HomeMy WebLinkAbout2016 CAFRComprehensive Annual
Financial Report
www.cottage‐grove.org
City of Cottage Grove
Minnesota
Year Ended
December 31, 2016
Annual City Photo Contest Winning Entries
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 9
Principal City Officials 11
Organization Chart 12
Independent Auditor's Report 15
Management's Discussion and Analysis 19
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position Statement 1 33
Statement of Activities Statement 2 35
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 36
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds Statement 4 38
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities Statement 5 40
Statement of Net Position - Proprietary Funds Statement 6 41
Statement of Revenues, Expenses, and Changes in Fund Net Position -
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 81
Schedule of City's Proportionate share of Net Pension Liability - GERF and PEPFF 87
Schedule of City Contributions - GERF and PEPFF 88
Schedule of Employer and Non-Employer Contributions - Fire Relief 89
Schedule of Changes in Net Pension Liability - Fire Relief 90
Funding Progress Schedule - Other Post Employment Health Care Benefits 91
I. INTRODUCTORY SECTION
II.FINANCIAL SECTION
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 10 97
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 11 98
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 12 100
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 13 102
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 14 105
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds Statement 15 106
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 16 108
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 17 110
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Recycling Statement 18 112
Storm Water Statement 19 113
Forfeiture/Seizure Statement 20 114
Ice Arena Statement 21 115
Golf Course Statement 22 116
Charitable Gambling Statement 23 117
Internal Service Funds:
Combining Statement of Net Position Statement 24 120
Combining Statement of Revenue, Expenses and Changes in Fund Net Position Statement 25 121
Combining Statement of Cash Flows Statement 26 122
Component Unit:
Economic Development Authority:
Combining Balance Sheet - All Governmental Fund Types Statement 27 124
Combining Statement of Revenues, Expenditures and Changes
in Fund Balance - All Governmental Fund Types Statement 28 125
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Supplementary Financial Information:
Combined Schedule of Bonded Indebtedness Exhibit 1 128
Debt Service Payments to Maturity Exhibit 2 130
Deferred Tax Levies Exhibit 3 131
Subcombining Balance Sheet - Pavement Management Debt Service Schedule Exhibit 4 132
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Pavement Management Debt Service Schedule Exhibit 5 133
Subcombining Balance Sheet - Tax Increment Construction Revolving Schedule Exhibit 6 134
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Tax Increment Construction Revolving Schedule Exhibit 7 135
Subcombining Balance Sheet - TIF Debt Service Revolving Schedule Exhibit 8 136
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance-
TIF Debt Service Revolving Schedule Exhibit 9 137
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Reference Page Number
Net Position by Component Table 1 141
Changes in Net Position Table 2 142
Fund Balances of Governmental Funds Table 3 144
Changes in Fund Balances of Governmental Funds Table 4 145
Assessed and Estimated Actual Value of Taxable Property Table 5 146
Property Tax Rates - Direct and Overlapping Governments Table 6 147
Principal Property Taxpayers Table 7 148
Property Tax Levies and Collections Table 8 149
Ratios of Outstanding Debt by Type Table 9 150
Ratios of General Bonded Debt Outstanding Table 10 151
Direct and Overlapping Governmental Activities Debt Table 11 152
Legal Debt Margin Information Table 12 153
Demographic and Economic Statistics Table 13 154
Principal Employers Table 14 155
Full-time Equivalent City Government Employees by Function Table 15 156
Operating Indicators by Function/Program Table 16 157
Capital Asset Statistics by Function/Program Table 17 158
III. STATISTICAL SECTION
I. INTRODUCTORY SECTION
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June 2, 2017
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, 2016.
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.
BerganKDV, 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, 2016.
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 2016 population at 35,939.
Cottage Grove operates as a Statutory Plan A City under Minnesota law. Policy making and
legislative authority are vested in a City Council, consisting of the Mayor and four other members,
elected at large and on a non-partisan basis. Terms of office are staggered four year terms, with elections held in each even-numbered year. The City Council is responsible for passing ordinances, adopting the budget and appointing members of the various citizens’ advisory boards. In addition,
the Mayor and Council appoint a full-time City Administrator, who is responsible for overall
supervision of City operations.
