HomeMy WebLinkAbout2014 CAFRComprehensive Annual
Financial Report
www.cottage-grove.org
City of Cottage Grove
Minnesota
Year Ended
December 31, 2014
Annual City Photo Contest Winning Entries
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 9
Principal City Officials 11
Organization Chart 12
Independent Auditor's Report 15
Management's Discussion and Analysis 19
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position Statement 1 33
Statement of Activities Statement 2 35
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 36
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds Statement 4 38
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities Statement 5 40
Statement of Net Position - Proprietary Funds Statement 6 42
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds Statement 7 43
Statement of Cash Flows - Proprietary Funds Statement 8 44
Notes to Financial Statements 45
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund Statement 9 78
Budgetary Comparison Schedule - Note to RSI 84
Funding Progress Schedule - Other Post Employment Health Care Benefits 86
I. INTRODUCTORY SECTION
II. FINANCIAL SECTION
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 10 91
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 11 92
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 12 94
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 13 96
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 14 99
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds Statement 15 100
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 16 102
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 17 104
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Recycling Statement 18 106
Storm Water Statement 19 107
Forfeiture/Seizure Statement 20 108
Ice Arena Statement 21 109
Golf Course Statement 22 110
Charitable Gambling Statement 23 111
Internal Service Funds:
Combining Statement of Net Position Statement 24 114
Combining Statement of Revenue, Expenses and Changes in Fund Net Position Statement 25 115
Combining Statement of Cash Flows Statement 26 116
Component Unit:
Economic Development Authority:
Combining Balance Sheet - All Governmental Fund Types Statement 27 118
Combining Statement of Revenues, Expenditures and Changes
in Fund Balance - All Governmental Fund Types Statement 28 119
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Supplementary Financial Information:
Construction/Acquisition Costs:
Capital Projects Funds Exhibit 1 122
Combined Schedule of Bonded Indebtedness Exhibit 2 124
Debt Service Payments to Maturity Exhibit 3 126
Deferred Tax Levies Exhibit 4 128
Subcombining Balance Sheet - Pavement Management Debt Service Schedule Exhibit 5 130
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Pavement Management Debt Service Schedule Exhibit 6 131
Subcombining Balance Sheet - Tax Increment Construction Revolving Schedule Exhibit 7 132
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Tax Increment Construction Revolving Schedule Exhibit 8 133
Subcombining Balance Sheet - TIF Debt Service Revolving Schedule Exhibit 9 134
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
TIF Debt Service Revolving Schedule Exhibit 10 135
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Net Position by Component Table 1 138
Changes in Net Position Table 2 140
Fund Balances of Governmental Funds Table 3 142
Changes in Fund Balances of Governmental Funds Table 4 143
Assessed and Estimated Actual Value of Taxable Property Table 5 144
Property Tax Rates - Direct and Overlapping Governments Table 6 145
Principal Property Taxpayers Table 7 146
Property Tax Levies and Collections Table 8 147
Ratios of Outstanding Debt by Type Table 9 148
Ratios of General Bonded Debt Outstanding Table 10 149
Direct and Overlapping Governmental Activities Debt Table 11 150
Legal Debt Margin Information Table 12 151
Demographic and Economic Statistics Table 13 152
Principal Employers Table 14 153
Full-time Equivalent City Government Employees by Function Table 15 154
Operating Indicators by Function/Program Table 16 155
Capital Asset Statistics by Function/Program Table 17 156
III. STATISTICAL SECTION
I. INTRODUCTORY SECTION
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May 18, 2015
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 for the year ended December 31, 2014.
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based upon a comprehensive framework of internal control standards that
it has established for this purpose. Because the cost of internal control should not exceed
anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the
financial statements are free of any material misstatements.
Kern, DeWenter, Viere, Ltd., independent certified public accountants have issued an unmodified
(“clean”) opinion on the City of Cottage Grove’s financial statements for the year ended December
31, 2014. The independent auditors’ report is located at the front of the financial section of this
report.
Management’s discussion and analysis (MD&A) immediately follows the independent auditors’
report and provides a narrative introduction, overview, and analysis of the basic financial
statements. This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it.
Profile of the City
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, sixteen 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; recent data estimates 2014 population at 35,626.
Cottage Grove operates as a Statutory Plan A City under Minnesota law. Policy making and
legislative authority are vested in a City Council, consisting of the Mayor and four other members, 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.
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Letter of Transmittal
May 18, 2015
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, 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 in September each year. The preliminary levy may be reduced 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 28th of each year.
Local economy Cottage Grove is part of the Minneapolis/St. Paul seven county metropolitan area; an economically
diverse environment with an equally diverse labor force. 2014 saw steady employment growth in
the region and the unemployment rate dropped to 3.9%, compared to the national rate of 5.6%.
However, as employment improved, wage growth and inflation remained subdued. The City’s tax base is 80% residential and 20% commercial/industrial property. Although the total
taxable market value declined by 37% in the four year period 2010-2013, a 5% recovery in 2014
brought the total taxable market value to $2.4 billion. Further growth in value is expected for 2015,
from both new construction and increases in property values of existing building stock. The City’s 600 acre business park is home to 1,150,000 square feet of industrial and manufacturing
businesses, including Up North Plastics, Renewal by Andersen, and Werner Electric. Other major
employers in the City include 3M Company, Target, Menard’s, Walmart, and Aggregate
Industries. The City's commercial areas include four community shopping centers and several restaurants.
In 2014, Leafline Labs, one of two legal medical cannabis facilities in the state of Minnesota,
located in the City’s business park. The construction of a 45,000 square foot
growing/manufacturing facility will be completed in the second quarter of 2015 with full production capability by July 1, 2015.
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Letter of Transmittal
May 18, 2015
Renewal by Anderson, Werner Electric and American Logistics will all expand their facilities in
2015. Combined, these businesses will add 300,000 square feet of manufacturing and warehouse
space and over 300 jobs to the Cottage Grove community.
Long-term financial planning
The City places a high priority on planning for future growth. Staff uses different long range
revenue and expenditure models during the annual preparation of a biennial budget plan for the General Fund, Special Revenue and Enterprise Funds. 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.
For example, during the 2015 to 2019 period over $20 million in total Pavement Management projects are anticipated. Pavement Management is not a full road reconstruction but rather a
reclamation or mill and overlay process to extend 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 has financial policies and plans which establish the principles that guide staff and Council members to make consistent and informed financial decisions. These policies and plans include:
• Fund balance policy
• Cash and investment management policy
• Debt management policy
• Capital improvements plan
• Infrastructure Maintenance Task Force (IMTF) policy It is important for the financial stability of the City to maintain reserve funds for unanticipated
expenditures or unforeseen emergencies as well as to provide adequate working capital for current
operations without short term borrowing. The City’s fund balance policy identifies that the
unassigned fund balance in the General Fund shall be no less than 55% of annual budgeted expenditures. Major Initiatives
The population of Cottage Grove has increased from 833 in 1950 to 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.
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Letter of Transmittal
May 18, 2015
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 significantly since 2007, averaging 60 new
building permits per year.
Master planning of the, 9,000 acre “East Ravine” development occurred in 2005. 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. In reality, development of this
area began in earnest in 2013 with the approval of two residential plats totaling 226 lots on 100
acres. Construction of 100 homes had been completed by the end of 2014. The City continues to
encourage residential developers to pursue acreage for development in the master plan area.
The City strategy of growth in the residential and commercial/industrial areas, providing more
homes and jobs, will ultimately draw the retail storefronts and services the community demands.
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, 2013. This was
the twenty-fourth 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.
Preparation of this report would not have been possible without the dedicated service of the
Finance Department staff to whom I express my appreciation, especially Brenda Malinowski, Assistant Finance Director and Cathy Mohr, Accountant. Appreciation is also due to the Mayor,
City Council members and City Administrator for their support in maintaining a fiscally sound
and stable organization in the service of its residents and business owners.
Respectfully Submitted,
CITY OF COTTAGE GROVE, MINNESOTA
Robin Roland
Finance Director
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CITY OF COTTAGE GROVE, MINNESOTA PRINCIPAL CITY OFFICIALS
December 31, 2014
Elected Officials
Term Expires
Mayor: Myron Bailey December 31, 2016
Council Members: Derrick Lehrke December 31, 2014
Justin Olsen December 31, 2016
Jen Peterson December 31, 2016 Dave Thiede December 31, 2014
Appointed Personnel
City Administrator Ryan Schroeder
Finance Director Robin Roland
City Clerk Caron Stransky
City Engineer and Community Development Director Jennifer Levitt
Economic Development Director Danette Parr
Public Safety Director Craig Woolery
Public Works Director Les Burshten Parks and Recreation Director Zac Dockter
1111
City Council
Engineering
Community
Programs/Communications
Human
Resources
Historic
Preservation
Building/Code
Inspections
Planning
Enterprise
Billing
Accounting
Payroll
MIS
Patrol
Investigations
Public Safety
Programs
Animal & Code
Enforcement
Fire &
Emergency Management
Streets
Fleet/Building
Maintenance
Utilities
Parks
Recreation
AdvisoryCommissions
Public Safety
City Administrator City
Attorney
Community
Development Public Works
Cottage Grove
Citizens
FinanceAdministration
River Oaks Golf
Course
City Clerk/
Elections
EMS/Medical
Services
Fire
Inspections
Updated 4/2013
Parks and
Recreation
Ice Arena
Forestry
Economic
Development
1212
II. FINANCIAL SECTION
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1414
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INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and Members
of the City Council
City of Cottage Grove
Cottage Grove, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements 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, Minnesota, as of and for the year ended December 31,
2014, and the related Notes to the Financial Statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents.
Management’s 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 financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s 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 City’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the City’s internal 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.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
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, Minnesota, as of December 31, 2014, 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.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, which follows this letter, and the budgetary comparison information and the
Funding Progress Schedule, as noted in 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 (GASB) 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 management’s 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 introductory section,
combining and individual fund statements and schedules, supplementary financial information and
statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual fund statements and schedules and supplementary financial information
are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial 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 combining and individual fund statements
and schedules and supplementary financial information are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
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The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
Report on Summarized Comparative Information
The financial statements include partial prior year comparative information. Such information does not
include all of the information required to constitute a presentation in accordance with accounting
principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the City’s basic financial statements for the year ended December 31, 2013,
from which such partial information was derived.
We have previously audited the City’s 2013 financial statements and our report, dated May 14, 2014,
expressed unmodified opinions on the respective financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund and the aggregate
remaining fund information. In our opinion, the summarized comparative information presented herein
as of and for the year ended December 31, 2013 is consistent, in all material respects, with the audited
financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 18, 2015
on our consideration of the City of Cottage Grove’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City of Cottage Grove’s internal control over financial reporting and compliance.
KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota May 18, 2015
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Cottage Grove, we offer readers of the City of Cottage Grove’s
financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2014. 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 7 of this report.
Financial Highlights
• The assets of the City of Cottage Grove exceeded its liabilities and deferred inflows of
resources at the close of the most recent fiscal year by $232,837,293 (net position). Of this
amount, $44,173,760 (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 $7,339,450 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 $28,986,549 an increase of $2,392,092
compared to the previous year. Approximately 84% or $24,456,755 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
$8,113,424 (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 $22,501,049, a decrease of $1,466,893 or 6% compared to the previous year.
The City refinanced $1.355 million in tax increment debt in 2014.
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.
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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, community development, economic development,
public safety, public works, and culture and recreation. The business-type activities of the City of
Cottage Grove include street lighting, water and sewer, and an ambulance service.
The government-wide financial statements include not only the City of Cottage Grove itself (known
as the primary government), but also a legally separate EDA component unit for which the City of
Cottage Grove is financially accountable. Financial information for this component unit is reported
separately from the financial information presented for the primary government itself.
The government-wide financial statements start on page 33 of this report.
Fund financial statements: A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of Cottage Grove, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
Cottage Grove can be divided into two categories: governmental funds and proprietary funds.
Governmental funds: Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike
the government-wide financial statements, governmental fund financial statements focus on near-
term inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government’s
near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statement. By
doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues,
expenditures, and change in fund balance provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
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Management’s Discussion and Analysis (continued)
Information is presented separately in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures, and changes in fund balance for the City’s seven
individual major governmental funds. They are as follows:
• 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 36 of this report.
Proprietary funds: The City of Cottage Grove maintains four 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 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 self-insurance, fleet maintenance, and information technology 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 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 for 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 42 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 45 of this report.
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Management’s Discussion and Analysis (continued)
Other information: The combining statements referred to earlier in connection with non-major
governmental funds and internal service funds are presented immediately following the required
supplementary information. Combining and individual fund statements and schedules start on page
91 of this report.
Government-wide Financial Analysis 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 $232,837,293 at
the close of the most recent fiscal year.
The largest portion of the City of Cottage Grove’s net position ($181,692,101 or 78%) 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
Governmental Activities Business-type Activities Total Primary Government
2014 2013 2014 2013 2014 2013
Current and other assets $38,476,039 $36,583,611
$16,327,364 $17,136,453
$54,803,403 $53,720,064
Capital assets 148,076,342 146,345,781 55,149,280 52,277,781 203,225,622 198,623,562
Total assets 186,552,381 182,929,392 71,476,644 69,414,234 258,029,025 252,343,626
Long-term liabilities outstanding 19,457,505 21,035,632
622,482 738,245
20,079,987 21,773,877
Other liabilities 4,543,405 4,608,636 525,740 430,770 5,069,145 5,039,406
Total liabilities 24,000,910 25,644,268 1,148,222 1,169,015 25,149,132 26,813,283
Deferred inflows of resources 42,600 32,500 - - 42,600 32,500
Net position:
Net investment in capital assets 127,260,042 124,156,059
54,432,059 51,453,195
181,692,101 175,609,254
Restricted 6,971,432 7,187,948 - - 6,971,432 7,187,948
Unrestricted 28,277,397 25,908,617 15,896,363 16,792,024 44,173,760 42,700,641
Total net position $162,508,871 $157,252,624
$70,328,422 $68,245,219
$232,837,293 $225,497,843
An additional portion of the City’s net position ($6,971,432 or 3%) represents resources that are
subject to external restrictions on how they may be used. The balance of unrestricted net position, $44,173,760 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.
22
Management’s Discussion and Analysis (continued)
Governmental Activities: Governmental activities increased the City of Cottage Grove’s net
position by $ 5,256,247 accounting for 72% of the total growth in net position.
• Program revenue decreased overall by $646,581. This is primarily related to reduced capital grants and contributions from the state and county for road construction projects.
• Investment income increased by $701,524 due to the unrealized gain in the value of
investments which are annually adjusted in accordance with accounting standards.
City of Cottage Grove's Changes in Net Position
Governmental Activities Business-Type Activities Total Primary Government
2014 2013 2014 2013 2014 2013
Revenues:
Program revenues: Charges for services $4,914,710 $4,925,856 $6,305,828 $6,694,903 $11,220,538 $11,620,759
Operating grants and contributions 1,545,268 1,211,506 - - 1,545,268 1,211,506
Capital grants and contributions 9,401,775 10,370,972 1,783,762 1,051,532 11,185,537 11,422,504
General revenues:
Property taxes 12,616,267 12,096,046 - - 12,616,267 12,096,046
Other taxes 1,280,553 1,506,216 - - 1,280,553 1,506,216
Grants and contributions not
restricted to specific programs 83,682 29,060 - - 83,682 29,060
Unrestricted investment earnings
(loss) 551,910 (149,614) 199,179 (45,902) 751,089 (195,516)
Gain on sale of capital assets 43,904 3,997 - - 43,904 3,997
Total revenues 30,438,069 29,994,039 8,288,769 7,700,533 38,726,838 37,694,572
Expenses:
General government 2,229,518 2,270,332 - - 2,229,518 2,270,332
Community development 946,001 903,180 - 946,001 903,180
Economic development 545,646 61,302 - - 545,646 61,302
Public safety 7,212,998 6,949,225 - - 7,212,998 6,949,225
Public works:
Regular operations 4,627,829 4,128,694 - - 4,627,829 4,128,694
Construction 2,971,353 3,992,536 - - 2,971,353 3,992,536
Culture and recreation 5,119,093 4,768,181 - - 5,119,093 4,768,181
Interest on long-term debt 808,642 976,891 - - 808,642 976,891
Street lights - - 867,690 742,410 867,690 742,410
Cottage Grove EMS - - 1,412,855 1,322,635 1,412,855 1,322,635
Water operating - - 2,216,819 2,341,555 2,216,819 2,341,555
Sewer operating - - 2,428,944 2,278,958 2,428,944 2,278,958
Total expenses 24,461,080 24,050,341 6,926,308 6,685,558 31,387,388 30,735,899
Increase in net position before transfers and special items 5,976,989 5,943,698 1,362,461 1,014,975 7,339,450 6,958,673
Special item – loan forgiveness - 1,020,000 - - 1,020,000
Transfers (720,742) 375,266 720,742 (375,266) - -
Increase in net position 5,256,247 7,338,964 2,083,203 639,709 7,339,450 7,978,673
Net position - January 1 157,252,624 149,648,235 68,245,219 67,870,935 225,497,843 217,519,170 Cumulative effect of change in accounting principle - 265,425 - (265,425) - -
Net position – January 1 as restated 157,252,624 149,913,660 68,245,219 67,605,510 225,497,843 217,519,170
Net position - December 31 $162,508,871 $157,252,624 $70,328,422 $68,245,219 $232,837,293 $225,497,843
23
Management’s Discussion and Analysis (continued)
The following chart illustrates the City’s expenses and corresponding program revenues for its
governmental activities.
Property Taxes
42%
Charges for services
16%
Operating Grants &
Contributions
5%Capital Grants &
Contributions
31%
Other taxes & tax
increment
4%Unrestricted
investment earnings
2%
Other
0%
Revenues by Source -Government Activities
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
Revenue
Expense
24
Management’s Discussion and Analysis (continued)
Business-Type Activities. Business-type activities increased net position by $2,083,203. Below
are graphs showing the business-type activities revenue and expense comparisons.
In business type activities, changes in net position were positive for all four funds.
Charges for
services
76%
Capital grants &
contributions
22%
Unrestricted
investment
earnings
2%
Revenues -Business type Activities
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Expenses and Program Revenues -Business-Type Activities
Expenses Program revenues
25
Management’s Discussion and Analysis (continued)
Financial Analysis of the Government's Funds
Governmental Funds. The focus of the City of Cottage Grove’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Cottage Grove’s financing requirements. In particular, 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 $28,986,549, an increase of $2,392,092. Committed, assigned
and unassigned fund balance which is available for spending at the government’s discretion has a
balance of $24,456,755 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 ($2,139,841) 2) for prepaid items ($26,548) 3) for inventory ($24,434) 4) to pay for capital improvements ($2,272,496) and 5) for future expenditures ($66,475).
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 $8,113,424 while total fund balance
was $9,512,141. 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 64% of the same amount.
The General fund balance increased by $280,175. This increase is primarily due to an increase in charges for services resulting from development activity in the city. Revenues exceeded budget by
$409,163 due to higher than expected building permit revenues and charges for engineering services
from development and infrastructure projects. Expenditures also exceeded budget by $38,099 due
to public works expenses for costs of snow and ice control.
The Municipal Building Fund increased $492,712 due to property tax revenues collected for
repayment of the interfund loan which funded the Public Safety/City Hall project in 2012.
The MSA Construction Fund increased by $2,031,896 due to the collection of County, State and
private developer reimbursements for completed construction projects on 85th Street, 70th Street, Keats Avenue and Ravine Parkway.
The Closed Debt Fund increased by $201,994 due to interfund loan interest and special assessment
revenues.
The Pavement Management Debt Service Fund increased by $271,296 due to special assessment
revenues collected in excess of debt service requirements.
The Pavement Management Capital Project Fund decreased by $1,813,644 due to the 2014
Pavement Management project. Municipal bonds will be issued in 2015 to finance this deficit in conjunction with the 2015 Pavement Management project.
26
Management’s Discussion and Analysis (continued)
The Construction Revolving Fund, a capital project fund, decreased by $10,728 and was closed
after the closeout of construction activity from previous year’s developments.
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 Street light utility, EMS (Ambulance), Water
and Sewer Utility funds totaled $15,692,528 or $848,578 less than 2013. Total net position
increased by $2,130,286, primarily due to contributed infrastructure from new developments. Decreases to the unrestricted net position of the Water and Sewer Utility funds were due to a
decrease in water usage and therefore, a reduction in related revenues resulting in operating losses
in these two funds. The EMS (Ambulance) Fund increased in both total net position and
unrestricted net position for 2014.
Budgetary Highlights
General Fund.
The General Fund original budget was revised to reflect the following significant changes:
• The intergovernmental revenue and fire department budgets were increased by $56,800 due
to State Fire Relief funds paid to the City in 2014.
• The charges for service and Mayor/Council expense budgets were both decreased by $36,250 to reflect the end of the 3M air monitoring program.
• The Police budget was increased by $10,000 for capital outlay expenses which had been
previously dedicated in the 2013 fund balance.
• The charges for service and forestry budget were decreased by $17,700 due to the reduction in tree sales to homeowners.
• Transfers out were increased by $80,889 due to the establishment of a separate Park Capital
Improvements Capital Project Fund which utilized fund balance originally dedicated from
the General Fund for Park Shelters and improvements.
The actual results were significantly different than the final budget amounts because of the
following:
• Licenses and Permits categories were $241,050 more than budgeted due to increased
commercial/institutional building permitting in 2014.
• Charges for services were $119,132 more than budgeted due to increased engineering fees
resulting from increased development activity.
• Fines revenues were $49,299 less than budgeted due to reduced revenues passed through to the City from the state and county.
• Investment income was $60,571 more than budgeted due to the recovery of most of the prior
year’s unrealized loss in the City portfolio. Interest rates also recovered slightly in 2014
resulting in more interest income.
• General government expenditures were $36,897 more than final budgeted amounts due to operational expenditures for the New City Hall facility. The 2014 budget had been prepared
with less than a year’s worth of data for the facility and actual operation costs were
underestimated.
27
Management’s Discussion and Analysis (continued)
• Public safety expenditures were $104,412 less than the final budgeted amounts due to staff
retirements and the resulting salary and benefit savings.
• Public works expenditures were $99,258 greater than final budget due to personnel costs, supplies and contractual services related to snow and ice removal across another seemingly
endless winter period.
• Culture and recreation expenditures were $30,710 more than final budget due to increased
operational costs in the Forestry division.
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, 2014, amounts to $203,225,622 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery
and equipment.
City of Cottage Grove's Capital Assets
(Net of Depreciation)
Governmental Activities Business-type Activities Total Primary Government
2014 2013 2014 2013 2014 2013
Land and land improvements $ 17,926,287 $ 17,926,287 $ 355,648 $ 356,444 $18,281,935 $18,282,731
Easements 1,157,202 1,157,202 - - 1,157,202 1,157,202
Construction in progress 606,641 3,924,613 28,909 - 635,550 3,924,613
Buildings and improvements 21,423,724 22,253,409 1,828,018 1,943,417 23,251,742 24,196,826
Equipment and furniture 282,359 371,638 - - 282,359 371,638
Machinery and equipment 4,636,672 4,399,915 686,620 559,792 5,323,292 4,959,707
Other improvements 3,037,552 2,886,949 4,682,489 3,999,637 7,720,041 6,886,586
Infrastructure:
Streets 72,199,607 69,162,942 - - 72,199,607 69,162,942
Storm sewers 23,330,305 20,817,416 - - 23,330,305 20,817,416
Sidewalks/trails 3,475,993 3,445,410 - - 3,475,993 3,445,410
Water and sewer lines - - 47,567,596 45,418,491 47,567,596 45,418,491
Ending balance $148,076,342 $146,345,781 $55,149,280 $52,277,781 $203,225,622 $198,623,562
The largest addition to capital assets in 2014 were the improvements to streets and other infrastructure due to the 70th Street and 2014 Pavement Management projects and the Cayden Glen and East Ridge Woods residential development projects.
Additional information on the City of Cottage Grove’s capital assets can be found in Note 5.
28
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 $22,501,049, a decrease of $1,466,893. $2,421,062 of the debt
outstanding is due within one year. $13,157,633 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
2014 2013
Governmental activities:
Bonds payable, net $15,657,633 $16,725,979
Capital lease payable - EDA 5,085,000 5,355,000
Capital lease payable – golf carts 73,667 108,743
Other postemployment benefits 59,343 50,438
Compensated absences 839,758 825,871
Total governmental activities 21,715,401 23,066,031
Business-type activities:
Bonds payable, net 717,221 824,586
Other postemployment benefits 8,571 7,211
Compensated absences 59,856 70,114
Total business-type activities 785,648 901,911
Total primary government $22,501,049 $ 23,967,942
The City of Cottage Grove holds a general obligation debt rating of Aa1 from Moody’s (2010 Global Ratings Scale) and of AA+/Stable from Standard and Poor’s. According to S&P, Cottage
Grove has “a strong financial profile, anchored by a very strong general fund balance; and good
management practices that have contributed to the city’s ongoing financial health.”
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Market Value. The current debt limitation for the City of Cottage Grove is $71,894,811.
Of that limit, $5,085,000 of the City's outstanding debt is counted within the statutory limitation
because all other debt is either wholly or partially repaid by revenues other than general property
tax levies. Additional information on the City of Cottage Grove’s long-term debt can be found in Note 6.
Requests for information: This financial report is designed to provide a general overview of the
City of Cottage Grove’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Finance Director, 12800 Ravine Parkway St, Cottage
Grove, Minnesota 55016.
