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Home My WebLink About2013-05-15 PACKET 02.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # � � DATE 5/15/13 ' • PREPARED BY Finance Robin Roland ORIGINATING DEPARTMENT STAFF AUTHOR *�**��*****�**********************�************� COUNCIL ACTION REQUEST Representatives from CliftonLarsonAllen will give a presentation on the 2012 Comprehensive Annual Financial Report. STAFF RECOMMENDATION Accept by Motion the 2012 Comprehensive Annual Financial Report. BUDGET IMPLICATION BUDGETED AMOUNT _ : =u• ► DVISORY COMMISSION ACTI ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS ❑ PARKS AND RECREATION ❑ HUMAN SERVICES/RIGHTS ❑ ECONOMIC DEV. AUTHORITY ❑ SUPPORTING DOCUMENT DATE REVIEWED ❑ ❑ ❑ ❑ ❑ ❑ ❑ � MEMO/LETTER: ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: �OTHER: presentation APPROVED ❑ ❑ ❑ ❑ ❑ ❑ ❑ DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ ADMINISTRATORS COMMENTS �`/ � � . ity Administrator Date *************************�**:��**��***�*�******** COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER Cottage � Grove � Pride and P�OSPerity Meet To: Mayor and City Council Members Ryan Schroeder, City Administrator From: Robin Roland, Finance Director Date: May 7, 2013 Subject: 2012 Comprehensive Annual Financial Report Introduction Rachel Flanders and Heidi Tatro with the City's auditing firm, CliftonLarsonAllen LLP will be at the meeting to present the 2012 Financial Statements. A copy of the 2012 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 157) 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. City of Cottage Grove Decet�'t��r �7. ��1� \ Audit Results �nd �c�mm�ri��afii�rrr�i Rachel Flanders, P�rtner Heidi Tatro, Manag�r Agenda • Audit Results • Required Communications • Financial Results • Other Items � Audit Results • Unqualified (i.e. "clean") opinion on the financial statements • No material weaknesses in internal controls noted • Minnesota legal compliance — no comments � Required Communications • Audit provides reasonable, but not absolute assurance !'I�� • New accounting policies — GASB 62: Codification of Accounting and Financial Reporting Guidance — GASB 63: Reporting of deferred outflows of resources, deferred inflows and net positions • Significant accounting estimates • No material audit adjustments and no uncorrected misstatements • No disagreements with management � Financial Results ib 000,000 ia,000,000 iz,000,000 io,000,000 a,000,000 6 000,000 a,000,000 z,000,000 zooa omis�eua�eo�s mswz om�enme�n��ome zss,aaa oFm�a�aFOrte¢, zza,am ocnarqesforsem�e ioos,sa� omcerqo�er�me�cai as�soa ou�e��a�avermia� ioza,ssz •vropemTa.� sia�aza GeneralFund Revenues zooz e63as ioo,za� izz,ibz i isi ozb �e� zv ea3 zoa sz36iz6 mm si aa� es,nz mi ssz i isa,asa b�s,o33 �s3 aea io,izs,�z� zoii ab sz3 aa,�oe iz3 6�6 a�z xii eea,zoz sz3 x�z io,33z,zza �s,3zs ai oao iba,s3z a3o,isz 633 63i a3i ba� iiis3zs� .. Financial Results (continued) General Fund Expenditures- includes capital outlay ia,000,000 � iz,000,000 � io,000,000 a,000,000 6 000,000 a,000,000 z,000,000 o cwmre a ae�reano� ov�eu�works ov�eu�sarec� •ee�eai ewc zoiz i bia,aba z xas,zez 6 z3a,iba z sai s3s m zooa i sbs bbi z,mb zoa s,3z� e�e z,eas xza zooz i ass biz i z33 33z s,3e6 saz z,�3s azz zoio i�sbzzo z,ioz,zea s,s63 �ba z,zas,z�z zoii i z3i o36 z xia,eea s zao,aoa z,�663zi Financial Results (continued) ria,000,000 - S�ASOO,000 �� S�AOOO,000 riz,soo,000 �� riz,000,000 ri? soo,000 ri? 000,000 rio,soo,000 rio,000,000 i�Revenues I�ExpentllN�es . � zoio S�A�oiaai riz,aoa,z3i zoii 512a3a591 riz,asz,azz zoiz S�A�3o,aoi � riz,�isszs � 0110onlavWln GeneralFund Revenues & Expenditures zooa zooz riz,eez�es � rizy3o,eis $11J23�JJ3 $11699355 Financial Results (continued) Governmen[-witle 5[a[emen[s $65�000�000 $55 000 000 &15 000 000 $35 000 000 $25 000 000 �CasM1&Inve9ments �Eyen s ��EyentlableNe�ASSe�s �m 2008 2009 20ID 2011 P➢12 Financial Results (continued) io,000,000 s 000,000 a,000,000 � 000,000 b 000,000 s,000,000 � a,000,000 3 000,000 z,000,000 � i 000,000 - Unreserved/Unassigned Fund Balance-General Fund zo.o� ao.o� �o.o� eo.o� so.o� ao.o� 30.0� zo.o� io.o� o.ou �Fund Balance �% ofAnnual Expenditures m zooa zooz mm mn miz Financial Results (continued) 5300,000 5%so,000 5%00,000 riso,000 rioo,000 Sso,000 Slso,000� Slioo,000� Sliso,000� �� ■ Opeating Inmme (Loss) ■ Opeating Cash Row � Golf Course Fund Financial Results (continued) Saoo,000 53so,000 5300,000 5%so,000 5%00,000 riso,000 rioo,000 Sso,000 Slso,000� Slioo,000� Sliso,000� 51%00,000� 51%so,000� • Opeatlng Inmme �Lnss� • Opeatlng LasM1 Fiow � Street Light Fund Financial Results (continued) 3so,000 300,000 zso,000 zoo,000 iso,000 ioo,000 so,000 �so,000� ■ Operating Inmme (Loss) ■ Operating Cash Row �.:_...OtlmnlavWb EMS Fund Financial Results (continued) Water Operating Fund 5?300,000 � ` 5? ioo,000 �, Ssoo,000 � poo,000 r Ssoo,000 ��. 5300,000 � rioo,000 � Slioo,000� , 51300,000� , ■ Operating Inmme (Loss) ■ Operating Cash Flow � Financial Results (continued) Ssoo,000 .— Saoo,000 �� 5300,000 �. — 5%00,000 �� rioo,000 � Slioo,000� �� 51%00,000� �� 51300,000� . Slaoo,000� �� Sewer Operating Fund ■ Operating Inmme ( Loss) ■ Operating Cash Flow � Other Items • GFOA Certificate of Achievement for Excellence in Financial Reporting — Received for 2011 _ 22"d consecutive year • GASB No. 61: Component Units — Effective 2013 — Modifies previous requirements for inclusion of component units (i.e., the City's EDA) � Other Items (continued) • GASB 65: Items Previously Reported as Assets and Liabilities — Effective 2013 • GASB No. 68: Participants in Multi-Employer Pension Plans — Effective 2015 � Questions and Feedback Thank you! Rachel Flanders, Partner Ph.612-397-3027 rachel.flanders@cliftonlarsonallen.com Heidi Tatro, Manager Ph.612-397-3123 heid i.tatro@cliftonlarsonallen.com � .. .=�� •'�. . ` -..� � '� � .. .. . ' '+ Y� ' • �� ''�\ �YN? _...�� , � � • ' �� ..... ' � � } `�!�' `� �: �.. 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Cover photo is a winning enhy from the 2012 City of Cottage Grove Photo Contest. The photographer is Bill Pohlmann. COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF COTTAGE GROVE STATE OF MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2012 Prepared By: Finance Department CITY OF COTTAGE GROVE, NIINNESOTA TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Principal City Officials Organization Chart II. FINANCIAL SECTION IndependentAuditors' Report Management's Discussion and Analysis Basic Financial Statements: Govemment-Wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Govemmental Funds to the Statement of Activities Statement of Net Position - Proprietary Funds Statement of Revenues, Eapenses, and Changes in Fund Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Notes to Financial Statements Required Supplementary Information: Budgetary Comparison Schedule - General Fund Budgetary Comparison Schedule - Note to RSI Funding Progress Schedule - Other Post Employment Health Care Benefits Reference Page Number 3 11 13 14 17 21 Statement 1 35 Statement 2 37 Statement3 38 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 40 42 43 44 48 53 Statement 9 88 94 95 CITY OF COTTAGE GROVE, NIINNESOTA TABLE OF CONTENTS Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Govemmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Govemmental Funds Subcombining Balance Sheet - Nonmajor Special Revenue Funds Subcombining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Special Revenue Funds Subcombining Balance Sheet - Nonmajor Debt Service Funds Subcombining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Debt Service Funds Subcombining Balance Sheet - Nonmajor Capital Project Funds Subcombining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Capital Project Funds Special Revenue Funds: Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Recycling Storm Water Forfeiture/Seizure Ice Arena Charitable Gambling Intemal Service Funds: Combining Statement of Net Position Combining Statement of Revenue, Expenses and Changes in Fund Net Position Combining Statement of Cash Flows Component Unit: Economic Development Authority: Combining Balance Sheet - All Govemmental Fund Types Combining Statement of Revenues, Expenditures and Changes in Fund Balance - All Govemmental Fund Types Reference Statement 10 Statement 11 Statement 12 Statement 13 Statement 14 Statement 15 Statement 16 Statement 17 Page Number 101 102 104 106 109 110 112 114 Statement 18 116 Statement 19 117 Statement 20 118 Statement 21 119 Statement 22 120 Statement 23 122 Statement 24 123 Statement 25 124 Statement 26 126 Statement 27 127 CITY OF COTTAGE GROVE, NIINNESOTA TABLE OF CONTENTS Supplementary Financial Information: Construction/Acquisition Costs: Capital Projects Funds Combined Schedule of Bonded Indebtedness Debt Service Payments to Maturity Deferred Tax Levies Subcombining Balance Sheet - Pavement Management Debt Service Schedule Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance- Pavement Management Debt Service Schedule Subcombining Balance Sheet - Construction Revolving Capital Project Schedule Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance- Conshuction Revolving Capital Project Schedule Subcombining Balance Sheet - Tax Increment Construction Revolving Schedule Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance- TaxIncrement Conshuction Revolving Schedule Subcombining Balance Sheet - TIF Debt Service Revolving Schedule Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance- TIF Debt Service Revolving Schedule Schedule of Sources and Uses of Public Funds: Oakwood Heights District Number 1-1 Up North Plastics DishictNumber 1-3 Cottages of Cottage Grove DishictNumber 1-8 TaxIncrementDistrictNumber 1-10 TaxIncrementDistrictNumber 1-12 TaxIncrementDistrictNumber 1-13 TaxIncrementDistrictNumber 1-14 Reference E�ubit 1 E�ibit 2 E�ubit 3 E�ibit 4 E�ibit 5 E�ubit 6 E�ibit 7 E�ubit 8 E�ibit 9 E�ibit 10 E�ibit 11 E�ibit 12 E�ibit 13 E�ubit 14 E�ubit 15 E�ubit 16 E�ubit 17 E�ubit 18 E�ubit 19 Page Number 130 134 136 138 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 CITY OF COTTAGE GROVE, NIINNESOTA TABLE OF CONTENTS III. STATISTICAL SECTION Net Position by Component Changes inNetPosition Fund Balances of Govemmental Funds Changes in Fund Balances of Governmental Funds Assessed and Estimated Actual Value of Taxable Property Property Tax Rates - Duect and Overlapping Govemments PrincipalProperty Taxpayers Property Tax Levies and Collections Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Govemmental Activities Debt Legal Debt Margin Information Demographic and Economic Statistics Principal Employers Full-time Equivalent City Govemment Employees by Function Operating Indicators by Function/Program Capital Asset Statistics by Function/Program Reference Page Number Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 157 158 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 L INTRODUCTORY SECTION TMs Page Intentiortally Left Blank- Cottage � Grove �ere Pride and P�osPeri Meet May 7, 2013 To the Honorable Mayor, Members of the city Council and Citizens of the City of Cottage Grove: Minnesota 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 far the year ended December 31, 2012. Management assumes full responsibility far the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control standards that it has established far 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. CliftonLarsonAllen LLP, independent certified public accountants have issued an unqualified ("clean'� opinion on the City of Cottage Grove's financial statements far the year ended December 31, 2012. The independent auditors' report is located at the front of the financial section of this report. ManagemenYs 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. ProFile of the CSty of Cottage Grove 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, sia�teen miles southeast of Downtown St. Paul. The City currently occupies 34.3 square miles of land. The 2010 Census established the City population at 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. The City Council is responsible for passing ordinances, adopting the budget and appointing members of the various citizens' advisory boards. In addition, the Mayor and Council appoint a full-time City Administrator, who is responsible for overall supervision of City operations. CITY OF COTTAGE GROVE • 12800 Ravine Parkway • Cottage Grove, Minnesota 55016 www.cottage-grove.org • 651-458-2800 • Fax 651-458-2897 • Equal Opportunity Employer TMs Page Intentiortally Left Blank- Letter of Transmittal May 7, 2013 The City provides a full range of municipal services. These services include police and fire protection, ambulance services, parks and park facilities, a golf course, recreational programming, an ice arena, street construction and maintenance, water, sewer and storm water utilities, economic development, planning and zoning, and general administrative functions. The Economic Development Authority (EDA) of the City of Cottage Grove is a separate legal entity organized pursuant to Minnesota Statute 469. There are seven members of the EDA who are appointed by the City Council; two appointees are Council members and the five others are appointed from the community. The EDA is included in this financial report as a discretely presented component unit, due to the EDA's 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 budget incorporates the City's financial policies, financial operations, debt management, reserves and investments. The process by which the biennial budget document is prepared begins with the submission of department appropriation requests in June. The requests, along with projected revenues and stated City Council strategic goals, provide the starting point for budget development. Collaborative meetings are held with City Staff and workshops are held with the City Council to refine the budget document in advance of the submission of the preliminary tax levy, which must be adopted by September 15�' each year. The preliminary levy may be lowered after it is adopted, but cannot be increased. An information session is held for taxpayers at the first City Council meeting in December in advance of adoption of the final levy and budget. The Council is required to adopt a final budget by no later than December 28�' of each year. 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 economv Cottage Grove is part of the Minneapolis/St. Paul seven county metropolitan area, an economically diverse environment with an equally diverse labor force. The City's major employers include School District 833, 3M Company, Up North Plastics, Renewal by Andersen, Target, Allied Systems, 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 sluggish recovery from the 2008 recession appears to be abating, with modest improvements in existing home sales and renewed interest in new residential development. Currently the national unemployment rate is 7.6% and the Twin Cities metro rate is 5.4%. It appears that a recovery to pre-recession employment levels has been achieved locally, ahead of national estimates. The Economic Development function within the City warks 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. Thirteen new businesses located in Cottage Grove in 2012 including AJacks Automotive, Cherry Berry and Yo-Joes, Diversified s Letter of Transmittal May 7, 2013 Manufacturing (DMC), Lindgren Dental Care, Modern Automotive Performance, Sport Clips, Manufacturing Solutions, and Dollar Tree. Business expansions included 3M, American Motor Sports Bar & Grill, Acorn Mini Storage, Snap Fitness and the Hope Glen Farm event facility. Future develonment 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, 32.5% and 30 - 50 years, 38.1%. According to the 2010 census, the average age is 35 years and the median family income is $80,830. This median family income is 141% higher than the Twin Cities Metro Area Cottage Grove has evolved from a 1970's bedroom community to a steadily growing suburb with an expanding commercial, retail and industrial base. The 1990's and early 2000's saw a residential development boom, with several years of building permits for single family homes numbering over 300 per year. Residential development slowed over the last five years, averaging 60 new building permits per year. In the ten years prior, (1999-2007) an average of 213 new building permits per year were issued. At the end of 2012, less than 75 vacant single family lots (with infrastructure) remain for construction in the City. One plat for residential development was submitted and approved in 2012, adding 271ots. The East Ravine, an area which encompasses over 9,000 acres was master planned for development prior to the 2008 recession. Development of the first one thousand acres of low density residential housing with park and open space amenities and nodes of commercial and retail uses was anticipated by 2015. Although the recession stalled any development in the East Ravine far the last five years, renewed interest appears to have taken hold in late 2012. As of April 2013, two residential plats have already been submitted totaling 226 lots, with other residential developers pursuing acreage for development in the master plan area. The following are other major initiatives for 2013. • Construction of the 178,700 square foot Wal-Mart redevelopment and other development atthe Shoppes of Cottage View retail node. • Redevelopment of the former Home Depot site. • Initiate operations of Business Enterprise Center providing affordable workspace and support services to increase entrepreneur's chance of success. • Redevelopment of the Norris Marketplace area • Expansion of the Business Park by attracting new businesses. Financial nerformance In 2012, the City's General Fund revenues were over budget by $359,051. Expenditures were over budget by $175,470 due to a shift in public safety operations. The final budget anticipated an increase of $153,034 in fund balance where final operations showed a$336,615 increase. Overall City fund balances declined by $9,032,513 due to a combination of planned expenditures and funding shifts. The construction costs ofthe Public Safety City Hall project resulted in $11.6 million of the fund balance decline. The total project cost was budgeted at $15.7 million and when completed in October of 2012, the actual cost of the project was $1 million under budget. 0 Letter of Transmittal May 7, 2013 At the end of 2011, the City Council determined to finance the cost of the project with cash on hand rather than issuance of debt. Future tax levies (2013 and beyond) will be dedicated to replenish the City's cash reserves. Recovery of costs from other governmental units and the issuance of $1.87 million in bonds to reimburse previous year expenses increased the city fund balances by $2.6 million in offset to the Public Safety City Hall project expenditures. The City's outstanding debt at year end is 4% below 2011 levels or $220 debt per capita. 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 far the General Fund, Special Revenue and Enterprise Funds. The biennial budget process allows for the assurance that any change to revenues or expenditures is sustainable in the successive year. Furthermore, Council and staff compile a five year Capital Improvement Plan (CIP) 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. A combination of special assessments and general obligation debt is used for most street construction and reconstruction projects. For example, during the 2013 to 2017 period over $19 million in total Pavement Management projects are anticipated. Pavement Management is not a full road reconstruction but rather a mill and overlay process or reclamation process to ea�tend roadway life. Project funding for Pavement Management is covered by a 45% / 55% cost split special assessments against benefiting properties with the balance of the costs covered by general obligation debt to be repaid by annual tax levies. Annual levies for debt repayment are balanced so that no more than 10% of any property tax levy is for the repayment of debt. Relevant Financial Policies The City uses a variety of financial policies to guide its fiscal actions and ensure fiscal stability. In 2003, the City had adopted a Fund Balance policy which identified the required designated amounts in the Fund Balance of the General Fund at fiscal year end and directed the transfer of any excess revenues to other funds for specific purposes. This policy was responsible far the transfer of over $4.6 million in 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. For the year ended December 31, 2011 and subsequent years, the City amended its Fund Balance policy to conform to the requirements of GASB 54. Much of the City's existing policy was already in conformance with the new statement, resulting only in reclassification of terminology according to the hierarchy of usable fund balance resources. In 2012, this policy allocated $255,361 to future debt reduction and capital projects funding. � Letter of Transmittal May 7, 2013 Cash management policies and practices The City's policy is to invest all available monies at competitive interest rates in accordance with the City's investment policy. This 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. Maturities of investments range from 30 days to 10 years, but no more than 25% of the total investments may have a maturity of greater than 5 years but less than 10 years. In 2012, the rate of return on the City's cash and investments was 0.65%. When the year- end fair market value adjustment is included, the City's return on investment was slightly higher at 0.68% of the total portfolio valuation. It should be noted that any increase of fair market value year over year does not necessarily represent a trend which will continue. The market adjustment (positive or negative) is not a`realized' gain or loss; the City policy is to hold all investments to maturity in order to capture the stated yield at the time of purchase. 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 Ea�tension Rate. This Tax Eatension Rate is the tax rate used to determine the property taxes paid by each property owner. The State Property Classification System (Class Rates) determines the Tax Capacity value of each property as follows: Class Rate Residential Homestead Value to $SOQ000 1.00% Over $SOQ000 125% Tax Capacity of. $125,000 Home 1,250 $20Q000 Home 2,000 Commercial Value to $15Q000 1.50% Value above $15Q000 2.00% Tax Capacity of. $75Q000 Building 14,250 $1,OOQ000 Building 19,250 $2,SOQ000 Building 49,250 0 Letter of Transmittal May 7, 2013 Overall property market values grew consistently from 1998 to 2008. However the 2008 recession and resulting decline in property values is reflected in the 2009 to 2012 data in the chart, due to the timing of property valuation system in the state of Minnesota For 2012, the total market value decreased 8.70%, or $231 million. Of this change, a decline of 9.7% was the devaluation of existing properties and the impact of the Market Value Exemption while an increase of 1% ($16 million) is attributed to new construction. The following table shows the changes in valuations over the past several years: Year Payable 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Estimated Market Value 1,717,46Q500 1,941,381,700 2,278,319,600 2,588,151,800 2,848,502,600 2,986,391,700 3,058,237,500 2,924,191, 800 2,695,641,900 2,464,372,900 Percent Change 1726% 13.04% 1736% 13.60% 10.06% 4.84% 2.41 % (438%) (7.81 %) (8.70%) Net Tax Capacity 21,118,262 22,561,473 26,315,736 29,344,344 32,824,288 34,606,397 35,932,471 34,558,053 32,545,440 3Q066,486 Percent Change 17.90% 6.83% 16.64% 11.51% 11.86% 5.43% 3.83% (3.83%) (5.82%) (7.61 %) The delinquency rate for property taxes remains low. Current tax collections were 98.9% of the property tax levy during 2012. Total collections have consistently been above 95% since 1990. The allocation of property tax levy by purpose (urban property only) for the years payable 2005 to 2012 are: Tax EaTension Rates Purpose 2005 2006 2007 2008 2009 2010 2011 2012 General Fund 34298 33316 32.022 31.548 30.825 31.780 34.500 39.066 Debt Service 4.872 4.609 3.791 3.641 3.807 3.635 3.755 2380 Total Tax Rate 39.170 37.925 35.813 35.189 34.632 35.415 38255 41.446 The decrease in the tax ea�tension rate from 2005 through 2009 was reflective of the strong appreciation of market values of existing properties in addition to new construction. The increase in the rate subsequent to 2009 was not due to an increase in the levy amount (as it remained flat) but rather to the sharp decline in valuations. Only when valuations stabilize and return to a growth pattern will a declining tax eatension rate strategy be possible again. 0 Letter of Transmittal May 7, 2013 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, 2011. This was the twenty-second 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 department personnel for their dedication and contributions to the audit and reporting process. Special recognition goes to Brenda Malinowski, Assistant Finance Director and Cathy Mohr, Accountant, for their development and preparation of the report, including the statistical section. 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 ; ,:. x . / I'� � �� Robin Roland Finance Director 10 Certificate of Achievement for Excellence in Financial Re ortin p g Presented to City of Cottage Grove Minne s ota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2011 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 fmancial reporting. - ;�, � ��.