HomeMy WebLinkAbout2016-06-01 PACKET 06.B. Cottage
J Grove
��er� Pride and Qro�P�rity Me�t
Clt�/ COUI'1CII PRESENTATIONS
Acfion Request Form 6.8.
Meeting Date
6/1/2016
Department
Finance
Title of Request
Comprehensive Annual Financial Report 12/31/15
Staff Recommendation
Accept Comprehensive Annual Financial Report for Year ended 12/31/15
ATTACH MENTS:
Description Type Upload Date
CAFR 2015 memo Cover Memo 5/25/2016
CAFR 12/31/15 Backup Material 5/25/2016
auditor communications letter Backup Material 5/27/2016
other audit communications Backup Material 5/25/2016
Cottage
� Grove
�here Pride and PCOSPerity Meet
To: Mayor and City Council Members
Charlene Stevens, City Administrator
From: Robin Roland, Finance Director
Date: May 25, 2016
Subject: 2015 Comprehensive Annual Financial Report
Introduction
Matt Mayer with the City's auditing firm, BerganKDV will be at the meeting to present the 2015
Financial Statements.
A copy of the 2015 Comprehensive Annual Financial Report and the auditor's required
communications are included herein for your review. The Letter of Transmittal in the Financial
Statements (page 3) and the Management Discussion and Analysis (page 19) summarize
important data and give a good overview of the City's financial situation.
In addition, the statistical section (page 138) includes supplemental detailed information and
financial trends.
Action Requested
Following the presentation a motion to receive and accept the Comprehensive Annual Financial
Report is appropriate.
�ottage
J �rave
�her� Pride and P�°Sperity Meet
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City of Cottage Grove
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Year Ended
December 3i, ZoiS
CTTY OF COTTAGE GROVE,MINNESOTA
TABLE OF CONTENTS
Reference Page Number
L INTRODUCTORY SECTION
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 9
Principal City Officials 11
Organization Chart 12
IL FINANCIAL SECTION
Independent Auditor's Report 15
Management's Discussion and Analysis 19
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Posirion Statement 1 33
Statement of Activities Statement 2 35
Fund Financial Statements:
Balance Sheet-Governmental Funds Statement 3 36
Statement of Revenues,Expenditures,and Cl�anges in Fund Balance-
Governmental Funds Statement 4 38
Reconciliation of the Statement of Revenues,Eapenditures,and Changes in
Fund Balances of Governmental Funds to the Statement of Activities Statement 5 40
Statement of Net Posirion-Proprietary Funds Statement 6 41
Statement of Revenues,Expenses,and Changes in Fund Net Posirion-
Proprietary Funds Statement 7 42
Statement of Cash Flows-Proprietary Funds Statement 8 43
Notes to Financial Statements 44
Required Supplementary Information:
Budgetary Comparison Schedule-General Fund Statement 9 83
Schedule of City's Proportionate sl�are of Net Pension Liability-GERF and PEPFF 89
Schedule of City Contributions-GERF and PEPFF 90
Schedule of Employer and Non-Employer Contriburions-Fire Relief 91
Schedule of Cl�anges in Net Pension Liability-Fire Relief 92
Funding Progress Schedule-Other Post Employment Health Care Benefits 93
CTTY 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 99
Combining Statement of Revenues,Eapenditures and Cl�anges in Fund Balance-
Nonmajor Governmental Funds Statement 11 100
Subcombining Balance Sheet-Nonmajor Special Revenue Funds Statement 12 102
Subcombining Statement of Revenues,Expenditures and Changes in
Fund Balance-Nonmajor Special Revenue Funds Statement 13 104
Subcombining Balance Sheet-Nonmajor Debt Service Funds Statement 14 107
Subcombining Statement of Revenues,Expenditures and Changes in
Fund Balance-Nonmajor Debt Service Funds Statement 15 108
Subcombining Balance Sheet-Nonmajor Capital Project Funds Statement 16 110
Subcombining Statement of Revenues,Expenditures and Changes in
Fund Balance-Nonmajor Capital Project Funds Statement 17 112
Special Revenue Funds:
Schedules of Revenues,Expenditures and Changes in
Fund Balance-Budget and Actual:
Recycling Statement 18 114
Storm Water Statement 19 115
Forfeiture/Seizure Statement 20 116
Ice Arena Statement 21 117
Golf Course Statement 22 118
Charitable Gambling Statement 23 119
Internal Service Funds:
Combining Statement of Net Position Statement 24 122
Combining Statement of Revenue,Expenses and Cl�anges in Fund Net Position Statement 25 123
Combining Statement of Cash Flows Statement 26 124
Component Unit
Economic Development Authority:
Combining Balance Sheet-All Governmental Fund Types Statement 27 126
Combining Statement of Revenues,Eapenditures and Cl�anges
in Fund Balance-All Governmental Fund Types Statement 28 127
CTTY OF COTTAGE GROVE,MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Supplementary Financial Information:
Construcrion/Acquisirion Costs:
Capital Projects Funds Exhibit 1 130
Combined Schedule of Bonded Indebtedness Exhibit 2 132
Debt Service Payments to Maturity Exhibit 3 134
Deferred TaY Levies Exhibit 4 136
Subcombining Balance Sheet-Pavement Management Debt Service Schedule Exhibit 5 137
Subcombining Statement of Revenues,Eapenditures,and Changes in Fund Balance-
Pavement Management Debt Service Schedule E�ibit 6 138
Subcombining Balance Sheet-TaY Increment Construction Revolving Schedule E�ibit 7 139
Subcombining Statement of Revenues,Eapenditures,and Changes in Fund Balance-
Tax Increment Construcrion Revolving Schedule E�ibit 8 140
Subcombining Balance Sheet-TIF Debt Service Revolving Schedule E�ibit 9 141
Subcombining Statement of Revenues,Eapenditures,and Changes in Fund Balance-
TIF Debt Service Revolving Schedule E�ibit 10 142
CTTY OF COTTAGE GROVE,MINNESOTA
TABLE OF CONTENTS
Reference Page Number
IIL STATISTICAL SECTION
Net Posirion by Component Table 1 145
Cl�anges in Net Position Table 2 146
Fund Balances of Governmental Funds Table 3 148
Cl�anges in Fund Balances of Governmental Funds Table 4 149
Assessed and Esrimated Actual Value of TaYable Properry Table 5 150
Properry TaY Rates-Direct and Overlapping Governments Table 6 151
Principal Properry TaYpayers Table 7 152
Property TaY Levies and Collecrions Table 8 153
Ratios of Outstanding Debt by Type Table 9 154
Ratios of General Bonded Debt Outstanding Table 10 155
Direct and Overlapping Governmental Acriviries Debt Table 11 156
Legal Debt Margin Information Table 12 157
Demographic and Economic Starisrics Table 13 158
Principal Employers Table 14 159
Full-time Equivalent City Government Employees by Function Table 15 160
Operating Indicators by Function/Program Table 16 161
Capital Asset Statistics by Function/Program Table 17 162
L INTRODUCTORY SECTION
1
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2
Cottage
J Grove
��� Pride an�PKosPerity Me�t
May 16, 2016
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, 2015.
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, 2015. 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 2015 population at 35,814.
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.
CITY OF COTTAGE GROVE • 12800 Ravine Parkway• Cottage Grove, Minnesota 55016
vvww.cottage-grove.org • 651-458-2800• Fax 651-458-2897 • Equal Opportunity Employer
Letter of Transmittal
May 16, 2016
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 28m 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. Total taxable
market value in 2015 was $2.7 billion; a recovery to almost 90% of pre-recessionary levels.
Moderate growth in value is expected for 2016, 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, Leafline Labs, American Logistics, Renewal by
Andersen, and Werner Electric. Other maj or 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 2015, Renewal by Andersen, Werner Electric and American Logistics all expanded their
facilities by a combined 300,000 square feet of manufacturing and warehouse space, adding over
300 j obs to the Cottage Grove community. Additional businesses expected to locate in the Business
Park in 2016 will include Gardenworld, a garden product wholesaler.
4
Letter of Transmittal
May 16, 2016
Also in 2015 the City of Cottage Grove reached an agreement to purchase the long vacant Home
Depot building in the City's Gateway North development. Purchase of this property was then
parlayed into a three-way redevelopment agreement for the entire center which once housed not
only the Home Depot but a Rainbow Foods grocery store and several smaller tenant spaces
including a liquor store, restaurant and Hallmark card store. The redevelopment will include the
demolition of some of the old spaces, construction of a 92,800 sq. ft. Hy-Vee grocery store and
the sale of the former Home Depot property to a developer for repurposing into new tenant spaces.
The proj ect will break ground in late May 2016 and is expected to open in the fall of 2017.
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 proj ect is analyzed to determine if sufficient funding exists for the
proj ect and the longer term impact of each of the proj ects on the individual capital fund balances.
For example, during the 2016 to 2020 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.
5
Letter of Transmittal
May 16, 2016
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.
Cottage Grove has evolved from a 1970's bedroom community to a steadily growing suburb with
an expanding commercial 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 4,000 acre "East Ravine" development occurred in 2003-2006.
Development of the first one thousand acres of low density residential housing with park and open
space amenities and nodes of commercial use 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 146 homes had been completed by the end of 2015. 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 additional 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, 2014. This was
the twenty-fifth 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 and
Cathy Mohr. 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.
6
Letter of Transmittal
May 16, 2016
Respectfully Submitted,
CITY OF COTTAGE GROVE, MINNESOTA
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Robin Roland
Finance Director
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Government Finance Officers Association
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Certificate of �
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Achlevement i
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Presented to
City of Cottage Grove
Minnesota
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Financial Report '
for the Fiscal Year Ended
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December 31, 2014 i
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Executive Director/CEO
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CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2015
Elected Officials
Term Expires
Mayor:
Myron Bailey December 31, 2016
Council Members:
Steve Dennis December 31, 2018
Justin Olsen December 31, 2016
Jen Peterson December 31, 2016
Dave Thiede December 31, 2018
Appointed Personnel
City Administrator Charlene Stevens
Finance Director Robin Roland
City Clerk Joe Fischbach
City Engineer and Community Development Director Jennifer Levitt
Public Safety Director Craig Woolery
Public Works Director Les Burshten
Parks and Recreation Director Zac Dockter
11
• • . • ' • '
J • . . . . .
Cottage Grove
Citizens
City Council Advisory
Commissions
City Administrator City
Attorney
Economic Community Parks and
Development Development Administration Finance Public Safety Recreation Public Works
Planning City Clerk/ Accounting Patrol Parks Streets
Elections
Building/Code Human Enterprise Fleet/Building
Inspections Resources Billing Investigations Recreation Maintenance
Historic Community Public Safety
Preservation Programs/ Payroll programs Ice Arena Utilities
Communications
Engineering River Oaks Golf MIS nimal&Code Forestry
Course Enforcement
Fire&
Emergency
Management
EMS/Medical
Services
Fire
Inspections
Updated 4/2013
12
IL FINANCIAL SECTION
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C: berganKov
BerganKDV,Ltd.
Independent Auditor's Report
Cedar Falls
602 Main Street
Suite 100
P.O.Box 489
Honorable Mayor and Members c�aa�FauS,�a
of the Cit Council so6i3-ooz6
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City of Cottage Grove F 3i9.zss.vzo
COttagO �7rOV0, M111110SOta CedarRapids
2720 lst Avenue NE
Suite 300
P.O.Box 10200
Cedar Rapids,IA
Report on the Financial Statements sz4oz-ozoo
T 319.294.8000
We have audited the accompanying financial statements of the governmental activities, the F 3�9 z9a.9oos
business-type activities, the discretely presented component unit, each maj or fund and the co�a���ue
aggregate remaining fund information of the City of Cottage Grove, Minnesota, as of and s��°30�'�°`w��
for the year ended December 31, 2015, and the related notes to financial statements, which P o.BoX sz6�
Coralville,IA
collectively comprise the City's basic financial statements as listed in the table of contents. szz4�-oz6�
T 319.248.0367
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Management's Responsibility for the Financial Statements Des Moines
Management is responsible for the preparation and fair presentation of these financial 9zo�n,o��npa�k o���e
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statements in accordance with accounting principles generally accepted in the United States so�3�-z933
of America� this includes the design, implementation and maintenance of internal control � s�s�z�s�oo
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relevant to the preparation and fair presentation of financial statements that are free from M.��Qapa�.s
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Auditor's Responsibility 55431-4420
T 952.563.6800
Our responsibility is to express opinions on these financial statements based on our audit. F 9szs63.6ao�
We conducted our audit in accordance with auditing standards generally accepted in the s�.ao�a
United States of America and the standards a licable to financial audits contained in ��o Pa�k n�e�ue s
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about whether the financial statements are free from material misstatement.
Waterloo
100 Eas[Park Avenue
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P.O.Box 2100
disclosures in the financial statements. The procedures selected depend on the auditor's wa�e��oo,�A
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judgment, including the assessment of the risks of material misstatement of the financial T 3�9 z3a.6sss
statements, whether due to fraud or error. In making those risk assessments, the auditor F 3�9 z346za�
considers internal control relevant to the City's preparation and fair presentation of the
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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.
15
C: berganKov
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 maj or fund, and the aggregate
remaining fund information of the City of Cottage Grove, Minnesota, as of December 31,
2015, 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.
Implementation of GASB 68 and GASB 71
As discussed in Note 21 to the financial statements, the City has adopted the provisions of
the Governmental Accounting Standards Board (GASB) Statement No. 68,Accounting and
Financial Reporting for Pensions and GASB Statement No. 71,Pension Transition for
Contributions Made Subsequent to the Measurement Date. Our opinion is not modified with
respect to this matter.
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 Required
Supplementary Information, 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 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.
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Other Matters (Continued)
Other Information (Continued)
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.
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, 2014, from which such partial information was
derived.
We have previously audited the City's 2014 financial statements and our report, dated
May 18, 2015, expressed unmodified opinions on the respective financial statements of the
governmental activities, the business-type activities, the discretely presented component
unit, each maj or 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, 2014, is consistent, in all material respects, with the audited financial
statements from which it has been derived.
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Other Reporting Required by Government Auditing Standards
In accordance with GovernmentAuditing Standards, we have also issued our report dated
May 16, 2016, 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 GovernmentAuditing Standards in considering the City of
Cottage Grove's internal control over financial reporting and compliance.
_�•�,�..,, ��l� � .
Minneapolis, Minnesota
May 16, 2016
18
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, 2015. 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 and deferred outflows of resources of the City of Cottage Grove and the EDA
Component Unit exceeded its liabilities and deferred inflows of resources at the close of the
most recent fiscal year by $227,369,275 (net position). Of this amount, $38,325,750
(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 decreased by $ 6,038,763, of which $ 7,694,339 is a change in
accounting principle. The reason for this decrease is due to the implementation of GASB
Statement No. 68 and No. 71 which requires the City to record their proportionate share of the
PERA state pension liabilities. The City pays into the PERA state pension plan based on rates
set by state statute and is not required to fully fund this liability.
• As of the close of the current fiscal year, the City of Cottage Grove's governmental funds
reported combined ending fund balances of $32,733,289 an increase of $3,746,740
compared to the previous year. Approximately 84% or $27,832,502 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
$8,829,697 (56%) 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 $26,722,169, an increase of $4,221,120 or 19% compared to the previous
year. The City issued $5,700,000 in General Obligation Improvement bonds in 2015.
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.
19
Management's Discussion and Analysis(continued)
The statement of net position presents information on all of the City of Cottage Grove's assets and
deferred outflows of resources and liabilities and deferred inflows of resources, 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.
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,
20
Management's Discussion and Analysis(continued)
expenditures, and change in fund balance provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
Information is presented separately in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures, and changes in fund balance for the City's six individual
major governmental funds. They are as follows:
• General Fund
• Municipal Building Capital Proj ect Fund–Capital proj ect fund
• MSA Construction Capital Proj ect Fund—Capital proj ect fund
• Closed Debt Fund—Debt service fund
• Pavement Management Debt Service Fund—Debt service fund
• Pavement Management Capital Proj ect Fund - Capital proj ect 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 maj or 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.
21
Management's Discussion and Analysis(continued)
Other information: The combining statements referred to earlier in connection with non-maj or
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 Analvsis
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the City of Cottage Grove, assets exceeded liabilities by $ 226,798,530 at
the close of the most recent fiscal year.
The largest portion of the City of Cottage Grove's net position ($179,765,680 or 79%) 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.
GYty of Cottage Grove Net Position
Governmental Activities Business-type Activities Total Primary Government
2015 2014 2015 2014 2015 2014
Currentandotherassets $44,131,434 $38,476,039 $15,359,060 $16,327,364 $59,490,504 $54,803,403
Capital assets 150,678,637 148,076,342 54,812,566 55,149,280 205,491,203 203,225,622
Total assets 194,810,071 186,552,381 70,171,636 71,476,644 264,981,707 258,029,025
Deferred outflows of
resources 1,904,324 - 215,065 - 2,119,389 -
Long-term liabilities
outstanding 23,888,688 19,457,505 19,724 622,482 23,908,412 20,079,987
Pensionliability 8,463,113 - 1,118,083 - 9,581,196 -
Otherliabilities 4,609,031 4,586,005 913,595 525,740 5,522,626 5,111,745
Totalliabilities 36,960,832 24,043.510 2,051,402 1,148,222 39,012,234 25,191.732
Deferred inflows of
resources 1,138,713 - 151,619 - 1,290,332 -
Net position:
Net inveshnent in capital
assets 125,562,970 127,260,042 54,202,710 54,432,059 179,765,680 181,692,101
Restricted 8,766,706 6,971,432 - - 8,766,706 6,971,432
Unrestricted 24,285,174 28,277,397 13,980,970 15,896,363 38,266,144 44,173,760
Totalnetposition $158,614,850 $162,508,871 $68,183,680 $70,328,422 $226,798,530 $232,837,293
An additional portion of the City's net position ($8,766,706 or 4%) represents resources that are
subj ect to external restrictions on how they may be used. The balance of unrestricted net position,
$38,266,144 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's net position by$2,780,081
in 2015,before a change in accounting principle of$6,674,102 is applied. The change in accounting
principle is the result of the implementation of Governmental Accounting Standards Board
Statement 68.
• Program revenue decreased overall by $2,656,133. This is primarily related to reduced
capital grants and contributions from the state and county for road construction proj ects.
• Investment income decreased by $256,023 due to the unrealized loss in the value of
investments which are annually adjusted in accordance with accounting standards.
GYty of Cottage Grove's Changes in Net Position
Governmental Activities Business-Type Activities Total Primary Government
2015 2014 2015 2014 2015 2014
Revenues:
Program revenues:
Charges for services $6,106,184 $4,914,710 $6,130,724 $6,305,828 $12,236,908 $11,220,538
Operating grants and contributions 1,237,805 1,545,268 - - 1,237,805 1,545,268
Capital grants and contributions 5,861,631 9,401,775 361,762 1,783,762 6,223,393 11,185,537
General revenues:
Property taxes 13,394,585 12,616,267 - - 13,394,585 12,616,267
Other taxes 1,274,317 1,280,553 - - 1,274,317 1,280,553
Grants and contributions not
restricted to specific programs 99,137 83,682 - - 99,137 83,682
Unrestricted investment eamings
(loss) 357,170 551,910 137,896 199,179 495,066 751,089
Gain(loss)on sale of capital assets (15,157) 43,904 - - (15,157) 43,904
Total revenues 28,315,672 30,438,069 6,630,382 8,288,769 34,946,054 38,726,838
Expenses:
General government 2,331,648 2,229,518 - - 2,331,648 2,229,518
Communitydevelopment 1,086,197 946,001 - - 1,086,197 946,001
Economic development 1,460,114 545,646 - - 1,460,114 545,646
Public safety 7,662,393 7,212,998 - - 7,662,393 7,212,998
Public works:
Regularoperations 4,713,100 4,627,829 - - 4,713,100 4,627,829
Construction 2,712,945 2,971,353 - - 2,712,945 2,971,353
Culture and recreation 5,153,844 5,119,093 - - 5,153,844 5,119,093
Interest on long-term debt 1,029,228 808,642 - - 1,029,228 808,642
Street lights - - 746,794 867,690 746,794 867,690
Cottage Grove EMS - - 1,507,766 1,412,855 1,507,766 1,412,855
Water operating - - 2,438,166 2,216,819 2,438,166 2,216,819
Sewer operating - - 2,448,283 2,428,944 2,448,283 2,428,944
Total eapenses 26,149,469 24,461,080 7,141,009 6,926,308 33,290,478 31,387,388
Increase(decrease)in net position before
transfers and special items 2,166,203 5,976,989 (510,627) 1,362,461 1,655,576 7,339,450
Transfers 613,878 (720,742) (613,878) 720,742 - -
Increase(decrease)in net position 2,780,081 5,256,247 (1,124,505) 2,083,203 1,655,576 7,339,450
Net position-January 1 162,508,871 157,252,624 70,328,422 68,245,219 232,837,293 225,497,843
Cumulative effect of change in
accountingprinciple (6,674,102) - (1,020,237) - (7,694,339) -
Netposition—Januarylasrestated 155,834,769 157,252,624 69,308,185 68,245,219 225,142,954 225,497,843
Net position-December 31 $158,614,850 $162,508,871 $68,183,680 $70,328,422 $226,798,530 $232,837,293
23
Management's Discussion and Analysis(continued)
Revenues by Source - Government Activities
Operating Grants& Other taxes&tax
Contributions� increment Unrestricted
4�� 5�� investment earnings
Capital Grants& I 10�
Contributions
21% \
Charges for services `Other
0%
22%
Property Taxes
47%
The following chart illustrates the City's expenses and corresponding program revenues for its
governmental activities.
S9,000,000
Sa,000,000
S�,000,000
S6,000,000
Ss,000,000
S4,000,000
$3,000,000 ■Revenue
$2,000,000
■Expense
$1,000,000
$-
�e�� �e�� �e�� ��e� �`o�h `�`oc a�`oc ae��
,eto e�oQ e�oQ �\`�� ��ca �y,�cJ ie�,ce y�oo
��O° a�, ae, �QJ �� c.° 4} ece
����a J�,� o��� `�oc �°,�5 J\���e `��.
�O `o�c� e`o� Q�.p�` J���c. �
Q
24
Management's Discussion and Analysis(continued)
Business-Type Activities. Business-type activities decreased net position by $1,124,505 before a
change in accounting principle of$1,020,237 is applied. Below are graphs showing the business-
type activities revenue and expense comparisons.
Revenues - Business type Activities
Capital grants&
contributions
5°� Unrestricted
� investment
� earnings
2%
Chargesfor
services
93%
Expenses and Program Revenues-
Business-Type Activities
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
� �,g ,��t �t
�������+ �;oa�4, ��, ��a�
��
Go�
■Expenses ■Program revenues
25
Management's Discussion and Analysis(continued)
In business type activities, changes in net position were negative for all funds except Sewer
operations.
Financial Analvsis of the Government's Funds
Governmental Funds. The focus of the City of Cottage Grove's governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such information
is useful in assessing the City of Cottage Grove's financing requirements. In particular,unassigned
fund balance may serve as a useful measure of a government's net resources available for spending
at the end of the fiscal year.
At the end of the current fiscal year, the City of Cottage Grove's governmental funds reported
combined ending fund balances of$32,733,289 an increase of$3,746,740. Committed, assigned
and unassigned fund balance which is available for spending at the government's discretion has a
balance of $27,832,502 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 ($2,766,643) 2) for prepaid items ($22,726) 3) for inventory ($20,696) 4) to pay
for capital improvements ($2,042,151) and 5) for future expenditures ($48,571).
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 $8,829,697 while total fund balance
was $10,253,437. 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 56% of total subsequent year General fund expenditures, while total fund
balance represents 65% of the same amount.
The General fund balance increased by $741,296. This increase is primarily due to an increase in
charges for services resulting from development activity in the city. Revenues exceeded budget by
$1,055,278 due to higher than expected building permit revenues and charges for engineering
services from development and infrastructure projects. Expenditures were $259,091 under budget
due to reduced public safety salaries and benefits due to personnel changes and reduced public
works expenses for snow and ice control resulting from a mild winter.
The Municipal Building Fund increased $489,854 due to property tax revenues collected for
repayment of the interfund loan which funded the Public Safety/City Hall proj ect in 2012.
The MSA Construction Fund decreased by $60,397 due to construction project costs on 70th Street
and Meadowgrass Avenue.
The Closed Debt Fund increased by $242,151 due to interfund loan interest and special assessment
revenues.
The Pavement Management Debt Service Fund increased by $625,208 due to special assessment
revenues collected in excess of debt service requirements.
26
Management's Discussion and Analysis(continued)
The Pavement Management Capital Project Fund increase by $1,943,884 due to the issuance of
municipal bonds which financed the 2014 and 2015 Pavement Management proj ect costs.
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.
Business-type activities decreased the City's net position by $1,124,505 in 2015, before a change
in accounting principle of$1,020,237 is applied. The change in accounting principle is the result
of the implementation of Governmental Accounting Standards Board Statement 68.
Bud�etarv Hi�hli�hts
General Fund.
The General Fund actual results were different than the final budget amounts due to the following:
• Licenses and Permits categories were $625,692 more than budgeted due to increased
commercial/institutional building permitting in 2015.
• Intergovernmental revenues were $172,908 more than budget due to unanticipated Federal
and State grant revenues and public safety aids.
• Charges for services were $44,657 more than budgeted due to increased community
development and engineering fees resulting from increased development activity.
• Fines revenues were $35,802 more than budgeted due to increased revenues passed through
to the City from the state and county.
• General government expenditures were $146,509 more than budgeted amounts due to
additional salary, benefits and professional service expenditures related to unanticipated
personnel changes.
• Public safety expenditures were $125,181 less than budgeted amounts due to staff
retirements and the resulting salary and benefit savings.
• Public works expenditures were $242,6491ower than budget due to lower personnel costs,
supplies and contractual services related to the effects of a moderate snow and ice removal
season.
• Culture and recreation expenditures were $40,357 less than final budget due to reduced
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, 2015, amounts to $205,491,203 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery
and equipment.
2�
Management's Discussion and Analysis(continued)
City of Cotta�e Grove's Capital Assets
(Net of Depreciation)
Governmental Activities Business-type Activities Total Primary Government
2015 2014 2015 2014 2015 2014
Land and land improvements $17,927,787 $17,926,287 $354,852 $355,648 $18,282,639 $18,281,935
Easements 1,157,202 1,157,202 - - 1,157,202 1,157,202
Construction in progress 500,898 606,641 - 28,909 500,898 635,550
Buildings and improvements 20,890,355 21,423,724 1,712,619 1,828,018 22,602,974 23,251,742
Equipment and furniture 314,540 282,359 - - 314,540 282,359
Machinery and equipment 4,667,519 4,636,672 615,843 686,620 5,283,362 5,323,292
Other improvements 3,032,731 3,037,552 4,578,962 4,682,489 7,611,693 7,720,041
Infrastructure:
Streets 75,893,083 72,199,607 - - 75,893,083 72,199,607
Storm sewers 22,439,016 23,330,305 - - 22,439,016 23,330,305
Sidewalks/trails 3,855,506 3,475,993 - - 3,855,506 3,475,993
Water and sewer lines - - 47,550,290 47,567,596 47,550,290 47,567,596
Ending balance $150,678,637 $148,076,342 $54,812,566 $55,149,280 $205,491,203 $203,225,622
The largest addition to capital assets in 2015 were the improvements to streets and other
infrastructure due to the 2015 Pavement Management proj ect, the extension of 97m Street and
Hemingway Avenue in the Business Park and the completion of the final streets in the CP Rail
proj ect.
Additional information on the City of Cottage Grove's capital assets can be found in Note 5.
Long-term debt: At the end of the current fiscal year, the City of Cottage Grove had total long
term debt outstanding of $26,722,169, an increase of $4,221,120. $2,813,757 of the debt
outstanding is due within one year. $17,978,235 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
2015 2014
Governmental activities:
Bonds payable,net $20,273,235 $15,657,633
Capitallease payable-EDA 4,805,000 5,085,000
Capitallease payable—golf carts 37,432 73,667
Other postemployment benefits 65,521 59,343
Compensated absences 857,206 839,758
Total governmental activities 26,038,394 21,715,401
Business-type activities:
Bonds payable,net 609,856 717,221
Other postemployment benefits 9,555 8,571
Compensated absences 64,364 59,856
Total business-type activities 683,775 785,648
Totalprimary government $26,722,169 $22,501,049
28
Management's Discussion and Analysis(continued)
The City of Cottage Grove holds a general obligation debt rating of Aal from Moody's (2010
Global Ratings Scale) and of AA+/Stable from Standard and Poor's. According to S&P, Cottage
Grove has "a strong financial profile, anchored by a very strong general fund balance; and good
management practices that have contributed to the city's ongoing financial health."
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total
Estimated Market Value. The current debt limitation for the City of Cottage Grove is $81,179,262.
Of that limit, $4,805,000 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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30
BASIC FINANCIAL STATEMENTS
31
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32
CITY OF COTTAGE GROVE,MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31,2015
With Comparative Data as of December 31,2014
Component Unit
Primary Government Total Economic Totals
Governmental Business-Type Prunary Development Reporting Entity
Activities Activities Government Authority 2015 2014
Assets:
Cashandinveshnents $ 38,211,340 $ 9,42Q845 $ 47,632,185 $ 389,254 $ 48,021,439 $ 47,03Q844
Accruedinterestreceivable 147,130 - 147,130 54,423 201,553 203,410
Due from other governmental units-net 286,815 4,211 291,026 - 291,026 889,787
Accountsreceivable-net 593,383 1,233,850 1,827,233 5,212 1,832,445 1,822,889
Prepaid items 191,792 149,662 341,454 1,500 342,954 299,192
Delinquent property taxes receivable 126,473 - 126,473 1,087 127,560 199,646
Due from county 93,051 - 93,051 - 93,051 76,605
Specialassessmentsreceivable 5,993,117 - 5,993,117 - 5,993,117 4,531,762
Inventories-atcost 91,636 - 91,636 - 91,636 94,132
Internal balances (4,SSQ502) 4,SSQ502 - - - -
Lease receivable - - - 4,805,000 4,805,000 5,085,000
Properties held for resale 2,217,498 - 2,217,498 311,718 2,529,216 579,216
Fire relief pension asset 729,701 - 729,701 - 729,701 -
Capital assets not being depreciated:
Land and land improvements 17,927,787 325,000 18,252,787 - 18,252,787 18,251,287
Easements 1,157,202 - 1,157,202 - 1,157,202 1,157,202
Constructioninprogress SOQ898 - SOQ898 - 500,898 635,550
Capital assets(net of accumulated depreciation):
Land improvements - 29,852 29,852 - 29,852 30,648
Buildings and improvements 2Q890,355 1,712,619 22,602,974 - 22,602,974 23,251,742
Equipmentandfurniture 314,540 - 314,540 - 314,540 282,359
Machinery and equipment 4,667,519 615,843 5,283,362 - 5,283,362 5,323,292
Other improvements 3,032,731 4,578,962 7,611,693 - 7,611,693 7,72Q041
Infrastructure 102,187,605 47,SSQ290 149,737,895 149,737,895 146,573,501
Totalassets 194,81Q071 7Q171,636 264,981,707 5,568,194 270,549,901 264,038,105
Deferred outflows of resources:
Deferred outflows related to city pensions 1,613,662 215,065 1,828,727 15,461 1,844,188 -
Deferred outflows related to fire relief pension 29Q662 29Q662 290,662
Total deferred outflows ofresources 1,904,324 215,065 2,119,389 15,461 2,134,850
Total assets and deferred outflows ofresources $ 196,714,395 $ 7Q386,701 $ 267,101,096 $ 5,583,655 $ 272,684,751 $ 264,038,105
Liabilities:
Accountspayable $ 836,760 $ 147,877 $ 984,637 $ 17,108 $ 1,001,745 $ 853,911
Salariespayable 537,821 64,190 602,011 3,870 605,881 533,568
Contracts payable 235,778 - 235,778 - 235,778 194,628
Due to other governmental units 12,687 24,071 36,758 - 36,758 194,954
Deposits payable 466,679 4,000 47Q679 3,503 474,182 714,299
Uneamed revenue 4Q 100 4Q 100 - 40,100 42,600
Accruedinterestpayable 329,500 9,406 338,906 54,423 393,329 261,678
Compensated absences payable:
Duewithinoneyear 612,274 54,195 666,469 2,483 668,952 691,343
Dueinmorethanoneyear 244,932 1Q169 255,101 2,141 257,242 224,226
Other postemployment benefits:
Duein more than one year 65,521 9,555 75,076 811 75,887 68,614
Net pension liability:
Duein more than one year 8,463,113 1,118,083 9,581,196 112,795 9,693,991 -
Capital lease payable:
Due within one year 327,432 - 327,432 - 327,432 316,235
Duein more than one year 4,515,000 - 4,515,000 - 4,515,000 4,842,432
Bonds payable(net of unamortized premiums):
Due within one year 1,21Q000 609,856 1,819,856 290,000 2,109,856 1,705,000
Due in more than oneyear 19,063,235 19,063,235 4,515,000 23,578,235 19,754,854
Totalliabilities 36,96Q832 2,051,402 39,012,234 5,002,134 44,014,368 30,398,342
Deferred inflows of resources:
Unavailable revenue-other 1,384 - 1,384 - 1,384 -
Deferred inflows related to pension 1,137,329 151,619 1,288,948 10,776 1,299,724
Total deferred inflows ofresources 1,138,713 151,619 1,29Q332 10,776 1,301,108
Net position:
Netinveshnentin capitalassets 125,562,970 54,202,710 179,765,680 - 179,765,680 181,692,101
Restricted for:
Forfeitureandseizure 39,166 - 39,166 - 39,166 52,175
Charitable gambling 9,405 - 9,405 - 9,405 14,300
Debtretirement 6,706,913 - 6,706,913 511,139 7,218,052 5,173,824
Tax increment purposes 2,011,222 - 2,011,222 - 2,011,222 2,235,339
Unrestricted 24,285,174 13,98Q970 38,266,144 59,606 38,325,750 44,472,024
Totalnetposition 158,614,850 68,183,680 226,798,530 570,745 227,369,275 233,639,763
Total liabilities,deferred inflows of resources
andnetposition $ 196,714,395 $ 7Q386,701 $ 267,101,096 $ 5,583,655 $ 272,684,751 $ 264,038,105
33
The accompanying notes are an integral part of these basic financial statements.