29
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3030
BASIC FINANCIAL STATEMENTS
3131
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3232
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31, 2014
With Comparative Data as of December 31, 2013
Component Unit
Total Economic
Governmental Business-Type Primary Development
Activities Activities Government Authority 2014 2013
Assets:
Cash and investments 36,643,689$ 9,840,501$ 46,484,190$ 546,654$ 47,030,844$ 44,534,402$
Accrued interest receivable 146,187 - 146,187 57,223 203,410 183,751
Due from other governmental units - net 884,722 5,065 889,787 - 889,787 988,167
Accounts receivable - net 475,507 1,343,228 1,818,735 4,154 1,822,889 3,556,169
Prepaid items 156,897 139,735 296,632 2,560 299,192 155,516
Delinquent property taxes receivable 197,875 - 197,875 1,771 199,646 283,631
Due from county 76,605 - 76,605 - 76,605 86,663
Special assessments receivable 4,531,762 - 4,531,762 - 4,531,762 4,216,302
Inventories - at cost 94,132 - 94,132 - 94,132 120,096
Internal balances (4,998,835) 4,998,835 - - - -
Lease receivable - - - 5,085,000 5,085,000 5,355,000
Properties held for resale 267,498 - 267,498 311,718 579,216 579,216
Capital assets not being depreciated:
Land and land improvements 17,926,287 325,000 18,251,287 - 18,251,287 18,251,287
Easements 1,157,202 - 1,157,202 - 1,157,202 1,157,202
Construction in progress 606,641 28,909 635,550 - 635,550 3,924,613
Capital assets (net of accumulated depreciation):
Land improvements - 30,648 30,648 - 30,648 31,444
Buildings and improvements 21,423,724 1,828,018 23,251,742 - 23,251,742 24,196,826
Equipment and furniture 282,359 - 282,359 - 282,359 371,638
Machinery and equipment 4,636,672 686,620 5,323,292 - 5,323,292 4,959,707
Other improvements 3,037,552 4,682,489 7,720,041 - 7,720,041 6,886,586
Infrastructure 99,005,905 47,567,596 146,573,501 - 146,573,501 138,844,259
Total assets 186,552,381$ 71,476,644$ 258,029,025$ 6,009,080$ 264,038,105$ 258,682,475$
Liabilities:
Accounts payable 698,482$ 119,145$ 817,627$ 36,284$ 853,911$ 850,471$
Salaries payable 474,407 50,379 524,786 8,782 533,568 486,550
Contracts payable 193,540 1,088 194,628 - 194,628 570,447
Due to other governmental units 17,711 177,243 194,954 - 194,954 495,660
Deposits payable 707,633 4,000 711,633 2,666 714,299 343,845
Accrued interest payable 193,736 10,719 204,455 57,223 261,678 317,749
Compensated absences payable:
Due within one year 621,661 58,166 679,827 11,516 691,343 679,208
Due in more than one year 218,097 1,690 219,787 4,439 224,226 230,889
Other postemployment benefits:
Due in more than one year 59,343 8,571 67,914 700 68,614 58,173
Capital lease payable:
Due within one year 316,235 - 316,235 - 316,235 305,075
Due in more than one year 4,842,432 - 4,842,432 - 4,842,432 5,158,668
Bonds payable (net of unamortized premiums):
Due within one year 1,320,000 105,000 1,425,000 280,000 1,705,000 1,490,000
Due in more than one year 14,337,633 612,221 14,949,854 4,805,000 19,754,854 21,415,565
Total liabilities 24,000,910 1,148,222 25,149,132 5,206,610 30,355,742 32,402,300
Deferred inflows of resources:
Unavailable revenue - other 42,600 - 42,600 - 42,600 32,500
Net position:
Net investment in capital assets 127,260,042 54,432,059 181,692,101 - 181,692,101 175,609,254
Restricted for:
Forfeiture and seizure 52,175 - 52,175 - 52,175 47,609
Charitable gambling 14,300 - 14,300 - 14,300 12,383
Debt retirement 4,669,618 - 4,669,618 504,206 5,173,824 5,419,646
Tax increment purposes 2,235,339 - 2,235,339 - 2,235,339 1,958,917
Park trust activities - - - - - 242,906
Unrestricted 28,277,397 15,896,363 44,173,760 298,264 44,472,024 42,956,960
Total net position 162,508,871$ 70,328,422$ 232,837,293$ 802,470$ 233,639,763$ 226,247,675$
Primary Government Totals
Reporting Entity
3333
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3434
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF ACTIVITIES Statement 2
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Component
Unit
Operating Capital Economic
Charges For Grants and Grants and Governmental Business-Type Development
Expenses Services Contributions Contributions Activities Activities 2014 2013 Authority
Functions/Programs
Primary government:
Governmental activities:
General government 2,229,518$ 138,768$ 109,434$ -$ (1,981,316)$ -$ (1,981,316)$ (1,836,102)$ -$
Community development 946,001 989,140 - - 43,139 - 43,139 212,611 -
Economic development 545,646 1,771 350,654 429,750 236,529 - 236,529 303,081 -
Public safety 7,212,998 325,368 539,322 206,328 (6,141,980) - (6,141,980) (6,015,582) -
Public works:
Regular operations 4,627,829 1,010,695 107,271 - (3,509,863) - (3,509,863) (3,231,811) -
Construction 2,971,353 - - 8,689,330 5,717,977 - 5,717,977 5,862,107 -
Culture and recreation 5,119,093 2,448,968 438,587 76,367 (2,155,171) - (2,155,171) (1,859,420) -
Interest on long-term debt 808,642 - - - (808,642) - (808,642) (976,891) -
Total governmental activities 24,461,080 4,914,710 1,545,268 9,401,775 (8,599,327) - (8,599,327) (7,542,007) -
Business-type activities:
Street lights 867,690 658,810 - 338,847 - 129,967 129,967 (131,616) -
Cottage Grove EMS 1,412,855 1,626,320 - - - 213,465 213,465 246,382 -
Water operating 2,216,819 1,868,942 - 780,877 - 433,000 433,000 593,669 -
Sewer operating 2,428,944 2,151,756 - 664,038 - 386,850 386,850 352,442 -
Total business-type activities 6,926,308 6,305,828 - 1,783,762 - 1,163,282 1,163,282 1,060,877 -
Total primary government 31,387,388$ 11,220,538$ 1,545,268$ 11,185,537$ (8,599,327) 1,163,282 (7,436,045) (6,481,130) -
Component Unit:
Economic Development Authority 639,296$ 575,793$ -$ -$ - - - - (63,503)
Total component unit 639,296$ 575,793$ -$ -$ - - - - (63,503)
General revenues:
Property taxes 12,616,267 - 12,616,267 12,096,046 107,771
Franchise taxes 542,689 - 542,689 540,767 -
Aggregate taxes 26,236 - 26,236 26,135 -
Tax increment collections 711,628 - 711,628 939,314 -
Grants and contributions not
restricted to specific programs 83,682 - 83,682 29,060 -
Unrestricted investment earnings (loss)551,910 199,179 751,089 (195,516) 8,370
Gain on sale of capital assets 43,904 - 43,904 3,997 -
Transfers (720,742) 720,742 - - -
Special item-loan forgiveness - - - 1,020,000 -
Total general revenues, transfers, and special items 13,855,574 919,921 14,775,495 14,459,803 116,141
Change in net position 5,256,247 2,083,203 7,339,450 7,978,673 52,638
Net position - beginning 157,252,624 68,245,219 225,497,843 217,519,170 749,832
Net position - ending 162,508,871$ 70,328,422$ 232,837,293$ 225,497,843$ 802,470$
Totals
Program Revenues
Net (Expense) Revenue and
Changes in Net Position
Primary Government
3
5
3
5
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2014
With Comparative Data as of December 31, 2013
Municipal MSA
Building Construction
General Capital Project Capital Project Closed Debt
Assets:Fund Fund Fund Fund
Cash and investments 9,585,732$ 313,457$ 3,696,047$ 1,831,339$
Accrued interest receivable 146,187 - - -
Interfund receivable 287,314 - - -
Interfund loan receivable - - - 2,000,000
Due from other governmental units - net 45,173 - 433,123 -
Accounts receivable - net 27,069 - - -
Prepaid items 18,019 - - -
Inventories - at cost - - - -
Delinquent property taxes receivable 175,906 5,844 - 5,434
Due from county 76,605 - - -
Special assessments receivable:
Deferred 7,486 - 516,419 277,943
Delinquent 3,800 - 416 5,546
Special deferred - - 57,307 4,537
Property held for resale - - 267,498 -
Total assets 10,373,291$ 319,301$ 4,970,810$ 4,124,799$
Liabilities:
Accounts payable 140,965$ 24,500$ 43,998$ -$
Salaries payable 408,552 - - -
Interfund payable - - - -
Contracts payable - - 27,830 -
Due to other governmental units 12,744 - 266 -
Deposits payable 60,870 - - -
Interfund loan payable - 8,295,000 - -
Total liabilities 623,131 8,319,500 72,094 -
Deferred inflows of resources:
Unavailable revenue - property taxes 175,906 5,844 - 5,434
Unavailable revenue - special assessments 11,286 - 574,142 288,026
Unavailable revenue - intergovernmental 8,227 - 127,769 -
Unavailable revenue - other 42,600 - - -
Total deferred inflows of resources 238,019 5,844 701,911 293,460
Fund balances (deficit):
Nonspendable:
Prepaid items 18,019 - - -
Inventory - - - -
Restricted for:
Forfeiture and seizure - - - -
Charitable gambling - - - -
Debt retirement - - - -
Tax increment purposes - - - -
Park trust activities - - - -
Committed - - - -
Assigned 1,380,698 - 4,196,805 3,831,339
Unassigned:
General Fund 8,113,424 - - -
Special Revenue Fund - - - -
Capital Project Funds - (8,006,043) - -
Total fund balances (deficit)9,512,141 (8,006,043) 4,196,805 3,831,339
Total liabilities, deferred inflows of resources,
and fund balances 10,373,291$ 319,301$ 4,970,810$ 4,124,799$
3636
The accompanying notes are an integral part of these basic financial statements.
Statement 3
Pavement Pavement Construction
Management Management Revolving Other
Debt Service Capital Project Capital Project Governmental
Fund Fund Fund Funds 2014 2013
1,330,774$ -$ -$ 17,172,678$ 33,930,027$ 30,898,444$
- - - - 146,187 123,828
598,445 - - 991,739 1,877,498 642,855
- - - 3,050,000 5,050,000 5,105,000
- 358,580 - 47,846 884,722 983,020
- - - 447,878 474,947 2,086,399
- - - 8,529 26,548 23,404
- - - 24,434 24,434 31,617
6,233 - - 4,458 197,875 281,201
- - - - 76,605 86,663
2,598,474 779,580 - 255,294 4,435,196 4,011,950
5,584 - - 534 15,880 46,241
18,842 - - - 80,686 158,111
- - - - 267,498 267,498
4,558,352$ 1,138,160$ -$ 22,003,390$ 47,488,103$ 44,746,231$
5,975$ 78,639$ -$ 160,039$ 454,116$ 440,782$
- - - 42,580 451,132 412,797
- 598,445 - 1,279,053 1,877,498 642,855
- 165,710 - - 193,540 483,547
- - - 4,341 17,351 457,034
- - - 646,763 707,633 332,373
- - - 1,550,000 9,845,000 10,335,000
5,975 842,794 - 3,682,776 13,546,270 13,104,388
6,233 - - 4,458 197,875 281,201
2,622,900 779,580 - 255,828 4,531,762 4,216,302
- 42,052 - 4,999 183,047 517,383
- - - - 42,600 32,500
2,629,133 821,632 - 265,285 4,955,284 5,047,386
- - - 8,529 26,548 23,404
- - - 24,434 24,434 31,617
- - - 52,175 52,175 47,609
- - - 14,300 14,300 12,383
1,923,244 - - 216,597 2,139,841 2,042,320
- - - 2,272,496 2,272,496 2,002,632
- - - - - 242,906
- - - 329,841 329,841 416,027
- - - 17,563,037 26,971,879 24,379,976
- - - - 8,113,424 7,775,548
- - - (1,409,153) (1,409,153) (1,341,755)
- (526,266) - (1,016,927) (9,549,236) (9,038,210)
1,923,244 (526,266) - 18,055,329 28,986,549 26,594,457
4,558,352$ 1,138,160$ -$ 22,003,390$ 47,488,103$ 44,746,231$
Fund balance reported above 28,986,549$ 26,594,457$
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources, and therefore,
are not reported in the funds 147,132,457 145,360,562
Other long-term assets are not available to pay for current-period expenditures, and therefore,
are deferred in the funds 4,912,684 5,014,886
Long-term liabilities, including bonds payable, are not due and
payable in the current period and therefore are not reported in the funds.(21,857,861)(23,264,656)
Internal service funds are used by management to charge the cost of insurance to individual funds.
The assets and liabilities are included in the governmental statement of net position 3,335,042 3,547,375
Net position of governmental activities 162,508,871$ 157,252,624$
Totals
Governmental Funds
3737
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Municipal MSA
Building Construction
General Capital Project Capital Project Closed
Revenues:Fund Fund Fund Debt Fund
General property taxes 11,357,685$ 499,836$ -$ 3,918$
Franchise taxes - - - -
Aggregate taxes - - - -
Tax increment collections - - - -
Special assessments 26,697 - 214,400 155,469
Licenses and permits 904,400 - - -
Direct charges to developers - - 124,563 -
Intergovernmental 958,912 - 1,984,836 -
Charges for services 437,332 - - -
Rent - 15,696 - -
Fines and forfeits 151,701 - - -
Investment earnings (loss)120,571 2,983 29,749 24,017
Interest on interfund loan - - - 20,000
Connection charges - - - -
Park dedication fees - - - -
Other sales - - - -
Donations 26,747 - - -
Miscellaneous 44,618 91,512 - -
Total revenues 14,028,663 610,027 2,353,548 203,404
Expenditures:
Current:
General government 1,981,162 28,538 - 1,410
Community development 919,126 - - -
Economic development - - - -
Public safety 6,461,773 4,000 - -
Public works 2,381,005 - 79,105 -
Culture and recreation 1,777,405 - - -
Capital outlay:
General government - - - -
Public safety 374,020 - - -
Public works 5,213 - 827,774 -
Culture and recreation - - - -
Debt service:
Principal retirement - - - -
Capital lease payment - - - -
Interest and fiscal charges - 84,777 - -
Total expenditures 13,899,704 117,315 906,879 1,410
Revenues over (under) expenditures 128,959 492,712 1,446,669 201,994
Other financing sources (uses):
Transfers in 523,710 - 670,503 -
Transfers out (372,494) - (85,276) -
Bonds issued - - - -
Premium on debt issued - - - -
Proceeds from the sale of capital assets - - - -
Total other financing sources (uses)151,216 - 585,227 -
Net increase (decrease) in fund balance 280,175 492,712 2,031,896 201,994
Fund balance - January 1 9,231,966 (8,498,755) 2,164,909 3,629,345
Cumulative effect of change in accounting principle - - - -
Fund balance - January 1, as restated 9,231,966 (8,498,755)2,164,909 3,629,345
Fund balance - December 31 9,512,141$ (8,006,043)$ 4,196,805$ 3,831,339$
38
The accompanying notes are an integral part of these basic financial statements.
Statement 4
Pavement Pavement Construction
Management Management Revolving Other
Debt Service Capital Project Capital Project Governmental
Fund Fund Fund Funds 2014 2013
585,364$ -$ -$ 241,114$ 12,687,917$ 12,081,764$
- - - 542,689 542,689 540,767
- - - 26,236 26,236 26,135
- - - 723,304 723,304 946,847
549,303 345,080 - 35,068 1,326,017 1,575,736
- - - - 904,400 860,954
- - - 537,298 661,861 2,106,723
- 316,528 - 671,745 3,932,021 4,642,768
- - - 3,135,019 3,572,351 4,023,844
- - - 420,279 435,975 -
- - - 19,616 171,317 188,657
22,082 15,084 161 237,646 452,293 (173,267)
- - - 39,066 59,066 47,025
- - - 841,434 841,434 805,261
- - - 63,595 63,595 252,386
- - - 429,750 429,750 -
- - - 352,380 379,127 399,257
- - - 60,860 196,990 306,152
1,156,749 676,692 161 8,377,099 27,406,343 28,631,009
11,288 - - 3,311 2,025,709 2,071,272
- - - - 919,126 892,699
- - - 541,838 541,838 151,562
- - - 18,779 6,484,552 6,297,323
- 389,120 2,633 1,454,205 4,306,068 4,271,651
- - - 2,392,064 4,169,469 3,954,968
- - - - - 51,091
- - - 94,445 468,465 195,111
- 2,281,972 - 811,420 3,926,379 11,534,904
- - - 633,578 633,578 493,455
550,000 - - 1,920,000 2,470,000 950,000
- - - 305,076 305,076 293,953
324,165 - - 473,566 882,508 769,129
885,453 2,671,092 2,633 8,648,282 27,132,768 31,927,118
271,296 (1,994,400) (2,472) (271,183) 273,575 (3,296,109)
- 180,756 - 466,026 1,840,995 759,446
- - (8,256) (747,033) (1,213,059) (638,374)
- - - 1,405,000 1,405,000 7,345,000
- - - 18,461 18,461 211,507
- - - 67,120 67,120 27,195
- 180,756 (8,256) 1,209,574 2,118,517 7,704,774
271,296 (1,813,644) (10,728) 938,391 2,392,092 4,408,665
1,651,948 1,287,378 10,728 17,116,938 26,594,457 23,427,265
- - - - - (1,241,473)
1,651,948 1,287,378 10,728 17,116,938 26,594,457 22,185,792
1,923,244$ (526,266)$ -$ 18,055,329$ 28,986,549$ 26,594,457$
Totals
Governmental Funds
39
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
2014 2013
Amounts reported for governmental activities in the
statement of activities (page 35) are different because:
Net changes in fund balances - total governmental funds (page 39)2,392,092$ 4,408,665$
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated useful lives
and reported as depreciation expense. This is the amount by which capital outlays
exceeded depreciation in the current period.(1,238,277) 6,545,621
The effect of various miscellaneous transactions involving capital assets is to decrease net position
(i.e. sales, and trade-ins).(27,296) (23,198)
Special items in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. Loan forgiveness from component unit.- 1,020,000
Donations of capital assets increase net position in the statement of activities, but do not
appear in the governmental funds because they are not financial resources.3,037,468 1,065,480
Revenues in the statement of activities that do not provide current financial resources (102,202) 734,520
are not reported as revenues in the funds.
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources
to governmental funds, while the repayment of the principal of long-term debt consumes
the current financial resources of governmental funds. Neither transaction, however, has
any effect on net position. This amount is the net effect of these differences in the treatment
of long-term debt and related items.1,373,422 (6,489,882)
Internal service funds are used by management to charge the cost of insurance
to individual funds. This amount is net revenue (loss) attributable to governmental activities.(212,333) (37,751)
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.33,373 115,509
Change in net position of governmental activities (page 35)5,256,247$ 7,338,964$
40
-This Page Intentionally Left Blank-
4141
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF NET POSITION Statement 6
PROPRIETARY FUNDS
December 31, 2014
Governmental
Total Activities -
Street Light Cottage Grove Water Sewer Enterprise Internal
Fund EMS Fund Operating Operating Funds Service Funds
Assets:
Current assets:
Cash and investments 1,331,858$ 882,201$ 4,748,232$ 2,878,210$ 9,840,501$ 2,713,662$
Interfund loan receivable - - 1,962,500 2,832,500 4,795,000 -
Due from other governmental units-net - 5,065 - - 5,065 -
Accounts receivable:
Customers 83,852 483,703 226,379 334,099 1,128,033 -
Certified to County - - 98,013 98,013 196,026 -
Other 626 800 17,743 - 19,169 560
Prepaid items 159 5,600 1,792 132,184 139,735 130,349
Inventories - at cost - - - - - 69,698
Total current assets 1,416,495 1,377,369 7,054,659 6,275,006 16,123,529 2,914,269
Noncurrent assets:
Capital assets:
Land and land improvements - - 364,803 - 364,803 424,665
Buildings and improvements - - 4,101,713 - 4,101,713 928,870
Equipment and furniture - - - - - 74,232
Machinery and equipment 139,222 773,544 1,061,247 298,093 2,272,106 178,512
Other improvements 6,937,694 - - - 6,937,694 - Water and sewer lines - - 37,727,324 26,045,169 63,772,493 -
Construction in progress - - 28,909 - 28,909 -
Total capital assets 7,076,916 773,544 43,283,996 26,343,262 77,477,718 1,606,279
Less: Accumulated depreciation (2,328,325) (395,264) (13,210,171) (6,394,678) (22,328,438) (662,394)
Net capital assets 4,748,591 378,280 30,073,825 19,948,584 55,149,280 943,885
Total noncurrent assets 4,748,591 378,280 30,073,825 19,948,584 55,149,280 943,885
Total assets 6,165,086 1,755,649 37,128,484 26,223,590 71,272,809 3,858,154
Liabilities:
Current liabilities:
Accounts payable 68,282 11,362 30,841 8,660 119,145 244,366
Salaries payable 3,262 24,553 18,547 4,017 50,379 23,275
Contracts payable - - 1,088 - 1,088 -
Due to other governmental units 2,573 5,121 17,774 151,775 177,243 360
Deposits payable - 4,000 - 4,000 -
Accrued interest payable - - 10,719 - 10,719 -
Compensated absences payable 6,405 16,332 24,717 10,712 58,166 26,474
Bonds payable - current portion - - 105,000 - 105,000 -
Total current liabilities 80,522 57,368 212,686 175,164 525,740 294,475
Noncurrent liabilities:
Compensated absences payable - 646 782 262 1,690 22,874
Other postemployment benefits 405 4,703 2,632 831 8,571 1,928
Bonds payable (net of unamortized
premiums and discounts)- - 612,221 - 612,221 -
Total noncurrent liabilities 405 5,349 615,635 1,093 622,482 24,802
Total liabilities 80,927 62,717 828,321 176,257 1,148,222 319,277
Net position:
Net investment in capital assets 4,748,591 378,280 29,356,604 19,948,584 54,432,059 943,885
Unrestricted 1,335,568 1,314,652 6,943,559 6,098,749 15,692,528 2,594,992 Total net position 6,084,159$ 1,692,932$ 36,300,163$ 26,047,333$ 70,124,587 3,538,877$
Some amounts reported for business-type activities in the statement of net position are different
because certain internal service fund assets and liabilities are included with business-type activities.203,835 70,328,422$
Business-Type Activities - Enterprise Funds
4242
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 7
CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2014
Governmental
Total Activities -
Street Light Cottage Grove Water Sewer Enterprise Internal
Fund EMS Fund Operating Operating Funds Service Funds
Operating revenues:
Charges for services - user fees 494,180$ 1,604,723$ 1,793,441$ 2,137,263$ 6,029,607$ 2,812,816$
Water meter/ street light material sales 142,300 - 34,130 - 176,430 -
Insurance refunds and reimbursements - - - - - 55,234
Total operating revenues 636,480 1,604,723 1,827,571 2,137,263 6,206,037 2,868,050
Operating expenses:
Operating and maintenance:
Personal services 79,823 1,057,025 416,896 91,068 1,644,812 475,358
Commodities 91,204 106,130 317,994 6,805 522,133 751,083
Commodities - items for resale 145,987 - - - 145,987 -
Contractual services 390,631 164,321 465,145 142,603 1,162,700 231,753
Disposal:
Contractual services - MCES - - - 1,573,180 1,573,180 -
Administrative and general:
Personal services - - 31,714 32,646 64,360 1,259,345
Commodities - - 17 17 34 -
Contractual services - - 138,925 137,402 276,327 421,149
Depreciation 155,472 64,206 808,657 437,734 1,466,069 45,414
Total operating expenses 863,117 1,391,682 2,179,348 2,421,455 6,855,602 3,184,102
Operating income (loss)(226,637) 213,041 (351,777) (284,192) (649,565) (316,052)
Nonoperating revenues (expenses):
Investment earnings 27,446 12,831 68,571 40,320 149,168 40,551
Interest on interfund debt - - 21,685 28,326 50,011 -
Miscellaneous 22,330 21,597 41,371 14,493 99,791 12,005
Debt service:
Interest - - (23,623) - (23,623) -
Total nonoperating revenues (expenses)49,776 34,428 108,004 83,139 275,347 52,556
Income (loss) before
contributions and transfers (176,861) 247,469 (243,773) (201,053) (374,218) (263,496)
Capital contributions 525,813 - 1,559,592 1,047,035 3,132,440 4,080
Transfer to General Fund (45,850) (94,680) (166,550) (181,610) (488,690) -
Transfer to Capital Project Fund (26,541) - (47,210) (65,495) (139,246) -
Total transfers (72,391) (94,680) (213,760) (247,105) (627,936) -
Change in net position 276,561 152,789 1,102,059 598,877 2,130,286 (259,416)
Net position - January 1 5,807,598 1,540,143 35,198,104 25,448,456 67,994,301 3,798,293
Net position - December 31 6,084,159$ 1,692,932$ 36,300,163$ 26,047,333$ 70,124,587$ 3,538,877$
Change in net position reported above 2,130,286
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (47,083)
Change in net position of business-type activities (page 35)2,083,203$
Business-Type Activities - Enterprise Funds
43
The accompanying notes are an integral part of these basic financial statements.
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF CASH FLOWS Statement 8
PROPRIETARY FUNDS
For The Year Ended December 31, 2014
Governmental
Total Activities -
Street Light Cottage Grove Water Sewer Enterprise Internal
Fund EMS Fund Operating Operating Funds Service Funds
Cash flows from operating activities:
Receipts from customers and users 642,161$ 1,620,400$ 1,872,689$ 2,189,939$ 6,325,189$ -$
Receipts from interfund services provided - - - - - 2,812,816
Receipts from insurance refunds and reimbursements - - - - - 55,234
Payment to suppliers (552,379) (274,293) (1,019,258) (1,848,800) (3,694,730) (1,362,433)
Payment to employees (80,003) (1,055,922) (452,348) (124,746) (1,713,019) (1,717,735)
Miscellaneous revenue 22,330 21,597 41,371 14,493 99,791 12,005
Net cash flows from operating activities 32,109 311,782 442,454 230,886 1,017,231 (200,113)
Cash flows from noncapital financing activities:
Transfers out (72,391) (94,680) (213,760) (247,105) (627,936) -
Net cash flows from
noncapital financing activities (72,391) (94,680) (213,760) (247,105) (627,936) -
Cash flows from capital and related
financing activities:
Acquisition of capital assets (305,552) (175,006) (724,571) - (1,205,129) -
Interest paid on debt - - (27,300) - (27,300) -
Principal paid on debt - - (105,000) - (105,000) -
Net cash flows from capital
and related financing activities (305,552) (175,006) (856,871) - (1,337,429) -
Cash flows from investing activities:
Investment earnings 27,446 12,831 68,571 40,320 149,168 40,551
Interest on interfund loan - - 21,685 28,326 50,011 -
Payment received on interfund loan - - 435,000 - 435,000 -
Net cash flows from investing activities 27,446 12,831 525,256 68,646 634,179 40,551
Net increase (decrease) in cash and cash equivalents (318,388) 54,927 (102,921) 52,427 (313,955) (159,562)
Cash and cash equivalents - January 1 1,650,246 827,274 4,851,153 2,825,783 10,154,456 2,873,224
Cash and cash equivalents - December 31 1,331,858$ 882,201$ 4,748,232$ 2,878,210$ 9,840,501$ 2,713,662$
Reconciliation of operating income/(loss) to net cash
from operating activities:
Operating income (loss) (226,637)$ 213,041$ (351,777)$ (284,192)$ (649,565)$ (316,052)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 155,472 64,206 808,657 437,734 1,466,069 45,414
Miscellaneous revenue 22,330 21,597 41,371 14,493 99,791 12,005
Changes in assets and liabilities:
Decrease (increase) in receivables 5,681 15,677 52,590 52,676 126,624 (560)
Decrease (increase) in prepaid items (159) (260) (44) (132,184) (132,647) (6,825)
Decrease (increase) in inventory 19,074 - - - 19,074 (293)
(Decrease) increase in payables 56,348 (2,479) (108,343) 142,359 87,885 66,198
Total adjustments 258,746 98,741 794,231 515,078 1,666,796 115,939
Net cash flows from operating activities 32,109$ 311,782$ 442,454$ 230,886$ 1,017,231$ (200,113)$
Noncash investing, capital and financing activities:
Capital asset contributions from governmental activities 186,966$ -$ 778,715$ 382,997$ 1,348,678$ 4,080$
Capital asset contributions from developers 338,847 - 780,877 664,038 1,783,762 -
Loss on disposal of capital asset - 5,151 - - 5,151 -
Business-Type Activities - Enterprise Funds
44
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Cottage Grove was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of
government. The governing body consists of a five member City Council elected by voters of the City. The financial statements of the City of Cottage Grove have been prepared in conformity with U.S. generally accepted
accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Cottage Grove (the primary government) and its component unit. The component unit discussed below is included in the City’s reporting entity because of the significance of its operational and financial relationship with the City.