� .: : '� � � � � ,.. _ # ;� : < "� President � Executive Director �, �` TMs Page Intentiortally Left Blank- 12 CITY OF COTTAGE GROVE, MINNESOTA PRINCIPAL CITY OFFICIALS December 31, 2012 Elected Officials Mayor: Myron Bailey Council Members: Derrick Lehrke Justin Olsen Jen Peterson Dave Thiede Appointed Personnel City Administrator Finance Director City Clerk City Engineer and Community Development Director Economic Development Director Public Safety Director Public Works Director Parks and Recreation Director Term Expires December 31, 2016 December 31, 2014 December 31, 2016 December 31, 2016 December 31, 2014 Ryan Schroeder Robin Roland Caron Stransky Jennifer Levitt Danette Parr Craig Woolery Les Burshten Zac Dockter 13 � City Administretor Cottage Grove Citizens City Council Advisory Commissions City Aitorney EconPmic Comm�unity „ � _� � Parksand � Develo ment Develo ment �ministration Finance Public Safet ° Recreation Public Works Planning CityClerk/ Accounting Patrol Parks Streets Elections Building/Code Human Enterprise Fleet/Buildinc Inspections Resources Billing Investigations Recreation Maintenance Community Historic Public Safety Programs/ Payroll IceArena Utilities Preservation „_____.._.__,.___ Programs Engineering I u RiverOaks I Course Updated 4/2013 MIS 14 mimal & Code Enforcement Fire & Emergency Management EMS/Medical Services Fire Inspections Forestry IL FINANCIAL SECTION 15 TMs Page Intentiortally Left Blank- 16 � J � ' CGffonLarsonAllen LLP � www.diflanlersonallencom CliftonLarsonAllen INDEPENDENTAUDITORS' REPORT Honorable Mayor and Members of the City Council City of Cottage Grove, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the govemmental activities, the business- type adivities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Cottage Grove (the City), as of and for the year ended December 31, 2012, and the related notes to the fnancial statements, which colledively comprise the entity's basic financial statements as listed in the table of contents. ManagemenPs Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of fnancial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conduded our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fnancial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves pertorming procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effediveness of the entity's intemal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinions. � I �.,.o..,.Mm.�.,a.�,.�M.,..�o..� oa TMs Page Intentiortally Left Blank- 18 Honorable Mayor and Members of the City Council City of Cottage Grove Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective 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 Grove as of December 31, 2012, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative lnformation We have previously audited the City of Cottage Grove's 2011 financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information, and we expressed an unmodified audit opinion on those audited financial statements in our report dated May 24, 2012. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2011 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the managemenYs discussion and analysis, budgetary comparison information, and schedule of funding progress as listed on the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managemenYs responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Cottage Grove's basic financial statements. The other supplementary information, combining and individual financial statements and schedules, as listed on the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. 19 Honorable Mayor and Members of the City Council City of Cottage Grove Other Matters (Continued) Otherinformation (Continued) The other supplementary information, combining and individual fnancial statements and schedules are the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic fnancial statements. Such information has been subjeded to the auditing procedures applied in the audit of the basic fnancial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary information, combining and individual financial statements and schedules are fairly stated, in all material respeds, in relation to the basic financial statements as a whole. The introductory section and statistical section, as listed in the table of contents, has not been subjected to the auditing procedures applied in the audit of the basic fnancial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 7, 2013, on our consideration of the City of Cottage Grove's internal control over fnancial reporting and on our tests of its compliance with certain provisions of laws, regulations, contrads, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over fnancial reporting and compliance and the result of that testing, and not to provide an opinion on intemal control over fnancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Cottage Grove's intemal control overfinancial reporting and compliance. L%G��Ati1Q'�L�� LL� CliftonLarsonAllen LLP Minneapolis, Minnesota May 7, 2013 zo MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Cottage Grove, we offer readers of the City of Cottage Grove's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2012. 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 $217,519,170 (net position). Of this amount, $39,669,937 (unrestricted net position) 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 position increased by $1,688,638 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 $23,427,265 a decrease of $9,032,513 compared to the previous year. Approximately 64% or $15,000,845 is available for spending according to the City's policies and constraints. • At the end of the current fiscal year, unassigned fund balance for the General fund was $7,449,565 (55%) of the total subsequent year General fund expenditures. • At the end of the current fiscal year, the City of Cottage Grove had total long-term debt outstanding of $18,668,274, an increase of $16,474 or less than 1% 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 position presents information on all of the City of Cottage Grove's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position 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 position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused personal leave time). 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, economic 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 far this component unit is reported separately from the financial information presented far the primary government itself. The government-wide financial statements start on page 35 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 governmenYs 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. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the City's seven individual major governmental funds. They are as follows: zz Management's Discussion and Analysis (continued) • General Fund • Municipal Building Capital Project 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 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in the 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 start on page 38 of this report. Proprietary funds: The City of Cottage Grove maintains five enterprise funds and three 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, fleet maintenance, and information services activity. Because 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, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data far the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements start on page 43 of this report. 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 start on page 53 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 23 Management's Discussion and Analysis (continued) supplementary information. Combining and individual fund statements and schedules start on page 101 ofthis report. Government-wide Financial Analvsis As noted earlier, net position 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 $217,519,170 at the close of the most recent fiscal year. The largest portion of the City of Cottage Grove's net position ($173,638,320 or 80%) 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. City of Cottage Grove Net Position Govemmental Activities Business-Type Activities 2012 2011 2012 2011 Total Primarv Govemment 2012 2011 Cmrentand other assets $32,472,994 $43,033,787 $16,074,042 $15,114,687 $48,547,036 $58,148,474 Capitalassets 136,095,120 125,115,783 54,404,725 55,12Q228 19Q499,845 18Q236,011 Totalassets 168,568,114 168,149,570 7Q478,767 7Q234,915 239,046,881 238,384,485 Longtermliabilitiesoutstanding 14,74Q350 14,094,151 1,848,839 1,963,647 16,589,189 16,057,798 Other liabilities 4,179,529 5,451,188 758,993 1,044,967 4,938,522 6,496,155 Totalliabilities 18,919,879 19,545,339 2,607,832 3,008,614 21,527,711 22,553,953 Net positio¢ Net investrnent in capital assets 12Q412,875 109,696,916 53,225,445 53,664,161 173,638,320 163,361,077 Restricted 4,21Q913 4,282,305 - 325,460 4,21Q913 4,607,765 Unrestricted 25,07A,447 34,625,010 14,645,490 13,236,680 39,669,937 47,861,690 Totalnetposition $149,648,235 $148,604,231 $67,87Q935 $67,226,301 $217,519,170 $215,83Q532 An additional portion of the City's net position ($4,210,913 or 2%) represents resources that are subject to ea�ternal restrictions on how they may be used. The balance of unrestricted net position, $39,669,937 may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Cottage Grove is able to report positive balances in all three categories of net position; 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. za Management's Discussion and Analysis (continued) Governmental Activities: Governmental activities increased the City of Cottage Grove's net position by $1,044,004 accounting for 62% of the total growth in net position. The primary reason for this positive change is an increase in the amount of property taxes collected despite no change in the property tax levy. The City had increased its property tax levy in prior years to provide a stable revenue flow despite a portion of the levy withheld by the State of Minnesota to balance their budget. In 2012, legislation eliminated that withholding and the City was able to collect the property taxes levied, without any State reduction. City of Cottage Grove's Changes in Net Position Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Generalrevenues: Proper[y tases Other tases Grants and contributions not restricted W specific programs UnresViRed invesGnent eamings Gain on sale of capital assets Totalrevenues Expenses: General govemment Economic development Public safety Public works: Regular operations ConsW Rion Culture and recreation Interest on long-tertn debt Golf course Street lights Cottage Grove EMS Water operating Sewer operating Total expenses Govemmental Activities Business-Type Activities Total Primary Govemment 2012 2011 2012 2011 2012 2011 $ 3,219,908 $ 3,078,230 $8,616,787 1,075,529 1,084,928 - 3,064,292 5,118,546 - 12,33Q135 11,494,758 - 1,456,300 1,507,922 - 29,742 26,146 368,821 67A,785 1 Q546 12,342 21,555,273 22,947,657 2,997,825 2,985,571 362,009 1,11Q214 7,069,301 6,252,530 4,074,995 2,534,116 3,059,273 827,645 3,805,839 2,882,276 2,948,075 846,258 2Q925,164 2Q83Q763 11$396 $7,503,977 $11,836,695 - 1,075,529 267,465 3,064,292 - 12,33Q135 - 1,456,300 162,296 8,735,183 7,933,738 $1Q582,207 1,084,928 5,386,011 11,494,758 1,507,922 29,742 26,146 487,217 787,081 1Q546 12,342 3Q29Q456 3Q881,395 2,997,825 362,009 7,069,301 - - 4,074,995 - - 2,534,116 - - 3,059,273 - - 827,645 1,614,321 1,504,006 1,614,321 659,869 625,312 659,869 1,109,809 1,038,972 1,109,809 2,049,877 1,901,985 2,049,877 2,7A2,778 2,223,749 2,7A2,778 7,676,654 7,294,07A 28,601,818 2,985,571 1,11Q214 6,252,530 3,805,839 2,882,276 2,948,075 846,258 1,504,006 625,312 1,038,972 1,901,985 2,223,749 28,17A,787 Increaseinnetpositionbeforetransfers 63Q109 2,116,894 1,058,529 639,714 1,688,638 2,756,608 ltansfers 413,895 438,800 (413,895) (438,800) Increasein netposition 1,044,004 2,555,694 644,634 20Q914 1,688,638 2,756,608 Netposition - January 1 148,604,231 146,048,537 67,226,301 67,025,387 215,83Q532 213,073,97A Netposition-December3l $149,648,235 $148,604,231 $67,87Q935 $67,226,301 $217,519,170 $215,83Q532 25 ManagemenYs Discussion and Analysis (continued) � Revenues by Source - Government Activities Opeating 6ants & Contributions� 4.99YO Charges for services 14.94YO Taxes q The following cktart illushates the City's expenses and corresponding program revenues for its governmental activities. Ss,000,000 � S�,000,000 � Se,000,000 � Ss,000,000 � Sa,000,000 � Sa,000,000 � $2,000,000 '� $1,000,000 - $- . �`pF` � c ,� � � o � �' e e � � � �a <° �d� ¢ � Wa �� Q �� o� ce � o �J�' �¢� �� J.o\\` \ �� `., a Q o° CapiTal6ants& Contributions Othertaxes&tax increment Unrestricted 4 inves[ment eamings :._..I 6J69'O ` ..... / 1.71YO Other . 0.19YO ■ Revenue ■ Expenm zs ManagemenYs Discussion and Analysis (continued) BusinessType Ac[ivities. Business-Type activities increased net position by $644,634. Below ue graphs showing the business-type activities revenue and expense comparisons. Revenues - Business type Activities Unrestricted inves[ment eamings 1YO Chargesfor services 99% Expenses and Program Revenues - BusinessType Activities $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $50Q000 $- ■Fxpenses ■Programrevenues In business Type activities, cktanges in net position were positive for the EMS Fund and the Water fund: the Golf course, Sheet lights and Sewer funds ktad decreases of ($104,719), (440,218) and ($15,775) respectively. z� �� a� �,0 a� � � Management's Discussion and Analysis (continued) Financial Analvsis 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, unassigned 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 $23,427,265, a decrease of $9,032,513. Committed, assigned and unassigned fund balance which is available for spending at the governmenYs discretion has a balance of $15,000,845 at year end. The remainder of the fund balance is non-spendable or restricted to indicate it is not available for new spending because it has already been obligated 1) to pay debt service ($1,417,608) 2) for loans outstanding ($5,155,000) 3) for assets held for resale ($267,498) 4) to pay for capital improvements ($1,555,296) and 5) for future expenditures ($31,018). The General fund is the chief operating fund of the City of Cottage Grove. At the end of the current fiscal year, unassigned fund balance of the General fund was $7,449,565 while total fund balance was $9,150,532. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 55% of total subsequent year General fund expenditures, while total fund balance represents 68% of the same amount. The General fund balance increased by $336,615. This increase is primarily due to an increase in general property tax collections compared to 2011 even though the actual property tax levy remained unchanged. Revenues exceeded budget by $359,051 due to higher than expected building permit revenues and excess TIF revenues returned to the City. Expenditures also exceeded budget by $175,470 due to implementation of a different public safety model (resulting in increased personnel costs) and increased public works expenses due to the lack of a Pavement Management project in 2012. The Municipal Building Fund decreased $10,164,275 due to the construction expenditures for the Public Safety/City Hall project. The Public Safety/City Hall total project was completed and occupied in October 2012; on time and nearly $1,000,000 under the budget of $15.7 million. The MSA Construction Fund increased by $404,516 due to collection of County and State reimbursements for the completed construction of Ravine Parkway and 85�' Street adjacent to the new Public Safety/City Hall building site. The Closed Debt Fund increased by $292,078 due to 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 $162,232 because of the use of fund balance for the final payoff on the 2002C Improvement bonds. za Management's Discussion and Analysis (continued) The Pavement Management Capital Project Fund increased by $1,728,669 due to the issuance of $1,865,000 in municipal bonds which funded the 2010/2011 Pavement Management projects. There remains a deficit balance of $193,007 which is due to current expenditures on the future (2013) Pavement Management project. Bonding and special assessments will cover this deficit in 2013. The Construction Revolving Fund, a capital project fund, increased by $54,823 because of the receipt of special assessments received for previous construction activity in new developments. The fund has recovered to a positive fund balance at year end. 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. At the end of the year, unrestricted net position of the Golf Course, Street light utility, EMS (Ambulance), Water and Sewer Utility funds totaled $14,405,773. Total net position increased by $613,010, primarily due to rents received by the Water utility for cell phone antennas on the water towers. Decreases to the net position of the other enterprise funds were offset by the increase to the net position ofthe Water fund. Budaetarv Hiahliahts General Fund. The General Fund original budget was revised to reflect the following significant changes: • The intergovernmental revenue and fire department budgets were decreased by $11,000 due to a State grant for a fuel tank replacement which took place in 2010. • The intergovernmental revenue and public warks contracted services budgets were increased by $17,700 to account for costs of 800 MHz radios purchased with a grant from Washington County. • The charges for service and Mayor/Council expense budgets were both decreased by $60,000 to reflect the suspension of the 3M air monitoring program during 2012. • The special assessment and building inspections budget were increased by $9,000 for property abatements and the corresponding fees recovered. • The charges for service and forestry budget were decreased by $18,550 due to the reduction in tree sales to homeowners. • Transfers were amended to recognize transfers in the amount of $255,361 occurring as part of the City's fund balance policy and to recognize a$30,000 set aside for landscaping of the Gateway Pond area The actual results were significantly different than the final budget amounts because of the following: • Current and delinquent General Property Taxes were $186,857 more than budgeted due to the City's portion of returned TIF revenues. • Licenses and Permits categories were $162,237 more than budgeted due to increased commerciaUinstitutional building permitting in 2012. zs Management's Discussion and Analysis (continued) • Fines revenues were $36,468 lessthan budgeted due to reduced revenues passed through to the City from the state and county. • Investment income was $18,960 less than budgeted due to the collection of less interest than had been budgeted at historically low interest rates. • Public safety expenditures were $131,419 greater than the final budgeted amounts due to a mid-year change to operational staffing. • Public warks expenditures were $123,427 greater than final budget due to personnel costs which could not be allocated to anticipated construction projects which did not occur in 2012. 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, 2012, amounts to $190,499,845 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery and equipment. Land and land improvements Easements Construction in progress Buildings and improvements Equipment and furniture MacMnery and equipment Other improvements Infrashucture: Sheets Storm sewers Sidewalks/hails Water and sewer lines Ending balance City of Cottage Grove's Capital Assets (Net of Depreciation) Governmental Activities Business-Type Activities 2012 2011 2012 2011 $ 16,529,494 $16,478,173 $ 1,744,531 $1,745,327 1,133,490 493,239 1,475,517 8,886,732 22,376,596 9,164,082 497,405 395,062 3,845,137 3,564,719 2,062,143 1,404,463 64,201,969 19,070,730 4,902,639 2,058,819 1,051,021 4,309,129 480,599 2,174,216 815,224 4,481,431 61,543,032 - - 19,501,519 - - 3,684,762 - - - 45,241,225 45,423,431 Totals Primuy Government 2012 2011 $ 18,274,025 $ 18,223,500 1,133,490 493,239 1,475,517 9,367,331 24,435,415 11,338, 298 497,405 395,062 4,896,158 4,379,943 6,371,272 5,885,894 64,201,969 61,543,032 19,070,730 19,501, 519 4,902,639 3,684,762 45,241,225 45,423,431 $136,095,120 $125,115,783 $54,404,725 $55,120,228 $190,499,845 $180,236,011 The largest addition to capital assets in 2012 was the new Public Safety/City Hall project which was completed and capitalized in 2012. 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 $18,668,274, an increase of $16,474. $2,079,085 of the debt outstanding is due within one year. $5,175,000 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 2012 Govemmental activities: Bonds payable, net Capital lease payable Other postemployment benefits Compensated absences Total govemmental 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 $ 10,067,245 5,615,000 41,281 752,309 16,475,835 1,036,584 90Q000 142,696 9,893 103,266 2,192,439 $ 18,668,274 2011 $ 9,553,867 5,865,000 39,636 725,863 16,184,366 1,456,067 90Q000 9,441 101,926 2,467,434 $ 18,651,800 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 far the City of Cottage Grove is $73,931,187. Of that limit, $5,615,000 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 governmenYs finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Finance Director, 12800 Ravine Parkway St, Cottage Grove, Minnesota 55016. 31 TMs Page Intentiortally Left Blank- 32 BASIC FINANCIAL STATEMENTS 33 TMs Page Intentiortally Left Blank- 34 CITY OF COTTAGE GROVE, MINNESOTA STATEMENT OFNET POSITION December 31, 2012 With Compaa[ive Da[a as of December 31, 2011 Assels: Cash and investrnevts Accmed ivterest receivable D�e finm other govemmevtal �vits - vet Loan receivable from primazy govemmevt Acco�vls receivable - vet Prepaid items Delivq�evtproperty taa:es receivable D�e from co�vry 3pecial assessmevls receivable Invevtories - a[ ws[ Intemal balances Defeaed charges Leasereceivable Properties held for resale Capital assets votbeivg deprecia[ed: Land and land'vnprovemevts Fasemevts Covstructiov iv progress Capital assels (vet of acc�m�la[ed deprecia[iov): Land improvemevls B�ildivgs and improvemevts Fq�ipmevt and fumiNre Machivery and eq�ipmevt Other improvemevls InfiashucNre Total assets Liabilities: Acco�vtspayable Claims payable 3alariespayable Covhacls payable D�e to other govemmevtal �vits Deposils payable Accrued interes[ payable Uveamed revev�e Compevsa[ed absevices payable: D�e within ove year D�e iv more than ove year Other postemploymevt bevefits: D�e iv more than ove year Loan payable to compovevt �vit D�e iv more than ove year Capital lease payable: D�e withiv ove year D�e iv more than ove year Bovds payable (vet of�varnortized premi�ms and disco�vls): D�e withiv ove year D�e iv more than ove year Total liabilities Net positiov: Net ivvestmevt iv capital assets Restricted for: ForfeiNre and seizure Charitable garnbling Debt retiremevt Tar, ivcremevt p�iposes Pa�k hvs[ activities Capital improvemevts Uvres[ricted Totalvetpositiov Pr'vnary Govemmevt Govemmevtal B�sivess-Type Activities Activities $ 31,127,252 $ 9,020,064 155,118 - 2,195,821 6,465 421,439 1,411,816 133,769 139,693 274,452 - 8$855 - 3,049,923 - 73,483 45,263 (5,439,717) 5,439,7ll 125,101 11,024 267,498 - Total Primary Govemmevt $ 40,147,316 155,118 2,202,286 1,833,255 273,462 274,452 8$855 3,049,923 118,746 136,125 267,498 - 1,833,255 1,514,523 1,080 274,542 262,451 2,310 276,762 314,957 - 88,855 75,449 - 3,049,923 3,757,113 - 118,746 160,559 52,125 188,250 ll4,522 5,615,000 5,615,000 5,865,000 311,718 579,216 579,216 16,529,494 1,712,290 18,241,784 - 18,241,784 18,190,463 1,133,490 - 1,133,490 - 1,133,490 493,239 1,475,Sll - 1,475,Sll - 1,475,Sll 9,367,331 - 32,241 32,241 - 32,241 33,037 22,376,596 2,058,819 24,435,415 - 24,435,415 11,338,298 497,405 - 497,405 - 497,405 395,062 3,845,137 1,051,021 4,896,158 - 4,896,158 4,379,943 2,062,143 4,309,129 6,371,272 - 6,371,272 5,885,894 8$ll5,338 45,241,225 133,416,563 133,416,563 13Q152,744 168,568,114 70,478,767 239,046,881 7,850,135 246,897,016 246,632,100 511,889 188,137 359,475 914,000 35,011 19Q665 215,361 29,500 525,485 226,824 41,281 127,466 45,919 38,764 14,200 189,044 79,647 23,619 9,893 639,355 8,370 647,725 600,238 188,137 - 188,137 317,168 405,394 7,128 412,522 358,555 914,000 - 914,000 1,724,848 73,781 - 73,781 46,875 204,865 - 204,865 418,398 404,405 62,523 466,928 442,812 29,500 - 29,500 65,110 605,132 9,873 615,005 589,203 250,443 5,698 256,141 243,999 Sl,ll4 411 51,585 49,150 - 900,000 900,000 - 900,000 900,000 260,000 33,953 293,953 - 293,953 250,000 5,355,000 108,743 5,463,743 - 5,463,743 5,615,000 950,000 230,000 1,180,000 260,000 1,440,000 2,005,000 9,117,245 806,584 9,923,829 5,278,560 15,202,389 14,788,814 18,919,879 2,607,832 21,527,711 5,632,563 27,160,274 28,415,ll0 120,412,875 53,225,445 173,638,320 17,692 6,624 2,85$411 1,254,672 73,514 17,692 - 6,624 - 2,858,411 495,214 1,254,672 - 73,514 - 173,638,320 163,361,077 17,692 50,968 6,624 1,920 3,353,625 3,556,798 1,254,672 834,984 73,514 637,498 - 15,000 25,024,447 14,645,490 39,669,937 1,722,358 41,392,295 49,758,685 $ 149,64$235 $ 67,87Q935 $ 217,519,ll0 $ 2,217,572 $ 219,736,742 $ 21$216,930 The accompanyivg votes are an integral part ofthese basic fivancial sta[emevts. S�tement 1 Compovevt Uvit Ecovomic Totals Developmevt ReportivgEvtity Authority 2012 2011 $ 785,379 $ 40,932,695 $ 51,264,469 182,523 337,641 346,403 - 2,202,286 1,181,427 900,000 900,000 900,000 35 TMs Page Intentiortally Left Blank- 36 CITY OF COTTAGE GROVE, MINNE60TA STATEMENT OF ACTNITIES For 1fie Yeac Evded Decembec 31, 2012 WiN Compacative Data for Ne Year Evded December 31, 2011 6latemeut2 Net (E4pevse) Revev�e avd Component Hogcam Revev�es Changes iv Net Positiov Unit Opecativg Capital Himary 6ovemmevt Ecovorttic Chacges Foc 6ravls avd 6ranls and 6ovemmental B�sivess-Type Totals Developruent Er.penses Services CovMb�tiovs Covtrib�tiovs Activifies Ac[ivities 2012 2011 A�Norily w V Fwctions/Proa'arns Primary govemmevt 6ovemment ac[ivities: 6eneral gwernmevt Ecovomic developruent Public safery Public wocks: Regular opecatiovs Construction GilNre and cecreatiov Interest ov lovgtertn debt Total gwernmevt activities B�sivess-type activifies: 6olf course sne�e ti,�,es Cottage 6rove EMS Watec opecativg Sewec opecativg Total b�sivess-lype activities Total primary govemmevt CompovevtUVit Ecovorttic Developmevt A�Nority Total componentwit � zyv�,szs � sss,z�z � icv sos � - � �iyaa�as� 362,009 210 35],614 65,000 60,815 ],069,301 429,646 430,24] 38,451 (6,1]Oy5]) a,mayvs ssqovs vv,�az - (s,ovs,iss) 2,534,116 - - 2y18,851 384,]35 s,osv,z�s i,ozc,css is,izi ai5vo (i5�z,a��) 82] 645 (83],645) 20y25,164 3y19y08 10]5529 3064192 (13,565,43.