-This Page Intentionally left Blank-
34
CITY OF COTTAGE GROVE,MINNESOTA
STATEMENT OF ACTIVITIES Statement 2
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Net(Expense)Revenue and Component
Program Revenues Changesin NetPosition Unit
Operating Capital Primary Government Economic
Charges For Grants and Grants and Governmental Business-Type Totals Development
Expenses Services Contriburions Contriburions Acriviries Acriviries 2015 2014 Authority
Functions/Proerams
Primary government
Governmental acriviries:
General government $ 2,331,648 $ 117,636 $ 138,021 $ - $ (2,075,991) $ - $ (2,075,991) $ (1,981,31� $ -
Communitydevelopment 1,086,197 1,527,836 - - 441,639 - 441,639 43,139 -
Economicdevelopment 1,460,114 3,467 355,442 469,454 (631,751) - (631,751) 236,529 -
Public safety 7,662,393 394,574 595,851 8,979 (6,662,989) - (6,662,989) (6,141,980) -
Public works:
Regularoperarions 4,713,100 971,599 139,670 - (3,601,831) - (3,601,831) (3,509,863) -
Construcrion 2,712,945 - - 5,340,066 2,627,121 - 2,627,121 5,717,977 -
Culture and recrearion 5,153,844 3,091,072 8,821 43,132 (2,010,819) - (2,010,819) (2,155,171) -
Interest on long-terxn debt 1,029,228 - - - (1,029,228) - (1,029,228) (808,642) -
Totalgovernmentalacriviries 26,149,469 6,106,184 1,237,805 5,861,631 (12,943,849) - (12,943,849) (8,599,327) -
Business-type activities:
StreetligJits 746,794 549,005 - 25,499 - (172,290) (172,290) 129,967 -
Cottage Grove EMS 1,507,766 1,431,007 - - - (76,759) (76,759) 213,465 -
Wateroperaring 2,438,166 1,840,088 - 194,013 - (404,065) (404,065) 433,000 -
Sewer operaring 2,448,283 2,310,624 - 142,250 - 4,591 4,591 386,850 -
Totalbusiness-type acriviries 7,141,009 6,130,724 - 361,762 - (648,523) (648,523) 1,163,282 -
Totalprimarygovernment $ 33,290,478 $ 12,236,908 $ 1,237,805 $ 6,223,393 (12,943,849) (648,523) (13,592,372) (7,436,045) -
Component Unit:
EconomicDevelopmentAuthority $ 596,066 $ 352,868 $ - $ - - - - - (243,198)
Totalcomponentunit $ 596,066 $ 352,868 $ - $ - - - - - (243,198)
Generalrevenues:
Propertytaxes 13,394,585 - 13,394,585 12,616,267 111,813
Franchisetaxes 526,643 - 526,643 542,689 -
Aggregate taxes 37,133 - 37,133 26,236 -
Taxincrementcollecrions 710,541 - 710,541 711,628 -
Grants and conh-iburions not
restricted to specific programs 99,137 - 99,137 83,682 -
Unrestrictedinvestmentearnings 357,170 137,896 495,066 751,089 4,133
Gain on sale of capital assets(loss) (15,157) - (15,157) 43,904 -
Transfers 613,878 (613,878) - - -
Total general revenues,transfers,and special items 15,723,930 (475,982) 15,247,948 14,775,495 115,946
Changeinnetposirion 2,780,081 (1,124,505) 1,655,576 7,339,450 (127,252)
Netposirion-beginning 162,508,871 70,328,422 232,837,293 225,497,843 802,470
Cumulative effect of change in
accounringprinciple (6,674,102) (1,020,237) (7,694,339) - (104,473)
Netposirion-beginning,asrestated 155,834,769 69,308,185 225,142,954 225,497,843 697,997
Netposirion-ending $ 158,614,850 $ 68,183,680 $ 226,798,530 $ 232,837,293 $ 570,745
The accompanying notes are an integra��art of these basic financial statements.
CITY OF COTTAGE GROVE,MINNESOTA
BALANCESHEET
GOVERNNIENTAL FUNDS
December 31,2015
With Compararive Data as of December 31,2014
Municipal MSA
Building Construcrion
General Capital Project Capital Project Closed Debt
Assets: Fund Fund Fund Fund
Cashandinvestments $ 10,219,643 $ 345,195 $ 3,959,419 $ 2,073,490
Accrued interest receivable 147,130 - - -
Interfixnd receivable 405,116 - - -
Interfixnd loan receivable - - - 2,000,000
Due from other governmental units-net 47,382 - 96,991 -
Accounts receivable-net 28,312 - - -
Prepaid items 15,383 - - -
Inventories-at cost - - - -
Delinquent property taxes receivable 113,030 4,379 - 1,615
Due from county 93,051 - - -
Special assessments receivable:
Deferred 4,807 - 443,674 193,417
Delinquent 561 - 297 4,721
Special deferred - - 31,948 4,715
Property held for resale - - 267,498 -
Total assets $ 11,074,415 $ 349,574 $ 4,799,827 $ 4,277,958
Laabilities:
Accounts payable $ 121,229 $ - $ 100,083 $ -
Salaries payable 455,576 - - -
Interfixnd payable - - - -
Contracts payable - - - -
Due to other governmental units 6,048 - - -
Deposits payable 79,627
Unearned revenue 40,100 - - -
Interfixnd loan payable - 7,860,000 - -
Totalliabiliries 702,580 7,860,000 100,083 -
Deferred inflows of resources:
Unavailable revenue-property taxes 113,030 4,379 - 1,615
Unavailable revenue-special assessments 5,368 - 475,919 202,853
Unavailable revenue-intergovernmental - - 87,417 -
Unavailable revenue-other - 1,384 - -
Total deferred inflows of resources 118,398 5,763 563,336 204,468
Fund balances(deficit):
Nonspendable:
Prepaid items 15,383 - - -
Inventory - - - -
Resh-icted for:
Forfeiture and seizure - - - -
Charitable gambling - - - -
Debt rerirement - - - -
Tax increment purposes - - - -
Committed - - - -
Assigned 1,408,357 - 4,136,408 4,073,490
Unassigned:
General Fund 8,829,697 - - -
Special Revenue Fund - - - -
Capital Project Funds - (7,516,189) - -
Totalfundbalances(deficit) 10,253,437 (7,516,189) 4,136,408 4,073,490
Total liabilities,deferred inflows of resources,
andfundbalances $ 11,074,415 $ 349,574 $ 4,799,827 $ 4,277,958
The accompanying notes are an integra3l part of these basic financial statements.
6
Statement 3
Pavement Pavement
Management Management Other Totals
Debt Service Capital Project Governmental Governmental Funds
Fund Fund Funds 2015 2014
$ 2,548,452 $ 1,526,216 $ 15,054,522 $ 35,726,937 $ 33,930,027
- - - 147,130 146,187
- - 1,221,111 1,626,227 1,877,498
- - 2,261,758 4,261,758 5,050,000
- 58,276 84,166 286,815 884,722
- - 565,071 593,383 474,947
- - 7,343 22,726 26,548
- - 20,696 20,696 24,434
4,656 - 2,793 126,473 197,875
- - - 93,051 76,605
4,145,148 - 1,129,114 5,916,160 4,435,196
6,404 - 101 12,084 15,880
28,210 - - 64,873 80,686
- - 1,950,000 2,217,498 267,498
$ 6,732,870 $ 1,584,492 $ 22,296,675 $ 51,115,811 $ 47,488,103
$ - $ 67,507 $ 316,318 $ 605,137 $ 454,116
- - 58,642 514,218 451,132
- - 1,626,227 1,626,227 1,877,498
- 47,341 188,437 235,778 193,540
- - 6,160 12,208 17,351
387,052 466,679 707,633
- - - 40,100 42,600
- - 761,758 8,621,758 9,845,000
- 114,848 3,344,594 12,122,105 13,588,870
4,656 - 2,793 126,473 197,875
4,179,762 - 1,129,215 5,993,117 4,531,762
- 52,026 - 139,443 183,047
- - - 1,384 -
4,184,418 52,026 1,132,008 6,260,417 4,912,684
- - 7,343 22,726 26,548
- - 20,696 20,696 24,434
- - 39,166 39,166 52,175
- - 9,405 9,405 14,300
2,548,452 - 218,191 2,766,643 2,139,841
- - 2,042,151 2,042,151 2,272,496
- - 394,204 394,204 329,841
- 1,417,618 16,695,201 27,731,074 26,971,879
- - - 8,829,697 8,113,424
- - (283,216) (283,216) (1,409,153)
- - (1,323,068) (8,839,257) (9,549,236)
2,548,452 1,417,618 17,820,073 32,733,289 28,986,549
$ 6,732,870 $ 1,584,492 $ 22,296,675 $ 51,115,811 $ 47,488,103
Fund balance reported above $ 32,733,289 $ 28,986,549
Amounts reported for governmental acriviries in the statement of net posirion are different because:
Capital assets used in goverrunental activities are not financial resources,and therefore,
are not reported in the funds 149,646,231 147,132,457
Other long-terxn assets are not available to pay for current-period expenditures,and therefore,
are deferred in the funds 6,988,734 4,912,684
Deferred outIlows of resources and deferred inflows of resources are created as a result of
various differences related to pensions that are not recognized in the governmental funds.
Deferred inflows of resources related to pensions (1,105,920) -
Deferred outflows of resources related to pensions 1,859,261 -
Long-term liabilities,including bonds payable,are not due and payable in the current period
and therefore are not reported in the funds. (34,455,583) (21,857,861)
Internal service fixnds are used by management to charge the cost of insurance to individual fixnds.
The assets and liabiliries are included in the govemmental statement of net posirion 2,948,838 3,335,042
Netpositionofgovernmentalactivities $ 158,614,850 $ 162,508,871
The accompanying notes are an integra3lpart of these basic financial statements.
7
CITY OF COTTAGE GROVE,MINNESOTA
STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNNIENTAL FUNDS
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Municipal MSA
Building Constnxction
General Capital Project Capital Project Closed
Revenues: Fund Fund Fund Debt Fund
General property taxes $ 12,078,076 $ 502,549 $ - $ 4,979
Franchise taxes - - - -
Aggregate taxes - - - -
Tax increment collections - - - -
Special assessments 15,787 - 136,331 106,760
Licenses and perxnits 1,305,442 - - -
Direct charges to developers - - - -
Intergovernmental 842,658 - 229,529 -
Charges for services 557,457 - - -
Rent - 16,167 - -
Fines and forfeits 210,802 - - -
Investment earnings(loss) 69,257 1,087 29,763 13,528
Interest on interfixnd loan - - - 28,741
Connection charges - - - -
Park dedication fees - - - -
Other sales - - - -
Donations 19,772 - - -
Miscellaneous 178,997 - - -
Total revenues 15,278,248 519,803 395,623 154,008
Expenditures:
Current:
General government 2,122,549 18,327 - 1,263
Community development 1,058,537 - - -
Economic development - - - -
Public safety 6,726,685 - - -
Public works 2,297,588 - 446,711 -
Culture and recreation 1,812,233 - - -
Capital outlay:
Public safety 196,324 - - -
Public works 12,138 - 9,309 -
Culture and recreation 22,135 - - -
Debtservice:
Principal retirement - - - -
Capital lease payment - - - -
Interest and fiscal charges - 112,753 - -
Total expenditures 14,248,189 131,080 456,020 1,263
Revenues over(under)expenditures 1,030,059 388,723 (60,397) 152,745
Otherfinancing sources(uses):
Transfers in 528,710 101,131 - 235,971
Transfers out (817,473) - - (146,565)
Bonds issued - - - -
Premium on debt issued - - - -
Proceeds from the sale of capital assets - - - -
Total other financing sources(uses) (288,763) 101,131 - 89,406
Netincrease(decrease)in fund balance 741,296 489,854 (60,397) 242,151
Fund balance-January 1 9,512,141 (8,006,043) 4,196,805 3,831,339
Fund balance-December 31 $ 10,253,437 $ (7,516,189) $ 4,136,408 $ 4,073,490
The accompanying notes are an integra�gart of these basic financial statements.
Statement 4
Pavement Pavement
Management Management Other Totals
Debt Service Capital Project Governmental Governmental Funds
Fund Fund Funds 2015 2014
$ 587,925 $ - $ 292,458 $ 13,465,987 $ 12,687,917
- - 526,643 526,643 542,689
- - 37,133 37,133 26,236
- - 710,541 710,541 723,304
1,102,963 - 137,955 1,499,796 1,326,017
- - - 1,305,442 904,400
- - 307,971 307,971 661,861
- 1,186,102 157,465 2,415,754 3,932,021
- - 3,685,422 4,242,879 3,572,351
- - - 16,167 435,975
- - 17,840 228,642 171,317
10,490 4,565 134,109 262,799 452,293
- - 45,599 74,340 59,066
- - 318,092 318,092 841,434
- - 9,010 9,010 63,595
- - 469,454 469,454 429,750
- - 358,241 378,013 379,127
- 7,050 104,760 290,807 196,990
1,701,378 1,197,717 7,312,693 26,559,470 27,406,343
11,462 - 1,726 2,155,327 2,025,709
- - - 1,058,537 919,126
- - 1,456,306 1,456,306 541,838
- - 25,119 6,751,804 6,484,552
- 453,641 1,146,897 4,344,837 4,306,068
- - 2,342,759 4,154,992 4,169,469
- - 87,913 284,237 468,465
- 5,094,675 749,116 5,865,238 3,926,379
- - 865,192 887,327 633,578
870,000 - 450,000 1,320,000 2,470,000
- - 316,235 316,235 305,076
341,273 84,091 373,990 912,107 882,508
1,222,735 5,632,407 7,815,253 29,506,947 27,132,768
478,643 (4,434,690) (502,560) (2,947,477) 273,575
146,565 424,329 1,612,951 3,049,657 1,840,995
- - (1,398,914) (2,362,952) (1,213,059)
- 5,700,000 - 5,700,000 1,405,000
- 254,245 - 254,245 18,461
- - 53,267 53,267 67,120
146,565 6,378,574 267,304 6,694,217 2,118,517
625,208 1,943,884 (235,256) 3,746,740 2,392,092
1,923,244 (526,266) 18,055,329 28,986,549 26,594,457
$ 2,548,452 $ 1,417,618 $ 17,820,073 $ 32,733,289 $ 28,986,549
The accompanying notes are an integra��art of these basic financial statements.
CITY OF COTTAGE GROVE,MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENLTES, Statement 5
EXPENDITiJRES,AND CHANGES IN FiJND BALANCES OF
GOVERNMENTAL FiJNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
2015 2014
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) $ 3,746,740 $ 2,392,092
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. 2,223,716 (1,238,277)
The effect of various miscellaneous transactions involving capital assets is to decrease net position
(i.e.sales,and trade-ins). (67,488) (27,296)
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. 357,546 3,037,468
Revenues in the statement of activities that do not provide current financial resources 1,346,349 (102,202)
are not reported as revenues in the funds.
Governmental funds recognize pension contributions as expenditures at the time of
payment whereas the statement of activities factors in items related to pensions on a
full accrual perspective. (281,715) -
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. (4,299,367) 1,373,422
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. (81,706) (212,333)
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. (163,994) 33,373
Change in net position of governmental activities(page 35) $ 2,780,081 $ 5,256,247
The accompanying notes are an integral part of these basic financial statements.
40
CITY OF COTTAGE GROVE,MINNESOTA
STATEMENT OF NET POSITION Statement 6
PROPRIETARY FUNDS
December 31,2015
Business-Type Activities-Enterprise Funds Governmental
Total Activities-
StreetLight CottageGrove Water Sewer Enterprise Internal
Fund EMS Fund Operating Operating Funds Service Funds
Assets:
Current assets:
Cash and investxnents $ 1,185,482 $ 962,140 $ 4,466,573 $ 2,806,650 $ 9,420,845 $ 2,484,403
Interfund loan receivable - - 1,527,500 2,832,500 4,360,000 -
Due from other govemmental units-net - - 1,543 2,668 4,211 -
Accounts receivable:
Customers 89,928 373,395 236,846 332,468 1,032,637 -
Certified to County - - 98,553 98,553 197,106 -
Other 3,163 - 944 - 4,107 -
Prepaid items - 4,462 2,426 142,774 149,662 169,066
Inventories-at cost - - - - - 70,940
Totalcurrentassets 1,278,573 1,339,997 6,334,385 6,215,613 15,168,568 2,724,409
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 - - - - - 164,338
Machinery and equipment 139,222 773,544 1,051,454 269,175 2,233,395 214,326
Other improvements 6,991,533 - - - 6,991,533 -
Water and sewer lines - - 38,725,100 26,187,419 64,912,519 -
Totalcapitalassets 7,130,755 773,544 44,243,070 26,456,594 78,603,963 1,732,199
Less: Accumulated depreciation (2,492,650) (463,289) (14,026,780) (6,808,678) (23,791,397) (699,793)
Net capital assets 4,638,105 310,255 30,216,290 19,647,916 54,812,566 1,032,406
Total noncurrent assets 4,638,105 310,255 30,216,290 19,647,916 54,812,566 1,032,406
Total assets 5,916,678 1,650,252 36,550,675 25,863,529 69,981,134 3,756,815
Deferred outflows:
Defeired outflows related to pension 7,371 155,573 42,782 9,339 215,065 45,063
Total defeired outflows 7,371 155,573 42,782 9,339 215,065 45,063
Liabilities:
Current liabilities:
Accounts payable 28,217 23,690 81,528 14,442 147,877 231,623
Salaries payable 4,305 32,165 22,900 4,820 64,190 23,603
Due to other govemmental units 10 6,701 17,360 - 24,071 479
Deposits payable - 4,000 - 4,000 -
Accrued interest payable - - 9,406 - 9,406 -
Compensated absences payable 5,785 18,829 22,009 7,572 54,195 32,201
Bonds payable-current portion - - 609,856 - 609,856 -
Totalcurrentliabilities 38,317 81,385 767,059 26,834 913,595 287,906
Noncurrent liabilities:
Compensated absences payable - 6,983 2,186 1,000 10,169 12,259
Other postemployment benefits 448 5,282 2,922 903 9,555 2,212
Netpensionliability 53,774 684,070 312,105 68,134 1,118,083 328,752
Totalnoncurrentliabilities 54,222 696,335 317,213 70,037 1,137,807 343,223
Totalliabilities 92,539 777,720 1,084,272 96,871 2,051,402 631,129
Deferred inflows:
Defeiredinflowsrelatedtopension 5,138 110,152 29,819 6,510 151,619 31,409
Total defeired inflows 5,138 110,152 29,819 6,510 151,619 31,409
Net position:
Net investment in capital assets 4,638,105 310,255 29,606,434 19,647,916 54,202,710 1,032,406
Unrestricted 1,188,267 607,698 5,872,932 6,121,571 13,790,468 2,106,934
Totalnetposition $ 5,826,372 $ 917,953 $ 35,479,366 $ 25,769,487 67,993,178 $ 3,139,340
Some amounts reported for business-type activities in the statement of netposition are different
because certain internal service fund assets and liabilities are included with business-type activities. 190,502
$ 68,183,680
The accompanying notes are an integra��art 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 31,2015
Business-Type Activities-Enterprise Funds 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 $ 523,447 $ 1,423,773 $ 1,804,338 $ 2,257,696 $ 6,009,254 $ 3,007,846
Water meter/street light material sales - - 27,732 - 27,732 -
Insurance refunds and reimbursements - - - - - 104,083
Total operating revenues 523,447 1,423,773 1,832,070 2,257,696 6,036,986 3,111,929
Operating expenses:
Operating and maintenance:
Personal services 89,207 1,181,451 493,861 101,700 1,866,219 510,547
Commodities 54,251 94,329 314,915 7,129 470,624 652,954
Commodities-items for resale - - - - - -
Contractual services 438,449 156,048 570,906 143,337 1,308,740 219,992
Disposal:
Contractual services-MCES - - - 1,586,212 1,586,212 -
Administrative and general:
Personal services - - 38,832 35,882 74,714 1,432,083
Commodities - - 75 157 232 -
Contractual services - - 132,945 130,809 263,754 374,689
Depreciation 164,324 68,026 861,441 442,918 1,536,709 49,791
Total operating expenses 746,231 1,499,854 2,412,975 2,448,144 7,107,204 3,240,056
Operating income(loss) (222,784) (76,081) (580,905) (190,448) (1,070,218) (128,127)
Nonoperating revenues(eapenses):
Investmentearnings 9,597 6,791 37,829 20,966 75,183 20,031
Interest on interfund debt - - 23,754 38,959 62,713 -
Asset contribution to governmental funds - - (936) (936)
Miscellaneous 25,558 7,234 8,018 52,928 93,738 13,057
Debt service:
Interest - - (20,472) - (20,472) -
Totalnonoperatingrevenues(eapenses) 35,155 14,025 48,193 112,853 210,226 33,088
Income(loss)before
contributions and transfers (187,629) (62,056) (532,712) (77,595) (859,992) (95,039)
Capital contributions 25,499 - 267,776 142,250 435,525 -
Transfer to General Fund (45,850) (94,680) (166,550) (181,610) (488,690) -
Transfer to Capital Project Fund - - (100,232) (97,783) (198,015) -
Totaltransfers (45,850) (94,680) (266,782) (279,393) (686,705) -
Changeinnetposition (207,980) (156,736) (531,718) (214,738) (1,111,172) (95,039)
Netposition-Januaryl 6,084,159 1,692,932 36,300,163 26,047,333 70,124,587 3,538,877
Cumulative effect of change in
accounting principal (49,807) (618,243) (289,079) (63,108) (1,020,237) (304,498)
Net position-January 1,as restated 6,034,352 1,074,689 36,011,084 25,984,225 69,104,350 3,234,379
Net position-December 31 $ 5,826,372 $ 917,953 $ 35,479,366 $ 25,769,487 $ 67,993,178 $ 3,139,340
Change in net position reported above (1,111,172)
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (13,333)
Change in net position of business-type activities(page 35) $ (1,124,505)
The accompanying notes are an integra��art of these basic financial statements.
CITY OF COTTAGE GROVE,MINNESOTA
STATEMENP OF CASH FLOWS Statement 8
PROPRIETARY FUNDS
For The Year Ended December 31,2015
Business-Type Activities-Enteiprise Funds 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 $ 514,834 $ 1,539,946 $ 1,836,319 $ 2,256,119 $ 6,147,218 $ -
Receipts from interfixnd services provided - - - - - 3,007,846
Receipts from insurance refunds and reimbursements - - - - - 104,083
Paymenttosuppliers (535,169) (235,332) (970,292) (2,024,229) (3,765,022) (1,278,818)
Paymenttoemployees (87,007) (1,144,020) (519,291) (136,910) (1,887,228) (1,957,146)
Miscellaneous revenue 25,558 7,234 8,018 52,928 93,738 13,057
Net cash flows from operating activities (81,784) 167,828 354,754 147,908 588,706 (110,978)
Cash flows from noncapital financing activities:
Transfers out (45,850) (94,680) (266,782) (279,393) (686,705) -
Net cash flows from
noncapitalfinancing activities (45,850) (94,680) (266,782) (279,393) (686,705) -
Cash flows from capital and related
financing activities:
Acquisition of capital assets (28,339) - (737,064) - (765,403) (138,312)
Interestpaid on debt - - (24,150) - (24,150) -
Principal paid on debt - - (105,000) - (105,000) -
Net cash flows from capital
and related financing activities (28,339) - (866,214) - (894,553) (138,312)
Cash flows from investing activities:
Investmentearnings 9,597 6,791 37,829 20,966 75,183 20,031
Interest on interfixnd loan - - 23,754 38,959 62,713 -
Payment received on interfixnd loan - - 435,000 - 435,000 -
Net cash flows from investing activities 9,597 6,791 496,583 59,925 572,896 20,031
Netincrease(decrease)in cash and cash equivalents (146,376) 79,939 (281,659) (71,560) (419,656) (229,259)
Cash and cash equivalents-January 1 1,331,858 882,201 4,748,232 2,878,210 9,840,501 2,713,662
Cash and cash equivalents-December 31 $ 1,185,482 $ 962,140 $ 4,466,573 $ 2,806,650 $ 9,420,845 $ 2,484,403
Reconciliation of operating income/(loss)to net cash
from operating activities:
Operating income(loss) $ (222,784) $ (76,081) $ (580,905) $ (190,448) $ (1,070,218) $ (128,127)
Adjustments to reconcile operating income(loss)
to net cash flows from operating activities:
Depreciation 164,324 68,026 861,441 442,918 1,536,709 49,791
Miscellaneous revenue 25,558 7,234 8,018 52,928 93,738 13,057
Pension expense 1,734 20,405 10,063 2,196 34,398 10,600
Changes in assets and liabilities:
Decrease(increase)in receivables (8,613) 116,173 4,249 (1,577) 110,232 560
Decrease(increase)in prepaid items 159 1,138 (634) (10,590) (9,927) (38,717)
Decrease(increase)in inventory - - - - - (1,242)
(Decrease)increase in payables (42,162) 30,933 52,522 (147,519) (106,226) (16,900)
Total adjustments 141,000 243,909 935,659 338,356 1,658,924 17,149
Net cash flows from operating activities $ (81,784) $ 167,828 $ 354,754 $ 147,908 $ 588,706 $ (110,978)
Noncash investing,capital and financing activities:
Capital asset contributions from governmental activities $ - $ - $ 73,763 $ - $ 73,763 $ -
Capital asset contributions from developers 25,499 - 194,013 142,250 361,762 -
Capital asset contributions to governmental activities - - (936) - (936) -
Loss on disposal of capital asset - - 1,013 - 1,013 -
The accompanying notes are an integra��art of these basic financial statements.
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Cottage Grove was incorporated in 1974 and operates under the State of Mimlesota 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
accounring 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 ENTTTY
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 enrity because of the significance of its operarional and financial relationship with
the City.
COMI'ONENT 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 posirion 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 empl�asize that it is legally separate from the City. The
component unit acrivity 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
informarion on all of the activiries 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 taYes and intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant ea�tent on fees and charges for support.
In the government-wide statement of net posirion,both the governmental and business-type acriviries 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 posirion 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 acrivities.
The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type
acrivity are offset by program revenues. Direct expenses are those that are clearly idenrifiable 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 acrivity and 2)grants
and contriburions that are restricted to meeting the operational or capital requirements of a particular funcrion or
business-type acrivity. TaYes 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.
44
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 eapenses
are recorded when a liability is incurred,regardless of the riming of related cash flows. Property taYes 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 l�ave 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 taYes, 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 l�ave 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 susceprible 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 accumularion 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 accumularion of residual resources from debt funds that l�ave 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 properry
taxes.
The PavementManagement Capital Project Fund accounts for pavement management construction projects.
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 eapenses.
The Cottage Grove F.MSFund accounts for the operation of the Cottage Grove ambulance service that serves the
ciries of Cottage Grove,Newport, Saint Paul Park,and Grey Cloud Island.
The Water Operating fund accounts for customer water service cl�arges which are used to finance water operating
expenses.
45
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
The Sewer Operating fund accounts for customer sewer service cl�arges which are used to finance sewer operaring
expenses.
Addirionally,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 l�as been eliminated from the government-wide financial statements.
Exceprions to this general rule are transacrions tl�at would be treated as revenues, expenditures or expenses if they
involved eaternal organizarions, such as buying goods and services or payments in lieu of taYes,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)operaring 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 eapenses 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 cl�arges 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). Operaring 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 eapenses.
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 accounring principles. Annual appropriated
budgets are adopted for the General and Special Revenue Funds.
Budgeted amounts are reported as originally adopted, and as amended by the City Council. Individual amendments
were not material in relation to the original appropriations which were adjusted. Budgeted eapenditure appropriations
can be carried forward to the neat 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 eapenditures and the means of financing them.
2. The City Council reviews the proposed budget and makes appropriate changes.
3. Per Statute,public meerings are held to receive taxpayer comments.
4. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by
each department based upon detailed budget esrimates for individual eapenditure accounts.
46
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
5. The City Administrator is authorized to transfer appropriarions within any department budget up to $1,000.
Addirional interdepartmental or interfund appropriations and deletions are authorized by the City Council with
expenditure reductions,fund(conringency)reserves or addirional 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 obligarion indentures determine the appropriation level and debt service taY 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 obligarion bond indenture provisions and net income
for operarion 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,
appropriarions for major projects are not adopted unril the actual bid award of the improvement. The
appropriarions 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,commodiries,contractual services and capital
outlay) within each acrivity. All amounts over budget have been approved by the City Council through the
disbursement approval process.
10. The City Council may authorize transfers of budgeted amounts between City funds.
The following is a listing of eapenditure categories that exceed budget appropriations for non-major funds:
Final Bud�et Actual Over Bud�et
Nonmajor Funds:
Special Revenue Funds:
Recycling:
Public works:
Commodiries $ 9,100 $ 10,269 $ 1,169
Contractual services 23,800 41,886 18,086
Storm Water Maintenance:
Public works:
Personnel services 238,915 268,577 29,662
Capital outlay - 12,215 12,215
Forfeiture/Seizure:
Public works:
Contractual services 16,300 16,863 563
Ice Arena:
Culture and recreation:
Commodiries 31,200 33,822 2,622
Contractual services 295,150 346,035 50,885
47
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
F. CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the ea�tent available in authorized investments.
Eariiings 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 l�ave 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 31,2015 are planned to be eliminated in 2016. Long-term interfund loans are
classified as "interfund loan receivable/payable." Any residual balances outstanding between the governmental
acriviries and business-type activities are reported in the government-wide financial statements as"internal balances."
Property taYes, special assessments, and ambulance receivables have been reported net of esrimated uncollecrible
accounts. (see Note 1 H, I and L) Because utility bills are considered liens on property, no esrimated uncollectible
amounts are established. Uncollectible amounts are not material for other receivables and have not been reported.
H. PROPERTY TAX REVENUE RECOGNTTION
The City Council annually adopts a taY 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 collecring all property taxes for
itself,the City, the local school district and other taYing authoriries. Such taYes become a lien on January 1 and are
recorded as receivables by the City at tl�at date. Real properry taYes are payable(by property owners)on May 15 and
October 15 of each calendar year. Personal properry taxes are payable by taxpayers on February 28 and June 30 of
each year. These taYes 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 taYes by properry owners;the County possesses this authority.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property taY revenue in the period for which the taYes were levied. Uncollectible property taYes
are not material and l�ave 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 pracrice, current and delinquent taYes received by the City in July,December and January are
recognized as revenue for the current year. TaYes collected by the County by December 31 (remitted to the City the
following January) and taYes 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 eapenditures.