COMPONENT UNIT
The Economic Development Authority (EDA) is considered a component unit of the City because the Council appoints the members of the governing authority and because the EDA is in a relationship of financial 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 government’s basic financial statements. The EDA is reported in a separate column to emphasize that it is legally separate from the City. The
component unit activity is reported on the modified accrual basis of accounting. Separate financial statements are not prepared for the EDA.
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
In the government-wide statement of net 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) restricted net position; and (3) unrestricted 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 expenses are those that are clearly identifiable with a specific function or business-type activity. Program revenues include 1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
45
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized
as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter
to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
The Municipal Building Capital Project Fund accounts for the accumulation of resources and construction or remodeling costs of municipal buildings and facilities.
The MSA Construction Capital Project Fund accounts for projects related to Municipal State Aids.
The Closed Debt Fund accounts for the accumulation of residual resources from debt funds that have been closed
as the associated debt has been satisfied.
The Pavement Management Debt Service Fund accounts for debt service payments used to finance the City’s various pavement management projects. Revenue is accumulated from both special assessments and property
taxes.
The Pavement Management Capital Project Fund accounts for pavement management construction projects.
The Construction Revolving Capital Project Fund accounts for new development construction projects that are financed by developers.
The government reports the following major proprietary funds:
The Street Light Fund accounts for customer street light and service charges which are used to finance street light
operating expenses.
The Cottage Grove EMS Fund accounts for the operation of the Cottage Grove ambulance service that serves the cities of Cottage Grove, Newport, Saint Paul Park, and Grey Cloud Island.
46
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
The Water Operating fund accounts for customer water service charges which are used to finance water operating expenses.
The Sewer Operating fund accounts for customer sewer service charges which are used to finance sewer operating expenses.
Additionally, the government reports the following fund type: Internal service funds account for the City’s self-insurance, fleet maintenance, and information services provided
to other departments of the government 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 external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Cottage Grove. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general
revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the water, sewer, ambulance, and street light enterprise funds are charges to customers for sales and services. The ambulance fund operating revenues are net of
write off’s mandated by various government agencies (including Medicare and Medicaid). Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed.
D. BUDGETS
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual appropriated budgets are adopted for the General and Special Revenue Funds.
Budgeted amounts are reported as originally adopted, and as amended by the City Council. Individual amendments
were not material in relation to the original appropriations which were adjusted. Budgeted expenditure appropriations can be carried forward to the next budget year subject to City Council approval.
E. LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them.
2. The City Council reviews the proposed budget and makes appropriate changes.
3. Per Statute, public meetings are held to receive taxpayer comments.
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CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
4. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts.
5. The City Administrator is authorized to transfer appropriations within any department budget up to $1,000. Additional interdepartmental or interfund appropriations and deletions are authorized by the City Council with expenditure reductions, fund (contingency) reserves or additional revenues.
6. Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue Funds, certain Capital Project Funds, Enterprise Funds and the Internal Service Fund. The
General Fund and Special Revenue Funds are the only funds with legally adopted annual budgets.
7. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service
Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These debt service and budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements.
8. A capital improvement program is reviewed annually by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements.
9. Expenditures may not legally exceed budgeted appropriations at the total fund level. The legal level of budgetary control is at the expenditure category level (i.e., personal services, commodities, contractual services and capital
outlay) within each activity. All amounts over budget have been approved by the City Council through the disbursement approval process. 10. The City Council may authorize transfers of budgeted amounts between City funds.
The following is a listing of expenditure categories that exceed budget appropriations for non-major funds: Final Budget Actual Over Budget
Nonmajor Funds: Special Revenue Funds:
Recycling: Public works:
Personnel services $ 26,700 $ 30,265 $ 3,565 Commodities - 8,979 8,979
Contractual services 23,674 28,842 5,168 Storm Water Maintenance:
Public works: Personnel services 232,295 234,418 2,123
Ice Arena: Culture and recreation:
Commodities 31,150 35,466 4,316 Contractual services 289,760 378,905 89,145
Golf: Culture and recreation:
Debt Service: Interest and fiscal charges 2,900 3,124 224
48
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments.
Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool.
The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received.
Investments are stated at fair value, based upon quoted market prices as of the balance sheet date.
For purposes of the statement of cash flows for the proprietary funds, cash equivalents are considered to be all highly liquid investments with a maturity of three months or less when purchased. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. Therefore, the entire balances in such funds are considered cash equivalents.
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, 2014 are planned to be eliminated in 2015. Long-term interfund loans are classified as “interfund loan receivable/payable.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”
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
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 inflows of resources because they are not available to finance current expenditures.
49
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
I. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment
improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often
do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full
payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax 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 inflows of resources.
J. INVENTORIES Inventories are stated at cost, which approximates market, using the first-in, first-out (FIFO) method and consist of items for resale, expendable supplies, and vehicle repair parts. The cost of such inventories is recorded as
expenditures/expenses when consumed rather than when purchased in both government-wide and fund financial statements.
K. PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items are recorded as expenditures/expenses when consumed rather than when purchased.
L. ALLOWANCE FOR UNCOLLECTIBLE
The City directly bills individuals for ambulance services. The City reserves an amount as uncollectible based on historical collection rates. The amounts of the estimated uncollectible ambulance billings to individuals as of December 31, 2014 were $330,900.
50
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
M. PROPERTIES HELD FOR RESALE Property is acquired by the City for redevelopment purposes and subsequent resale. Properties held for resale is
reported as an asset at the lower of cost or estimated fair value. Fair value estimates have been based on estimated realizable sales proceeds net of selling expenses.
N. CAPITAL ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Infrastructure assets have been capitalized retroactively to 1980. Capital assets are defined
by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repair which 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, 2014, no interest was capitalized in connection with construction in progress.
Capital assets not being depreciated include land, easements and construction in progress. Property, plant and equipment of the primary government, as well as the component units, is depreciated using the straight-line method over the following estimated useful lives: Assets Years
Buildings and improvements 20-50
Equipment and furniture 3-10 Machinery and equipment 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.
O. DEFERRED INFLOWS OF RESOURCES
In addition to liabilities, the statement of financial position and Fund Financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until
that time. The City presents deferred inflows of resources on the Governmental Fund Balance Sheet as unavailable revenues.
51
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
P. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused annual leave benefits. Under the City’s
personnel policies and collective bargaining agreements, city employees are granted annual leave benefits in varying amounts based on length of service. Annual Leave accruals vary from 18 to 26 days per year.
As benefits accrue to employees, the accumulated leave amounts are reported as an expense and liability in the proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance with the provisions
of GASB 16, Accounting for Compensated Absences, no liability is recorded for non-vesting accumulating rights to receive accumulated leave benefits. However, a liability is recognized for that portion of accumulating leave benefits that is vested as severance pay.
Q. LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums are deferred and amortized over the life
of the bonds. In the fund financial statements, governmental fund types recognize bond premiums 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. Issuance costs whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
R. FUND BALANCE
In the fund financial statements, governmental 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 and inventory.
Restricted – Amounts related to externally 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 commitment by resolution. Assigned – Amounts constrained for specific purposes that are internally imposed. The Council has adopted a fund balance policy which delegates the authority to assign fund balances to the City Administrator and/or Finance
Director. 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 expenditures 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 expenditures to provide sufficient working capital
and margin of safety to address local emergencies without borrowing. 52
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
S. NET POSITION Net position represents the difference between assets and liabilities and deferred inflows of resources in the
government-wide financial statements. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net position is reported as restricted in the government-wide financial statement when there are limitations on use through
external restrictions imposed by creditors, grantors or laws or regulations of other governments.
T. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that
constitute reimbursements to a fund for expenditures/expenses initially made from it are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers.
U. 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. V. 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 GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET POSITION The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds
and net position – governmental activities as reported in the government-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 $(21,857,861) difference are as follows:
Bonds payable $ (15,400,000) Capital leases payable (5,158,667)
Accrued interest payable (193,736) Compensated absences payable (790,410)
Other post employment benefits (57,415)
Unamortized premium on bonds (257,633)
Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities $ (21,857,861)
53
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation
expense.” The details of this $(1,238,277) difference are as follows:
Capital outlay $ 3,041,724
Depreciation expense (4,280,001)
Net adjustment to increase net changes in fund
balances - total governmental funds to arrive at changes in net position of governmental activities $ (1,238,277)
Another element of that reconciliation states that “revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.” The details of this $(102,202) difference
are as follows: General property taxes: At December 31, 2013 $ (281,201)
At December 31, 2014 197,875
Special assessments: At December 31, 2013 (4,216,302)
At December 31, 2014 4,531,762
Intergovernmental: At December 31, 2013 (517,383)
At December 31, 2014 183,047
Net adjustments to increase net changes in fund balances -
total governmental funds to arrive at changes in net position of governmental activities $ (102,202)
54
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the long-term debt consumes the current financial resources of governmental funds.” Neither transaction, however, has any effect on net position.
The details of this $1,373,422 difference are as follows:
Debt issued: Issuance of general obligation bonds $ (1,405,000) Plus premium on debt issued (18,461)
Principal repayments: General obligation debt 2,470,000
Capital leases 305,076
Amortization of deferred premiums 21,807
Net adjustments to increase net changes in fund balances - total governmental funds
to arrive at changes in net position of governmental activities $ 1,373,422
Another element of that reconciliation states that “some expenses reported in the statement of activities do not
require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this $33,373 difference are as follows:
Compensated absences:
At December 31, 2013 $ 780,258 At December 31, 2014 (790,410)
Accrued interest:
At December 31, 2013 245,795 At December 31, 2014 (193,736)
Other post employment benefits
At December 31, 2013 48,881 At December 31, 2014 (57,415)
Net adjustment to increase net changes in fund balances - total governmental funds to arrive at
changes in net position of governmental activities $ 33,373
55
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 3 DEPOSITS AND INVESTMENTS
A. DEPOSITS
The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this
pool is displayed on the statement of net 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 – deposits beyond the requirements of state statutes. As of December 31, 2014, 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. government treasury bills, notes, or bonds; issues of a U.S. government
agency; general obligations of a state or local government rated “A” or better; revenue obligations of a state or local government rated “AA” or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time
deposits insured by a federal agency. Minnesota statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial bank or
other financial institution not owned or controlled by the depository.
B. INVESTMENTS
Minnesota Statutes and the City’s investment policy authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk.
b) General Obligations of the State of Minnesota or any of its municipalities as follow: 1) general obligation of any state or local government with taxing powers which is rated “A” or better
by a national bond rating service; 2) revenue obligation of any state or local government with taxing powers which is rated “AA” or
better by a national bond rating service; and 3) general obligation of the Minnesota Housing Finance Agency rated “A” or better by a national bond
rating agency. c) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
d) Commercial paper of the highest quality (A1, P1), and maturing in 270 days or less. e) Repurchase agreements from national or state banks that are members of the Federal Reserve System with
capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York.
f) Certificates of Deposit collateralized by FDIC or FSLIC insurance. Deposits exceeding $250,000 insurance shall be covered by a surety bond or collateralized with U.S. Treasury or agency securities computed at
market value which shall be at least 10% more than the amount of each deposit in excess of the insured portions. All collateral shall be assigned to the City from the depository.
g) Shares of mutual funds holdings pursuant to M.S. 118A.04. The City participates in the Minnesota Municipal Money Market Fund (4M Fund) whereby, the fair market value of the position in the pool is the same as the
value of the pool shares owned.
56
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Interest rate risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City’s formal investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The policy also states that no more than 25% of total
investments should extend beyond five years and in no circumstance should any extend beyond ten years. Total Fair Investment maturities in Years Credit Risk
Investment type Market Value Less than 1 1 – 5 More than 5 Rating Agency
U.S. Agencies Federal Home Loan Bank-FHLB $ 5,958,190 $ - $ 3,495,065 $ 2,463,125 AA/Aaa S&P/Moody’s Fannie Mae–FNMA 8,701,133 - 8,701,133 - AA/Aaa S&P/Moody’s Freddie Mac-FHLMC 2,253,160 - 2,253,160 - AA/Aaa S&P/Moody’s Federal Farm Credit Bank 2,580,520 - 2,580,520 - AA/Aaa S&P/Moody’s
U.S. Treasury Securities 1,001,640 - 1,001,640 - NR N/A Term Series Investment Pool 500,000 500,000 - - NR N/A Commercial Paper 2,250,000 2,250,000 - - A1/P1 S&P/Moody’s
Municipal Obligations 4,601,234 1,442,620 3,158,614 - AA/Aa S&P/Moody’s Negotiable CD’s 15,573,508 7,599,190 7,974,318 - NR N/A
Total Investments 43,419,385 $ 11,791,810 $ 29,164,450 $ 2,463,125
Money Markets 2,391,046
Deposits 1,208,653 Petty Cash and Change 11,760
Total Cash and Investments $ 47,030,844
NR indicates “not rated” N/A indicates “not applicable
Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of failure of the depository financial
institution, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The City has no custodial credit risk for its investments since all the City’s investments held in safekeeping
by U.S. Trust in the City’s name are insured and registered.
Credit Risk – Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. As indicated previously, Minnesota statute requires Commercial paper to be of the highest quality (A1, P1) and
municipal general obligations need an “A” rating or better.
Concentration of Credit Risk – The City’s investment policy places no limit on the amount that may be invested in any one issuer. The following is a list of investments by issuer which individually comprise more than 5 percent of
the City’s total investments:
Credit
Type Amount Percent
Federal Home Loan Bank - FHLB $ 5,958,190 14%
Fannie Mae - FNMA 8,701,133 20%
Freddie Mac - FHLMC 2,253,160 5%
Federal Farm Credit Bank 2,580,520 6%
57
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 4 RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2014 are as follows:
Special Delinquent Certified
Assessment Property to
Receivable Taxes County Total
Primary government:
Major funds:
General Fund $ 6,883 $ 106,300 $ - $ 113,183
Municipal Building Capital Project Fund - 3,500 - 3,500
MSA Construction Capital Project Fund 517,613 - - 517,613
Closed Debt Fund 252,575 3,300 - 255,875
Pavement Management Debt Service Fund 2,335,163 3,700 - 2,338,863
Pavement Manage. Capital Project Fund 694,837 - - 694,837
Nonmajor funds 227,543 2,700 - 230,243
Major Business-Type funds:
Water Operating fund - - 57,965 57,965
Sewer Operating fund - - 57,935 57,935
Total primary government 4,034,614 119,500 115,900 4,270,014
Component unit:
Economic Development Authority - 1,100 - 1,100
Total reporting entity $ 4,034,614 $ 120,600 $ 115,900 $ 4,271,114
Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of
deferred inflows and unearned revenue reported in the governmental funds were as follows:
Property
Taxes
Special
Assessments
Intergovernmental
Miscellaneous
Licenses
Total
Primary government: Major funds:
General Fund $ 175,906 $ 11,286 $ 8,227 $ 42,600 $ 238,019 Municipal Building Capital Project Fund 5,844 - - - 5,844
MSA Construction Capital Project Fund - 574,142 127,769 - 701,911 Closed Debt Fund 5,434 288,026 - - 293,460
Pavement Management Debt Service Fund 6,233 2,622,900 - - 2,629,133 Pavement Manage. Capital Project Fund - 779,580 42,052 - 821,632
Nonmajor funds 4,458 255,828 4,999 - 265,285
Total primary government 197,875 4,531,762 183,047 42,600 4,955,284
Component unit: Economic Development Authority 1,771 - - - 1,771
Total reporting entity $ 199,646 $ 4,531,762 $ 183,047 $ 42,600 $ 4,957,055
58
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 5 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2014 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Primary Government
Governmental activities:
Capital assets, not being depreciated:
Land $ 17,926,287 $ - $ - $ 17,926,287
Permanent easements 1,157,202 - - 1,157,202
Construction in progress 3,924,613 3,380,275 (6,698,247) 606,641
Total capital assets, not being depreciated 23,008,102 3,380,275 (6,698,247) 19,690,130
Capital assets, being depreciated:
Buildings and improvements 35,902,054 - (100,000) 35,802,054
Equipment and furniture 1,347,083 - (10,211) 1,336,872
Machinery and equipment 10,240,508 970,307 (414,403) 10,796,412
Other improvements 5,808,318 387,861 (15,000) 6,181,179
Infrastructure:
Streets 87,236,268 4,830,127 - 92,066,395
Storm sewers 26,397,704 2,619,347 - 29,017,051
Sidewalks/trails 4,688,362 589,522 - 5,277,884
Total capital assets being Depreciated 171,620,297 9,397,164 (539,614) 180,477,847
Less accumulated depreciation for:
Buildings and improvements 13,648,645 829,685 (100,000) 14,378,330
Equipment and furniture 975,445 89,279 (10,211) 1,054,513
Machinery and equipment 5,840,593 711,083 (391,936) 6,159,740
Other improvements 2,921,369 236,508 (14,250) 3,143,627
Infrastructure:
Streets 18,073,326 1,793,462 - 19,866,788
Storm sewers 5,580,288 106,458 - 5,686,746
Sidewalks/trails 1,242,952 558,939 - 1,801,891
Total accumulated depreciation 48,282,618 4,325,414 (516,397) 52,091,635
Total capital assets, being depreciated, net 123,337,679 5,071,750 (23,217) 128,386,212
Governmental activities capital assets, net $ 146,345,781 $ 8,452,025 $ (6,721,464) $ 148,076,342
59
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Beginning Ending
Primary Government Balance Increases Decreases Balance
Business-type activities:
Capital assets, not being depreciated:
Land $ 325,000 $ - $ - $ 325,000
Construction in progress - 28,909 - 28,909
Total capital assets, not being depreciated 325,000 28,909 - 353,909
Capital assets, being depreciated:
Land improvements 39,803 - - 39,803
Buildings and improvements 4,101,713 - - 4,101,713
Machinery and equipment 2,215,822 251,057 (194,773) 2,272,106
Other improvements 6,106,329 831,365 - 6,937,694
Water and sewer lines 60,541,105 3,231,388 - 63,772,493
Total capital assets, being depreciated 73,004,772 4,313,810 (194,773) 77,123,809
Less accumulated depreciation for:
Land improvements 8,359 796 - 9,155
Buildings and structures 2,158,296 115,399 - 2,273,695
Machinery and equipment 1,656,030 119,078 (189,622) 1,585,486
Other improvements 2,106,692 148,513 - 2,255,205
Water and sewer lines 15,122,614 1,082,283 - 16,204,897
Total accumulated depreciation 21,051,991 1,466,069 (189,622) 22,328,438
Total capital assets being depreciated - net 51,952,781 2,847,741 (5,151) 54,795,371
Business-type activities capital assets - net $52,277,781 $ 2,876,650 $ (5,151) $55,149,280
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government $ 182,967
Community development 10,939
Public safety 614,603
Public works 2,757,335
Culture and recreation 759,570
Total depreciation expense governmental activities $ 4,325,414
Business-type activities:
Street lights $ 155,472
Cottage Grove EMS 64,206
Water operating 808,657
Sewer operating 437,734
Total depreciation expense before transfer $ 1,466,069
60
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 6 LONG-TERM DEBT A. GENERAL OBLIGATION DEBT The City issues general obligation bonds to provide funds for the acquisition and construction of major capital improvements. The City issues special assessment bonds to finance various improvements and will be repaid primarily
from special assessments levied on the properties benefiting from the improvements. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. As of December 31, 2014, the governmental long-term debt of the financial reporting entity
consisted of the following:
Final
Interest Issue Maturity Original Payable
Rate Date Date Issue 12/31/2014
Primary government:
GOVERNMENTAL ACTIVITIES
General Obligation Tax Increment Bonds:
GO Tax Increment Bonds of 2004A 3.0-4.65% 7/1/2004 2/1/2024 $ 1,405,000 $ 1,095,000 GO Tax Increment Refunding Bonds of 2014A 2.0-2.50% 5/29/2014 2/1/2021 1,405,000 1,405,000 Total General Obligation Tax Increment Bonds 2,810,000 2,500,000
Special Assessment Bonds with Government Commitment:
GO Improvement Bonds of 2008A 3.5-3.6% 6/11/2008 2/1/2019 3,370,000 1,335,000 GO Improvement Bonds of 2009A 2.5-4.3% 4/16/2009 2/1/2024 3,650,000 2,390,000 GO Improvement Refunding Bonds of 2009C 2.0-3.0% 4/16/2009 12/1/2015 625,000 205,000 GO Improvement Bonds of 2012A .30-2.2% 3/13/2012 2/1/2027 1,865,000 1,625,000
GO Improvement Bonds of 2013A 3.0%-3.5% 9/26/2013 2/1/2029 7,345,000 7,345,000
Total Special Assessment Bonds 16,855,000 12,900,000
Bond premium - 257,633
Total Governmental Activities Bonds 19,665,000 15,657,633
Capital lease payable - EDA component unit 6,500,000 5,085,000 Capital lease payable – golf carts 176,039 73,667 Other postemployment benefits - 59,343 Compensated absences payable - 839,758 Total City indebtedness - governmental activities 26,341,039 21,715,401
BUSINESS TYPE ACTIVITIES Revenue bonds: GO Water Revenue Refunding Bonds of 2009B 2.5-4% 4/16/2009 2/1/2020 1,205,000 705,000 Bond premium - 12,221
Total Revenue Bonds 1,205,000 717,221 Other postemployment benefits - 8,571
Compensated absences payable - 59,856
Total City indebtedness - business type activities 1,205,000 785,648 Total City indebtedness - primary government $ 27,546,039 $ 22,501,049
Component Unit: EDA:
Lease-Purchase Revenue Bonds of 2008B 4.0-4.90% 6/11/2008 4/1/2028 $ 6,500,000 $ 5,085,000 Other postemployment benefits - 700 Compensated absences payable - 15,955 Total indebtedness - component unit $ 6,500,000 $ 5,101,655
61
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Annual debt service requirements to maturity for general obligation bonds are as follows:
Tax Increment Bonds Special Assessment Bonds
Year Ending Governmental Activities Governmental Activities
December 31 Principal Interest Principal Interest
2015 $ 205,000 $ 81,704 $ 1,115,000 $ 384,003
2016 210,000 71,710 1,010,000 350,178
2017 225,000 66,520 1,040,000 319,811
2018 240,000 61,030 1,065,000 288,075
2019 260,000 55,190 1,100,000 254,409
2020 275,000 48,820 835,000 224,367
2021 265,000 41,540 850,000 198,683
2022 255,000 31,872 870,000 172,070
2023 275,000 19,810 895,000 144,345
2024 290,000 6,743 915,000 115,518
2025 - - 675,000 91,340
2026 - - 695,000 71,725
2027 - - 640,000 51,714
2028 - - 585,000 31,587
2029 - - 610,000 10,675
Total $ 2,500,000 $ 484,939 $ 12,900,000 $ 2,708,500
Revenue Bonds Revenue Bonds
Year Ending Business-Type Activities Component Unit
December 31 Principal Interest Principal Interest
2015 $ 105,000 $ 24,150 $ 280,000 $ 223,292
2016 110,000 20,650 290,000 211,892
2017 115,000 16,712 300,000 199,942
2018 120,000 12,450 310,000 187,360
2019 125,000 7,700 320,000 174,288
2020 130,000 2,600 335,000 160,697
2021 - - 350,000 145,871
2022 - - 365,000 129,601
2023 - - 380,000 112,370
2024 - - 395,000 94,252
2025 - - 410,000 75,233
2026 - - 430,000 55,176
2027 - - 450,000 33,943
2028 - - 470,000 11,515
Total $ 705,000 $ 84,262 $ 5,085,000 $ 1,815,432
It is not practicable to determine the specific year for payment of long-term accrued compensated absences.
Current Refunding
On May 29, 2014 the City issued $1,405,000 Taxable General Obligation Tax Increment Bonds, Series 2014A with an average interest rate of 1.8679% for a current refunding of the 2014-2021 maturities of the City’s $1,775,000 Series 2004B
bonds. The average interest rate on the 2004B bonds was 6.1182% net proceeds of $1,419,948 were used to retire all outstanding principal of the refunded bonds on July 1, 2014. This refunding reduced total debt service over the seven year
period by $168,940 or $157,053 when discounted to present value.
62
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
B. CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 31, 2014, was as follows:
Beginning Balance Additions Reductions Ending Balance Due Within One Year
Primary Government:
Governmental activities:
Bonds payable:
General obligation bonds $ 2,600,000 $ 1,405,000 $ (1,505,000) $ 2,500,000 $ 205,000
Special assessment bonds 13,865,000 - (965,000) 12,900,000 1,115,000
Bond premiums 260,979 18,461 (21,807) 257,633 -
Total bonds payable 16,725,979 1,423,461 (2,491,807) 15,657,633 1,320,000
Capital lease payable-EDA component unit 5,355,000 - (270,000) 5,085,000 280,000
Capital lease payable-golf carts 108,743 - (35,076) 73,667 36,235
Other postemployment benefits 50,438 8,905 - 59,343 -
Compensated absences payable 825,871 691,136 (677,249) 839,758 621,661
Total government activities 23,066,031 2,123,502 (3,474,132) 21,715,401 2,257,896
Business-type activities:
Bonds payable:
Revenue bonds 810,000 - (105,000) 705,000 105,000
Bond premiums 14,586 - (2,365) 12,221 -
Total bonds payable 824,586 - (107,365) 717,221 105,000
Other postemployment benefits 7,211 1,360 - 8,571 -
Compensated absences payable 70,114 89,769 (100,027) 59,856 58,166
Total business-type activities 901,911 91,129 (207,392) 785,648 163,166
Total primary government $ 23,967,942 $ 2,214,631 $ (3,681,524) $ 22,501,049 $ 2,421,062
Component Unit:
Bonds payable:
Revenue bonds $ 5,355,000 $ - $ (270,000) $ 5,085,000 $ 280,000
Total bonds payable 5,355,000 - (270,000) 5,085,000 280,000
Other postemployment benefits 524 176 - 700 -
Compensated absences payable 14,112 8,979 (7,136) 15,955 11,516
Total component unit $ 5,369,636 $ 9,155 $ (277,136) $ 5,101,655 $ 291,516
For the governmental activities, capital leases, other postemployment benefits and compensated absences are
generally liquidated by the general fund.
63
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
All long-term bonded indebtedness outstanding at December 31, 2014 is backed by the full faith and credit of the City, including special assessment and revenue bond issues. Delinquent assessments receivable at December 31, 2014 totaled $15,880.
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 $6,500,000 of revenue bonds and the proceeds were used by the
City to finance the expansion. The lease qualifies as a capital lease for accounting purposes, and therefore, the
construction costs have been capitalized in the primary government.