� � - � CiSaa�as� � �Z,ozs,soa� � - 60,815 (]45,318) - �c,i�oys�� s,zcs,s�� - �s,ovs,iss� �z,scqcoz� - 384,]35 ly]3,145 - (i5�z,a�� i,��s,sas� (83],645) (846y58) (13,565,43.� (11,549,059) i,cia,szi i,scc,ais - - - (as,zsc� �as,zsc� �ioa,soz� csv,s� saq�c - - - (i�v,i�s� �iiv,i�s� ��,ois� 1,109,809 1,528,]56 - - - 418y4] 418y4] ]5,254 2,049,8]] 2,]]3,93] - - - ]24,060 ]24,060 4]3,103 2242]]8 220]363 (35,415) (35,415) 102881 ] 6]6 654 8 616 ]8] 940 133 940 133 4]] 418 $ 28 601 818 $ 11 836 695 $ 1 0]5 529 $ 3 064192 (13,565,435) 940,133 (12,625,302) (11,0]1,641) $ 602 2]] $ 322 342 $ $ $ 602 2]] $ 322 342 $ $ 6evecal revev�es: Property taees Fcavcttisetaees Aggregate texes Tax ivcremevt collec[ions Grants and contributions not cestric[ed to speci5c progarns Uvres[ricted ivves[mevt earttivgs 6aiv ov sale of capital assets Transfers Totel gevecal revev�es avd travsfecs 12,330,135 53],682 26,180 892,438 12,330,135 11,494,]58 53],682 535,188 26,180 26,131 892,438 946,603 (2]9,935) (2]9,935) Change iv vet positiov Net po9tion - beginnivg Net po9tiov - evdivg 106,013 29,]42 - 29,]42 26,146 - 368,821 118,396 48],21] ]8],081 5,096 10,546 - 10,546 12,342 - 413 895 (413,895) 14 609 439 (295,499) 14,313y40 13 828 249 111 109 i,oaa,00a caa,csa i,css,css z,�sc,cos �ics,szc� 148,604,231 6],226,301 215,83Q532 213,0]3y24 2,386,398 $ 149,648,235 $ 6],8]Oy35 $ 21],519,1]0 $ 215,830,532 $ 2,21],5]2 The accompanyivg votes are av ivtegcal part of these basic 5vavcial statemevts. �.�.,,� <.sS : i)�I��] ,;�l�?( ,�,.:. 1Ii ,�,�C>7�'e .'i __._� � .��i'� I _. �. ..,i'� � _ _ . ;�li> .� _ ��i�� I i .I i <<�..',:il � „ i_l , :i �_.. ,cii �r �c;� _.i��.riri i,i�ci-- r�.�i �� ,_. _ .. „ i�i��: . i � . �' _ c... .. ._ i LI: I ... �:1L I� i„_�:I� ..,. .. �.I licii` ., _.. .� . _f _ �.;.��.��..: �I � .. , .. . ,.� I I ;i> ;:�� 1�c i_ ,;' ti �� 1 - _ _ . ;; S _ _I � S � - . ._ . . 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I�_ �I '�� I � i� �, - - -, „� � �� i i -,— , - � � I `, - `S y .-, _ .i��: . .�7:.: , � .. . .� ._ . �. . ..:tt t _. .i. . ��ir��: �; I�_ ��i . 1 �i .�I � i � .: � i ' , ,_ ;.`_ I ��.,'� � _'! �;: �i� I i I i. � : ji _ �J.=i � _ .. _ . . _ . � I 1 3 _, _.. . . . ... .�..� �_� .. �_':� ��I'�� .i � .' . ` _. _._ . � �� ` __ l 1 � . I.. . �..� \ ; _ � I � � � i'i: ._ . � -' . ... �_'�__ ,. � � � I I �_: � 1 �,;�,•. �__ _ I' I !� �t . I . _ ._ . - � , -. i � � ,. , c iC - ,, 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, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Amounis reported for govemmental activities in the statement of activities (page 37) ue different because: Net changes in fund balances - total govemmental funds (page 41) Govemmental funds report capital ouflays 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 amountby which capital ouflays exceeded depreciation in the currentperiod. The effect of various miscellaneous hansactions involving capital assets is to decrea.se net position (i.e. sales and hade-ins). Donations of capital assets increase net position in the statement of activities, but do not appear in the govemmental funds because they ue not financial resources. Revenues in the statement of activities that do notprovide current financial resources ue not reported as revenues in the funds. The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to govemmental funds, wMle the repayment of the principal of long-term debt consumes the current financial resources of govemmental funds. Neither hansaction, however, has any effect on net position. This amount is the net effect of these differences in the heatrnent of long-term debt and related items. Intemal service funds ue used by management to chuge the cost of insurance to individual funds. TMs amount is net revenue attdbutable to govemmental activities. S ome expenses reported in the statement of activities do not require the use of current financial resources and, therefore, ue not reported as expenditures in govemmental funds. Change in net position of govemmental activities (page 37) The accompanying notes ue an integral part of these basic financial statements. 2012 Statement 5 2011 $ (9,032,513) $ (11,001,788) 1 Q574,891 6,708,184 (2 508� 84064 371,576 78Q524 �sisw� �i,zz�,ss9� (244,882) 7,327,646 82,227 107,745 111,819 (222,992) $ 1,044,004 $ 2,555,694 42 CITY OF COTTAGE GROVE, MINNESOTA STATEMENT OF NET POSITION PROPRIETARYFUNDS December 31. 2012 Assets: Cmrent assets: Cash and investrnents Interfund loan receivable Due from other govemmental units-net Accoun[s receivable: CusWmers Certified W County Other Prepaid items InvenWries - at cost Total current assets Noncurrent assets: Deferred charges Capital assets: Land and land improvemen[s Buildings and improvemen[s Fquipment and fumiture Machinery and equipment Other improvemen[s Water and sewer lines Total capital assets Less: Accumulated depreciation Net capital assets Total noncmrent assets Total assets Liabilities: Cmrent liabilities: Accoun[s payable Salaries payable Due to other governmental units Deposits payable Acemed interest payable Compensated absences payable Capital lease payable - current portion Bonds payable - cwrent portion Total cmrent liabilities Noncurrent liabilities: Compensated absences payable Other postemplo}anent benefits Capital lease payable - noncmrent portion Interfund loan payable Loan payable to component unit Bonds payable (net of unamortized premiums and discounts) Total noncmrent liabilities Total liabilities Statement 6 Business-Type Activities - Enteiprise Funds Govemmental Total Activities - GolfCourse StreetLight CottageGrove Water Sewer Enterprise Internal Fund Fund EMS Fund Operating Operating Funds Service Funds $ 14,731 $2,415,907 $ 654,119 $ 3,611,235 $ 2,37A,072 $ 9,02Q064 $ 2,766,260 - - - 3,20Q000 3,20Q000 6,40Q000 - - - 6,465 - - 6,465 - - 88,181 445,003 282,503 367,258 1,182,945 - - - - 98,666 99,863 198,529 - 1,670 9,030 - 19,642 - 3Q342 190 7,459 - 5,340 1,705 125,189 139,693 127,067 26,189 19,074 45,263 73,483 SQ049 2,532,192 1,11Q927 7,213,751 6,116,382 17,023,301 2,967,000 11,07A 11,024 1,387,290 - - 364,803 - 1,752,093 47A,665 - - - 4,101,713 - 4,101,713 928,870 - - - - - - 74,232 918,119 139,222 709,960 1,012,909 323,673 3,103,883 158,929 2,76Q825 5,347,706 - - - 8,108,531 - 34,877,989 7A,461,870 59,339,859 5,066,234 5,486,928 709,960 4Q357,414 7A,785,543 76,406,079 1,586,696 (2,357,198) (2,033,598) (406,773) (11,649,997) (5,553,788) (22,001,354) (555,200) 2,709,036 3,453,330 303,187 28,707,417 19,231,755 54,404,725 1,031,496 2,709,036 3,453,330 303,187 28,718,441 19,231,755 54,415,749 1,031,496 2,759,085 5,985,522 1,414,114 35,932,192 25,348,137 71,439,050 3,998,496 8,443 38,624 11,592 53,070 15,737 127,466 11Q656 16,914 2,416 1Q146 13,619 2,824 45,919 15,975 2,966 - 8,055 27,727 16 38,764 936 1Q200 - - 4,000 - 14,200 - 173,000 - - 16,044 - 189,044 - 28,628 6,447 14,195 21,038 9,339 79,647 16,311 33,953 - - - - 33,953 - 23Q000 23Q000 274,104 47,487 43,988 365,498 27,916 758,993 143,878 7,290 3,523 108,743 1,20Q000 900,000 - 7,708 307 3,356 5,511 3,110 23,619 28,463 2,029 678 9,893 1,312 - - 108,743 - - - 1,20Q000 - - - 900,000 - 806,584 806,584 2,219,556 307 11,064 814,17A 3,788 3,048,839 29,775 2,493,660 47,794 55,052 1,179,622 31,704 3,807,832 173,653 Net positio¢ Netinvestrnentin capitalassets 2,566,340 3,453,330 303,187 27,67Q833 19,231,755 53,225,445 1,031,496 Unrestricted (2,30Q915) 2,484,398 1,055,875 7,081,737 6,084,678 14,405,773 2,793,347 Totalnetposition $ 265,425 $5,937,728 $ 1,359,062 $34,752,570 $25,316,433 67,631,218 $ 3,87A,843 Some amounts reported for business-t}pe activities in the statement ofnetposition are different because certain internal service fund assets and liabilities are included with business-type activities. 239,717 $ 67,87Q935 The accompanying notes are an integral part of these basic financial statements. 43 ��r��1��oe��.��F��b�� y:��fi�.;��.�u�. � i ,�I�i �� i , �� :`�>; � , �.I��; '` , . . � ' �� ' i I�1� �� „ , i;i i � i . , � •, i � � . �f�h� � ..,, � !�-1 1 _��,b ;l_ _ !I , 'i�21�ir. f�_�i��.,_ _ l„ i ,_.. „St. ll� � . �ti f��'.�'i � ._. 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I � -. .' _ ;' ��, _ - ---- �� '`..�. -��, � - � . — _ ._ _ i '� _ � , __ � , ,� ,_ , , � ,� _ �' � ` 'tirca,�tarv�'a;� � �, , <. €. ? <<� :;` __� � r,c��_.. ,� � ��. - In��I �. ,-!. _ .... 1' ,' `..',.-i :� I_ ' l .� :,�� 'l�_i= �� '_ , 1 I fl '� , Ii ��.,I1_ .i', , �. , i� .,�,1 lii� !I - � , . CI ,. I�,,. . , i . ..._, . �_ _ TMs Page Intentiortally Left Blank- 52 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 1 SUMD�IARY OF SIGNIFTCANT ACCOUNTING POLICIES- The City of Cottage Grove was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of govemment 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 govemmental units by the Govemmental 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 govemment) 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 iINIT The Economic Development Authority (EDA) is considered a component unit of the City because the Council appoints the members of the goveming authority and because the EDA is in a relationship of financial benefits 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 govemmenYs 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. GOVERNNIENT-WIDE AND FUND FINANCIAL STATEMENTS The govemment-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary govemment and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Govemmental acfivities, which normally are supported by taxes and intergovemmental revenues, are reported separately from business-type acfivities, which rely to a significant extent on fees and charges for support. In the govemment-wide statement of net position, 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 position is reported in three parts: (1) net investment in capital assets; (2) reshicted net position; and (3) unreshicted net position. 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 zrpenses 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 duectly 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 requuements 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 govemmental 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, 2012 C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The govemment-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Govemmental fund financial statements are reported using the currentfinancial resources measurementfocus and the modified accrual basis of accounfing. 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, intergovemmental 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 govemment. The govemment reports the following major governmental funds: The General Fund is the govemmenYs primary operating fund. It accounts for all financial resources of the general government, except those requued to be accounted for in another fund. The Municipal Builc&ng Capital ProjectPund accounts for the accumulation of resources and construction or remodeling costs of municipal buildings and facilities. The MSA Construction Capital ProjectPund accounts for projects related to Municipal State Aids. The Closed DebtPund accounts for the accumulation of residual resources from debt funds that have been closed as the associated debt has been satisfied. The PavementManagementDebtService Pund 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 PavementManagement Capital ProjectPund accounts for pavement management construction projects. The Construction Revolving Capital ProjectPund accounts for new development construction projects that are financed by developers. The govemment reports the following major proprietary funds: The Golf Course Fund accounts for the City's eighteen hole golf course and banquet facility. The StreetLightPund accounts for customer street light and service charges which are used to finance street light operating expenses. The Cottage Grove EMS Pund 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, 2012 The Water Operafing 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 govemment reports the following fund type: Intemal service funds account for the City's self-insurance, fleet maintenance, and information services provided to other deparhnents of the govemment on a cost reimbursement basis. 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 extemal 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 duect 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. Intemally 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 govemment 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 e�penses not meeting this definition are reported as non- operating revenues and e�penses. When both restricted and unrestricted resources are available for an allowable use, it is the governmenYs policy to use restricted resources first, then unrestricted resources as they are needed. D. BUDGETS Budgets are adopted on a basis consistent with U. S. generally accepted accounting principles. Annual appropriated budgets are adopted for the General and Special Revenue Funds. Budgeted amounts are reported as originally adopted, and as amended by the City Council. Individual amendments were not material in relation to the original appropriations which were adjusted. Budgeted eapenditure appropriations can be carried forward to the next budget year subject to City Council approval. E. LEGAL COMPLIANCE - BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. The City Council reviews the proposed budget and makes appropriate changes. 55 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 3. Per Statute, public meetings are held to receive taxpayer comments. 4. The budget is legally enacted through passage of a resolution on a deparhnental basis and can be expended by each deparhnentbased 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 interdeparhnental 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 Intemal 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. The following is a listing of eapenditure categories that exceed budget appropriations for non-major funds: Nonmajor Funds: Special Revenue Funds: Recycling: Public works: Contractual services Storm Water Maintenance Fund: Public works: Contractual services Forfeiture/Seizure fund: Public safety: Commodities Contractual services Capital outlay Ice Arena Fund: Culture and recreation: Personal services Contractual services Final BudQet Actual $11,900 $22,810 37Q480 482,763 3,300 11,115 15,800 22,667 - 15,198 336,600 338,625 258,560 294,908 Over BudQet $1Q910 112,283 7,815 6,867 15,198 2,025 36,348 ss CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. Eamings from investments are allocated to individual funds on the basis of the fund's equity in the cash and inveshnent pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. For purposes of the statement of cash flows for the proprietary funds, cash equivalents are considered to be all highly liquid investments with a maturity of three months or less when purchased. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. Therefore, the entire balances in such funds are considered cash equivalents. 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, 2012 are planned to be eliminated in 2013. Longterm interfund loans are classified as "interfund loan receivable/payable." Any residual balances outstanding between the govemmental activities and business-type activities are reported in the government-wide financial statements as "intemal balances." Interfund loan receivables, as reported in the fund financial statements, are offset by a fund balance nonspendable account in applicable govemmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Property taxes, special assessments, and ambulance receivables have been reported net of estimated uncollectible accounts. (see Note 1 H, I and L) Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. H. PROPERTY TAX REVENUE RECOGNITION The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local school district and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes received by the City in July, December and January are 57 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 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 REVENiJE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax 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 GOVERNMENTALFUNDS The original cost of materials and supplies has been recorded as expenditures at the time of purchase. These funds do notmaintain 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 PREPAIDITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both govemment-wide and fund financial statements. 58 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 L. ALLOWANCE FOR UNCOLLECTIBLE The City duectly 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, 2012 were $297,000. M. PROPERTIES HELD FOR RESALE Property is acquued 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 fau value. Fair value estimates have been based on estimated realizable sales proceeds net of selling e�penses. 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 govemmental or business-type activities columns in the govemment-wide financial statements. Infrastructure assets have been capitalized retroactively to 1980. Capital assets are defined by the govemment 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, 2012, no interest was capitalized in connection with conshuction in progress. Capital assets not being depreciated include land, easements and construction in progress. Property, plant and equipment of the primary govemment, 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 fumiture 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. 59 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 O. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate eamed 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 retuements. In accordance with the provisions of GASB 16, Accounting for Compensated Absences, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. However, a liability is recognized for that portion of accumulating sick leave benefits that is vested as severance pay. P. LONGTERM 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 govemmental activities, business- type activities, or proprietary fund type statement of net position. 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. Q. FUND BALANCE In the fund financial statements, govemmental funds report fund balances in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable — Amounts that cannot be spent because they are not in spendable form, such as prepaid items, assets for resale, and longterm interfund receivables. Restncted—Amounts related to extemally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed—Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council. Committed amounts cannot be used for any other purpose unless the Council modifies or rescinds the commihnent by resolution. Assigned — Amounts constrained for specific purposes that are intemally imposed. The Council has adopted a fund balance policy which delegates the authority to assign fund balances to the City Administrator and/or Finance Duector. Unassigned — The residual classification for the General fund and also negative residual amounts in other funds. The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when e�penditures are made. The City formally adopted a fund balance policy for the General Fund. The policy establishes an unassigned fund balance range of no less than 55% of the subsequent year's budgeted eapenditures to provide sufficient working capital and margin of safety to address local emergencies without borrowing. m CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 R. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for eapenditures/expenses initially made from it are properly applicable to another fund, are recorded as eapenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. S. USE OF ESTIMATES The preparation of financial statements in accordance with U.S. generally accepted accounting principles (GAAP) requires management to make estimates that affect the amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. T. COMPARATIVE DATA Summarized comparative data for the prior year has been presented only for certain sections of the accompanying financial statements in order to provide an understanding of the changes in the City's financial position and operations. Certain reclassifications have been made to prior year data to conform to the current year presentation. The reclassifications had no effect on the change in net position or total net position as previously reported. Note 2 RECONCILIATION OF GOVERND�IENT-WIDE AND FUND FTNANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERND�IENTAL FUND BALANCE SHEET AND THE GOVERND�IENT-WIDE STATEMENT OF NET POSITION The govemmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net posifion —governmental acfivities as reported in the govemment-wide statement of net position. 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 $(16,708,14� difference are as follows: Bonds payable Claims payable Capital leases payable Accrued interest payable Compensated absences payable Other post employment benefits Unamortized bond issuance costs Unamortized discount on bonds Unamortizedpremium onbonds $ (1Q07Q000) (188,137) (5,615,000) (215,361) (707,535) (39,969) 125,101 36,004 (33,249) Net adjustmentto reduce fund balance - total governmental funds to arrive atnet position - governmental activities $ (16,708,14� 61 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERND�IENTAL FUND STATEMENT OF REVENiJES, EXPENDITURES, AND CIIANGES IN FUND BALANCES AND THE GOVERND�IENT-WIDE STATEMENT OF ACTIVITIES The govemmental 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 position of govemmental activities as reported in the government-wide statement of activities. One element of that reconciliation eaplains 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 eapense." The details of this $1Q574,891 difference are as follows: Capital outlay Depreciation expense Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of govemmental activities $ 14,299,356 (3,724,465) $ 1Q574,891 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 $(816,606) difference are as follows: General property taxes deferred revenue: At December 31, 2011 At December 31. 2012 Special assessments deferred revenue: At December 31, 2011 At December 31. 2012 Grant deferred revenue: At December 31, 2011 At December 31, 2012 Net adjustments to increase net changes in fund balances - total govemmental funds to arrive at changes in net position of governmental activities $ (312,295) 274,452 (3,757,113) 3,049,923 (1,027,564) 955,991 $ (816,60� s2 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 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 govemmental funds." Neither transactioq however, has any effect on net position. The details of this $(244,882) difference are as follows: Debt issued: Issuance of general obligation bonds Less discounts Less issuance costs Principal repayments: General obligation debt Capital lease Amortization of deferred discounts, premiums, and issuance costs $ (1,865,000) 15,852 32,755 $ 1,335,000 25Q000 (13,489) Net adjustments to increase net changes in fund balances - total govemmental funds to arrive at changes in net position of govemmental activities $ (244,882) 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 e�penditures in govemmental funds." The details of this $111,819 difference are as follows: Compensated absences: At December 31, 2011 At December 31, 2012 Accrued interest: At December 31, 2011 At December 31, 2012 Other post employment benefits At December 31, 2011 At December 31, 2012 Claims payable at December 31, 2011 At December 31, 2011 At December 31, 2012 $ 689,749 (707,535) 217,496 (215,361) 38,408 (39,969) 317,168 (188,137) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of govemmental activities $ 111,819 63 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 3 DEPOSITS AND INVESTMENTS A. DEPOSITS The City maintains a cash and inveshnent pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the statement of net position 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 �leposits beyond the requuements of state statutes. As of December 31, 2012, 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 110% of the deposits not covered by insurance or corporate surety bonds. Authorized collateral include: U.S. govemment treasury bills, notes, or bonds; issues of a U.S. govemment agency; general obligations of a state or local govemment rated "A" or better; revenue obligations of a state or local government rated "AA" or better; urevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota statutes requue securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust deparhnents of a commercial bank or other financial institution not owned or controlled by the depository. B. INVESTMENTS Minnesota Statutes and the City's inveshnentpolicy 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 govemment 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 (Al, Pl), 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 $1QOOQ000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York. � Certificates of Deposit collateralized by FDIC or FSLIC insurance. Deposits exceeding $25Q000 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. 