48
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
L SPECIAL ASSESSMENT REVENUE RECOGNTTION
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 l�andled by the County Auditor in the same manner as property taYes. Properry 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 tl�at properry until full
payment is made or the amount is determined to be excessive by the City Council or court acrion. If special
assessments are allowed to go delinquent,the property is subject to taY forfeit sale. Proceeds of sales from taY forfeited
properties are allocated first to the County's costs of administering all taY forfeit properties. Pursuant to State Statutes,
a property sl�all be subject to a taY 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 l�ave 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, eapendable supplies, and vehicle repair parts. The cost of such inventories is recorded as
expenditures/eapenses when consumed rather than when purcl�ased in both government-wide and fund financial
statements.
K PREPAID TTEMS
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 eapenditures/eapenses
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 collecrion rates. The amounts of the estimated uncollecrible ambulance billings to individuals as of
December 31,2015 were$311,600.
49
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 eapenses.
N. CAPTTAL ASSETS
Capital assets,which include properry,plant,equipment and infrastructure assets(e.g.,roads,bridges,sidewalks,and
similar items), are reported in the applicable governmental or business-type acrivities columns in the government-
wide financial statements. Infrastructure assets l�ave been capitalized retroacrively 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 esrimated
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 esrimated 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 ea�tend assets lives are not
capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during
the construction pl�ase of capital assets of business-type activiries is included as part of the capitalized value of the
assets constructed. For the year ended December 31,2015,no interest was capitalized in connection with construcrion
in progress.
Capital assets not being depreciated include land, easements and construction in progress. Properry, plant and
equipment of the primar�� 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 l�ave been wholly (or substantially) financed by non-operating funds (special assessments,
general taYes,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 thanby user cl�arges. Accordingly,the water and sewer
user rates are not established at levels sufficient to cover depreciarion on these assets.
O. DEFERRED OUTFLOWS AND 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 rime. The City presents deferred inflows of resources on the Governmental Fund Balance Sheet as unavailable
revenues. These amounts are deferred and recognized as an inflow of resources in the period tl�at the amounts become
available. The City presents deferred inflows of resources on the Statement of Net Position for amounts related to
pensions. In addition to assets,the statement of financial position will somerimes report a separate section for deferred
outflows of resources. This separate financial statement element represents a consumprion of net position that applies
50
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
to future period(s)and so will not be recognized as an outflow of resources(eapense/eapenditure)until that time. The
City presents deferred outflows of resources on the Statements of Net Position for amounts related to pensions.
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 collecrive 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 rerirements. 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
tl�at is vested as severance pay.
Q. LONGTERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term
debt and other long-term obligarions are reported as liabilities in the applicable governmental acriviries,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 PENSION
For purposes of ineasuring the net pension liability, deferred outflows/inflows of resources, and pension eapense,
information about the fiduciary net posirion of the Public Employees Rerirement Association(PERA) and additions
to/deducrions from PERA's fiduciary net position l�ave been determined on the same basis as they are reported by
PERA except tl�at PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of
employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance
with the benefit terms. Investments are reported at fair value
S. FUND BALANCE
In the fund financial statements, governmental funds report fund balances in classificarions tl�at 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 ea�ternally 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(resolurion) of
the City Council. Committed amounts cannot be used for any other purpose unless the Council modifies or rescinds
the commitment by resolurion.
51
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 classificarion 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.
Addirionally,the City would first use committed,then assigned, and lastly unassigned amounts of unrestricted fund
balance when eapenditures 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.
T. NET POSITION
Net posirion represents the difference between assets and deferred outflows of resources and liabiliries 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 limitarions on use through ea�ternal restrictions imposed by creditors, grantors or laws or regulations of other
governments.
U. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, eapenditures or expenses. Transactions that
constitute reimbursements to a fund for expenditures/eapenses initially made from it are properly applicable to another
fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of eapenditures/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.
V. USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. generally accepted accounting principles (GAAP)
requires management to make esrimates that affect the amounts reported in the financial statements during the
reporting period. Actual results could differ from such esrimates.
W. COMPARATIVE DATA
Summarized compararive data for the prior year l�as been presented only for certain secrions of the accompanying
financial statements in order to provide an understanding of the cl�anges in the City's financial position and operarions.
Certain reclassifications have been made to prior year data to conform to the current year presentarion. The
reclassifications l�ad no effect on the change in net posirion or total net posirion as previously reported.
52
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 POSTTION
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 tl�at reconciliation eaplains 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 $(34,455,583)
difference are as follows:
Bonds payable $ (19,780,000)
Capital leases payable (4,842,432)
Accrued interest payable (329,500)
Compensated absences payable (812,746)
Other post employment benefits (63,309)
Net pension liability (8,134,361)
Unamortized premium on bonds (493,235)
Net adjustment to reduce fund balance-total
governmental funds to arrive at net position-
governmental activiries $ (34,455,583)
B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES,EXPENDTTURES,AND CHANGES IN FUND BALANCES AND THE
GOVERNMENT-WIDE STATEMENT OF ACTIVTTIES
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 tl�at
reconciliation eaplains tl�at"governmental funds report capital outlays as eapenditures. However,in the statement
of acrivities the cost of those assets is allocated over their esrimated useful lives and reported as depreciarion
expense." The details of this$2,223,716 difference are as follows:
Capital outlay $6,677,600
Depreciarion expense (4,453,884)
Net adjustment to increase net cl�anges in fund
balances-total governmental funds to arrive at
changes in net posirion of governmental activiries $2,223,716
53
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Another element of that reconciliation states tl�at "revenues in the statement of activities tl�at do not provide
current financial resources are not reported as revenues in the funds." The details of this $1,346,349 difference
are as follows:
General properry taxes:
At December 31,2014 $ (197,875)
At December 31,2015 126,473
Special assessments:
At December 31,2014 (4,531,762)
At December 31,2015 5,993,117
Intergovernmental:
At December 31,2014 (183,047)
At December 31,2015 139,443
Net adjustments to increase net cl�anges in fund balances-
total governmental funds to arrive at changes in net
position of governmental acrivities $ 1,346,349
Another element of tl�at reconciliarion 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 transacrion,however,has any effect on net position.
The details of this$(4,299,367)difference are as follows:
Debt issued:
Issuance of general obligarion bonds $(5,700,000)
Plus premium on debt issued (254,265)
Principal repayments:
General obligarion debt 1,320,000
Capital leases 316,255
Amortization of deferred premiums 18,643
Net adjustments to increase net cl�anges in
fund balances-total governmental funds
to arrive at cl�anges in net posirion of
governmental acrivities $(4,299,367)
54
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Another element of that reconciliation states that"some eapenses reported in the statement of activities do not
require the use of current financial resources and therefore are not reported as eapenditures in governmental
funds." The details of this$(163,994)difference are as follows:
Compensated absences:
At December 31,2014 $ 790,410
At December 31,2015 (812,746)
Accrued interest:
At December 31,2014 193,736
At December 31,2015 (329,500)
Other post employment benefits
At December 31,2014 57,415
At December 31,2015 (63,309)
Net adjustment to increase net cl�anges in fund
balances-total governmental funds to arrive at
changes in net position of governmental
acriviries (163.9941
Note 3 DEPOSITS AND INVESTMENTS
A. DEPOSITS
The City maintains a cash and investment pool tl�at is available for use by all funds. Each fund type's portion of this
pool is displayed on the statement of net posirion and balance sheets as"Cash and Investments."
Custodial Credit Risk— Custodial credit risk for deposits is the risk tl�at 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 31,2015,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 Miiiiiesota Statutes, the City maintains deposits at financial insritutions 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 obligarions of a state or local government rated"A" or better;revenue obligarions of a state or local
government rated"AA"or better;irrevocable standby letter of credit issued by a Federal Home Loan Bank;and rime
deposits insured by a federal agency. Minnesota statutes require securiries 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 institurion 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 obligarions guaranteed by the United States or its agencies, its instrumentaliries or
organizations created by an act of congress,excluding mortgage-backed securities defined as high risk.
b) General Obligarions of the State of Miiiiiesota 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 raring 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
55
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
3) general obligation of the Miiiiiesota Housing Finance Agency rated"A"or better by a narional bond
rating agency.
c) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
d) Commercial paper of the highest quality(Al,P1),and maturing in 270 days or less.
e) Repurchase agreements from national or state banks tl�at are members of the Federal Reserve System with
capitalizarion exceeding$10,000,000;a primary reporting dealer in U.S.government securities to the Federal
Reserve Bank of New York.
fl 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 securiries computed at
market value which sl�all 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) Sl�ares of mutual funds holdings pursuant to M.S. 118A.04. The City participates in the Miiiiiesota Municipal
Money Market Fund(4M Fund)whereby,the fair market value of the posirion in the pool is the same as the
value of the pool shares owned.
Interest rate risk-Interest rate risk is the risk tl�at 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 ea�tend beyond five years and in no circumstance should any ea�tend beyond ten years.
Tota1 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 $3,681,486 - $1,500,995 $2,180,491 AA/Aaa S&P/Moody's
Fannie Mae—FNMA 7,243,958 1,000,050 6,243,908 - AA/Aaa S&P/Moody's
Freddie Mac-FHLMC 2,497,210 - 2,497,210 - AA/Aaa S&P/Moody's
Federal Farm Credit Bank 1,040,480 - 1,040,480 - AA/Aaa S&P/Moody's
U.S.Treasury Securities 999,770 999,770 - - NR/Aaa N/A/Moody's
CommercialPaper 1,750,000 1,750,000 - - Al/Pl S&P/Moody's
Municipal Obligations 4,716,646 1,137,259 3,579,387 - AA/Aa S&P/Moody's
Negotiable CD's 21,688,798 10,011,899 11,676,899 - NR N/A
Total Investments 43,618,348 $14,898,978 $26,538,879 $ 2,180,491
Money Markets 2,743,854
Deposits 1,647,457
Petty Cash and Change 11,780
Total Cash and Investments $48,021,439
NR indicates"not rated"
N/A indicates"not applicable
Custodial CreditRisk—For an investment,custodial credit risk is the risk tl�at,in the event of failure of the depository financial
institurion, the City will not be able to recover the value of its investment or collateral securiries 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.
CreditRisk—Credit risk is the risk tl�at an issuer or other counterparty to an investment will not fulfill its obligations.
As indicated previously, Minnesota statute requires Commercial paper to be of the highest quality (Al, P1) and
municipal general obligations need an"A"rating or better.
56
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 $3,681,486 8%
Faiiiiie Mae-FNMA 7,243,958 17%
Freddie Mac-FHLMC 2,497,210 6%
Note 4 RECEIVABLES
Significant receivable balances not eapected to be collected within one year of December 31,2015 are as follows:
Special Delinquent Certified
Assessment Property to
Receivable TaYes County Total
Primary government:
Major funds:
General Fund $ 4,345 $ 60,300 $ - $ 64,645
Municipal Building Capital Project Fund - 2,300 - 2,300
MSA Construction Capital Project Fund 430,363 - - 430,363
Closed Debt Fund 178,632 900 - 179,532
Pavement Management Debt Service Fund 3,750,694 2,500 - 3,753,194
Nonmajorfunds 1,013,900 1,500 - 1,015,400
Major Business-Type funds:
Water Operating fund - - 57,161 57,161
Sewer Operating fund - - 57,076 57,076
Total primary government 5,377,934 67,500 114,237 5,559,671
Component unit
Economic Development Authority - 600 - 600
Total reporting entity $ 5,377,934 $ 68,100 $ 114,237 $ 5,560,271
57
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Governmental funds report deferred inflows of resources in connection with receivables for revenues tl�at 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 Special Miscellaneous
Taxes Assessments Intergovernmental Revenue Total
Primary government:
Major funds:
General Fund $ 113,030 $ 5,368 $ - $ - $ 118,398
Municipal Building Capital Project Fund 4,379 - - 1,384 5,763
MSA Construction Capital Project Fund - 475,919 87,417 - 563,336
Closed Debt Fund 1,615 202,853 - - 204,468
PavementManagementDebtServiceFund 4,656 4,179,762 - - 4,184,418
Pavement Manage. Capital Project Fund - - 52,026 - 52,026
Nonmajorfunds 2,793 1,129,215 - - 1,132,008
Totalprimary government 126,473 5,993,117 139,443 1,384 6,260,417
Component unit
Economic Development Authority 1,087 - - - 1,087
Total reporting entity $ 127,560 $ 5,993,117 $ 139,443 $ 1,384 $ 6,261,504
58
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Note 5 CAPTTAL ASSETS
Capital asset acrivity for the year ended December 31,2015 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Primary Government
Governmental activities:
Capital assets,not being depreciated:
Land $ 17,926,287 $ 1,500 $ - $ 17,927,787
Permanenteasements 1,157,202 - - 1,157,202
Construction in progress 606,641 5,797,522 (5,903,265) 500,898
Tota1 capital assets,not being depreciated 19,690,130 5,799,022 (5,903,265) 19,585,887
Capital assets,being depreciated:
Buildings and improvements 35,802,054 305,106 (86,000) 36,021,160
Equipment and furniture 1,336,872 98,601 (100,352) 1,335,121
Machinery and equipment 10,796,412 876,520 (370,148) 11,302,784
Otherimprovements 6,181,179 240,341 (136,288) 6,285,232
Infrastructure:
Streets 92,066,395 5,591,307 - 97,657,702
Storm sewers 29,017,051 108,132 - 29,125,183
Sidewallcs/trails 5,277,884 80,154 - 5,358,038
Tota1 capital assets being depreciated 180,477,847 7,300,161 (692,788) 187,085,220
Less accumulated depreciation for:
Buildings and improvements 14,378,330 827,475 (75,000) 15,130,805
Equipment and furniture 1,054,513 66,420 (100,352) 1,020,581
Machinery and equipment 6,159,740 788,250 (312,725) 6,635,265
Otherimprovements 3,143,627 245,162 (136,288) 3,252,501
Infrastructure:
Streets 19,866,788 1,897,831 - 21,764,619
Storm sewers 6,572,382 586,277 - 7,158,659
Sidewallcs/trails 916,255 113,785 - 1,030,040
Total accumulated depreciation 52,091,635 4,525,200 (624,365) 55,992,470
Tota1 capital assets,being depreciated,net 128,386,212 2,774,961 (68,423) 131,092,750
Governmental activities capital assets,net $ 148,076,342 $8,573,983 $(5,971,688) $ 150,678,637
59
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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) -
Tota1 capital assets,not being depreciated 353,909 - (28,909) 325,000
Capital assets,being depreciated:
Land improvements 39,803 - - 39,803
Buildings and improvements 4,101,713 - - 4,101,713
Machinery and equipment 2,272,106 36,989 (75,700) 2,233,395
Other improvements 6,937,694 53,839 - 6,991,533
Water and sewer lines 63,772,493 1,140,026 - 64,912,519
Tota1 capital assets,being depreciated 77,123,809 1,230,854 (75,700) 78,278,963
Less accumulated depreciation for:
Land unprovements 9,155 796 - 9,951
Buildings and structures 2,273,695 115,399 - 2,389,094
Machinery and equipment 1,585,486 105,816 (73,750) 1,617,552
Other improvements 2,255,205 157,366 - 2,412,571
Water and sewer lines 16,204,897 1,157,332 - 17,362,229
Tota1 accumulated depreciation 22,328,438 1,536,709 (73,750) 23,791,397
Tota1 capital assets being depreciated-net 54,795,371 (305,855) (1,950) 54,487,566
Business-type activities capital assets-net $55,149,280 $ (305,855) $ (30,859) $54,812,566
Depreciation expense was charged to funcrion/programs of the primary government as follows:
Governmental activities:
General government $ 197,168
Community development 9,010
Public safety 636,114
Public warks 2,916,338
Culture and recreation 766,570
Tota1 depreciation expense governmental activities $ 4,525,200
Business-type activities:
Street lights $ 164,324
Cottage Grove EMS 68,026
Water operating 861,441
Sewer operating 442,918
Tota1 depreciation expense before transfer $ 1,536,709
60
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
NOTE 6 LONGTERM DEBT
A. GENERAL OBLIGATION DEBT
The City issues general obligarion bonds to provide funds for the acquisirion and construcrion of major capital
improvements. The City issues special assessmentbonds 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 acrivities. As of December 31,2015,the governmental long-term debt of the financial reporting enrity
consisted of the following:
Final
Interest Issue Maturity Original Payable
Rate Date Date Issue 12/31/2015
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 $ 1,060,000
GO Tax Increment Refunding Bonds of 2014A 2.0-2.50% 5/29/2014 2/1/2021 1,405,000 1,235,000
Total General Obligation Tax Increment Bonds 2,810,000 2,295,000
Special Assessment Bonds with Government Commitment
GO Improvement Bonds of 2008A 3.5-3.6% 6/11/2008 2/1/2019 3,370,000 1,090,000
GO Improvement Bonds of 2009A 2.5-4.3% 4/16/2009 2/1/2024 3,650,000 2,165,000
GO Improvement Bonds of 2012A .30-2.2% 3/13/2012 2/1/2027 1,865,000 1,505,000
GO Improvement Bonds of 2013A 3.0%-3.5% 9/26/2013 2/1/2029 7,345,000 7,025,000
GO Improvement Bonds of 2015A 2.5%-3.0% 5/27/2015 2/1/2031 5,700,000 5,700,000
Total Special Assessment Bonds 21,930,000 17,485,000
Bond premium - 493,235
Total Governmental Activities Bonds 24,740,000 20,273,235
Capital lease payable-EDA component unit 6,500,000 4,805,000
Capital lease payable—golf carts 176,039 37,432
Other postemployment benefits - 65,521
Compensated absences payable - 857,206
Total City indebtedness-governmental activities 31,416,039 26,038,394
BUSINESS TYPE ACTIVITIES
Revenue bonds:
GO Water Revenue Refunding Bonds of 2009B 2.5-4% 4/16/2009 2/1/2020 1,205,000 600,000
Bond premium - 9,856
Total Revenue Bonds 1,205,000 609,856
Other postemployment benefits - 9,555
Compensated absences payable - 64,364
Total City indebtedness-business type activities 1,205,000 683,775
Total City indebtedness-primary government $ 32,621,039 $ 26,722,169
Component Unit EDA:
Lease-Purchase Revenue Bonds of 2008B 4.0-4.90% 6/11/2008 4/1/2028 $ 6,500,000 $ 4,805,000
Other postemployment benefits - 811
Compensated absences payable - 4,624
Total indebtedness-component unit $ 6,500,000 $ 4,810,435
61
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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
2016 $ 210,000 $ 71,710 $ 1,010,000 $ 542,079
2017 225,000 66,520 1,380,000 477,646
2018 240,000 61,030 1,410,000 435,635
2019 260,000 55,190 1,455,000 391,469
2020 275,000 48,820 1,190,000 350,777
2021 265,000 41,540 1,215,000 314,293
2022 255,000 31,872 1,240,000 276,655
2023 275,000 19,810 1,275,000 237,680
2024 290,000 6,743 1,295,000 197,453
2025 - - 1,065,000 161,725
2026 - - 1,095,000 131,260
2027 - - 1,040,000 101,249
2028 - - 990,000 70,553
2029 - - 1,025,000 38,366
2030 - - 415,000 16,383
2031 - - 385,000 5,390
Total $ 2,295,000 $ 403,235 $ 17,485,000 $ 3,748,613
Revenue Bonds Revenue Bonds
Year Ending Business-Type Activities Component Unit
December 31 Principal Interest Principal Interest
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 $ 600,000 $ 60,112 $ 4,805,000 $ 1,592,140
It is not practicable to determine the specific year for payment of long-term accrued compensated absences.
62
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
B. CHANGES IN LONGTERM LIABILTTIES
Long-term liability activity for the year ended December 31,2015,was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Primary Government
Governmental activities:
Bonds payable:
General obligation bonds $ 2,500,000 $ - $ (205,000) $ 2,295,000 $ 210,000
Special assessment bonds 12,900,000 5,700,000 (1,115,000) 17,485,000 1,010,000
Bond premiums 257,633 254,245 (18,643) 493,235 -
Total bonds payable 15,657,633 5,954,245 (1,338,643) 20,273,235 1,210,000
Capitallease payable-EDA component unit 5,085,000 - (280,000) 4,805,000 290,000
Capitallease payable-golf carts 73,667 - (36,235) 37,432 37,432
Otherpostemploymentbenefits 59,343 6,178 - 65,521 -
Compensated absences payable 839,758 694,269 (676,821) 857,206 612,274
Total government activities 21,715,401 6,654,692 (2,331,699) 26,038,394 2,149,706
Business-type activities:
Bonds payable:
Revenue bonds 705,000 - (105,000) 600,000 600,000
Bond premiums 12,221 - (2,365) 9,856 -
Total bonds payable 717,221 - (107,365) 609,856 600,000
Other postemployment benefits 8,571 984 - 9,555 -
Compensated absences payable 59,856 84,703 (80,195) 64,364 54,195
Totalbusiness-typeactivities 785,648 85,687 (187,560) 683,775 654,195
Totalprimary government $22,501,049 $ 6,740,379 $ (2,519,259) $ 26,722,169 $ 2,803,901
Component Unit
Bonds payable:
Revenue bonds $ 5,085,000 $ - $ (280,000) $ 4,805,000 $ 290,000
Total bonds payable 5,085,000 - (280,000) 4,805,000 290,000
Other postemployment benefits 700 111 - 811 -
Compensated absences payable 15,955 10,428 (21,759) 4,624 2,483
Total component unit $ 5,101,655 $ 10,539 $ (301,759) $ 4,810,435 $ 292,483
For the governmental activiries,capital leases,other postemployment benefits and compensated absences are
generally liquidated by the general fund.
63
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
All long-term bonded indebtedness outstanding at December 31,2015 is backed by the full faith and credit of the City,
including special assessment and revenue bond issues. Delinquent assessments receivable at December 31, 2015
totaled$12,084.
On November 18, 2015 City Council authorized calling the remaining outstanding balances of the 2009B Water
Revenue Refunding Bonds of 2009B in advance of their original maturities. The bonds were called and paid in full
on February 1,2016.
D. CAPITAL LEASES
In 2008,the City entered into a lease-purcl�ase agreement with the EDA(a component unit)to finance the eapansion
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 qiialifies as a capital lease for accounting purposes, and therefore, the
construction costs l�ave 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:
Ice Arena
Asset: Expansion Golf Carts
Building and improvements $ 6,943,038 $ 176,039
Less: accumulated depreciation (1,723,969) (88,020)
$ 5,219,069 $ 88,019
The following is a schedule of future minimum lease payments under the capital lease:
Governmental Activiries
Ice Arena Golf Course
Year Expansion Machinery
2016 $ 501,892 $ 38,201
2017 499,942 -
2018 497,360 -
2019 494,288 -
2020 495,697 -
2020-2024 2,457,327 -
2025-2028 1,450,634 -
Total minimum lease payments 6,397,140 38,201
Less amount
representing interest 1,592,140 769
Present value of minimum
lease payments $ 4,805,000 $ 37,432
64
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
E. REVENUE PLEDGED
Future revenue pledged for the payment of long-term debt as follows:
Revenue Pledged Current Year
Debt
Percent Service as Remaining Principal
of Total Percentage Principal and Pledged
Bond Use of Debt of Net Term of and Interest Revenue
Issue Proceeds Type Service Revenue Pledge Interest Paid Received
2008B Ice
Arena Construct Ice Arena
Lease Addition Revenues,
Revenue to Ice net of 2008-
Bonds Arena eapenses 100% 40.76% 2028 $4,913,846 $503,293 $1,234,681
Note tl�at the 2008B Ice Arena Lease Revenue bonds were paid off with a refinancing in January 2016. The amount
shown in this table as remaining principal and interest reflects only that pay-off amount.
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 limitarion was 3 %of taxable market value in 2015 and 2014. The City of Cottage Grove's legal debt margin for
2015 and 2014 is computed as follows:
December 31,2015 December 31,2014
Market Value(after fiscal dispariries) $ 2,705,975,400 $ 2,396,493,700
Debt Limit 81,179,262 71,894,811
Amount of debt applicable to debt limit
Total bonded debt $25,185,000 $21,190,000
Less: Special assessmentbonds (17,485,000) (12,900,000)
Proprietaty bonds (600,000) (705,000)
TaY increment bonds (2,295,000) (2,500,000)
Total debt applicable to debt limit $4,805,000 $5,085,000
Legal debt margin $ 76,374,262 $ 66,809,811
Note 8 PENSION PLANS
A. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION(PERA)-DEFINED BENEFIT
Plan Description
The City of Cottage Grove participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by the Public Employees Retirement Association of Miiiiiesota (PERA). PERA's defined benefit pension
plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined
benefit pension plans are taY qlialified plans under Section 401 (a)of the Internal Revenue Code.
General Employees Retirement Fund(GERF)
All full-time and certain part-time employees of the City are covered by the General Employees Retirement Fund(GERF).
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. The Basic Plan was closed to new members in 1967. All new members
must participate in the Coordinated Plan.
65
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Public Employees Police and Fire Fund(PEPFF)
The PEPFF,originally established for police officers and firefighters not covered by a local relief associarion,now covers
all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and
firefighters belonging to local relief associarions tl�at elected to merge with and transfer assets and administrarion to PERA.
Benefits Provided
PERA provides rerirement,disability,and death benefits. Benefit provisions are established by state statute and can only
be modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan.
Members in plans tl�at are at least 90%funded for two consecutive years are given 2.5%increases. Members in plans that
have not exceeded 90%funded,or have fallen below 80%,are given 1%increases.
The benefit provisions stated in the following paragraphs of this secrion are current provisions and apply to active plan
participants. Vested, terminated employees who are enritled to benefits but are not receiving them yet are bound by the
provisions in effect at the rime they last terminated their public service.
GERF Benefits
Benefits are based on a member's highest average salary for any five successive years of allowable service,age,and years
of credit at terminarion of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan
members. The retiring member receives the higher of a step-rate benefit accrual formula(Method 1) or a level accrual
formula(Method 2). Under Method 1,the annuity accrual rate for a Basic Plan member is 22%of average salary for each
of the first ten years of service and 2.7%for each remaining year. The annuity accrual rate for a Coordinated Plan member
is 12%of average salary for each of the first ten years and 1.7%for each remaining year. Under Method 2,the annuity
accrual rate is 2.7%of average salary for Basic Plan members and 1.7%for Coordinated Plan members for each year of
service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and
normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced
Social Security benefits capped at 66.
PEPFF Benefits
Benefits for the PEPFF members first hired after June 30,2010,but before July 1,2014,vest on a prorated basis from 50%
after five years up to 100%after ten years of credited service. Benefits for PEPFF members first hired after June 30,2014,
vest on a prorated basis from 50%after ten years up to 100%after twenty years of credited service. The annuity accrual
rate is 3%of average salary for eachyear of service. For PEPFF who were first hired prior to July 1, 1989,a full annuity
is available when age plus years of service equal at least 90.
Contributions
Minnesota Statutes Cl�apter 353 sets the rates for employer and employee contributions. Contribution rates can only be
modified by the state legislature.
GERF Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.1%and 6.50%, respectively, of
their annual covered salary in calendar year 2015. The City of Cottage Grove was required to contribute 11.78%of
pay for Basic Plan members and 7.50%for Coordinated Plan members in calendar year 2015. The City of Cottage
Grove contributions to the GERF for the year ended December 31,2015,were$403,968. The City of Cottage Grove's
contributions were equal to the required contributions as set by state statute.
PEPFF Contributions
Plan members were required to contribute 10.8%of their annual covered salary in calendar year 2015. The City of
Cottage Grove was required to contribute 1620%of pay for PEPFF members in calendar year 2015. The City of
Cottage Grove's contriburions to the PEPFF for the year ended December 31, 2015, were $664,299. The City of
Cottage Grove's contriburions were equal to the required contributions as setby state statute.
66
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Pension Costs
GERF Pension Costs
At December 31,2015,the City of Cottage Grove reported a liability of$4,762,735 for its proportionate sl�are of the
GERF's net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension
liability used to calculate the net pension liability was determined by an actuarial valuation as of tl�at date. The City
of Cottage Grove's proportion of the net pension liability was based on the City of Cottage Grove's contriburions
received by PERA during the measurement period for employer payroll paid dates from July 1, 2014, through June
30, 2015, relarive to the total employer contriburions received from all of PERA's participating employers. At June
30,2015,the City of Grove's proportion share was.0919%
There were no provision changes during the measurement period.
For the year ended December 31, 2015, the City of Cottage Grove recognized pension expense of$563,224 for its
proportionate share of the GERF's pension eapense.
At December 31, 2015, the City of Cottage Grove reported its proportionate sl�are of the GERF's deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between eapected and actual economic eaperience $ - $240,123
Difference between projected and actual investment earnings 450,866 -
Changes inproportion - 214,911
Contributions paid to PERA subsequent to the measurement date 201,982 -
Total $652,848 $455,034
$201,982 reported as deferred outflows of resources related to pensions resulting from City of Cottage Grove
contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the
year ended December 31,2015. Other amounts reported as deferred outflows and inflows of resources related to
pensions will be recognized in pension eapense as follows:
Year ended December 31: Pension Expense Amount
2016 $(38,961)
2017 (38,961)
2018 (38,961)
2019 112,715
2020 -
Thereafter -
PEPFF Pension Costs
At December 31,2015,the City of Cottage Grove reported a liability of$4,931,256 for its proportionate sl�are of the
PEPFF's net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension
liability used to calculate the net pension liability was determined by an actuarial valuation as of tl�at date. The City
of Cottage Grove's proportion of the net pension liability was based on the City of Cottage Grove's contributions
received by PERA during the measurement period for employer payroll paid dates from July 1, 2014,through June
30,2015,relative to the total employer contributions received from all of PERA's participating employers. At June
30,2015,the City of Cottage Grove's proportion was.434%.
There were no provision changes during the measurement period.
67
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
For the year ended December 31, 2015,the City of Cottage Grove recognized pension expense of$840,772 for its
proportionate share of the PEPFF's pension eapense. The City of Cottage Grove also recognized $39,060 for the
year ended December 31, 2015, as pension expense (and grant revenue)for its proportionate sl�are of the State of
Miiiiiesota's on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State of Mimlesota to
begin contributing$9 million to the PEPFF each year, starting in fiscal year 2014.
At December 31,2015,the City of Cottage Grove reported its proportionate share of the PEPFF's deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between expected and actual economic experience $- $799,688
Difference between projected and actual investment earnings 859,190 -
Changes in proportion - 45,002
Contributions paid to PERA subsequent to the measurement date 332,150 -
Total $1,191,340 $844,690
$332,150 reported as deferred outflows of resources related to pensions resulring from City of Cottage Grove contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended December 31: Pension Expense Amount
2016 $45,860
2017 45,860
2018 45,860
2019 45,857
2020 (168,937)
Thereafter -
Actuarial Assumptions
The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial
assumptions:
Inflation 2.75%per year
Active Member Payroll Growth 3.50%per year
Investment Rate of Return 7.90%
Salary increases were based on a service-related table. Mortality rates for acrive members, retirees, survivors and
disabilitants were based on RP-2000 tables for males or females, as appropriate, with slight adjustments. Cost of living
benefit increases for rerirees are assumed to be: 1%effecrive every January lgt through 2026 and 2.5%thereafter.
Actuarial assumptions used in the June 30,2015,valuarion were based on the results of actuarial eaperience studies. The
experience study in the GERF was for the period July 1, 2004, through June 30, 2008, with an update of economic
assumptions in 2014. Experience studies l�ave not been prepared for PERA's other plans,but assumptions are reivewed
annually.
There were no cl�anges in actuarial assumptions in 2015.
The long-term eapected rate of return on pension plan investments is 7.9%. The State Board of Investment,which manages
the investments of PERA,prepares an analysis of the reasonableness of the long-term eapected rate of return on a regular
basis using abuilding block method in whichbest-estimate ranges of expected future rates of return are developed for each
major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected
future rates of return by the target asset allocarion percentages. The target allocation and best estimates of arithmeric real
rates of return for each major asset class are summarized in the following table:
68
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Asset Class Target Allocation Long-Term Expected Real Rate of
Return
Domestic Stocks 45% 5.50%
International Stocks 15% 6.00%
Bonds 18% 1.45%
Alternative Assets 20% 6.40%
Cash 2% 0.50%
Discount Rate
The discount rate used to measure the total pension liability was 7.9%. The projecrion of cash flows used to determine the
discount rate assumed tl�at employee and employer contributions will be made at the rate specified in statute. Based on tl�at
assumprion,each of the pension plan's fiduciary net position was projected to be available to make all projected future benefit
payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension liability.
