,443
Local contribution
250,000
-
-
250,000
Grant
250,000
-
-
250,000
Applicant fees
-
145,700
-
(145,700)
Transfer in from other funds
11,000,000
-
-
11,000,000
Total sources of funds
45,662,172
2,785,013
156,724
42,720,435
Uses of funds:
Land/building acquisition
6,200,000
1,445,331
-
4,754,669
Construction costs
3,943,000
972,383
279,654
2,690,963
Bond payments:
Principal
11,000,000
-
-
11,000,000
Interest
868,546
-
-
868,546
Loan payments:
Principal
11,000,000
-
-
11,000,000
Interest
868,546
-
-
868,546
Administrative costs
782,080
103,129
540
678,411
Miscellaneous - refunds
-
140,700
-
(140,700)
Transfer out to other funds
11,000,000
-
-
11,000,000
Total uses of funds
45,662,172
2,661,543
280,194
42,720,435
Funds remaining (or deficit)
$0
$123,470
($123,470)
$0
— 160
Current
Budget
Accounted
For in Current
Prior Years Year
Sources of funds:
Bond proceeds
$23,400,000
$3,000,000 $ -
Loan proceeds
7,800,000
- -
Tax increment received
28,300,000
2,167,763 742,105
Direct charges to developer
-
153,635 -
Land sale
1,700,000
1,604,000 -
Transfer in
7,800,000
455,719 -
Market value credit - TIF
-
106 -
Community development block grant
400,000
- -
Interest on invested funds
500,000
101,862 4,050
Other
-
23,020 -
Total sources of funds
69,900,000
7,506,105 746,155
Uses of funds:
Land/building acquisition
Construction costs
Bond payments:
Principal
Interest
Loan payments:
Principal
Interest
Administrative costs
Discount on debt issued
Transfer out to other funds
Other
Total uses of funds
Funds remaining (or deficit)
5,000,000
9,000,000
23,400,000
13,748,000
7,800,000
2,830,000
7,800,000
322,000
69,900,000
$0
2,564,657
3,103,952
110,000
611,502
150,939
220,858
36,812
316,531
7,115,251
$390,854
1 6,971
60,000
145,246
4,165
226,382
$519,773
Amount
Remaining
$20,400,000
7,800,000
25,390,132
(153,635)
96,000
7,344,281
(106)
400,000
394,088
(23,020)
61,647,740
2,435,343
5,879,077
23,230,000
12,991,252
7,800,000
(150,939)
2,604,977
(36,812)
7,800,000
5,469
62,558,367
($910,627)
— 161 —
Accounted
Current For in
Budget Prior Years
Current Amount
Year Remaining
Sources of funds:
12,000,000
619,999
- 11,380,001
Tax increment received
$7,100,000
$203,053
$116,216 $6,780,731
Interest on investments
1,000,000
-
28 999,972
Land sales
17,025,000
918,746
- 16,106,254
Developer contribution
-
4,000
- (4,000)
Bond proceeds
20,000,000
-
- 20,000,000
Loan proceeds
20,000,000
-
- 20,000,000
Transfers in
20,000,000
-
- 20,000,000
Total sources of funds
85,125,000
1,125,799
116,244 83,882,957
Uses of funds:
Land/building acquisition
12,000,000
619,999
- 11,380,001
Site Improvements /preparation
1,000,000
27,494
- 972,506
Public utilities
3,400,000
-
- 3,400,000
Streets
1,700,000
454,396
- 1,245,604
Other public improvements
6,000,000
-
- 6,000,000
Bond payments:
Principal
20,000,000
-
- 20,000,000
Interest
477,000
-
- 477,000
Loan payments:
Principal
20,000,000
-
- 20,000,000
Interest
477,000
-
- 477,000
Administrative costs
71,000
43,687
1,189 26,124
Transfers out
20,000,000
-
- 20,000,000
Total uses of funds
85,125,000
1,145,576
1,189 83,978,235
Funds remaining (or deficit)
$0
($19,777)
$115,055 ($95,278)
— 162 —
Accounted
Current For in Current Amount
Budget Prior Years Year Remaining
Sources of funds:
Tax increment received
$1,110,000
$55,550
$76,758 $977,692
Interest on investments
20,000
-
644 19,356
Developer contribution
-
2,000
- (2,000)
Bond proceeds
1,115,000
-
- 1,115,000
Loan proceeds
2,230,000
575,000
1,655,000
Transfers in
1,115,000
-
- 1,115,000
Total sources of funds
5,590,000
632,550
77,402 4,880,048
Uses of funds:
Site Improvements /preparation
130,000
505,225
-
(375,225)
Public utilities
525,000
60,501
-
464,499
Bond payments:
Principal
1,115,000
-
-
1,115,000
Interest
182,500
-
-
182,500
Loan payments:
Principal
2,230,000
-
-
2,230,000
Interest
182,500
55,673
34,500
92,327
Administrative costs
110,000
16,273
300
93,427
Transfers out
1,115,000
-
-
1,115,000
Total uses of funds
5,590,000
637,672
34,800
4,917,528
Funds remaining (or deficit)
$0
($5,122)
$42,602
($37,480)
163
- 164 -
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 pe7formance 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 Debt by Type
Table 10 — Ratios of General Bonded Debt 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 derived from the
comprehensive annual financial reports for the relevant year.