64 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Interest rate nsk - 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 eaposure 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 cucumstance should any extend beyond ten years. Total Fair InvestmentType MuketValue U.S Agencies Federal Home Loan Bank-FHLB $6,025,055 Fannie Mae—FNMA 13,033,710 Freddie Mac-FHLMC 3,518,663 Federal Farm Credit Bank 2,009,910 Term Series Investment Pool 2,OOQ000 MurucipalObligations 2,665,630 Negotiable CD's 9,77Q990 TotalInvestments $39,023,958 Money Mukets 1,268,741 Deposits 628,350 Petty Cash and Cktange 11,646 Total Cash and Investments $4Q932,695 NR indicates "not rated" N/A indicates "not applicable Investment maturities in Yeus Credit Risk Less than 1 1— 5 More than 5 Rating Agency $503,355 $4,028,695 9,519,400 1,006,328 2,009,910 1,723,970 2,905,883 $21,194,186 $1,493,005 AA/Aaa S&P/Moody's 3,514,310 AA/Aaa S&P/Moody's - AA/Aaa S&P/Moody's - AA/Aaa S&P/Moody's - NR N/A 2,512,335 2,000,000 15Q296 6,865,107 $12,031,093 791,364 AA/Aa S&P/Moody's - NR N/A $5,798,679 Custoc&al Crec&t Risk — For an inveshnent, 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, 2012, the investment balances were fully covered by insurance for each brokerage firm. Crec&t Risk — Credit risk is the risk that an issuer or other counterparty to an inveshnent will not fulfill its obligations. As indicated previously, Minnesota statute requues Commercial paper to be of the highest quality (Al, Pl) and municipal general obligations need an "A" rating or better. Concentration ofCrec&tRisk— The City's inveshnent 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 N1ae - FNMA Freddie Mac - FHLMC Federal Farm CreditBank 4M Fund Investments Credit Amount Percent $ 6,025,055 15% 13,033,710 33% 3,518,663 9% 2,009,910 5% 2,OOQ000 5% 65 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 4 RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2012 are as follows: Special Delinquent Certified Assessment Property to Receivable Taxes County Total Primary government: Major funds: GeneralFund $ 29,273 $ 103,700 $ - $ 132,973 Municipal Building Capital Project Fund 12,928 2,600 - 15,528 MSA Construction Capital ProjectFund 787,385 - - 787,385 Closed DebtFund 526,845 3,100 - 529,945 Pavement Management Debt Service Fund 1,412,799 5,100 - 1,417,899 Construction Revolving Capital Project Fund 22,521 - - 22,521 Nonmajor funds 132,007 2,800 - 134,807 Major Business-Type funds: Water Operating fund - - 52,905 52,905 Sewer Operating fund - - 54,126 54,126 Total primary government 2,923,758 117,300 107,031 3,148,089 Component unit: EconomicDevelopmentAuthority - 1,100 - 1,100 Totalreportingentity $ 2,923,758 $ 118,400 $ 107,031 $ 3,149,189 Govemmental 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 eamed. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the govemmental funds were as follows: Primary government: Major funds: General Fund Municipal Building Capital Project Fund MSA Construction Capital ProjectFund Closed Debt Fund Pavement Management Debt Service Fund Construction Revolving Capital Project Fund Nonmajor funds Total primary government Component unit Economic Development Authority Total reporting entity Unavailable Uneamed Property Special Miscellaneous Taxes Assessments MSA fundine Fees Total $ 225,874 5,558 10,724 6,921 25,375 274,452 $ 37,779 12,928 799,769 566,566 1,439,392 26,703 166,786 3,049,923 $ - $ 29,500 $ 293,153 - - 18,486 955,991 - 1,755,760 - - 577,290 - - 1,446,313 - - 26,703 - - 192,161 955,991 29,500 4,309,866 2,310 - - - 2,310 $ 276,762 $ 3,049,923 $ 955,991 $ 29,500 $ 4,312,176 m CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 5 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2012 was as follows: Primary Government Govemmental activities: Capital assets, not being depreciated: Land Permanent easements Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings and improvements Equipment and fiuniture MacMnery and equipment Other improvements Infrashucture: Sheets Storm sewers Sidewalks/hails Total capital assets being Depreciated Less accumulated depreciation for: Buildings and improvements Equipment and fiuniture MacMnery and equipment Other improvements Infrashucture: Sheets Storm sewers Sidewalks/hails Total accumulated depreciation Total capital assets, being depreciated, net Beginning Balance $ 16,478,173 493,239 8,886,732 25,858,144 19,572,164 1,318,691 8,288,813 3,808,082 76,368,752 24,478,447 4,309,019 138,143,968 1 Q408,082 923,629 4,724,094 2,403,619 14,825,720 4,976,928 624,257 38,886,329 Increases $ 51,321 64Q251 13,523,854 14,215,426 13,932,247 252,577 859,017 807,054 4,228,534 76,074 1,309,881 21,465,384 719,733 15Q234 578,599 146,289 1,569,597 506,863 92,004 3,763,319 17,702,065 $ 31,917,491 99,257,639 Govemmental activities capital assets, net $ 125,115,783 67 Decreases $ - (20,935,069) (20,935,069) (167,558) (176,643) (3,085) (347,28� (167,558) (176,643) (344,201) (3,085) $ (20,938,154) Ending Balance $ 16,529,494 1,133,490 1,475,517 19,138,501 33,504,411 1,403,710 8,971,187 4,612,051 80,597,286 24,554,521 5,618,900 159,262,066 11,127,815 906,305 5,126,050 2,549,908 16,395,317 5,483,791 716,261 42,305,447 116,956,619 $ 136,095,120 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 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 Builclings and improvements MacMnery and equipment Other improvements Water and sewer lines Total capital assets, being depreciated Less accumulated depreciation for: Land improvements Buildings and structures MacMnery and equipment Other improvements Water and sewer lines Total accumulated depreciation Total capital assets being depreciated - net Business-Type activities capital assets - net Beginning Ending Balance Increases Decreases Balance $ 1,712,290 $ - $ - $ 1,712,290 480,599 - (480,599) - z,i9z,ss9 - �qso,s99� i,�iz,z90 39,803 4,101,713 2,944,622 8,039,497 58,518,311 73,643,946 6,766 1,927,495 2,129,401 3,558,065 13,094,880 20,716,607 52,927,339 $ 55,120,228 459,115 69,034 821,548 1,349,697 796 115,399 223,315 241,337 1,003,754 1,584,601 (299,854) (299,854) (299,854) (299,854) 39,803 4,101,713 3,103,883 8,108,531 59,339,859 74,693,789 7,562 2,042,894 2,052,862 3,799,402 14,098,634 22,001,354 (234,904) - 52,692,435 $ (234,904) $ (480,599) $ 54,404,725 Depreciation e�pense was charged to function/programs of the primary government as follows: Govemmental activities: General govemment $ 135,011 Public safety 518,589 Public works 2,437,361 Culture and recreation 672,358 Total depreciation expense govemmental activities $ 3,763,319 Business-Type activities: Golf course Sheet lights Cottage Grove EMS Water operating Sewer operating Total depreciation expense before hansfer Plus: Accumulated depreciation on hansferred assets Total depreciation expense - business-Type activities $ 172,540 127,183 66,030 759,723 422,085 1,547,561 37,040 $ 1,584,601 m CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 NOTE 6 LONGTERM 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 govemmental activities and amounts to be repaid from business-type activities. As of December 31, 2012, the govemmental long-term debt of the financial reporting entity consisted of the following: Final Interest Issue Maturity Original Payable Rate Date Date Issue 12/31/2012 Primary govemment: General Obligation Tax Increment Bonds: GO Tax Increment Bonds of 2004A 3.0-4.65% 7/1/2004 2/1/2024 $ 1,405,000 $ 1,145,000 GO Tax Increment Bonds of 2004B 4.5-575% 7/1/2004 2/1/2021 1,775,000 1,59Q000 TotalGeneralObligationTaYIncrementBonds 3,18Q000 2,735,000 Special Assessment Bonds with Govemment Commitrnent GO Improvement Bonds of 2008A 3.5-3.6% GO Improvement Bonds of 2009A 2.5-43% GO Improvement Refimding Bonds of 2009C 2.0-3.0% GO Improvement Bonds of 2012A 30-22% Total Special Assessment Bonds Bond premium/discount (net) Total Govemmental Activities Bonds Capital lease payable - EDA component unit Other postemployment benefits Compensated absences payable Total City indebtedness - govemmental activities BUSINESS TYPE ACI'IVITIES Revenue bonds: GO Water/Sewer Revenue Bonds of 1997A GO Water Revenue Refimding Bonds of 2009B Bond premium/discount (net) Total Revenue Bonds Loan payable - EDA component unit Loan payable - EDA component unit Capital lease payable Other postemployment benefits Compensated absences payable Total City indebtedness - business Type activities Total City indebtedness - primary govemment ComponentUnit EDA: Lea.s�Purc}tase Revenue Bonds of 2008B Bond premium/discount (net) Other postemployment benefits Compensated absences payable Total indebtedness - component unit 6/11/2008 2/1/2019 3,37Q000 2,16Q000 4/16/2009 2/1/2024 3,65Q000 2,840,000 4/16/2009 12/1/2015 625,000 47Q000 3/13/2012 2/1/2027 1,865,000 1,865,000 9,51Q000 7,335,000 - (2,755) 12,69Q000 1Q067,245 6,50Q000 5,615,000 - 41,281 - 752,309 19,19Q000 16,475,835 43-5.1% 5/21/1997 2/1/2013 2.5-4% 4/16/2009 2/1/2020 2.00% 12/31/2004 12/31/2020 2.00% 12/31/2007 12/31/2022 4.0-490% 6/11/2008 Ml/2028 1,475,000 1,205,000 2,68Q000 50Q000 40Q000 176,039 3,756,039 $ 22,946,039 $6,50Q000 $ 6,50Q000 13Q000 91Q000 (3,41� 1,036,584 50Q000 40Q000 142,696 9,893 103,266 2,192,439 $ 18,668,274 $ 5,615,000 (76,440) 411 15,571 $ 5,554,542 m CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Annual debt service requirements to maturity for general obligation bonds are as follows: Tax Increment Bonds Yeu Ending Govemmental Activities December 31 Principal Interest 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total $ 135,000 150,000 170,000 190,000 210,000 235,000 260,000 285,000 280,000 255,000 275,000 290,000 $ 136,287 129,182 121,114 111,847 101,310 89,358 75,805 60,727 45,221 31,872 19,810 6,743 Special Assessment Bonds Govemmental Activities Principal Interest $ 815,000 $ 217,723 965,000 185,263 795,000 160,787 600,000 137,912 615,000 120,071 630,000 101,235 650,000 80,844 370,000 64,527 375,000 52,943 380,000 40,805 390,000 28,005 395,000 14,553 140,000 6,200 145,000 3,135 70,000 770 $ 2,735,000 $ 929,276 $ 7,335,000 $ 1,214,773 Revenue Bonds Yeu Ending Business-Type Activities December 31 Principal Interest 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total $ 230,000 $ 105,000 105,000 110,000 115,000 120,000 125,000 130,000 33,690 27,300 24,150 20,650 16,712 12,450 7,700 2,600 $ 1,040,000 $ 145,252 Revenue Bonds Component Unit Principal Interest $ 260,000 $ 244,892 270,000 234,292 280,000 223,292 290,000 211,892 300,000 199,942 310,000 187,360 320,000 174,288 335,000 160,697 350,000 145,871 365,000 129,601 380,000 112,370 395,000 94,252 410,000 75,233 430,000 55,176 450,000 33,943 470,000 11,515 $ 5,615,000 $ 2,294,616 It is not practicable to determine the specific year for payment of long-term accrued compensated absences. 70 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 B. LOANSPAYABLE The City (primary govemment) 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 $SOQ000 at 5.5% interest. An additional loan was issued in 2007 for $40Q000 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: Primary Govemment Business-Type Activities Loan Payable Yeu Encling EDAComponentUnit December 31 Principal Interest 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total $ SQ000 50,000 50,000 50,000 50,000 75,000 150,000 175,000 185,000 65,000 $ 900,000 $ 18,000 17,000 16,000 15,000 14,000 13,000 11,500 8,500 5,000 1,300 $ 119,300 71 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 C. CIiANGES IN LONG-TERM LIABLITIES Long-term liability activity for the year ended December 31, 2012, was as follows: Beginning Balance Additions Reductions Primuy Govemment: Govemmental activities: Bonds payable: General obligation bonds Special assessment bonds Bond premium/disoount (net) Total bonds payable Capital lease payable-EDA component urut Other postemployment benefits Compensated absences payable Total govemment activities Business-Type activities: Bonds payable: Revenue bonds Bond premium/disoount (net) Total bonds payable Loans payable Capital lease payable Other postemployment benefits Compensated absences payable Total business-Type activities Total primuy govemment Component Unit: Bonds payable: Revenue bonds Bond premium/disoount (net) Total bonds payable Other postemployment benefits Compensated absences payable Total component unit $ 2,790,000 6,75Q000 13,867 9,553,867 5,865,000 39,636 725,863 16,184,366 1,460,000 � 1,456,067 900,000 9,441 101,926 2,467,434 $ - 1,865,000 (15 852) 1,849,148 1,645 623,535 2,474,328 176,039 452 88,776 265,267 $ 18,651,800 $ 2,739,595 $ 5,865,000 $ - (81 120) - 5,783,880 - 73 338 5,413 13,208 $ 5,789,366 $ 13,546 $ (55,000) (1,280,000) (770) (1,335,770) (250,000) (597,089) (2,182,859) (420,000) 517 (419,483) (33,343) (87,436) (540,262) �(2 723 121) $ (250,000) 4,680 (245,320) (3,050) � (248 370) Encling Due Wittun Balance One Yeu $ 2,735,000 7,335,000 (2,755) 10,067,245 5,615,000 41,281 752,309 16,475,835 1,04Q000 (3,41� 1,036,584 90Q000 142,696 9,893 103,266 2,192,439 $18,668,274 $ 5,615,000 (76,440) 5,538,560 411 15,571 $ 5,554,542 $ 135,000 815,000 95Q000 26Q000 525,485 1,735,485 23Q000 23Q000 33,953 79,647 343,600 $ 2,079,085 $ 26Q000 26Q000 9,873 $ 269,873 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, 2012 is backed by the full faith and credit of the City, including special assessment and revenue bond issues. Delinquent assessments receivable at December 31, 2012 totaled $51,506. 72 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 D. CAPITAL LEASES 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,SOQ000 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. In 2012, the City entered into a lease agreement for the purchase of 75 golf carts for the Golf Course Enterprise Fund. This lease agreement qualifies as a capital lease for accounting purposes, and therefore, has been recorded at the present value of the future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows: Asset: Govemmental Activities Building and improvements $ 6,943,038 Less: accumulated depreciation (1,028,093) $ 5,914,945 Golf Course Enterprise Fund $ 176,039 (12,574) $ 163,465 The following is a schedule of future minimum lease payments under the capital lease: Year 2013 2014 2015 2016 2017 2017-2021 2022-2026 2027-2028 Total minimum lease payments Less amount representing interest Present value of minimum lease payments Govemmental Activities Ice Arena Expansion $ 504,892 504,292 503,292 501,892 499,942 2,477,817 2,435,974 481,515 7,909,616 2,294,616 Golf Course Enterprise Fund Machinery $ 38,201 38,201 38,201 38,201 152,804 108 $ 5,615,000 $ 142,696 73 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 7 LEGAL DEBT D�IARGIN 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 2011 and 2012. The City of Cottage Grove's legal debt margin for 2012 and 2011 is computed as follows: Market Value (after fiscal disparities) Debt Limit Amount of debt applicable to debt limit: Total bonded debt Less: Special assessment bonds Proprietary bonds Tax increment bonds Total debt applicable to debt limit Legal debt margin December 31, 2012 $ 2,464,372,900 73,931,187 $16,725,000 (7 335 000) (1,040 000) (2 735 000) $5,615,000 $ 68,316,187 December 31, 2011 $ 2,695,641,900 8Q869,257 $16,865,000 (6750 000) (1,460 000) (2 790 000) $5,865,000 $ 75,004,257 Note 8 PENSION PLANS A. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) - DEFINED BENEFIT Plan Descriotion 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, fuefighters 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 22 percent of average salary for each of the fust 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 12 percent of average salary for each of the fust 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 hued 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 retuement 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 retuement. 74 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 There are different types of annuities available to members upon retuement. 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 theu 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 requued supplementary information for GERF and PEPFF. That report may be obtained on the Internet at www.mnoera.orQ, by writing to PERA, at 60 Empire Drive #20Q St Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. FundinQ Policv Minnesota Statutes Chapter 353 sets the rates for employer and employee conhibutions. 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 requued to contribute 9.1% and 625%, respectively, of their annual covered salary in 2012. PEPFF members were required to contribute 9.6% of their annual covered salary in 2012. The City of Cottage Grove is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan members, 725% for Coordinated Plan members, and 14.4% for PEPFF members. The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 2012, 2011 and 2010 were $335,345, $328,842, and $323,174, respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ending December 31, 2012, 2011 and 2010 were $518,441, $496,804, and $474,280 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 Descriotion 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 Retuement Association of Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401(a) of the Intemal 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 eamings, 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 2012 were: Amount Percentage of Covered Payroll Required Emolovees Emolover Emolovees Emolover Rates PEDCP $1,139 $1,139 5.00% 5.00% 5.00% 75 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 C. COTTAGE GROVE FIRE RELIEF ASSOCIATION Plan Descrintion The Volunteer Firefighters of the City of Cottage Grove are members of the Cottage Grove Volunteer Fue 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 Deparhnent. 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 includes financial statements and required supplementary information. The report may be obtained by writing to Cottage Grove Volunteer Fue Relief Association, 8641 80"' Street South, Cottage Grove, MN 55016. Fundine Policv 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 requuements. The City's annual pension cost for the current year and related information for the plan is as follows: Annual pension cost Contributions made: City State aid Actuarial valuation date Actuarial cost method Amortization method Remaining amortization period: Normal cost Prior service cost Asset valuation method Actuarial assumptions: Investment rate of retum Projected salary increases Inflation rate Cost of living adjustments $123,523 $4,388 $123,523 12/31/2012 Enhy age normal Level dollar Closed 20 years 10 years Market Three-Year Trend Information Percentage of APC Year EndinQ Annual Pension Cost contributed 12/31/2012 $123,523 100% 12/31/2011 12Q470 100% 12/31/2010 119,098 100% 5% N/A N/A None Net Pension ObliQation $- 76 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Schedule of Fundina Proaress Actuarial Actuarial Actuarial (Unfunded) / Valuation Value of Accrued Assets in Excess Funding Date Assets Liabilitu (AAI,I of AAI, (UAAI,1 Ratio 12/31/2012 $1,944,433 1,678,259 266,174 115.86% 12/31/2011 1,78Q252 1,541,750 238,502 115.47% 12/31/2010 1,81Q182 1,57Q994 239,188 11523% The amount received from the State of Minnesota in Fue Relief Aid, $123,523, and then contributed to the Cottage Grove Fue Relief Association is included as a revenue and e�penditure, 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, 2012 were: Fund Major Govemmental Funds: Municipal Building Capital Project Fund Closed Debt Fund Nonmajor Govemmental Funds Major Business-Type Funds: Water Operating Enterprise Fund Sewer Operating Enterprise Fund Golf Course Enterprise Fund Total Receivable Payable � - $ 9,90Q000 2,OOQ000 - 3,155,000 455,000 3,20Q000 - 3,20Q000 - - 1,20Q000 $ 11,555,000 $ 11,555,000 Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and payable balances at December 31. 2012 are as follows: Fund Major Govemmental Funds: Pavement Management Debt Service Fund Pavement Management Capital Proj ect Fund Nonmajor Govemmental Funds Total Receivable Payable $ 122,137 $ - - 122,137 461,804 461,804 $ 583,941 $ 583,941 77 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Interfund transfers: Transfer in: General Fund Muncipal Building Capital Project Fund MSA ConsWCtion Capital Project Fund Closed Debt Fund Pavement Management Debt Service Fund Pavement Management Capital Project Fund Construction Revolving Capital Project Fund Nonmajor Govern. Funds Water Operating Fund Total transfers Transfer out Major Business Type Fund MSA Construction Cottage ConsWCtion Closed Revolving Nonmajor Street Grove Sewer Intemal General Capital Debt Capital Govera Light EMS Operating Service Fund Projec[Fund Fund Projec[Fund Funds Fund Fund Fund Fund Total $- $- $- $- 45,064 - - - 105,149 - - - - - 40,810 - 3Q042 - - - 501,806 87,000 49,404 $- 830,000 81,586 91,569 19,440 $- $4,800 $- $- $4,800 284,479 875,064 284,479 105,149 40,810 111,628 91,569 657,650 $682,061 $87,000 $4Q810 $49,404 $1,022,595 $293,479 $4,800 $29,200 $31,000 $2,24Q349 Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. All transfers in 2012 were considered to be routine in nature. Additionally, administrative fees paid by the Golf Course, Sheet 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 $ SQ700 43,800 54,100 156,560 175,040 $ 48Q200 78 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 10 TAX INCREMENT DISTRICTS The City of Cottage Grove is the administering authority for the following Tax Increment Financing Districts: Up North Cottages of Gateway Plastics Cottage Grove North District #1-3 #1-8 #1-12 Type of District Chapter Established District Duration Current tas capaciry Original taY capacity Captured tas capacity Fiscal disparity deduction Total tas capacity retained by City Debt issued Amount redeemed Debt outstanding Redevelop Housing 472A 469.174 1985 1991 25 years 25 years $ 17Q584 $ 34,360 $ 807,796 IndusVial IndusVial Park Park #1-13 #1-14 Econ. Econ. Develop. Develop. 469.174 469.174 2005 2007 9 years 9 years $ $ 177,378 131,250 (6z,zso) (i,z6s) (zs9,iz�) (zs,o6s) (s,zz� 108,334 33,092 568,669 154,313 126,07A (54,530) (45,485) $ 108,334 $ 33,092 $ 568,669 $ 99,784 $ 8Q539 $ S1Q000 $ - $ 3,OOQ000 $ - $ - (sio,000) (z6s,000) $ - $ - $ 2,735,000 $ - $ - Redevelop 469.174 2001 25 years Note 11 DEFTCIT FUND BALANCES/NET POSITION The City has deficit fund balances/net position at December 31, 2012 as follows: Fund Amount The deficit fund balances will be resolved through Major Govemmental Funds: Municipal Building Capital ProjectFund $8,867,096 Future tax levies PavementManagementCapitalProjectFund 193,007 Futurebonding Nonmajor Govemmental Funds: Sewer Connection and Area Fund 461,804 Future special assessments and developer charges Note 12 CONTINGENCIES A. RISK D�IANAGEMENT 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 compensatioq the City is subject to a$1Q000 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. 79 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 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 $SQ000 for each claim (annual aggregate is $1OQ000). 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 $59,122 reported in the Fund at December 31, 2012 is based on the requirements of Governmental Accounting Standards Board Statement Number 1 Q 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: Yeu 2012 2011 2010 Beginning Claims and of Yeu Cktanges in Liability Estimates $ 51,095 $ 172,454 47,349 136,703 67,176 25,751 End Claim of Yeu Payments Liability $ (164,42'� $ 59,122 (132,957) 51,095 (45,578) 47,349 B. LITIGATION The City attomey 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 attomey, remotely recoverable by plaintiffs. C. FIDERAL 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, 2012. 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 recorded claims payable in the govemment wide statements for an amount currently under review. m CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 13 DEFERRID AD VALOREM TAX LEVIES - BONDID 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 altemative sources of financing. The City Council is requued 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, 2012 and 2011. Future scheduled tax levies for all bonds outstanding at December 31, 2012 totaled $3,544,612. 81 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 14 FUND BALANCES At December 31, 2012 the City had various fund balances through legal restriction and City Council authorization. Fund balance appropriations at December 31, 2012 are shown on the various balance sheets as segregations of the fund balance. The fund balance classifications for govemmental funds are as follows: Nonspendable Reshicted Committed Assigned Unassigned Total General Fund: $ - $ - $ - $ - $ 7,449,565 $7,449,565 Prepaid items 5,764 - - - - 5,764 Compensated absences - - - 752,309 - 752,309 Puk shelter/playgiound equipment - - - 217,091 - 217,091 M VHC aid set aside - - - 648,053 - 648,053 Emerald ash borer program - - - 40,200 - 40,200 Public safety equipment - - - 3,500 - 3,500 School bus safety - - - 4,050 - 4,050 Gateway pond landscaping Total General Fund Municipal Building Capital Project Fund: Municipal building activities MSA Conshuction Capital Project Fund: Assets for resale MSA construction activities Closed Debt Fund: Longterm interfund receivable Debt retirement Pavement Management Debt Service Fund: Debt retirement Pavement Management Capital Project Fund Construction Revolving Capital Project Fund: Construction activities Total Other Major Funds Nonmajor Govemmental Funds: Prepaid items Longterm interfund receivable Forfeiture and seizure Charitable gambling Debt retirement Tax increment purposes Puk trust activities Ice uena Storm water activities Recycling program Equipment replacement Sheet sealcoating Economic development Future pavement martagement Tree mitigation Future roads and hails Capital improvements Deficit Fund Balance Total Nonmajor Funds Total Fund Balances Governmental Funds 5,764 - - 1,695,203 7,449,565 9,150,532 267,498 - 2,000,000 - - 93Q911 - �s,s6�,o96� �s,s6�,o9� 771,859 - 1,445,525 - - (193 007) 267,498 771,859 2,000,000 1,445,525 930,911 (193 00'� - - - 36,720 - 36,720 2,267,498 93Q911 - 2,254,104 (9,060,103) (3,607,590) 938 3,155,000 - 17,692 - 6,624 - 486,697 - 1,481,782 - 73,514 305,741 186,772 67,808 2,289,352 371,062 2,520,131 1,431,412 198,614 189,221 5,563,767 938 3,155,000 17,692 6,624 486,697 1,481,782 73,514 305,741 186,772 67,808 2,289,352 371,062 2,520,131 1,431,412 198,614 189,221 5,563,767 3,155,938 2,066,309 560,321 12,563,559 (461,804) 17,884,323 $ 5,429,200 $ 2,997�7,20 $ 560,321 $ 16,512,866 $(2,072,342) $ 23,427,265 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 Note 15 OTHER POSTEMPLOYMENT BENEFTT PLAN At December 31, 2008, the City adopted Govemmental 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. A. PLAN DESCRIPTION The City provides benefits for retuees 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, retuees are required to pay the total premium cost As of December 31, 2012 there were approximately 108 active participants and no retued participants receiving benefits from the City's health plans. The Plan does not issue a separate report. B. FUNDINGPOLICY The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2012, the City conhibuted $8,858 to the plan. 