Pension Liability Sensitivity
The following presents the City of Cottage Grove's proportionate share of the net pension liability for all plans it participates
in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City of Cottage Grove's
proportionate sl�are of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower
or 1 percentage point higher than the current discount rate:
1%Decrease in Discount Rate Discount Rate 1%Increase in Discount Rate
Discount rate 6.9% 7.9% 8.9%
City's proportionate share of
The GERF net pension liability $7,488,712 $4,762,735 $2,511,497
City's proportionate share of
The PEPFF netpensionliability $9,611,069 $4,931,256 $1,064,914
Pension Plan Fiduciary Net Position
Detailed informarion about each pension plan's fiduciary net position is available in a separately-issued PERA financial
report tl�at includes financial statements and required supplementary information. Tl�at report may be obtained on the Internet
at www.mnpera•or�.
B. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION(PERA)-DEFINED CONTRIBUTION PLAN
Five council members of the City of Cottage Grove are covered by the Public Employees Defined Contriburion Plan
(PEDCP), a multiple-employer deferred compensation plan administered by PERA. The PEDCP is a taY qualified plan
under Section 401(a) of the Internal Revenue Code and all contriburions by or on bel�alf of employees are taY deferred
until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrarive eapenses.
Minnesota Statutes, Cl�apter 353D.03, specifies plan provisions,including the employee and employer contribution rates
for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes
5%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% of employer contriburions and twenty-five hundredths of 1% (.0025) of the
assets in each member's account annually.
Total contriburions made by the City of Cottage Grove d�ng fiscal year 2015 were:
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Contribution Amount Percentage of Covered Payroll Required
Employee Employer Employee Employer Rate
$1,139 $1,139 5% 5% 5%
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 Associarion.
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, Cl�apter 69.
The Relief Association provides rerirement 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 Associarion issues a publicly available financial report tl�at includes financial statements and required
supplementary information. The report may be obtained by writing to Cottage Grove Volunteer Fire Relief
Association, 8641 80�'Street South, Cottage Grove,MN 55016.
Benefits Provided
Volunteer firefighters of the City are members of the Cottage Grove Fire Relief Association. Full retirement benefits
are payable to members who have reached age 50 and have completed 20 years of service for a lump sum service
pension. Partial benefits are payable to members who have reached 50 and have completed 5 years of service.
Disability benefits and survivor benefits are also payable to members or their beneficiaries based upon requirements
set forth in the bylaws. These benefit provisions and all other requirements are consistent with enabling state statues.
Emplovees Covered bv Benefit Terms
At December 31,2014,the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits -
Inacrive employees enritled to but not receiving benefits 18
Active employees 45
Total number of participants 63
Contributions
Minnesota Statutes Cl�apter 424A.092 specifies minimum support rates required on an annual basis. The minimum
support rates from the municipality and from State aids are determined as the amount required to meet the normal
cost plus amortizing any existing prior service costs over a ten year period. The City's obligation is the financial
requirement for the year less state aids.Any additional payments by the City sl�all be used to amortize the wlfunded
liability of the relief association. The Association is comprised of volunteers: therefore, there are no payroll
eapenditures (i.e. there are no covered payroll percentage calculations). During the year, the City recognized as
revenue and as an eapenditure an on bel�alf payment of$191,183 made by the State of Minnesota for the Relief
Association.
70
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Net Pension Liabilitv
The City's net pension liability was measured as of December 31, 2014, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date.
Actuarial assumptions.
The total pension liability in the December 31, 2014, actuarial valuation was determined using the following
actuarial assumptions,applied to all periods included in the measurement
Inflation 2.75%
Salary increase N/A
Investment rate of return 5.5%
The value of death benefits is similar to the value of the retirement pension. Because of low rerirement ages,the
plan assumes no pre-retirement mortality. Post-retirement mortality does not apply as the benefit structure and
form of payment do not reflect liferime benefits.
The long-term return on assets l�as been set based on the plan's target investment allocation along with long-term
return expectarions by asset class.When there is sufficient historical evidence of market outperformance,historical
average returns may be considered. Best estimates of arithmeric real rates of return for each major asset class
included in the pension plan's target asset allocarion as of the measurement date are summarized in the table on the
following page.
Asset Class Tar�et Allocation Lon�-term Ea�pected
Nominal Rate of
Return
Domestic equity 40% 8.0%
International equity 20% 8.0%
Fixed income 30% 4.5%
Real estate and alternarives 0% 6.5%
Cash 10% 3.0%
Discount rate
The discount rate used to measure the total pension liability was 5.50%. Assets were projected using expected
benefit payments and expected asset returns. Expected benefit payments by year were discounted using the
eapected asset return assumption for years in which the assets were sufficient to pay all benefit payments. Any
remaining benefit payments after the trust fund is exl�austed are discounted at the municipal bond rate. The
equivalent single rate is the discount rate.
71
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Cl�an�es in the Net Pension Liability
Increase(Decrease)
Plan
Total Fiduciary
Pension Net Net Pension
Liability Position Liability
Balances at December 31,2014 $1,352,967 $2,404,881 $(1,051,914)
Changes for the year
Service cost 79,827 - 79,827
Interest 88,550 - 88,550
Cl�anges of assumptions 77,611 - 77,611
Cl�anges ofbenefitterms 139,930 - 139,930
Contriburions—State and local - 196,512 (196,512)
Net investment income - (117,642) 117,642
Benefit payments, including
member contribution refunds (140,973) (140,973) -
Administrative eapense - (15,165) 15,165
Net cl�anges 244,945 (77,268) 322,213
Balances at December 31,2015 $1,597,912 $2,327,613 $(729,701)
Pension Liabilitv Sensitivity
The following presents the City of Cottage Grove's proportionate sl�are of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City of
Cottage Grove's proportionate share of the net pension liability would be if it were calculated using a discount rate 1
percentage point lower or 1 percentage point higher than the current discount rate:
1%Decrease in Discount Rate Discount Rate 1%Increase in Discount Rate
Discount rate 4.5% 5.5% 6.5%
City's proportionate share of
The netpensionliability $(641,116) $(729,701) $(814,331)
Pension plan fiduciary net posirion. Detailed information about the pension plan's fiduciary net position is available
in the separately issued relief associarion financial report.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
For the year ended December 31,2015,the City of Cottage Grove recognized pension expense of$228,063.
At December 31,2015,the City of Cottage Grove reported its proportionate sl�are of the deferred outflows of resources
and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between eapected and actual economic eaperience $- $-
Difference between projected and actual investment earnings 220,217 -
Changes in assumption 70,445 -
Total $290,662 $-
72
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension
eapense as follows:
Year ended December 31: Pension Expense Amount
2016 $62,220
2017 62,220
2018 62,220
2019 62,220
2020 7,166
Thereafter 34,616
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 31,2015 were:
Fund Receivable Payable
Major Governmental Funds:
Municipal Building Capital Project Fund $ - $ 7,860,000
Closed Debt Fund 2,000,000 -
Nonmajor Governmental Funds 2,261,758 761,758
Major Business-Type Funds:
Water Operating Enterprise Fund 1,527,500 -
Sewer Operating Enterprise Fund 2,832,500 -
Total $ 8,621,758 $ 8,621,758
Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and payable balances at
December 31,2015 are as follows:
Fund Receivable Payable
General Fund $ 405,116 $ -
Nonmajor Governmental Funds 1,221,111 1,626,227
Total $ 1,626,227 $ 1,626,227
Interfund transfers:
Transfers In
Municipal Closed Pavement Pavement
Bldg Debt Manage. Mange.
Capital Fund Debt Capital Nonmajor
General Project Service Project Govern.
Fund Fund Fund Fund Funds Total
Transfers Out
General Fund $ - $101,131 $235,971 $ - $ 67,420 $ 412,951 $ 817,473
Closed Debt Fund - - - 146,565 - - 146,565
Nonmajor Governmental Funds 40,020 - - - 158,894 1,200,000 1,398,914
Major Business Fund Type:
Street Light Fund 45,850 - - - - - 45,850
Cottage Grove EMS Fund 94,680 - - - - - 94,680
Water Operating Fund 166,550 - - - 100,232 - 266,782
Sewer Operating Fund 181,610 - - - 97,783 - 279,393
Total transfers $ 528,710 $101,131 $235,971 $ 146,565 $ 424,329 $1,612,951 $3,049,657
73
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Interfund transfers allow the City to allocate financial resources to the funds tl�at receive benefit from services provided by
another fund. All transfers in 2015 were considered to be routine in nature except for the $1,200,000 transfer. City Council
approved to reclassify an interfund loan to a transfer between the Golf Course Fund and Future Economic Development Fund
because the repayment of loan was not eapected to be repaid in a reasonable time.
Note 10 TAX INCREMENT DISTRICTS
The City of Cottage Grove is the administering authority for the following TaY Increment Financing Districts:
Cottages of Gateway
Cottage North American
Grove District Industrial Park Logistics
#1-8 #1-12 #1-14 #1-15
Econ. Econ.
Type of District Housing Redevelop Develop. Develop.
Chapter 469.174 469174 469.174 469.174
Established 1991 2001 2007 2015
District Duration 25 years 25 years 9 years 9 years
Current tax capacity $ 30,306 $ 774,294 $131,250 $60,026
Original tax capacity (1,268) (238,351) (5,226) (60,026)
Capturedtax capacity 29,038 535,943 126,024 -
Fiscal disparity deduction - - (44,424) -
Tota1 tax capacity retained by City $ 29,038 $535,943 $ 81,600 $ -
Debtissued $ - $ 4,405,000 $ - $ -
Amountredeemed - (2,110,000) - -
Debt outstanding $ - $2,295,000 $ - $ -
Note 11 DEFICTT FUND BALANCES/NET POSTTION
The City has deficit fund balances/net position at December 31,2015 as follows:
Fund Amount The deficit fund balances will be resolved through
Major Governmental Funds:
Municipal Building Capital Project Fund $ 7,516,189 Future taY levies
Nonmajor Governmental Funds:
Ice Arena Fund 95,234 Future revenues
Golf Course Fund 159,943 Future excess revenues and transfers from other City
resources
Park Trust Fund 392,466 Future developer charges
Sewer Connection and Area Fund 930,602 Future special assessments and developer cl�arges
74
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 compensarion coverage is provided through a pooled self-insurance program through the League of
Miiiiiesota Ciries 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 compensarion,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 purcl�ases 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$143,708 reported
in the Fund at December 31, 2015 is based on the requirements of Governmental Accounting Standards Board
Statement Number 10,which requires tl�at a liability for claims be reported if information prior to the issuance of the
financial statements indicates that it is probable tl�at a liability has been incurred at the date of the financial statements
and the amount of the loss can be reasonably esrimated.
Changes in the fund's claims liability amounts were as follows:
Beginning Claims and End
of Year Changes in Claim of Year
�'e� Liability Estimates Payments Liability
2015 $ 158,905 $ 125,171 $ (140,368) $ 143,708
2014 130,039 172,634 (143,768) 158,905
2013 59,122 130,723 (59,806) 130,039
B. LTTIGATION
The City attorney l�as indicated tl�at exisring 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.
75
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 l�ave 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 31,2015.
D. TAX INCREMENTS
The City's taY increment districts are subject to review by the State of Minnesota Office of the State Auditor(OSA).
Any disallowed claims or misuse of taY increments could become a liability of the applicable fund.
Note 13 DEFERRED AD VALOREM TAX LEVIES-BONDED DEBT
General Obligarion 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 taY 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 taY levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taYes over
the appropriate years. The future tax levies are subject to cancellarion when and if the City l�as provided alternarive sources of
financing. The City Council is required to levy any additional taYes found necessary for full payment of principal and interest.
These future scheduled taY levies are not shown as assets in the accompanying financial statements at December 31,2015 and
2014. Future scheduled taY levies for all bonds outstanding at December 31,2015 totaled$12,481,346.
76
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
Note 14 FUND BALANCES
At December 31,2015 the City had various fund balances through legal restriction and City Council authorizarion. Fund
balance appropriarions at December 31,2015 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 Tota1
General Fund: $ - $ - $ - $ - $ 8,829,697 $ 8,829,697
Prepaid items 15,383 - - - - 15,383
Compensated absences - - - 818,494 - 818,494
2016 budget - - - 520,000 - 520,000
Emerald ash borer program - - - 40,200 - 40,200
Public safety equipment - - - 25,163 - 25,163
School bus safety - - - 4,500 - 4,500
Total General Fund 15,383 - - 1,408,357 8,829,697 10,253,437
Municipal Building Capital Project Fund (7,516,189) (7,516,189)
MSA Construction Capital Project Fund:
MSA construction activities - - - 4,136,408 - 4,136,408
Closed Debt Fund:
Debt retirement - - - 4,073,490 - 4,073,490
Pavement Management Debt Service Fund:
Debtretirement - 2,548,452 - - - 2,548,452
Pavement Management Capital Proj ect Fund:
Pavement management construction activities - - - 1,417,618 - 1,417,318
Total Other Major Funds - 2,548,452 - 9,627,516 (7,516,189) 4,659,779
Nonmajor Governmental Funds:
Prepaid items 7,343 - - - - 7,343
Inventory 20,696 - - - - 20,696
Forfeiture and seizure - 39,166 - - - 39,166
Chaxitable gambling - 9,405 - - - 9,405
Debtretirement - 218,191 - - - 218,191
Taxincrementpurposes - 2,042,151 - - - 2,042,151
Recycling program - - 56,590 - - 56,590
Storm water activities - - 337,614 - - 337,614
Equipmentreplacement - - - 1,579,583 - 1,579,583
Street sealcoating - - - 650,156 - 650,156
Economic development - - - 3,772,549 - 3,772,549
Future pavement management - - - 1,431,412 - 1,431,412
Tree mitigation - - - 338,495 - 338,495
Future roads and trails - - - 860,691 - 860,691
Capital improvements - - - 8,062,315 - 8,062,315
Deficit Fund Balance - - - - (1,606,284) (1,606,284)
TotalNonmajorFunds 28,039 2,308,913 394,204 16,695,201 (1,606,284) 17,820,073
Total Fund Balances Governmental Funds $ 43,422 $ 4,857,365 $ 394,204 $ 27,731,074 $ (292,776) $ 32,733,289
77
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2015
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 Cit� engaged an actiiar�� 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. Acrive employees,
who retire from the City when over age 50 and with 20 years of service, may conrinue 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, 2015 there were
appro�mately 114 active participants, 2 rerired 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 obligarion on a pay as you go basis. For fiscal year 2015,the City contributed$14,939 to
the plan.
C. ANNUAL OPEB COST AND NET OPEB OBLIGATION
The City's annual other postemployment benefit(OPEB) cost(eapense) 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 tl�at, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any un-funded actuarial liabiliries 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 684
Adjustment to Annual Required Contribution (2,666)
Annual OPEB Cost(Expense) 22,212
Contributions Made (14,939)
Increase in Net OPEB Obligation 7,273
Net OPEB Obligation-Beginning of Year 68,614
Net OPEB Obligation-End of Year $ 75,887
The City's annual OPEB cost,the percentage of the annual OPEB cost contributed to the plan,and the net OPEB
obligarion for 2015:
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
12/31/2015 $22,212 67.2% $ 75,887
12/31/2014 22,533 53.7% 68,614
12/31/2013 11,244 41.4% 58,173
78
CTTY 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 valuarion date,the City's unfunded actuarial accrued liability
(iJAAL) was $324,523. The annual payroll for acrive 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 valuarions of an ongoing plan involve esrimates of the value of reported amounts and assumprions
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 contriburions of the employer are subject to continual revision as actual results
are compared with past eapectarions 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 rime relarive to the actuarial accrued liabiliries for benefits.
E. ACTUARIAL METHODS AND ASSUMPTIONS
Projecrions 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 rime of each
valuarion and the historical pattern of sharing of benefit costs between the employer and plan members to
that point. The actuarial methods and assumprions used include techniques that are designed to reduce the
effects of short-term volarility in actuarial accrued liabiliries and the actuarial value of assets,consistent with
the long-term perspecrive of the calcularions.
In the January 1, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumprions included a 1%investment rate of return(net of administrarive eapenses), 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
remaiiiing amortization period at December 31,2015 was 22 years.
Note 16 OPERATING LEASES
The City leases land for the golf course under an operaring lease. The monthly lease payments equal$1 per month
for the remaining term of the lease agreement. The lease was amended in 2015 to add a first ea�tension option to 2020.
In 2015,$60 was paid under this lease arrangement for the entire five year eatension.
79
CTTY 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. Tota12015
payments for these leases were$16,743 for the primar��government and$2,085 for component unit. Future minimum
annual lease payments at December 31,2015 are as follows:
Primary Government Component Unit
Golf
Year Ended Course
December 31 Land Copiers Copier
2016 $ 12 $ 14,280 $ 1,738
2017 12 - -
2018 12 - -
2019 12 - -
2020 12 - -
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 Athleric Associarion. The lease payments began in 2008 when the new ice
arena expansion project opened. The future minimum annual lease payments tl�at the City will receive are as follows:
Independent Cottage Grove
Year Ended School District Athleric
December 31 833 Associarion
2016 $ 104,250 $ 400,000
2017 104,250 400,000
2018 104,250 400,000
2019 104,250 400,000
2020 104,250 400,000
2021-2025 521,250 2,000,000
2026-2029 417,000 1,519,000
Note 17 COMMTTTED CONTRACTS
At December 31,2015,the City l�ad commitments of$120,594 for uncompleted construction contracts.
Note 18 CONDUTT DEBT OBLIGATIONS
The City has issued Industrial Revenue Bonds to provide financial assistance to private sector enriries for the
acquisition and construction of industrial and commercial faciliries 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 maiuier for the repayment of the bonds. Accordingly,the bonds are not
reported as liabilities in the accompanying financial statements.
so
CTTY OF COTTAGE GROVE,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2014
As of December 31,2015,a series of Industrial Revenue Bonds were outstanding.
Ori�inal Issue
Bond Issue Date Amount 12/31/15 Balance Maturity Date
Industrial Revenue Bonds-Allina Health Systems 08/OS/1998 $4,100,000 Not available 08/OS/2018
Commercial Development Revenue Note-HSI 12/22/2004 935,000 512,169* 12/O1/2024
Commercial Development Revenue Note-ESR,Inc. 11/22/2005 76,500 35,299 11/22/2025
Commercial Development Revenue Note-ESR,Inc. OS/19/2005 853,000 502,729 12/19/2025
Subordinate Senior Housing Revenue Bonds-PHS 12/O1/2006 21,105,000 20,185,000 12/O1/2046
Subordinate Senior Housing Revenue Bonds-PHS 12/O1/2006 8,075,000 7,780,000 12/O1/2046
Variable Rate Revenue Bonds-Alliiia Health System 11/O1/2009 6,100,000 6,100,000 11/15/2022
�41244.500 �35.115.197
*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 20ll to be resold for possible future development. The occupant is not
known at this time.
The City purcl�ased the Home Depot parcel in 2015 to be resold for future development. The City anticipates selling
this parcel in 2016.
Note 20 SUBSEQUENT EVENT
Subsequent to December 31, 2015, the City Council authorized the issuance and public sale of$4,660,000 General
Obligation Refunding Bonds, Series 2016A. The bonds were issued and dated January 6,2016.
Note 21 CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2015, the City implemented GASB Statement No. 68 Accounfing and Financial
Reporfing for Pensions and GASB Statement No. 71,Pension Transifion for Confribufions Made Subsequent to the
Measurement Date. This resulted in an adjustment to the beginning net position of the Statement of Activities of
$7,798,812 to add the beginning net pension liability related to PERA and the beginning net pension asset related to
the fire relief associarion, and an adjustment to the beginning net posirion on the Statement of Revenues, Eapenses
and Cl�anges in Fund Net Position-Proprietary Funds of$1,324,735 to add the beginning net pension liability related
to PERA.
Note 22 NEW STANDARD ISSUED BUT NOT YET IMPLEMENTED
GASB l�as issued GASB Statement No. 75,Accounfing and Financial Reporfing for Postemployment Benefits Other
than Pensions. This new statement requires governments in all types of OPEB plans to present more extensive note
disclosures and required supplementary information(RS�about OPEB liabilities.
81
-This Page Intentionally left Blank-
a2
REQUIRED SUPPLEMENTARY INFORMATION
83
CITY OF COTTAGE GROVE,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND Page 1 of 5
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenue:
General property taxes:
Currentanddelinquent $ 11,953,100 $ 11,953,100 $ 12,078,076 $ 124,976 $ 11,357,685
Special Assessments 19,500 19,500 15,787 (3,713) 26,697
Licenses and permits:
General government 75,350 75,350 86,338 10,988 82,925
Communitydevelopment 575,300 575,300 1,191,976 616,676 792,602
Engineering - - 5,420 5,420 6,460
Publicsafety 29,100 29,100 21,708 (7,392) 22,413
Total licenses and permits 679,750 679,750 1,305,442 625,692 904,400
Intergovernmental:
Federal:
Safe and sober-public safety 22,000 22,000 21,561 (439) 26,707
Assistance to firefighters grant-public safety - - 4,224 4,224 198,096
Ballistic vest grant-public safety - - 3,836 3,836 10,179
Misa grant-general government - - 550 550 -
State:
Local government aid 72,500 72,500 72,518 18 59,626
Market value homestead credit - - 5,171 5,171 2,608
MSA maintenance-public works 42,000 42,000 43,245 1,245 44,715
PERA aid 21,450 21,450 21,448 (2) 21,448
Fire relief aid-public safety 123,000 123,000 191,183 68,183 177,804
Police relief aid-public safety 270,000 270,000 307,725 37,725 300,197
Conservation grant-culture and recreation - - 22,135 22,135 -
Other-public safety 16,000 16,000 30,795 14,795 17,992
L,ocal:
SRO program-public safety 75,000 75,000 75,000 - 75,000
Narcotics officer program-public safety 4,000 4,000 653 (3,34'� 3,458
Other-public safety 4,000 4,000 4,689 689 3,617
Other-public works - - 18,930 18,930 3,764
Other-culture and recreation 19,800 19,800 18,995 (805) 13,701
Total intergovernmental 669,750 669,750 842,658 172,908 958,912
Charges for services:
Administration charges-general government:
Investment charge-general government 13,800 13,800 11,201 (2,599) 20,115
Other-general government 300 300 722 422 24,172
Other-community development 35,500 35,500 62,815 27,315 57,020
Other-engineering 229,000 229,000 267,625 38,625 133,058
Other-public safety 48,500 48,500 43,561 (4,939) 41,741
Other-public warks 33,600 33,600 24,459 (9,141) 22,609
Other-culture and recreation 152,100 152,100 147,074 (5,02� 138,617
Total charges for services 512,800 512,800 557,457 44,657 437,332
84
CITY OF COTTAGE GROVE,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND Page 2 of 5
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenue:(continued)
Fines and forfeits-public safety $ 175,000 $ 175,000 $ 210,802 $ 35,802 $ 151,701
Investmentearnings(loss) 60,000 60,000 69,257 9,257 120,571
Donations:
Donations-general government - - - - 500
Donations-public safety - - 13,750 13,750 16,166
Donations-culture and recreation 7,000 7,000 6,022 (978) 10,081
Total donations 7,000 7,000 19,772 12,772 26,747
Miscellaneous:
Other-general government 133,670 133,670 140,679 7,009 11,556
Other-public safety 12,000 12,000 25,010 13,010 11,439
Other-public works - - 12,963 12,963 12,765
Other-culture and recreation 400 400 345 (55) 8,858
Total miscellaneous 146,070 146,070 178,997 32,927 44,618
Total revenues 14,222,970 14,222,970 15,278,248 1,055,278 14,028,663
Expenditures:
General government:
Mayor and city council:
Personalservices 40,050 40,050 38,942 1,108 38,942
Commodities 1,200 1,200 911 289 938
Contractualservices 61,500 61,500 57,551 3,949 87,610
Total mayor and city council 102,750 102,750 97,404 5,346 127,490
Administrative:
Personal services 261,600 261,600 333,846 (72,24� 231,059
Commodities 800 800 1,699 (899) 69
Contractual services 6,315 6,315 11,566 (5,251) 12,532
Totaladministrative 268,715 268,715 347,1ll (78,39� 243,660
Finance:
Personal services 484,900 484,900 493,885 (8,985) 473,249
Commodities 2,500 2,500 911 1,589 575
Contractualservices 42,525 42,525 34,134 8,391 35,971
Total finance 529,925 529,925 528,930 995 509,795
Personnel:
Personal services 100,600 100,600 104,568 (3,968) 99,491
Commodities 200 200 76 124 389
Contractual services 11,025 11,025 36,340 (25,315) 5,894
Totalpersonnel 111,825 111,825 140,984 (29,159) 105,774
Assessing service:
Contractual services 155,600 155,600 153,248 2,352 150,315
City clerk/elections:
Personal services 152,600 152,600 144,181 8,419 184,410
Commodities 700 700 587 113 529
Contractualservices 14,725 14,725 13,112 1,613 16,214
Total City clerk/elections 168,025 168,025 157,880 10,145 201,153
85
CITY OF COTTAGE GROVE,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND Page 3 of 5
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Expenditures:(continued)
General government:(continued)
Legal:
Contractual services $ 185,900 $ 185,900 $ 218,843 $ (32,943) $ 192,864
Community and employee programs:
Personal services 3,600 3,600 2,852 748 2,623
Commodities 500 500 42 458 1,601
Contractualservices 61,830 61,830 63,567 (1,73'� 57,287
Total community and employee programs 65,930 65,930 66,461 (531) 61,511
Government buildings:
Personal services 82,700 82,700 80,741 1,959 67,529
Commodities 16,570 16,570 35,758 (19,188) 21,403
Contractual services 277,705 277,705 293,390 (15,685) 288,464
Total government buildings 376,975 376,975 409,889 (32,914) 377,396
Historic preservation:
Personal services 10,300 10,300 900 9,400 9,530
Commodities 95 95 49 46 38
Contractual services - - 850 (850) 1,636
Total historic preservation 10,395 10,395 1,799 8,596 11,204
Totalgeneralgovernment 1,976,040 1,976,040 2,122,549 (146,509) 1,981,162
Community Development:
Planning and zoning:
Personal services 282,000 282,000 298,255 (16,255) 281,955
Commodities 1,000 1,000 997 3 1,019
Contractualservices 39,360 39,360 29,108 10,252 37,816
Total planning and zoning 322,360 322,360 328,360 (6,000) 320,790
Building inspections:
Personalservices 446,400 446,400 437,487 8,913 409,123
Commodities 9,650 9,650 9,113 537 7,635
Contractual services 92,610 92,610 89,203 3,407 83,334
Total building inspections 548,660 548,660 535,803 12,857 500,092
Engineering:
Personal services 138,015 138,015 153,784 (15,769) 53,394
Commodities 800 800 978 (178) 1,217
Contractualservices 46,115 46,115 39,612 6,503 43,633
Total engineering 184,930 184,930 194,374 (9,444) 98,244
Total community development 1,055,950 1,055,950 1,058,537 (2,58'� 919,126
Public safety:
Police protection:
Personal services 5,018,080 5,018,080 4,812,418 205,662 4,660,772
Commodities 289,450 289,450 269,378 20,072 253,106
Contractual services 415,800 415,800 438,318 (22,518) 420,711
Capital outlay 188,900 188,900 196,324 (7,424) 136,466
Total police protection 5,912,230 5,912,230 5,716,438 195,792 5,471,055
Fire protection:
Personal services 577,000 577,000 632,451 (55,451) 551,311
Commodities 104,855 104,855 60,497 44,358 72,555
Contractualservices 215,225 215,225 230,128 (14,903) 226,599
Capital outlay - - - - 237,554
Total fire protection 897,080 897,080 923,076 (25,99� 1,088,019
Fire relief:
Contractualservices 123,000 123,000 196,512 (73,512) 183,536
86
CITY OF COTTAGE GROVE,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND Page 4 of 5
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Expenditures:(continued)
Public safety:(continued)
Civil defense:
Personal services $ 29,200 $ 29,200 $ 27,700 $ 1,500 $ 13,878
Commodities 100 100 1,700 (1,600) 2,809
Contractual services 47,345 47,345 28,649 18,696 46,284
Total civil defense 76,645 76,645 58,049 18,596 62,971
Animal control:
Personal services 15,035 15,035 14,600 435 11,820
Commodities 3,400 3,400 3,808 (408) 3,667
Contractual services 20,800 20,800 10,526 10,274 14,725
Total animal control 39,235 39,235 28,934 10,301 30,212
Totalpublicsafety 7,048,190 7,048,190 6,923,009 125,181 6,835,793
Public works:
Public warks administration:
Personalservices 293,500 293,500 292,351 1,149 273,854
Commodities 19,450 19,450 16,544 2,906 16,993
Contractual services 146,950 146,950 142,536 4,414 197,212
Total public warks administration 459,900 459,900 451,431 8,469 488,059
Streets:
Personal services 604,800 604,800 582,552 22,248 522,094
Commodities 296,500 296,500 233,916 62,584 222,322
Contractual services 340,320 340,320 381,667 (41,34'� 336,830
Capital outlay 6,700 6,700 6,239 461 -
Total streets 1,248,320 1,248,320 1,204,374 43,946 1,081,246
Snow and ice control:
Personal services 194,700 194,700 135,820 58,880 241,905
Commodities 292,800 292,800 200,833 91,967 277,794
Contractual services 140,800 140,800 98,318 42,482 120,672
Capital outlay - - - - 5,213
Total snow and ice control 628,300 628,300 434,971 193,329 645,584
Street signs/striping:
Personal services 114,300 114,300 115,063 (763) 90,411
Commodities 36,350 36,350 33,077 3,273 29,474
Contractualservices 58,800 58,800 64,9ll (6,111) 51,444
Capital outlay 6,405 6,405 5,899 506 -
Total street signs/striping 215,855 215,855 218,950 (3,095) 171,329
Total public works 2,552,375 2,552,375 2,309,726 242,649 2,386,218
87
CITY OF COTTAGE GROVE,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND Page 5 of 5
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Expenditures:(continued)
Culture and recreation:
Forestry:
Personal services $ 75,960 $ 75,960 $ 106,911 $ (30,951) $ 106,308
Commodities 14,000 14,000 7,572 6,428 5,168
Contractual services 240,320 240,320 206,515 33,805 183,313
Total forestry 330,280 330,280 320,998 9,282 294,789
Recreation programs:
Personal services 270,600 270,600 254,209 16,391 240,378
Commodities 10,850 10,850 5,926 4,924 5,873
Contractualservices 78,205 78,205 81,407 (3,202) 83,884
Totalrecreationprograms 359,655 359,655 341,542 18,113 330,135
Parks maintenance:
Personal services 715,920 715,920 713,474 2,446 682,248
Commodities 172,950 172,950 153,894 19,056 156,507
Contractual services 295,920 295,920 282,325 13,595 313,726
Capital outlay - - 22,135 (22,135) -
Total parks maintenance 1,184,790 1,184,790 1,171,828 12,962 1,152,481
Total culture and recreation 1,874,725 1,874,725 1,834,368 40,357 1,777,405
Totalexpenditures 14,507,280 14,507,280 14,248,189 259,091 13,899,704
Revenues over(under)expenditures (284,310) (284,310) 1,030,059 1,314,369 128,959
Other financing sources(uses):
Transfer from Special Revenue Fund 40,020 40,020 40,020 - 35,020
Transfer from Enterprise Fund 488,690 488,690 488,690 - 488,690
Transferto Debt Service Fund - (404,522) (404,522) - -
Transfer to Special Revenue Fund - - - - (55,405)
Transfer to Capital Project Fund (244,400) (412,951) (412,951) - (317,089)
Total other financing sources(uses): 284,310 (288,763) (288,763) - 151,216
Net increase(decrease)in fund balance $ - $ (573,073) 741,296 $ 1,314,369 280,175
Fund balance-January 1 9,512,141 9,231,966
Fund balance-December 31 $ 10,253,437 $ 9,512,141
88
City of Cottage Grove
Schedule of City's Proportionate Share
of Net Pension Liability
Last Ten Years GERF Retirement Fund
City's
Proporkionate
Share of the Net
City's Pension Liability Plan Fiduciary
City's Proportion Proportionate (Asset)as a Net Position as a
of the Net Share of the Net Percentage of its Percentage of the
For Fiscal Year Pension Liability Pension Liability City's Covered- Covered- Total Pension
Ended June 30, (Asset) (Asset) Employee Payroll Employee Payroll Liability
2015 0.0919% $ 4,762,735 $ 5,401,220 88.18% 7819%
Schedule of City's Proportionate Share
of Net Pension Liability
Last Ten Years PEPFF Retirement Fund
City's
Proporkionate
Share of the Net
City's Pension Liability Plan Fiduciary
City's Proportion Proportionate (Asset)as a Net Position as a
of the Net Share of the Net Percentage of its Percentage of the
For Fiscal Year Pension Liability Pension Liability City's Covered- Covered- Total Pension
Ended June 30, (Asset) (Asset) Employee Payroll Employee Payroll Liability
2015 0.4340% $ 4,931,256 $ 3,970,895 124.18% 86.61%
89
City of Cottage Grove
Schedule of City Contributions
GERF Retirement Fund
Last Ten Years
Contributions in
Relation to the Contributions as a
StaYutorily StaYutorily Contribution Percentage of
Fiscal Year Required Required Deficiency City's Covered- Covered-
Ending June 30, Contribution Contributions (Excess) Employee Payroll Employee Payroll
2015 $ 398,340 $ 398,340 $ - $ 5,401,220 7.38%
Schedule of City Contributions
PEPFF Retirement Fund
Last Ten Years
Contributions in
Relation to the Contributions as a
StaYutorily StaYutorily Contribution Percentage of
Fiscal Year Required Required Deficiency City's Covered- Covered-
Ending June 30, Contribution Contributions (Excess) Employee Payroll Employee Payroll
2015 $ 625,416 $ 625,416 $ - $ 3,970,895 15.8%
90
City of Cottage Grove
Schedule of Employer Contributions
and Non-Employer Contributing
Entities - Fire Relief Association
Plan Year Ended
12/31/15
Employer
Statutorily determined contribution (SDC) $ -
Actual contribution 5,329
Contribution deficiency (excess) $ (5,329)
Non-employer
2% aid $ 189,183
The Association implemented the Provisions of Governmental Accounting Standards Board Statement
No. 68 for the year ended December 31, 2015. The schedules within the Require Supplementary
Information section required a ten year presentation, but does not require retroactive reporting.