In 2012, the City entered into a lease agreement for the purchase of 75 golf carts. 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:
Ice Arena
Expansion
Golf Carts
Building and improvements $ 6,943,038 $ 176,039
Less: accumulated depreciation (1,492,010) (62,871)
$ 5,451,028 $ 113,168
The following is a schedule of future minimum lease payments under the capital lease:
Governmental Activities
Year Ice Arena
Expansion
Golf Course
Machinery 2015 $ 503,292 $ 38,201 2016 501,892 38,201
2017 499,942 - 2018 497,360 -
2019 494,288 - 2020-2024 2,467,791 -
2025-2028 1,935,867 -
Total minimum lease payments 6,900,432 76,402 Less amount
representing interest 1,815,432 2,735
Present value of minimum lease payments $ 5,085,000 $ 73,667
64
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 7 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property
taxes. The limitation was 3 % of taxable market value in 2013 and 2014. The City of Cottage Grove's legal debt margin for 2014 and 2013 is computed as follows:
December 31, 2014 December 31, 2013
Market Value (after fiscal disparities) $ 2,396,493,700 $ 2,277,900,700 Debt Limit 71,894,811 68,337,021 Amount of debt applicable to debt limit:
Total bonded debt $21,190,000 $22,630,000 Less: Special assessment bonds (12,900,000) (13,865,000)
Proprietary bonds (705,000) (810,000)
Tax increment bonds (2,500,000) (2,600,000) Total debt applicable to debt limit $5,085,000 $5,355,000
Legal debt margin $ 66,809,811 $ 62,982,021
Note 8 PENSION PLANS
A. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) - DEFINED BENEFIT Plan Description
All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees
Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356.
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All
police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by state statute, and vest after five years of credited service. The defined
retirement benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service.
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10
years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is
1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan
members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all GERF members and PEPFF members hired prior to July 1, 1989, whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equals 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced
Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is available to eligible members seeking early retirement.
65
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
There are different types of annuities available to members upon retirement. A single-life annuity is a lifetime annuity that ceases upon the death of the retiree- no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions
in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to
PERA, at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute
9.1% and 6.25%, respectively, of their annual covered salary in 2014. PEPFF members were required to contribute 10.2% of their annual covered salary in 2014. The City of Cottage Grove is required to contribute the following
percentages of annual covered payroll: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members, and 15.3% for PEPFF members. The City’s contributions to the Public Employees Retirement Fund for the years ending December 31, 2014, 2013 and 2012 were $384,378, $366,774 and $335,345, respectively. The City’s contributions to the Public Employees Police & Fire Fund for the years ending December 31, 2014, 2013 and 2012 were $604,030,
$547,617 and $518,441 respectively. The City’s contributions were equal to the contractually required contributions for each year as set by state statute. Contribution rates will increase on January 1, 2015 in the Coordinated Plan (6.5% for members and 7.5% for employers) and the PEPFF (10.8% for members and 16.2% for employers).
B. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) - DEFINED CONTRIBUTION Plan Description
Five council members of the City of Cottage Grove are covered by the defined contribution pension plan (PEDCP), a multiple-employer deferred compensation plan administered by the Public Employees Retirement Association of Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses.
Minnesota Statutes, Chapter 353D.03, specifies the employee and employer contribution rates for those qualified
personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For
administering the plan, PERA receives 2 percent of employer contributions and twenty-five hundredths of one percent of the assets in each member's account annually.
Total contributions made by the City during fiscal year 2014 were: Amount Percentage of Covered Payroll Required
Employees Employer Employees Employer Rates PEDCP $1,139 $1,139 5.00% 5.00% 5.00%
66
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
C. COTTAGE GROVE FIRE RELIEF ASSOCIATION Plan Description
The Volunteer Firefighters of the City of Cottage Grove are members of the Cottage Grove Fire Relief Association. The Cottage Grove Fire Relief Association is the administrator of a single employer defined benefit pension plan
established to provide benefits for members of the Cottage Grove Fire Department. The plan is established and administered in accordance with Minnesota Statute, Chapter 69.
The Relief Association provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established in accordance with State Statute, and vest after ten years of credited service. The defined retirement benefits are based on a member’s years of service. Benefit provisions can
be amended by the Relief Association within the parameters provided by State Statutes. The Relief Association issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to Cottage Grove Volunteer Fire Relief
Association, 8641 80th Street South, Cottage Grove, MN 55016.
Funding Policy
Minnesota Statutes Chapter 424A.092 specifies the minimum support rates required on an annual basis. The minimum
support rates from the City of Cottage Grove and State Aid are determined as the amount required to meet the normal cost plus amortizing any existing prior service costs over a ten-year period. The significant actuarial assumptions used to compute the municipal support are not the same as those used to compute the accrued liability. An actuarially determined contribution for funding purposes is not calculated.
Contributions made: City $ 5,155
State aid $ 177,804 Actuarial valuation date 12/31/2014
Actuarial cost method Entry age normal Amortization method Straight line closed 5
year period Asset valuation method Market
Actuarial assumptions: Investment rate of return 6.5%
Projected salary increases N/A Inflation rate 2.75%
Cost of living adjustments None Age of service retirement 50
Post-retirement benefit increases None
67
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Schedule of Funding Progress Actuarial
Valuation Date
Actuarial
Value of Assets
Actuarial
Accrued Liability (AAL)
(Unfunded) /
Assets in Excess of AAL (UAAL) Funding Ratio
12/31/2014 $2,404,736 $ 1,352,967 $ 1,051,769 177.74%
12/31/2013 2,242,564 1,798,706 443,858 124.68% 12/31/2012 1,944,433 1,678,259 266,174 115.86%
The amount received from the State of Minnesota in Fire Relief Aid, $177,804 and then contributed to the Cottage Grove Fire Relief Association is included as a revenue and expenditure, respectively, in the General Fund.
Note 9 INTERFUND LOANS AND TRANSFERS
The City uses interfund loans when possible to finance construction activities in order to avoid costs associated with issuing bonds. These loans are for this purpose. The interfund loan receivable and payable balances at December 31, 2014 were: Fund Receivable Payable
Major Governmental Funds: Municipal Building Capital Project Fund $ - $ 8,295,000
Closed Debt Fund 2,000,000 - Nonmajor Governmental Funds 3,050,000 1,550,000
Major Business-Type Funds: Water Operating Enterprise Fund 1,962,500 -
Sewer Operating Enterprise Fund 2,832,500 -
Total $ 9,845,000 $ 9,845,000
Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and payable balances at
December 31, 2014 are as follows:
Fund Receivable Payable
General Fund $ 287,314 $ - Pavement Management Debt Service Fund 598,445 -
Pavement Management Capital Project Fund - 598,445 Nonmajor Governmental Funds 991,739 1,279,053
Total $ 1,877,498 $ 1,877,498
68
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Interfund transfers:
Transfers In
General Fund
MSA
Const. Capital
Project Fund
Pavement
Mange. Capital
Project Fund
Nonmajor
Govern. Funds Total
Transfers Out
General Fund $ - $ - $ - $ 372,494 $ 372,494 MSA Const. Capital Project Fund - - - 85,276 85,276 Const. Revolving Cap. Proj. Fund - - - 8,256 8,256
Nonmajor Governmental Funds 35,020 643,962 68,051 - 747,033
Major Business Fund Type:
Street Light Fund 45,850 26,541 - - 72,391 Cottage Grove EMS Fund 94,680 - - - 94,680 Water Operating Fund 166,550 - 47,210 - 213,760
Sewer Operating Fund 181,610 - 65,495 - 247,105
Total transfers $ 523,710 $ 670,503 $ 180,756 $ 466,026 $ 1,840,995
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by
another fund. All transfers in 2014 were considered to be routine in nature.
Note 10 TAX INCREMENT DISTRICTS The City of Cottage Grove is the administering authority for the following Tax Increment Financing Districts:
Cottages of
Cottage Grove #1-8
Gateway
North District #1-12
Industrial Park #1-14
Type of District
Housing
Redevelop
Econ.
Develop.
Chapter 469.174 469.174 469.174
Established 1991 2001 2007
District Duration 25 years 25 years 9 years
Current tax capacity $ 30,306 $ 804,332 $131,250
Original tax capacity (1,268) (238,371) (5,226)
Captured tax capacity 29,038 565,961 126,024
Fiscal disparity deduction - - (45,771)
Total tax capacity retained by City $ 29,038 $565,961 $ 80,253
Debt issued $ - $ 4,405,000 $ -
Amount redeemed - (1,905,000) -
Debt outstanding $ - $ 2,500,000 $ -
69
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 11 DEFICIT FUND BALANCES/NET POSITION The City has deficit fund balances/net position at December 31, 2014 as follows:
Fund Amount The deficit fund balances will be resolved through
Major Governmental Funds: Municipal Building Capital Project Fund $ 8,006,043 Future tax levies
Pavement Management Capital Project Fund 526,266 Future bond issue Nonmajor Governmental Funds:
Golf Course Fund 1,377,166 Future excess revenues and transfers from other City resources
Park Trust Fund 210,628 Future developer charges
Sewer Connection and Area Fund 806,299 Future special assessments and developer charges
Note 12 CONTINGENCIES A. RISK MANAGEMENT The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and
omissions and natural disasters for which the City carries commercial insurance policies. The City retains risk for the deductible portions of the insurance policies. The amount of these deductibles is considered immaterial to the financial
statements.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years.
Workers compensation coverage is provided through a pooled self-insurance program through the League of
Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to supplemental assessments as deemed necessary by the LMCIT. The LMCIT reinsures through Worker’s
Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is subject to a $10,000 medical expense deductible. The City’s premiums are determined after loss experience is known. The
amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid.
Property and casualty insurance coverage is provided through a pooled self-insurance program through LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments as deemed necessary by
the LMCIT.
The City established a Self Insurance Fund in 1986 to account for and finance its uninsured risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
Under this program, the Self Insurance Fund provides coverage for losses up to $50,000 for each claim (annual aggregate is $100,000). The City purchases commercial insurance for claims in excess of coverage provided by the
Fund and for any risk of loss not covered. Settled claims have not exceeded the commercial coverage in any of the past three fiscal years.
This fund is presented as an internal service fund type. All funds of the City participate in the program and make
payments to the Self Insurance Fund based on historical cost information. The claims liability of $158,905 reported in the Fund at December 31, 2014 is based on the requirements of Governmental Accounting Standards Board
Statement Number 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements
and the amount of the loss can be reasonably estimated.
70
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Changes in the fund's claims liability amounts were as follows:
Beginning Claims and End of Year Changes in Claim of Year Year Liability Estimates Payments Liability
2014 $ 130,039 $ 172,634 $ (143,768) $ 158,905
2013 59,122 130,723 (59,806) 130,039
2012 51,095 172,454 (164,427) 59,122
B. LITIGATION
The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely
recoverable by plaintiffs. C. FEDERAL AND STATE FUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting
from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types
included herein or on the overall financial position of the City at December 31, 2014.
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. The prior year
claim payable has been removed because the OSA has finished their review.
Note 13 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold
by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts
of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided alternative sources of
financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2014 and 2013. Future scheduled tax levies for all bonds outstanding at December 31, 2014 totaled $8,541,531
71
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 14 FUND BALANCES At December 31, 2014 the City had various fund balances through legal restriction and City Council authorization. Fund
balance appropriations at December 31, 2014 are shown on the various balance sheets as segregations of the fund balance. The fund balance classifications for governmental funds are as follows:
Nonspendable Restricted Committed Assigned Unassigned Total
General Fund: $ - $ - $ - $ - $ 8,113,424 $ 8,113,424
Prepaid items 18,019 - - - - 18,019
Compensated absences - - - 804,771 - 804,771
MVHC aid set aside - - - 499,864 - 499,864
Emerald ash borer program - - - 40,200 - 40,200
Public safety equipment - - - 31,363 - 31,363
School bus safety - - - 4,500 - 4,500
Total General Fund 18,019 - - 1,380,698 8,113,424 9,512,141
Municipal Building Capital Project Fund (8,006,043) (8,006,043)
MSA Construction Capital Project Fund:
MSA construction activities - - - 4,196,805 - 4,196,805
Closed Debt Fund:
Debt retirement - - - 3,831,339 - 3,831,339
Pavement Management Debt Service Fund:
Debt retirement - 1,923,244 - - - 1,923,244
Pavement Management Capital Project Fund:
Pavement management construction activities - - - - (526,266) (526,266)
Total Other Major Funds - 1,923,244 - 8,028,144 (8,532,309) 1,419,079
Nonmajor Governmental Funds:
Prepaid items 8,529 - - - - 8,529
Inventory 24,434 - - - - 24,434
Forfeiture and seizure - 52,175 - - - 52,175
Charitable gambling - 14,300 - - - 14,300
Debt retirement - 216,597 - - - 216,597
Tax increment purposes - 2,272,496 - - - 2,272,496
Recycling program - - 53,942 - - 53,942
Storm water activities - - 253,014 - - 253,014
Ice arena - - 22,885 - - 22,885
Equipment replacement - - - 1,623,685 - 1,623,685
Street sealcoating - - - 453,075 - 453,075
Economic development - - - 4,999,862 - 4,999,862
Future pavement management - - - 1,431,412 - 1,431,412
Tree mitigation - - - 377,901 - 377,901
Future roads and trails - - - 779,610 - 779,610
Capital improvements - - - 7,897,492 - 7,897,492
Deficit Fund Balance - - - - (2,426,080) (2,426,080)
Total Nonmajor Funds 32,963 2,555,568 329,841 17,563,037 (2,426,080) 18,055,329
Total Fund Balances Governmental Funds $ 50,982 $ 4,478,812 $ 329,841 $ 26,971,879 $(2,844,965) $ 28,986,549
72
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 15 OTHER POSTEMPLOYMENT BENEFIT PLAN At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting
and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City engaged an actuary to determine the City’s liability for postemployment healthcare benefits other than pensions. A. PLAN DESCRIPTION
The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees,
who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both themselves and their eligible dependent(s) under the City’s health benefits program until age 65. Pursuant to the
provisions of the plan, retirees are required to pay the total premium cost. As of December 31, 2014 there were approximately 109 active participants, 3 retired participants and 1 disabled participant receiving benefits from the
City’s health plans. The Plan does not issue a separate report.
B. FUNDING POLICY
The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2014, the City contributed $12,092 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 Contribution $ 24,194
Interest on Net OPEB Obligation 582
Adjustment to Annual Required Contribution (2,243)
Annual OPEB Cost (Expense) 22,533
Contributions Made (12,092)
Increase in Net OPEB Obligation 10,441
Net OPEB Obligation- Beginning of Year 58,173
Net OPEB Obligation- End of Year $ 68,614
The City’s annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB
obligation for 2014:
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
12/31/2014 $22,533 53.7% $ 68,614
12/31/2013 $11,244 41.4% $ 58,173
12/31/2012 $11,293 78.4% $ 51,585 73
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
D. FUNDED STATUS AND FUNDED PROGRESS
As of January 1, 2014, the most recent actuarial valuation date, the City’s unfunded actuarial accrued liability
(UAAL) was $324,523. The annual payroll for active employees covered by the plan in the actuarial valuation was $9,765,700 for a ratio of UAAL to covered payroll of 3.3%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the
plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding
progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liabilities for benefits.
E. ACTUARIAL METHODS AND ASSUMPTIONS
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to
that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the January 1, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 1% investment rate of return (net of administrative expenses), which is a
blended rate of the expected long-term investment returns on plan assets and on the employer’s own investments calculated based on the funded level of the plan at the valuation date. The inflation assumption was 1%. The initial healthcare trend rate was 8%, reduced by decrements to an ultimate rate of 3% after five years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis. The
remaining amortization period at December 31, 2014 was 23 years.
Note 16 OPERATING LEASES The City leases land for the golf course under an operating lease. The lease expired on April 30, 2010 with the option
to extend the term for three additional terms of five years each. The lease was extended for an additional five years. The lease calls for monthly lease payments of $1,247 for the first five years and from that point payments will be
based on fair market value per acre. This lease was amended during 1996 to require that the monthly lease payments remain at $1,247 for lease years 6 through 10 (1995 to 2000). The lease was amended again in 1999 to require that
the monthly lease payments equal $1 per month for the remaining term of the lease agreement. In 2014, $12 was paid under this lease arrangement.
74
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
The City leases eight copiers under an operating lease and the EDA component unit leases one copier. Total 2014
payments for these leases were $16,133 for the primary government and $2,773 for component unit. Future minimum
annual lease payments at December 31, 2014 are as follows:
Primary Government Component Unit
Golf
Year Ended Course
December 31 Land Copiers Copier
2015 $ 12 $ 16,743 $ 2,085
2016 - 14,280 1,738
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:
Independent Cottage Grove
Year Ended School District Athletic
December 31 833 Association
2015 $ 104,250 $ 400,000
2016 104,250 400,000
2017 104,250 400,000
2018 104,250 400,000
2019 104,250 400,000
2020-2024 521,250 2,000,000
2025-2029 521,250 1,919,000
Note 17 COMMITTED CONTRACTS
At December 31, 2014, the City had commitments of $577,919 for uncompleted construction contracts.
Note 18 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Revenue Bonds to provide financial assistance to private sector entities for the
acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans.
Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not
reported as liabilities in the accompanying financial statements.
75
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
As of December 31, 2014, a series of Industrial Revenue Bonds were outstanding.
Bond Issue Date Original Issue Amount 12/31/14 Balance Maturity Date Industrial Revenue Bonds-Allina Health Systems 08/05/1998 $4,100,000 Not available 08/05/2018
Commercial Development Revenue Note-HSI 12/22/2004 935,000 558,638* 12/01/2024 Commercial Development Revenue Note-ESR, Inc. 11/22/2005 76,500 38,616 11/22/2025 Commercial Development Revenue Note-ESR, Inc. 05/19/2005 853,000 549,795 12/19/2025
Subordinate Senior Housing Revenue Bonds-PHS 12/01/2006 21,105,000 20,430,000 12/01/2046 Subordinate Senior Housing Revenue Bonds-PHS 12/01/2006 8,075,000 7,860,000 12/01/2046 Variable Rate Revenue Bonds-Allina Health System 11/01/2009 6,100,000 6,100,000 11/15/2022
$41,244,500 $35,537,049 *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.
Note 20 SUBSEQUENT EVENT
In April 2015, the City council called for the issuance and public sale of $6,000,000 General Obligation Improvement Bonds of 2015A on May 6, 2015.
Note 21 NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 68, Accounting and Financial Reporting for Pensions, replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, and Statement No. 50, Pension
Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions
to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, an
amendment of GASB Statement No. 68, requires that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning
new pension liability. The provisions of this Statement should be applied simultaneously with the provisions of
Statement 68 which is effective for periods beginning after June 15, 2014.
76
REQUIRED SUPPLEMENTARY INFORMATION
7777
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 5
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget - 2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenue:
General property taxes:
Current and delinquent 11,303,030$ 11,303,030$ 11,357,685$ 54,655$ 10,858,270$
Special Assessments 19,500 19,500 26,697 7,197 8,520
Licenses and permits:
General government 76,550 76,550 82,925 6,375 78,060
Community development 555,000 555,000 792,602 237,602 752,479
Engineering - - 6,460 6,460 2,720
Public safety 31,800 31,800 22,413 (9,387) 27,695
Total licenses and permits 663,350 663,350 904,400 241,050 860,954
Intergovernmental:
Federal:
Safe and sober - public safety 22,000 22,000 26,707 4,707 28,646
Assistance to firefighters grant - public safety 202,300 202,300 198,096 (4,204) -
Ballistic vest grant - public safety - - 10,179 10,179 -
Misc. grant - general government - - - - 588
State:
Local government aid 59,600 59,600 59,626 26 -
Market value homestead credit - - 2,608 2,608 2,685
MSA maintenance - public works 42,000 42,000 44,715 2,715 44,715
PERA aid 21,450 21,450 21,448 (2) 21,448
Fire relief aid - public safety 121,000 177,800 177,804 4 181,742
Police relief aid - public safety 260,000 260,000 300,197 40,197 275,061
Forestry grant - culture and recreation - - - - 12,908
Other - general government - - - - 4,926
Other - public safety 16,000 16,000 17,992 1,992 20,699
Other - culture and recreation - - - - 4,978
Local:
SRO program - public safety 75,000 75,000 75,000 - 75,000
Narcotics officer program - public safety 4,000 4,000 3,458 (542) 5,497
Other - public safety - - 3,617 3,617 13,167
Other - public works - - 3,764 3,764 1,585
Other - culture and recreation 19,800 19,800 13,701 (6,099) 14,446
Total intergovernmental 843,150 899,950 958,912 58,962 708,091
Charges for services:
Administration charges - general government:
Enterprise funds 520,710 - - - 520,760
Investment charge - general government 13,800 13,800 20,115 6,315 (8,773)
Other - general government 60,300 24,050 24,172 122 47,719
Other - community development 37,500 37,500 57,020 19,520 104,971
Other - engineering 19,000 19,000 133,058 114,058 257,753
Other - public safety 48,100 48,100 41,741 (6,359) 36,805
Other - public works 17,100 17,100 22,609 5,509 25,538
Other - culture and recreation 176,350 158,650 138,617 (20,033) 129,976
Total charges for services 892,860 318,200 437,332 119,132 1,114,749
Budgeted Amounts
7878
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 5
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget - 2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenue: (continued)
Fines and forfeits - public safety 201,000$ 201,000$ 151,701$ (49,299)$ 168,667$
Investment earnings (loss)60,000 60,000 120,571 60,571 (30,389)
Donations:
Donations - general government 100,000 100,000 500 (99,500) 792
Donations - public safety 1,000 1,000 16,166 15,166 26,105
Donations - culture and recreation 7,000 10,000 10,081 81 12,495
Total donations 108,000 111,000 26,747 (84,253) 39,392
Miscellaneous:
Other - general government 11,070 11,070 11,556 486 38,615
Other - public safety 12,000 12,000 11,439 (561) 19,476
Other - public works 12,000 12,000 12,765 765 8,863
Other - culture and recreation 8,400 8,400 8,858 458 5,718
Total miscellaneous 43,470 43,470 44,618 1,148 72,672
Total revenues 14,134,360 13,619,500 14,028,663 409,163 13,800,926
Expenditures:
General government:
Mayor and city council:
Personal services 40,050 40,050 38,942 1,108 38,942
Commodities 1,100 1,100 938 162 1,046
Contractual services 136,400 100,150 87,610 12,540 195,265
Total mayor and city council 177,550 141,300 127,490 13,810 235,253
Administrative:
Personal services 247,450 247,450 231,059 16,391 255,635
Commodities 800 800 69 731 968
Contractual services 12,445 12,445 12,532 (87) 10,865
Total administrative 260,695 260,695 243,660 17,035 267,468
Finance:
Personal services 470,800 466,400 473,249 (6,849) 474,496
Commodities 2,400 2,400 575 1,825 1,160
Contractual services 39,185 39,185 35,971 3,214 34,435
Total finance 512,385 507,985 509,795 (1,810) 510,091
Personnel:
Personal services 100,650 97,250 99,491 (2,241) 101,665
Commodities 200 200 389 (189) 100
Contractual services 10,980 10,980 5,894 5,086 8,488
Total personnel 111,830 108,430 105,774 2,656 110,253
Assessing service:
Contractual services 158,400 158,400 150,315 8,085 147,882
City clerk/elections:
Personal services 213,800 182,600 184,410 (1,810) 165,264
Commodities 2,300 2,300 529 1,771 352
Contractual services 18,275 18,275 16,214 2,061 10,567
Total City clerk/elections 234,375 203,175 201,153 2,022 176,183
Budgeted Amounts
7979
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 3 of 5
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget - 2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Expenditures: (continued)
General government: (continued)
Legal:
Contractual services 173,100$ 173,100$ 192,864$ (19,764)$ 191,171$
Community and employee programs:
Personal services 3,000 3,000 2,623 377 3,325
Commodities 500 500 1,601 (1,101) -
Contractual services 50,330 50,330 57,287 (6,957) 46,328
Total community and employee programs 53,830 53,830 61,511 (7,681) 49,653
Government buildings:
Personal services 7,300 46,300 67,529 (21,229) 14,055
Commodities 13,170 13,170 21,403 (8,233) 12,287
Contractual services 266,840 266,840 288,464 (21,624) 250,908
Total government buildings 287,310 326,310 377,396 (51,086) 277,250
Historic preservation:
Personal services 10,000 10,000 9,530 470 1,243
Commodities 40 40 38 2 -
Contractual services 1,000 1,000 1,636 (636) 665
Total historic preservation 11,040 11,040 11,204 (164) 1,908
Total general government 1,980,515 1,944,265 1,981,162 (36,897) 1,967,112
Community Development:
Planning and zoning:
Personal services 269,050 278,300 281,955 (3,655) 289,236
Commodities 900 900 1,019 (119) 1,077
Contractual services 34,115 34,115 37,816 (3,701) 57,735
Total planning and zoning 304,065 313,315 320,790 (7,475) 348,048
Building inspections:
Personal services 422,950 413,700 409,123 4,577 398,929
Commodities 8,850 8,850 7,635 1,215 9,587
Contractual services 86,595 86,595 83,334 3,261 83,562
Total building inspections 518,395 509,145 500,092 9,053 492,078
Engineering:
Personal services 74,995 74,995 53,394 21,601 2,318
Commodities 800 800 1,217 (417) 7,744
Contractual services 45,225 45,225 43,633 1,592 42,511
Total engineering 121,020 121,020 98,244 22,776 52,573
Total community development 943,480 943,480 919,126 24,354 892,699
Public safety:
Police protection:
Personal services 4,747,800 4,741,950 4,660,772 81,178 4,610,840
Commodities 280,950 280,950 253,106 27,844 276,472
Contractual services 380,850 386,700 420,711 (34,011) 379,196
Capital outlay 116,400 126,400 136,466 (10,066) 159,910
Total police protection 5,526,000 5,536,000 5,471,055 64,945 5,426,418
Fire protection:
Personal services 509,520 549,520 551,311 (1,791) 430,499
Commodities 95,000 95,000 72,555 22,445 60,901
Contractual services 214,865 214,865 226,599 (11,734) 230,176
Capital outlay 240,800 240,800 237,554 3,246 -
Total fire protection 1,060,185 1,100,185 1,088,019 12,166 721,576
Fire relief:
Contractual services 123,000 179,800 183,536 (3,736) 186,422
Budgeted Amounts
8080
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 4 of 5
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget - 2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Expenditures: (continued)
Public safety: (continued)
Civil defense:
Personal services 27,700$ 27,700$ 13,878$ 13,822$ 11,269$
Commodities 100 100 2,809 (2,709) 1,583
Contractual services 50,420 50,420 46,284 4,136 15,508
Total civil defense 78,220 78,220 62,971 15,249 28,360
Animal control:
Personal services 12,600 12,600 11,820 780 12,492
Commodities 4,000 4,000 3,667 333 2,411
Contractual services 29,400 29,400 14,725 14,675 15,341
Total animal control 46,000 46,000 30,212 15,788 30,244
Total public safety 6,833,405 6,940,205 6,835,793 104,412 6,393,020
Public works:
Public works administration:
Personal services 269,455 269,455 273,854 (4,399) 238,527
Commodities 19,150 19,150 16,993 2,157 24,508
Contractual services 156,845 178,845 197,212 (18,367) 153,511
Capital outlay - - - - 13,000
Total public works administration 445,450 467,450 488,059 (20,609) 429,546
Streets:
Personal services 549,800 549,800 522,094 27,706 491,595
Commodities 220,950 220,950 222,322 (1,372) 265,160
Contractual services 340,320 338,320 336,830 1,490 254,429
Total streets 1,111,070 1,109,070 1,081,246 27,824 1,011,184
Snow and ice control:
Personal services 185,350 185,350 241,905 (56,555) 241,452
Commodities 226,000 226,000 277,794 (51,794) 249,317
Contractual services 111,800 111,800 120,672 (8,872) 186,731
Capital outlay 5,300 5,300 5,213 87 -
Total snow and ice control 528,450 528,450 645,584 (117,134) 677,500
Street signs/striping:
Personal services 111,600 98,600 90,411 8,189 94,216
Commodities 30,590 30,590 29,474 1,116 36,562
Contractual services 59,800 52,800 51,444 1,356 70,511
Total street signs/striping 201,990 181,990 171,329 10,661 201,289
Total public works 2,286,960 2,286,960 2,386,218 (99,258) 2,319,519
Budgeted Amounts
8181
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 5 of 5
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget - 2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Expenditures: (continued)
Culture and recreation:
Forestry:
Personal services 71,200$ 71,200$ 106,308$ (35,108)$ 103,992$
Commodities 12,975 12,975 5,168 7,807 22,243
Contractual services 192,720 175,020 183,313 (8,293) 223,500
Total forestry 276,895 259,195 294,789 (35,594) 349,735
Recreation programs:
Personal services 256,200 256,200 240,378 15,822 240,390
Commodities 10,950 7,950 5,873 2,077 8,784
Contractual services 81,695 81,695 83,884 (2,189) 66,846
Total recreation programs 348,845 345,845 330,135 15,710 316,020
Parks maintenance:
Personal services 679,000 679,000 682,248 (3,248) 643,425
Commodities 160,650 160,650 156,507 4,143 163,263
Contractual services 296,005 302,005 313,726 (11,721) 308,334
Capital outlay - - - - 156,295
Total parks maintenance 1,135,655 1,141,655 1,152,481 (10,826) 1,271,317
Total culture and recreation 1,761,395 1,746,695 1,777,405 (30,710) 1,937,072
Total expenditures 13,805,755 13,861,605 13,899,704 (38,099) 13,509,422
Revenues over (under) expenditures 328,605 (242,105) 128,959 371,064 291,504
Other financing sources (uses):
Transfer from Special Revenue Fund - 35,020 35,020 - -
Transfer from Enterprise Fund 3,000 488,690 488,690 - 3,000
Transfer to Special Revenue Fund (55,405) (55,405) (55,405) - -
Transfer to Capital Project Fund (236,200) (317,089) (317,089) - (213,070)
Total other financing sources (uses):(288,605) 151,216 151,216 - (210,070)
Net increase (decrease) in fund balance 40,000$ (90,889)$ 280,175 371,064$ 81,434
Fund balance - January 1 9,231,966 9,150,532
Fund balance - December 31 9,512,141$ 9,231,966$
Budgeted Amounts
8282
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8383
CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE
NOTE TO RSI December 31, 2014
Note A LEGAL COMPLIANCE – BUDGETS
The General Fund Budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the department level for both budgets. The following is a listing of expenditures that exceeded budget appropriations.