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The City provides a full range of municipal services. These services include police and fire
protection, ambulance services, parks and park facilities, a golf course, recreational programming,
an ice arena, street construction and maintenance, water, sewer and storm water utilities, planning and zoning, and general administrative functions.
The Economic Development Authority (EDA) of the City of Cottage Grove is a separate legal
entity organized pursuant to Minnesota Statute 469. There are seven members of the EDA who
are appointed by the City Council; two appointees are Council members and the five others are
appointed from the community. The EDA is included in this financial report as a discretely
presented component unit, due to the EDA’s relationship of financial benefit or burden to the City.
The annual budget serves as the foundation for the City of Cottage Grove’s financial planning and
control. The budget incorporates the City’s financial policies, financial operations, debt
management, reserves and investments. The process by which the biennial budget document is
prepared begins with the submission of department appropriation requests in June. The requests, along with projected revenues and stated City Council strategic goals, provide the starting point
for budget development. Collaborative meetings are held with City Staff and workshops are held
with the City Council to refine the budget document in advance of the submission of the
preliminary tax levy in September each year. The preliminary levy may be reduced after it is
adopted, but cannot be increased. An information session is held for taxpayers at the first City Council meeting in December in advance of adoption of the final levy and budget. The Council
is required to adopt a final budget by no later than December 28th of each year.
Local economy
Cottage Grove is part of the Minneapolis/St. Paul seven county metropolitan area; an economically
diverse environment with an equally diverse labor force. 2016 continued with steady employment
growth in the region and the unemployment rate at 2.8%, compared to the national rate of 4.7%.
Wage growth and inflation continued at a moderate pace.
The City’s tax base is 80% residential and 20% commercial/industrial property. Total taxable
market value in 2016 was $2.8 billion; a recovery to almost 95% of pre-recessionary levels.
Moderate growth in value is expected for 2017, 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 major employers in the City include 3M Company, Target,
Menard’s, Walmart, and Aggregate Industries. The City's commercial areas include four
community shopping centers and several restaurants.
In 2016, Gardenworld, a garden product wholesaler, relocated their facilities from St. Paul to the
Cottage Grove Business Park with construction of a 30,000 sq. ft. warehouse and 44,000 sq. ft.
greenhouse on nine acres.
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Construction of a 92,800 sq. ft. Hy-Vee grocery store in the City’s Gateway North development
began in the second quarter of 2016 and is almost complete at this writing, with an expected opening in August 2017. This redevelopment also includes construction of a 4,500 sq. ft. Motor
Fuel/Convenience Store and the renovation of the former Home Depot property into several retail
tenant spaces which will open in the first quarter of 2018. The vibrancy of this redevelopment has
left retail vacancy in the Gateway district at less than 3%.
Long-term financial planning
The City places a high priority on planning for future growth. Staff uses different long range
revenue and expenditure models during the annual preparation of a biennial budget plan for the
General Fund, Special Revenue and Enterprise Funds. The biennial budget process allows for the assurance that any change to revenues or expenditures is sustainable in the successive year.
Furthermore, Council and staff compile a five year Capital Improvement Plan (CIP) which
addresses the future building and infrastructure projects necessary to address the new residential
and commercial property outlined in the City’s 2030 Comprehensive Plan.
As part of the CIP, each capital project is analyzed to determine if sufficient funding exists for the
project and the longer term impact of each of the projects on the individual capital fund balances.
For example, during the 2017 to 2021 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.
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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. In 2016, the City issued 98 single family residential housing permits
and one permit for a 184 unit senior rental housing project.
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. Residential developers continue to pursue acreage for development in the master plan
area and the City expects another 160 acres to begin development in 2017.
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, 2015. This was
the twenty-sixth 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 Cathy Mohr and Lauren
Reichstadt-Nacar. 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.