Information prior to 2015 is not available.
91
City of Cottage Grove
Schedule of Changes in Net Pension Liability
and Related Ratios- Fire Relief Association
Plan Year Ended
12/31/15
Total pension liability (TPL)
Service cost $ 79,827
Interest 88,550
Changes of assumptions 77,611
Changes of benefit terms 139,930
Benefit payments, including refunds or member contributions (140,973)
Net change in total pension liability 244,945
Beginning of year 1,352,967
End of Year $ 1,597,912
Plan fiduciary net pension (FNP)
Contributions - employer $ 5,329
Contributions -non-employeer 191,183
Net investment income (117,642)
Benefit payments, including refunds of inember contributions (140,973)
Administrative expense (15,165)
Net change in plan fiduciary net position (77,268)
Beginning of year 2,404,881
End of year $ 2,327,613
Net pension liability (NPL) $ (729,701)
The City implemented the Provisions of Governmental Accounting Standards Board Statement No. 68 for
the year ended December 31, 2015. The schedules within the Require Supplementary Information section
required a ten year presentation,but does not require retroactive reporting. Information prior to 2015 is
not available.
92
CITY OF COTTAGE GROVE,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
FCTNDING PROGRESS SCHEDULE
OTHER POST EMPLOYMENT HEALTH CARE BENEFITS
December 31,2015
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%
93
-This Page Intentionally left Blank-
94
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
95
-This Page Intentionally left Blank-
96
NONMAJOR GOVERNMENTAL FUNDS
97
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 PRO7ECT FUNDS
The Capital Project Funds account for financial resources to be used for the acquisition or
construction of maj or capital facilities (other than those financed by Proprietary Funds).
98
CITY OF COTTAGE GROVE,MINNESOTA
COMBINING BALANCE SHEET Statement 10
NONMAJOR GOVERNMENTAL Fj.JNDS
December 31,2015
With Comparative Data as of December 31,2014
Totals
Nonmajor
Special Debt Capital Governmental Funds
Revenue Service Project 2015 2014
Assets:
Cash and investments $ 344,057 $ 1,225,153 $ 13,485,312 $ 15,054,522 $ 17,172,678
Interfund receivable - - 1,221,111 1,221,111 991,739
Interfund loan receivable - - 2,261,758 2,261,758 3,050,000
Due from other governmental units-net 34,495 - 49,671 84,166 47,846
Accounts receivable-net 321,490 - 243,581 565,071 447,878
Prepaid items 7,343 - - 7,343 8,529
Inventories-at cost 20,696 - - 20,696 24,434
Delinquent property taxes receivable 2,663 - 130 2,793 4,458
Special assessments receivable:
Deferred - - 1,129,114 1,129,114 255,294
Delinquent - - 101 101 534
Property held for resale - - 1,950,000 1,950,000 -
Total assets $ 730,744 $ 1,225,153 $ 20,340,778 $ 22,296,675 $ 22,003,390
Liabilities:
Accounts payable $ 55,633 $ - $ 260,685 $ 316,318 $ 160,039
Salaries payable 58,642 - - 58,642 42,580
Interfund payable 405,116 - 1,221,111 1,626,227 1,279,053
Contracts payable 833 - 187,604 188,437 -
Due to other governmental units 5,511 - 649 6,160 4,341
Deposits payable 14,748 - 372,304 387,052 646,763
Interfund loan payable - - 761,758 761,758 1,550,000
Totalliabilities 540,483 - 2,804,111 3,344,594 3,682,776
Deferred inflows of resources:
Unavailable revenue-property taxes 2,663 - 130 2,793 4,458
Unavailable revenue-special assessments - - 1,129,215 1,129,215 255,828
Unavailable revenue-intergovernmental - - - - 4,999
Total deferred inflows of resources 2,663 - 1,129,345 1,132,008 265,285
Fund balance:
Nonspendable:
Prepaid items 7,343 - - 7,343 8,529
Inventory 20,696 - - 20,696 24,434
Restricted for:
Farfeiture and seizure 39,166 - - 39,166 52,175
Charitable gambling 9,405 - - 9,405 14,300
Debt retirement - 218,191 - 218,191 216,597
Taxincrementpurposes - 1,006,962 1,035,189 2,042,151 2,272,496
Committed 394,204 - - 394,204 329,841
Assigned - - 16,695,201 16,695,201 17,563,037
Unassigned (283,216) - (1,323,068) (1,606,284) (2,426,080)
Total fund balance 187,598 1,225,153 16,407,322 17,820,073 18,055,329
Total liabilities,deferred inflows of resources,
and fund balance $ 730,744 $ 1,225,153 $ 20,340,778 $ 22,296,675 $ 22,003,390
99
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 31,2015
With Comparative Data for the Year Ended December 31,2014
Totals
Nonmajor
Special Debt Capital Governmental Funds
Revenues: Revenue Service Project 2015 2014
General property taxes $ 291,955 $ - $ 503 $ 292,458 $ 241,114
Franchise taxes - - 526,643 526,643 542,689
Aggregate taxes - - 37,133 37,133 26,236
Taxincrementcollections - - 710,541 710,541 723,304
Special assessments - - 137,955 137,955 35,068
Direct charges to developers - - 307,971 307,971 537,298
Intergovernmental 145,987 - 11,478 157,465 671,745
Charges for services 3,062,368 - 623,054 3,685,422 3,135,019
Rent - - - - 420,279
Fines and forfeits 17,840 - - 17,840 19,616
Investment earnings(loss) 2,558 10,823 120,728 134,109 237,646
Interest on interfund loan - - 45,599 45,599 39,066
Connection charges - - 318,092 318,092 841,434
Park dedication fees - - 9,010 9,010 63,595
Other sales - - 469,454 469,454 429,750
Donations - - 358,241 358,241 352,380
Miscellaneous 7,929 - 96,831 104,760 60,860
Total revenues 3,528,637 10,823 3,773,233 7,312,693 8,377,099
Expenditures:
Current
General government - 1,400 326 1,726 3,311
Economic development - - 1,456,306 1,456,306 541,838
Public safety 23,683 - 1,436 25,119 18,779
Public works 521,748 - 625,149 1,146,897 1,454,205
Culture and recreation 1,998,951 - 343,808 2,342,759 2,392,064
Capital outlay:
Public safety 8,495 - 79,418 87,913 94,445
Public works 12,215 - 736,901 749,116 811,420
Culture and recreation 255,666 - 609,526 865,192 633,578
Debt service:
Principal retirement - 205,000 245,000 450,000 1,920,000
Capital lease payment 316,235 - - 316,235 305,076
Interest and fiscal charges 225,258 81,704 67,028 373,990 473,566
Total expenditures 3,362,251 288,104 4,164,898 7,815,253 8,648,282
Revenues over(under)expenditures 166,386 (277,281) (391,665) (502,560) (271,183)
Other financing sources(uses):
Transfers in 1,200,000 - 412,951 1,612,951 466,026
Transfers out (198,914) - (1,200,000) (1,398,914) (747,033)
Bonds issued - - - - 1,405,000
Premium on debt issued - - - - 18,461
Proceeds from the sale of capital assets - - 53,267 53,267 67,120
Total other financing sources(uses) 1,001,086 - (733,782) 267,304 1,209,574
Netincrease(decrease)in fund balance 1,167,472 (277,281) (1,125,447) (235,256) 938,391
Fund balance-January 1 (979,874) 1,502,434 17,532,769 18,055,329 17,116,938
Fund balance-December 31 $ 187,598 $ 1,225,153 $ 16,407,322 $ 17,820,073 $ 18,055,329
100
NONMA70R 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:
Recvclin� — 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 Gamblin� — Established to account for the 3% tax on charitable
gambling operations.
101
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31,2015
With Compararive Data as of December 31,2014
Storm
Water Forfeiture/
Recycling Maintenance Seizure
Assets:
Cashandinvestments $ 57,473 $ 237,005 $ 40,174
Due from other governmental units-net - 5,574 -
Accounts receivable-net - 117,173 -
Prepaid items - - -
Inventories-at cost - - -
Delinquent property taYes receivable - - -
Total assets $ 57,473 $ 359,752 $ 40,174
Liabilities:
Accounts payable $ 401 $ 5,851 $ 1,008
Salaries payable 482 15,454 -
Interfund payable - - -
Contracts payable - 833 -
Due to other governmental units - - -
Deposits payable - - -
Interfund loan payable - - -
Totalliabilities 883 22,138 1,008
Deferred inflows of resources:
Unavailable revenue-properry taYes - - -
Unavailable revenue-intergovernmental - - -
Total deferred inflows of resources - - -
Fund balance:
Nonspendable:
Prepaid items - - -
Inventory - - -
Restricted for:
Forfeiture and seizure - - 39,166
Cl�aritable gambling - - -
Committed for:
Ice arena - - -
Storm water acriviries - 337,614 -
Recycling program 56,590 - -
Unassigned - - -
Totalfundbalance 56,590 337,614 39,166
Total liabilities,deferred inflows of resources,
and fund balance $ 57,473 $ 359,752 $ 40,174
102
Statement 12
Totals
Nonmajor
Ice Golf Cl�aritable Special Revenue Funds
Arena Course Gambling 2015 2014
$ - $ - $ 9,405 $ 344,057 $ 283,695
28,921 - - 34,495 31,179
203,859 458 - 321,490 262,715
988 6,355 - 7,343 8,529
- 20,696 - 20,696 24,434
2,663 - - 2,663 3,909
$ 236,431 $ 27,509 $ 9,405 $ 730,744 $ 614,461
$ 44,161 $ 4,212 $ - $ 55,633 $ 43,142
20,085 22,621 - 58,642 42,580
262,569 142,547 - 405,116 287,314
- - - 833 -
2,187 3,324 - 5,511 4,341
- 14,748 - 14,748 8,050
- - - - 1,200,000
329,002 187,452 - 540,483 1,585,427
2,663 - - 2,663 3,909
- - - - 4,999
2,663 - - 2,663 8,908
988 6,355 - 7,343 8,529
- 20,696 - 20,696 24,434
- - - 39,166 52,175
- - 9,405 9,405 14,300
- - - - 22,885
- - - 337,614 253,014
- - - 56,590 53,942
(96,222) (186,994) - (283,216) (1,409,153)
(95,234) (159,943) 9,405 187,598 (979,874)
$ 236,431 $ 27,509 $ 9,405 $ 730,744 $ 614,461
103
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES 1N FUND BALANCE
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31,2015
With Compararive Data for the Year Ended December 31,2014
Storm
Water Forfeiture/
Recycling Maintenance Seizure
Revenues:
General properry taxes $ - $ - $ -
Intergovernmental:
Local:
Washington county 82,494 - -
School district - - -
Other - 5,574 919
Cl�arges for services - 721,744 -
Fines and forfeits - - 17,840
Investment earnings(loss) 336 1,477 410
Donations - - -
Miscellaneous 3,500 - -
Total revenues 86,330 728,795 19,169
Eapenditures:
Current
Public safety - - 23,683
Public works 83,682 438,066 -
Culture and recreation - - -
Capital outlay:
Public safety - - 8,495
Public works - 12,215 -
Culture and recreation - - -
Debt service:
Capital lease payment - - -
Interest and fiscal charges - - -
Total eapenditures 83,682 450,281 32,178
Revenues over(under)expenditures 2,648 278,514 (13,009)
Other financing sources(uses):
Transfer from General Fund - - -
Transfer from Capital Project Fund - - -
Transfer to General Fund - (35,020) -
Transfer to Capital Project Fund - (158,894) -
Total other financing sources(uses) - (193,914) -
Net increase(decrease)in fund balance 2,648 84,600 (13,009)
Fund balance-January 1 53,942 253,014 52,175
Fund balance-December 31 $ 56,590 $ 337,614 $ 39,166
104
Statement 13
Totals
Nonmajor
Ice Golf Cl�aritable Special Revenue Funds
Arena Course Gambling 2015 2014
$ 291,955 $ - $ - $ 291,955 $ 240,718
- - - 82,494 53,792
57,000 - - 57,000 57,000
- - - 6,493 47,437
883,558 1,457,066 - 3,062,368 2,864,091
- - - 17,840 19,616
230 - 105 2,558 6,187
- - - - 1,726
1,938 2,491 - 7,929 10,320
1,234,681 1,459,557 105 3,528,637 3,300,887
- - - 23,683 15,752
- - - 521,748 532,391
729,528 1,269,423 - 1,998,951 2,117,308
- - - 8,495 -
- - - 12,215 66,933
120,955 134,711 - 255,666 134,328
280,000 36,235 - 316,235 305,076
223,293 1,965 - 225,258 237,417
1,353,776 1,442,334 - 3,362,251 3,409,205
(119,095) 17,223 105 166,386 (108,318)
- - - - 55,405
- 1,200,000 - 1,200,000 -
- - (5,000) (40,020) (35,020)
- - - (158,894) (68,051)
- 1,200,000 (5,000) 1,001,086 (47,666)
(119,095) 1,217,223 (4,895) 1,167,472 (155,984)
23,861 (1,377,166) 14,300 (979,874) (823,890)
$ (95,234) $ (159,943) $ 9,405 $ 187,598 $ (979,874)
105
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 Revolvin� — (2008A Improvements Bonds) are repaid from special
assessments collected from new developments within the City.
Tax Increment— 1985 Tax Increment Bonds (TIF 1-1), 2004A Tax Increment Refunding
Bonds (TIF 1-3), 2004A Tax Exempt Increment Bonds (TIF 1-12), and 2014A Taxable Tax
Increment Refunding Bonds (TIF 1-12) are repaid primarily from taxes increments.
106
CTTY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 14
NONMAJOR DEBT SERVICE FUNDS
December 31,2015
With Comparative Data as of December 31,2014
Totals
Developer Nonmajor
Financed Tax Increment Debt Service Funds
Revolving Funds Funds 2015 2014
Assets:
Cash and inveshnents $ 218,191 $ 1,006,962 $ 1,225,153 $ 1,502,434
Total assets $ 218,191 $ 1,006,962 $ 1,225,153 $ 1,502,434
Fund balance:
Restricted for:
Debtretirement $ 218,191 $ - $ 218,191 $ 216,597
Taxincrementpurposes - 1,006,962 1,006,962 1,285,837
Total fund balance 218,191 1,006,962 1,225,153 1,502,434
Total fund balance $ 218,191 $ 1,006,962 $ 1,225,153 $ 1,502,434
107
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, Statement 15
EXPENDITj.JRES AND CHANGES 1N Fj.JND BALANCE
NONMAJOR DEBT SERVICE Fj.JNDS
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Totals
Developer Tax Nonmajor
Financed Increment Debt Service Funds
Revolving Funds Funds 2015 2014
Revenues:
Inveshnent earnings(loss) $ 1,594 $ 9,229 $ 10,823 $ 23,868
Total revenues 1,594 9,229 10,823 23,868
Expenditures:
Current
General government
Contractual services - 1,400 1,400 2,835
Debt service:
Principal retirement - 205,000 205,000 1,680,000
Interest and fiscal chaxges - 81,704 81,704 160,634
Totalexpenditures - 288,104 288,104 1,843,469
Revenues over(under)expenditures 1,594 (278,875) (277,281) (1,819,601)
Other financing sources(uses):
Bonds issued - - - 1,405,000
Premium on debt issued - - - 18,461
Total other financing sources(uses) - - - 1,423,461
Net increase(decrease)in fund balance 1,594 (278,875) (277,281) (396,140)
Fund balance-January 1 216,597 1,285,837 1,502,434 1,898,574
Fund balance-December 31 $ 218,191 $ 1,006,962 $ 1,225,153 $ 1,502,434
108
NONMAJOR CAPITAL PRO7ECT FUNDS
Capital Proj ect Funds are used to account for the acquisition and construction of maj or 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 Sealcoatin�—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 Proj ects —to account for the preliminary expenditures of proj ects 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 proj ects in new municipal parks.
Inclusive Plav�round—to account for inclusive playground proj ect.
Park Capital Improvements—to account for capital proj ects 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 Revolvin F� und — to account for construction proj ects that are
financed with tax increments.
109
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31,2015
With Comparative Data as of December 31,2014
Future
Equipment Street Economic Future Completed Park
Replacement Sealcoating Development Projects Construction Trust
Assets:
Cash and investments $ 1,604,114 $ 527,341 $ 1,253,732 $ 3,297,841 $ 466,194 $ -
Interfund receivable - - - - - -
Interfund loan receivable - - 761,758 - 1,500,000 -
Due from other governmental units-net - 25,892 - - - 11,478
Accounts receivable-net 1,885 96,923 2,757 113,373 - -
Delinquent property taxes receivable - - - 130 - -
Special assessments receivable:
Deferred - - 46,749 155,995 - 174,477
Delinquent - - - - 101 -
Property held for resale - - 1,950,000 - - -
Total assets $ 1,605,999 $ 650,156 $ 4,014,996 $ 3,567,339 $ 1,966,295 $ 185,955
Liabilities:
Accounts payable $ 26,416 $ - $ 8,645 $ 36,662 $ 1,523 $ 115,692
Interfund payable - - - - - 287,603
Contracts payable - - 187,053 - - -
Due to other governments - - - - - 649
Deposits payable - - - 372,098 - -
Interfund loan payable - - - - - -
Totalliabilities 26,416 - 195,698 408,760 1,523 403,944
Deferred inflows of resources:
Unavailable revenue-property taxes - - - 130 - -
Unavailable revenue-special assessments - - 46,749 155,995 101 174,477
Total deferred inflows of resources - - 46,749 156,125 101 174,477
Fund balance:
Restricted for:
Tax increment purposes - - - - - -
Assigned for:
Equipment replacement 1,579,583 - - - - -
Streetsealcoating - 650,156 - - - -
Economic development - - 3,772,549 - - -
Futurepavementmanagement - - - 1,431,412 - -
Tree mitigation - - - 338,495 - -
Future roads and trails - - - 860,691 - -
Capital improvements - - - 371,856 1,964,671 -
Unassigned - - - - - (392,466)
Total fund balance 1,579,583 650,156 3,772,549 3,002,454 1,964,671 (392,466)
Total liabilities,deferred inflows of resources,
and fund balance $ 1,605,999 $ 650,156 $ 4,014,996 $ 3,567,339 $ 1,966,295 $ 185,955
110
Statement 16
Tax Increment Totals
Park Water Sewer Future Construction Nonmajor
Inclusive Capital Connection Connection Storm Sewer Revolving Capital Project Funds
Playground Improvements and Area and Area Improvements Fund 2015 2014
$ 1,050 $ 12,570 $ 1,680,981 $ - $ 2,783,720 $ 1,857,769 $ 13,485,312 $ 15,386,549
- 287,603 933,508 - - - 1,221,111 991,739
- - - - - - 2,261,758 3,050,000
- - 9,395 2,906 - - 49,671 16,667
- 28,643 - - - - 243,581 185,163
- - - - - - 130 549
- - 222,757 181,359 347,777 - 1,129,114 255,294
- - - - - - 101 534
- - - - - - 1,950,000 -
$ 1,050 $ 328,816 $ 2,846,641 $ 184,265 $ 3,131,497 $ 1,857,769 $ 20,340,778 $ 19,886,495
$ - $ 6,716 $ 651 $ - $ 3,558 $ 60,822 $ 260,685 $ 116,897
- - - 933,508 - - 1,221,111 991,739
- 551 - - - - 187,604 -
- - - - - - 649 -
- 206 - - - - 372,304 638,713
- - - - - 761,758 761,758 350,000
- 7,473 651 933,508 3,558 822,580 2,804,111 2,097,349
- - - - - - 130 549
- - 222,757 181,359 347,777 - 1,129,215 255,828
- - 222,757 181,359 347,777 - 1,129,345 256,377
- - - - - 1,035,189 1,035,189 986,659
- - - - - - 1,579,583 1,623,685
- - - - - - 650,156 453,075
- - - - - - 3,772,549 4,999,862
- - - - - - 1,431,412 1,431,412
- - - - - - 338,495 377,901
- - - - - - 860,691 779,610
1,050 321,343 2,623,233 - 2,780,162 - 8,062,315 7,897,492
- - - �930,602� - - (i,323,o6s� �i,oi6,92��
1,050 321,343 2,623,233 (930,602) 2,780,162 1,035,189 16,407,322 17,532,769
$ 1,050 $ 328,816 $ 2,846,641 $ 184,265 $ 3,131,497 $ 1,857,769 $ 20,340,778 $ 19,886,495
111
CITY OF COTTAGE GROVE,MINNESOTA
SUBCOMBINING STATEMENT OF REVENLTES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Future
Equipment Street Economic Future Completed Park
Replacement Sealcoating Development Projects Construction Trust
Revenues:
General property taxes $ - $ - $ - $ 503 $ - $ -
Franchise taxes - 526,643 - - - -
Aggregate taxes - 37,133 - - - -
Tax increment collections - - - - - -
Special assessments:
Current - - - - - -
Delinquent - - - - 433 -
Prepayments on deferred - - - - - -
Penalties - - - - 137 -
Direct charges to developers - 5,260 - 132,242 170,469 -
Intergovernmental:
State - - - - - -
Other - - - - - 11,478
Charges for services - 188,793 - - - -
Rent - - - - - -
Investmentearnings(loss) 11,641 2,809 28,540 20,673 3,206 -
Interest on interfund loan - - 24,300 - 21,299 -
Connection charges - - - - - -
Park dedication fees - - - - - 9,010
Other sales - - - - - -
Donations - - 355,442 - - -
Miscellaneous 33 - 3,467 - - 59,928
Total revenues 11,674 760,638 411,749 153,418 195,544 80,416
Expenditures:
Current
General government 213 - - - 113 -
Economic development - - 439,062 - - -
Public safety - - - 1,436 - -
Public works 6,720 563,557 - 322 1,523 -
Culture and recreation - - - 49,480 - 113,834
Capital outlay:
Public safety 79,418 - - - - -
Public works 371,980 - - - 191,158 -
Culture and recreation 63,663 - - - - 148,420
Debt service:
Principal retirement - - - - - -
Interest and fiscal charges - - - - - -
Total expenditures 521,994 563,557 439,062 51,238 192,794 262,254
Revenues over(under)eapenditures (510,320) 197,081 (27,313) 102,180 2,750 (181,838)
Other financing sources(uses):
Transfer from General Fund 412,951 - - - - -
Transfer from Capital Project Fund - - - - - -
Transfer to Special Revenue Fund - - (1,200,000) - - -
Transfer to Capital Project Fund - - - - - -
Proceeds from the sale of capital assets 53,267 - - - - -
Total other financing sources(uses) 466,218 - (1,200,000) - - -
Net increase(decrease)in fund balance (44,102) 197,081 (1,227,313) 102,180 2,750 (181,838)
Fund balance-January 1 1,623,685 453,075 4,999,862 2,900,274 1,961,921 (210,628)
Fund balance-December 31 $ 1,579,583 $ 650,156 $ 3,772,549 $ 3,002,454 $ 1,964,671 $ (392,466)
112
Statement 17
Tax Increment Totals
Park Water Sewer Future Construction Nonmajor
Inclusive Capital Connection Connection Storm Sewer Revolving Capital Project Funds
Playground Improvements and Area and Area Improvements Fund 2015 2014
$ - $ - $ - $ - $ - $ - $ 503 $ 396
- - - - - - 526,643 542,689
- - - - - - 37,133 26,236
- - - - - 710,541 710,541 723,304
- - 23,733 49,709 27,755 - 101,197 12,288
- - - - - - 433 316
- - 7,762 17,964 10,462 - 36,188 22,395
- - - - - - 137 69
- - - - - - 307,971 537,298
- - - - - - - 114,054
- - - - - - 11,478 399,462
- 434,261 - - - - 623,054 270,928
- - - - - - - 420,279
- 4,269 19,794 - 19,717 10,079 120,728 207,591
- - - - - - 45,599 39,066
- - 139,427 109,690 68,975 - 318,092 841,434
- - - - - - 9,010 63,595
- - - - - 469,454 469,454 429,750
1,050 1,749 - - - - 358,241 350,654
- 33,403 - - - - 96,831 50,540
1,050 473,682 190,716 177,363 126,909 1,190,074 3,773,233 5,052,344
- - - - - - 326 476
- - - - - 1,017,244 1,456,306 541,838
- - - - - - 1,436 3,027
- - 9,266 13,938 29,823 - 625,149 921,814
- 180,494 - - - - 343,808 274,756
- - - - - - 79,418 94,445
- - 73,763 - - 100,000 736,901 744,487
- 397,443 - - - - 609,526 499,250
- - - 245,000 - - 245,000 240,000
- - - 42,728 - 24,300 67,028 75,515
- 577,937 83,029 301,666 29,823 1,141,544 4,164,898 3,395,608
1,050 (104,255) 107,687 (124,303) 97,086 48,530 (391,665) 1,656,736
- - - - - - 412,951 317,089
- - - - - - - 93,532
- - - - - - (1,200,000) -
- - - - - - - (643,962)
- - - - - - 53,267 67,120
- - - - - - ��33,�s2� �i66,22i�
1,050 (104,255) 107,687 (124,303) 97,086 48,530 (1,125,447) 1,490,515
- 425,598 2,515,546 (806,299) 2,683,076 986,659 17,532,769 16,042,254
$ 1,050 $ 321,343 $ 2,623,233 $ (930,602) $ 2,780,162 $ 1,035,189 $ 16,407,322 $ 17,532,769
113
CITY OF COTTAGE GROVE,NIINNESOTA
SPECIAL REVENLTE FUND-RECYCLING Statement 18
SCHEDULE OF REVENUES,EXPENDITj_JRES AND
CHANGES 1N Fj_JND BALANCE-BUDGET AND ACTUAL
Far The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenues:
Intergovernmental:
Local:
Washington County recycling grant-public warks $ 53,150 $ 53,150 $ 82,494 $ 29,344 $ 53,792
Investment earnings(loss) - - 336 336 903
Miscellaneous-public warks - - 3,500 3,500 3,500
Total revenues 53,150 53,150 86,330 33,180 58,195
Expenditures:
Public works:
Current
Personal services 31,900 31,900 31,527 373 30,265
Commodities 9,100 9,100 10,269 (1,169) 8,979
Contractual services 23,800 23,800 41,886 (18,086) 28,842
Capital outlay 9,500 9,500 - 9,500 -
Total expenditures 74,300 74,300 83,682 (9,382) 68,086
Revenues over(under)expenditures $ (21,150) $ (21,150) 2,648 $ 23,798 (9,891)
Fund balance-January 1 53,942 63,833
Fund balance-December 31 $ 56,590 $ 53,942
114
CITY OF COTTAGE GROVE,MINNESOTA
SPECIAL REVENUE FLJND-STORM WATER MAINTENANCE FLJND Statement 19
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenue:
Intergovernmental:
Local:
Other-public works $ - $ - $ 5,574 $ 5,574 $ 47,437
Charges for services 711,650 711,650 721,744 10,094 684,119
Investment eamings(loss) 1,000 1,000 1,477 477 1,693
Total revenue 712,650 712,650 728,795 16,145 733,249
Expenditures:
Public works:
Current
Personal services 238,915 238,915 268,577 (29,662) 234,418
Commodities 57,430 57,430 10,918 46,512 2,841
Contractual services 282,850 282,850 158,571 124,279 227,046
Capital outlay - - 12,215 (12,215) 66,933
Total expenditures 579,195 579,195 450,281 128,914 531,238
Revenue over(under)expenditures 133,455 133,455 278,514 145,059 202,011
Other financing sources(uses):
Transfer to General Fund (35,020) (35,020) (35,020) - (35,020)
Transfer to Capital Project Fund (117,600) (117,600) (158,894) (41,294) (68,051)
Total other financing sources(uses): (152,620) (152,620) (193,914) (41,294) (103,071)
Net increase(decrease)in fund balance $ (19,165) $ (19,165) 84,600 $ 103,765 98,940
Fund balance-January 1 253,014 154,074
Fund balance-December 31 $ 337,614 $ 253,014
115
CITY OF COTTAGE GROVE,MINNESOTA
SPECIAL REVENUE FUND -FORFEITURE/SEIZURE Statement 20
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES 1N FUND BALANCE-BUDGET AND ACTUAL
For The Year Ended December 31,2015
With Compararive Data for the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Posirive Actual
Original Final Amounts (Negative) Amounts
Revenues:
Intergovernmental:
County $ 8,000 $ 8,000 $ 919 $ (7,081) $ -
Forfeitures and seizures 21,000 21,000 17,840 (3,160) 19,616
Investment earnings(loss) 500 500 410 (90) 702
Total revenues 29,500 29,500 19,169 (10,331) 20,318
Eapenditures:
Public safety:
Current
Commodities 8,000 8,000 6,820 1,180 -
Contractual services 16,300 16,300 16,863 (563) 15,752
Capital outlay 18,000 18,000 8,495 9,505 -
Total expenditures 42,300 42,300 32,178 10,122 15,752
Revenues over(under)expenditures $ (12,800) $ (12,800) (13,009) $ (209) 4,566
Fund balance-January 1 52,175 47,609
Fund balance-December 31 $ 39,166 $ 52,175
116
CITY OF COTTAGE GROVE,MINNESOTA
SPECIAL REVENUE FUND-ICE ARENA Statement 21
SCHEDULE OF REVENUES,EXPENDITj_JRES AND
CHANGES 1N Fj_JND BALANCE-BUDGET AND ACTUAL
Far The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenues:
General property taxes:
Current and delinquent $ 290,000 $ 290,000 $ 291,955 $ 1,955 $ 240,718
Intergovernmental:
Local:
School district 57,000 57,000 57,000 - 57,000
Charges for services 972,500 972,500 883,558 (88,942) 795,736
Investment earnings(loss) 6,000 6,000 230 (5,770) 2,698
Miscellaneous - - 1,938 1,938 6,563
Totalrevenues 1,325,500 1,325,500 1,234,681 (90,819) 1,102,715
Expenditures:
Culture and recreation:
Current
Personal services 374,800 374,800 349,671 25,129 350,478
Commodities 31,200 31,200 33,822 (2,622) 35,466
Contractual services 295,150 295,150 346,035 (50,885) 378,905
Capital outlay 230,000 230,000 120,955 109,045 8,802
Debt Service:
Capital lease payment 280,000 280,000 280,000 - 270,000
Interest and fiscal charges 228,900 228,900 223,293 5,607 234,293
Total expenditures 1,440,050 1,440,050 1,353,776 86,274 1,277,944
Revenues over(under)expenditures $ (114,550) $ (114,550) (119,095) $ (4,545) (175,229)
Fund balance-January 1 23,861 199,090
Fund balance-December 31 $ (95,234) $ 23,861
117
CITY OF COTTAGE GROVE,MINNESOTA
SPECIAL REVENUE FLJND-GOLF COURSE Statement 22
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenues:
Charges for services $ 1,561,500 $ 1,561,500 $ 1,457,066 $ (104,434) $ 1,384,236
Miscellaneous 1,500 1,500 2,491 991 257
Total revenues 1,563,000 1,563,000 1,459,557 (103,443) 1,384,493
Expenditures:
Culture and recreation:
Current
Personal services 759,200 759,200 742,162 17,038 720,993
Commodities 169,500 169,500 119,359 50,141 139,884
Contractual services 504,000 504,000 407,902 96,098 491,582
Capital outlay 144,000 144,000 134,711 9,289 125,526
Debt Service:
Capital lease payment 36,235 36,235 36,235 - 35,076
Interest and fiscal charges 1,965 1,965 1,965 - 3,124
Total expenditures 1,614,900 1,614,900 1,442,334 172,566 1,516,185
Revenues over(under)expenditures (51,900) (51,900) 17,223 69,123 (131,692)
Other financing sources(uses):
Transfer from General Fund - - - - 55,405
Transfer from Capital Project Fund - - 1,200,000 (1,200,000) -
Total other financing sources(uses) - - 1,200,000 (1,200,000) 55,405
Net increase(decrease)in fund balance $ (51,900) $ (51,900) 1,217,223 $ 1,269,123 (76,287)
Fund balance-January 1,as restaYed (1,377,166) (1,300,879)
Fund balance-December 31 $ (159,943) $ (1,377,166)
118
CTTY OF COTTAGE GROVE,MINNESOTA
SPECIAL REVENUE FUND-CIIARITABLE GAMBLING Statement 23
SCHEDULE OF REVENUES,EXPENDITURES AND
CI IANGES IN FUND BALANCE-BUDGET AND ACTUAL
For The Year Ended December 31,2015
With Comparative Data far the Year Ended December 31,2014
Variance with
2015 Final Budget- 2014
Budgeted Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Revenues:
Investment earnings(loss) $ - $ - $ 105 $ 105 $ 191
Donations - - - - 1,726
Totalrevenues - - 105 105 1,917
Other fmancing sources(uses):
Transfer to General Fund (5,000) (5,000) (5,000) - -
Total other financing sources(uses): (5,000) (5,000) (5,000) - -
Revenues over(under)expenditures $ - $ - (4,895) $ 105 1,917
Fund balance-January 1 14,300 12,383
Fund balance-December 31 $ 9,405 $ 14,300
119
-This Page Intentionally left Blank-
120
1NTERNAL 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.