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 costs for the year, the amount actually paid from the plan, and changes in the City's net OPEB obligation: Annual required Conhibution Interest on Net OPEB Obligation Adjustment to Annual Required Conhibution Armual OPEB Cost (Er.pense) Conhibutions Made Increase in Net OPEB Obligation Net OPEB Obligation- Beginning of Yeu Net OPEB Obligation- End of Yeu $ 12,290 1,474 (2,471) 11,293 (8,858) 2,435 49,150 $ 51,585 The City's annual OPEB cost, the percentage of the annual OPEB cost conhibuted to the plan, and the net OPEB obligation for 2012: Fiscal Yeu Ended 12/31/2012 12/31/2011 12/31/2010 Percentage Armual of Annual Net OPEB OPEB Cost OPEB Cost Conhibuted Obligation $ 11,293 78.4% $ 51,585 11,391 57.5% 49,150 19,796 33.9% 44,308 83 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 D. FUNDID STATUS AND FUNDID PROGRESS As of January 1, 2011, the most recent actuarial valuation date, the City's unfunded actuarial accrued liability (UAAI,) 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 UAAI, to covered payroll of 12%. 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 eapectations 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. E. ACTUARIAL METHODS AND ASSiJD�IPTIONS 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 pattem 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, 2011 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 3% investment rate of retum (net of administrative expenses), which is a blended rate of the eapected long-term inveshnent retums on plan assets and on the employer's own inveshnents calculated based on the funded level of the plan at the valuation date. The inflation assumption was 3%. The initial healthcare trend rate was 8%, reduced by decrements to an ultimate rate of 4% after five years. The UAAI, is being amortized as a level percentage of projected payrolls on an open basis. The remaining amortization period at December 31, 2012 was 25 years. Note 16 OPERATING LEASES The City leases land for the golf course under an operating lease. The lease e�pired on April 3Q 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 fau 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 2012, $12 was paid under this lease arrangement. 84 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 The City leases six copiers under an operating lease and the EDA component unit leases one copier. Total 2012 payments for these leases were $11,927 for the primary govemment and $485 for component unit Future minimum annual lease payments at December 31, 2012 are as follows: Yeu Ended December 31 2013 2014 2015 2016 11,422 Component Unit Copier $2,910 2,425 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: Year Ended December 31 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2029 Primuy Govemment Golf Course Land Copiers $ 12 $ 13,314 12 13,314 12 13,314 Independent School District 833 $ 104,250 104,250 104,250 104,250 104,250 521,250 521,250 208,500 Note 17 COD�ID�IITTID CONTRACTS Cottage Grove Athletic Association $ 40Q000 40Q000 40Q000 40Q000 40Q000 2,OOQ000 2,OOQ000 719,000 AtDecember 31, 2012, the City had commihnents of $378,120 for uncompleted construction contracts. 85 CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 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, 2012, a series of Industrial Revenue Bonds were outstanding. Bond Industdal Revenue Bonds-Allina Health Systems Indushial Revenue Bonds-Advance Corporation Commercial Development Revenue Note-HSI Commercial Development Revenue Note-ESR, Inc. Commercial Development Revenue Note-ESR, Inc. Subordinate Seruor Housing Revenue Bonds-PHS Subordinate Seruor Housing Revenue Bonds-PHS Vuiable Rate Revenue Bonds-Allina Health System Issue Date 08/OS/1998 04/30/2001 12/22/2004 11/22/2005 OS/19/2005 12/O 1/2006 12/O 1/2006 11/O 1/2009 Orieirtal Issue Amount $4,100,000 3,500,000 935,000 76,500 853,000 21,105,000 8,075,000 6,100,000 $44.744.500 12/31/12 Balanoe* Not available 2,345,000 646,263 44,187 645,639 2Q898,868 7,996,132 6,100,000 $38.676.089 Maturitv Date 08/OS/2018 04/O 1/2021 12/O 1/2024 11/22/2025 12/19/2025 12/O 1/2046 12/O 1/2046 11/15/2022 *Per original conduit debt bond schedule Note 19 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 EDA component unit purchased land in 2011 to be resold for possible future development The occupant is not known at this time. m REQUIRED SUPPLEMENTARY INFORMATION a� CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Revenue: General property taYes: Current and delinquent Special Assessments Licenses and permits: General govemment Community development Public safety Public works Total licenses and permits Intergovemmental: Federal: Firefighter assistance grant - public safety Disaster assistance - public safety Safe and sober - public safety Ballistic vest gant - public safety State: Disaster assistance - public safety Muketvaluehomestead credit MSA maintenance - public works PERA aid Fire relief aid - public safety Police relief aid - public safety Forestprotection grant- puks and recrea.tion Other - general govemment Other - public safety Local: S RO program - public safety Nucotics officer progam - public safety Other - public safety Other - public works Other - culture and recrea.tion Total intergovemmental Chuges for services: Adminishation chuges - general govemment: Enterprise funds Investrnent chuge - general govemment Other - general govemment Other - commuruty development Other - public safety Other - public works Other - culture and recrea.tion Total chuges for services Budgeted Amounts Original Final Statement 9 Page 1 of 6 V ariance with 2012 Final Budget- 2011 Actual Positive Actual Amounts (Negative) Amounts $ 10,967,100 $ 10,967,100 $ 11,153,957 $ 186,857 $ 10,332,994 19,500 28,500 28,664 164 14,984 103,650 103,650 9Q095 (13,555) 99,771 531,000 531,000 714,667 183,667 46Q725 34,800 34,800 25,275 (9,525) 31,216 - - 1,650 1,650 1,560 669,450 669,450 831,687 162,237 593,272 20,000 20,000 25,039 - - 5,340 - - 515 - - 3,452 42,000 42,000 43,905 21,450 21,450 21,448 120,000 12 Q000 123,5 23 240,000 24Q000 252,429 27,000 - 4,842 16,000 16,133 75,000 3,500 15,000 19,800 583,750 510,500 13,800 60,300 36,500 56,300 46,000 178,350 901,750 75,000 75,000 3,500 5,448 15,000 22,394 17,700 20,391 19,800 13,772 59Q450 633,631 510,500 51Q500 13,800 8,315 300 916 36,500 22,905 56,300 115,154 46,000 46,285 159,800 126,084 823,200 83Q159 m - 29,520 - 15,447 5,039 22,824 5,340 1,289 515 4,634 3,452 4,698 1,905 43,905 (2) 21,448 3,523 121,470 12,429 254,444 - 6,206 4,842 - 133 2Q943 1,948 7,394 2,691 (6,028) 43,181 75,000 4,079 7,304 2,867 32,131 668,209 (5,485) 616 (13,595) 58,854 285 (33,71� 6,959 495,600 20,158 41,392 66,199 76,196 44,414 135,252 879,211 CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Fines and forfeits - public safety Investrnenteunings Donations: Donations - general govemment Donations - public safety Donations - culture and recreation Total donations Miscellaneous: Other - general govemment Other - public safety Other - public works Other - culture and recrea.tion Total miscellaneous Total revenues Expenditures: Current: General govemment: Mayor and city council: Personal services Commodities Conhactual services Total mayor and city council Admirushative: Personal services Commodities Conhactual services Total admirushative Finance: Personal services Commodities Conhactual services Total finance Management information systems: Personal services Commodities Conhactual services Capital ouflay Total management information systems 2012 Budgeted Amounts Actual Original Final Amounts $ 201,000 $ 201,000 $ 164,532 60,000 60,000 41,040 - - 2,500 1,000 1,000 4,610 7,000 7,000 4,350 8,000 8,000 11,460 1,250 1,250 5,793 12,000 12,000 1Q697 10,000 10,000 12,791 400 400 5,990 23,650 23,650 35,271 13,434,200 13,371,350 13,73Q401 40,050 40,050 38,942 1,750 1,750 656 150,250 90,250 122,461 192,050 132,050 162,059 205,100 205,100 235,824 800 800 989 9,720 9,720 12,637 215,620 215,620 249,450 420,300 420,300 432,600 2,500 2,500 1,333 35,985 35,985 35,719 458,785 458,785 469,652 V ariance with Final Budget- Positive (Negative) $ (36,468) (18,960) 2,500 3,610 (2,650) 3,460 4,543 (1,303) 2,791 5,590 11,621 359,051 1,108 1,094 (32,211) (30,009) (30,724) (189) �� (33,830) (12,300) 1,167 266 (10,867) Statement 9 Page 2 of 6 2011 Actual Amounts $ 193,676 84,706 3,027 7,313 4,925 15,265 36,465 10,796 9,013 56,274 12,838,591 38,942 997 140,844 180,783 234,373 1,319 860 236,552 406,894 1,402 21,567 429,863 91,027 43,431 57,135 13,922 205,515 m CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Expenditures:(continued) General govemment (continued) Personnel: Personal services Commodities Conhactual services Total personnel Assessing service: Conhactual services City clerk/elections: Personal services Commodities Conhactual services Total City clerk/elections Legal: Conhactual services Community and employee programs: Personal services Commodities Conhactual services Total community and employee progams Govemment buildings: Personal services Commodities Conhactual services Total govemmentbuildings Historic preservation: Personal services Commodities Conhactual services Total Mstoric preservation Planning and zorung: Personal services Commodities Conhactual services Total planning and zoning Bu$ding inspections: Personal services Commodities Conhactual services Total building inspections Total general govemment 2012 Budgeted Amounts Actual Original Final Amounts $ 103,300 $ 103,300 $ 89,707 200 200 66 8,530 8,530 6,486 112,030 112,030 96,259 V ariance with Final Budget- Positive (Negative) $ 13,593 134 2,044 15,771 Statement 9 Page 3 of 6 2011 Actual Amounts $ 78,722 159 12,251 91,132 150,900 150,900 145,032 5,868 141,860 174,000 174,000 196,136 (22,136) 134,659 1,800 1,800 1,634 166 1,777 16,675 16,675 15,041 1,634 9,625 192,475 192,475 212,Sll (20,336) 146,061 177,700 177,700 18Q222 (2,522) 181,485 4,000 4,000 4,000 - 3,675 500 500 33 467 - 47,700 47,700 42,581 5,119 56,937 52,200 52,200 46,614 5,586 6Q612 6,700 6,700 9,037 (2,337) 8,481 12,300 12,300 11,649 651 9,631 211,450 211,450 171,743 39,707 182,868 230,450 23Q450 192,429 38,021 20Q980 10,000 10,000 5,019 4,981 4,421 - - 41 (41) 298 3,500 3,500 - 3,500 225 13,500 13,500 5,060 8,440 4,944 369,250 369,250 271,170 98,080 378,196 1,700 1,700 1,298 402 1,694 43,880 43,880 44,289 (4D9) 57,914 414,830 414,830 316,757 98,073 437,804 386,900 386,900 397,005 (10,105) 392,613 8,580 8,580 6,482 2,098 7,380 43,750 52,750 101,703 (48,953) 48,807 439,230 448,230 505,190 (56,960) 448,800 2,649,770 2,598,770 2,581,535 17,235 2,766,391 m CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Expenditures:(continued) Public safety: Police protection: Personal services Commodities Conhactual services Capital ouflay Total police protection Fire protection: Personal services Commodities Conhactual services Capital ouflay Total fire protection Fire relief. Conhactual services Civil defense: Personal services Commodities Conhactual services Total civil defense Arumal control: Personal services Commodities Conhactual services Total animal conhol Total public safety Public works: Public works adminishation: Personal services Commodities Conhactual services Total public works adminishation Engineering: Personal services Commodities Conhactual services Total engineering 2012 Budgeted Amounts Actual Original Final Amounts $ 4,367,900 $ 4,367,900 $ 4,463,710 289,200 285,700 282,270 352,700 352,700 354,711 90,000 113,000 116,269 5,099,800 5,119,300 5,216,960 V ariance with Final Budget- Positive (Negative) $ (95,810) 3,430 (2,011) (3,269) (97,660) Statement 9 Page 4 of 6 2011 Actual Amounts $ 4,328,904 246,426 261,694 101,660 4,938,684 435,000 435,000 539,828 (104,828) 455,581 83,000 83,000 61,944 21,056 7Q030 205,175 205,175 206,765 (1,590) 187,785 11,000 - - - 33,220 734,175 723,175 808,537 (85,362) 746,616 123,000 123,000 127,9ll (4,911) 125,671 27,700 27,700 1Q286 17,414 33,104 ioo ioo 6z9 �sz9� ia,s6i 29,520 29,520 11,820 17,700 19,368 57,320 57,320 22,735 34,585 67,333 11,600 11,600 1Q511 4,100 4,100 1,954 64,250 64,250 45,556 79,950 79,950 58,021 6,094,245 6,102,745 6,234,164 1,089 2,146 18,694 21,929 11,743 2,548 48,209 62,500 181,000 181,000 211,434 20,350 38,050 33,048 151,545 151,545 155,601 352,895 37Q595 40Q083 102,900 102,900 128,922 1,000 1,000 579 31,500 31,500 59,606 135,400 135,400 189,107 (131,419) 5,940,804 (30,434) 244,856 5,002 19,675 (4,05� 121,453 (29,488) 385,984 (26,022) 97,473 421 338 (28,10� 4D,371 (53,707) 138,182 91 CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Expenditures:(continued) Public works: Sheets: Personal services Commodities Conhactual services Capital ouflay Total sheets Snow and ice conhol: Personal services Commodities Conhactual services Capital ouflay Total snow and ice conhol Sheet signs/shiping: Personal services Commodities Conhactual services Capital ouflay Total sheet signs/shiping Total public works Culture and recreation: Foreshy: Personal services Commodities Conhactual services Total foreshy Recreation programs: Personal services Commodities Conhactual services Total recreation programs Budgeted Amounts Original Final $ 500,900 $ 500,900 185,500 185,500 265,920 265,920 Statement 9 Page 5 of 6 V ariance with 2012 Final Budget- 2011 Actual Positive Actual Amounts (Negative) Amounts $ 545,586 $ (44,686) 212,318 (26,818) 339,831 (73,911) 952,320 952,320 1,097,735 (145,415) 169,200 169,200 118,813 50,387 213,000 213,000 19Q520 22,480 115,800 115,800 102,980 12,820 17,000 17,000 - 17,000 515,000 515,000 412,313 102,687 109,200 109,200 88,280 25,700 25,700 24,122 42,320 42,320 64,543 12,000 12,000 9,779 189,220 189,220 186,724 2,144,835 2,162,535 2,285,962 62,800 62,800 84,210 13,375 13,375 9,661 263,295 244,745 16Q203 339,470 32Q920 254,074 247,000 247,000 225,007 10,875 1Q875 7,036 74,305 74,305 72,238 332,180 332,180 304,281 20,920 1,578 (22,223) 2,221 2,496 (123,427) (21,410) 3,714 84,542 66,846 21,993 3,839 2,067 27,899 $ 508,845 169,064 314,237 58,500 1,050,646 154,157 202,341 113,732 470,230 88,487 29,917 51,222 169,626 2,214,668 94,477 15,728 198,478 308,683 225,823 9,320 64,095 299,238 92 CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Expenditures:(continued) Culture and recrea.tion: (continued) Puks maintenance: Personal services Commodities Conhactual services Capital ouflay Total puks maintenance Total culture and recreation Total expenditures Revenues over (under) eayenditares Other financing sources (uses): Transfer from Enterprise Fund Transfer from Special Revenue Fund Transfer to Debt S ervice Fund Transfer to Capital Project Fhnd Total other financing sources (uses): Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 Budgeted Amounts Original Final Statement 9 Page 6 of 6 V ariance with 2012 Final Budget- 2011 Actual Positive Actual Amounts (Negative) Amounts $ 572,000 $ 572,000 $ 60Q255 $ (28,255) $ 555,470 163,200 163,200 151,811 11,389 171,65 4 288,705 288,705 304,443 (15,738) 331,749 - - - - 264,242 1,023,905 1,023,905 1,056,509 (32,604) 1,323,115 1,695,555 1,677,005 1,614,864 62,141 1,931,036 12,584,405 12,541,055 12,716,525 (175,470) 12,852,899 849�195 830 295 1 013 896 183 581 (14308) 4,800 4,800 4,800 - (ios,ia9� �ios,ia9) - �as6�oo� �s�6,�i2� �s�6,�i2) - �asi,�oo� �m»26i� �m»2�) - $ 397,895 $ 153,034 336,615 $ 183,581 8,813,917 $ 9,15Q532 3,600 4,700 (319 215) (310,915) (325,223) 9,139,140 $ 8,813,917 93 CITY OF COTTAGE GROVE, MINNE60TA REQUIl2EDSUPPLEMENTARYINFORMATION BUD6ETARY COMPARISONSCHEDULE NOTE TO RSI Decembec 31, 2012 NoteA LEGALCOMPLIANCE-BUDGET6 The General Fund is legally adopted on a basis consistentwith accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the departrnent level for both budgets. The following is a listing of expenditures that exceeded budget appropriations. Final Budeet Actual Over Budeet General Fund General govemment Mayor and city council: Contractual services $ 9Q250 $ 122,461 $ 32,211 Administrative: Personalservices 205,100 235,87A 3Q77A Commodities 800 989 189 Contractual services 9,720 12,637 2,917 Finance: Personal services 42Q300 432,600 12,300 City clerWelections: Personalservices 174,000 196,136 22,136 Legal: Contractual services 177,700 18Q222 2,522 Government buildings: Personal services 6,700 9,037 2,337 His[orical preservation: Commodities - 41 41 Planning and zoning: Contractualservices 43,880 44,289 409 Building inspections: Personalservices 386,900 397,005 1Q105 Contractualservices 52,750 101,703 48,953 Public safety: Police protectio¢ Personalservices 4,367,900 4,463,710 95,810 Contractual services 352,700 354,711 2,011 Capitaloutlay 113,000 116,269 3,269 Fire protectio¢ Personalservices 435,000 539,828 104,828 Contractualservices 205,175 206,765 1,590 Fire relief: Contractualservices 123,000 127,911 4,911 Civil defense: Commodities 100 629 529 Public works: Public works adminis[ration: Personalservices 181,000 211,434 3Q434 Contractualservices 151,545 155,601 4,056 Engineering: Personalservices 102,900 128,922 26,022 Contractualservices 31,500 59,606 28,106 Streets: Personal services 500,900 545,586 44,686 Commodities 185,500 212,318 26,818 Contractualservices 265,920 339,831 73,911 Street signs/striping: Contractual services 42,320 64,543 22,223 Culture and recreatio¢ Fores[ry: Personalservices 62,800 84,210 21,410 Parks maintenance: Personal services 572,000 60Q255 28,255 Contractualservices 288,705 304,443 15,738 94 CITY OF COTTAGE GROVE, MINNESOTA REQUIREDSUPPLEMENTARYINFORMATION FUNDINGPROGRESSSCHEDULE OTHER POST EMPLOYMENT HEALTH CARE BENEFITS December 31, 2012 Actuarial Actuarial Value of Valuation Assets Date (a) 1/1/2008 � - 1/1/2011 - Actuarial Accrued Liability (AAL) @) $ 146,597 108,298 Unfunded Funded AAL Ratio @-a) (�) $ 146,597 - 108,298 - Covered Payroll (c ) $ 8,75Q900 8,887,000 UAALasa Percentage of Covered Payroll ((b-a)/c) 1.7% 12% 95 TMs Page Intentiortally Left Blank- m COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES s� TMs Page Intentiortally Left Blank- m NONMAJOR GOVERNMENTAL FUNDS m SPECIAL REVENUE FUNDS A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal and related costs on general long-term debt. CAPITAL PROJECT FUNDS The Capital Project Funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds). 100 CITY OF COTTAGE GROVE, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2012 With Comparative Data as of December 31, 2011 Assets: Cash and investmenTs Accrued interestreceivable Interfund receivable Interfund loan receivable Due from other govemmental units - net AccounTs receivable - net Prepaid items Delinquent property taxes receivable Special assessments receivable: Deferred Delinquent Total assets Liabilities: Accounts payable Salaries payable Interfund payable Contracts payable Due to other govemmental units Deposits payable Interfund loan payable Defeired revenue Total liabilities Fund balance: Nonspendable: Prepaid items Long-teim interfund loan receivable Restdcted for: Forfeiture and seizure Charitable gambling Debt retirement Tax increment purposes Park trust activities Committed Assigned Unassigned Total fund balance Total liabilities and fund balance Special Debt Revenue Service $ 353,761 69,068 239,407 938 5,083 Statement 10 Capital Project Totals Nonmajor Govemmental Funds 2012 2011 $ 1,569,207 $ 12,156,615 $ 14,079,583 $ 15,856,135 - 53,000 53,000 34,000 - 461,804 461,804 234,520 - 3,155,000 3,155,000 3,90Q000 - 1,001,331 1,070,399 58,230 - 140,934 380,341 364,783 - - 938 938 - 20,292 25,375 34,363 - 89,146 74,178 163,324 476,703 - - 3,462 3,462 2,446 $ 668,257 $ 1,658,353 $ 17,066,616 $ 19,393,226 $ 2Q962,118 $ 45,591 $ 1,316 $ 76,015 $ 122,922 $ 104,095 21,979 - - 21,979 14,334 - - 461,804 461,804 234,520 5,732 - 62,343 68,075 23,915 4,297 - - 4,297 3,813 - - 182,665 182,665 16Q199 - - 455,000 455,000 SOQ000 5,083 89,146 97,932 192,161 514,212 82,682 9Q462 1,335,759 1,508,903 1,555,088 938 - - 938 938 - - 3,155,000 3,155,000 3,90Q000 17,692 - - 17,692 SQ968 6,624 - - 6,624 1,920 - 486,697 - 486,697 476,633 - 1,081,194 40Q588 1,481,782 1,184,983 - - 73,514 73,514 637,498 560,321 - - 560,321 833,500 - - 12,563,559 12,563,559 12,555,110 - - (461,804) (461,804) (234,520) 585,575 1,567,891 15,730,857 17,884,323 19,407,030 $ 668,257 $ 1,658,353 $ 17,066,616 $ 19,393,226 $ 2Q962,118 101 CITY OF COTTAGE GROVE, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS For The Yeu Ended December 31, 2012 With Compuative Data for the Year Ended December 31, 2011 Revenues: General property taYes FrancMse taYes Aggegate taYes TaY increment collections Special assessments Direct chuges to developers Intergovemmental Chuges for services Fines and forfeits Investrnenteunings Interest on interfund loan Connection chuges Puk dedication fees Donations Miscellaneous Total revenues Expenditures: Current: General govemment Economic development Public safety Public works Culture and recrea.tion Capital outlay: General govemment Economic development Public safety Public works Culture and recrea.tion Debt service: Principal retirement Capital lea.se payment Interest and fiscal chuges Total expenditures Special Debt Revenue Service $ 24Q651 $ - - 45Q667 - 203,688 157,605 - 1,465,287 - 33,490 - 4,907 6,905 4,682 - 3,996 - 1,91Q618 661,260 - 7,314 33,782 - 806,351 - 663,823 - 15,198 - 87,096 - Statement 11 Totals Nonmajor Capital Govemmental Fhnds Project 2012 2011 $ 1,303 $ 241,954 $ 24Q936 537,682 537,682 535,188 26,180 26,180 26,131 441,771 892,438 946,603 143,226 346,914 588,934 16,555 16,555 101,913 961,870 1,119,475 266,521 171,741 1,637,028 1,614,807 - 33,490 53,077 82,749 94,561 218,926 121,986 121,986 105,500 282,265 282,265 322,009 41,990 41,990 62,198 357,614 362,296 368,561 15,328 19,324 1,907 3,202,260 5,774,138 5,453,211 486 7,800 7,560 491,040 491,040 793,046 - 33,782 21,648 92Q510 1,726,861 1,492,098 108,968 772,791 659,939 6,199 6,199 23,223 111,913 111,913 - 484,759 499,957 34,729 1,353,647 1,353,647 1,62Q549 637,477 724,573 283,724 - 235,000 22Q000 455,000 44Q000 25Q000 - - 25Q000 245,000 255,093 156,475 97,315 508,883 539,465 2,111,343 398,789 4,432,314 6,942,446 6,16Q981 Revenues over (under) expenditures (20Q725) 262,471 (1,23Q054) (1,168,308) (707,770) Other financing sources (uses): Transfers in - - 657,650 657,650 344,215 T�ansf�souc �ioi,oz� - �9zi,s69� �i,ozz,s9s� �z9,�oo� Proceeds from the sale of capital assets - - 1Q546 1Q546 12,344 Total other financing sources (uses) (101,02� - (253,373) (354,399) 326,859 Net increase (decrea.se) in fund balance Fund balance - January 1 Fhnd balance - December 31 (301,751) 262,471 (1,483,427) (1,522,707) (380,911) 887,326 1,305,420 17,214,284 19,407,030 19,787,941 $ 585,575 $ 1,567,891 $ 15,73Q857 $ 17,884,323 $ 19,407,030 102 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: Recvcline - 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. 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. Charitable Gamblin� — Established to account for the 3% tax on charitable gambling operations. 103 5,��''a� ��'' a�+�1!'� V `� N 4�� ° +j�,''��b�9:�= �1 I ,I, '_. , .. _ � ��. � . _ �I � i ��. I � , I i ', � � � � .; � _��I; � t,_. ' I , t:'�, �. ,�i� [ �%� � - i 7'i��.,�i ; 1 � 1 1 I ,�. _, s.._. . _ ';t��,. i� �. ,_.,n? ,�._ i !�� t ' i�l � ,.. - '"�;�� t �,�,�i t��t �. I� _�. ��`- �._;tl, �_. 1-;�;L� �� . _ . _ ,',' _ _ �� ,i,i� „__ , I. t; _� i cri_ I.i-... ( c`,�;.I , �!i.l�, � .;i'i� � i � I1��_., , . ,.� �,:.. .�� ::i_��_� t `t'. , i��. '�_C:C':,.. ., .. i �._ � , r�� _.,_ ��l ,'i'.; .' tlill'I 7--- . _iii._ ,..� . � , si , .I�I��. . . ,,., i� ... _ _ i� �. ,�,� � .,;! � ��i� „�� 1�.._ i i��!�� i t�. ;�, i.in�._l ., i n�1�� ...�_ .'�C�'�:_ ?1�.; �?� ,I i�,. .. , .. ... . _ .. `' -�.. _ ,.(� � 1� ' - I � �I_ _ _ ` i i � ` ;`:, ,'1 - - - - I �� - � ,�; � � � - � - i i ' i i. '. `°��;[tua€^t;� � � ,�.��!� ..�::Il�..��._� �_ 11t'�_1 �:.E . I ,_.�� r'�,111"� �,It : ! l ll i`�i� .. i�_ ;� ' i . . � �... �. -. .. "�.'° .'�l .. , _,�.�, _ '`' - • _'�il � - �� ; ,.. , , �� . _ . , _ - -? i r i � - - ' I , _. �, � -, .' ' � ..� - : ��.' . _. . _ �� i� �, _, _ _ - �- � ,� �` — ,'.,�' - _ . _- I _ . -. . - . -: I . -,. - � � - �� - - - � - �ti ��:. _ � �� ! � ��i - �� II�M"�� °� � ��:��N��I� ��aN=; t�F��:�"�"�. �.�1 ` `9 °:"r�:��V� � � � i � � i � �, i i � �: �� i , �� I �� '��. ' ._ �.I�I l_`' �� i. !` i i�?' ;I, , ��•!'� � ' , _ �. i i� I��l "- i��.� i�i ."� I ., ��bcr_�1 �)_ ,�� !i�. i .�t;��:i�_��'�� . _,.. ._ �� ,._ �.,u� � u. ,.!i �, ...., � .�t;f;:l_ , r r�� . � � �r;int l , "il�. 1-...� i �_ �� . � ��. . I l "c`" � . . . . . ,..., . i. ,.,.� � ._.... I 1 �11. 