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Respectfully Submitted,
CITY OF COTTAGE GROVE, MINNESOTA
Robin Roland
Finance Director
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CITY OF COTTAGE GROVE, MINNESOTA PRINCIPAL CITY OFFICIALS
December 31, 2016
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/ Community Development Director Jennifer Levitt
Public Safety Director Craig Woolery
Public Works Director Les Burshten
Parks and Recreation Director Zac Dockter
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City CouncilCity Council
Engineering Engineering
Community Programs/
Communications
Community Programs/
Communications
Human
Resources
Human
Resources
Historic PreservationHistoric Preservation
Building/Code Inspections Building/Code Inspections
Planning Planning Enterprise
Billing
Enterprise
Billing
Accounting Accounting
Payroll Payroll
MIS MIS
Patrol Patrol
Investigations Investigations
Public Safety Programs Public Safety Programs
Animal & Code Enforcement Animal & Code Enforcement
Fire & Emergency
Management
Fire & Emergency
Management
Streets Streets
Fleet/Building
Maintenance
Fleet/Building
Maintenance
Utilities Utilities
Parks Parks
Recreation Recreation
AdvisoryCommissionsAdvisoryCommissions
Public SafetyPublic Safety
City AdministratorCity Administrator City
Attorney
City
Attorney
Community
Development
Community
Development Public WorksPublic Works
Cottage Grove
Citizens
Cottage Grove
Citizens
FinanceFinanceAdministrationAdministration
River Oaks Golf Course River Oaks Golf Course
City Clerk/
Elections
City Clerk/
Elections
EMS/Medical Services EMS/Medical Services
Fire InspectionsFire Inspections
City of Cottage Grove
Organization Chart
City of Cottage Grove
Organization Chart
Updated 11/2015
Parks and
Recreation
Parks and
Recreation
Ice ArenaIce Arena
Forestry/HorticultureForestry/Horticulture
Economic Development
Economic Development
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II. FINANCIAL SECTION
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Cottage Grove, we offer readers of the City of Cottage Grove’s
financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2016. 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 $227,347,727 (net position). Of this amount, $32,840,252(unrestricted net position) may be used to meet the government’s ongoing obligations tocitizens and creditors in accordance with the City's fund designations and fiscal policies.
•The City’s total net position increased by $428,404. The increase is due to reimbursements
and bonding for construction projects in the City.
•As of the close of the current fiscal year, the City of Cottage Grove’s governmental fundsreported combined ending fund balances of $27,186,955 a decrease of $5,546,334 compared
to the previous year. Approximately 88% or $23,940,568 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
$9,036,425 (55%) of the total subsequent year General fund expenditures.
•At the end of the current fiscal year, the City of Cottage Grove had total long-term debtoutstanding of $28,470,265, an increase of $1,748,033 or 6.5% compared to the previous
year. The City issued $4,275,000 in General Obligation Improvement bonds and
$4,660,000 in General Obligation Refunding Bonds in 2016.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Cottage Grove’s
basic financial statements. The City’s basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are designed
to provide readers with a broad overview of the City of Cottage Grove’s finances, in a manner
similar to a private-sector business.
The statement of net position presents information on all of the City of Cottage Grove’s assets and
deferred outflows of resources and liabilities and deferred inflows of resources, with the difference
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Management’s Discussion and Analysis (continued)
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,
expenditures, and change in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
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Management’s Discussion and Analysis (continued)
Information is presented separately in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures, and changes in fund balance for the City’s six individual
major governmental funds. They are as follows:
• General Fund
• Municipal Building Capital Project Fund – Capital project fund
• MSA Construction Capital Project Fund —Capital project fund
• Closed Debt Fund —Debt service fund
• Pavement Management Debt Service Fund —Debt service fund
• Pavement Management Capital Project Fund - Capital project fund
Data from the other governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these non-major governmental funds is provided in the form of
combining statements elsewhere in the report.
The City of Cottage Grove adopts an annual appropriated budget for its general and special revenue
funds. A budgetary comparison statement has been provided for those funds to demonstrate
compliance with this budget.
The basic governmental fund financial statements start on page 36 of this report.