121
CITY OF COTTAGE GROVE,MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 24
INTERNAL SERVICE FiJNDS
December 31,2015
With Comparative Data as of December 31,2014
Totals
Self Fleet Information Internal Service Funds
Insurance Maintenance Services 2015 2014
Assets:
Current assets:
Cash and investments $ 2,047,432 $ 347,474 $ 89,497 $ 2,484,403 $ 2,713,662
Accounts receivable - - - - 560
Prepaid items 143,973 - 25,093 169,066 130,349
Inventory-at cost - 70,940 - 70,940 69,698
Total current assets 2,191,405 418,414 114,590 2,724,409 2,914,269
Noncurrent assets:
Capital assets:
Land - 424,665 - 424,665 424,665
Buildings and improvements - 928,870 - 928,870 928,870
Equipment and furniture - - 164,338 164,338 74,232
Machinery and equipment - 214,326 - 214,326 178,512
Total capital assets - 1,567,861 164,338 1,732,199 1,606,279
Less:Accumulated depreciation - (641,071) (58,722) (699,793) (662,394)
Total noncurrent assets - 926,790 105,616 1,032,406 943,885
Total assets $ 2,191,405 $ 1,345,204 $ 220,206 $ 3,756,815 $ 3,858,154
Deferred outflows:
Deferred outflows related to pension - 30,630 14,433 45,063 -
Total deferred outflows - 30,630 14,433 45,063 -
Liabilities:
Current liabilities:
Accounts payable $ 6,317 $ 61,718 $ 1,717 $ 69,752 $ 46,458
Health care benefits payable 18,163 - - 18,163 39,003
Unpaid claims 143,708 - - 143,708 158,905
Salaries payable 537 16,010 7,056 23,603 23,275
Due to other governmental units - 479 - 479 360
Compensated absences payable - 26,416 5,785 32,201 26,474
Total current liabilities 168,725 104,623 14,558 287,906 294,475
Noncurrent liabilities:
Compensated absences payable - 9,605 2,654 12,259 22,874
Other post employment benefits - 1,895 317 2,212 1,928
Net pension liability - 223,456 105,296 328,752 -
Total noncurrent liabilities - 234,956 108,267 343,223 24,802
Totalliabilities 168,725 339,579 122,825 631,129 319,277
Deferred inflows:
Deferred inflows related to pension - 21,349 10,060 31,409 -
Total deferred inflows - 21,349 10,060 31,409 -
Net position:
Net investment in capital assets - 926,790 105,616 1,032,406 943,885
Unrestricted 2,022,680 88,116 (3,862) 2,106,934 2,594,992
Total net position $ 2,022,680 $ 1,014,906 $ 101,754 $ 3,139,340 $ 3,538,877
122
CITY OF COTTAGE GROVE, MINNESOTA
INTERNAL SERVICE FiJNDS Statement 25
COMBINING STATEMENT OF REVENUES,EXPENSES AND
CHANGES IN NET POSITION
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Totals
Self Fleet Information Internal Service Funds
Insurance Maintenance Services 2015 2014
Operating revenues:
Charges for services:
User fees $ - $ 1,004,596 $ 425,000 $ 1,429,596 $ 1,483,361
Employee benefits 1,357,600 - - 1,357,600 1,096,105
Propertyinsurance 220,650 - - 220,650 233,350
Insurance refunds and reimbursements 104,083 - - 104,083 55,234
Total operating revenues 1,682,333 1,004,596 425,000 3,111,929 2,868,050
Operating expenses:
Operating and maintenance:
Personal services - 346,800 163,747 510,547 475,358
Commodities - 581,798 71,156 652,954 751,083
Contractual services - 82,307 137,685 219,992 231,753
Total operation and maintenance - 1,010,905 372,588 1,383,493 1,458,194
Administrative and general:
Personal insurance benefits 1,432,083 - - 1,432,083 1,259,345
Contractual services 249,518 - - 249,518 248,515
Claims 125,171 - - 125,171 172,634
Total administrative and general 1,806,772 - - 1,806,772 1,680,494
Depreciation - 28,185 21,606 49,791 45,414
Total operating expenses 1,806,772 1,039,090 394,194 3,240,056 3,184,102
Operating income(loss) (124,439) (34,494) 30,806 (128,127) (316,052)
Nonoperating revenues:
Investment earnings(loss) 16,073 2,907 1,051 20,031 40,551
Miscellaneous 4,303 5,574 3,180 13,057 12,005
Total nonoperating revenues 20,376 8,481 4,231 33,088 52,556
Income(loss)before contributions and transfers (104,063) (26,013) 35,037 (95,039) (263,496)
Capital Contributions - - - - 4,080
Change in net position (104,063) (26,013) 35,037 (95,039) (259,416)
Net position-January 1 2,126,743 1,247,889 164,245 3,538,877 3,798,293
Cumulative effect of change in accounting principle - (206,970) (97,528) (304,498) -
Net position-January 1,as restated 2,126,743 1,040,919 66,717 3,234,379 3,798,293
Net position-December 31 $ 2,022,680 $ 1,014,906 $ 101,754 $ 3,139,340 $ 3,538,877
123
CITY OF COTTAGE GROVE,MINNESOTA
COMBINING STATEMENT OF CASH FLOWS Statement 26
INTERNAL SERVICE FUNDS
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Totals
Self Fleet Information Internal Service Funds
Insurance Maintenance Services 2015 2014
Cash flows from operating activities:
Receipts from interfund services provided $ 1,578,250 $ 1,004,596 $ 425,000 $ 3,007,846 $ 2,812,816
Receipts from insurance refunds and reimbursements 104,083 - - 104,083 55,234
Paymentto suppliers (418,902) (647,249) (212,667) (1,278,818) (1,362,433)
Paymenttoemployees (1,452,879) (342,036) (162,231) (1,957,146) (1,717,735)
Miscellaneous revenue 4,303 5,574 3,180 13,057 12,005
Net cash flows from operating activities (185,145) 20,885 53,282 (110,978) (200,113)
Cash flows from capital and related financing activites
Acquisition of capital assets - (48,206) (90,106) (138,312) -
Cash flows from investing activities:
Investment earnings(loss) 16,073 2,907 1,051 20,031 40,551
Net increase(decrease)in cash and cash equivalents (169,072) (24,414) (35,773) (229,259) (159,562)
Cash and cash equivalents-January 1 2,216,504 371,888 125,270 2,713,662 2,873,224
Cash and cash equivalents-December 31 $ 2,047,432 $ 347,474 $ 89,497 $ 2,484,403 $ 2,713,662
Reconciliation of operating income(loss)to net cash
provided(used)by operating activities:
Operating income(loss) $ (124,439) $ (34,494) $ 30,806 $ (128,127) $ (316,052)
Adjustments to reconcile operating income(loss)
to net cash flows from operating activities:
Depreciation - 28,185 21,606 49,791 45,414
Miscellaneous revenue 4,303 5,574 3,180 13,057 12,005
Pension expense - 7,205 3,395 10,600 -
Changes in assets and liabilities:
Decrease(increase)in receivables - 560 - 560 (560)
Decrease(increase)in prepaid items (34,244) - (4,473) (38,717) (6,825)
Decrease(increase)in inventory - (1,242) - (1,242) (293)
Increase(decrease)in payables (30,765) 15,097 (1,232) (16,900) 66,198
Total adjustments (60,706) 55,379 22,476 17,149 115,939
Net cash flows from operating activities $ (185,145) $ 20,885 $ 53,282 $ (110,978) $ (200,113)
Noncash investing,capital and financing activities:
Capital asset contribution from government $ - $ - $ - $ - $ 4,080
124
ECONOMIC DEVELOPMENT AUTHORITY
CONIl'ONENT UNIT
Established to account for the receipt and use of monies for economic purposes.
125
CITY OF COTTAGE GROVE,MINNESOTA
COMBINING BALANCE SHEET-ALL GOVERNMENTAL FUND TYPES Statement 27
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31,2015
With Comparative Data as of December 31,2014
Totals
Economic Development Authority
Special Debt Component Unit
Revenue Service 2015 2014
Assets:
Cash and investments $ - $ 389,254 $ 389,254 $ 546,654
Interfund receivable - 176,308 176,308 14,775
Accountsreceivable 5,212 - 5,212 4,154
Capital lease receivable from primary government - 4,805,000 4,805,000 5,085,000
Prepaid items 1,500 - 1,500 2,560
Delinquent propertytaxesreceivable 1,087 - 1,087 1,771
Property held for resale 311,718 - 311,718 311,718
Total assets $ 319,517 $ 5,370,562 $ 5,690,079 $ 5,966,632
Liabilities:
Accountspayable $ 17,108 $ - $ 17,108 $ 36,284
Salaries payable 3,870 - 3,870 8,782
Interfund payable 176,308 - 176,308 14,775
Deposits Payable 3,503 - 3,503 2,666
Totalliabilities 200,789 - 200,789 62,507
Deferred inflows of resources:
Unavailable revenue-property taxes 1,087 - 1,087 1,771
Total deferred inflows of resources 1,087 - 1,087 1,771
Fund balance:
Nonspendable:
Prepaid items 1,500 - 1,500 2,560
Assets for resale 311,718 - 311,718 311,718
Restricted for:
Debt service reserve - 5,370,562 5,370,562 5,646,429
Unassigned (195,577) - (195,577) (58,353)
Total fund balance 117,641 5,370,562 5,488,203 5,902,354
Total liabilities,deferred inflows of resources,
and fund balance $ 319,517 $ 5,370,562 $ 5,690,079 $ 5,966,632
Fund balance reported above $ 5,488,203
Other long-term assets,including property taxes receivable,are not available to pay for current-period
expenditures,and therefore,are deferred in the funds. 1,087
Deferred outflows of resources and deferred inflows of resources are created as a result of
various differences related to pensions that are not recognized in the governmental funds.
Deferred inflows of resources related to pensions (10,776)
Deferred outflows of resources related to pensions 15,461
Long-term liabilities,including bonds payable,compensated absences,net pension liability and other
post employment benefits,are not due and payable in the current period and therefore are not reported
in the funds. (4,923,230)
Net position of component unit(page 33) $ 570,745
126
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 31,2015
With Comparative Data for the Year Ended December 31,2014
Totals
Economic Development Authority
Special Debt Component Unit
Revenue Service 2015 2014
Revenues:
General property taxes:
Current and delinquent $ 112,497 $ - $ 112,497 $ 108,430
Charges for service 30,000 - 30,000 230,000
Investment earnings(loss) - 4,133 4,133 8,370
Interest on loan to primary government - 223,293 223,293 234,293
Miscellaneous 102,375 - 102,375 114,200
Total revenues 244,872 227,426 472,298 695,293
Expenditures:
General government:
Current
Personal services 183,791 - 183,791 216,300
Commodities 12,345 - 12,345 7,013
Contractual services 187,020 - 187,020 182,371
Debt service:
Principal retirement - 280,000 280,000 270,000
Interest and fiscal charges - 223,293 223,293 234,293
Total expenditures 383,156 503,293 886,449 909,977
Revenues over(under)expenditures (138,284) (275,867) (414,151) (214,684)
Fund balance-January 1 255,925 5,646,429 5,902,354 6,117,038
Fund balance-December 31 $ 117,641 $ 5,370,562 $ 5,488,203 $ 5,902,354
Net decrease in fund balance reported above $ (414,151)
Revenues in the staYement of activities that do not report current financial resources are not
reported as revenues in the funds:
General property taxes unavailable revenue:
At December 31,2014 (1,771)
At December 31,2015 1,087
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 280,000
Governmental funds recognize pension contributions as expenditures at the time of
payment whereas the staYement of activities factors in items related to pensions on a
full accrual perspective. (3,637)
Some expenses reported in the staYement 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 31,2014 15,955
At December 31,2015 (4,624)
Other post employment benefits:
At December 31,2014 700
At December 31,2015 (811)
Change in net position of component unit(page 35) $ (127,252)
127
-This Page Intentionally left Blank-
128
SUPPLEMENTARY FINANCIAL INFORMATION
129
CTTY OF COTTAGE GROVE,MINNESOTA
CONSTRUCTION/ACQUISITION COSTS
CAPITAL PROJECT FUNDS
December 31, 2015
Construction/Acquisirion Costs
Fund Land
No. Descriprions Contractor Engineer Acquisition
500 FUNDED BY CLOSED CONSTRUCTION
CP Rail final streets $ 162,959 $ 26,073 $ -
Total Fund 500 162,959 26,073 -
515 FUNDED BY PARK IMl'ROVEMENT
Woodridge Park building 269,782 - -
Total Fund 515 269,782 - -
520 FUNDED BY MSA:
Ideal Avenue - - -
Jamaica 70th to Militaty - 97,885 -
70th&Meadow Grass intersection improvements 421,585 51,024 -
Total Fund 520 421,585 148,909 -
529 FUNDED BY
97th and Hemingway Ave. 100,000 - -
Total Fund 529 100,000 - -
FUNDED BY SPECIAL ASSESSMENT BONDS:
560 Pavement Management:
2014 Pavement Management 1,923,616 251,545 -
2015 PavementManagement 4,101,946 404,521 -
97th and Hemingway Ave. 486,232 - -
Total Fund 560 6,511,794 656,066 -
FUNDED BY PARK TRUST FUNDS:
570 Hamlet Park North - 27,741 -
Oak Cove Park - - -
Trails EastRidge Woods 3rd - - -
Trails Everwood 4th - - -
Trunk oversizing EastRidge Woods 3rd - - -
Total Fund 570 - 27,741 -
Totals $ 7,466,120 $ 858,789 $ -
Less: Completed construcrion*
Work in progress-December 31,2015
130
Exhibit 1
Construction/Acquisirion Costs Eapended
Legal, ROW/ Total Prior
Fiscal Easement Other Costs 2015 Years
$ - $ - $ 2,126 $ 191,158 * $ 191,158 $ -
- - 2,126 191,158 191,158 -
- - 35,324 305,106 * 305,106 -
- - 35,324 305,106 305,106 -
- - 105,743 105,743 * - 105,743
- - 7,008 104,893 - 104,893
- - 5,230 477,839 * 9,309 468,530
- - 117,981 688,475 9,309 679,166
- - - 100,000 * 100,000 -
- - - 100,000 100,000 -
- - 52,080 2,227,241 * 31,578 2,195,663
- - 70,399 4,576,866 * 4,576,866 -
- - - 486,232 * 486,232 -
- - 122,479 7,290,339 5,094,676 2,195,663
- - - 27,741 - 27,741
- - 344,618 344,618 - 344,618
- - 23,510 23,510 * 23,510 -
- - 23,646 23,646 - 23,646
- - 73,763 73,763 * 73,763 -
- - 465,537 493,278 97,273 396,005
$ - $ - $ 743,447 $ 9,068,356 $ 5,797,522 $ 2,874,829
8,567,458
$ 500,898
131
CTTY OF COTTAGE GROVE,MINNESOTA
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
December 31, 2015
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
$1,405,000 Tax Increment Refunding Bonds of 2014A 2.0-2.50% 5/29/2014 2/1/2021
Total General Obligarion 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 Bonds of 2012A 0.30-220% 3/13/2012 2/1/2027
Improvement Bonds of 2013A 3.00-3.50% 9/26/2013 2/1/2029
Improvement Bonds of 2015A 2.50-3.00% 5/27/2015 2/1/2031
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
132
Exhibit 2
Authorized Principal Due Interest Due
And Issued Retired Outstanding In 2016 In 2016
$ 1,405,000 $ 345,000 $ 1,060,000 $ 35,000 $ 47,400
1,405,000 170,000 1,235,000 175,000 24,310
2,810,000 515,000 2,295,000 210,000 71,710
3,370,000 2,280,000 1,090,000 255,000 33,978
3,650,000 1,485,000 2,165,000 225,000 81,338
1,865,000 360,000 1,505,000 120,000 22,597
7,345,000 320,000 7,025,000 410,000 212,265
5,700,000 - 5,700,000 - 191,901
21,930,000 4,445,000 17,485,000 1,010,000 542,079
1,205,000 605,000 600,000 600,000 11,288
1,205,000 605,000 600,000 600,000 11,288
25,945,000 5,565,000 20,380,000 1,820,000 625,077
6,500,000 1,695,000 4,805,000 290,000 211,892
6,500,000 1,695,000 4,805,000 290,000 211,892
$ 32,445,000 $ 7,260,000 $ 25,185,000 $ 2,110,000 $ 836,969
133
CITY OF COTTAGE GROVE,MINNESOTA
DEBT SERVICE PAI'AdENTS TO MATURITY E�ibit 3
December 31,2015 Page 1 of 2
Primary Governxnent
General Obligation Bonds Special Assessment Bonds
Tax Increment Pavement Management Developer Financed
$1,405,000
$1,405,000 Tax
Tax Increment Total Total Total Total Total
Increment Refunding Tax General $3,650,000 $1,865,000 $7,345,000 $ 5,700,000 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 2012A of 2013A of 2015A Bonds of 2008A Bonds Bonds
Bonds payable $ 1,060,000 $ 1,235,000 $ 2,295,000 $ 2,295,000 $2,165,000 $1,505,000 $7,025,000 $5,700,000 $16,395,000 $1,090,000 $1,090,000 $ 17,485,000
Fubxreinterestpayable 319,065 84,170 403,235 403,235 407,728 163,856 1,673,497 1,424,116 3,669,197 79,416 79,416 3,748,613
Totals $ 1,379,065 $ 1,319,170 $ 2,698,235 $ 2,698,235 $ 2,572,728 $ 1,668,856 $ 8,698,497 $7,124,116 $20,064,197 $ 1,169,416 $ 1,169,416 $ 21,233,613
Payments to maturity:
2016 82,400 199,310 281,710 281,710 306,338 142,596 622,266 191,901 1,263,101 288,978 288,978 1,552,079
2017 80,860 210,660 291,520 291,520 303,375 141,818 624,740 497,835 1,567,768 289,878 289,878 1,857,646
2018 79,320 221,710 301,030 301,030 295,037 140,858 621,840 492,560 1,550,295 295,340 295,340 1,845,635
2019 77,780 237,410 315,190 315,190 291,025 144,599 623,565 492,060 1,551,249 295,220 295,220 1,846,469
2020 76,240 247,580 323,820 323,820 286,525 148,002 624,840 481,410 1,540,777 - - 1,540,777
2021 104,040 202,500 306,540 306,540 281,825 146,118 620,740 480,610 1,529,293 - - 1,529,293
2022 286,872 - 286,872 286,872 276,800 144,005 621,265 474,585 1,516,655 - - 1,516,655
2023 294,810 - 294,810 294,810 271,320 146,685 621,340 473,335 1,512,680 - - 1,512,680
2024 296,743 - 296,743 296,743 260,483 149,070 620,965 461,935 1,492,453 - - 1,492,453
2025 - - - - - 146,200 620,140 460,385 1,226,725 - - 1,226,725
2026 - - - - - 148,135 618,590 459,535 1,226,260 - - 1,226,260
2027 - - - - - 70,770 620,944 449,535 1,141,249 - - 1,141,249
2028 - - - - - - 616,587 443,966 1,060,553 - - 1,060,553
2029 - - - - - - 620,675 442,691 1,063,366 - - 1,063,366
2030 431,383 431,383 431,383
2031 - - - - - - - 390,390 390,390 - - 390,390
Totals $ 1,379,065 $ 1,319,170 $ 2,698,235 $ 2,698,235 $ 2,572,728 $ 1,668,856 $ 8,698,497 $7,124,116 $20,064,197 $ 1,169,416 $ 1,169,416 $ 21,233,613
134
CITY OF COTTAGE GROVE,MINNESOTA
DEBT SERVICE PAI'AdENTS TO MATURITY Exhibit 3
December 31,2015 Page 2 of 2
Primary Governxnent(continued) Component Unit
Proprietary Funds Revenue Bonds
Water/Sewer
$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 $ 600,000 $ 600,000 $ 600,000 $ 20,380,000 $ 4,805,000 $ 25,185,000
Futureinterest payable 60,112 60,112 60,112 4,211,960 1,592,140 5,804,100
Totals $ 660,112 $ 660,112 $ 660,112 $ 24,591,960 $ 6,397,140 $ 30,989,100
Payments to maturity:
2016 130,650 130,650 130,650 1,964,439 501,892 2,466,331
2017 131,712 131,712 131,712 2,280,878 499,942 2,780,820
2018 132,450 132,450 132,450 2,279,115 497,360 2,776,475
2019 132,700 132,700 132,700 2,294,359 494,288 2,788,647
2020 132,600 132,600 132,600 1,997,197 495,697 2,492,894
2021 - - - 1,835,833 495,871 2,331,704
2022 - - - 1,803,527 494,601 2,298,128
2023 - - - 1,807,490 492,370 2,299,860
2024 - - - 1,789,196 489,252 2,278,448
2025 - - - 1,226,725 485,233 1,711,958
2026 - - - 1,226,260 485,176 1,711,436
2027 - - - 1,141,249 483,943 1,625,192
2028 - - - 1,060,553 481,515 1,542,068
2029 - - - 1,063,366 - 1,063,366
2030 431,383 - 431,383
2031 - - - 390,390 - 390,390
Totals $ 660,112 $ 660,112 $ 660,112 $ 24,591,960 $ 6,397,140 $ 30,989,100
135
CTTY OF COTTAGE GROVE,MINNESOTA
DEFERRED TAX LEVIES Eghibit 4
December 31,2015
Pavement Management
Special Assessment Bonds
Total
$3,650,000 $1,865,000 $7,345,000 $5,700,000 Pavement
Local Local Local Local Management
Year of Improvement Improvement Improvement Improvement Special
Tax Levy/ Bonds Bonds Bonds Bonds Assessment Total
Collection of 2009A of 2012A of 2013A of 2015A Bonds All Levies
2015/16 177,461 79,622 413,776 318,517 989,376 989,376
2016/17 175,529 78,739 410,888 318,114 983,270 983,270
2017/18 178,243 82,855 412,936 322,804 996,838 996,838
2018/19 180,144 86,596 414,511 316,679 997,930 997,930
2019/20 181,834 84,753 410,363 321,054 998,004 998,004
2020/21 183,314 82,638 411,150 319,863 996,965 996,965
2021/22 184,322 85,567 411,466 323,765 1,005,120 1,005,120
2022/23 179,596 88,266 411,308 316,853 996,023 996,023
2023/24 - 85,326 410,678 320,440 816,444 816,444
2024/25 - 87,489 409,576 323,712 820,777 820,777
2025/26 - 42,424 412,673 318,269 773,366 773,366
2026/27 - - 409,271 318,076 727,347 727,347
2027/28 - - 414,022 321,939 735,961 735,961
2028/29 315,014 315,014 315,014
2029/30 - - - 328,911 328,911 328,911
$ 1,440,443 $ 884,275 $ 5,352,618 $ 4,804,010 $ 12,481,346 $ 12,481,346
136
CTTY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 5
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
December 31,2015
With Comparative Data as of December 31,2014
Totals
2009A 2009C 2012A 2013A 2015A Pavement Management
Improvement Improvement Improvement Improvement Improvement Debt Service Schedule
Bonds Bonds Bonds Bonds Bonds 2015 2014
Assets:
Cash and investments $ 524,384 $ - $ 355,462 $ 1,025,167 $ 643,439 $ 2,548,452 $ 1,330,774
Interfund receivable - - - - - - 598,445
Delinquent property taxes receivable 1,729 - 760 2,167 - 4,656 6,233
Special assessments receivable:
Deferred 579,578 - 329,145 1,373,530 1,862,895 4,145,148 2,598,474
Delinquent 2,457 - 1,017 2,201 729 6,404 5,584
Special deferred 3,250 - 7,196 8,704 9,060 28,210 18,842
Total assets $ 1,111,398 $ - $ 693,580 $ 2,411,769 $ 2,516,123 $ 6,732,870 $ 4,558,352
Liabilities:
Accounts payable $ - $ - $ - $ - $ - $ - $ 5,975
Totalliabilities - - - - - - 5,975
Deferred inflows of resources:
Unavailable revenue-property taxes 1,729 - 760 2,167 - 4,656 6,233
Unavailable revenue-special assessments 585,285 - 337,358 1,384,435 1,872,684 4,179,762 2,622,900
Total deferred inflows of resources 587,014 - 338,118 1,386,602 1,872,684 4,184,418 2,629,133
Fund balance:
Restricted for debt retirement 524,384 - 355,462 1,025,167 643,439 2,548,452 1,923,244
Total fund balance 524,384 - 355,462 1,025,167 643,439 2,548,452 1,923,244
Total liabilities,deferred inflows of resources,
and fund balance $ 1,111,398 $ - $ 693,580 $ 2,411,769 $ 2,516,123 $ 6,732,870 $ 4,558,352
137
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBII�IING STATEMENT OF REVENUES, Exhibit 6
EXPENDITiJRES AND CHANGES IN FiJND BALANCE
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
For The Year Ended December 31,2015
With Comparative Data for the Year Ended December 31,2014
Totals
2009A 2009C 2012A 2013A 2015A Pavement Management
Improvement Improvement Improvement Improvement Improvement Debt Service Schedule
Bonds Bonds Bonds Bonds Bonds 2015 2014
Revenues:
General property taxes:
Current and delinquent $ 176,651 $ 1,267 $ 81,122 $ 328,885 $ - $ 587,925 $ 585,364
Special assessments:
Current 119,989 16,659 58,820 175,528 592,212 963,208 422,386
Delinquent 1,573 239 - 1,479 - 3,291 2,282
Prepayments on deferred 15,862 - 14,616 53,053 51,944 135,475 123,932
Penalties 585 61 29 212 102 989 703
Investment earnings(loss) 2,814 434 2,088 5,973 (819) 10,490 22,082
Total revenues 317,474 18,660 156,675 565,130 643,439 1,701,378 1,156,749
Expenditures:
Current
Contractual services 2,059 1,291 1,225 6,887 - 11,462 11,288
Debt service:
Principal retirement 225,000 205,000 120,000 320,000 - 870,000 550,000
Interest and fiscal charges 88,650 6,150 23,258 223,215 - 341,273 324,165
Total expenditures 315,709 212,441 144,483 550,102 - 1,222,735 885,453
Revenues over(under)expenditures 1,765 (193,781) 12,192 15,028 643,439 478,643 271,296
Other financing sources(uses):
Transfer from Debt Service Fund - 146,565 - - - 146,565 -
Total other financing sources(uses) - 146,565 - - - 146,565 -
Net increase(decrease)in fund balance 1,765 (47,216) 12,192 15,028 643,439 625,208 271,296
Fund balance-January 1 522,619 47,216 343,270 1,010,139 - 1,923,244 1,651,948
Fund balance-December 31 $ 524,384 $ - $ 355,462 $ 1,025,167 $ 643,439 $ 2,548,452 $ 1,923,244
138
CTTY OF COTTAGE GROVE, MINNESOTA
SUBCOMBII�]ING BALANCE SHEET Eghibit 7
TAX INCREMENT CONSTRUCTION REVOL VING SCHEDULE
December 31,2015
With Comparative Data as of December 31,2014
Reconciliation TIF Revolving Capital
TIF TIF TIF TIF TIF to Nonmajor Project Schedule
1-8 1-12 1-14 1-15 1-16 Fund 2015 2014
Assets:
Cash and investments $ 403,641 $ 1,453,048 $ 1,080 $ - $ - $ - $ 1,857,769 $ 1,336,659
Total assets $ 403,641 $ 1,453,048 $ 1,080 $ - $ - $ - $ 1,857,769 $ 1,336,659
Liabilities:
Accounts payable $ - $ 52,661 $ - $ 161 $ 8,000 $ - $ 60,822 $ -
Interfund loan payable - - 296,000 437,863 27,895 - 761,758 350,000
Totalliabilities - 52,661 296,000 438,024 35,895 - 822,580 350,000
Fund balance(deficit):
Restricted for:
Tax increment purposes 403,641 1,400,387 - - - (768,839) 1,035,189 986,659
Unassigned - - (294,920) (438,024) (35,895) 768,839 - -
Total fund balance(deficit) 403,641 1,400,387 (294,920) (438,024) (35,895) - 1,035,189 986,659
Total liabilities,deferred inflows of resources,
and fund balance $ 403,641 $ 1,453,048 $ 1,080 $ - $ - $ - $ 1,857,769 $ 1,336,659
139
CTTY OF COTTAGE GROVE,MINNESOTA
SUBCOMBINING SCHEDULE OF REVENUES, Eghibit 8
EXPENDITURES AND CHANGES 1N FUND BALANCE
TAX 1NCREMENT CONSTRUCTION REVOLVING SCHEDULE
For The Year Ended December 31,2015
With Compararive Data for the Year Ended December 31,2014
Totals
TIF Revolving Capital
TIF TIF TIF TIF TIF ProjectSchedule
1-8 1-12 1-14 1-15 1-16 2015 2014
Revenues:
TaY increment collections $ 32,090 $ 599,845 $ 78,606 $ - $ - $ 710,541 $ 723,304
Investment earnings(loss) 2,721 7,341 17 - - 10,079 14,354
Sale of Properry - - - 469,454 - 469,454 -
Miscellaneous - - - - - - 1,561
Totalrevenues 34,811 607,186 78,623 469,454 - 1,190,074 739,219
Expenditures:
Current
Contractual services 263 173,266 342 82,530 35,895 292,296 222,690
Land purchase 724,948 - 724,948 -
Construcrion costs:
Contractual services 100,000 100,000 -
Debt service:
Interest and fiscal cl�arges - - 24,300 - - 24,300 24,300
Totalexpenditures 263 173,266 24,642 907,478 35,895 1,141,544 246,990
Revenues over(under)expenditures 34,548 433,920 53,981 (438,024) (35,895) 48,530 492,229
Fund balance (deficit)-January 1 369,093 966,467 (348,901) - - 986,659 494,430
Fund balance (deficit)-December 31 $ 403,641 $ 1,400,387 $ (294,920) $ (438,024) $ (35,895) $ 1,035,189 $ 986,659
140
CTTY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Eghibit 9
TIF DEBT SERVICE REVOLVING SCHEDULE
December 31,2015
With Compararive Data as of December 31,2014
2004A TaY 2004A 2014A TaYable
1985 TaY Increment TaY Exempt TaY Increment Totals
Increment Refunding Increment Refunding TIF Debt Service
Bonds Bonds Bonds Bonds Revolving Schedule
TIF 1-1 TIF 1-3 TIF 1-12 TIF 1-12 2015 2014
Assets:
Cashandinvestments $ 355,780 $ 563,871 $ 22,125 $ 65,186 $ 1,006,962 $ 1,285,837
Total assets $ 355,780 $ 563,871 $ 22,125 $ 65,186 $ 1,006,962 $ 1,285,837
Fund balance:
Restricted for taY increment purposes $ 355,780 $ 563,871 $ 22,125 $ 65,186 $ 1,006,962 $ 1,285,837
Totalfundbalance 355,780 563,871 22,125 65,186 1,006,962 1,285,837
Totalfundbalance $ 355,780 $ 563,871 $ 22,125 $ 65,186 $ 1,006,962 $ 1,285,837
141
CTTY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, Eghibit 10
EXPENDITURES AND CHANGES 1N FUND BALANCE
TIF DEBT SERVICE REVOLVING SCHEDULE
For The Year Ended December 31,2015
With Compararive Data for the Year Ended December 31,2014
2004A TaY 2004A 2014A TaYable
1985 TaY Increment TaY Exempt TaY Increment Totals
Increment Refunding Increment Refunding TIF Debt Service
Bonds Bonds Bonds Bonds Revolving Schedule
TIF 1-1 TIF 1-3 TIF 1-12 TIF 1-12 2015 2014
Revenues:
Investmentearnings(loss) $ 2,600 $ 4,121 $ 544 $ 1,964 $ 9,229 $ 19,580
Total revenues 2,600 4,121 544 1,964 9,229 19,580
Eapenditures:
Current
Contractual services - - 475 925 1,400 2,835
Debt service:
Principal retirement - - 35,000 170,000 205,000 1,505,000
Interest and fiscal cl�arges - - 48,870 32,834 81,704 157,571
Total expenditures - - 84,345 203,759 288,104 1,665,406
Revenues over(under)eapenditures 2,600 4,121 (83,801) (201,795) (278,875) (1,645,826)
Other financing sources(uses):
Bonds issued - - - - - 1,405,000
Premium on debt issued - - - - - 18,461
Total other financing sources(uses) - - - - - 1,423,461
Net increase(decrease)in fund balance 2,600 4,121 (83,801) (201,795) (278,875) (222,365)
Fundbalance-January 1 353,180 559,750 105,926 266,981 1,285,837 1,508,202
Fund balance-December 31 $ 355,780 $ 563,871 $ 22,125 $ 65,186 $ 1,006,962 $ 1,285,837
142
IIL STATISTICAL SECTION (UNAUDITED)
143
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144
CITY OF COTTAGE GROVE,MINNESOTA
NET POSITION BY COMPONENT Table 1
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Governxnental activities
Netinveshnentincapitalassets $ 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 $ 125,562,970
Restricted 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 8,766,706
Unrestricted 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 24,285,174
Total governxnental activities net position $ 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 $ 158,614,850
Business-type activities
Netinveshnentin capitalassets $ 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 $ 54,202,710
Restricted 258,170 260,365 262,375 269,195 325,685 325,460 - - - -
Unrestricted 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 13,980,970
Total business-type activities netposition $ 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 $ 68,183,680
Primary Government
Netinveshnentincapitalassets $ 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 $ 179,765,680
Restricted 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 8,766,706
Unrestricted 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 38,266,144
Totalprimary governmentnetposition $ 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 $ 226,798,530
145
CITY OF COTTAGE GROVE,MINNESOTA
CHANGES IN NET POSITION Table 2
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Expenses
Governmental activities:
General govemment
Regularoperations $ 1,830,072 $ 1,907,725 $ 2,155,101 $ 1,868,582 $ 2,125,407 $ 2,985,571 $ 2,997,825 $ 2,27Q332 $ 2,229,518 $ 2,331,648 (1)
Land Sales 706,602 2,273,696 - - - - - - - -
Paymenttocomponentunit - - 678,880 - - - - - - -
Community development 753,185 803,916 893,468 1,106,256 1,14Q456 - - 903,180 946,001 1,086,197 (1)
Economic development - - - - - 1,11Q214 362,009 61,302 545,646 1,460,114