1 �'..i ., . , l 1ii�� .r � � �'�. . �.. _ _ r . , L,_.. i: � �� , �i�_� � . �� 'u r r��nt � � �.�r:l � •, cn ��:�n: �. _ � _,_ .�1�: � I _ir;_ i _ _ � .� i;��n �t��J .�t �,_. _ � ' � �` �' �: J � . ..�. i...� . �i �� 1��1T1', �.. . ,_�li�'. I i ,'�c';! ,i _I ... .. I � ::II ' .. , �. �,i �`;1� i i�r�^; i�;� � i.�`�: �r fLfli�� _ _ �, ii.! ICS , I�G[ i _ . I t �. � � ! �'.�;.I'_. � � - i, ';' �I. . , �."_ �, �, �.i �!'. , ! �.<<�; _ . !',�:. _ . , i n�r� �1�� i � �� '..I �,. , r��;� 1'Li �� `;;�� i'__ -_�'�:�('l.. � I 1 '! .f ,..'.� _. , �_ I . ... i� � � � �_�. _ :�� i, _ ��,�i; !,, �,� �i, ��r� i � ,.}(l \ � '' i ..ii� 1-�.� 1 i� i� ..`.�`. .. .._ .. .. I I _ ��,,`, I , I __ -;1 ?: 1 �'r I - `� r . _ _ _ 1 �' . _ . - - _ _ _. ( i � �! �. ._. €�.Q;_,it'u�tF:'6-,t T.� _. , _t �� ,<<_ � �:_ , ..,;:? ,_. ,i� _ !! �: ? - .� � � i � � _ ;i �- �� ' .... . I I I. ' _ _i , _i i � � - �'�.'�, �l �l�„ ; l:_ i i i I :I.�.� `i;i i � �'�. � �� i , � )4 ,. , �, 1 I , . . — — — - - � � _ �_ � i l_ �i I �11 `` . _ . _ . �` - C - - �( � -I_� I � ��_�,,�: i��)il vi _ � , iqtii � I ��_ � � ��. rr _ � �i �r� ' � � �� , ,�, �i''.._. ... , NONMAJOR DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal and related costs on long-term debt. The City's Debt Service Funds account for two types of bonded indebtedness: • Improvement Bonds • Tax Increment Bonds Delveloner Financed Revolvine —(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. 108 CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJORDEBT SERVICE FUNDS December 31, 2012 With Compuative Data as of December 31, 2011 Assets: Cash and investments Special assessments receivable: Deferred Total assets Liabilities: Accounts payable Deferred revenue Total liabilities Fund balance: Reshicted for: Debt retirement Tax increment purposes Total fund balance Total liabilities and fund balance Developer Financed Tax Increment Revolving Funds Funds $ 486,697 $ 1,082,510 89,146 - $575,843 $1,082,510 Statement 14 Totals Nonmajor Debt Service Funds 2012 2011 $ 1,569,207 $ 1,305,420 89,146 272,390 $1,658,353 $1,577,810 $ - $ 1,316 $ 1,316 $ - 89,146 - 89,146 272,390 89,146 1,316 90,462 272,390 486,697 - 486,697 476,633 - 1,081,194 1,081,194 828,787 486,697 1,081,194 1,567,891 1,305,420 $ 575,843 $ 1,082,510 $ 1,658,353 $ 1,577,810 109 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, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: Tax increment collections Special assessments: Current Prepayments on defeired Penalties Investment eamings Totalrevenues Expenditures: Cuirent: General govemment Contractual services Debt service: Principal retirement Interest and fiscal charges Total expenditures Revenues over (under) expenditures Fund balance - January 1 Fund balance - December 31 Developer Financed Revolving Funds $ Statement 15 Totals Tax Nonmajor Increment Debt Service Fhnds Funds 2012 2011 $ 450,667 $ 450,667 $ 141,726 163,731 - 163,731 233,710 39,620 - 39,620 113,909 337 - 337 1,851 2,251 4,654 6,905 12,702 205,939 455,321 661,260 503,898 300 7,014 7,314 634 18Q000 55,000 235,000 225,000 15,575 14Q900 156,475 165,045 195,875 202,914 398,789 390,679 1Q064 252,407 262,471 113,219 476,633 828,787 1,305,420 1,192,201 $ 486,697 $ 1,081,194 $ 1,567,891 $ 1,305,420 110 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. Equinment Renlacement Fund - Established to accumulate monies far the replacement of capital equipment. Street Sealcoatin� — Established to account for the receipt of franchise fees to be used for sealcoating activities. Future Economic Develonment Fund — Established to account for the receipt and use of monies for economic development purposes. Future Proiects - to account for the preliminary expenditures of projects which do not have a source of financing. Comnleted Construction - to account for the various surpluses (deficits) of other Special Assessment Construction Funds. Park Trust —to account for capital projects in the municipal parks. Water Connection and Area Charge - to accountfor water connection and area charges. Sewer Connection and Area Char�e - to account for sewer connection and area charges. Future Storm Sewer Imnrovements - to collect storm sewer area charges which are designated for future construction. Tax Increment Construction Revolvin� Fund - to account for construction projects that are financed with tax increments. Gatewav District Imnrovements — to account for improvements in the Gateway District that are non-TIF. 111 ''B7.'o � E�':�.:ti � ��.'�f s�t"t'.�f', �'.1V`a"� \' � ',. . . . , � �:��. ,,. � _ � ._i ... I ,i.. . � .. :i. _ 4 . . . , _, ,. , . , , . ,, Ic: . � . , _ _.. � , . ., ,- 1-1; �.., 'i:`:- .. _ . .. �` __.:l ti �l-_ . ._. � .. .C�' _ , _� i i�i� i_._!'.�t11,1_� - - .�.i. �.. - - Iui ;ii' ..�._ .;��iC' - - - - - i i �:��I I :!!1 ., i _U��• _ _ .. - .. - �-• .ni I ..� I� i� __u �.r�i_i�_ i ;I ��:i i� ir�! _ ^I , _ __ iii �.r. �i` i �---:4>;'' 1 � i � . � j�- _. ,'!�.� - - ' - �� ,, �. .�'��,. � � . � ., � - - _ . _ � �-. i ��:li .i: , �,� __ _, - _ _. � _ 1_ �'I� 1 -�,I�,'.� _. .,_.��i �LI� �i(_ ��.r,��il �iL��.. �lc �� _ > i� � . ;',�c ii ��ii � ��ii � � v _.:�t . �. �_�_. � ':�I I�:i'. � r��: � !n�:! I�..,.�.�,, , i , i�r� _ i. ' �_., , .�� . �I_.. 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',�liiti:;; �.i>t i_ .. � �li .�,��i r . ii��_ �_ i iii_. _ ii , �r�ti _ „�r , � . I �� i 1 �i=n�i� � `' . �„ t �. .. � . � . �. � . �- � .. . �� I ��. - - - - - - . _�.1.+1 _ , _..... I ...... . �. _. _ � i �� ,. ... I .... .. �1., �. I . ..`.�i , � .. _ . _ _ I i.' ....,� _ .. _ ... ' ' ' - !� i I _ _ ._ _ i _ . .-.. � . � . . t � _ I , . i � . . � ._, . . �' � . .� _ _ _ .. - , . I il li,ii.. I I �` . . .. . .. � �I, I . - - ._ , . . ... . . . _ � �' � � ' � r ' I �, � _ _ _ _ . .[�� t _ .. . . ,.. .. ... � .�—"' ��_.,�:� ..� .,. . `�.�i = i . i � � �` .. ... _ ... �.:J I �. . ., .. . I . . .. .- _ .. . ". �I i. .. _ '_ _ ' "' 1 .��1 � � \�� .. _ .. .. _ .�.��. ...... _ _ _ _ _ '�, � . � � _ .. _ _ ... _ 1`. , �.� _. _ I .�, � - - �.� . � . , _ I _.. ... _. .. ._ .... .. _. ... _ ... . � � `. . .. . - '�- _ _ �� -� .-� 1 . . . . I . _ . . .. 'i 1 . _ . � }� I C _ _ ` _ _ . _ _ . .. � i ..,.. _ _ . _ _ I ,. , . ... . _ _ . . . - - lV ,'.� _ - - - 1 I . _ -- � _ � _ „ � _ i i. I_ � � -. , , .., i , �„ �� ,, �,,; . , � � i �, , � ; � �,�.., , �, - , :' J':� l� - �S 5_ _ 'I ,�. , . < CITY OF COTTAGE GROVE, MINNESOTA SPECIAL REVENiTE FCJND - RECYCLING SCHEDULE OF REVENiTES, EXPENDITLJRES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: Intergovemmental: Local: Washington County recycling grant - public works Investment eamuigs 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 2012 Budgeted Amounts Actual Original Final Amounts $ 52,400 52,400 Statement 18 Variance with Final Budget- 2011 Positive Actual (Negative) Amounts $ 52,400 $ 53,150 $ 750 $ 53,150 - 377 377 1,180 - 3,500 3,500 1,000 52,400 57,027 4,627 55,330 42,400 42,400 39,088 3,312 43,600 17,000 17,000 6,621 1Q379 2,694 ii,9oo ii,9oo zz,sio �iq9io> iz,mi 71,300 71,300 68,519 2,781 59,265 � �18,900� � �18,900� (11,492) � 7 408 79,300 $ 67,808 (3,935) 83,235 $ 79,300 116 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 Yeu Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Revenue: Intergovemmental: Local: Other - public works Cktarges for services Investment eunings Miscellaneous Total revenue Expenditures: Public works: Current: Persortal services Commodities Conhactual services Other chuges - admirushative chuge Total exPenditures Revenue over (under) exPenditures Budgeted Amounts Original Final $ - $ - 632,900 632,900 2,000 2,000 634,900 634,900 2012 Actual Amounts Variance with Final Budget- Positive (Negative) Statemelrt 19 2011 Actual Amounts $ 46,040 $ 46,040 $ 149,260 647,056 14,156 644,858 1,498 (502) 3,468 - - 250 694,594 59,694 797,836 224,500 224,500 202,178 22,322 222,244 54,450 54,450 22,591 31,859 22,628 37Q480 37Q480 482,763 (112,283) 521,894 30,300 3Q300 30,300 - 29,400 679,730 679,730 737,832 (58,102) 796,166 (44,830) (44,830) (43,238) 1,592 1,670 Other firtancing sources (uses): Transfer to Capital Project Fund Net increase (decrease) in fund balance � (44830) � (44830) Fund balance - January 1 Fund balance - December 31 (81,58� 81,586 (124824) � 83178 311,596 $ 186,772 1,670 309,926 $ 311,596 117 CITY OF COTTAGE GROVE, NIINNESOTA SPECIAL REVENUE FUND - FORFEITURE/SEIZURE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: Intergovernmental: county Forfeitures and seizures Investmenteamings Total revenues Expenditures: Public safety: Current: Commodities Contractual services Capital outlay Total expenditures Revenues over (under) eapenditures Other financing sources (uses): Transfer to Capital ProjectFund Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 2012 Budgeted Amounts Actual Original Final Amounts Variance with Final Budget- Positive (Negative) Statement 20 2011 Actual Amounts � s,000 � s,000 � i,ais � �6,sss� � i,zas 43,000 43,000 33,490 (9,510) 53,077 i,000 i,000 zs9 ��6i� s90 52,000 52,000 35,144 (16,85� 54,912 3,300 3,300 11,115 (7,815) 1,499 is,soo is,soo zz,66� �6,s6�� ii,�99 - - is,i9s �is,i9s� io,000 i9,ioo i9,ioo as,9so �z9,sso� zs,z9s 32,900 32,900 13,83 (46,73� 31,614 19,440 19,440 19,440 - 25,000 $ 13,460 $ 13,460 (33,27� $ (46,73� 6,614 SQ968 $ 17,692 44,354 $ SQ968 118 CITY OF COTTAGE GROVE, MINNESOTA SPECIAL REVENiTE FUND - ICE ARENA SCHEDULE OF REVENUES, EXPENDITLTRES AND CHANGES IN FLJND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: General property taxes: Current and delinquent Intergovemmental: Local: School district Charges for services Investrnenteamings Miscellaneous Totalrevenues Expenditures: Culture and recreation: Current Personal services Commodities Contractual services Capital ouflay Debt Service: Capital lease payment Interest and fiscal charges Total expenditures Revenues over (under) expenditures Fund balance - January 1 Fund balance - December 31 Budgeted Amounts Original Final Statement 21 Variance with 2012 Final Budget- 2011 Actual Positive Actual Amounts (Negahve) Amounts $ 24Q000 $ 24Q000 $ 24Q651 $ 651 $ 238,253 57,000 57,000 57,000 - 57,000 816,000 816,000 818,231 2,231 823,251 9,000 9,00o z,��i �6,zz9> �,asi - - 496 496 - i,izz,000 i,izz,000 i,ii9,ia9 �z,ssi> i,izs,�s 336,600 336,600 36,000 36,000 258,560 258,560 11 Q000 11 Q000 338,625 (2,025) 313,101 3Q290 5,710 29,909 294,908 (36,348) 302,048 87,096 22,904 60,322 25Q000 25Q000 25Q000 - 245,000 255,100 255,100 255,093 7 264,993 i,z�,z6o i,z�,z6o i,zs6,oiz �9,�sz> i,zis,s�s � (izn,z6o� � (izn,z6o� �is6s6s� � (iz,6os� �s9,nss� 443,542 $ 306,679 532,980 $ 443,542 119 CITY OF COTTAGE GROVE, NIINNESOTA SPECIAL REVENUE FUND - CHARITABLE GAMBLING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: Investmenteamings Donations Total revenues Expenditures: General govemment: Current: Contractual Total expenditures Statement 22 Variance with 2012 Final Budget- 2011 Budgeted Amounts Actual Positive Actual Original Final Amounts (Negative) Amounts $ - $ - $ 22 $ 22 $ 28 1,500 1,500 4,682 3,182 3,840 1,500 1,500 4,704 3,204 3,868 Revenues over (under) eapenditures $ 1,500 $ 1,500 Fund balance - January 1 Fund balance - December 31 - - 5,000 - 5,000 4,704 $ 3,204 (1,132) 1,920 $ 6,624 3,052 $ 1,920 120 INTERNAL SERVICE Self Insurance Fund - Established to provide self insurance far 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. Information Services Fund — Established to account for costs related to accessing information electronically and maintaining technology services including phone, voicemail and internet services. Revenues received from departments are based on usage of those technology services. 121 CITY OF COTTAGE GROVE, MINNESOTA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2012 With Compuative Data as of December 31, 2011 Assets: Current assets: Cash and investrnents Accounts receivable Prepaid items Inventory - at cost Total current assets Noncurrent assets: Capital assets: Land Buildings and improvements Equipment and fumiture MacMnery and equipment Total capital assets Less: Accumulated depreciation Total noncurrent assets Total assets Liabilities: Current liabilities: Accounts payable Health cue benefits payable Unpaid claims Salaries payable Due to other govemmental units Compensated absences payable Total current liabilities Noncurrent liabilities: Compensated absences payable Other post employment benefits Total noncurrent liabilities Total liabilities Net position: Net investrnent in capital assets Unreshicted Total net position Self Fleet Information Insurance Maintenance Services $ 2,452,373 $ 308,945 $ 4,942 - 190 - 108,319 596 18,152 - 73,483 - 2,56Q692 383,214 23,094 - 424,665 - 928,870 - 158,929 - 1,512,464 - (54J�J99) - 964,687 2,560,692 1,347,901 13,691 15,146 21,151 - 59,122 - 493 11,619 - 907 - 13,301 94,457 40,973 - 25,666 - 1,290 - 26,956 94,457 67,929 - 964,687 2,466,235 315,285 $ 2,466,235 $ 1,279,972 74,232 74,232 (J 423) 66,809 89,903 1,546 3,863 29 3,010 8,448 2,797 22 2,819 11,267 66,809 11,827 $ 78,636 Statement23 Totals Intemal Service Funds 2012 2011 $ 2,766,260 190 127,067 73,483 2,967,000 $ 2,714,722 2,070 105,590 81,275 2,903,657 424,665 928,870 74,232 158,929 1,586,696 (555,200) 1,031,496 3,998,496 30,383 21,151 59,122 15,975 936 16,311 143,878 28,463 1,312 29,775 173,653 1,031,496 2,793,347 $ 3,824,843 424,665 928,870 158,929 1,512,464 (516,346) 996,118 3,899,775 61,962 28,392 51,095 9,986 6 9,863 161,304 26,251 1,228 27,479 188,783 996,118 2,714,874 $ 3,710,992 122 CITY OF COTTAGE GROVE, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For The Year Ended December 31, 2012 With Compuative Data for the Yeu Ended December 31, 2011 Operating revenues: C}targes for services: User fees Employee benefits Property insurance Insurance refunds and reimbursemenis Total operating revenues Operating expenses: Operation and maintenance: Personal services Commodities Conhactual services Total operation and maintenance Admuushative and general: Personal insurance benefits Conhactual services Claims Total admirushative and general Depreciation Total operating expenses Operating income (loss) Nonoperating revenues: Investrnent eamings Miscellaneous Total nonoperating revenues Income (loss) before hansfers Transfers: Transfer to Enterprise FSuid Change in net position Net position - January 1 Net position - December 31 Statement24 Totals Self Fleet Information Intemal Service Fhnds Insurance Maintenance Services 2012 2011 $ - $ 963,842 $ 375,210 $ 1,339,052 $ 1,008,521 1,075,100 - - 1,075,100 1,121,800 227,700 - - 227,700 23Q900 123,741 - - 123,741 68,706 1,426,541 963,842 375,210 2,765,593 2,429,927 31Q572 102,793 413,365 295,990 559,490 72,949 632,439 566,676 66,045 113,653 179,698 74,096 936,107 289,395 1,225,502 936,762 984,093 - - 984,093 942,411 217,318 - - 217,318 23Q171 172,454 - - 172,454 167,844 1,373,865 - - 1,373,865 1,34Q426 - 31,431 7,423 38,854 32,018 1,373,865 967,538 296,818 2,638,221 2,309,206 52,676 (3,69� 78,392 127,372 12Q721 14,645 1,752 244 16,641 31,503 - 838 - 838 6,053 14,645 2,590 244 17,479 37,556 67,321 (1,10� 78,636 144,851 158,277 �si,000� - �si,000� �si,000� 67,321 (32,10� 78,636 113,851 127,277 2,398,914 1,312,078 - 3,71Q992 3,583,715 $ 2,466,235 $ 1,279,972 $ 78,636 $ 3,824,843 $ 3,71Q992 123 CITY OF COTTAGE GROVE, MINNESOTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For The Yeu Ended December 31, 2012 With Compuative Data for the Year Ended December 31, 2011 Cash flows from operating activities: Receipis from interfund services provided Receipis from insurance refunds and reimbursements Paymentto suppliers Paymentto 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: Investrnentincome Net increase in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustrnenis to reconcile operating income to net cash flows from operating activities: Depreciation Miscellaneous revenue Changes in assets and liabilities: Decrea.se (increa.se) in receivables Decrea.se (increa.se) in prepaid items Decrea.se (increa.se) in inventozy Fncrea.se (decrea.se) in payables Total adjustrnenis Net cash flows from operating activities Statement25 Totals Self Fleet Information IntemalServiceFunds Insurance Maintenance Services 2012 2011 $ 1,302,800 $ 963,842 $ 375,210 $ 2,641,852 $ 2,361,221 123,741 - - 123,741 68,706 (391,690) (641,467) (203,179) (1,236,33� (1,043,93� (991,363) (305,502) (93,101) (1,389,96� (1,224,54� - 838 - 838 6,053 43,488 17,711 78,930 14Q129 167,498 (31 000) (31000� (31000� - (�a,zsz� ��a,zsz� �s,soi� 14,645 1,752 244 16,641 31,503 58,133 (11,537) 4,942 51,538 159,700 2,394,240 32Q482 - 2,714,722 2,555,022 $ 2,452,373 $ 308,945 $ 4,942 $ 2,766,260 $ 2,714,722 $ 52,676 $ (3,69� $ 78,392 $ 127,372 $ 12Q721 31,431 7,423 38,854 32,018 838 - 838 6,053 1,421 459 - 1,880 5,084 (3,325) - (18,152) (21,477) (1,04� - 9�192 - 9�192 (16213) (7,284) (19,113) 11,267 (15,130) 20,881 (9,188) 21,4D7 538 12,757 46,777 $ 43,488 $ 17,711 $ 78,930 $ 14Q129 $ 167,498 124 ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT Established to account for the receipt and use of monies for economic purposes. 125 CITY OF COTTAGE GROVE, MINNESOTA COMBINING BALANCE SHEET - ALL GOVERNMENTAL FUND TYPES ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT December 31, 2012 With Compuative Data as of December 31, 2011 Aeeets: Cash and inves[men[s Accounts Receivable Accrued intereet receivable Loan receivable from primuy govemment Capital lease receivable from primuy govemment Prepaid iteme Delinquent pioperty tasee receivable Property held for resale Total aseete Liabilities: Accoun[spayable Salaries payable Due to other govemmental urute Deferred revenue Total liabilitiee Fund balance: Nonspendable: Prepaid iteme Assets for resale Long-term loan receivable Long-term capital lease receivable Reetdcted for: Debt eervice reeerve Committed for EDA activitiee Total fund balance Total liabilitiee and fund balance Fund balance reported above Statement26 TOC318 Economic Development Authority Special Debt ComponentUnit Revenue Service 2012 2011 $ 227,642 $ 120,000 900,000 557,737 $ 785,379 5,615,000 1,080 - 2,310 - 311,718 $ 1,562,750 $ 6,172,737 120,000 900,000 5,615,000 1,080 2,310 311,718 $ 7,735,487 $ 8,370 7,128 2,310 17,808 1,080 311,718 900,000 $ 943,215 1,100 102,000 900,000 5,865,000 1,580 2,662 311,718 $ 8,127,275 $ - $ 8,370 $ 757 - 7,128 6,008 - - 63 - 2,310 2,662 - 17,808 9,490 - 1,080 1,580 - 311,718 311,718 - 900,000 900,000 5,615,000 5,615,000 5,865,000 - 557,737 557,737 554,426 332,144 332,144 485,061 1,544,942 6,172,737 7,717,679 8,117,785 $ 1,562,750 $ 6,172,737 $ 7,735,487 $ 8,127,275 Other long-term aseets, including pioper[y taYee receivable, ue not av�lable to pay for currenUperiod expendituree, and therefore, ue deferred in the fimde. Long-tean liabilitiee, including bonde payable, bond diecounte and ununortized bond ieeuance coets, compeneated abeencee and other poet employment benefits, ue not due and payable in the current period and [herefore ue not reported in [he funds. Net poeition of component unit (page 35) $ 7,717,679 2,310 (5,502,417) $ 2,217,572 126 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 Yeu Ended December 31, 2012 With Comparative Data for the Yeu Ended December 31, 2011 Revenues: General property tases: Current and delinquent Chuges for service Inveetrnent euninge Intereet on loan to primary govemment Miscellaneous Total revenuee Expendituree: General govemment: Current: Peisortal services Commodities CoNractual eervicee Debt eervice: Principal retirement Intereet and fiecal chugee Total expendituree Revenuee over (under) expendituree Fund balance - January 1 Fund balance - December 31 Special Revenue Statement27 TOI318 Economic Development Authority Debt ComponentUnit Service 2012 2011 $ 106,365 $ - $ 106,365 $ 105,384 3Q000 - 3Q000 3Q000 1,785 3,311 5,096 9,193 18,000 255,093 273,093 282,993 21,749 21,749 29,540 177,899 258,404 436,303 457,110 214,568 2,474 114,274 214,568 81,451 2,474 1,784 114,274 76,985 - 25Q000 25Q000 245,000 255,093 255,093 264,993 331,316 505,093 836,409 67Q213 �iss,ai�� za6,6s9� �aoo,io6� �zis,ios� 1,698,359 6,419,426 8,117,785 8,33Q888 $ 1,544,942 $ 6,172,737 $ 7,717,679 $ 8,117,785 Net deaease in fund balance reported above Revenuee in the etatement of activitiee that do not report current financial reeourcee ue not reported as revenues in [he funds: General property tases deferred revenue: At December 31, 2011 At December 31, 2012 The ieeuance of long-term debt (e.g., bonde, leaeee) providee current financial reeourcee to govemmental fimde, wlrile the repayment of the principal of long-tean debt coneumee the current financial reeourcee of govemmental fimde. Neither haneaction, however, has any effect on net poeition. TMe amount ie the net effect of theee differencee in the heahnent of long-term debt and related iteme: Amortization of deferred diecounte and ieeuance coets Principal repayments Some expeneee reported in the etatement of activitiee do not require the use of current firtancial resources and [herefore ue not reported as expenditures in govemmental funds: Compeneated abeencee: At December 31, 2011 At December 31, 2012 Other poet employment benefits: At December 31, 2011 At December 31, 2012 Change in net poeition of component urut (page 37) $ (40Q106) (2,662) 2,310 (7,872) 250,000 5,413 (15,571) 73 (411) $ (168,826) 127 TMs Page Intentiortally Left Blank- 128 SUPPLEMENTARY FINANCIAL INFORMATION 129 'i�NY� �� t �.,�� I �.'�.Y',C.Ie�¢y� �'. �r .DV:: �. `I � I , �.I�I�i '��, ��'�, �7' �, . � � � � . ,_ I , 'ii� .. _ ._ . 'r� _ , rG,�L , �.. ��, :lil � , — ,, C �. `i 1= `�11�, . .�1� �. _.i 51' . �\�`, . _ . � I . . I �; [ '�. 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I� ,�(! _ ': � I ri ,� ;�� i CITY OF COTTAGE GROVE, MINNESOTA DEBT SERVICE PAYMENTS TO MATURITY December 31. 2012 Exhibit 3 Page 1 of 2 Primary Govemment General Obligation Bonds Special AssesgnentBonds Tas Increment Pavement Manaeement Develooer Financed $ 1,405,000 $ 1,775,000 Tas Tas Total Total Total Total Total Increment Increment Tas General $ 3,65Q000 $ 625,000 $ 1,865,000 Pavement $ 3,37Q000 Developer Special Bonds Bonds Increment Obligation Bonds Bonds Bonds Management Bonds Financed Assessment of 2004A of 2004B Bonds Bonds of 2009A of 2009C of 2012A Bonds of 2008A Bonds Bonds Bonds payable $ 1,145,000 $ 1,59Q000 $ 2,735,000 $ 2,735,000 $ 2,84Q000 $ 47Q000 $ 1,865,000 $ 5,175,000 $ 2,16Q000 $ 2,16Q000 $ 7,335,000 Futureinterestpayable 468,962 46Q314 929,276 929,276 693,929 31,226 244,481 969,636 245,137 245,137 1,214,773 Totals Payments W maturity: w 2013 °' 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 $ 1,613,962 $ 2,OSQ314 $ 3,664,276 $ 3,664,276 $ 3,533,929 $ 501,226 $ 2,109,481 $ 6,144,636 $ 2,405,137 $ 2,405,137 $ 8,549,773 $ 75,982 75,045 83,870 82,400 80,860 79,320 77,780 76,240 104,040 286,872 294,810 296,743 $ 195,305 204,137 207,244 219,447 230,450 245,038 258,025 269,487 221,181 $ 271,287 279,182 291,114 301,847 311,310 324,358 335,805 345,727 325,221 286,872 294,810 296,743 $ 271,287 279,182 291,114 301,847 311,310 324,358 335,805 345,727 325,221 286,872 294,810 296,743 $ 327,150 $ 73,288 32Q400 216,788 313,651 211,150 306,338 - 303,375 - 295,037 - 291,025 - 286,525 - 281,825 - 276,800 - 271,320 - 260,483 - $ 153,570 $ 143,797 143,258 142,596 141,818 140,858 144,599 148,002 146,118 144,005 146,685 149,070 146,200 148,135 7Q770 554,008 680,985 66$059 44$934 445,193 435,895 435,624 434,527 427,943 420,805 41$005 409,553 146,200 14$135 7Q770 $ 478,715 469,278 287,728 28$978 289,878 295,340 295,220 $ 478,715 469,278 287,728 288,978 289,878 295,340 295,220 $ 1,032,723 1,15Q263 955,787 737,912 735,071 731,235 73Q844 434,527 427,943 420,805 41$005 409,553 146,200 14$135 7Q770 Totals $ 1,613,962 $ 2,OSQ314 $ 3,664,276 $ 3,664,276 $ 3,533,929 $ 501,226 $ 2,109,481 $ 6,144,636 $ 2,405,137 $ 2,405,137 $ 8,549,773 CITY OF COTTAGE GROVE, MINNESOTA DEBT SERVICE PAYMENTS TO MATURITY December 31. 