Final Budget Actual Over Budget General Fund
General government: Administrative: Contractual services $12,445 $12,532 $87
Finance: Personal services 466,400 473,249 6,849 Personnel:
Personal services 97,250 99,491 2,241 Commodities 200 389 189 City clerk/elections:
Personal Services 182,600 184,410 1,810 Legal: Contractual services 173,100 192,864 19,764
Community and employee programs: Commodities 500 1,601 1,101
Contractual services 50,330 57,287 6,957 Government buildings: Personal services 46,300 67,529 21,229
Commodities 13,170 21,403 8,233 Contractual services 266,840 288,464 21,624 Historical preservation:
Contractual services 1,000 1,636 636 Community development: Planning and zoning:
Personal services 278,300 281,955 3,655 Commodities 900 1,019 119 Contractual services 34,115 37,816 3,701
Engineering: Commodities 800 1,217 417 Public safety:
Police protection: Contractual services 386,700 420,711 34,011 Capital outlay 126,400 136,466 10,066
Fire protection: Personal services 549,520 551,311 1,791
Contractual services 214,865 226,599 11,734 Fire relief:
Contractual services 179,800 183,536 3,736 Civil defense: Commodities 100 2,809 2,709
8484
CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE
NOTE TO RSI December 31, 2014
Final Budget Actual Over Budget
General Fund (continued) Public works: Public works administration:
Personal services $269,455 $273,854 $4,399 Contractual services 178,845 197,212 18,367 Streets:
Commodities 220,950 222,322 1,372 Snow and ice control: Personal services 185,350 241,905 56,555
Commodities 226,000 277,794 51,794 Contractual services 111,800 120,672 8,872 Culture and recreation:
Forestry: Personal services 71,200 106,308 35,108 Contractual services 175,020 183,313 8,293
Recreation programs: Contractual services 81,695 83,884 2,189 Parks maintenance:
Personal services 679,000 682,248 3,248 Contractual services 302,005 313,726 11,721
8585
CITY OF COTTAGE GROVE, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION FUNDING PROGRESS SCHEDULE OTHER POST EMPLOYMENT HEALTH CARE BENEFITS December 31, 2014
Actuarial UAAL as a
Actuarial Accrued Percentage
Actuarial Value of Liability Unfunded Funded Covered of Covered
Valuation Assets (AAL) AAL Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c ) ((b-a)/c)
1/1/2014 - $ 324,523 $ 324,523 - $ 9,765,700 3.3%
1/1/2011 - 108,298 108,298 - 8,887,000 1.2%
1/1/2008 - 146,597 146,597 - 8,750,900 1.7%
8686
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
8787
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8888
NONMAJOR GOVERNMENTAL FUNDS
8989
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).
9090
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET Statement 10
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2014
With Comparative Data as of December 31, 2013
Special Debt Capital
Revenue Service Project 2014 2013
Assets:
Cash and investments 283,695$ 1,502,434$ 15,386,549$ 17,172,678$ 15,559,921$
Interfund receivable - - 991,739 991,739 642,855
Interfund loan receivable - - 3,050,000 3,050,000 3,105,000
Due from other governmental units - net 31,179 - 16,667 47,846 110,025
Accounts receivable - net 262,715 - 185,163 447,878 420,308
Prepaid items 8,529 - - 8,529 10,229
Inventories - at cost 24,434 - - 24,434 31,617
Delinquent property taxes receivable 3,909 - 549 4,458 17,920
Special assessments receivable:
Deferred - - 255,294 255,294 11,695
Delinquent - - 534 534 624
Total assets 614,461$ 1,502,434$ 19,886,495$ 22,003,390$ 19,910,194$
Liabilities:
Accounts payable 43,142$ -$ 116,897$ 160,039$ 91,689$
Salaries payable 42,580 - - 42,580 36,474
Interfund payable 287,314 - 991,739 1,279,053 642,855
Contracts payable - - - - 71,398
Due to other governmental units 4,341 - - 4,341 6,003
Deposits payable 8,050 - 638,713 646,763 309,598
Interfund loan payable 1,200,000 - 350,000 1,550,000 1,605,000
Total liabilities 1,585,427 - 2,097,349 3,682,776 2,763,017
Deferred inflows of resources:
Unavailable revenue - property taxes 3,909 - 549 4,458 17,920
Unavailable revenue - special assessments - - 255,828 255,828 12,319
Unavailable revenue - intergovernmental 4,999 - - 4,999 -
Total deferred inflows of resources 8,908 - 256,377 265,285 30,239
Fund balance:
Nonspendable:
Prepaid items 8,529 - - 8,529 10,229
Inventory 24,434 - - 24,434 31,617
Restricted for:
Forfeiture and seizure 52,175 - - 52,175 47,609
Charitable gambling 14,300 - - 14,300 12,383
Debt retirement - 216,597 - 216,597 390,372
Tax increment purposes - 1,285,837 986,659 2,272,496 2,002,632
Park trust activities - - - - 242,906
Committed 329,841 - - 329,841 416,027
Assigned - - 17,563,037 17,563,037 15,844,373
Unassigned (1,409,153) - (1,016,927) (2,426,080) (1,881,210)
Total fund balance (979,874) 1,502,434 17,532,769 18,055,329 17,116,938
Total liabilities, deferred inflows of resources,
and fund balance 614,461$ 1,502,434$ 19,886,495$ 22,003,390$ 19,910,194$
Totals
Nonmajor
Governmental Funds
9191
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 11
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Special Debt Capital
Revenues:Revenue Service Project 2014 2013
General property taxes 240,718$ -$ 396$ 241,114$ 237,546$
Franchise taxes - - 542,689 542,689 540,767
Aggregate taxes - - 26,236 26,236 26,135
Tax increment collections - - 723,304 723,304 946,847
Special assessments - - 35,068 35,068 167,152
Direct charges to developers - - 537,298 537,298 366,682
Intergovernmental 158,229 - 513,516 671,745 270,671
Charges for services 2,864,091 - 270,928 3,135,019 2,909,095
Rent - - 420,279 420,279 -
Fines and forfeits 19,616 - - 19,616 19,990
Investment earnings (loss)6,187 23,868 207,591 237,646 (125,704)
Interest on interfund loan - - 39,066 39,066 35,780
Connection charges - - 841,434 841,434 805,261
Park dedication fees - - 63,595 63,595 252,386
Other sales - - 429,750 429,750 -
Donations 1,726 - 350,654 352,380 359,077
Miscellaneous 10,320 - 50,540 60,860 44,880
Total revenues 3,300,887 23,868 5,052,344 8,377,099 6,856,565
Expenditures:
Current:
General government - 2,835 476 3,311 1,671
Economic development - - 541,838 541,838 151,562
Public safety 15,752 - 3,027 18,779 24,723
Public works 532,391 - 921,814 1,454,205 1,590,534
Culture and recreation 2,117,308 - 274,756 2,392,064 2,174,191
Capital outlay:
Public safety - - 94,445 94,445 35,201
Public works 66,933 - 744,487 811,420 868,471
Culture and recreation 134,328 - 499,250 633,578 337,160
Debt service:
Principal retirement - 1,680,000 240,000 1,920,000 545,000
Capital lease payment 305,076 - - 305,076 293,953
Interest and fiscal charges 237,417 160,634 75,515 473,566 481,441
Total expenditures 3,409,205 1,843,469 3,395,608 8,648,282 6,503,907
Revenues over (under) expenditures (108,318) (1,819,601) 1,656,736 (271,183) 352,658
Other financing sources (uses):
Transfers in 55,405 - 410,621 466,026 519,539
Transfers out (103,071) - (643,962) (747,033) (425,304)
Bonds issued - 1,405,000 - 1,405,000 -
Premium on debt issued - 18,461 - 18,461 -
Proceeds from the sale of capital assets - - 67,120 67,120 27,195
Total other financing sources (uses)(47,666) 1,423,461 (166,221) 1,209,574 121,430
Net increase (decrease) in fund balance (155,984) (396,140) 1,490,515 938,391 474,088
Fund balance - January 1 (823,890) 1,898,574 16,042,254 17,116,938 17,884,323
Cumulative effect of change in accounting principle - - - - (1,241,473)
Fund balance - January 1, as restated (823,890) 1,898,574 16,042,254 17,116,938 16,642,850
Fund balance - December 31 (979,874)$ 1,502,434$ 17,532,769$ 18,055,329$ 17,116,938$
Nonmajor
Totals
Governmental Funds
92
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:
Recycling – 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.
Golf Course Fund – Established to account for the City's eighteen hole golf course
and banquet facility.
Charitable Gambling – Established to account for the 3% tax on charitable
gambling operations.
9393
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2014
With Comparative Data as of December 31, 2013
Storm
Water Forfeiture/
Recycling Maintenance Seizure
Assets:
Cash and investments 63,345$ 153,340$ 52,710$
Due from other governmental units - net 4,999 - -
Accounts receivable - net - 108,782 -
Prepaid items - - -
Inventories - at cost - - -
Delinquent property taxes receivable - - -
Total assets 68,344$ 262,122$ 52,710$
Liabilities:
Accounts payable 8,969$ 3,325$ 535$
Salaries payable 434 5,783 -
Interfund payable - - -
Contracts payable - - -
Due to other governmental units - - -
Deposits payable - - -
Interfund loan payable - - -
Total liabilities 9,403 9,108 535
Deferred inflows of resources:
Unavailable revenue - property taxes - - -
Unavailable revenue - intergovernmental 4,999 - -
Total deferred inflows of resources 4,999 - -
Fund balance:
Nonspendable:
Prepaid items - - -
Inventory - - -
Restricted for:
Forfeiture and seizure - - 52,175
Charitable gambling - - -
Committed for:
Ice arena - - -
Storm water activities - 253,014 -
Recycling program 53,942 - -
Unassigned - - -
Total fund balance 53,942 253,014 52,175
Total liabilities, deferred inflows of resources,
and fund balance 68,344$ 262,122$ 52,710$
9494
Statement 12
Ice Golf Charitable
Arena Course Gambling 2014 2013
-$ -$ 14,300$ 283,695$ 294,237$
26,180 - - 31,179 22,469
152,853 1,080 - 262,715 230,958
976 7,553 - 8,529 10,229
- 24,434 - 24,434 31,617
3,909 - - 3,909 5,360
183,918$ 33,067$ 14,300$ 614,461$ 594,870$
27,819$ 2,494$ -$ 43,142$ 39,854$
18,800 17,563 - 42,580 36,474
107,431 179,883 - 287,314 103,400
- - - - 14,117
2,098 2,243 - 4,341 5,955
- 8,050 - 8,050 13,600
- 1,200,000 - 1,200,000 1,200,000
156,148 1,410,233 - 1,585,427 1,413,400
3,909 - - 3,909 5,360
- - - 4,999 -
3,909 - - 8,908 5,360
976 7,553 - 8,529 10,229
- 24,434 - 24,434 31,617
- - - 52,175 47,609
- - 14,300 14,300 12,383
22,885 - - 22,885 198,120
- - - 253,014 154,074
- - - 53,942 63,833
- (1,409,153) - (1,409,153) (1,341,755)
23,861 (1,377,166) 14,300 (979,874) (823,890)
183,918$ 33,067$ 14,300$ 614,461$ 594,870$
Totals
Special Revenue Funds
Nonmajor
9595
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Storm
Water Forfeiture/
Recycling Maintenance Seizure
Revenues:
General property taxes -$ -$ -$
Intergovernmental:
Local:
Washington county 53,792 - -
School district - - -
Other - 47,437 -
Charges for services - 684,119 -
Fines and forfeits - - 19,616
Investment earnings (loss)903 1,693 702
Donations - - -
Miscellaneous 3,500 - -
Total revenues 58,195 733,249 20,318
Expenditures:
Current:
Public safety - - 15,752
Public works 68,086 464,305 -
Culture and recreation - - -
Capital outlay:
Public works - 66,933 -
Culture and recreation - - -
Debt service:
Capital lease payment - - -
Interest and fiscal charges - - -
Total expenditures 68,086 531,238 15,752
Revenues over (under) expenditures (9,891) 202,011 4,566
Other financing sources (uses):
Transfer from General Fund - - -
Transfer from Capital Project Fund - - -
Transfer to General Fund - (35,020) -
Transfer to Capital Project Fund - (68,051) -
Total other financing sources (uses)- (103,071) -
Net increase (decrease) in fund balance (9,891) 98,940 4,566
Fund balance - January 1 63,833 154,074 47,609
Cumulative effect of change in accounting principle - - -
Fund balance - January 1, as restated 63,833 154,074 47,609
Fund balance - December 31 53,942$ 253,014$ 52,175$
9696
Statement 13
Ice Golf Charitable
Arena Course Gambling 2014 2013
240,718$ -$ -$ 240,718$ 237,539$
- - - 53,792 88,247
57,000 - - 57,000 57,000
- - - 47,437 49,461
795,736 1,384,236 - 2,864,091 2,822,192
- - - 19,616 19,990
2,698 - 191 6,187 (6,138)
- - 1,726 1,726 5,829
6,563 257 - 10,320 7,239
1,102,715 1,384,493 1,917 3,300,887 3,281,359
- - - 15,752 24,723
- - - 532,391 719,789
764,849 1,352,459 - 2,117,308 2,086,172
- - - 66,933 -
8,802 125,526 - 134,328 58,389
270,000 35,076 - 305,076 293,953
234,293 3,124 - 237,417 249,139
1,277,944 1,516,185 - 3,409,205 3,432,165
(175,229) (131,692) 1,917 (108,318) (150,806)
- 55,405 - 55,405 -
- - - - 53,000
- - - (35,020) -
- - - (68,051) (70,186)
- 55,405 - (47,666) (17,186)
(175,229) (76,287) 1,917 (155,984) (167,992)
199,090 (1,300,879) 12,383 (823,890) 585,575
- - - - (1,241,473)
199,090 (1,300,879) 12,383 (823,890) (655,898)
23,861$ (1,377,166)$ 14,300$ (979,874)$ (823,890)$
Totals
Nonmajor
Special Revenue Funds
9797
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
Delveloper Financed Revolving – (2008A Improvements Bonds) are repaid from special
assessments collected from new developments within the City.
Tax Increment – (1985 Tax Increment Bonds, 2004A Tax Increment Refunding Bonds (TIF
1-3), 2004A Tax Exempt Increment Bonds (TIF 1-12), 2004B Taxable Increment Bonds and
2014A Taxable Tax Increment Refunding Bonds) are repaid primarily from taxes increments.
9898
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 14
NONMAJOR DEBT SERVICE FUNDS
December 31, 2014
With Comparative Data as of December 31, 2013
Developer
Financed Tax Increment
Revolving Funds Funds 2014 2013
Assets:
Cash and investments 216,597$ 1,285,837$ 1,502,434$ 1,898,574$
Total assets 216,597$ 1,285,837$ 1,502,434$ 1,898,574$
Fund balance:
Restricted for:
Debt retirement 216,597$ -$ 216,597$ 390,372$
Tax increment purposes - 1,285,837 1,285,837 1,508,202
Total fund balance 216,597 1,285,837 1,502,434 1,898,574
Total fund balance 216,597$ 1,285,837$ 1,502,434$ 1,898,574$
Totals
Nonmajor
Debt Service Funds
99
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Statement 15
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Developer Tax
Financed Increment
Revolving Funds Funds 2014 2013
Revenues:
Tax increment collections -$ -$ -$ 705,909$
Special assessments:
Current - - - 95,386
Penalties - - - 83
Investment earnings (loss)4,288 19,580 23,868 (9,136)
Total revenues 4,288 19,580 23,868 792,242
Expenditures:
Current:
General government:
Contractual services - 2,835 2,835 997
Debt service:
Principal retirement 175,000 1,505,000 1,680,000 315,000
Interest and fiscal charges 3,063 157,571 160,634 145,562
Total expenditures 178,063 1,665,406 1,843,469 461,559
Revenues over (under) expenditures (173,775) (1,645,826) (1,819,601) 330,683
Other financing sources (uses):
Bonds issued - 1,405,000 1,405,000 -
Premium on debt issued - 18,461 18,461 -
Total other financing sources (uses)- 1,423,461 1,423,461 -
Net increase (decrease) in fund balance (173,775) (222,365) (396,140) 330,683
Fund balance - January 1 390,372 1,508,202 1,898,574 1,567,891
Fund balance - December 31 216,597$ 1,285,837$ 1,502,434$ 1,898,574$
Totals
Debt Service Funds
Nonmajor
100100
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. Equipment Replacement Fund – Established to accumulate monies for the replacement
of capital equipment.
Street Sealcoating – Established to account for the receipt of franchise fees to be used for sealcoating activities.
Future Economic Development Fund – Established to account for the receipt and use of
monies for economic development purposes.
Future Projects – to account for the preliminary expenditures of projects which do not have a
source of financing.
Completed Construction – to account for the various surpluses (deficits) of other Special
Assessment Construction Funds.
Park Trust – to account for capital projects in new municipal parks.
Park Capital Improvements – to account for capital projects in existing municipal parks.
Water Connection and Area – to account for water connection and area charges.
Sewer Connection and Area – to account for sewer connection and area charges.
Future Storm Sewer Improvements – to collect storm sewer area charges which are designated for future construction.
Tax Increment Construction Revolving Fund – to account for construction projects that are
financed with tax increments.