165
166 -
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— 177 —
CITY OF COTTAGE GROVE, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
As of December 31, 2010
% of Debt
Net Debt Applicable
Outstanding to City
Overlapping:
Washington County
School Districts
ISD No. 200 (Hastings)
ISD No. 833 (South Wash. County)
Metro Council
Total Overlapping
City of Cottage Grove Direct Debt
Table 11
City of Cottage Grove
Share of
Overlapping
Debt
$ 11.3,525,000
11.9537% $
13,570,468
54,220,000
1.8871%
1,023,186
295,095,000
32.5729%
96,120,944
167,600,000
0.9725%
1,629,910
112,344,508
$ 22,785,000
100.00%
22,785,000
Total Direct and Overlapping Debt: $ 653,225,000 $ 135,129,508
Source: Washington County. Percentage of debt applicable is calculated by dividing portion of tax eapactiy
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 Ion.--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.
— 178 —
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179
CITY OF COTTAGE GROVE, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Table 13
Sources:
(1) Census for 2010. Metropolitan Council.
(2) Washington County data from Bureau of Economic Analysis..
(3) Indepdendent School District No. 833 including Valley Crossing School.
— 180
Per
Capita
Fiscal
Personal
Personal
School
Unemployment
Year
Population(1)
Income (2)
Income (2)
Enrollment (3)
Rate (2)
2001
30,753
$ 1,167,968,187
$ 37,979
15,401
3.0%
2002
30,984
1,191,768,576
38,464
15,652
3.7%
2003
31,437
1,251,538,407
39,811
15,744
4.1%
2004
31,774
1,356,146,094
42,681
16,088
4.0%
2005
33,179
1,428,654,561
43,059
16,400
3.5%
2006
33,529
1,522,786,593
45,417
16,467
3.5%
2007
33,788
1,602,362,112
47,424
16,805
3.9%
2008
34,017
1,636,830,006
48,118
16,800
5.0%
2009
34,213
1,580,914,304
46,208
16,795
7.5%
2010
34,589
1,614,271,397
46,670
17,060
6.6%
Sources:
(1) Census for 2010. Metropolitan Council.
(2) Washington County data from Bureau of Economic Analysis..
(3) Indepdendent School District No. 833 including Valley Crossing School.
— 180
CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL EMPLOYERS Table 14
Current year and nine years ago
Total 3,461 50% 3,351 60%
Sources:
City of Cottage Grove Annual Muncipal Disclosure Reporting.
181 —
2010
2001
Percentage
Percentage
of Total
of Total
Taxpayer
Employees
Rank
Employment
Employees
Rank
Employment
School District 833
1,081
1
16%
992
1
18%
3M Cottage Grove
730
2
11%
750
2
13%
Renewal by Andersen
402
3
6%
250
4
4%
Up North Plastics Inc
215
4
3%
280
3
5%
Werner Electric
208
5
3%
-
-
-
Cub Foods
200
6
3%
187
7
3%
Menard's
200
6
3%
200
5
4%
City of Cottage Grove
175
8
3%
170
8
3%
Target
130
9
2%
-
-
-
Kohl's
120
10
2%
-
-
-
Rainbow Foods
-
-
200
5
4%
Allina
-
162
9
3%
Allied Systems
-
160
10
3%
Total 3,461 50% 3,351 60%
Sources:
City of Cottage Grove Annual Muncipal Disclosure Reporting.
181 —
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