Public safety 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 7,662,393
Public works:
Regularoperations 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 4,713,100
Construction 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 2,712,945
Cultureandrecreation 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 5,153,844 (2)
Interestonlongtermdebt 1,188,586 1,278,801 1,163,542 1,548,704 1,056,110 846,258 827,645 976,891 808,642 1,029,228
Totalgovernmentalactivitiesexpenses 17,784,452 19,078,654 18,586,036 18,575,208 19,114,010 2Q830,763 2Q925,164 24,050,341 24,461,080 26,149,469
Business-type activities:
Golfcourse 1,640,032 1,616,541 1,617,708 1,553,921 1,447,849 1,504,006 1,614,321 - - - (2)
Streetlights 566,300 567,966 459,314 508,615 534,206 625,312 659,869 742,410 867,690 746,794
Cottage Grove EMS 1,029,482 951,159 768,240 92Q991 975,560 1,038,972 1,109,809 1,322,635 1,412,855 1,507,766
Water operating 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 2,438,166
Seweroperating 1,892,487 1,806,750 1,953,985 2,079,127 2,15Q795 2,223,749 2,242,778 2,278,958 2,428,944 2,448,283
Totalbusiness-typeactivities 7,323,859 7,430,526 6,896,318 6,863,724 7,OOQ162 7,294,024 7,676,654 6,685,558 6,926,308 7,141,009
Totalprimarygovemmente;cpenses $ 25,108,311 $ 26,509,180 $ 25,482,354 $ 25,438,932 $ 26,114,172 $ 28,124,787 $ 28,601,818 $3Q735,899 $31,387,388 $ 33,290,478
Program Revenues
Governmental activities:
Charges for services:
General govemment:
Regularoperations $ 1,204,709 $ 324,315 $ 288,502 $ 246,027 $ 224,719 $ 764,185 $ 883,272 $ 238,721 $ 138,768 $ 117,636 (1)
Land sales 1,095,357 2,265,963 - - - - - - - -
Community development 1,063,113 884,977 959,800 852,453 944,278 - - 1,115,203 989,140 1,527,836 (1)
Economic development - - - - - 175 210 7,626 1,771 3,467
Public safety 383,067 372,491 363,046 391,593 396,887 444,039 429,646 353,130 325,368 394,574
Public works:
Regularoperations 803,783 748,267 818,692 72Q397 71Q341 845,315 88Q095 797,432 1,O1Q695 971,599
Construction 88,919 130,073 237 17,273 - - - - - -
Cultureandrecreation 575,110 616,602 779,941 98Q003 1,178,977 1,024,516 1,026,685 2,413,744 2,448,968 3,091,072 (2)
Operating grants and contributions 1,114,928 1,216,184 1,252,052 1,192,559 1,21Q249 1,084,928 1,075,529 1,211,506 1,545,268 1,237,805
Capitalgrantsandcontributions 13,034,878 12,787,794 6,156,916 2,941,206 2,464,782 5,118,546 3,064,292 1Q37Q972 9,401,775 5,861,631
Totalgovernmentalactivitiesprogramrevenues 19,363,864 19,346,666 1Q619,186 7,341,511 7,13Q233 9,281,704 7,359,729 16,508,334 15,861,753 13,205,620
146
Fiscal Year
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Program Revenues(continued)
Business-type activities:
Charges for services:
Golf course 1,603,992 1,645,832 1,557,213 1,563,399 1,583,098 1,399,204 1,566,035 - - - (2)
Streetlights 660,503 915,074 691,384 596,703 494,162 532,607 54Q696 58Q837 658,810 549,005
CottageGroveEMS 1,040,474 1,158,397 876,762 1,13Q948 1,068,953 1,114,226 1,528,756 1,569,017 1,626,320 1,431,007
Wateroperating 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 1,840,088
Seweroperating 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 2,310,624
Capital grants and contributions - - - - 165,266 267,465 - 1,051,532 1,783,762 361,762
Total business-type activities program revenues 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 6,492,486
Totalprunary govemmentprogram revenues $ 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 $ 19,698,106
Net(E;cpense)/Revenue
Governmentalactivities $ 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) $ (12,943,849)
Business-typeactivities 164,637 750,789 706,154 795,976 674,406 477,418 94Q133 1,06Q877 1,163,282 (648,523)
Totalprimarygovemmentnete;cpense $ 1,744,049 $ 1,018,801 $ (7,26Q696) $ (1Q437,721) $ (11,309,371) $ (11,071,641) $(12,625,302) $(6,481,130) $ (7,436,045) $ (13,592,372)
General Revenues and Other Changes in Net Position
Governmental activities:
Propertytaxes $ 10,462,633 $ 11,113,215 $ 11,535,320 $ 11,808,510 $ 11,427,029 $ 11,494,758 $ 12,33Q135 $12,096,046 $ 12,616,267 $ 13,394,585
Franchisetaxes 325,414 390,901 396,173 399,588 517,391 535,188 537,682 54Q767 542,689 526,643
Aggregatetaxes 12,879 9,494 13,489 24,234 3Q554 26,131 26,180 26,135 26,236 37,133
Tax increment collections 770,857 904,836 909,434 1,123,774 1,253,414 946,603 892,438 939,314 711,628 710,541
Grants and contributions not restricted to
specificprograms 714,891 637,663 324,378 202,751 27,050 26,146 29,742 29,060 83,682 99,137
Unrestricted inveshnentearnings(loss) 1,697,138 2,316,104 1,864,048 998,846 502,721 624,785 368,821 (149,614) 551,910 357,170
Gain on sale ofcapital assets 22,278 20,634 - 4,227 23,872 12,342 1Q546 3,997 43,904 (15,157)
Other - - - - - - - - - -
Transfers (2,583,801) (4,312,159) (3,459,013) (1,134,566) 428,270 438,800 413,895 375,266 (72Q742) 613,878
Special item-golf course loan forgiveness - - - - - - - 1,02Q000 - -
Total governmental activities 11,422,289 11,080,688 11,583,829 13,427,364 14,21Q301 14,104,753 14,609,439 14,88Q971 13,855,574 15,723,930
Business-type activities:
Unrestrictedinveshnentearnings(loss) 347,410 491,391 473,098 176,619 119,772 162,296 118,396 (45,902) 199,179 137,896
Other - - - - - - - - - -
Transfers 2,583,801 4,312,159 3,459,013 1,134,566 (428,270) (438,800) (413,895) (375,266) 72Q742 (613,878)
Totalbusiness-type activities 2,931,211 4,803,550 3,932,111 1,311,185 (308,498) (276,504) (295,499) (421,168) 919,921 (475,982)
Totalprimarygovemment $ 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 $ 15,247,948
Change in Net Position
Governmentalactivities $ 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 $ 2,780,081
Business-typeactivities 3,095,848 5,554,339 4,638,265 2,107,161 365,908 20Q914 644,634 639,709 2,083,203 (1,124,505)
Total primary govemment $ 16,097,549 $ 16,903,039 $ 8,255,244 $ 4,30Q828 $ 2,592,432 $ 2,756,608 $ 1,688,638 $ 7,978,673 $ 7,339,450 $ 1,655,576
Notes: (1)Community Development is in General Govemment in 201 Q&2011.
(2)Golf Course reclassified to a special revenue fund in 2013.
147
CITY OF COTTAGE GROVE,MINNESOTA
FiJND BALANCES OF GOVERNMENTAL FiJNDS Table 3
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
General Fund
Reserved $ 12,657 $ 7,326 $ 8,060 $ 35,038 $ 33,905 $ - $ - $ - $ - $ -
Unreserved 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 15,383
Assigned - - - - - 1,611,427 1,695,203 1,443,243 1,380,698 1,408,357
Unassigned - - - - - 7,178,108 7,449,565 7,775,548 8,113,424 8,829,697
Totalgeneralfund $ 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 $ 10,253,437
All other Governmental Funds
Reserved reported in:
Special Revenue Funds $ 325 $ 1,475 $ 1,225,825 $ 1,076,850 $ 1,273 $ - $ - $ - $ - $ -
Debt Service Funds 9,533,463 8,735,656 9,587,587 6,076,380 8,716,563 - - - - -
CapitalProjectsFunds 2,410,045 2,323,835 3,122,128 500,000 267,498 - - - - -
Unreserved reported in:
Special Revenue Funds 5,502,814 5,876,378 5,494,321 6,058,259 6,366,077 - - - - -
Debt Service Funds 1,474,889 3,016,733 1,658,843 4,071,740 4,726,677 - - - - -
Capital Projects Funds 5,475,815 4,969,486 5,945,984 14,827,707 14,244,338 - - - - -
Nonspendable:
Prepaid items - - - - - 938 938 10,229 8,529 7,343
Inventory - - - - - - - 31,617 24,434 20,696
Restricted - - - - - 3,445,145 2,997,220 4,347,850 4,478,812 4,857,365
Committed - - - - - 833,500 560,321 416,027 329,841 394,204
Assigned - - - - - 21,540,577 20,240,161 22,936,733 25,591,181 26,322,717
Unassigned - - - - - (2,174,299) (9,521,907) (10,379,965) (10,958,389) (9,122,473)
Total all other governmental funds $ 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 $ 22,479,852
Total all funds $ 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 $ 32,733,289
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.
148
CITY OF COTTAGE GROVE,MINNESOTA
CHANGES IN FiJND BALANCES OF GOVERNMENTAL FUNDS Table 4
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenues
Generalpropertytaxes $ 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 $ 13,465,987
Other taxes 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 1,274,317
Special assessments 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 1,499,796
Licensesand permits 1,162,761 1,013,351 1,029,559 683,204 753,468 593,272 831,687 860,954 904,400 1,305,442
Directchargesto developers 329,453 27,442 35,787 24,786 50,047 101,913 16,555 2,106,723 661,861 307,971
Intergovernmental 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 2,415,754
Chargesforservices 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 3,808,618
Rent - - - - - - - - 435,975 450,428
Finesandforfeits 231,727 223,463 224,807 192,169 201,559 246,753 198,022 188,657 171,317 228,642
Inveshnent eamings(loss) 1,308,723 1,699,306 1,412,432 508,246 350,673 448,782 196,879 (173,267) 452,293 262,799
Interest on interfund loan 302,012 496,478 361,341 458,001 130,000 144,500 155,301 47,025 59,066 74,340
Connectioncharges 439,789 417,092 148,434 201,463 439,238 322,009 282,265 805,261 841,434 318,092
Park dedicationfees 143,661 788,177 21,707 64,584 145,640 62,198 41,990 252,386 63,595 9,010
Miscellaneous 1,825,184 2,980,621 705,107 674,038 609,809 595,218 601,255 705,409 1,005,867 1,138,274
Totalrevenues 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 26,559,470
E;cpenditures
Current:
Generalgovemment 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 2,155,327
Community development 740,175 788,811 894,642 1,102,740 1,132,127 - - 892,699 919,126 1,058,537 (1)
Economic development - - - - 299,614 793,046 491,040 151,562 541,838 1,456,306
Public safety 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 6,751,804
Public works 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 4,344,837
Cultureandrecreation 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 4,154,992
Capitaloutlay 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 7,036,802
Debt Service:
Principalretirement 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 1,320,000
Capitallease payment - 3,374 3,627 158,900 239,189 245,000 250,000 293,953 305,076 316,235
Debtpaymenttocomponentunit - - 678,880 - - - - - - -
Interest and fiscal charges 1,233,407 1,308,876 1,158,708 1,640,143 1,101,145 906,910 849,046 769,129 882,508 912,107
Total e;cpenditures 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 29,506,947
Excess revenues over(under)e;cpenditures (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 (2,947,477)
Other Financing Sources(Uses)
Transfers in 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 3,049,657
Transfers out (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) (2,362,952)
Bondsissued - - 3,370,000 3,685,000 - - 1,865,000 7,345,000 1,405,000 5,700,000
Capitallease issued 15,090 - 6,500,000 - - - - - - -
Premium on debtissued - - 27,946 22,705 - - - 211,507 18,461 254,245
Discount on debt Issued - - - (2,906) - - (15,852) - - -
Proceedsfrom sale of capitalassets 11,514 22,412 43,175 49,694 71,506 12,344 10,546 27,195 67,120 53,267
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 6,694,217
Netchangeinfundbalances $ (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 $ 3,746,740
Debt service as a percentage of
noncapitale;cpenditures 30.5% 21.1% 21.5% 28.9% 16.8% 34.6% 13.4% 10.2% 16.5% 113%
Note: (1)Community Development is in General Government in 2011&2012
149
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
2015 $ 20,730,170 $ 5,093,035 $ 776,575 $ 2,609,305 $ 633,787 $ 29,842,872 $ 3,544,899 $ 33,387,771 1.23% $ 2,705,975,400 41.591
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
Source: Washington County
Notes:
(1)The tax capacity(assessed taxable value)of the property is calculated by applying a
statutory forxnula to the estimated market value of the property.
150
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)
City Direct Rate(1) Overlapping Rates
VocationaU Total Direct and
Total City Washington School School Total Overlapping Tax
General Debt Service Direct Rate County District(2) District(3) Other(4) Overlapping Rate
2015 38.886 2.705 41.591 30.186 35.675 - 4.182 70.043 111.634
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
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
151
CTTY OF COTTAGE GROVE,MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS Table 7
Current year and nine years ago
2015 2006
Percentage Percentage
of Total of Total
City City
Net TaY TaY Net TaY TaY
Capacity Capacity Capacity Capacity
TaYpayer Value Rank Value Value Rank Value
Xcel Energy/NSP 604,390 1 1.88% 457,355 2 1.56%
3M Company $ 625,241 2 1.95% $ 513,232 1 1.75%
Menard Inc. 178,806 3 0.56% 171,090 5 0.58%
Mars II Inc. 169,544 4 0.53% 182,062 3 0.62%
Dayton-Hudson Corporarion 154,230 5 0.48% 152,574 6 0.52%
Wal-Mart Real Estate Business Trust 149,612 6 0.47% - 0.00%
Renewal by Andersen Corporarion 144,534 7 0.45% 175,510 4 0.60%
Grove-Rainbow LP 135,516 8 0.42% - -0.01%
Wer Dis LLC 131,250 9 0.42% - -
MN Pipeline Co. 130,690 10 0.41% - -
Kohl's Department Stores Inc. - - 114,200 8 0.39%
First Trust Co. of St.Paul - - 116,853 10 0.40%
Super Valu Holdings - - 106,932 9 0.36%
Home Depot USA,Inc - - 123,574 7 0.42%
Total $ 2,423,813 7.55% $ 2,113,382 720%
Source: Washington County
152
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
2015 $ 12,526,600 $ 875,500 $ (8,722) $ - $ 13,393,378 $ 13,326,911 99.50% $ 3,737 $ - $ 13,326,911 99.50%
2014 11,873,130 826,000 (5,947) - 12,693,183 12,610,243 99.35% 11,112 75,201 12,685,444 99.94%
2013 11,585,100 656,150 (5,354) - 12,235,896 12,114,166 99.01% (21,952) 82,537 12,196,703 99.68%
2012 11,683,300 557,950 (4,762) - 12,236,488 12,104,072 98.92% (23,267) 99,615 12,203,687 99.73%
2011 11,035,100 1,206,150 (4,350) (690,152) 11,546,748 11,395,797 98.69% (25,901) 118,312 11,514,109 99.72%
2010 10,903,300 1,251,700 (4,637) (629,015) 11,521,348 11,358,969 98.59% (33,547) 125,137 11,484,106 99.68%
2009 10,784,900 1,661,600 (176,941) (412,323) 11,857,236 11,591,141 97.76% (97,610)(1) 164,752 11,755,893 99.15%
2008 10,920,700 1,263,300 (306,555) (295,108) 11,582,337 11,354,286 98.03% (47,239) 177,249 11,531,535 99.56%
2007 10,568,850 1,253,600 (617,641) - 11,204,809 10,975,151 97.95% (3,585) 224,952 11,200,103 99.96%
2006 9,758,390 1,391,720 (695,238) - 10,454,872 10,268,967 98.22% (16,140) 168,640 10,437,607 99.83%
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.
153
CITY OF COTTAGE GROVE,MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE Table 9
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
General Obligation
General General Special Other Other Total Percentage
Fiscal Obligation Tax Obligation Assessments Capital Long-Term Revenue Capital Long-Term Primary ofPersonal Per
Year Increment Bonds(1) Bonds(1) Bonds(1) I,eases Debt Bonds(1) Lease Debt Government Income(2) Capita(2)
2015 $ 2,309,130 $ - $ 17,964,105 $ 4,842,432 $ - $ 609,856 $ - $ - $ 25,725,523 1.28% $ 718
2014 $ 2,516,865 $ - $ 13,140,768 $ 5,158,667 $ - $ 717,221 $ - $ - $ 21,533,521 1.12% 605
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
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.
154
CTTY OF COTTAGE GROVE,MINNESOTA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 10
Last Ten Fiscal Years
General Obligarion Percentage of
General General Special Less: Amounts Esrimated
Fiscal Obligarion Tax Obligarion Assessments Available in Debt Actual Taxable Per
Year Increment Bonds(1) Bonds(1) Bonds(1) Service Funds Total Market Value(2) Capita(3)
2015 $ 2,309,130 $ - $ 17,964,105 $ 3,773,605 $ 16,499,630 0.61% $ 461
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
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 Esrimated Actual Value of TaYable Properry for esrimated actual taYable market value.
(3) See the Demographic and Economic Starisrics schedule for popularion data.
155
CITY OF COTTAGE GROVE,MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 11
As of December 31,2015
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) 256,005,000 30.7616% 78,751,234
Metro Council 206,140,000 0.9772% 2,014,400
Total Overlapping 95,906,620
City of Cottage Grove Direct Debt $ 25,115,667 100.00% 25,115,667
Total Direct and Overlapping Debt $ 630,035,667 $ 121,022,287
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.
156
CITY OF COTTAGE GROVE,MINNESOTA
LEGAL DEBT MARGIN INFORMATION Table 12
Last Ten Fiscal Years
Fiscal Year
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Debtlimit $ 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 $ 81,179,262
Total net debt applicable to limit 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 4,805,000
Legaldebtmargin $ 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 $ 76,374,262
Total net debt applicable to the limit
as a percentage of debt limit 1.40% 0.87% 7.54% 6.92% 6.96% 7.25% 7.59% 7.84% 7.07% 5.92%
Legal Debt Margin Calculation for Fiscal Year 2014
Market Value(afterfiscal disparities) $ 2,705,975,400
Debt limit(3%of assessed value) 81,179,262
Debt applicable to limit 4,805,000
Legaldebtmargin $ 76,374,262
157
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)
2015 35,814 $ 2,012,741,903 $ 56,200 17,893 3.9%
2014 35,619 $ 1,926,643,820 $ 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%
Sources:
(1)Metropolitan Council-2002-2009&2012-2013. Census-2010. Cottage Grove Planning Department-2014-2015
(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.
158
CITY OF COTTAGE GROVE,MINNESOTA
PRINCIPAL EMPLOYERS Table 14
Current year and nine years ago
2015 2006
Percentage Percentage
of Total of Total
Taxpayer Employees Rank Employment Employees Rank Employment
School District 833 2,232 1 33% 1,081 1 16%
3M Cottage Grove 775 2 11% 1,000 2 15%
Renewal by Andersen 450 3 7% 250 4 4%
Up North Plastics Inc 300 4 4% 280 3 4%
Werner Electric 170 8 2% - - -
City of Cottage Grove 176 7 3% - - -
Walmart 230 5 3% - - -
Target 130 10 2% 212 5 3%
Cub Foods 200 6 0 208 6 3%
Commercial Carriers Inc. - - - 200 7 3%
Menard's 150 9 0 200 8 3%
Aggregate Industries - - - 165 10 2%
Rainbow Foods - - - 200 9 3%
Total 4,813 70% 3,796 57%
Sources:
City of Cottage Grove Annual Municipal Disclosure Reporting and Cottage Grove Economic Development Department.
159
CTTY OF COTTAGE GROVE,MINNESOTA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Table 15
Last Ten Fiscal Years
Budgeted Full-time Equivalent Employees as of December 31
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
General Government
Total General Government 21.94 23.03 22.48 21.76 21.76 21.76 22.06 23.38 23.40 23.25
Public Safety
Police/Cottage Grove EMS
Officers 39.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 40.00 40.00
Civilians* 15.40 9.40 9.10 7.25 7.25 7.25 8.46 8.09 8.26 7.56
Fire/Emergency Management 3.00 4.00 4.00 4.00 4.00 4.00 4.00 5.00 7.00 9.00
Total Public Safety 57.40 52.40 52.10 50.25 50.25 50.25 51.46 52.09 55.26 56.56
Public Works 23.56 22.56 21.56 21.56 21.56 21.56 20.83 21.68 23.68 24.08
Recreation and Swimming Pool 3.50 3.00 3.00 2.50 2.50 2.50 2.50 2.55 2.55 2.55
Ice Arena 2.60 2.60 2.60 2.60 2.60 2.60 3.20 3.65 3.65 3.65
Water/Sewer 10.04 10.04 9.36 8.36 8.36 8.36 8.23 8.18 8.18 8.28
Storm Sewer 1.40 3.40 3.40 3.40 3.40 3.40 3.54 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 1.06 1.06 1.06 1.06
Fleet Maintenance 3.84 3.84 3.84 3.84 3.84 3.84 4.04 4.04 4.04 4.04
Total 130.32 126.91 124.38 120.31 120.31 120.31 121.92 125.17 130.36 132.01
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.
160
CITY OF COTTAGE GROVE,MINNESOTA
OPERATING IIVDICATORS BY FUNCTION/PROGRAM Table 16
Last Ten Years
Fiscal Year
Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
General Government
Elections 2 2 2 2 2
Registeredvoters as of7 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 Perxnits(New Dwelling Units) 185 67 89 66 89 49 53 56 77 65
CodeEnforcementInspections 943 1,032 1,777 1,759 1,447 1,276 2,407 2,826 1,482 1,013
Public Safety
Police
Crimes-PartI 1010(1) 892 850 743 674 694 756 783 774 719
Crimes-PartII 2,480 2,883 2,472 2,478 2,055 2,117 1,614 1,473 1,434 1,419
Total Calls for Service 15,500 20,469 20,356 19,434 20,104 20,707 17,348 18,151 18,448 20,576
Fire
Medical 1,280 1,250 1,442 1,765 1,968 2,000 2,347 2,437 2,562 2,464
Fire 325 580 553 556 643 456 295 280 301 290
Avg Response Time(minutes)Medical* n/a n/a n/a n/a n/a 8:38 6:51 6:15 6:19 6:13
Avg Response Time(minutes)Fire* n/a n/a n/a n/a n/a 8:24 8:04 7:25 7:34 7:06
Avg Response Time(minutes)Both* 9.32 8.57 8:54 8:59 9:01 8:36 6:59 6:22 6:27 6:16
*Entire service area
Public Works
Sq.Yards of Streets Sealcoated 345,178 404,821 425,577 352,953 349,349 382,374 488,210 457,275 199,725 118,159
Miles of Streets New Construction 2.63 0.73 0.00 0.00 0.26 1.12 0.30 1.23 1.99 0.56
Miles of waterxnain added 3.74 2.06 1.68 0.00 0.39 0.63 0.79 2.42 1.84 1.06
Source: Various City of Cottage Grove Departxnents
Notes:
(1) 2006 are estimated amounts.
(2) Inforxnation not available is labeled n/a.
161
CITY OF COTTAGE GROVE,MINNESOTA
CAPITAL ASSET STATISTICS BY FCTNCTION/PROGRAM Table 17
Last Ten Years
Fiscal Year
Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Public Safety
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol Units 12 12 12 12 12 12 12 13 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 2,207 2,270 2,273 2,273 2,279 2,320 2,345 2,416 2,481 2,495
Xcel owned Lights 301 301 301 301 301 301 301 301 301 301
Streets(miles) 154.72 155.45 155.45 155.45 155.71 156.83 157.13 158.36 160.35 160.91
Sidewalks/trails(miles) 39.01 41.35 44.23 44.27 46.40 48.25 48.61 53.82 57.83 59.56
Parks(acreage)
Community Parks 330 368 377 377 377 377 377 377 377 400
Neighborhood Parks 201 201 201 201 201 201 244 275 303 275
Recreation facilities 21 21 21 21 21 21 21 21 21 15
County Parks 539 552 571 571 571 571 571 571 571 569
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 406 450 453 453 453 453 453 581 581 961
Water
Number of Connections 10,056 10,056 10,298 10,381 10,423 10,474 10,538 10,573 10,640 10,706
Miles of Water Mains and Laterals 139.11 141.17 142.85 142.85 143.24 143.87 144.66 147.08 148.92 149.98
Sanitary Sewer
Number of Connections 9,998 10,143 10,209 10,330 10,382 10,433 10,486 10,532 10,604 10,670
Miles of Sanitary Sewer Mains and Laterals 124.00 126.72 126.72 126.72 127.02 127.58 127.99 129.32 131.11 131.45
Storm Sewer
Miles of storm sewers 75.67 77.04 77.17 77.41 78.07 79.50 80.39 85.41 87.81 89.52
Source: Various City Departments
162
City of Cottage Grove
Washington County, Minnesota
Communications Letter
December 31, 2015
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Table of Contents
Report on Matters Identified as a Result of
the Audit of the Financial Statements 1
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Required Communication 3
Financial Analysis 6
Emerging Issues 23 !
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the Audit of the Financial Statements
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Honorable Mayor and Members T sis.z6s.i�is ',
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Cottage Grove, Minnesota Su te 300Avenue NE
P.O.Box 10200 I
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In planning and performing our audit of the financial statements of the City of Cottage F 31�.z9a.9oos i�
Grove, Minnesota, as of and for the year ended December 31, 2015, in accordance with Coralville !
auditing standards generally accepted in the United States of America we considered the z53oco��iao�waY
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City's internal control over financial reporting(internal control) as a basis for designing co ag iu�5 A'
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the effectiveness of the City's internal control. Accordingly,we do not express an opinion oes Moi�es '
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material wealcnesses or significant deficiencies and,therefore, material wealcnesses or 3800 American 81vd W
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significant deficiencies may exist that were not identified. ei�m��9�on,Mrv �
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A deficiency in internal control exists when the design or operation of a control does not F 9szs63.6so�
allow management or employees, in the normal course of performing their assigned sr.cio�a I
220 Park Avenue 5
functions, to prevent, or detect and coi�ect,misstatements on a timely basis. A material P.O.Box 1304
weakness is a deficiency, or a combination of deficiencies in internal control, such that there 56 OI�u37MN
is a reasonable possibility that a material misstateinent of the City's financial statements will r 3zo.zsi.�o�o
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not be prevented, or detected and corrected on a timely basis. We did not identify any '
deficiencies in internal control that we consider to be material weaknesses. wa`e`i°°
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The accompanying memorandum also includes financial analysis provided as a basis for
discussion. The matters discussed herein were consider•ed by us during ouz•audit and they do �
not modify the opinion expressed in our Independent Auditor's Report dated May 16, 2016,
on such statements.
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This communication is intended solely for the information and use of the City Council and �
management, federal and state oversight agencies and others within the City and is not
intended to be and should not be used by anyone other than these specified parties. ,
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Minneapolis, Minnesota j
May 16, 2016
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Required Communication ,
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We have audited the financial statements of the City for the year ended December 31, 2015, and have
issued out•report dated May 16, 2016. Professional standards require that we provide you with the ,
following information related to our audit. i
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OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN
THE UNITED STATES OF AMERICA AND GOVERNMENTAUDITING STANDARDS ',
As stated in our engagement letter, our responsibility, as described by professional standards, is to
express an opinion about whether the financial statements prepared by management with your oversight
are fairly pz•esented, in all material respects, in conformity with accounting principles generally accepted ;
in the United States of America. Our audit of the financial statements does not relieve you or i
management of your responsibilities.
As part of our audit, we considered the internal control of the City. Such considerations were solely for '
the purpose of determining our audit procedures and not to provide any assurance concerning internal i
control.
As part of obtaining reasonable assurance about whether the financial statements are free of material ,
misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, '
contracts, and grant agreements. However, the objective of our tests was not to provide an opinion on I
compliance with such provisions.
Our responsibility for the supplementary information accompanying the financial statements, as i
described by professional standards, is to evaluate the presentation of the supplementary information in �
relation to the financial statements as a whole and to report on whether the supplementary information is !
fairly stated, in all material respects, in relation to the financial statements taken as a whole. ',
PLANNED SCOPE AND TIMING OF THE AUDIT �
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the �
financial statements; therefore, our audit involved judgment about the number of transactions to be
examined and the areas to be tested. �
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Our audit included obtaining an understanding of the City and its environment, including internal �
control, sufficient to assess the rislcs of material misstatement of the financial statements and to design I
the nature,timing, and extent of further audit procedures. Material misstatements may result from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or(4)violations of laws or
governmental regulations that are attributable to the City or to acts by management or employees acting �
on behalf of the City. j
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to financial statements.No new accounting
policies were adopted and the application of existing policies was not changed during the year ended '
December 31, 2015. We noted no transactions entered into by the City during the year for which there is
a lack of authoritative guidance or consensus. All significant transactions have been recognized in the
proper period.