101101
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2014
With Comparative Data as of December 31, 2013
Future
Equipment Street Economic Future Completed
Replacement Sealcoating Development Projects Construction
Assets:
Cash and investments 1,624,483$ 328,402$ 3,468,149$ 3,534,494$ 461,921$
Interfund receivable - - - - -
Interfund loan receivable - - 1,550,000 - 1,500,000
Due from other governmental units - net - 16,667 - - -
Accounts receivable - net - 108,006 - 57,541 -
Delinquent property taxes receivable - - - 549 -
Special assessments receivable:
Deferred - - - - -
Delinquent - - - - 534
Total assets 1,624,483$ 453,075$ 5,018,149$ 3,592,584$ 1,962,455$
Liabilities:
Accounts payable 798$ -$ 18,287$ 61,149$ -$
Interfund payable - - - - -
Contracts payable - - - - -
Due to other governments - - - - -
Deposits payable - - - 630,612 -
Interfund loan payable - - - - -
Total liabilities 798 - 18,287 691,761 -
Deferred inflows of resources:
Unavailable revenue - property taxes - - - 549 -
Unavailable revenue - special assessments - - - - 534
Total deferred inflows of resources - - - 549 534
Fund balance:
Restricted for:
Tax increment purposes - - - - -
Park trust activities - - - - -
Assigned for:
Equipment replacement 1,623,685 - - - -
Street sealcoating - 453,075 - - -
Economic development - - 4,999,862 - -
Future pavement management - - - 1,431,412 -
Tree mitigation - - - 377,901 -
Future roads and trails - - - 779,610 -
Capital improvements - - - 311,351 1,961,921
Unassigned - - - - -
Total fund balance 1,623,685 453,075 4,999,862 2,900,274 1,961,921
Total liabilities, deferred inflows of resources,
and fund balance 1,624,483$ 453,075$ 5,018,149$ 3,592,584$ 1,962,455$
102102
Statement 16
Tax Increment
Park Water Sewer Future Construction
Park Capital Connection Connection Storm Sewer Revolving
Trust Improvements and Area and Area Improvements Fund 2014 2013
-$ 227,564$ 1,721,220$ -$ 2,683,657$ 1,336,659$ 15,386,549$ 13,367,110$
- 189,448 802,291 - - - 991,739 642,855
- - - - - - 3,050,000 3,105,000
- - - - - - 16,667 87,556
- 19,616 - - - - 185,163 189,350
- - - - - - 549 12,560
- - 56,183 126,359 72,752 - 255,294 11,695
- - - - - - 534 624
-$ 436,628$ 2,579,694$ 126,359$ 2,756,409$ 1,336,659$ 19,886,495$ 17,416,750$
21,180$ 2,929$ 7,965$ 4,008$ 581$ -$ 116,897$ 51,835$
189,448 - - 802,291 - - 991,739 539,455
- - - - - - - 57,281
- - - - - - - 48
- 8,101 - - - - 638,713 295,998
- - - - - 350,000 350,000 405,000
210,628 11,030 7,965 806,299 581 350,000 2,097,349 1,349,617
- - - - - - 549 12,560
- - 56,183 126,359 72,752 - 255,828 12,319
- - 56,183 126,359 72,752 - 256,377 24,879
- - - - - 986,659 986,659 494,430
- - - - - - - 242,906
- - - - - - 1,623,685 1,860,300
- - - - - - 453,075 313,607
- - - - - - 4,999,862 4,471,683
- - - - - - 1,431,412 1,431,412
- - - - - - 377,901 372,624
- - - - - - 779,610 341,399
- 425,598 2,515,546 - 2,683,076 - 7,897,492 7,053,348
(210,628) - - (806,299) - - (1,016,927) (539,455)
(210,628) 425,598 2,515,546 (806,299) 2,683,076 986,659 17,532,769 16,042,254
-$ 436,628$ 2,579,694$ 126,359$ 2,756,409$ 1,336,659$ 19,886,495$ 17,416,750$
Capital Project Funds
Nonmajor
Totals
103103
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Future
Equipment Street Economic Future Completed
Replacement Sealcoating Development Projects Construction
Revenues:
General property taxes -$ -$ -$ 396$ -$
Franchise taxes - 542,689 - - -
Aggregate taxes - 26,236 - - -
Tax increment collections - - - - -
Special assessments:
Current - - - - 12,288
Delinquent - - - - 316
Prepayments on deferred - - - - -
Penalties - - - - 69
Direct charges to developers - 37,381 - 499,917 -
Intergovernmental:
Federal - - - - -
State - - - - -
Other - - - - -
Charges for services - 270,928 - - -
Rent - - - - -
Investment earnings (loss)27,037 3,746 42,413 36,736 6,512
Interest on interfund loan - - 24,300 - 14,766
Connection charges - - - - -
Park dedication fees - - - - -
Other sales - - 429,750 - -
Donations - - 350,654 - -
Miscellaneous - - 210 - -
Total revenues 27,037 880,980 847,327 537,049 33,951
Expenditures:
Current:
General government - - - - 476
Economic development - - 319,148 - -
Public safety - - - 3,027 -
Public works 3,757 741,512 - 90,560 2,611
Culture and recreation - - - 7,495 -
Capital outlay:
Public safety 94,445 - - - -
Public works 346,218 - - - -
Culture and recreation 57,852 - - - -
Debt service:
Principal retirement - - - - -
Interest and fiscal charges - - - - -
Total expenditures 502,272 741,512 319,148 101,082 3,087
Revenues over (under) expenditures (475,235) 139,468 528,179 435,967 30,864
Other financing sources (uses):
Transfer from General Fund 171,500 - - - -
Transfer from Capital Project Fund - - - 8,256 -
Transfer to Special Revenue Fund - - - - -
Transfer to Capital Project Fund - - - - -
Proceeds from the sale of capital assets 67,120 - - - -
Total other financing sources (uses)238,620 - - 8,256 -
Net increase (decrease) in fund balance (236,615) 139,468 528,179 444,223 30,864
Fund balance - January 1 1,860,300 313,607 4,471,683 2,456,051 1,931,057
Fund balance - December 31 1,623,685$ 453,075$ 4,999,862$ 2,900,274$ 1,961,921$
104
Statement 17
Tax Increment
Park Water Sewer Future Construction
Park Capital Connection Connection Storm Sewer Revolving
Trust Improvements and Area and Area Improvements Fund 2014 2013
-$ -$ -$ -$ -$ -$ 396$ 7$
- - - - - - 542,689 540,767
- - - - - - 26,236 26,135
- - - - - 723,304 723,304 240,938
- - - - - - 12,288 67,009
- - - - - - 316 3,136
- - 10,492 9,643 2,260 - 22,395 370
- - - - - - 69 1,168
- - - - - - 537,298 366,682
- - - - - - - 4,509
- - - - 114,054 - 114,054 -
- - - - 399,462 - 399,462 71,454
- - - - - - 270,928 86,903
- 420,279 - - - - 420,279 -
4,068 3,192 40,468 - 29,065 14,354 207,591 (110,430)
- - - - - - 39,066 35,780
- - 282,479 317,554 241,401 - 841,434 805,261
63,595 - - - - - 63,595 252,386
- - - - - - 429,750 -
- - - - - - 350,654 353,248
- 44,000 - - 4,769 1,561 50,540 37,641
67,663 467,471 333,439 327,197 791,011 739,219 5,052,344 2,782,964
- - - - - - 476 674
- - - - - 222,690 541,838 151,562
- - - - - - 3,027 -
- - 31,546 29,251 22,577 - 921,814 870,745
164,494 102,767 - - - - 274,756 88,019
- - - - - - 94,445 35,201
- - 136,256 101,878 160,135 - 744,487 868,471
421,403 19,995 - - - - 499,250 278,771
- - - 240,000 - - 240,000 230,000
- - - 51,215 - 24,300 75,515 86,740
585,897 122,762 167,802 422,344 182,712 246,990 3,395,608 2,610,183
(518,234) 344,709 165,637 (95,147) 608,299 492,229 1,656,736 172,781
64,700 80,889 - - - - 317,089 213,070
- - - - 85,276 - 93,532 253,469
- - - - - - - (53,000)
- - (470,725) (171,697) (1,540) - (643,962) (302,118)
- - - - - - 67,120 27,195
64,700 80,889 (470,725) (171,697) 83,736 - (166,221) 138,616
(453,534) 425,598 (305,088) (266,844) 692,035 492,229 1,490,515 311,397
242,906 - 2,820,634 (539,455) 1,991,041 494,430 16,042,254 15,730,857
(210,628)$ 425,598$ 2,515,546$ (806,299)$ 2,683,076$ 986,659$ 17,532,769$ 16,042,254$
Totals
Nonmajor
Capital Project Funds
105
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - RECYCLING Statement 18
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget-2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Intergovernmental:
Local:
Washington County recycling grant - public works 53,150$ 53,150$ 53,792$ 642$ 53,150$
Investment earnings (loss)- - 903 903 (416)
Miscellaneous - public works - - 3,500 3,500 3,500
Total revenues 53,150 53,150 58,195 5,045 56,234
Expenditures:
Public works:
Current:
Personal services 26,700 26,700 30,265 (3,565) 35,026
Commodities - - 8,979 (8,979) 96
Contractual services 23,674 23,674 28,842 (5,168) 25,087
Capital outlay 7,000 7,000 - 7,000 -
Total expenditures 57,374 57,374 68,086 (10,712) 60,209
Revenues over (under) expenditures (4,224)$ (4,224)$ (9,891) (5,667)$ (3,975)
Fund balance - January 1 63,833 67,808
Fund balance - December 31 53,942$ 63,833$
Budgeted Amounts
106106
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - STORM WATER MAINTENANCE FUND Statement 19
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget-2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenue:
Intergovernmental:
Local:
Other - public works -$ -$ 47,437$ 47,437$ 49,461$
Charges for services 675,950 675,950 684,119 8,169 649,343
Investment earnings (loss)1,000 1,000 1,693 693 (1,736)
Total revenue 676,950 676,950 733,249 56,299 697,068
Expenditures:
Public works:
Current:
Personal services 232,295 232,295 234,418 (2,123) 231,357
Commodities 54,950 54,950 2,841 52,109 3,768
Contractual services 339,160 339,160 227,046 112,114 393,555
Other charges - administrative charge 35,020 35,020 - 35,020 30,900
Capital outlay 82,000 82,000 66,933 15,067 -
Total expenditures 743,425 743,425 531,238 212,187 659,580
Revenue over (under) expenditures (66,475) (66,475) 202,011 268,486 37,488
Other financing sources (uses):
Transfer to General Fund - - (35,020) (35,020) -
Transfer to Capital Project Fund - - (68,051) (68,051) (70,186)
Total other financing sources (uses):- - (103,071) (103,071) (70,186)
Net increase (decrease) in fund balance (66,475)$ (66,475)$ 98,940 165,415$ (32,698)
Fund balance - January 1 154,074 186,772
Fund balance - December 31 253,014$ 154,074$
Budgeted Amounts
107107
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - FORFEITURE/SEIZURE Statement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget-2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Intergovernmental:
County 8,000$ 8,000$ -$ (8,000)$ 35,097$
Forfeitures and seizures 40,000 40,000 19,616 (20,384) 19,990
Investment earnings (loss)500 500 702 202 (447)
Total revenues 48,500 48,500 20,318 (28,182) 54,640
Expenditures:
Public safety:
Current:
Commodities 2,000 2,000 - 2,000 5,763
Contractual services 20,100 20,100 15,752 4,348 18,960
Total expenditures 22,100 22,100 15,752 6,348 24,723
Revenues over (under) expenditures 26,400$ 26,400$ 4,566 (21,834)$ 29,917
Fund balance - January 1 47,609 17,692
Fund balance - December 31 52,175$ 47,609$
Budgeted Amounts
108108
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - ICE ARENA Statement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget-2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
General property taxes:
Current and delinquent 240,000$ 240,000$ 240,718$ 718$ 237,539$
Intergovernmental:
Local:
School district 57,000 57,000 57,000 - 57,000
Charges for services 923,500 923,500 795,736 (127,764) 807,352
Investment earnings (loss)6,000 6,000 2,698 (3,302) (3,469)
Miscellaneous - - 6,563 6,563 302
Total revenues 1,226,500 1,226,500 1,102,715 (123,785) 1,098,724
Expenditures:
Culture and recreation:
Current:
Personal services 367,600 367,600 350,478 17,122 345,279
Commodities 31,150 31,150 35,466 (4,316) 26,232
Contractual services 289,760 289,760 378,905 (89,145) 317,942
Capital outlay 120,000 120,000 8,802 111,198 11,968
Debt Service:
Capital lease payment 270,000 270,000 270,000 - 260,000
Interest and fiscal charges 239,700 239,700 234,293 5,407 244,892
Total expenditures 1,318,210 1,318,210 1,277,944 40,266 1,206,313
Revenues over (under) expenditures (91,710)$ (91,710)$ (175,229) (83,519)$ (107,589)
Fund balance - January 1 199,090 306,679
Fund balance - December 31 23,861$ 199,090$
Budgeted Amounts
109109
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - GOLF COURSE Statement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget-2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Charges for services 1,526,300$ 1,526,300$ 1,384,236$ (142,064)$ 1,365,497$
Miscellaneous 1,500 1,500 257 (1,243) 3,437
Total revenues 1,527,800 1,527,800 1,384,493 (143,307) 1,368,934
Expenditures:
Culture and recreation:
Current:
Personal services 749,800 749,800 720,993 28,807 720,559
Commodities 172,270 172,270 139,884 32,386 139,034
Contractual services 575,060 575,060 491,582 83,478 485,426
Other charges - administrative charge - - - - 51,700
Capital outlay 139,000 139,000 125,526 13,474 46,421
Debt Service:
Capital lease payment 39,100 39,100 35,076 4,024 33,953
Interest and fiscal charges 2,900 2,900 3,124 (224) 4,247
Total expenditures 1,678,130 1,678,130 1,516,185 161,945 1,481,340
Revenues over (under) expenditures (150,330) (150,330) (131,692) 18,638 (112,406)
Other financing sources (uses):
Transfer from General Fund 55,405 55,405 55,405 - -
Transfer from Capital Project Fund - - - - 53,000
Total other financing sources (uses)55,405 55,405 55,405 - 53,000
Net increase (decrease) in fund balance (94,925)$ (94,925)$ (76,287) 18,638$ (59,406)
Fund balance - January 1 (1,300,879) -
Cumulative effect of change in accounting principle - (1,241,473)
Fund balance - January 1, as restated (1,300,879) (1,241,473)
Fund balance - December 31 (1,377,166)$ (1,300,879)$
Budgeted Amounts
110110
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING Statement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Variance with
2014 Final Budget-2013
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Investment earnings (loss)-$ -$ 191$ 191$ (70)$
Donations 1,500 1,500 1,726 226 5,829
Total revenues 1,500 1,500 1,917 417 5,759
Fund balance - January 1 12,383 6,624
Fund balance - December 31 14,300$ 12,383$
Budgeted Amounts
111111
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112112
INTERNAL SERVICE
Self Insurance Fund – Established to provide self insurance for the City and its officers, employees and agents for claims in excess of standard deductibles and to
account for the City flexible spending program and purchase of insurance.
Fleet Maintenance Fund – Established to account for costs related to repair and maintenance of City equipment and vehicles. Revenues received from departments are based on level of service performed.
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.
113
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 24
INTERNAL SERVICE FUNDS
December 31, 2014With Comparative Data as of December 31, 2013
Self Fleet Information
Insurance Maintenance Services 2014 2013
Assets:
Current assets:
Cash and investments 2,216,504$ 371,888$ 125,270$ 2,713,662$ 2,873,224$
Accounts receivable - 560 - 560 -
Prepaid items 109,729 - 20,620 130,349 123,524
Inventory - at cost - 69,698 - 69,698 69,405
Total current assets 2,326,233 442,146 145,890 2,914,269 3,066,153
Noncurrent assets:
Capital assets:
Land - 424,665 - 424,665 424,665
Buildings and improvements - 928,870 - 928,870 928,870
Equipment and furniture - - 74,232 74,232 74,232
Machinery and equipment - 178,512 - 178,512 158,929
Total capital assets - 1,532,047 74,232 1,606,279 1,586,696
Less: Accumulated depreciation - (625,278) (37,116) (662,394) (601,477)
Total noncurrent assets - 906,769 37,116 943,885 985,219
Total assets 2,326,233$ 1,348,915$ 183,006$ 3,858,154$ 4,051,372$
Liabilities:
Current liabilities:
Accounts payable 1,089$ 44,299$ 1,070$ 46,458$ 25,191$
Health care benefits payable 39,003 - - 39,003 28,480
Unpaid claims 158,905 - - 158,905 130,039
Salaries payable 493 15,544 7,238 23,275 20,936
Due to other governmental units - 360 - 360 1,263
Compensated absences payable - 17,717 8,757 26,474 20,360
Total current liabilities 199,490 77,920 17,065 294,475 226,269
Noncurrent liabilities:
Compensated absences payable - 21,401 1,473 22,874 25,253
Other post employment benefits - 1,705 223 1,928 1,557
Total noncurrent liabilities - 23,106 1,696 24,802 26,810
Total liabilities 199,490 101,026 18,761 319,277 253,079
Net position:
Net investment in capital assets - 906,769 37,116 943,885 985,219
Unrestricted 2,126,743 341,120 127,129 2,594,992 2,813,074
Total net position 2,126,743$ 1,247,889$ 164,245$ 3,538,877$ 3,798,293$
Totals
Internal Service Funds
114114
CITY OF COTTAGE GROVE, MINNESOTA
INTERNAL SERVICE FUNDS Statement 25
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Self Fleet Information
Insurance Maintenance Services 2014 2013
Operating revenues:
Charges for services:
User fees -$ 1,068,151$ 415,210$ 1,483,361$ 1,409,617$
Employee benefits 1,096,105 - - 1,096,105 1,077,840
Property insurance 233,350 - - 233,350 227,900
Insurance refunds and reimbursements 55,234 - - 55,234 89,018
Total operating revenues 1,384,689 1,068,151 415,210 2,868,050 2,804,375
Operating expenses:
Operating and maintenance:
Personal services - 316,965 158,393 475,358 458,839
Commodities - 590,784 160,299 751,083 663,121
Contractual services - 129,792 101,961 231,753 170,716
Total operation and maintenance - 1,037,541 420,653 1,458,194 1,292,676
Administrative and general:
Personal insurance benefits 1,259,345 - - 1,259,345 1,102,417
Contractual services 248,515 - - 248,515 225,025
Claims 172,634 - - 172,634 130,723
Total administrative and general 1,680,494 - - 1,680,494 1,458,165
Depreciation - 30,567 14,847 45,414 46,277
Total operating expenses 1,680,494 1,068,108 435,500 3,184,102 2,797,118
Operating income (loss)(295,805) 43 (20,290) (316,052) 7,257
Nonoperating revenues:
Investment earnings (loss)34,383 4,558 1,610 40,551 (23,372)
Miscellaneous 4,432 7,573 - 12,005 20,565
Total nonoperating revenues 38,815 12,131 1,610 52,556 (2,807)
Income (loss) before contributions and transfers (256,990) 12,174 (18,680) (263,496) 4,450
Capital Contributions - 4,080 - 4,080 -
Transfers:
Transfer to Enterprise Fund - - - - (31,000)
Change in net position (256,990) 16,254 (18,680) (259,416) (26,550)
Net position - January 1 2,383,733 1,231,635 182,925 3,798,293 3,824,843
Net position - December 31 2,126,743$ 1,247,889$ 164,245$ 3,538,877$ 3,798,293$
Totals
Internal Service Funds
115
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS Statement 26
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Self Fleet Information
Insurance Maintenance Services 2014 2013
Cash flows from operating activities:
Receipts from interfund services provided 1,329,455$ 1,068,151$ 415,210$ 2,812,816$ 2,715,357$
Receipts from insurance refunds and reimbursements 55,234 - - 55,234 89,018
Payment to suppliers (391,934) (701,153) (269,346) (1,362,433) (1,115,722)
Payment to employees (1,248,851) (311,245) (157,639) (1,717,735) (1,547,882)
Miscellaneous revenue 4,432 7,573 - 12,005 20,565
Net cash flows from operating activities (251,664) 63,326 (11,775) (200,113) 161,336
Cash flows from noncapital financing activities:
Transfer to Enterprise Fund - - - - (31,000)
Cash flows from investing activities:
Investment earnings (loss)34,383 4,558 1,610 40,551 (23,372)
Net increase (decrease) in cash and cash equivalents (217,281) 67,884 (10,165) (159,562) 106,964
Cash and cash equivalents - January 1 2,433,785 304,004 135,435 2,873,224 2,766,260
Cash and cash equivalents - December 31 2,216,504$ 371,888$ 125,270$ 2,713,662$ 2,873,224$
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss)(295,805)$ 43$ (20,290)$ (316,052)$ 7,257$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation - 30,567 14,847 45,414 46,277
Miscellaneous revenue 4,432 7,573 - 12,005 20,565
Changes in assets and liabilities:
Decrease (increase) in receivables - (560) - (560) 190
Decrease (increase) in prepaid items 92 650 (7,567) (6,825) 3,543
Decrease (increase) in inventory - (293) - (293) 4,078
Increase (decrease) in payables 39,617 25,346 1,235 66,198 79,426
Total adjustments 44,141 63,283 8,515 115,939 154,079
Net cash flows from operating activities (251,664)$ 63,326$ (11,775)$ (200,113)$ 161,336$
Noncash investing, capital and financing activities:
Capital asset contribution from government -$ 4,080$ -$ 4,080$ -$
Totals
Internal Service Funds
116
ECONOMIC DEVELOPMENT AUTHORITY
COMPONENT UNIT
Established to account for the receipt and use of monies for economic purposes.
117117
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET - ALL GOVERNMENTAL FUND TYPES Statement 27
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31, 2014
With Comparative Data as of December 31, 2013
Special Debt
Revenue Service 2014 2013
Assets:
Cash and investments -$ 546,654$ 546,654$ 608,278$
Interfund receivable - 14,775 14,775 -
Accounts receivable 4,154 - 4,154 -
Capital lease receivable from primary government - 5,085,000 5,085,000 5,355,000
Prepaid items 2,560 - 2,560 1,500
Delinquent property taxes receivable 1,771 - 1,771 2,430
Property held for resale 311,718 - 311,718 311,718
Total assets 320,203$ 5,646,429$ 5,966,632$ 6,278,926$
Liabilities:
Accounts payable 36,284$ -$ 36,284$ 151,894$
Salaries payable 8,782 - 8,782 7,490
Interfund payable 14,775 - 14,775 -
Due to other governmental units - - - 74
Deposits Payable 2,666 - 2,666 -
Total liabilities 62,507 - 62,507 159,458
Deferred inflows of resources:
Unavailable revenue - property taxes 1,771 - 1,771 2,430
Total deferred inflows of resources 1,771 - 1,771 2,430
Fund balance:
Nonspendable:
Prepaid items 2,560 - 2,560 1,500
Assets for resale 311,718 - 311,718 311,718
Restricted for:
Debt service reserve - 5,646,429 5,646,429 5,908,436
Unassigned (58,353) - (58,353) (104,616)
Total fund balance 255,925 5,646,429 5,902,354 6,117,038
Total liabilities, deferred inflows of resources,
and fund balance 320,203$ 5,646,429$ 5,966,632$ 6,278,926$
Fund balance reported above 5,902,354$
1,771
(5,101,655)
Net position of component unit (page 33)802,470$
Long-term liabilities, including bonds payable, compensated absences and other post employment
benefits, are not due and payable in the current period and therefore are not reported in the funds.
Totals
Economic Development Authority
Component Unit
Other long-term assets, including property taxes receivable, are not available to pay for current-period
expenditures, and therefore, are deferred in the funds.
118
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 28
CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
Special Debt
Revenue Service 2014 2013
Revenues:
General property taxes:
Current and delinquent 108,430$ -$ 108,430$ 106,992$
Charges for service 230,000 - 230,000 30,000
Investment earnings (loss)377 7,993 8,370 (5,201)
Interest on loan to primary government - 234,293 234,293 244,893
Miscellaneous 114,200 - 114,200 69,703
Total revenues 453,007 242,286 695,293 446,387
Expenditures:
General government:
Current:
Personal services 216,300 - 216,300 217,550
Commodities 7,013 - 7,013 98,135
Contractual services 182,371 - 182,371 206,450
Debt service:
Principal retirement - 270,000 270,000 260,000
Interest and fiscal charges - 234,293 234,293 244,893
Total expenditures 405,684 504,293 909,977 1,027,028
Revenues over (under) expenditures 47,323 (262,007) (214,684) (580,641)
Special item:
Loan forgiveness to primary government - - - (1,020,000)
Net increase (decrease) in fund balance 47,323 (262,007) (214,684) (1,600,641)
Fund balance - January 1 208,602 5,908,436 6,117,038 7,717,679
Fund balance - December 31 255,925$ 5,646,429$ 5,902,354$ 6,117,038$
Net decrease in fund balance reported above (214,684)$
Revenues in the statement of activities that do not report current financial resources are not
reported as revenues in the funds:
General property taxes unavailable revenue:
At December 31, 2013 (2,430)
At December 31, 2014 1,771
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources
to governmental funds, while the repayment of the principal of long-term debt consumes
the current financial resources of governmental funds. Neither transaction, however, has
any effect on net position. This amount is the net effect of these differences in the treatment
of long-term debt and related items:
Principal repayments 270,000
Some expenses reported in the statement of activities do not require the use of current
financial resources and therefore are not reported as expenditures in governmental
funds:
Compensated absences:
At December 31, 2013 14,112
At December 31, 2014 (15,955)
Other post employment benefits:
At December 31, 2013 524
At December 31, 2014 (700)
Change in net position of component unit (page 35)52,638$
Totals
Economic Development Authority
Component Unit
119
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120120
SUPPLEMENTARY FINANCIAL INFORMATION
121121
CITY OF COTTAGE GROVE, MINNESOTA
CONSTRUCTION/ACQUISITION COSTS
CAPITAL PROJECT FUNDS
December 31, 2014
Fund Land
No.Descriptions Contractor Engineer Acquisition
510 FUNDED BY FUTURE DEVELOPMENT:
Jamaica/Military Realignment -$ 97,885$ -$
Total Fund 510 - 97,885 -
520 FUNDED BY MSA:
Ideal Avenue - - -
Hinton Avenue Reclamation 1,068,824 195,644 -
East Point Douglas street & utilities 1,482,164 230,349 -
Hardwood Avenue sidewalks & trails - - -
70th & Meadow Grass intersection improvements 412,276 51,024 -
CSAH 19-20-22 alignment 469,814 213,874 -
CSAH 19-20-22 alignment 396,852 - -
Total Fund 520 3,829,930 690,891 -
FUNDED BY SPECIAL ASSESSMENT BONDS:
560 Pavement Management:
2013 Pavement Management 4,799,303 765,530 -
2014 Pavement Management 1,913,488 248,806 -
Total Fund 560 6,712,791 1,014,336 -
FUNDED BY PARK TRUST FUNDS:
570 Hamlet Park North - 27,741 -
Oak Cove Park - - -
Trails Everwood 4th - - -
Trails - - -
Total Fund 570 - 27,741 -
FUNDED BY AREA FUNDS:
575 Trunk Fund Oversizing Capitalize - - -
Total Fund 575 - - -
580 Trunk Fund Oversizing Capitalize - - -
Total Fund 580 - - -
585 80th Street Box Culvert 1,184,308 224,387 -
Trunk Fund Oversizing Capitalize - - -
Total Fund 585 1,184,308 224,387 -
Totals 11,727,029$ 2,055,240$ -$
Less: Completed construction*
Work in progress - December 31, 2014
Construction/Acquisition Costs
122122
Exhibit 1
Expended
Legal,ROW/Total Prior
Fiscal Easement Other Costs 2014 Years
-$ -$ 7,008$ 104,893$ -$ 104,893$
- - 7,008 104,893 - 104,893
- - 105,743 105,743 - 105,743
- - 11,802 1,276,270 *- 1,276,270
- - 230,035 1,942,548 *144,603 1,797,945
- - 187,167 187,167 *187,167 -
- - 5,230 468,530 *468,530 -
- 600,957 8,157 1,292,802 *27,474 1,265,328
- - - 396,852 *- 396,852
- 600,957 548,134 5,669,912 827,774 4,842,138
- - 86,547 5,651,380 *86,309 5,565,071
- - 33,369 2,195,663 *2,195,663 -
- - 119,916 7,847,043 2,281,972 5,565,071
- - - 27,741 - 27,741
- - 344,618 344,618 344,618 -
- - 23,646 23,646 23,646 -
- - 52,469 52,469 *16,490 35,979
- - 420,733 448,474 384,754 63,720
- - 136,256 136,256 *136,256 -
- - 136,256 136,256 136,256 -
- - 101,878 101,878 *101,878 -
- - 101,878 101,878 101,878 -
- - 80,074 1,488,769 *48,621 1,440,148
- - 144,522 144,522 *111,514 33,008
- - 224,596 1,633,291 160,135 1,473,156
-$ 600,957$ 1,558,521$ 15,941,747$ 3,892,769$ 12,048,978$
15,335,106
606,641$
Construction/Acquisition Costs
123123
CITY OF COTTAGE GROVE, MINNESOTA
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
December 31, 2014
Interest Final
Rate Dated Payment
Primary Government
General Obligation Bonds:
$1,405,000 Tax Increment Bonds of 2004A 3.0-4.65%7/1/2004 2/1/2024
$1,775,000 Tax Increment Bonds of 2004B 4.5-5.75%7/1/2004 2/1/2021