2012 Exhibit 3 Page 2 of 2 Primary Govemment (continued) Component Unit Proprietary Funds Revenue Bonds WatedSewer $1,475,000 $1,205,000 $6,SOQ000 Wated Water Total EDA Total Sewer Revenue Debt Ice Arena Debt Revenue Refunding Total Total Service LeasePurehase Service Bonds Bonds WatedSewer Revenue Primary Revenue Reporting of1997A of2009B Bonds Bonds Govemment of2008B Entiry Bondspayable $ 13Q000 $ 91Q000 $ 1,04Q000 $ 1,04Q000 $ 11,11Q000 $ 5,615,000 $ 16,725,000 Futureinterestpayable 3,315 141,937 145,252 145,252 2,289,301 2,294,616 4,583,917 Totals Payments W maturity: w 2013 � 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 $ 133,315 $ 1,051,937 $ 1,185,252 $ 1,185,252 $ 13,399,301 $ 7,909,616 $ 21,308,917 $ 133,315 $ 13Q375 - 132,300 - 129,150 - 130,650 - 131,712 - 132,450 - 132,700 - 132,600 $ 263,690 132,300 129,150 130,650 131,712 132,450 132,700 132,600 $ 263,690 132,300 129,150 130,650 131,712 132,450 132,700 132,600 $ 1,567,700 1,561,745 1,376,051 1,17Q409 1,178,093 1,188,043 1,199,349 912,854 753,164 707,677 712,815 706,296 146,200 148,135 7Q770 $ 504,892 $ 2,072,592 504,292 2,066,037 503,292 1,879,343 501,892 1,672,301 499,942 1,678,035 497,360 1,685,403 494,288 1,693,637 495,697 1,408,551 495,871 1,249,035 494,601 1,202,278 492,370 1,205,185 489,252 1,195,548 485,233 631,433 485,176 633,311 483,943 554,713 481,515 481,515 Totals $ 133,315 $ 1,051,937 $ 1,185,252 $ 1,185,252 $ 13,399,301 $ 7,909,616 $ 21,308,917 'w m CITY OF COTTAGE GROVE, MINNESOTA DEFERRED TAX LEVIES December 31, 2012 51,162 $ 81,512 203,337 81,007 198,917 80,377 - 79,622 - 78,739 - 82,855 - 86,596 - 84,753 - 82,638 - 85,567 - 88,266 - 85,326 - 87,489 - 42,424 Pavement $3,65Q000 Local Year of Improvement Tax Levy/ Bonds Collection of 2009A 2012/13 2013/14 2014/15 2014/15 2016/17 201��18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 $ 175,095 $ 174,527 173,960 177,461 175,529 178,243 18Q144 181,834 183,314 184,322 179,596 Exhibit 4 Pavement Management Special Assessment Total Bonds All Levies $ 307,769 $ 307,769 458,871 458,871 453,254 453,254 257,083 257,083 254,268 254,268 261,098 261,098 266,740 266,740 266,587 266,587 265,952 265,952 269,889 269,889 267,862 267,862 85,326 85,326 87,489 87,489 42,424 42,424 $ 1,964,025 $ 453,416 $ 1,127,171 $ 3,544,612 $ 3,544,612 $625,000 $1,865,000 Refunding Local Improvement Improvement Bonds Bonds of 2009C of 2012A TMs Page Intentiortally Left Blank- 139 A O CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING BALANCE SHEET PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE December 31, 2012 With Comparative Data as of December 31, 2011 Assets: Cash and investments Interfund receivable Delinquent property taxes receivable Special assessments receivable: Deferred Delinquent Special deferred Total assets Liabilities: Deferred revenue Total liabilities Fund balance: Restricted for debtretirement Total fund balance Total liabilities and fund balance 2002C Improvement Bonds $ E�ibit 5 Totals 2009A 2009C 2012A Pavement Management Improvement Improvement Improvement Debt Service Schedule Bonds Bonds Bonds 2012 2011 $ 39Q119 $ 138,247 $ 28Q408 $ 808,774 $ 194,399 122,137 - - 122,137 898,744 3,752 1,748 1,421 6,921 13,376 - 864,077 49,337 SOQ037 1,413,451 1,046,310 - 4,920 4,856 1,193 1Q969 1Q699 - 2,797 - 12,175 14,972 2,646 $ - $ 1,387,802 $ 194,188 $ 795,234 $ 2,377,224 $ 2,166,174 $ - $ 875,546 $ 55,941 $ 514,826 $ 1,446,313 $ 1,073,031 - 875,546 55,941 514,826 1,446,313 1,073,031 - 512,256 138,247 28Q408 93Q911 1,093,143 - 512,256 138,247 28Q408 93Q911 1,093,143 $ - $ 1,387,802 $ 194,188 $ 795,234 $ 2,377,224 $ 2,166,174 A CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: General property taxes: Cuirent and delinquent Special assessments: Cuirent Delinquent Prepayments on defeired Penalties Investment eaznings Total revenues Expenditures: Current: Contractual services Debt service: Principal retirement Interest and fiscal charges Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfer from Debt Service Fund Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 2002C 2009A 2009C 2012A Improvement Improvement Improvement Improvement Bonds Bonds Bonds Bonds Exhibit 6 Totals Pavement Management Debt Service Schedule 2012 2011 $ 4,862 $ 176,214 $ 141,109 $ 146,149 $ 468,334 $ 621,212 - 147,878 21,187 86,165 255,230 354,193 357 3,212 133 533 4,235 9,821 - 33,120 1,040 47,194 81,354 51,673 44 969 62 169 1,244 2,804 445 1,946 403 198 2,992 7,084 5,708 363,339 163,934 280,408 813,389 1,046,787 213 2,163 1,156 - 3,532 6,520 600,000 225,000 55,000 - 880,000 6,695,000 9,900 108,337 14,662 - 132,899 271,445 610,113 335,500 70,818 - 1,016,431 6,972,965 (604,405) 27,839 93,116 280,408 (203,042) (5,926,178) 40,810 - - - 40,810 2,699,888 40,810 - - - 40,810 2,699,888 (563,595) 27,839 93,116 280,408 (162,232) (3,226,290) 563,595 484,417 45,131 - 1,093,143 4,319,433 $ - $ 512,256 $ 138,247 $ 280,408 $ 930,911 $ 1,093,143 CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING BALANCE SHEET CONSTRUCTION REVOLVING CAPITAL PR07ECT SCHEDULE December 31, 2012 With Comparative Data as of December 31, 2011 Assets Cash and investments Special assessments receivable: Deferred Total assets Exhibit 7 Totals Construction Revolving 2005 2006 2007 2010 Capital Project Schedule Improvements Improvements Improvements Improvements 2012 2011 $ - $ - $ 4Q087 $ 14,278 $54,365 $ 191,664 - - 26,703 - 26,703 74,580 $ - $ - $ 66,790 $ 14,278 $ 81,068 $ 266,244 Liabilities and Fund Balance Liabilities: A �' Accounts payable $ - $ - Contracts payable - - Interfund loan payable - - Deferred revenue - - Totalliabilities - - Fund balance (deficit): Assigned for: Capital improvements - - Unassigned - - motal frmd balanoe (defioit) - - Total liabilities and fund balance (deficit) $ - $ - $ 16,831 26,703 43,534 $ 814 $ 17,645 $ 1,318 - - 8,449 - - 20Q000 - 26,703 74,580 814 44,348 284,347 23,256 13,464 36,720 - - - - (18,103) 23 256 13 464 36 (18 103) $ 66,790 $ 14,278 $ 81,068 $ 266,244 A w CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CONSTRUCTION REVOLVING CAPITAL PROJECT SCHEDULE For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: Special assessments: Current Delinquent Prepayments on deferred Penalties Investment eamings Total revenues Expenditures: CuII ent: Public works: Personal services Contractual services Construction/acquisition cosTs: Contractor Engineer Debt service: Interest and fiscal charges Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfer from Capital Project Fluid Transfer to Capital Proj ect Fluid Total other financing sources (uses) Net increase (decrease) in fund balance H�znd balanoe (defioit) - JanuaLy 1 Flmd balanoe (defioit) - Deoember 31 2005 2006 2007 2010 Improvements Improvements Improvements Improvements $ 6,985 $ 93 261 _ 7,339 9 - $ 33,464 $ - - 12,970 - - 54 - = 911 132 - 47,399 132 - 500 - 1,033 2,986 8,853 - 16,831 - Exhibit S Totals Construction Revolving Capital Project Schedule 2012 2011 $ 40,449 $ 317,801 - 19,776 12,970 31,817 147 9,837 1,304 4,888 54,870 384,119 500 12,881 16,831 683 3,038 1,502 3,486 - - 12,000 - 12,000 39,000 9 1,033 32,317 8,853 42,212 47,709 7,330 (1,033) 15,082 (8,721) 12,658 336,410 - 11,991 79,578 - 91,569 - (49,404) - - - (49,404) - (49,404) 11,991 79,578 - 42,165 - (42,074) 10,958 94,660 (8,721) 54,823 336,410 �z ma �io�ss� ��i aoa� 22 iss �is io-3� �3sasi3� $ - $ - $ 23,256 $ 13,464 $ 36,720 $ (18,103) CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING BALANCE SHEET TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE December 31, 2012 With Comparative Data as of December 31, 2011 Reconciliation TIF TIF TIF TIF TIF toNonmajor 1-8 1-10 1-12 1-13 1-14 Fund E�ibit 9 TIF Revolving Capital Project Schedule 2012 2011 Assets: Cash and investments $ 298,384 $ - $ 553,340 $ - $ 3,864 $ - $ 855,588 $ 896,517 Interfundreceivable - - 7,416 - - (7,41� - - Delinquent property taxes receivable - - 19,209 - - - 19,209 26,403 Total assets $ 298,384 $ - $ 579,965 $ - $ 3,864 $ (7,41� $ 874,797 $ 922,920 Liabilities: Accounts payable Interfund payable p Interfund loan payable Deferred revenue Total liabilities Fund balance (deficit): Restricted for: Tax increment purposes Unassigned Total fimd balance (deficit) Total liabilities and fund balance $ - $ - $ - $ - $ - $ - $ - $ 40,321 - 7,416 - - - (7,41� - - - - - - 455,000 - 455,000 SOQ000 - - 19,209 - - - 19,209 26,403 - 7,416 19,209 - 455,000 (7,41� 474,209 566,724 298,384 - 560,756 - - (458,552) 40Q588 356,196 - 7,41 - - 451,13 458,552 - - 298,384 7,41 560,756 - 451,13 - 40Q588 356,196 $ 298,384 $ - $ 579,965 $ - $ 3,864 $ (7,41� $ 874,797 $ 922,920 A N CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 TIF 1-8 Revenues: Tax increment collections Investmenteamings Total revenues Expenditures: Current: Contractual services DOUY S0N1C0: Interest and fiscal charges Total expenditures Revenues over (under) e�penditures Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 $ 36,573 $ 1,603 38,176 241 TIF TIF 1-10 1-12 - $ 327,612 - 3,306 - 33Q918 Totals TIF Revolving Capital TIF TIF Project Schedule 1-13 1-14 2012 2011 $ - $ 77,586 $ 441,771 $ 804,877 482 115 5,506 11,250 482 77,701 447,277 816,127 340 175,564 195,012 1,728 372,885 755,360 - - - - 3Q000 3Q000 34,500 241 340 175,564 195,012 31,728 402,885 789,860 37,935 (340) 155,354 (194,530) 45,973 44,392 26,267 26Q449 7,07 405,402 194,530 (497,109) 356,196 329,929 $ 298,384 $ (7,41� $ 56Q756 $ - $ (451,13� $ 40Q588 $ 356,196 Exhibit 10 CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING BALANCE SHEET TIF DEBT SERVICE REVOLVING SCHEDULE December 31, 2012 With Comparative Data as of December 31, 2011 Assets: Cash and investments Total assets 1985 Tax Increment Bonds TIF 1-1 2004A Tax Increment Refunding Bonds TIF 1-3 2004A Tax Exempt Increment Bonds TIF 1-12 2004B Ta�ble Increment Bonds TIF 1-12 E�ibit 11 Totals TIF Debt Service Revolving Schedule 2012 2011 $ 35Q924 $ 421,734 $ 99,153 $ 21Q699 $ 1,082,510 $ 828,787 $ 35Q924 $ 421,734 $ 99,153 $ 21Q699 $ 1,082,510 $ 828,787 Liabilities: p Accountspayable $ - $ 1,316 $ - $ - $ 1,316 $ - m Totalliabilities - 1,316 - - 1,316 - Fund balance: Restrictedfortaxincrementpurposes 35Q924 42Q418 99,153 21Q699 1,081,194 828,787 Totalfundbalance 35Q924 42Q418 99,153 21Q699 1,081,194 828,787 Total liabilities and fund balance $ 35Q924 $ 421,734 $ 99,153 $ 21Q699 $ 1,082,510 $ 828,787 CITY OF COTTAGE GROVE, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TIF DEBT SERVICE REVOLVING SCHEDULE For The Year Ended December 31, 2012 With Comparative Data for the Year Ended December 31, 2011 Revenues: Tax increment collections Investmenteamings Totalrevenues Expenditures: Current: A � Contractual services Debt service: Principal retirement Interest and fiscal charges Total e�penditures Revenues over (under) e�penditures Fund balance - January 1 Fund balance - December 31 1985 Tax Increment Bonds TIF 1-1 2004A T ax Increment Refunding Bonds TIF 1-3 2004A Tax Exempt Increment Bonds TIF 1-12 2004B Taxable Increment Bonds TIF 1-12 Exhibit 12 Totals TIF Debt Service Revolving Schedule 2012 2011 $ - $ 125,667 $ 75,000 $ 25Q000 $ 45Q667 $ 141,726 2,083 1,947 425 199 4,654 9,420 2,083 127,614 75,425 25Q199 455,321 151,146 121 6,469 212 212 7,014 517 - - 15,000 4Q000 55,000 4Q000 - - 51,707 89,193 14Q900 143,083 121 6,469 66,919 129,405 202,914 183,600 1,962 121,145 8,506 120,794 252,407 (32,454) 348,962 299,273 9Q647 89,905 828,787 861,241 $ 35Q924 $ 42Q418 $ 99,153 $ 21Q699 $ 1,081,194 $ 828,787 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT OAKWOOD HEIGHTS - DISTRICT NUMBER 1-1 December 31. 2012 Sources of funds: Bond proceeds Loan proceeds Refunding bond proceeds Current property taxes received Taxincrementreceived Direct charges to developer Transfers Interest on inveshnents Total sources of funds Uses of funds: Land acquisition Conshuction costs Bond payments: Principal Interest Loan payments: Principal Interest Refunding bond payments: Principal Adminishative costs Bond discount Transfer to other funds Bonding costs Total uses of funds P�unds remaining (or defioit) Accounted Current For in Current Budget Prior Years Year $ 1,375,000 $ 518,876 $ - $ 856,124 1,375,000 - - 1,375,000 1,375,000 - - 1,375,000 - 2,671 - (2,671) 5,71Q068 562,897 - 5,147,171 aoi,soi soi,zzz - �99,�zi� 1,375,000 - - 1,375,000 zi,000 zis,6zi z,oss �i96�oa� Exhibit 13 Amount Remaining 11,632,569 1,801,287 2,083 9,829,199 1,594,000 2,29Q887 102,273 1,491,727 2,29Q887 1,375,000 1,583,832 1,375,000 SOQ000 525,000 349,250 85Q000 1,234,582 1,375,000 SOQ000 1,375,000 - - 1,375,000 112,450 26,790 121 85,539 51,400 - - 51,400 1,375,000 423,886 - 951,114 - 25,126 - (25,12� 11,632,569 1,452,325 121 1 Q 18Q 123 � - � 348,962 � 1,962 � (350,924) 148 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT UP NORTH PLASTICS - DISTRICT NUMBER 1-3 December 31. 2012 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 Conshuction costs Bond payments: Principal Interest Loan payments: Principal Interest Refunding bond payments: Principal Paymenttorefund bond escrow agent Adminishative costs Bond discount Transfers Refund tax increment Bonding costs Total uses of funds P�unds remaining (or defioit) Current Budget $ 1,35Q000 $ 1,35Q000 1,35Q000 2,SOQ000 30Q000 1,35Q000 _ Accounted For in Prior Years 905,344 352,803 1,646,150 89,317 Current Year Exhibit 14 Amount Remaining $ - $ 444,656 - 997,197 - 1,35Q000 125,667 728,183 - 21Q683 1,947 1,348,053 8,20Q000 2,993,614 127,614 5,078,772 70Q000 1,231,500 1,35Q000 364,000 1,35Q000 286,000 1,35Q000 21 Q000 7,600 1,35Q000 304,413 61 Q000 416,288 352,803 272,399 337,425 17,273 372,804 1 Q936 395,587 1,231,500 74Q000 (52,288) 997,197 13,601 - 1,35Q000 - (337,425) 6,469 186,258 - 7,600 - 1,35Q000 - (372,804) - (1Q93� 8,199,100 2,694,341 6,469 5,498,290 � 900 � 2s9� � i2i ias � (ai9sis� Note: The property owner received a tax abatement for 2002 & 2007, resulting from a property valuation appeal. 149 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT COTTAGES OF COTTAGE GROVE - DISTRICT NUMBER 1-8 December 31, 2012 Sources of funds: Tax increment received Interest on investments Total sources of funds Uses of funds: Construction costs Adminishative costs Total uses of funds P�unds remaining (or defioit) Exhibit 15 Accounted Current For in Current Amount Budget Prior Years Year Remaining $ 825,000 $ 661,860 $ 36,573 $ 126,567 - 22,039 1,603 (23,642) 825,000 683,899 38,176 102,925 75Q000 419,791 - 33Q209 75,000 3,659 241 71,100 825,000 423,450 241 401,309 � - � 260449 � 37,935 � (298384) 150 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT DISTRICT NUMBER 1-10 December 31. 2012 Sources of funds: Bond proceeds Loan proceeds Tax increment received Market Value Credit -TIF Real estate sales Developer contribution Intereston invested funds Local contribution Grant Applicant fees Transfer in from other funds Current Budget $ 11,OOQ000 11,OOQ000 7,632,172 4,30Q000 23Q000 25Q000 25Q000 11,OOQ000 - 45,662,172 2,935,003 $ - 1,472,876 79 1,306,791 8,000 1,557 145,700 Total sources of funds Uses of funds: Land/building acquisition Construction costs Bond payments: Principal Interest Loan payments: Principal Interest Adminishative costs Miscellaneous - refunds Transfer out to other funds Total uses of funds P�unds remaining (or defioit) 6,20Q000 3,943,000 1,445,331 1,252,037 11,OOQ000 868,546 Accounted For in Prior Years Current Year $ E�ibit 16 Amount Remaining $ 11,OOQ000 11,OOQ000 6,159,296 (79) 2,993,209 (8,000) 228,443 25Q000 25Q000 (145,700) 11,OOQ000 42,727,169 4,754,669 2,69Q963 11,OOQ000 868,546 11,OOQ000 - - 11,OOQ000 868,546 - - 868,546 782,080 104,011 340 677,729 - 14Q700 - (14Q700) 11,OOQ000 - - 11,OOQ000 45,662,172 2,942,079 340 42,719,753 � - � (7 07� � (340) � 7 416 151 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT DISTRICT NUMBER 1-12 December 31. 2012 Sources of funds: Bond proceeds Loan proceeds Tax increment received Direct charges to developer Land sale Transfer in Market value credit - TIF Community developmentblock grant Interest on invested funds Other Total sources of funds Uses of funds: Land/building acquisition Construction costs Bond payments: Principal Interest Loan payments: Principal Interest Adminishative costs Discount on debt issued Transfer out to other funds Other Total uses of funds P�unds remaining (or defioit) Accounted Current For in Current Budget Prior Years Year Exhibit 17 Amount Remaining $ 23,40Q000 $ 3,OOQ000 $ - $ 2Q40Q000 7,80Q000 - - 7,80Q000 28,30Q000 3,512,919 652,612 24,134,469 - 153,635 - (153,635) 1,70Q000 1,604,000 - 96,000 7,80Q000 455,719 - 7,344,281 - 106 - (10� 40Q000 - - 40Q000 SOQ000 115,249 3,930 38Q821 - 23,020 - (23,020) 69,90Q000 8,864,648 656,542 60,378,810 S,OOQ000 2,564,657 - 2,435,343 9,OOQ000 3,874,179 165,930 4,959,891 23,40Q000 21Q000 55,000 23,135,000 13,748,000 899,831 14Q900 12,707,269 7,80Q000 - - 7,80Q000 - 15Q939 - (15Q939) 2,83Q000 225,745 1Q059 2,594,196 - 36,812 - (36,812) 7,80Q000 - - 7,80Q000 322,000 316,531 - 5,469 69,90Q000 8,278,694 371,889 61,249,417 � - � sss�sa � zsa 6s3 � �s�o 60�� 152 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT DISTRICT 1-13 December 31. 2012 Sources of funds: Tax increment received Interest on investments Land sales Developer contribution Bond proceeds Loan proceeds Transfers in Total sources of funds Uses of funds: Land/building acquisition Site Improvements/preparation Public utilities Streets Other public improvements Bond payments: Principal Interest Loan payments: Principal Interest Tax increment repaid to county Adminishative costs Transfers out Total uses of funds P�unds remaining (or defioit) Accounted Current For in Budget Prior Years $ 7,1OQ000 $ 417,519 1,OOQ000 1,506 17,025,000 918,746 - 4,000 2QOOQ000 - 2QOOQ000 - 2QOOQ000 - 85,125,000 1,341,771 12,OOQ000 1,OOQ000 3,40Q000 1,70Q000 6,OOQ000 619,999 27,494 454,396 2QOOQ000 477,000 Current Year $ 482 482 E�ibit 18 Amount Remaining $ 6,682,481 998,012 16,106,254 (4,000) 2QOOQ000 2QOOQ000 2QOOQ000 83,782,747 11,38Q001 972,506 3,40Q000 1,245,604 6,OOQ000 2QOOQ000 477,000 2QOOQ000 - - 2QOOQ000 477,000 - - 477,000 - - 194,6ll (194,611) 71,000 45,352 401 25,247 2QOOQ000 - - 2QOOQ000 85,125,000 1,147,241 195,012 83,782,747 � - � 194 530 � (194 530) � - 153 CITY OF COTTAGE GROVE, NIINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR A TAX INCREMENT FINANCING DISTRICT DISTRICT 1-14 December 31. 2012 Sources of funds: Tax increment received Interest on investments Developer contribution Bond proceeds Loan proceeds Transfers in Total sources of funds Uses of funds: Site Improvements/preparation Public utilities Bond payments: Principal Interest Loan payments: Principal Interest Administrative costs Transfers out Total uses of funds P�unds remaining (or defioit) Accounted Current For in Current Budget Prior Years Year E�ibit 19 Amount Remaining $ 1,11Q000 $ 207,019 $ 77,586 $ 825,395 2Q000 1,166 115 18,719 - 2,000 - (2,000) 1,115,000 - - 1,115,000 2,23Q000 575,000 - 1,655,000 1,115,000 - - 1,115,000 5,59Q000 785,185 77,701 4,727,114 13Q000 505,225 525,000 6Q501 1,115,000 182,500 (375,225) 464,499 1,115,000 182,500 2,23Q000 75,000 - 2,155,000 182,500 124,673 3Q000 27,827 11Q000 16,895 1,727 91,378 1,115,000 - - 1,115,000 5,59Q000 782,294 31,727 4,775,979 � - � 2 891 � 45,974 � (48 865) 154 IIL STATISTICAL SECTION (UNAUDITED) This part of the City of Cottage Grove's comprehensive annual financial report presents detailed information as a context for understanding whatthe information in the financial statements, note disclosures, and requued supplementary information says about the City's overall financial health. Financial Trends These schedules contain trend informafion to help the reader understand how the govemment's financial performance and well-being have changed over fime. Table 1—Net Position by Component Table 2— Changes in Net Position Table 3— Fund Balances of Govemmental Funds Table 4— Changes in Fund Balances of Govemmental Funds Revenue Capacity These schedules contain information to help the reader assess the government's most significantlocal 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 Ta�payers Table 8— Property Tax Levies and Collections Debt CapaciTy These schedules presentinformation to help the reader assess the affordability of the govemment's current levels of outstanc&ng debt and the government's ability to issue adc&fional debtin the future. Table 9— Ratios of Outstanding Debt by Type Table 10 — Ratios of General Bonded Debt Outstanding Table 11 — Duect and Overlapping Govemmental Activities Debt Table 12 — Legal Debt Margin Information Demographic and Economic Information These schedules offer demographic and economic inc&cators to help the reader understand the environment within which the government's financial acfivifies 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 govemment provides and acfivties it performs. Table 15 —Full-time Equivalent City GovemmentEmployees 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. 155 CITY OF COTTAGE GROVE, MINNESOTA NET POSITION BY COMPONEN'C LastTen Fiscal Years (accrualbasis ofaccounting) Table 1 FiscalYear 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Gove�nmental activities NetinvestrnentincapitalasseAS $ 59,363,471 $ 62,89$005 $ 70,746,458 $ 83,873,878 $ 95,076,747 $ J4,59Q013 $ 92,735,500 $ J4,794,079 $ 109,696,916 $ 12Q412,875 Restricted 1Q925,638 1Q023,695 9,032,992 6,187,415 6,415,232 7,828,338 $158,356 5,841,563 4,282,305 4,21Q913 Unrestricted 25,82Q535 35,3J4,577 33,881,516 36,601,374 36,519,388 39,209,995 42,928,157 45,412,895 34,625,010 25,07A,447 Total gove�nmenhel activities netposition $ 96,109,644 $ 108,316,277 $ 113,66Q966 $ 126,662,667 $ 138,011,367 $ 141,628,346 $ 143,822,013 $ 146,M$537 $ 148,604,231 $ 149,6 Business-rype activities Netinvestrnentin capital asseAS $ 33,73Q551 $ 35,616,155 $ 42,982,032 $ 44,96$098 $ 49,6{5,870 $ 53,367,475 $ 54,106,SM $ 53,87Q041 $ 53,664,161 $ 53,225,445 Restricted 193,420 222,420 25Q670 25$170 26Q365 262,375 269,195 325,685 325,460 - Unrestricted 6,612,818 7,322,779 8,031,164 9,133,446 1Q007,818 1Q922,468 12,283,780 12,879,661 13,236,680 14,6 Totalbusiness-rypeactivitiesnetposition $ 40,536,789 $ 43,161,354 $ 51,263,866 $ 54,359,714 $ 59,914,053 $ 6 $ 66,659,479 $ 67,025,387 $ 67,226,301 $ 67,87Q935 Primazy Gove�nment Netinvestrnentin capital asseAS $ 93,094,022 $ 98,514,160 $ 113,72$490 $ 128,841,976 $ 144,722,617 $ 147,957,488 $ 146,842,OM $ 148,664,120 $ 163,361,077 $ 173,638,320 Restricted 11,119,058 1Q7A6,115 9,283,662 6,445,585 6,675,597 8,090,713 8,427,551 6,167,248 4,607,765 4,21Q913 Unrestricted 32,433,353 42,717,356 41,912,680 45,734,820 46,527,206 SQ132,463 55,211,937 5$7A2,556 47,861,690 39,669,937 Totalprimarygove�nmentnetposition $ 136,6 $ 151,477,631 $ 16 $ 181,022,381 $ 197,925,420 $ 206,18Q66 $ 21Q481,492 $ 213,073,97A $ 215,83Q532 $ 217,519,170 N m TMs Page Intentiortally Left Blank- 157 CITY OF COTTAGE GROVE, MINNESOTA CHANGFS IN NET P031'PION Table 2 Last Tev Fiscal Years (accrualbasis ofacco�vting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 F�:pevses Govemmental activities: Geveral gwemmevt Reg�lar opera[iovs Lar�d Sales Paymevtto compovent�vit Ecovomic developmevt Cmnm�vily developmevt P�blic safely P�blic wo�ks: Reg�lar opera[ions Construc[ion C�INre ar�d recrea[iov Interes[ on lovg-tenn debt Total govemmental activities expenses B�siness-lype ac[ivities: Golfcourse 8heet lights Cottage Grove EM3 W a[er opera[ivg 8ewer operating N Totalb�sivesstypeactivities � Totalprimarygwemmevter.pevses Prograrn Reven�es Govemmental activities: Charges for services: Geveral gwemmevt Reg�lar opera[iovs Lar�d sales Ecovomic developmevt Cmnm�vily developmevt P�blic safely P�blic wo�ks: Reg�lar opera[ions Covs[mction C�INre ar�d recreatiov Opera[ing grants and covtrib�tiovs Capitalgrarrtsand contrib�tiovs Total govemmental activities prograrn revev�es $ 2,427,055 $ 2,475,047 $ 2,183,566 $ 1,830,072 $ 1,907,725 $ 2,155,101 $ 1,868,582 $ 2,125,407 $ 2,985,571 $ 2,997,825 (1) - - - 706,602 2,273,696 - - - - - ' ' ' ' ' 678,880 ' ' ' ' - - - - - - - - 1,11Q214 362,009 799,786 883,820 753,206 753,185 803,916 893,468 1,106,256 1,140,456 - -(1) 4,989,ll1 4,959,289 5,361,107 5,437,971 5,475,440 5,705,153 5,724,450 5,888,224 6,252,530 7,069,301 2,206,273 2,355,509 2,537,113 2,817,872 2,855,163 3,197,111 3,267,455 3,364,115 3,805,839 4,074,995 1,239,504 1,337,546 2,160,950 2,618,123 2,066,692 2,188,158 2,384,980 2,547,078 2,882,276 2,534,116 1,989,288 2,052,729 2,357,548 2,432,041 2,417,221 2,604,623 2,674,781 2,992,620 2,948,075 3,059,273 962,822 1,466,334 1,166,284 1,188,586 1,278,801 1,163,542 1,548,704 1,056,110 846,258 827,645 14,613,899 15,530,274 16,519,774 17,784,452 19,078,654 18,586,036 18,575,208 19,114,010 20,830,763 20,925,164 1,772,831 1,769,690 1,720,195 1,640,032 1,616,541 1,617,708 1,553,921 1,447,849 1,504,006 1,614,321 486,138 422,591 493,461 566,300 567,966 459,314 508,615 534,206 625,312 659,869 1,312,003 991,236 1,008,843 1,029,482 951,159 768,240 920,991 975,560 1,038,972 1,109,809 1,737,601 1,997,592 2,031,760 2,195,558 2,488,110 2,097,071 1,801,070 1,891,752 1,901,985 2,049,877 1,51$268 1,581,574 1,749,236 1,892,487 1,806,750 1,953,985 2,079,127 2,15Q795 2,223,749 2,242,778 6,826,841 6,762,683 7,003,495 7,323,859 7,430,526 6,896,318 6,863,724 7,000,162 7,294,024 7,676,654 $ 21,440,740 $ 22,292,957 $ 23,523,269 $ 25,108,311 $ 26,509,180 $ 25,482,354 $ 25,438,932 $ 26,114,ll2 $ 28,124,787 $ 28,601,818 $ 928,448 $ 850,632 $ 935,790 $ 1,204,709 $ 324,315 $ 288,502 $ 246,027 $ 224,719 $ 764,185 $ 883,272 (1) - - - 1,095,357 2,265,963 - - - - - - - - - - - - - 175 210 1,130,271 1,219,922 1,126,836 1,063,113 884,977 959,800 852,453 944,278 - -(1) 372,126 423,937 418,686 383,067 372,491 363,046 391,593 396,887 444,039 429,646 759,978 520,321 651,070 803,783 748,267 818,692 720,397 710,341 845,315 880,095 - 253,757 20,637 88,919 130,073 237 17,273 - - - 404,465 500,929 492,628 575,110 616,602 779,941 980,003 1,ll8,977 1,024,516 1,026,685 1,886,416 2,562,484 1,548,390 1,114,928 1,216,184 1,252,052 1,192,559 1,210,249 1,084,928 1,075,529 19,113,697 12,263,279 15,073,998 13,034,878 12,787,794 6,156,916 2,941,206 2,464,782 5,11$546 3,064,292 24,595,401 1$595,261 2Q26$035 19,363,864 19,346,666 1Q619,186 7,341,511 7,13Q233 9,281,704 7,359,729 N m Prograrn Reven�es (covlin�ed) B�siness-lype ac[ivities: Charges for services: Golfcourse 8treet lights Cottage Grove EM3 W a[er opera[ivg 8ewer operating Capital grants and covtrib�tiovs Total b�sivesstype activities prograrn revev�es Total primary gwemmevt prograrn revev�es Net (E.pevse)/Revev�e Govemmentalaclivities B�siness-lype ac[ivities Total primary gwemmevt vet er.pevse 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1,738,884 1,593,049 1,668,420 1,603,992 1,645,832 1,557,213 1,563,399 1,583,098 1,399,204 1,566,035 696,707 686,400 661,500 660,503 915,074 691,384 596,703 494,162 532,607 540,696 1,014,943 834,092 896,145 1,040,474 1,158,397 876,762 1,130,948 1,068,953 1,114,226 1,528,756 1,985,1ll 2,014,023 2,075,463 2,351,884 2,602,123 2,543,433 2,428,738 2,161,076 2,249,926 2,773,937 1,814,823 1,755,694 1,833,232 1,831,643 1,859,889 1,933,680 1,939,912 2,202,013 2,208,014 2,207,363 33,483 6ll 165,266 267,465 7,283,957 6,883,875 7,134,760 7,488,496 8,181,315 7,602,472 7,659,700 7,674,568 7,771,442 8,616,787 $ 31,879,358 $ 25,479,136 $ 27,402,795 $ 26,852,360 $ 27,527,981 $ 18,221,658 $ 15,001,211 $ 14,804,801 $ 17,053,146 $ 15,976,516 $ 9,981,502 $ 3,064,987 $ 3,748,261 $ 1,579,412 $ 268,012 $ (7,966,850) $ (11,233,697) $ (11,983,777) $ (11,549,059) $ (13,565,435) 457,116 121,192 131,265 164,637 750,789 706,154 795,976 674,406 477,418 940,133 $ 10,438,618 $ 3,186,ll9 $ 3,879,526 $ 1,744,049 $ 1,018,801 $ (7,260,69� $ (10,437,721) $ (11,309,371) $ (11,071,641) $ (12,625,302) Geveral Revev�es and Other Changes in NetPosition Govemmental activities: Property tar.es Franchisetm:es Aggregatetm:es Tar, ivcremevt wllections Granls ar�d covtrib�tions votrestricted to specific prograrns Uvrestricted investrnevt emnings Gain ov sale ofc�ital assets Ofher $ 7,921,860 $ 8,673,552 $ 9,241,094 $ 10,462,633 $ 11,113,215 $ 11,535,320 $ 11,808,510 $ 11,427,029 $ 11,494,758 $ 12,330,135 - 283,542 320,369 325,414 390,901 396,173 399,588 517,391 535,188 537,682 - - 13,296 12,879 9,494 13,489 24,234 30,554 26,131 26,180 534,692 630,231 771,093 770,857 904,836 909,434 1,123,774 1,253,414 946,603 892,438 789,308 818,798 476,205 1,036,113 11,030 10,992 762,983 714,891 637,663 324,378 938,501 1,697,138 2,316,104 1,864,048 - 22,278 20,634 - 202,751 27,050 26,146 29,742 998,846 502,721 624,785 368,821 4,227 23,872 12,342 10,546 7,436 Trar�sfers (1,657,459) (2,311,582) (7,794,429) (2,583,801) (4,312,159) (3,459,013) (1,134,566) 428,270 438,800 413,895 Totalgovemmentalactivities 8,075,636 9,141,646 4,260,343 11,422,289 11,080,688 11,583,829 13,427,364 14,210,301 14,104,753 14,609,439 B�siness-lype ac[ivities: Uvrestrictedinvestrnevtemnings 68,342 191,791 ll6,818 347,410 491,391 473,098 ll6,619 119,772 162,296 118,396 Ofher 51,265 - - - - - - - - - ltansFers 1,657,459 2,311,582 7,794,429 2,583,801 4,312,159 3,459,013 1,134,566 (42$270) (43$800) (413,895) Totalb�siness-type activities 1,777,066 2,503,373 7,971,247 2,931,211 4,803,550 3y32,111 1,311,185 (308,498) (276,504) (295,499) Totalprimary gwemmevt $ 9,852,702 $ 11,645,019 $ 12,231,590 $ 14,353,500 $ 15,884,238 $ 15,515,940 $ 14,738,549 $ 13,901,803 $ 13,828,249 $ 14,313,940 Change iv Net Positiov Govemmentalactivities $ 18,057,138 $ 12,206,633 $ 8,008,604 $ 13,001,701 $ 11,348,700 $ 3,616,979 $ 2,193,667 $ 2,226,524 $ 2,555,694 $ 1,044,004 B�siness-lype ac[ivities 2 234 182 2 624 565 8 102 512 3 095 848 5 554 339 4 638 265 2 107 161 365 908 200 914 644 634 Total primary gwemmevt $ 20 291 320 $ 14 831 198 $ 16 111 116 $ 16 097 549 $ 16 903 039 $ 8 255 244 $ 4 300 828 $ 2 592 432 $ 2 756 608 $ 1 688 638 Note: (1) After 2010 Comm�vily Developmevt is iv General Govemment CITY OF COTTAGE GROVE, NIINNESOTA FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiecal Yeaze (modified accrual basie of accounting) - - - - - - - - 24,382 5,764 - - - - - - - - 1,611,427 1,695,203 - - - - - - - - 7,178,108 7,449,565 $ 7,205,374 $ 7,335,156 $ 7,636,361 $ 7,851,581 $ 8,389,876 $ 8,825,797 $ 9,131,585 $ 9,139,140 $ 8,813,917 $ 9,15Q532 Fiscal Yeaz 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 m 0 General Fund Reserved Unreserved Nonspendable: Prepaid iteme Assigned Unassigned Total general fimd $ 14,308 $ 24,528 $ 11,836 $ 12,657 $ 7,326 $ 8,060 $ 35,038 $ 33,905 $ 7,191,066 7,31Q628 7,624,525 7,838,924 8,382,550 8,817,737 9,096,547 9,105,235 523 $ 425 $ 325 $ 325 $ 1,475 $ 1,225,825 $ 1,076,850 $ 1,273 $ 13,925,638 12,626,747 11,921,066 9,533,463 8,735,656 9,587,587 6,076,380 8,716,563 3,132,783 1,507,600 1,20Q447 2,41Q045 2,323,835 3,122,128 SOQ000 267,498 3,643,897 4,358,139 5,502,814 5,876,378 5,494,321 6,058,259 6,366,077 1,536,006 1,155,524 1,474,889 3,016,733 1,658,843 4,071,740 4,726,677 5,454,941 7,273,402 5,475,815 4,969,486 5,945,984 14,827,707 14,244,338 All other Govemmental Funds Reserved reported in: Special Revenue Funds Debt Service Funds Capital Projects Funds Unreserved reported in: Special Revenue Funds Debt Service Funds Capital Projects Funds Nonspendable: Prepaid iteme Assets for resale Long-term interfund loan receivable Restricted Committed Assigned Unassigned Total all other govemmental fimds Total all funds 3,083,522 (1,522,280) Table3 938 938 - - - - - - - - 267,498 267,498 - - - - - - - - 6,1OQ000 5,155,000 - - - - - - - - 3,445,145 2,997,220 - - - - - - - - 833,500 56Q321 - - - - - - - - 15,173,079 14,817,663 - - - - - - - - (z,i�a,z99� �9,szi,9o�� $ 18,62Q186 $ 24,769,616 $ 25,908,903 $ 24,397,351 $ 24,923,563 $ 27,034,688 $ 32,61Q936 $ 34,322,426 $ 23,645,861 $ 14,276,733 $ 25,825,560 $ 32,104,772 $ 33,545,264 $ 32,248,932 $ 33,313,439 $ 35,86Q485 $ 41,742,521 $ 43,461,566 $ 32,459,778 $ 23,427,265 Notee: The implementation of Govemmental Accounting Stand�ds Boazd Statement No. 54 in 2011 reeulted in a eignificant change in the City'e fimd balance claseificatione. CITY OF COTTAGE GROVE, MINNE60TA CHAN6ESINFUNDBALANCESOF60VERNMENTALFUNDS Last Tev Fiscal Yeacs (moASed accrual basis of accowtivg) $ ],]]3,85] $ 8,632,429 $ 9,340,614 $ 10,3]],285 $ 11,06],434 $ 11,533,333 $ 11,]45,148 $ 11,456,224 $ 11,539,640 $ 12,36]y]8 534,692 913,]]3 1,104,]58 1,109,150 1,305,231 1,319,096 1,54],5]6 1,801,359 1,50],922 1,456,300 10,528,810 ],389,]91 9,8]4,8]] ],354,0]3 ],322,653 4,110,568 4,3]2,581 2,899y54 1,8]5,486 1,153,019 1,225y92 1,321,613 1,26],639 1,162,]61 1,013,351 1,029,559 683,204 ]53,468 593,2]2 831,68] 160,926 31,426 120,423 329,453 2],442 35,]8] 24,]86 50,04] 101y13 16,555 4,496,532 3,O18y59 3,845,060 3,65],543 4,660,453 1,158,]60 1,226,818 1,166,]85 3,8]9,411 2,684,040 2,116,158 1y52y60 lyl],232 2,443,25] 2,183,]5] 2,328y13 2,630,298 2,668,428 2,494,018 2,46],18] 191y05 201,128 234,148 231,]2] 223,463 224,80] 192,169 201,559 246,]53 198,022 389,182 553,412 6]2,488 1,308,]23 1,699,306 1,412,432 508,246 350,6]3 448,]82 196,8]9 ]0,]42 454y58 226,639 302,012 496,4]8 361,341 458,001 130,000 144,500 155,301 51],143 515,668 504,13] 439,]89 41],092 148,434 201,463 439,238 322,009 282,265 398,099 2]6,895 331,064 143,661 ]88,1]] 21,]0] 64,584 145,640 62,198 41y90 825,821 1,693,540 1,082,29] 1,825,184 2y80,621 ]05,10] 6]4,038 609,809 595,218 601,255 2Q22Q859 26y56,552 3Q521,3]6 3Q684,618 34,185,458 24,38Q844 24,328y12 22,6]3,184 23,811,122 22,452,4]8 FiscalYeac 2003 2004 2005 2006 200] 2008 2009 2010 2011 2012 m Revev�es 6evecal property texes Othec texes Special assessmevls Licevses avd permils Dicect chacges to developers Intecgovemmevtel Chacges foc services Fives avd forfeils Ivvestrnevteamivgs Ivterest ov ivterfund loan Connectiov chacges Park deAcatiov fees Miscellaveo�s Total reven�es Er.penAtures Currevt 6evecal govemment Economic developmevt Communiry developmevt P�blic safely P�blic works C�INre avd recreafion Capital o�tlay Debt Service Privapal retiremevt Capital leasepaymevt Debtpaymevtto componentwit Ivterest avd 5sca1 charges Totel zepevdiNres Excess revev�es ovec (�vder) er.penAtures Othec Fivanavg So�roes (USes) Transfttsin 1Yavsfers o�t Bonds issued Capitalleaseiss�ed Premi�m ov debtiss�ed Disco�vt ov debtISSUed Proceeds from sale of capital assels Total oNer 5vavcivg sources (�ses) Net chavge iv fund balavices 2,222,840 2,208,459 ]95y5] 886,]25 4,596,363 4,608,185 2,498,822 2,]66,893 1,600,256 1,]64,528 20,222,6]3 6,894,]50 2,026,355 2,361y44 ]55,20] ]40,ll5 5,0]0,655 5,092y8] 3,014,214 3,159,41] 1y64,283 2,023,881 11,048,]91 12,]55,]43 4,030,450 ly]8,]14 ]88,811 894,642 5,125,04] 5,190,603 3,106,491 3,358,92] ly]5,083 2,036,414 14,105,231 15,003,669 1,]59,695 2,0]l,]15 2y42,106 - 199,614 ]93,046 1,102,]40 1,132,12] - 5,195,003 5,493,30] 5,82],5]2 3,4]6,]94 3,33],054 3,]]4,559 2,023,085 2,330y09 2,326,]33 2y90,009 3,383,343 10,8]],928 2,689,156 491,040 Table 4 6,151,6]] 4,059,582 2,38],655 15,420,808 5,025,000 3,325,000 3y85,000 4,640,000 2,]00,000 1,845,000 3,]55,000 1,625,000 ],135,000 1,335,000 - - - - 3,3]4 3,62] 158y00 239,189 245,000 250,000 - 1,135,000 - - - 6]8,880 - - - - ]56,019 1,4]4,85] 1,216,3]9 1,233,40] 1,308,8]6 1,158,]OS 1,64Q143 1,101,145 906y10 849,046 3],]1],930 25,064,39] 29,OSQ884 32,00],554 33,143,363 32,149,184 22,201,369 21,013,403 34,828,854 33,633y64 �s,ass,mi� i,s9z,iss i,aaqa9z �i,szz,�c� i,oaz,u9s ��,�sv,sao� z,iz�,sas i,csv,�si �ii,ov,�sz� �ii,isi,asc� 1,]99,]6] 2,808,183 4,03],385 2,44],895 2,580,150 2,6]5,0]4 2y42,924 1,233,938 3,052,403 2,ll1,149 (1,]91,]6]) (2,808,183) (4,03],385) (2,44],895) (2,580,150) (2,309,809) (2,942,924) (1,246,180) (3,048,803) (1,881,8]0) ],]05,000 4,325,000 - - - 3,3]0,000 3,685,000 - - 1,865,000 - - - 15,090 - 6,500,000 - - - - 1],4]2 9,218 " " " 2]y46 22,]OS " " " �ac,sos� �sc,siz� - - - - �zyoc� - - �is,ssz� 4,500 89,651 11,514 22,412 43,ll5 49,694 ]1,506 12,344 10,546 ]688664 438]OS] 26604 22412 10306386 3]54493 59264 15y44 2,148y]3 a (�vv,am� a c,z�v,ziz a i,aaqa9z a (i,asc,ssz� a i,oca,sm a z,sa�,oac a s,ssz,aic a i,�iv,oas a(ii,00i,�ss� a (v,aiz,sis� Debt service as a peroentege of voncapital zepevdiNres 33.0% 32J% 28.8% 30.5% 21.1% 21.5% 28.9% 16.8% 33.6% 12.6% Note: (1) Aftec2010 Comm�nily Developmevtis iv 6evecal 6ovemment CITY OF COTTAGE GROVE, MINNE60TA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Las[ Ten Fiscal Years Table 5 Tacable TolalTacable AssessW Esmnated Resideutial Realand Ntis�IDisparity TotalAdjnstW Valneasa AclualTacable TotalDirec[ TolalDirut Payable Resideutial Commuual AgricuLLnral Noo-homestead Personal Personal Contribntion(Net) Tacable Percenlageof Mm�ket TacRete TacRa[e Year Property Property Property andOMer Proper[y Property andTlF Valne TacableValne Valne (Urban) (RUral) 2012 2011 2010 2009 2008 200] 2006 2005 2004 2003 $ 19,042�1J0 21,316y06 23,326,829 24,]25,529 24,639,556 23,]30y]4 21,]5],]29 19,051,]62 16,2]2,065 14,092y04 6onrce: WasttivgtovCOwly $ 5,094,236 5,120,056 5,55],410 5,511,940 4,640,]30 4�3Q196 3,]SSy2] 3,]19,364 3�35,810 3,614,]14 ]24,88] ]]8,196 6]2�44 613y32 536,1]3 460�08 412,]83 346,052 301,431 2]3191 2,010,313 2,003y68 2131,128 2�1.8],839 2,163,150 1y04,124 1,605,598 1�59,53] 986,022 836,988 Notes: Taeable property val�es ivcl�de boN urban avd cural properties. (1) The tae capacily (assessed taeable val�e) of the pcoper[y is calculated by applyivg a s[aNtory fortn�la to the estimated market val�e of Ne pcoperty. $ 568,0]8 SSOy99 502 282 49],621 481 295 490,]OS 465 295 452,429 435,092 430 260 2],439,]84 $ 29,]]0,125 32,289y93 33,636,861 32,460,884 30y25,310 28,030,332 24y19,144 21,330,420 19,248,15] 2,626,]02 2,]]5�15 2,268,060 2,195,610 2,145,513 1,898y]8 1,314,012 1,386,592 1,231,053 1,8]0,105 30,066,486 32,545,440 34,558,053 35y32,4]1 34,606,39] 32,824,288 29�44,344 26�15,]36 22,561,4]3 21,118,262 122% 121% 1.18% 1.1]% 1.16% 1.15% 1.13% 1.16% 1.16% 123% 2,464,3]2y00 2,695,641y00 2y24,191,800 3,058,23],500 2y86,391,]00 2,848,502,600 2,588,151,800 2,2]8,319,600 1y41,381,]00 1,]ll,460,500 41.446 38.255 35.415 34.632 35.189 35.813 3].925 39.1]0 43.65] 42.0]] 29J26 2].905 25.881 25.384 25J24 2].488 26.548 28.599 3225] 30.999 m N CITY OF COTTAGE GROVE, MINNESOTA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Yeazs (rate per $1,000 of assessed value) Table 6 City Direct Rate Overlapping Rates m w Fiscal Year Rural Property 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Urban Property 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 General 27346 24.150 22246 21.577 22.083 23.697 21.939 23.727 26.602 25.849 39.065 34.500 31.780 30.825 31.548 32.022 33316 34298 38.002 36.927 Debt Service 2381 3.755 3.635 3.807 3.641 3.791 4.609 4.872 5.655 5.150 2381 3.755 3.635 3.807 3.641 3.791 4.609 4.872 5.655 5.150 Total City Direct Rate 29.726 27.905 25.881 25384 25.724 27.488 26.548 28.599 32257 30.999 41.446 38255 35.415 34.632 35.189 35.813 37.925 39.170 43.657 42.077 Washington County 31.939 29.772 27.775 26371 25.936 25.673 26.968 28.599 31.201 33303 31.939 29.772 27.775 26371 25.936 25.673 26.968 28.599 31.201 33303 School DistdoT(1) 37.894 35216 31.650 30.708 29.841 31.101 27.460 29.182 31327 36.822 37.894 35216 31.650 30.708 29.841 31.101 27.460 29.182 31327 36.822 VocationaU School DistdoT(2) 0.066 0.075 0.083 0.098 0.066 0.075 0.083 0.098 Source: WasMngton County Overlapping rates are those of local and county govemments that apply to proper[y owners witMn the City of Cottage Grove. Not all overlapping rates apply to all City of Cottage Grove property owners. City's property taY revenue base includes both urban and rural properties. Rural rate is 70% of urban rate plus debt. (1) Independent School Distdct 833 (z) vooarional �tgcaoc 916 (3) Includes Metropolitan Transit Commission, Metropolitan Council, and South WasMngton Wateished Other (3) 5.139 4.715 4.499 4268 4206 4.093 4.528 4.919 5364 9.844 5.139 4.715 4.499 4268 4206 4.093 4.528 4.919 5364 9.844 Total Overlapping 74.972 69.703 63.924 61347 59.983 60.867 59.022 62.775 67.975 80.067 74.972 69.703 63.924 61347 59.983 60.867 59.022 62.775 67.975 80.067 Total Direct and Overlapping Tax Rate 104.698 97.608 89.805 86.731 85.707 88.355 85.570 91374 100232 111.066 116.418 107.958 99339 95.979 95.172 96.680 96.947 101.945 111.632 122.144 m A CITY OF COTTAGE GROVE, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Current year and nine years ago Taxpayer 3M Company Xcel Energy/NSP Menard Inc. PHM/Cottage Grove Inc. Renewal by Andersen Corporation Mars II Inc. Dayton-Hudson Corporation Grove-Rainbow LP Wer Dis LLC Kohl's Dept. Stores Inc. U.S. Bank Trust, NA Cottage Grove Investors IV Limited Partnership Super Valu Holdings Carriage West Total Source: Washington County 2012 Percentage of Total City Net Tax Tax Capacity Capacity Value Rank Value $ 637,743 518,100 193,170 176,591 175,510 17Q584 16Q496 135,516 131,250 122,662 1 2 3 4 5 6 7 8 9 10 232% 1.89% 0.70% 0.64% 0.64% 0.62% 0.58% 0.49% 0.48% 0.45% $ 2,421,622 8.83% Table 7 2003 Percentage of Total City Net Tax Tax Capacity Capacity Value Rank Value $ 571,209 416,359 165,380 167,810 101,914 147,438 1 2.97% 2 2.16% 4 0.86% 3 0.87% 9 0.53% 6 0.77% 161,996 131,028 103,438 89,534 $ 2,056,106 5 7 8 10 0.84% 0.68% 0.54% 0.47% 10.68% CITY OF COTTAGE GROVE, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Table 8 Collected within the Taxes Levied for the Fiscal Year Fiscal Year ofLevy Total Collections to Date Percentage Collutions Percentage Fiscal GrossOperating Debt MVHC/ StateAid TotalNet of inSubsequent of Year Tax Levy Tax Levy Ag Credit (1) Cut Tax Levy Amount Levy Abatements Years Amount Levy 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 $ 11,035,100 11,035,100 1Q903,300 10,784,900 1Q920,700 10,56$850 9,758,390 9,103,000 $472,000 7,893,000 $ 1,206,150 1,206,150 1,251,700 1,661,600 1,263,300 1,253,600 1,391,720 1,337,600 1,306,000 1,145,100 $ (4,762) $ (4350) �4�� (176,941) (306555) (617 641) (�5�238) (743,999) (821�388) (759 605) (�0 152) (629 O15) (412323) (795 108) $ 12,236,488 11,546,748 11,521,348 11,857,236 11,582,337 11,204,809 1Q454,872 Q696,601 $956,612 $278,495 $ 12,1M,072 11,395,797 11,358,969 11,591,141 11,354,286 1Q975,151 1Q268,967 9,4J4,235 8,836,444 7,969,414 Notes: (1) In 2009 a properry tae classification appeal for oneproperty owner resulted in a large abatement (2) In 2005 an assessed valuation appeal in tae court resulting in a large abatement for 2003, 2004, and 2005 was settled. 98.92% 98.69% 98.59% 97J6% 98.03% 97.95% 9812% 97.91% 98.66% 96.27% $ (4,359) $ (1Q484) (19,000) (9$201) (1) (12,938) (1�264) (16140) (78 513� (2� (78 409� (2� L34561� (2� 86,807 117,944 146,515 200,695 220,248 165,606 121,538 41,756 (25,482) $ 12,104,072 11,482,6M 11,476,913 11,737,656 11,554,981 11,195,399 1Q434,573 9,615,773 $878,200 7,943,932 98.92% 99.44% 99.61% 98.99% 99J6% 99.92% 99.81% 99.17% 99.12% 95.96% m N CITY OF COTTAGE GROVE, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Las[ Ten Fiscal Years Fiscal Year 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Govemmental Activities Business-Type Activities General Obligation General General Special Other Other Total Obligation Tas Obligation Assessments Capital Long-Term Revenue Capital Long-Tertn Primary IncrementBonds Bonds Bonds Leases Debt Bonds Lease Debt Government $ 2,735,000 $ - $ 7,335,000 $ 5,615,000 $ - $ 1,04Q000 $ 142,696 $ 90Q000 $ 17,767,696 2,79Q000 - 6,75Q000 5,865,000 - 1,46Q000 - 90Q000 17,765,000 2,83Q000 - 13,845,000 6,11Q000 - 1,82Q000 - 90Q000 25,505,000 2,925,000 - 15,375,000 6,349,189 - 2,36Q000 9,085 90Q000 27,918,274 3,215,000 255,000 14,90Q000 6,508,089 - 2,835,000 96,742 90Q000 28,709,831 3,49Q000 495,000 12,86Q000 11,716 65,313 3,31Q000 146,606 90Q000 21,278,635 3,725,000 725,000 15,095,000 15,090 115,313 3,75Q000 193,474 SOQ000 24,118,877 3,94Q000 945,000 19,30Q000 - 115,313 4,17Q000 197,969 SOQ000 29,168,282 4,145,000 1,145,000 22,88Q000 - 115,313 4,535,000 11,833 SOQ000 33,332,146 1,22Q000 - 25,95Q000 1,325,000 115,313 4,865,000 - - 33,475,313 Notes: Details regarding the City's outstanding debt can be found in the notes W the financial statements. (1)See the Demographic and Economic Statistics schedule for personal income and population data. Table 9 Pereentage of Personal Per Iucome (1) Capita (1) 0.99% $ 508 1.03% 510 1.57% 737 lJ8% 816 lJ6% 844 135% 630 1.60% 719 2.06% 879 2.48% 1,049 2.69% 1,065 m m m V CITY OF COTTAGE GROVE, MINNESOTA RATIOS OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years General Fiscal Obligation Tax Year Increment Bonds 2012 $ 2011 2010 2009 2008 2007 2006 2005 2004 2003 2,735,000 2,79Q000 2,83Q000 2,925,000 3,215,000 3,49Q000 3,725,000 3,94Q000 4,145,000 1,22Q000 General Obligation Bonds $ 255,000 495,000 725,000 945,000 1,145,000 General Obligation Special Assessments Bonds Less: Amounts Available in Debt Service Funds $ 7,335,000 $ 6,75Q000 13,845,000 15,375,000 14,90Q000 12,86Q000 15,095,000 19,30Q000 22,88Q000 25,95Q000 2,377,981 1,499,819 5,512,986 5,031,380 5,725,764 6,179,732 5,993,804 9,019,284 8,862,237 9,646,887 Total $ 7,692,019 8,04Q 181 11,162,014 13,268,620 12,644,236 1 Q665,268 13,551,196 15,165,716 19,307,763 17,523,113 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1)See the Assessed and Estimated Actual Value of Taxable Property for estimated actual ta�ble market value. (2)See the Demographic and Economic Statistics schedule for population data. Percentage of Estimated Actual Taxable Market Value (1) 031% 030% 038% 0.43% 0.42% 037% 0.52% 0.67% 0.99% 1.02% Table 10 Per Capita 2 220 231 323 388 372 316 404 457 608 557 CITY OF COTTAGE GROVE, MINNESOTA DII2ECT AND OVERLAPPING GOVERNMENTAL ACTNITIES DEBT Ae of December 31, 2012 Overlapping: Waelrington County SC}LOOI D18h1CC8 ISD No. 200 (Hastinge) ISD No. 833 (South Wash. County) Metro Council Total Overlapping City of Cottage Grove Direct Debt Total Direct and Overlapping Debt: Source: City of Cottage Grove Municipal Diecloeure Repor[ing Net Debt Outstanding $ 144,625,000 49,515,000 276,76Q000 226,580,000 $ 15,685,000 $ 713,165,000 $ 123,149,648 Notee: Overlapping govemments ue thoee trtat coincide, at least in part, with the geograpMc boundariee of the City. TMe echedule eetimatee the por[ion of the outstanding debt of thoee overlapping govemmente that ie bome by the reeidents and bueineeeee of the City. Tlrie pioceee recogrtizee that, when coneidering the City'e ability to ieeue and repay long-term debt, the entire debt burden bome by the reeidents and busineeeee ehould be taken into account. However, thie doee not imply trtat every taxpayer ie a reeident, and [herefore responsible for repaying [he debt, of each overlapping govemment. % ofDebt Applicable to ciry City of Cottage Grove S}tare of Overlapping Debt 10.9655% $ 15,858,854 1.6733% 828,534 32.0030% 88,571,503 0.9735% 2,205,756 107,464,648 100.00% 15,685,000 Table 11 168 CITY OF COTTAGE GROVE, MINNE60TA LEGAL DEBT MARGIN INFORMATION Last Tev Fiscal Yeacs Table 12 FiscalYear 2003 2004 2005 2006 2� 2008 2009 2010 2011 2012 Debtlirttit $ 34,349,210 $ 38,82],634 $ 45,566,392 $ 51,]63,036 $ 56,9]0,052 $ 89,591,]51 $ 91,]4],125 $ 8],]25,]54 $ 80,869,25] $ ]3y31,18] Totalvetdebtapplicabletolirttit 1,145,000 945,000 ]25,000 495,000 6,]55,000 6,345,000 6,110,000 5,865,000 5,615,000 Legal debtmacgiv $ 34,349,210 $ 3],682,634 $ 44,621,392 $ 51,038,036 $ 56,4]5,052 $ 82,836,]51 $ 85,402,125 $ 81,615,]54 $ ]5,004,25] $ 68,316,18] Total vet debt applicable to Ne limit asaperoentageofdebtlirttit 0.00% 2.95% 2.0]% 1.40% 0.8]% ].54% 6.92% 6.96% ]25% ].59% Legal DebtMacgiv Calculafion for Fiscal Year 2012 Macket Val�e (aftec 5sca1 disparities) $ 2,464,3]2y00 Debtlirttit(3%ofassessedval�e) ]3y31,18] Debtapplicabletolimit 5615000 Legaldebtmargiv $ 6831618] m m CITY OF COTTAGE GROVE, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Fiscal Yeazs Fiscal Year 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Population(1) 34,984 34,828 34,589 34,213 34,017 33,788 33,529 33,179 31,774 31,437 Personal Inoome (2 $ 1,797,326,586 1,724,787,044 1,626,824,437 1,564,355,212 1,633,122,153 1,578,845,664 1,502,803,309 1,412,794,999 1,343,849,556 1,242,736,047 Per Capita Personal Inoome (2) 51,375 49,523 47,033 45,724 48,009 46,728 44,821 42,581 42,294 39,531 School Enrollment 17,639 17,389 17,060 16,795 16,800 16,805 16,467 16,400 16,088 15,744 Sources: (1) Metropolitan Council-2002-2009. Census-2010. Cottage Grove Planning Department-2011. (2) WasMngton County data from Bureau of Economic Analysis. (3) Independent School Distdct No. 833 including Valley Crossing School. (4) Minnesota Depaztrnent of Employment and Economic Development. Table 13 Unemployment Rate (4) 5.5% 62% 6.9% 7.6% 4.9% 3.9% 3.5 % 3.5% 4.0% 4.1% 170 CITY OF COTTAGE GROVE, MINNESOTA PRINCIPAL EMPLOYERS Current year and nine years ago 2012 2003 Taxpayer School Dishict 833 3M Cottage Grove Renewal by Andersen Up North Plastics Inc Cub Foods Menud's City of Cottage Grove Wemer Elechic Tuget Rainbow Foods Allied Systems Allina Total Tablel4 Percentage Percenhge of Total of Total Employees Rank Employment Employees Rank Employment 1,315 1 22% 1,128 1 19% 750 2 13% 675 2 11% 330 3 6% 399 3 7% 250 4 4% 260 4 4% 200 5 3% 146 9 2% 200 6 3% 200 5 3% 174 7 3% 181 6 3% 170 8 3% - - - 130 9 2% 150 8 3% 99 10 2% - - - - - 160 7 3% - - 138 10 2% 3,618 60% 3,437 58% Sources: City of Cottage Grove Annual Municipal Disclosure Reporting. 171 CITY OF COTTAGE GROVE, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Yeazs General Govemment Total General Govemment Public Safety Police/Cottage Grove EMS Officeis Civilians* Fire/Emergency Management Total Public Safety Public Works Recreation and Swimming Pool Ice Arena Water/Sewer Storm Sewer � Golf Course Fund �' Street Light Fluid Fleet Maintenance Total Table 15 Budgeted Flill-time Equivalent Employees as of December 31 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20.53 21.13 21.48 21.94 23.03 22.48 21.76 21.76 21.76 22.06 36.00 37.00 38.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 14.53 14.53 15.83 15.40 9.40 9.10 725 725 725 8.46 3.00 3.00 3.00 3.00 4.00 4.00 4.00 4.00 4.00 4.00 53.53 54.53 56.83 57.40 52.40 52.10 5025 5025 5025 51.46 22.01 22.56 23.56 23.56 22.56 21.56 21.56 21.56 21.56 20.83 3.70 3.50 3.50 3.50 3.00 3.00 2.50 2.50 2.50 2.50 2.95 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 320 9.84 9.84 10.04 10.04 10.04 936 836 836 836 823 1.40 1.40 1.40 1.40 3.40 3.40 3.40 3.40 3.40 3.54 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 1. 04 1. 04 1. 04 1.04 1.04 1. 04 1. 04 1.04 1. 04 1. 06 3.84 3.84 3.84 3.84 3.84 3.84 3.84 3.84 3.84 4.04 123.84 125.44 12929 13032 126.91 12438 12031 12031 12031 121.92 Source: City of Cottage Grove Finance Office *Dispatch services were transferred to WasMngton County in 2007. Six positions were transferred to the County as part of this transition. CITY OF COTTAGE GROVE, MINNESOTA OPERATING RVDICATORB BY FTJNCTION/PROGRAM Table 16 Las[ Ten Years Fiscal Year Function/Program 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Geveral Govemmevt Electiovs 2 2 2 2 2 Registered voters as of7 arn electiov day 18,581 19,588 20,358 20,607 21,119 N�mber ofvotes cas[ 18,001 13,420 19,050 13,345 19,727 Voterparticipa[iov(regis[ered) 96.88% 68.51% 93.58% 64.76% 93.41% (electiovs are held every otlier year) Comm�vily Developmevt Ivspectiovs B�ilding Pennits (New Dwelling Uvits) 284 308 265 185 67 89 66 89 49 53 CodeEvforcemevtlnspectiovs 396 411 683 943 1,032 1,777 1,759 1,447 1,276 2,407 V w P�blic 3afery Police Cr'vnes - Part I Cr'vnes - Par[ II Total Calls for 8ervice Fire Medical Fire Avg ResQovse fPime (minntes) Medioal Avg ResQovse fll'vne (mivntes) A'ire Avg Respovse T'vne (miv�tes) Both P�blic Works 8q. Yards of 8treets 8ealcoa[ed Miles of 3treets New Covshuctiov Miles ofwa[ertnaiv added 3o�rce: Vario�sCilyofCottageGroveDepartmevts 979 2,563 14,941 1,307 278 Wa Wa 8.34 Wa 6.91 7.82 964 2,690 14,944 1,362 233 Wa Wa 8.30 408,367 0.49 0.60 1000(1) 2,609 15,300 1,355 300 Wa Wa 932 331,705 2.64 3J5 1010(1) 2,480 15,500 1,280 325 Wa Wa 932 345,ll8 2.63 3J4 892 2,883 2Q469 1,250 580 Wa Wa 8.57 404,821 OJ3 2.06 850 2,472 2Q356 1,442 553 n/a n/a 8:54 425,577 0.00 1.68 743 2,478 19,434 1,765 556 n/a n/a 8:59 352,953 0.00 0.00 674 2,055 2Q104 1,968 643 n/a n/a 9:01 349,349 016 039 694 2,1ll 20,707 2,000 456 838 824 836 382,374 1.12 0.63 756 1,614 17,348 2,347 295 6:51 8:04 6:59 48$210 0.30 OJ9 Notes: (1) 2005, 2006 are es[ima[ed arno�vls. (2) Infortna[iov vot available is labeled v/a CITY OF COTTAGE GROVE, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 17 Last Ten Yeaze V A Fiscal Yeaz Function/Program 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Public Safery Police Statione 1 1 1 1 1 1 1 1 1 1 Patrol Units 11 11 12 12 12 12 12 12 12 12 Fire Statione 4 4 4 4 4 4 4 4 4 4 Fire Trucks 8 8 6 6 6 6 6 6 6 6 Public Works City-ownedLights 2,066 2,076 2,124 2,207 2,270 2,273 2,273 2,279 2,320 2,345 Xcel owned Lights 301 301 301 301 301 301 301 301 301 301 Sheets (milee) 149.18 149.67 152.09 15492 155.45 155.45 155.45 15591 156.83 157.13 Sidewalke/haile (milee) 3124 31.96 34.65 39.01 4135 4423 4427 46.40 4825 48.61 Pazks (acreage) Community Pazks 312 312 330 330 368 377 377 377 377 377 Neighborhood Pazks 161 170 176 176 176 176 176 176 176 219 Mini Pazk 24 24 25 25 25 25 25 25 25 25 Recreationfacilities 21 21 21 21 21 21 21 21 21 21 County Pazke 539 539 539 539 552 571 571 571 571 571 State Scientific and Nature Area 238 203 238 238 238 238 238 238 238 238 Golf Coutse 219 219 219 219 219 219 219 219 219 219 OtherOpen Space 319 353 353 406 450 453 453 453 453 453 Water Number of Connections Miles of Water Mains and Laterals Sanitary Sewer Number of Connections Miles of Sanitary Sewer Mains and Laterals Storm Sewer Miles of stoan sewers 9,250 9,439 9,762 1Q056 131.02 131.62 13537 139.11 9,039 9,039 9,703 9,998 118.02 118.22 121.27 124.00 6899 6934 72.47 75.67 1Q056 1Q298 1Q381 141.17 142.85 142.85 1 Q 143 1 Q209 1 Q330 12692 12692 12692 77.04 77.17 77.41 1Q423 1Q474 1Q538 14324 143.87 144.66 1Q382 1Q433 1Q486 127.02 127.58 127.99 78.07 79.50 8039 n/a is not available Source: VarioueCityDepartrnents