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City of Cottage Grove ;
Required Communication
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES
Accounting estimates are an integral part of the financial statements prepared by inanagement and are j
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that futur•e events affecting them may differ ;
significantly from those expected. The most sensitive estimates affecting the financial statements were:
Depreciation—The City is cui�ently depreciating its capital assets over their estimated useful lives, '
as determined by management, using the straight-line method.
Net Other Post-Employment Benefits (OPEB) Obligation—This liability is based on an actuarial
study using estimates of future obligations of the City for post employment benefits.
EMS Collections—The allowance for doubtful accounts for the City's EMS Fund is based on past �
collections history. ,
Net Pension Liability, Deferred Outflows of Resources Relating to Pension Activity and Deferred
Inflows of Resources relating to Pension Activity—These balances are based on an allocation by the ,
pension plans using estimates based on contributions. j
The disclosures in the financial statements are neutral, consistent, and clear. ',
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DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT i
We encountered no significant difficulties in dealing with management in performing and completing �
our audit.
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CORRECTED AND UNCORRECTED MISSTATEMENTS �
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Professional standards require us to accumulate all misstatements identified during the audit, other than '
those that are clearly trivial, and communicate them to the appropriate level of management. We �
identified uncorrected inisstatements of the financial statements. Management has determined their
effects are immaterial, both individually and in the aggregate, to the financial statements talcen as a
whole. �
DISAGREEMENTS WITH MANAGEMENT
For purposes of this letter, a disagreement with management is a financial accounting, reporting or
auditing matter, whether or not resolved to our satisfaction that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the i
course of our audit.
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City of Cottage Grove '
Required Communication
MANAGEMENT REPRESENTATIONS i
We requested certain representations from management which were provided to us in the management ,
representation letter.
MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS
In some cases,management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves ,
application of an accounting principle to the City's financial statements or a determination of the type of '�
auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our ,
knowledge, there were no such consultations with other accountants. '
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OTHER AUDIT FINDINGS OR ISSUES
We generally discuss a variety of matters, including the application of accounting principles and I
auditing standards, with management each year prior to retention as the City's auditors. However, these
discussions occui7ed in the normal course of our professional relationship and our responses were not a ,
condition to our retention. ',
OTHER MATTERS
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With respect to the supplementary infoimation accompanying the financial statements, we made cer•tain �
inquiries of management and evaluated the form, content and methods of preparing the information to �
determine that the information complies with accounting principles generally accepted in United States i
of America,the method of preparing it has not changed from the prior period, and the infoimation is
appropriate and complete in relation to our audit of the financial statements. We compared and
reconciled the supplementary infoimation to the underlying accounting records used to prepare the ''
financial statements or to the financial statements themselves.
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City of Cottage Grove
Financial Analysis
The following pages provide graphic representation of select data pei-taining to the financial position and
operations of the City for the past five years. Our analysis of each graph is presented to provide a basis
for discussion of past performance and how implementing certain changes may enhance future
performance. We suggest you view each graph and document if our analysis is consistent with yours. A
subsequent discussion of this information should be useful for planning plu•poses.
GENERAL FUND
For the year ended December 31, 2015, revenues for the City's General Fund totaled $15,278,248. This
represents an increase of$1,249,585, or 8.9%, froin 2014. General Fund expenditures totaled
$14,248,189 in 2015, which is an increase of$348,485, or 2.5%, fi•om 2014. Revenue and expenditure
activity, coinbined with transfets resulted in an increase in fund balance of$741,296 in 2015.
The ending General Fund balance of$10,253,437 is further brolcen down into spending categories;
$15,383 of the fund balance has already been spent on prepaid items while $1,408,357 is assigned for
various purposes including $818,494 for compensated absences and $520,000 to balance the 2016
budget. This leaves $8,829,697 available for spending on any purpose, which is considered unassigned
fund balance. The City's policy is to have an unassigned fund balance range of no less than 55% of the
subsequent year's budgeted expenditures. The unassigned fund balance of$8,829,697 at
December 31, 2015, represents 55.6% of 2016 budgeted expenditures and transfers out of$15,870,120.
General Fund Revenues, Expenditures, and Fund Balance
$is,000,000
$16,000,000
$14,000,000
$12,000,000 -�'
-:�y
$10,000,000
$8,000,000 �
M1
$6,000,000
$4,000,000 �-
�_
$2,000,000
$ 2011 2012 2013 2014 2015
�Total Revenues $12,838,591 $13,730,401 $13,800,926 $14,028,663 $15,278,248
■Total Expenditures 12,852,899 12,716,525 13,509,422 13,899,704 14,248,189
❑FundBalance 8,813,917 9,150,532 9,231,966 9,512,141 10,253,437
6
City of Cottage Grove
Financial Analysis
GENERAL FUND
Trends for each of the City's major revenue classifications over the past five years are graphically
portrayed in the bar chart below.
As stated earlier, General Fund revenues increased $1,249,585, or 8.9%, from 2014. The most
significant inci•ease was in propei�ty taxes and special assessments, which increased $709,481 due to an
increase in the General Fund's shai•e of the levy of approximately $650,000 plus increased collections of
delinquent ainounts. License and permits revenues also increased significantly, increasing $401,042 due
to a significant increase in building activity including large commercial projects. Charges for services
increased $120,125, or 3.6%, from 2014 primarily due to the City boolcing engineering services as a
i•evenue instead of against expenditures as had been done in the past. This i•esulted in an increase in
expenditures as well. Fines, forfeitures, and other revenue increased $135,191, or 3.1%, from 2014 due -
to a donation fi•om the cable commission that was recorded in the General Fund in 2015 instead of the
Municipal Building Fund. These increases were partially offset by a decrease in intergovernmental
revenues of$116,254 due primarily to the receipt of a federal grant to purchase self-contained breathing
apparatuses in 2014.
General Fund Revenues
$16,000,000
$15,000,000
$14,000,000 a
I
$13,000,000
$12,000,000
$11,000,000
$10,000,000 —
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000 - •
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$ 2011 2012 2013 2014 2015
�PropertyTaxesandSpecialAssessments $10,347,978 $11,182,621 $]0,866,790 $11,38d,382 $12,093,563
■Licenses and Permits 593,272 831,687 860,954 904,400 1,305,442
�Intergovermnental 668,209 633,631 708,091 958,912 842,658
❑ChargesforServices 879,211 83Q159 1,114,749 437,332 557,457
■Fines and Forfeitures and Other 349,921 252,303 250,342 343,637 478,828
�
City of Cottage Grove
Financial Analysis
GENERAL FUND
The chart below shows an allocation of General Fund revenues by source as a percentage of total
General Fund revenues. The City continues to rely on property tax revenue as the majority of its General
Fund income. Sources of revenue have been consistent over each of the past five years.
General Fund Revenues by Source
90%
80%
�-
70% _'�
;
60% -
';�
50%
40%
30%
20%
10%
0% -
�
20 ll 2012 2013 2014 20]5
�Property Tales and Special Assessments 80% 81% 79% 81% 79%
■Licenses and Permits 5% 6% 6% 7% 9%
❑Intergovernmental 5% 5% 5% 7% 6%
❑Charges for Seivices 7% 6% 8% 3% 4%
■Fines and Forfeitures and Other 3% 2% 2% 2% 3%
8
City of Cottage Grove
Financial Analysis
GENERAL FUND
As discussed previously, total General Fund expenditures increased $348,485, or 2.5%, from 2014.
General government and community development expenditures reported the most significant increases
from 2014 to 2015, increasing $141,387 and $139,4ll, respectively. The increase in general government
expenditures was primarily due to the severance payout to the former City Administrator. The increase
in community development expenditures was due to the City no longer recording fees collected against
expenditures, as noted previously.
Public safety,public worlcs, and culttu•e and recreation expenditures were fairly consistent by program
fi•om 2014 to 2015. Public worlcs expenditut•es decreased slightly due to a dect•ease in snow i�emoval
costs with the milder winter. Also notable was an increase in police personnel costs due to wage
increases and the entire portion police personnel expenditures being recorded in the General Fund in
2015 instead of a small portion in the EMS Fund was offset by the purchase of the self-contained
breathing apparatuses in 2014.
General Fund Expenditures
�i�,000,000
�ia,000,000 __ .
$i2,000,000 �
�io,000,000
�s,000,000
$6,000,000
::. .
$�,000,000 '='
$Z,000,000
$ 2011 2012 2013 2014 2015
�GeneralGovenuiient $2,766,391 $2,581,535 $1,967,112 $1,981,162 $2,122,549
■Community Development - - 892,699 919,126 1,058,537
■Public Safety 5,940,804 6,234,164 6,393,020 6,835,793 6,923,009
❑Public Works 2,214,668 2,285,962 2,319,519 2,386,218 2,309,726
❑Culture and Recreation 1,931,036 1,G14,864 1,937,072 1,777,405 1,834,368
9
City of Cottage Grove
Financial Analysis
GENERAL FUND
The chart below shows an allocation of General Fund expenditures by function as a pei•centage of total
General Fund expenditures. Community development expenditures have been broken out from general
government expenditures since 2013. Besides this classification change, expenditures by function
remained consistent across functions.
General Fund Expenditures by Function
so�io
�ts�io
�to�io
3s�io
3o�io
Zs�io
zo°io
is�io
i o°io
S% E _
ir
�% L _
2011 2012 2013 2014 2015
o General Government 22% 20% 15% 14% 15%
a Conununity Development 0% 0% 7% 7% 7%
❑PuUlic Safety 46% 49% 47% 49% 49%
❑Public Works 17% 18% 17% 17% 16%
■Culh�re and Recreation 15% 13% 14% 13% 13%
10
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City of Cottage Grove ''
Financial Analysis ;
i
GENERAL FUND �
As noted in the table below,total General Fund revenues exceeded the final budgeted amount by
$1,055,278, or 7.4%. The most significant variances were in the licenses and permits,
intergovernmental, and property taxes categories. Licenses and permits were over budget due to ;
conseivative budgeting for building permits related revenue. Intergovernmental r•evenues were over
budget as the City received higher fire and police state aid than budgeted as well as a conservative I
program grant that was not budgeted. Property taxes were over budget due to the City budgeting
conservatively for delinquent amounts. ,
Total General Fund expenditures were under budget by$259,091. Public safety expenditures were i
$125,181 under budget due to the City realizing savings with officers being on military leave in 2015 as
well as vacancies throughout 2015 and new officers staring at lower pay. Public works expenditures i
were $242,649 under•budget due primarily to snow removal costs coming in under budget. Partially ,
offsetting these variances were general government expenditures which came in $146,509 over budget ,
due to the severance payout to the former City Administrator. i
Overall,the City budgeted for a$573,073 decrease in fund balance, while actual fund balance increased '
$741,296.
Final Budget Actual Variance ,
Revemies
General properry tases $ 11,953,100 $ 12,078,076 $ 124,976
Special assessments 19,500 15,787 (3,713) '
Licenses and permits 679,750 1,305,442 625,692
Intergovenunentai 669,750 842,658 172,908
Charges for services 512,800 557,457 44,657
Fines and forfeitures 175,000 210,802 35,802 �
Investment earnuigs 60,000 69,257 9,257
Other 153,070 198,769 45,699 ',
Total revemies 14,222,970 15,278,248 1,055,278
Expendihires
Current:
General government 1,976,040 2,122,549 146,509 '
Community development 1,055,950 1,058,537 2,587
Public safety 6,859,290 6,726,685 (132,605)
Public works 2,539,270 2,297,588 (241,682)
Culture and recreation 1,874,725 1,812,233 (62,492) �
Capital outlay
Public safety 188,900 196,324 7,424
Public�vorks 13,105 12,138 (967)
Cultureandrecreation - 22,135 22,135 i
Total expendihtres 14,507,280 14,248,189 (259,091)
Other fmancing sources(uses)
Transfers iu 528,710 528,710 - �
Transfers out (817,473) (817,473) -
Total other financing sources(uses) (288,763) (288,763) -
I
Net increase decrease m fimd balance $ �
( )� (573,073) $ 741,296 $ 1,314,369
11
City of Cottage Grove
Financial Anal,ysis
STREET LIGHT FUND
The City's Sti�eet Light Fund has reported operating losses with depreciation for each of the past five
years. In addition, the operating loss amount grew from 2010 to 2013, with small decreases in 2014 and
2015. From 2011 to 2013, operating expenses were increasing at a fastei•rate than oper•ating revenues. In
2015, both operating revenues and operating expenses decreased. Operating revenues decreased 17.8%
due to significant sales of street lights to developers in 2014. Revenues from individual customeis did
increase in 2015 due to rate increases. Operating expenses decreased 13.5% due to the purchase of the
street lights that were sold to developers in 2014.
The um•estricted net position of the Street Light Fund is shown on the following page. This represents
the portion of net position that is available for spending.
We recommend the City monitor the fees charged by sh•eet light services to ensure user fees are
sufficient to cover current and future obligations.
Street Light Fund
$i,000,000
$soo,000 '���
� `:71 � ���.
$600,000 — " �xe 1 �
� � ����� ;(9',
$400,000 ,. , ���:
$200,000 --
n
$- _
`.��i. �� a",� , . ��( {f 3�oi5�� �i�i�, Yi(;C �
$(200,000) �,r I�,,t�;�'.
� � � �
$(400,000)
2011 2012 2013 201�4 2015
0 Operating Revenues ■Operating Expenses
❑Operating Income(Loss)witl�out Depreciation ❑Operating Loss with Depreciation
12
City of Cottage Grove
Financial Analysis
STREET LIGHT FUND
Street Light Fund Unrestricted Net Position
$3,500,000
!� a��-���-
$3,000,000 - - -- --
�
_ �' ���St:
$2,500,000 - ` - -- -
$2,000,000 - -
-r ,
$1,$00,000 I , �'°t�S;r
�
$1,000,000
$500,000
$- �
2011 2012 2013 2014 2015
13
City of Cottage Grove
Financial Analysis
EMS FUND
The City's EMS Fund reported an operating loss for the first time in the past five years in 2015. Charges
for seivices decreased $180,950, or 11.3%, from 2014 due to decreased call volume. Rates increased,
but the amount of write-offs were also higher. Operating expenses increased $108,172, or 7.8%, over
this same time period. The1•e was an increase of approxiinately $124,000 in personnel expenses due to
the hiring of an additional firefighter/paramedic in 2015 as well as pay increases for existing personnel.
The uru•estricted net position of the EMS Fund is shown on the following page. This represents the
portion of net position that is available for spending.
EMS Fund
$1,800,000
�-'-_ 1t:1 ' �r;,�: _.
$1,600,000 — „ ;_,�; -
b rw: ;r�:�.
$1,400,000 � '' ��`°1�� ;
5; �yf �?NI.:'e;
$1,200,000
j `� '�.If�1 1
$1,000,000 ;i;i��;�;������t�� — —
$800,000 -- — --
$600,000
�� �1' ���4y
�������� _– _ — _-
Q }� � � .
�DZO���Q� ,'.�f�(04.`Yil}`i) _ __ _ _
� . ,�11.'�.�-jj
�'
�(GOO�000)
2011 2012 2013 2014 2015
0 Charges for Services ■Operating Expenses
�Operating Income wiUiout Depreciation ❑Operating Income(Loss)with Depreciation
14
City of Cottage Grove
Financial Analysis
EMS FUND
EMS Fund Unrestl•icted Net Position
$1,400,000
$1,200,000 _ _
$1,000,000 - - _ - - -
$800,000 --- --- - -
$600,000 -
$400,000 -
::::�:-
$200,000
$-
2011 2012 2013 2014 2015
15
City of Cottage Grove
Financial Analysis
WATER OPERATING FUND
The City's Water Operating Fund operating revenue was consistent from 2014 to 2015, inci•easing
$4,499, or 0.2%,while operating expenses inci•eased $233,627, or 10.7%. The increase in operating
expenses is due to a number of factors. First,pei•sonnel spent more time on water operating activities in
2015 as less time was needed to be spent on snow removal. Engineering services also increased with
seivices provided for the water meter replacement project and well maintenance project. Depreciation
expense also increased almost $53,000 due to the addition of new water mains in 2015.
The um•estricted net position of the Water Operating Fund is shown on the following page. This
represents the portion of net position that is available for spending.
Water Operating Fund
$2,6so,000
$Z,�oo,000 —
, ,
$Z,iso,000 ���� ; , ; -
, .. „ . ,
,�:'<il'���
$1,900,000 � `I;i' 9N�7� -
$1,650,000 ��:!ii'; _ �,�
$1,400,000 --
$1,150,000 —
$900,000
$650,000 ��,�������(g�;��
,4;t`(e e�"eV;,
v� a
�D�0��00� . �.���Ir%/� (���1 #J �'XsS �D-.hi'�i�) �i�0}
$150,000
$(100,000)
$(350,000)
$(600,000)
2011 2012 2013 2014 2015
D Operating Revenue o Operating Expenses
❑Operating Income without Depreciation �Operating Income(Loss)widi Depreciation
1 f)
City of Cottage Grove
Financial Analysis
WATER OPERATING FUND
Water Operating Fund Unrestricted Net Position
$s,000,000
$7,434,369
$7,081,737 $6,943,559
$7,000,000
$5,928,063 $5,872,932
$6,000,000
$5,000,000
.-:. .-:
'�
$4,000,000 � • -
$3,000,000
$2,000,000
$1,000,000
$-
2011 2012 2013 2014 2015
■Liquid Resom•ces Available for Spending �Amount Representing Intei•fund Loan
17
City of Cottage Grove
Financial Analysis
SEWER OPERATING FUND
The City's Sewer Operating Fund charges for services fi•om 2014 to 2415 increased $120,433, or 5.6%,
while operating expenses increased $26,689, or 1.1%. Operating revenues increased due to rate
increased in 2015. The increase in operating expenses is due to several small increases. Personnel costs
increased slightly as well as sewage disposal fees.
The um•estricted net position of the Sewer Operating Fund is shown on the following page. This
represents the portion of net position that is available for spending.
Sewer Operating Fund
$Z,soo,000
,�. ";',: ��tj.," � �� I , :iet;:�° - �� 7 ;fL�- l .�. , °';xi �
I.i i'
$2,000,000 � , �� �� � � �13102: � �. � �
$1,500,000 — — — --
$1,000,000 —
z,
$500,000 — —
� ,,-;,o�
, ��i,�ora,,>,�4, .
�
lE��;'. �L��1�"�'.;
$—
� �
$(500,000)
2011 2012 2013 2014 2015
o Charges for Services �Operating Espenses O Operating Income without Depreciation ❑Operating Loss with Depreciation
Ig
City of Cottage Grove
Financial Analysis
SEWER OPERATING FUND
Sewer Operating Fund Unz•estricted Net Position
$�,000,000
$5,863,838 $6,084,678 $6,109,174 $6,098,749 $6,121,571
$6,000,000
$5,000,000 -- -
$4,000,000 - - -- --
$3,000,000 - — -- -
$2,000,000 -
i
$1,000,000
$-
2011 2012 2013 2014 2015
■Liquid Resow•ces Available for Spending �Amount Representing Interfund Loan
19
i
;
City of Cottage Grove
Financial Analysis
GOVERNMENTAL ACTIVITIES i
The tables below and on the following page illustrate the City's various sources of revenue and ',
expenditures per capita over a three year period in comparison to 2014 data for Minnesota cities ranked �
by various sizes. ;
Govenmiental Funds Revenue Per Capita I
with State-Wide Averages by Population Class ;
State-Wide* City of Cottage Grove
Year December�1,2014 2013 2014 2015**
Population 2,500-IQ000 10,000-20,000 20,000-100,000 35,403 35,619 35,814 ,
i
Property taxes $ 427 $ 396 $ 427 $ 344 $ 359 $ 379 ;
Tas increments 26 37 46 27 20 20 �
Franchise fees and other taxes 32 42 37 16 16 16
Special assessments 59 51 64 45 37 42
Licenses and permits 28 27 41 24 25 36 i
Intergovenmiental revemies 298 264 166 131 110 67
Charges for services 105 82 90 204 163 137
OHier 66 72 65 30 57 57 '
Total revemie $ 1,041 $ 971 $ 936 $ 821 $ 787 $ 754
i
* State-wide data obtained from the Office of the State Auditor's 2014 Minnesota City Finunces Report. ;
** Population is estimate obtained from City's planning department.
The City's total revenues have decreased since 2013 due primarily to a decrease in intergovernmental
revenues. This decrease is due decreases in the amount of MSA aid the City has been drawing foi•street ;
proj ects. �
�
�
�
�
,
�
20 �
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City of Cottage Grove '
Financial Analysis
GOVERNMENTAL ACTIVITIES i
�
Governmental Funds Espenditures Per Capita
with State-Wide Averages by Population Class
State-Wide* City of Cottage Grove ,
Year December 31,2014 2013 2014 2015**
Population 2,500-IQ000 1Q000-20,000 20,000-100,000 35,403 35,619 35,814
Current
General government $ 131 $ 104 $ 87 $ 59 $ 57 $ 60
Econo�nic and community 'I
development 42 65 78 44 52 81 1
Public safety 248 237 254 178 182 189
Public works 121 1 l9 ll4 12l 121 121 ;
Culture and recreation 86 101 92 ll2 I 17 116 '
Otlier 26 24 20 - - - '
Total cunent $ 654 $ 650 $ 645 $ 514 $ 529 $ 567
i
Capital outlay ,
and constniction $ 357 $ 278 $ 276 $ 347 $ 141 $ 196
Debt service �
Principal $ 180 $ 163 $ I15 $ 42 $ 85 $ 54
v�terest and fiscal 54 40 34 29 31 32 ,
Total debt service $ 234 $ 203 $ 149 $ 71 $ 116 $ 86 I
* State-wide data obtained from the Office of the State Auditor's 2014 Minnesota City Finances Repor•t. �
** Population is estimate obtained from the City's planning department.
The City's current expenditures per capita increased from 2014 to 2015,primarily in the economic and
community development program due to the purchase of land for future economic development in 2015.
Capital expenditure activity increased in 2015 due to a larger 2015 pavement management project,
which resulted in increased per capita spending on capital outlay and construction. Debt service �
�
expenditures were significantly higher in 2014 due to the issuance of a refunding bond in the prior year.
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21 �
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City of Cottage Grove
�inancial Analysis '
TAX LEVY, CAPACITY,AND RATES i
The chart below depicts average tax rates for the City, along with the average tax rates for the seven ,
county metro area and all Minnesota cities for 2014 and 2015. Overall, the City has generally j
maintained a lower average tax rate when compared to state and metro averages.
All Cities Seven County City of �
State-Wide Metro Area Cottage Grove
2014 2015 2014 2015 2014 2015
Average tax rate ',
City 48.75% 46.90% 46.01% 43.37% 43.61% 41.41%
County 47.57% 44.71% 46.57% 42.89% 32.81% 30.19% �
School 28.94% 27.09% 30.93% 28.32% 38.88% 35.43% '
�
Special taxing 7.30% 6.90% 9.45% 8.76% 5.40% 4.87%
Total 132.56% 125.60% 132.96% 123.34% 120.70% 111.90% i
Amounts obtained from the League of Minnesota Cities PNoperry Tax Data Tuble reports. ,
,I
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I
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City of Cottage Grove
Emerging Issues ,
Executive Summary i
The following is an executive summary of financial and business related updates to assist you in staying
cui�rent on emerging issues in accounting and finance. This summary will give you a preview of the new i
standards that have been recently issued and what is on the horizon for the near future. The most recent
and significant updates include:
• Accounting Standard Update–GASB Statement No. 75 -Accounting and Financial Reporting ;
for Postemployment Benefits Other Than Pensions–GASB has issued GASB statement 75 I
relating to accounting and financial reporting for postemployment benefits other than pensions. The �
new statement requires governments in all types of OPEB plans to present more extensive note
disclosures and required supplementar•y information (RSI) about their OPEB liabilities.
ACCOUNTING STANDARD UPDATE–GASB STATEMENT NO. 75 -ACCOUNTINGAND i
FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THANPENSIONS '
The primary objective of this Statement is to improve accounting and financial reporting by state and I
local governments for postemployment benefits other than pensions (other postemployment benefits or
OPEB). It also improves information provided by state and local governmental employers about ,
financial support for OPEB that is provided by other entities. This Statement results from a '�
comprehensive review of the effectiveness of existing standards of accounting and financial reporting
for all postemployment benefits (pensions and OPEB) with regard to providing decision-useful
information, supporting assessments of accountability and interperiod equity, and creating additional '
transparency. �
!
This Statement replaces the requirements of Statements No. 45,Accounting and Fznancial Repo�ting by I
Employe�•s for•Postemploy�nent Benefrts Other Than Pensions, as amended, and No. 57, OPEB
Measzi��ements by Agent Employer�s af�d Agent Mzcltiple-Employer Plans, foT� OPEB. Statement No. i
74,Financial Reporting for Postemployment Benefit Plans Other Thccn Pension Plans, establishes new �
accounting and financial reporting requirements for OPEB plans. '
GASB Statement 75 requires governments to report a liability on the face of the financial statements for
the OPEB that they provide:
� Governments that are responsible only foi�OPEB liabilities related to their own employees and ;
that provide OPEB through a defined benefit OPEB plan administered through a trust that meets '
specified criteria wi11 report a net OPEB liability—the difference between the total OPEB
liability and assets accumulated in the trust and restricted to making benefit payments.
• Governments that participate in a cost-sharing OPEB plan that is administered through a trust
that meets the specified criteria will report a liability equal to their p�°opo��tionate share of the
collective OPEB liabiliry for all entities participating in the cost-sharing plan. �
(
23
(
City of Cottage Grove
Emerging Issues
ACCOUNTING STANDARD UPDATE—GASB STATEMENT NO. 75 -ACCOUNTINGAND
FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THANPENSIONS
(CONTINUED) '
• Governments that do not provide OPEB through a trust that meets specified criteria will report
the total OPEB liabiliry related to their employees.
GASB Statement 75 carries forward from Statement 45 the option to use a specified alternative
measurement method in place of an actuarial valuation for puiposes of determining the total OPEB ,
liability for benefits provided through OPEB plans in which there are fewer than 100 plan members
(active and inactive). This option was retained in order to reduce costs for smaller governments.
GASB Statement 75 requires governments in all types of OPEB plans to present more extensive note -
disclosures and required supplementary information (RSI) about their OPEB liabilities. Among the new ,
note disclosures is a description of the effect on the reported OPEB liability of using a discount rate and '
a healthcare cost trend rate that are one pei�centage point higher and one percentage point lower than I�
assumed by the government. The new RSI includes a schedule showing the causes of increases and
decreases in the OPEB liability and a schedule comparing a government's actual OPEB contributions to
its contribution requirements.
Information provided above was obtained from www.gasb.org. I
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24
City of Cottage Grove
Washington County, Minnesota
Reports on Compliance with
Government Auditing Standards,
and Minnesota Legal Compliance
December 31, 2015
_� : bergan���ov
dISORS
City of Cottage Grove
Table of Contents
Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on
an Audit of Financial Statements Performed in
Accordance with GovernmentAuditing Standards 1
Report on Minnesota Legal Compliance 3
C: berganKov
BerganKDV,Ltd.
Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with ceaa�Fa�is
60Z Main Street
Government Auditing Standards s����e�oo
P.O.Box 489
Cedar Falls,IA
50613-0026
T 319.268.1715
Independent Auditor's Report F 319.268.1720
Cedar Rapids
27201st Avenue NE
Suite 300
P.O.8ox 10200
Cedar Rapids,IA
Honorable Mayor and Members 5Z4oz-oZoo
T 319.294.8000
of the City Council F si9.z9a.9oo3
City of Cottage Grove co�a,�;iie
Cottage Grove, Minnesota 2530 Corridor Way
Suite 301
P.O.Box 5267
Coralville,IA
SZZ41-0267
We have audited, in accordance with the auditing standards generally accepted in United F 3i9:z4s:osaz
States of America and the standards applicable to financial audits contained in Government
Des Moines
Auditing Standards issued by the Comptroller General of the United States, the financial 9zo�n,o«npa�k o���e
Johnsron,IA
statements of the governmental activities, the business-type activities, the discretely so�3�-�933
resented com onent unit each ma or fund and the a re ate remainin fund information r s�s�z�s�oo
p p � .1 � gg g g F sis.�z�seoo
of the City of Cottage Grove, Minnesota, as of and for the year ended December 31, 2015,
Minneapolis
and the related notes to financial statements, which collectively comprise the City's basic 3aoo ame���a�Bi�a w
Suite 1000
financial statements, and have issued our report thereon dated May 16, 2016. e,00m,,,gton,MN
55431 4420
T 95Z.563.6800
Internal Control Over Financial Reporting F 95Z.563.6801
In planning and performing our audit of the financial statements, we considered the City's s�.ao�a
internal control over financial reporting (internal control)to determine the audit procedures p o Box�304��s
that are appropriate in the circumstances for the purpose of expressing our opinions on the sr c�oud,Mn,
56302 3713
financial statements, but not for the purpose of expressing an opinion on the effectiveness of T 3zo zs�.�o�o
the City's internal control. Accordingly, we do not express an opinion on the effectiveness of F 3zo zs�.va4
the City's internal control. wa`e�'°°
100 East Park Avenue
Suite 300
P.O.Box 2100
A deficiency in internal control exists when the design or operation of a control does not wate��oo.�a
allow mana ement or em lo ees in the normal course of erformin their assi ned so�o4 z�oo
g p y � p g g T 319234.6885
functions, to prevent, or detect and correct, misstatements on a timely basis. A material F 3�z34.6za�
weakness is a deficiency, or a combination of deficiencies, in internal control such that there
is a reasonable possibility that a material misstatement of the City's financial statements will ��`���k��`°`�
not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with
governance.
1
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Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies. Given these limitations, during
our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are
free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of
our audit and, accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control
and compliance and the result of that testing, and not to provide an opinion on the
effectiveness of the City's internal control or on compliance. This report is an integral part of
an audit performed in accordance with Government Auditing Standards in considering the
City's internal control and compliance. Accordingly, this communication is not suitable for
any other purpose.
_�•�,�..,, ��l� � .
Minneapolis, Minnesota
May 16, 2016
2
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BerganKDV,Ltd.
Report on Minnesota Legal Compliance
Cedar Falls
6DZ Main Street
Independent Auditor's Report s���e�oa
P.D.Box 489
Cedar Falls,IA
50613-0026
T 319.268.1715
F 319168.1720
Honorable Mayor and Members CedarRapids
Of t110 Clty COU11C11 Su te 300�venue NE
Cit of Cotta e Grove Po BoX�ozoo
y g Cedar Rapids,IA
Cottage Grove, Minnesota szaoz-ozoo
T 319.294.8000
F 319194.9003
Coralville
We have audited, in accordance with auditing standards generally accepted in the United s��°30�'�°�w��
States of America, and the standards applicable to financial audits contained in Government Po BoXszs�
Coralville,IA
Auditing Standards, issued by the Comptroller General of the United States, the financial Szz4�-oz6�
statements of the overnmental activities the business-t e activities the discretel r 3�9zas.o36�
g � YP � Y F si9.zas.osaz
presented component unit, each maj or fund, and the aggregate remaining fund information
Des Moines
of the City of Cottage Grove, Minnesota, as of and for the year ended December 31, 2015, 9zo�n,o��npa�k o���e
Johnston,lA
the related notes to financial statements, and have issued our report thereon dated so�3�-�933
Ma 16 2016. T sis.�z�s�oo
y � F S15J�7.5800
Minneapolis
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor 3aoo ame���a�ei�a w
pursuant to Minnesota Statutes § 6.65, contains seven categories of compliance to be tested: gi o i�g o�,Mn,
contracting and bidding deposits and investments conflicts of interest public indebtedness ss43�-44zo
' ' ' T 95Z.563.6800
claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit F 9szs63.seo�
considered all of the listed categories. st.cio�a
220 Park Avenue 5
P.O.Box 1304
In connection with our audit, nothing came to our attention that caused us to believe that the s�.ao�d,Mn,
56302 3713
City of Cottage Grove failed to comply with the provisions of the Minnesota Legal r 3zo zs��o�o
Compliance Audit Guide for Cities. However, our audit was not directed primarily toward F 3zo.�s�.va4
obtaining knowledge of such noncompliance. Accordingly, had we performed additional OO[EastParkAvenue
procedures, other matters may have come to our attention regarding the City's s���e soo
P.O.Box 2100
noncompliance with the above referenced provisions. wa�e��oo,�A
50704 2100
T 314234.6885
This report is intended solely for the information and use of those charged with governance F 3�9 z346ze�
and management of the City and the State Auditor and is not intended to be and should not
be used by anyone other than these specified parties. be�9��kd�`°m
_��..,, ��l� � .
Minneapolis, Minnesota
May 16, 2016
3