$1,405,000 Tax Increment Refunding Bonds of 2014A 2.0-2.50%5/29/2014 2/1/2021
Total General Obligation Bonds
Special Assessment Debt:
Improvement Bonds of 2008A 3.50-3.60%6/11/2008 2/1/2019
Improvement Bonds of 2009A 2.50-4.30%4/16/2009 2/1/2024
Improvement Refunding Bonds of 2009C 2.00-3.00%4/16/2009 12/1/2015
Improvement Bonds of 2012A 0.30-2.20%3/13/2012 2/1/2027
Improvement Bonds of 2013A 3.00-3.50%9/26/2013 2/1/2029
Total Special Assessment Debt with Governmental Commitment
Proprietary Fund Bonds:
Water Revenue Refunding Bonds of 2009B 2.50-4.0%4/16/2009 2/1/2020
Total Proprietary Fund Bonds
Total Bonded Indebtedness - Primary Government
Component Unit - EDA
$6,500,000 Ice Arena Lease Rev Bonds of 2008B 4.0%-4.90%6/11/2008 4/1/2028
Total Component Unit - EDA
Total Bonded Indebtedness - Reporting Entity
124124
Exhibit 2
Authorized Principal Due Interest Due
And Issued Retired Outstanding In 2015 In 2015
1,405,000$ 310,000$ 1,095,000$ 35,000$ 48,870$
1,775,000 1,775,000 - - -
1,405,000 - 1,405,000 170,000 32,834
4,585,000 2,085,000 2,500,000 205,000 81,704
3,370,000 2,035,000 1,335,000 245,000 42,728
3,650,000 1,260,000 2,390,000 225,000 88,651
625,000 420,000 205,000 205,000 6,150
1,865,000 240,000 1,625,000 120,000 23,258
7,345,000 - 7,345,000 320,000 223,216
16,855,000 3,955,000 12,900,000 1,115,000 384,003
1,205,000 500,000 705,000 105,000 24,150
1,205,000 500,000 705,000 105,000 24,150
22,645,000 6,540,000 16,105,000 1,425,000 489,857
6,500,000 1,415,000 5,085,000 280,000 223,292
6,500,000 1,415,000 5,085,000 280,000 223,292
29,145,000$ 7,955,000$ 21,190,000$ 1,705,000$ 713,149$
125125
CITY OF COTTAGE GROVE, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY Exhibit 3
December 31, 2014 Page 1 of 2
1,405,000$
1,405,000$ Tax
Tax Increment Total Total Total Total Total
Increment Refunding Tax General 3,650,000$ 625,000$ 1,865,000$ 7,345,000$ Pavement 3,370,000$ Developer Special
Bonds Bonds Increment Obligation Bonds Bonds Bonds Bonds Management Bonds Financed Assessment
of 2004A of 2014A Bonds Bonds of 2009A of 2009C of 2012A of 2013A Bonds of 2008A Bonds Bonds
Bonds payable 1,095,000$ 1,405,000$ 2,500,000$ 2,500,000$ 2,390,000$ 205,000$ 1,625,000$ 7,345,000$ 11,565,000$ 1,335,000$ 1,335,000$ 12,900,000$
Future interest payable 367,935 117,004 484,939 484,939 496,379 6,150 187,114 1,896,713 2,586,356 122,144 122,144 2,708,500
Totals 1,462,935$ 1,522,004$ 2,984,939$ 2,984,939$ 2,886,379$ 211,150$ 1,812,114$ 9,241,713$ 14,151,356$ 1,457,144$ 1,457,144$ 15,608,500$
Payments to maturity:
2015 83,870 202,834 286,704 286,704 313,651 211,150 143,258 543,216 1,211,275 287,728 287,728 1,499,003
2016 82,400 199,310 281,710 281,710 306,338 - 142,596 622,266 1,071,200 288,978 288,978 1,360,178
2017 80,860 210,660 291,520 291,520 303,375 - 141,818 624,740 1,069,933 289,878 289,878 1,359,811
2018 79,320 221,710 301,030 301,030 295,037 - 140,858 621,840 1,057,735 295,340 295,340 1,353,075
2019 77,780 237,410 315,190 315,190 291,025 - 144,599 623,565 1,059,189 295,220 295,220 1,354,409
2020 76,240 247,580 323,820 323,820 286,525 - 148,002 624,840 1,059,367 - - 1,059,367
2021 104,040 202,500 306,540 306,540 281,825 - 146,118 620,740 1,048,683 - - 1,048,683
2022 286,872 - 286,872 286,872 276,800 - 144,005 621,265 1,042,070 - - 1,042,070
2023 294,810 - 294,810 294,810 271,320 - 146,685 621,340 1,039,345 - - 1,039,345
2024 296,743 - 296,743 296,743 260,483 - 149,070 620,965 1,030,518 - - 1,030,518
2025 - - - - - - 146,200 620,140 766,340 - - 766,340
2026 - - - - - - 148,135 618,590 766,725 - - 766,725
2027 - - - - - - 70,770 620,944 691,714 - - 691,714
2028 - - - - - - - 616,587 616,587 - - 616,587
2029 - - - - - - - 620,675 620,675 - - 620,675
Totals 1,462,935$ 1,522,004$ 2,984,939$ 2,984,939$ 2,886,379$ 211,150$ 1,812,114$ 9,241,713$ 14,151,356$ 1,457,144$ 1,457,144$ 15,608,500$
Pavement Management Developer FinancedTax Increment
General Obligation Bonds Special Assessment Bonds
Primary Government
1
2
6
CITY OF COTTAGE GROVE, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY Exhibit 3
December 31, 2014 Page 2 of 2
$1,205,000 $6,500,000
Water Total EDA Total
Revenue Debt Ice Arena Debt
Refunding Total Total Service Lease Purchase Service
Bonds Water/Sewer Revenue Primary Revenue Reporting
of 2009B Bonds Bonds Government of 2008B Entity
Bonds payable 705,000$ 705,000$ 705,000$ 16,105,000$ 5,085,000$ 21,190,000$
Future interest payable 84,262 84,262 84,262 3,277,701 1,815,432 5,093,133
Totals 789,262$ 789,262$ 789,262$ 19,382,701$ 6,900,432$ 26,283,133$
Payments to maturity:
2015 129,150 129,150 129,150 1,914,857 503,292 2,418,149
2016 130,650 130,650 130,650 1,772,538 501,892 2,274,430
2017 131,712 131,712 131,712 1,783,043 499,942 2,282,985
2018 132,450 132,450 132,450 1,786,555 497,360 2,283,915
2019 132,700 132,700 132,700 1,802,299 494,288 2,296,587
2020 132,600 132,600 132,600 1,515,787 495,697 2,011,484
2021 - - - 1,355,223 495,871 1,851,094
2022 - - - 1,328,942 494,601 1,823,543
2023 - - - 1,334,155 492,370 1,826,525
2024 - - - 1,327,261 489,252 1,816,513
2025 - - - 766,340 485,233 1,251,573
2026 - - - 766,725 485,176 1,251,901
2027 - - - 691,714 483,943 1,175,657
2028 - - - 616,587 481,515 1,098,102
2029 - - - 620,675 - 620,675
Totals 789,262$ 789,262$ 789,262$ 19,382,701$ 6,900,432$ 26,283,133$
Water/Sewer
Component Unit
Revenue BondsProprietary Funds
Primary Government (continued)
1
2
7
CITY OF COTTAGE GROVE, MINNESOTA
DEFERRED TAX LEVIES Exhibit 4
December 31, 2014
Total
$3,650,000 $625,000 $1,865,000 $7,345,000 Pavement
Local Refunding Local Local Management
Year of Improvement Improvement Improvement Improvement Special
Tax Levy/Bonds Bonds Bonds Bonds Assessment Total
Collection of 2009A of 2009C of 2012A of 2013A Bonds All Levies
2014/15 173,960$ 198,917$ 80,377$ 410,941$ 864,195$ 864,195$
2015/16 177,461 - 79,622 413,776 670,859 670,859
2016/17 175,529 - 78,739 410,888 665,156 665,156
2017/18 178,243 - 82,855 412,936 674,034 674,034
2018/19 180,144 - 86,596 414,511 681,251 681,251
2019/20 181,834 - 84,753 410,363 676,950 676,950
2020/21 183,314 - 82,638 411,150 677,102 677,102
2021/22 184,322 - 85,567 411,466 681,355 681,355
2022/23 179,596 - 88,266 411,308 679,170 679,170
2023/24 - - 85,326 410,678 496,004 496,004
2024/25 - - 87,489 409,576 497,065 497,065
2025/26 - - 42,424 412,673 455,097 455,097
2026/27 - - - 409,271 409,271 409,271
2027/28 - - - 414,022 414,022 414,022
1,614,403$ 198,917$ 964,652$ 5,763,559$ 8,541,531$ 8,541,531$
Pavement Management
Special Assessment Bonds
1
2
8
1
2
8
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129129
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 5
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
December 31, 2014
With Comparative Data as of December 31, 2013
2009A 2009C 2012A 2013A
Improvement Improvement Improvement Improvement
Bonds Bonds Bonds Bonds 2014 2013
Assets:
Cash and investments 525,607$ 50,203$ 343,270$ 411,694$ 1,330,774$ 1,652,317$
Interfund receivable - - - 598,445 598,445 -
Delinquent property taxes receivable 2,874 1,383 1,172 804 6,233 7,746
Special assessments receivable:
Deferred 669,870 15,881 376,576 1,536,147 2,598,474 2,984,516
Delinquent 2,698 239 661 1,986 5,584 4,170
Special deferred 3,099 - 6,827 8,916 18,842 17,862
Total assets 1,204,148$ 67,706$ 728,506$ 2,557,992$ 4,558,352$ 4,666,611$
Liabilities:
Accounts payable 2,988$ 2,987$ -$ -$ 5,975$ 369$
Total liabilities 2,988 2,987 - - 5,975 369
Deferred inflows of resources:
Unavailable revenue - property taxes 2,874 1,383 1,172 804 6,233 7,746
Unavailable revenue - special assessments 675,667 16,120 384,064 1,547,049 2,622,900 3,006,548
Total deferred inflows of resources 678,541 17,503 385,236 1,547,853 2,629,133 3,014,294
Fund balance:
Restricted for debt retirement 522,619 47,216 343,270 1,010,139 1,923,244 1,651,948
Total fund balance 522,619 47,216 343,270 1,010,139 1,923,244 1,651,948
Total liabilities, deferred inflows of resources,
and fund balance 1,204,148$ 67,706$ 728,506$ 2,557,992$ 4,558,352$ 4,666,611$
Totals
Pavement Management
Debt Service Schedule
1
3
0
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Exhibit 6
EXPENDITURES AND CHANGES IN FUND BALANCE
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
2009A 2009C 2012A 2013A
Improvement Improvement Improvement Improvement
Bonds Bonds Bonds Bonds 2014 2013
Revenues:
General property taxes:
Current and delinquent 175,540$ 998$ 81,136$ 327,690$ 585,364$ 411,871$
Special assessments:
Current 128,375 18,116 66,031 209,864 422,386 229,465
Delinquent 1,405 191 686 - 2,282 7,479
Prepayments on deferred 14,256 185 27,656 81,835 123,932 634,540
Penalties 319 33 124 227 703 1,821
Investment earnings (loss)6,016 3,541 3,625 8,900 22,082 (6,163)
Total revenues 325,911 23,064 179,258 628,516 1,156,749 1,279,013
Expenditures:
Current:
Contractual services 4,605 3,809 1,224 1,650 11,288 3,969
Debt service:
Principal retirement 225,000 205,000 120,000 - 550,000 405,000
Interest and fiscal charges 95,400 11,788 23,798 193,179 324,165 149,007
Total expenditures 325,005 220,597 145,022 194,829 885,453 557,976
Revenues over (under) expenditures 906 (197,533) 34,236 433,687 271,296 721,037
Fund balance - January 1 521,713 244,749 309,034 576,452 1,651,948 930,911
Fund balance - December 31 522,619$ 47,216$ 343,270$ 1,010,139$ 1,923,244$ 1,651,948$
Totals
Pavement Management
Debt Service Schedule
1
3
1
1
3
1
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 7
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
December 31, 2014
With Comparative Data as of December 31, 2013
Reconciliation
TIF TIF TIF to Nonmajor
1-8 1-12 1-14 Fund 2014 2013
Assets:
Cash and investments 369,093$ 966,467$ 1,099$ -$ 1,336,659$ 899,430$
Delinquent property taxes receivable - - - - - 11,676
Total assets 369,093$ 966,467$ 1,099$ -$ 1,336,659$ 911,106$
Liabilities:
Interfund loan payable -$ -$ 350,000$ -$ 350,000$ 405,000$
Total liabilities - - 350,000 - 350,000 405,000
Deferred inflows of resources:
Unavailable revenue - property taxes - - - - - 11,676
Total deferred inflows of resources - - - - - 11,676
Fund balance (deficit):
Restricted for:
Tax increment purposes 369,093 966,467 - (348,901) 986,659 494,430
Unassigned - - (348,901) 348,901 - -
Total fund balance (deficit)369,093 966,467 (348,901) - 986,659 494,430
Total liabilities, deferred inflows of resources,
and fund balance 369,093$ 966,467$ 1,099$ -$ 1,336,659$ 911,106$
TIF Revolving Capital
Project Schedule
1
3
2
1
3
2
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING SCHEDULE OF REVENUES, Exhibit 8
EXPENDITURES AND CHANGES IN FUND BALANCE
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
TIF TIF TIF
1-8 1-12 1-14 2014 2013
Revenues:
Tax increment collections 32,090$ 613,905$ 77,309$ 723,304$ 240,938$
Investment earnings (loss)4,861 9,301 192 14,354 (6,826)
Miscellaneous - 1,561 - 1,561 7,416
Total revenues 36,951 624,767 77,501 739,219 241,528
Expenditures:
Current:
Contractual services 263 222,084 343 222,690 120,386
Debt service:
Interest and fiscal charges - - 24,300 24,300 27,300
Total expenditures 263 222,084 24,643 246,990 147,686
Revenues over (under) expenditures 36,688 402,683 52,858 492,229 93,842
Fund balance (deficit) - January 1 332,405 563,784 (401,759) 494,430 400,588
Fund balance (deficit) - December 31 369,093$ 966,467$ (348,901)$ 986,659$ 494,430$
Totals
TIF Revolving Capital
Project Schedule
1
3
3
1
3
3
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 9
TIF DEBT SERVICE REVOLVING SCHEDULE
December 31, 2014
With Comparative Data as of December 31, 2013
2004A Tax 2004A 2004B 2014A Taxable
1985 Tax Increment Tax Exempt Taxable Tax Increment
Increment Refunding Increment Increment Refunding
Bonds Bonds Bonds Bonds Bonds
TIF 1-1 TIF 1-3 TIF 1-12 TIF 1-12 TIF 1-12 2014 2013
Assets:
Cash and investments 353,180$ 559,750$ 105,926$ -$ 266,981$ 1,285,837$ 1,508,202$
Total assets 353,180$ 559,750$ 105,926$ -$ 266,981$ 1,285,837$ 1,508,202$
Fund balance:
Restricted for tax increment purposes 353,180$ 559,750$ 105,926$ - 266,981$ 1,285,837$ 1,508,202$
Total fund balance 353,180 559,750 105,926 - 266,981 1,285,837 1,508,202
Total fund balance 353,180$ 559,750$ 105,926$ -$ 266,981$ 1,285,837$ 1,508,202$
Revolving Schedule
TIF Debt Service
Totals
1
3
4
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Exhibit 10
EXPENDITURES AND CHANGES IN FUND BALANCE
TIF DEBT SERVICE REVOLVING SCHEDULE
For The Year Ended December 31, 2014
With Comparative Data for the Year Ended December 31, 2013
2004A Tax 2004A 2004B 2014A Taxable
1985 Tax Increment Tax Exempt Taxable Tax Increment
Increment Refunding Increment Increment Refunding
Bonds Bonds Bonds Bonds Bonds
TIF 1-1 TIF 1-3 TIF 1-12 TIF 1-12 TIF 1-12 2014 2013
Revenues:
Tax increment collections -$ -$ -$ -$ -$ -$ 705,909$
Investment earnings (loss)5,029 7,970 2,200 4,374 7 19,580 (6,896)
Total revenues 5,029 7,970 2,200 4,374 7 19,580 699,013
Expenditures:
Current:
Contractual services 42 43 2,750 - - 2,835 718
Debt service:
Principal retirement - - 25,000 1,480,000 - 1,505,000 135,000
Interest and fiscal charges - - 50,045 107,526 - 157,571 136,287
Total expenditures 42 43 77,795 1,587,526 - 1,665,406 272,005
Revenues over (under) expenditures 4,987 7,927 (75,595) (1,583,152) 7 (1,645,826) 427,008
Other financing sources (uses):
Transfers in (out)- - - (264,830) 264,830 - -
Bonds issued - - - 1,402,856 2,144 1,405,000 -
Premium on debt issued - - - 18,461 - 18,461 -
Total other financing sources (uses)- - - 1,156,487 266,974 1,423,461 -
Net increase (decrease) in fund balance 4,987 7,927 (75,595) (426,665) 266,981 (222,365) 427,008
Fund balance - January 1 348,193 551,823 181,521 426,665 - 1,508,202 1,081,194
Fund balance - December 31 353,180$ 559,750$ 105,926$ -$ 266,981$ 1,285,837$ 1,508,202$
Totals
TIF Debt Service
Revolving Schedule
1
3
5
1
3
5
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136136
III. STATISTICAL SECTION (UNAUDITED)
This part of the City of Cottage Grove’s comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the City’s overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. Table 1 – Net Position by Component
Table 2 – Changes in Net Position Table 3 – Fund Balances of Governmental Funds Table 4 – Changes in Fund Balances of Governmental Funds
Revenue Capacity These schedules contain information to help the reader assess the government’s most significant local revenue source, property taxes. Table 5 – Assessed and Estimated Actual Value of Taxable Property Table 6 – Property Tax Rates Direct and Overlapping Governments Table 7 – Principal Property Taxpayers
Table 8 – Property Tax Levies and Collections
Debt Capacity These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future.
Table 9 – Ratios of Outstanding Debt by Type Table 10 – Ratios of General Bonded Debt Outstanding Table 11 – Direct and Overlapping Governmental Activities Debt Table 12 – Legal Debt Margin Information
Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place.
Table 13 – Demographic and Economic Statistics Table 14 – Prinicipal Employers
Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and activities it performs. Table 15 – Full-time Equivalent City Government Employees by Function
Table 16 – Operating Indicators by Function/Program Table 17 – Capital Assets Statistics by Function/Program
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
137137
CITY OF COTTAGE GROVE, MINNESOTA
NET POSITION BY COMPONENT Table 1
Last Ten Fiscal Years
(accrual basis of accounting)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Governmental activities
Net investment in capital assets 70,746,458$ 83,873,878$ 95,076,747$ 94,590,013$ 92,735,500$ 94,794,079$ 109,696,916$ 120,412,875$ 124,156,059$ 127,260,042$
Restricted 9,032,992 6,187,415 6,415,232 7,828,338 8,158,356 5,841,563 4,282,305 4,210,913 7,187,948 6,971,432
Unrestricted 33,881,516 36,601,374 36,519,388 39,209,995 42,928,157 45,412,895 34,625,010 25,024,447 25,908,617 28,277,397
Total governmental activities net position 113,660,966$ 126,662,667$ 138,011,367$ 141,628,346$ 143,822,013$ 146,048,537$ 148,604,231$ 149,648,235$ 157,252,624$ 162,508,871$
Business-type activities
Net investment in capital assets 42,982,032$ 44,968,098$ 49,645,870$ 53,367,475$ 54,106,504$ 53,870,041$ 53,664,161$ 53,225,445$ 51,453,195$ 54,432,059$
Restricted 250,670 258,170 260,365 262,375 269,195 325,685 325,460 - - -
Unrestricted 8,031,164 9,133,446 10,007,818 10,922,468 12,283,780 12,829,661 13,236,680 14,645,490 16,792,024 15,896,363
Total business-type activities net position 51,263,866$ 54,359,714$ 59,914,053$ 64,552,318$ 66,659,479$ 67,025,387$ 67,226,301$ 67,870,935$ 68,245,219$ 70,328,422$
Primary Government
Net investment in capital assets 113,728,490$ 128,841,976$ 144,722,617$ 147,957,488$ 146,842,004$ 148,664,120$ 163,361,077$ 173,638,320$ 175,609,254$ 181,692,101$
Restricted 9,283,662 6,445,585 6,675,597 8,090,713 8,427,551 6,167,248 4,607,765 4,210,913 7,187,948 6,971,432
Unrestricted 41,912,680 45,734,820 46,527,206 50,132,463 55,211,937 58,242,556 47,861,690 39,669,937 42,700,641 44,173,760
Total primary government net position 164,924,832$ 181,022,381$ 197,925,420$ 206,180,664$ 210,481,492$ 213,073,924$ 215,830,532$ 217,519,170$ 225,497,843$ 232,837,293$
Fiscal Year
1
3
8
1
3
8
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139139
CITY OF COTTAGE GROVE, MINNESOTA
CHANGES IN NET POSITION Table 2
Last Ten Fiscal Years
(accrual basis of accounting)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Expenses
Governmental activities:
General government
Regular operations 2,183,566$ 1,830,072$ 1,907,725$ 2,155,101$ 1,868,582$ 2,125,407$ 2,985,571$ 2,997,825$ 2,270,332$ 2,229,518$ (1)
Land Sales - 706,602 2,273,696 - - - - - - -
Payment to component unit - - - 678,880 - - - - - -
Community development 753,206 753,185 803,916 893,468 1,106,256 1,140,456 - - 903,180 946,001 (1)
Economic development - - - - - - 1,110,214 362,009 61,302 545,646
Public safety 5,361,107 5,437,971 5,475,440 5,705,153 5,724,450 5,888,224 6,252,530 7,069,301 6,949,225 7,212,998
Public works:
Regular operations 2,537,113 2,817,872 2,855,163 3,197,111 3,267,455 3,364,115 3,805,839 4,074,995 4,128,694 4,627,829
Construction 2,160,950 2,618,123 2,066,692 2,188,158 2,384,980 2,547,078 2,882,276 2,534,116 3,992,536 2,971,353
Culture and recreation 2,357,548 2,432,041 2,417,221 2,604,623 2,674,781 2,992,620 2,948,075 3,059,273 4,768,181 5,119,093 (2)
Interest on long-term debt 1,166,284 1,188,586 1,278,801 1,163,542 1,548,704 1,056,110 846,258 827,645 976,891 808,642
Total governmental activities expenses 16,519,774 17,784,452 19,078,654 18,586,036 18,575,208 19,114,010 20,830,763 20,925,164 24,050,341 24,461,080
Business-type activities:
Golf course 1,720,195 1,640,032 1,616,541 1,617,708 1,553,921 1,447,849 1,504,006 1,614,321 - - (2)
Street lights 493,461 566,300 567,966 459,314 508,615 534,206 625,312 659,869 742,410 867,690
Cottage Grove EMS 1,008,843 1,029,482 951,159 768,240 920,991 975,560 1,038,972 1,109,809 1,322,635 1,412,855
Water operating 2,031,760 2,195,558 2,488,110 2,097,071 1,801,070 1,891,752 1,901,985 2,049,877 2,341,555 2,216,819
Sewer operating 1,749,236 1,892,487 1,806,750 1,953,985 2,079,127 2,150,795 2,223,749 2,242,778 2,278,958 2,428,944
Total business-type activities 7,003,495 7,323,859 7,430,526 6,896,318 6,863,724 7,000,162 7,294,024 7,676,654 6,685,558 6,926,308
Total primary government expenses 23,523,269$ 25,108,311$ 26,509,180$ 25,482,354$ 25,438,932$ 26,114,172$ 28,124,787$ 28,601,818$ 30,735,899$ 31,387,388$
Program Revenues
Governmental activities:
Charges for services:
General government:
Regular operations 935,790$ 1,204,709$ 324,315$ 288,502$ 246,027$ 224,719$ 764,185$ 883,272$ 238,721$ 138,768$ (1)
Land sales - 1,095,357 2,265,963 - - - - - - -
Community development 1,126,836 1,063,113 884,977 959,800 852,453 944,278 - - 1,115,203 989,140 (1)
Economic development - - - - - - 175 210 7,626 1,771
Public safety 418,686 383,067 372,491 363,046 391,593 396,887 444,039 429,646 353,130 325,368
Public works:
Regular operations 651,070 803,783 748,267 818,692 720,397 710,341 845,315 880,095 797,432 1,010,695
Construction 20,637 88,919 130,073 237 17,273 - - - - -
Culture and recreation 492,628 575,110 616,602 779,941 980,003 1,178,977 1,024,516 1,026,685 2,413,744 2,448,968 (2)
Operating grants and contributions 1,548,390 1,114,928 1,216,184 1,252,052 1,192,559 1,210,249 1,084,928 1,075,529 1,211,506 1,545,268
Capital grants and contributions 15,073,998 13,034,878 12,787,794 6,156,916 2,941,206 2,464,782 5,118,546 3,064,292 10,370,972 9,401,775 Total governmental activities program revenues 20,268,035 19,363,864 19,346,666 10,619,186 7,341,511 7,130,233 9,281,704 7,359,729 16,508,334 15,861,753
Fiscal Year
1
4
0
1
4
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Program Revenues (continued)
Business-type activities:
Charges for services:
Golf course 1,668,420 1,603,992 1,645,832 1,557,213 1,563,399 1,583,098 1,399,204 1,566,035 - - (2)
Street lights 661,500 660,503 915,074 691,384 596,703 494,162 532,607 540,696 580,837 658,810
Cottage Grove EMS 896,145 1,040,474 1,158,397 876,762 1,130,948 1,068,953 1,114,226 1,528,756 1,569,017 1,626,320
Water operating 2,075,463 2,351,884 2,602,123 2,543,433 2,428,738 2,161,076 2,249,926 2,773,937 2,369,570 1,868,942
Sewer operating 1,833,232 1,831,643 1,859,889 1,933,680 1,939,912 2,202,013 2,208,014 2,207,363 2,175,479 2,151,756
Capital grants and contributions - - - - - 165,266 267,465 - 1,051,532 1,783,762
Total business-type activities program revenues 7,134,760 7,488,496 8,181,315 7,602,472 7,659,700 7,674,568 7,771,442 8,616,787 7,746,435 8,089,590 Total primary government program revenues 27,402,795$ 26,852,360$ 27,527,981$ 18,221,658$ 15,001,211$ 14,804,801$ 17,053,146$ 15,976,516$ 24,254,769$ 23,951,343$
Net (Expense)/Revenue
Governmental activities 3,748,261$ 1,579,412$ 268,012$ (7,966,850)$ (11,233,697)$ (11,983,777)$ (11,549,059)$ (13,565,435)$ (7,542,007)$ (8,599,327)$
Business-type activities 131,265 164,637 750,789 706,154 795,976 674,406 477,418 940,133 1,060,877 1,163,282 Total primary government net expense 3,879,526$ 1,744,049$ 1,018,801$ (7,260,696)$ (10,437,721)$ (11,309,371)$ (11,071,641)$ (12,625,302)$ (6,481,130)$ (7,436,045)$
General Revenues and Other Changes in Net Position
Governmental activities:
Property taxes 9,241,094$ 10,462,633$ 11,113,215$ 11,535,320$ 11,808,510$ 11,427,029$ 11,494,758$ 12,330,135$ 12,096,046$ 12,616,267$
Franchise taxes 320,369 325,414 390,901 396,173 399,588 517,391 535,188 537,682 540,767 542,689
Aggregate taxes 13,296 12,879 9,494 13,489 24,234 30,554 26,131 26,180 26,135 26,236
Tax increment collections 771,093 770,857 904,836 909,434 1,123,774 1,253,414 946,603 892,438 939,314 711,628
Grants and contributions not restricted to
specific programs 762,983 714,891 637,663 324,378 202,751 27,050 26,146 29,742 29,060 83,682
Unrestricted investment earnings (loss)938,501 1,697,138 2,316,104 1,864,048 998,846 502,721 624,785 368,821 (149,614) 551,910
Gain on sale of capital assets - 22,278 20,634 - 4,227 23,872 12,342 10,546 3,997 43,904
Other 7,436 - - - - - - - - -
Transfers (7,794,429) (2,583,801) (4,312,159) (3,459,013) (1,134,566) 428,270 438,800 413,895 375,266 (720,742)
Special item-golf course loan forgiveness - - - - - - - - 1,020,000 -
Total governmental activities 4,260,343 11,422,289 11,080,688 11,583,829 13,427,364 14,210,301 14,104,753 14,609,439 14,880,971 13,855,574
Business-type activities:
Unrestricted investment earnings (loss)176,818 347,410 491,391 473,098 176,619 119,772 162,296 118,396 (45,902) 199,179
Other - - - - - - - - - -
Transfers 7,794,429 2,583,801 4,312,159 3,459,013 1,134,566 (428,270) (438,800) (413,895) (375,266) 720,742
Total business-type activities 7,971,247 2,931,211 4,803,550 3,932,111 1,311,185 (308,498) (276,504) (295,499) (421,168) 919,921 Total primary government 12,231,590$ 14,353,500$ 15,884,238$ 15,515,940$ 14,738,549$ 13,901,803$ 13,828,249$ 14,313,940$ 14,459,803$ 14,775,495$
Change in Net Position
Governmental activities 8,008,604$ 13,001,701$ 11,348,700$ 3,616,979$ 2,193,667$ 2,226,524$ 2,555,694$ 1,044,004$ 7,338,964$ 5,256,247$
Business-type activities 8,102,512 3,095,848 5,554,339 4,638,265 2,107,161 365,908 200,914 644,634 639,709 2,083,203 Total primary government 16,111,116$ 16,097,549$ 16,903,039$ 8,255,244$ 4,300,828$ 2,592,432$ 2,756,608$ 1,688,638$ 7,978,673$ 7,339,450$
(2) Golf Course reclassified to a special revenue fund in 2013.
Notes: (1) Community Development is in General Government in 2010, & 2011.
Fiscal Year
1
4
1
1
4
1
CITY OF COTTAGE GROVE, MINNESOTA
FUND BALANCES OF GOVERNMENTAL FUNDS Table 3
Last Ten Fiscal Years
(modified accrual basis of accounting)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
General Fund
Reserved 11,836$ 12,657$ 7,326$ 8,060$ 35,038$ 33,905$ -$ -$ -$ -$
Unreserved 7,624,525 7,838,924 8,382,550 8,817,737 9,096,547 9,105,235 - - - -
Nonspendable:
Prepaid items - - - - - - 24,382 5,764 13,175 18,019
Assigned - - - - - - 1,611,427 1,695,203 1,443,243 1,380,698
Unassigned - - - - - - 7,178,108 7,449,565 7,775,548 8,113,424
Total general fund 7,636,361$ 7,851,581$ 8,389,876$ 8,825,797$ 9,131,585$ 9,139,140$ 8,813,917$ 9,150,532$ 9,231,966$ 9,512,141$
All other Governmental Funds
Reserved reported in:
Special Revenue Funds 325$ 325$ 1,475$ 1,225,825$ 1,076,850$ 1,273$ -$ -$ -$ -$
Debt Service Funds 11,921,066 9,533,463 8,735,656 9,587,587 6,076,380 8,716,563 - - - -
Capital Projects Funds 1,200,447 2,410,045 2,323,835 3,122,128 500,000 267,498 - - - -
Unreserved reported in:
Special Revenue Funds 4,358,139 5,502,814 5,876,378 5,494,321 6,058,259 6,366,077 - - - -
Debt Service Funds 1,155,524 1,474,889 3,016,733 1,658,843 4,071,740 4,726,677 - - - -
Capital Projects Funds 7,273,402 5,475,815 4,969,486 5,945,984 14,827,707 14,244,338 - - - -
Nonspendable:
Prepaid items - - - - - - 938 938 10,229 8,529
Inventory - - - - - - - - 31,617 24,434
Restricted - - - - - - 3,445,145 2,997,220 4,347,850 4,478,812
Committed - - - - - - 833,500 560,321 416,027 329,841
Assigned - - - - - - 21,540,577 20,240,161 22,936,733 25,591,181
Unassigned - - - - - - (2,174,299) (9,521,907) (10,379,965) (10,958,389)
Total all other governmental funds 25,908,903$ 24,397,351$ 24,923,563$ 27,034,688$ 32,610,936$ 34,322,426$ 23,645,861$ 14,276,733$ 17,362,491$ 19,474,408$
Total all funds 33,545,264$ 32,248,932$ 33,313,439$ 35,860,485$ 41,742,521$ 43,461,566$ 32,459,778$ 23,427,265$ 26,594,457$ 28,986,549$
Notes:
The implementation of Governmental Accounting Standards Board Statement No. 54 in 2011 resulted in a significant change in the City's fund balance classifications.
Fiscal Year
1
4
2
1
4
2
CITY OF COTTAGE GROVE, MINNESOTA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Table 4
Last Ten Fiscal Years
(modified accrual basis of accounting)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Revenues
General property taxes 9,340,614$ 10,377,285$ 11,067,434$ 11,533,333$ 11,745,148$ 11,456,224$ 11,539,640$ 12,367,978$ 12,081,764$ 12,687,917$
Other taxes 1,104,758 1,109,150 1,305,231 1,319,096 1,547,576 1,801,359 1,507,922 1,456,300 1,513,749 1,292,229
Special assessments 9,874,877 7,354,073 7,322,653 4,110,568 4,372,581 2,899,954 1,875,486 1,153,019 1,575,736 1,326,017
Licenses and permits 1,267,639 1,162,761 1,013,351 1,029,559 683,204 753,468 593,272 831,687 860,954 904,400
Direct charges to developers 120,423 329,453 27,442 35,787 24,786 50,047 101,913 16,555 2,106,723 661,861
Intergovernmental 3,845,060 3,657,543 4,660,453 1,158,760 1,226,818 1,166,785 3,879,411 2,684,040 4,642,768 3,932,021
Charges for services 1,917,232 2,443,257 2,183,757 2,328,913 2,630,298 2,668,428 2,494,018 2,467,187 4,023,844 3,572,351
Rent - - - - - - - - - 435,975
Fines and forfeits 234,148 231,727 223,463 224,807 192,169 201,559 246,753 198,022 188,657 171,317
Investment earnings (loss)672,488 1,308,723 1,699,306 1,412,432 508,246 350,673 448,782 196,879 (173,267) 452,293
Interest on interfund loan 226,639 302,012 496,478 361,341 458,001 130,000 144,500 155,301 47,025 59,066
Connection charges 504,137 439,789 417,092 148,434 201,463 439,238 322,009 282,265 805,261 841,434
Park dedication fees 331,064 143,661 788,177 21,707 64,584 145,640 62,198 41,990 252,386 63,595
Miscellaneous 1,082,297 1,825,184 2,980,621 705,107 674,038 609,809 595,218 601,255 705,409 1,005,867
Total revenues 30,521,376 30,684,618 34,185,458 24,389,844 24,328,912 22,673,184 23,811,122 22,452,478 28,631,009 27,406,343
Expenditures
Current:
General government 2,026,355 2,361,944 4,030,450 1,978,714 1,759,695 2,071,715 2,942,106 2,689,156 2,071,272 2,025,709
Community development 755,207 740,175 788,811 894,642 1,102,740 1,132,127 - - 892,699 919,126 (1)
Economic development - - - - - 299,614 793,046 491,040 151,562 541,838
Public safety 5,070,655 5,092,987 5,125,047 5,190,603 5,295,003 5,493,307 5,827,572 6,151,677 6,297,323 6,484,552
Public works 3,014,214 3,159,417 3,106,491 3,358,927 3,476,794 3,337,054 3,774,559 4,059,582 4,271,651 4,306,068
Culture and recreation 1,964,283 2,023,881 1,975,083 2,036,414 2,023,085 2,330,909 2,326,733 2,387,655 3,954,968 4,169,469
Capital outlay 11,048,791 12,755,743 14,105,231 15,003,669 2,990,009 3,383,343 10,877,928 15,420,808 12,274,561 5,028,422
Debt Service:
Principal retirement 3,985,000 4,640,000 2,700,000 1,845,000 3,755,000 1,625,000 7,135,000 1,335,000 950,000 2,470,000
Capital lease payment - - 3,374 3,627 158,900 239,189 245,000 250,000 293,953 305,076
Debt payment to component unit - - - 678,880 - - - - - -
Interest and fiscal charges 1,216,379 1,233,407 1,308,876 1,158,708 1,640,143 1,101,145 906,910 849,046 769,129 882,508
Total expenditures 29,080,884 32,007,554 33,143,363 32,149,184 22,201,369 21,013,403 34,828,854 33,633,964 31,927,118 27,132,768
Excess revenues over (under) expenditures 1,440,492 (1,322,936) 1,042,095 (7,759,340) 2,127,543 1,659,781 (11,017,732) (11,181,486) (3,296,109) 273,575
Other Financing Sources (Uses)
Transfers in 4,037,385 2,447,895 2,580,150 2,675,074 2,942,924 1,233,938 3,052,403 2,171,149 759,446 1,840,995
Transfers out (4,037,385) (2,447,895) (2,580,150) (2,309,809) (2,942,924) (1,246,180) (3,048,803) (1,881,870) (638,374) (1,213,059)
Bonds issued - - - 3,370,000 3,685,000 - - 1,865,000 7,345,000 1,405,000
Capital lease issued - 15,090 - 6,500,000 - - - - - -
Premium on debt issued - - - 27,946 22,705 - - - 211,507 18,461
Discount on debt Issued - - - - (2,906) - - (15,852) - -
Proceeds from sale of capital assets - 11,514 22,412 43,175 49,694 71,506 12,344 10,546 27,195 67,120
Total other financing sources (uses)- 26,604 22,412 10,306,386 3,754,493 59,264 15,944 2,148,973 7,704,774 2,118,517
Net change in fund balances 1,440,492$ (1,296,332)$ 1,064,507$ 2,547,046$ 5,882,036$ 1,719,045$ (11,001,788)$ (9,032,513)$ 4,408,665$ 2,392,092$
Debt service as a percentage of
noncapital expenditures 28.8%30.5%21.1%21.5%28.9%16.8%33.6%12.6%9.5%15.2%
Note: (1) Community Development is in General Government in 2010 & 2011
Fiscal Year
1
4
3
1
4
3
CITY OF COTTAGE GROVE, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Table 5
Last Ten Fiscal Years
Taxable
Total Taxable Assessed Estimated
Residential Real and Fiscal Disparity Total Adjusted Value as a Actual Taxable
Payable Residential Commercial Agricultural Non-homestead Personal Personal Contribution (Net)Taxable Percentage of Market Total Direct
Year Property Property Property and Other Property Property and TIF Value Taxable Value Value Tax Rate
2014 18,114,214$ 5,001,690$ 761,279$ 2,207,013$ 622,578$ 26,706,774$ 2,264,989$ 28,971,763$ 1.21%2,396,493,700$ 43.812
2013 17,241,606 5,076,716 700,036 1,920,395 612,076 25,550,829 2,134,831 27,685,660 1.22%2,277,900,700 45.046
2012 19,042,270 5,094,236 724,887 2,010,313 568,078 27,439,784 2,626,702 30,066,486 1.22%2,464,372,900 41.446
2011 21,316,906 5,120,056 778,196 2,003,968 550,999 29,770,125 2,775,315 32,545,440 1.21%2,695,641,900 38.255
2010 23,326,829 5,557,410 672,344 2,231,128 502,282 32,289,993 2,268,060 34,558,053 1.18%2,924,191,800 35.415
2009 24,725,529 5,511,940 613,932 2,287,839 497,621 33,636,861 2,295,610 35,932,471 1.17%3,058,237,500 34.632
2008 24,639,556 4,640,730 536,173 2,163,150 481,275 32,460,884 2,145,513 34,606,397 1.16%2,986,391,700 35.189
2007 23,730,974 4,339,196 460,308 1,904,124 490,708 30,925,310 1,898,978 32,824,288 1.15%2,848,502,600 35.813
2006 21,757,729 3,788,927 412,783 1,605,598 465,295 28,030,332 1,314,012 29,344,344 1.13%2,588,151,800 37.925
2005 19,051,762 3,719,364 346,052 1,359,537 452,429 24,929,144 1,386,592 26,315,736 1.16%2,278,319,600 39.170
Source: Washington County
Notes:
(1) The tax capacity (assessed taxable value) of the property is calculated by applying a
statutory formula to the estimated market value of the property.
1
4
4
1
4
4
CITY OF COTTAGE GROVE, MINNESOTA
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS Table 6
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
General Debt Service
Total City
Direct Rate
Washington
County
School
District (2)
Vocational/
School
District (3)Other (4)
Total
Overlapping
Total Direct and
Overlapping Tax
Rate
2014 40.976 2.836 43.812 32.811 39.169 - 5.401 77.381 121.193
2013 42.665 2.381 45.046 34.225 41.285 - 5.637 81.147 126.193
2012 39.065 2.381 41.446 31.939 37.894 - 5.139 74.972 116.418
2011 34.500 3.755 38.255 29.772 35.216 - 4.715 69.703 107.958
2010 31.780 3.635 35.415 27.775 31.650 - 4.499 63.924 99.339
2009 30.825 3.807 34.632 26.371 30.708 - 4.268 61.347 95.979
2008 31.548 3.641 35.189 25.936 29.841 - 4.206 59.983 95.172
2007 32.022 3.791 35.813 25.673 31.101 - 4.093 60.867 96.680
2006 33.316 4.609 37.925 26.968 27.460 0.066 4.528 59.022 96.947
2005 34.298 4.872 39.170 28.599 29.182 0.075 4.919 62.775 101.945
Source: Washington County
Overlapping rates are those of local and county governments that apply to property owners within the City of Cottage Grove.
Not all overlapping rates apply to all City of Cottage Grove property owners.
(1) The City Direct Rate is the Urban based rate.
(2) Independent School District 833
(3) Vocational District 916
(4) Includes Metropolitan Transit Commission, Metropolitan Council, and South Washington Watershed
City Direct Rate(1)Overlapping Rates
1
4
5
1
4
5
CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS Table 7
Current year and nine years ago
2014 2005
Percentage Percentage
of Total of Total
City City
Net Tax Tax Net Tax Tax
Capacity Capacity Capacity Capacity
Taxpayer Value Rank Value Value Rank Value
3M Company 618,873$ 1 2.32%604,376$ 1 2.42%
Xcel Energy/NSP 579,616 2 2.17%445,630 2 1.79%
Menard Inc.193,170 3 0.72%171,090 5 0.69%
PHM/Cottage Grove Inc.176,591 4 0.66%- -
Mars II Inc.169,544 5 0.63%182,062 3 0.73%
Dayton-Hudson Corporation 160,496 6 0.60%152,574 6 0.61%
Renewal by Andersen Corporation 144,536 7 0.54%175,510 4 0.70%
MN Pipeline Co.136,418 8 0.51%-
Grove-Rainbow LP 135,516 9 0.51%91,602 10 0.36%
Wer Dis LLC 131,250 10 0.50%- -
First Trust Co. of St. Paul - - 111,161 8 0.45%
Super Valu Holdings - - 106,932 9 0.43%
Home Depot USA, Inc - - 123,574 7 0.50%
Total 2,446,010$ 9.16%2,164,511$ 8.68%
Source: Washington County
1
4
6
CITY OF COTTAGE GROVE, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS Table 8
Last Ten Fiscal Years
Collected within the
Taxes Levied for the Fiscal Year Fiscal Year of Levy Total Collections to Date
Percentage Collections Percentage
Fiscal Gross Operating Debt MVHC/State Aid Total Net of in Subsequent of
Year Tax Levy Tax Levy Ag Credit (1)Cut Tax Levy Amount Levy Abatements Years Amount Levy
2014 11,373,130$ 1,326,000$ (5,947)$ -$ 12,693,183$ 12,610,243$ 99.35%(6,163)$ -$ 12,610,243$ 99.35%
2013 11,035,100 1,206,150 (5,354) - 12,235,896 12,114,166 99.01%(26,312) 58,578 12,172,744 99.48%
2012 11,035,100 1,206,150 (4,762) - 12,236,488 12,104,072 98.92%(22,497) 79,123 12,183,195 99.56%
2011 11,035,100 1,206,150 (4,350) (690,152) 11,546,748 11,395,797 98.69%(25,176) 97,966 11,493,763 99.54%
2010 10,903,300 1,251,700 (4,637) (629,015) 11,521,348 11,358,969 98.59%(32,824) 122,004 11,480,973 99.65%
2009 10,784,900 1,661,600 (176,941) (412,323) 11,857,236 11,591,141 97.76%(97,224) (1)162,057 11,753,198 99.12%
2008 10,920,700 1,263,300 (306,555) (295,108) 11,582,337 11,354,286 98.03%(47,239) 174,291 11,528,577 99.54%
2007 10,568,850 1,253,600 (617,641) - 11,204,809 10,975,151 97.95%(3,585) 223,006 11,198,157 99.94%
2006 9,758,390 1,391,720 (695,238) - 10,454,872 10,268,967 98.22%(16,140) 167,337 10,436,304 99.82%
2005 9,103,000 1,337,600 (743,999) - 9,696,601 9,494,235 97.91%(78,513) (2)122,787 9,617,022 99.18%
Notes:
(1) In 2009 a property tax classification appeal for one property owner resulted in a large abatement.
(2) In 2005 an assessed valuation appeal in tax court resulting in a large abatement for 2004, and 2005 was settled.
1
4
7
1
4
7
CITY OF COTTAGE GROVE, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE Table 9
Last Ten Fiscal Years
General Obligation
General General Special Other Other Total Percentage
Fiscal Obligation Tax Obligation Assessments Capital Long-Term Revenue Capital Long-Term Primary of Personal Per
Year Increment Bonds(1)Bonds(1)Bonds(1)Leases Debt Bonds(1)Lease Debt Government Income (2)Capita(2)
2014 2,516,865$ -$ 13,140,768$ 5,158,667$ -$ 717,221$ -$ -$ 21,533,521$ 1.12%604$
2013 2,600,000 - 14,125,979 5,463,743 - 824,586 - - 23,014,308 1.25%650
2012 2,735,000 - 7,332,245 5,615,000 - 1,036,584 142,696 900,000 17,761,525 0.97%505
2011 2,790,000 - 6,763,867 5,865,000 - 1,456,067 - 900,000 17,774,934 1.01%510
2010 2,830,000 - 13,832,649 6,110,000 - 1,814,178 - 900,000 25,486,827 1.56%737
2009 2,925,000 - 15,375,000 6,349,189 - 2,360,000 9,085 900,000 27,918,274 1.76%816
2008 3,215,000 255,000 14,900,000 6,508,089 - 2,835,000 96,742 900,000 28,709,831 1.76%844
2007 3,490,000 495,000 12,860,000 11,716 65,313 3,310,000 146,606 900,000 21,278,635 1.34%630
2006 3,725,000 725,000 15,095,000 15,090 115,313 3,750,000 193,474 500,000 24,118,877 1.60%719
2005 3,940,000 945,000 19,300,000 - 115,313 4,170,000 197,969 500,000 29,168,282 2.06%879
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.(2) See the Demographic and Economic Statistics schedule for personal income and population data.
Governmental Activities Business-Type Activities
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4
8
1
4
8
CITY OF COTTAGE GROVE, MINNESOTA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 10
Last Ten Fiscal Years
General Obligation Percentage of
General General Special Less: Amounts Estimated
Fiscal Obligation Tax Obligation Assessments Available in Debt Actual Taxable Per
Year Increment Bonds(1)Bonds(1)Bonds(1)Service Funds Total Market Value (2)Capita (3)
2014 2,516,865$ -$ 13,140,768$ 2,833,208$ 12,824,425$ 0.54%360$
2013 2,600,000 - 14,125,979 3,550,891 13,175,088 0.58%372
2012 2,735,000 - 7,332,245 2,377,981 7,689,264 0.31%219
2011 2,790,000 - 6,763,867 1,499,819 8,054,048 0.30%231
2010 2,830,000 - 13,832,649 5,512,986 11,149,663 0.38%322
2009 2,925,000 - 15,375,000 5,031,380 13,268,620 0.43%388
2008 3,215,000 255,000 14,900,000 5,725,764 12,644,236 0.42%372
2007 3,490,000 495,000 12,860,000 6,179,732 10,665,268 0.37%316
2006 3,725,000 725,000 15,095,000 5,993,804 13,551,196 0.52%404
2005 3,940,000 945,000 19,300,000 9,019,284 15,165,716 0.67%457
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.
(2) See the Assessed and Estimated Actual Value of Taxable Property for estimated actual taxable market value.
(3) See the Demographic and Economic Statistics schedule for population data.
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4
9
CITY OF COTTAGE GROVE, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 11
As of December 31, 2014
City of Cottage Grove
% of Debt Share of
Net Debt Applicable Overlapping
Outstanding to City Debt
Overlapping:
Washington County 120,300,000$ 12.2795%14,772,239$
School Districts
ISD No. 200 (Hastings)22,475,000 1.6407%368,747
ISD No. 833 (South Wash. County)259,975,000 30.7616%79,972,470
Metro Council 155,020,000 0.9772%1,514,855
Total Overlapping 96,628,311
City of Cottage Grove Direct Debt 20,816,300$ 100.00%20,816,300
Total Direct and Overlapping Debt:578,586,300$ 117,444,611$
Source: City of Cottage Grove Municipal Disclosure Reporting
Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by
the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident,
and therefore responsible for repaying the debt, of each overlapping government.
150150
CITY OF COTTAGE GROVE, MINNESOTA
LEGAL DEBT MARGIN INFORMATION Table 12
Last Ten Fiscal Years
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Debt limit 45,566,392$ 51,763,036$ 56,970,052$ 89,591,751$ 91,747,125$ 87,725,754$ 80,869,257$ 73,931,187$ 68,337,021$ 71,894,811$
Total net debt applicable to limit 945,000 725,000 495,000 6,755,000 6,345,000 6,110,000 5,865,000 5,615,000 5,355,000 5,085,000
Legal debt margin 44,621,392$ 51,038,036$ 56,475,052$ 82,836,751$ 85,402,125$ 81,615,754$ 75,004,257$ 68,316,187$ 62,982,021$ 66,809,811$
Total net debt applicable to the limit
as a percentage of debt limit 2.07%1.40%0.87%7.54%6.92%6.96%7.25%7.59%7.84%7.07%
Legal Debt Margin Calculation for Fiscal Year 2014
Market Value (after fiscal disparities)2,396,493,700$
Debt limit (3% of assessed value)71,894,811
Debt applicable to limit 5,085,000
Legal debt margin 66,809,811$
Fiscal Year
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CITY OF COTTAGE GROVE, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 13
Last Ten Fiscal Years
Per
Capita
Fiscal Personal Personal School Unemployment
Year Population(1)Income (2)Income (2)Enrollment (3)Rate (4)
2014 35,626 1,927,020,274$ 54,090$ 17,685 3.9%
2013 35,403 1,843,080,180 52,060 17,671 4.8%
2012 35,187 1,823,284,779 51,817 17,639 5.5%
2011 34,828 1,764,595,448 50,666 17,389 6.0%
2010 34,589 1,638,619,286 47,374 17,060 6.9%
2009 34,213 1,583,309,214 46,278 16,795 7.6%
2008 34,017 1,630,264,725 47,925 16,800 4.9%
2007 33,788 1,588,272,516 47,007 16,805 3.9%
2006 33,529 1,503,105,070 44,830 16,467 3.5%
2005 33,179 1,419,364,441 42,779 16,400 3.5%
Sources:
(1) Metropolitan Council-2002-2009 & 2012-2013. Census-2010. Cottage Grove Planning Department-2014.
(2) Washington County data from Bureau of Economic Analysis.
(3) Independent School District No. 833 including Valley Crossing School.
(4) Minnesota Department of Employment and Economic Development.
152152
CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL EMPLOYERS Table 14
Current year and nine years ago
2014 2005
Percentage Percentage
of Total of Total
Taxpayer Employees Rank Employment Employees Rank Employment
School District 833 1,591 1 24%1,128 1 18%
3M Cottage Grove 760 2 11%675 2 11%
Renewal by Andersen 454 3 7%399 3 6%
Up North Plastics Inc 245 4 4%260 4 4%
Werner Electric 213 5 3%- - -
City of Cottage Grove 186 6 3%175 6 3%
AGCO 163 7 2%- - -
Walmart 140 8 2%- - -
Target 135 9 2%150 7 2%
Allina 110 10 2%138 9 2%
Cub Foods - - - 146 8 2%
Menard's - - - 200 5 3%
Rainbow Foods - - - 130 10 2%
Total 3,997 59%3,401 54%
Sources:
City of Cottage Grove Annual Municipal Disclosure Reporting and Cottage Grove Economic Development Department.
153153
CITY OF COTTAGE GROVE, MINNESOTA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Table 15
Last Ten Fiscal Years
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
General Government
Total General Government 21.48 21.94 23.03 22.48 21.76 21.76 21.76 22.06 23.38 23.40
Public Safety
Police/Cottage Grove EMS
Officers 38.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 40.00
Civilians*15.83 15.40 9.40 9.10 7.25 7.25 7.25 8.46 8.09 8.26
Fire/Emergency Management 3.00 3.00 4.00 4.00 4.00 4.00 4.00 4.00 5.00 7.00
Total Public Safety 56.83 57.40 52.40 52.10 50.25 50.25 50.25 51.46 52.09 55.26
Public Works 23.56 23.56 22.56 21.56 21.56 21.56 21.56 20.83 21.68 23.68
Recreation and Swimming Pool 3.50 3.50 3.00 3.00 2.50 2.50 2.50 2.50 2.55 2.55
Ice Arena 2.60 2.60 2.60 2.60 2.60 2.60 2.60 3.20 3.65 3.65
Water/Sewer 10.04 10.04 10.04 9.36 8.36 8.36 8.36 8.23 8.18 8.18
Storm Sewer 1.40 1.40 3.40 3.40 3.40 3.40 3.40 3.54 3.54 3.54
Golf Course Fund 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Street Light Fund 1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.06 1.06 1.06
Fleet Maintenance 3.84 3.84 3.84 3.84 3.84 3.84 3.84 4.04 4.04 4.04
Total 129.29 130.32 126.91 124.38 120.31 120.31 120.31 121.92 125.17 130.36
Source: City of Cottage Grove Finance Office
*Dispatch services were transferred to Washington County in 2007. Six positions were
transferred to the County as part of this transition.
Budgeted Full-time Equivalent Employees as of December 31
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CITY OF COTTAGE GROVE, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM Table 16
Last Ten Years
Function/Program 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
General Government
Elections 2 2 2 2 2
Registered voters as of 7 am election day 19,588 20,358 20,607 21,119 20,780
Number of votes cast 13,420 19,050 13,345 19,727 11,166
Voter participation (registered)68.51%93.58%64.76%93.41%53.73%
(elections are held every other year)
Community Development
Inspections
Building Permits (New Dwelling Units)265 185 67 89 66 89 49 53 56 77
Code Enforcement Inspections 683 943 1,032 1,777 1,759 1,447 1,276 2,407 2,826 1,482
Public Safety
Police
Crimes - Part I 1000(1)1010(1)892 850 743 674 694 756 783 774
Crimes - Part II 2,609 2,480 2,883 2,472 2,478 2,055 2,117 1,614 1,473 1,434
Total Calls for Service 15,300 15,500 20,469 20,356 19,434 20,104 20,707 17,348 18,151 18,448
Fire
Medical 1,355 1,280 1,250 1,442 1,765 1,968 2,000 2,347 2,437 2,562
Fire 300 325 580 553 556 643 456 295 280 301
Avg Response Time (minutes) Medical*n/a n/a n/a n/a n/a n/a 8:38 6:51 6:15 6:19
Avg Response Time (minutes) Fire* n/a n/a n/a n/a n/a n/a 8:24 8:04 7:25 7:34
Avg Response Time (minutes) Both*9.32 9.32 8.57 8:54 8:59 9:01 8:36 6:59 6:22 6:27
*Entire service area
Public Works
Sq. Yards of Streets Sealcoated 331,705 345,178 404,821 425,577 352,953 349,349 382,374 488,210 457,275 199,725
Miles of Streets New Construction 2.64 2.63 0.73 0.00 0.00 0.26 1.12 0.30 1.23 1.99
Miles of watermain added 3.75 3.74 2.06 1.68 0.00 0.39 0.63 0.79 2.42 1.84
Source: Various City of Cottage Grove Departments
Notes:
(1) 2005, 2006 are estimated amounts.
(2) Information not available is labeled n/a.
Fiscal Year
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5
5
1
5
5
CITY OF COTTAGE GROVE, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 17
Last Ten Years
Function/Program 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Public Safety
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol Units 12 12 12 12 12 12 12 12 13 13
Fire
Stations 4 4 4 4 4 4 4 4 4 4
Fire Trucks 6 6 6 6 6 6 6 6 6 6
Public Works
City-owned Lights 2,124 2,207 2,270 2,273 2,273 2,279 2,320 2,345 2,416 2,481
Xcel owned Lights 301 301 301 301 301 301 301 301 301 301
Streets (miles)152.09 154.72 155.45 155.45 155.45 155.71 156.83 157.13 158.36 160.35
Sidewalks/trails (miles)34.65 39.01 41.35 44.23 44.27 46.40 48.25 48.61 53.82 57.83
Parks (acreage)
Community Parks 330 330 368 377 377 377 377 377 377 377
Neighborhood Parks 201 201 201 201 201 201 201 244 275 303
Recreation facilities 21 21 21 21 21 21 21 21 21 21
County Parks 539 539 552 571 571 571 571 571 571 571
State Scientific and Nature Area 238 238 238 238 238 238 238 238 238 238
Golf Course 219 219 219 219 219 219 219 219 219 219
Other Open Space 353 406 450 453 453 453 453 453 581 581
Water
Number of Connections 9,762 10,056 10,056 10,298 10,381 10,423 10,474 10,538 10,573 10,640
Miles of Water Mains and Laterals 135.37 139.11 141.17 142.85 142.85 143.24 143.87 144.66 147.08 148.92
Sanitary Sewer
Number of Connections 9,703 9,998 10,143 10,209 10,330 10,382 10,433 10,486 10,532 10,604
Miles of Sanitary Sewer Mains and Laterals 121.27 124.00 126.72 126.72 126.72 127.02 127.58 127.99 129.32 131.11
Storm Sewer
Miles of storm sewers 72.47 75.67 77.04 77.17 77.41 78.07 79.50 80.39 85.41 87.81
Source: Various City Departments
Fiscal Year
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5
6
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6