Proprietary funds: The City of Cottage Grove maintains four enterprise funds and three internal
service funds as a part of its proprietary fund type. Enterprise funds are used to report the same
functions presented as business-type activities in the governmental-wide financial statements. The
City of Cottage Grove uses enterprise funds to account for street light operations, ambulance service, water operations, and sewer operations. Internal service funds are an accounting device
used to accumulate and allocate costs internally among the City of Cottage Grove’s various
functions. The City of Cottage Grove uses internal service funds to account for self-insurance, fleet
maintenance, and information technology services activity. Because these services predominantly
benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for street light operations, ambulance service, water operations, and sewer operations, all of which are considered to be major funds of the City of Cottage Grove. Conversely, the internal
service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data for the internal service funds is provided in the form of combining
statements elsewhere in this report.
The basic proprietary fund financial statements start on page 41 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 44 of this report.
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Management’s Discussion and Analysis (continued)
Other information: The combining statements referred to earlier in connection with non-major
governmental funds and internal service funds are presented immediately following the required
supplementary information. Combining and individual fund statements and schedules start on page
95 of this report.
Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the City of Cottage Grove, assets exceeded liabilities by $227,226,934 at
the close of the most recent fiscal year.
The largest portion of the City of Cottage Grove’s net position ($186,898,337 or 82%) reflects its
investment in capital assets (e.g. land, buildings, machinery, and equipment) less any related debt
used to acquire those assets that is still outstanding. The City of Cottage Grove uses these capital
assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Cottage Grove’s investment in its capital assets is reported net of
related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of Cottage Grove Net Position
Governmental Activities Business-type Activities Total Primary Government
2016 2015 2016 2015 2016 2015
Current and other assets $45,519,033 $44,131,434
$15,474,515 $15,359,060
$ 60,993,548 $59,490,504
Capital assets 160,269,991 150,678,637 54,063,470 54,812,566 214,333,461 205,491,203
Total assets 205.789.024 194,810,071 69,537,985 70,171,636 275,327,009 264,981,707
Deferred outflows of resources 14,356,983 1,904,324
1,771,666 215,065
16,128,649 2,119,389
Long-term liabilities outstanding 25,825,187 23,888,688
22,241 19,724
25,847,428 23,908,412
Pension liability 22,034,267 8,463,113 2,778,185 1,118,083 24,812,452 9,581,196
Other liabilities 10,023,702 4,609,031 488,189 913,595 10,511,891 5,522,626
Total liabilities 57,883,156 36,960,832 3,288,615 2,051,402 61,171,771 39,012,234
Deferred inflows of resources 2,727,403 1,138,713 329,550 151,619 3,056,953 1,290,332
Net position:
Net investment in capital assets 132,834,867 125,562,970
54,063,470 54,202,710
186,898,337 179,765,680
Restricted 7,609,138 8,766,706 - 7,609,138 8,766,706
Unrestricted 19,091,443 24,285,174 13,628,016 13,980,970 32,719,459 38,266,144
Total net position $159,535,448 $158,614,850
$67,691,486 $68,183,680
$227,226,934 $226,798,530
An additional portion of the City’s net position ($7,609,138 or 3%) represents resources that are
subject to external restrictions on how they may be used. The balance of unrestricted net position,
$32,719,459 may be used to meet the City’s ongoing obligations to citizens and creditors.
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Management’s Discussion and Analysis (continued)
At the end of the current fiscal year, the City of Cottage Grove is able to report positive balances in
all three categories of net 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.
Governmental Activities: Governmental activities increased the City’s net position by $920,598
in 2016.
• Program revenue increased overall by $5,218,682. This is primarily related to increased capital grants and contributions from the state and county for road construction projects.
• Investment income decreased by $112,721 due to the unrealized loss in the value of
investments which are annually adjusted in accordance with accounting standards.
Property Taxes
41%
Charges for services
19%
Operating Grants &
Contributions
5%
Capital Grants &
Contributions
30%
Other taxes & tax
increment
4%
Unrestricted
investment
earnings
1%
Other
0%
Revenues by Source -Government Activities
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Management’s Discussion and Analysis (continued)
City of Cottage Grove's Changes in Net Position
Governmental Activities Business-Type Activities Total Primary Government
2016 2015 2016 2015 2016 2015
Revenues:
Program revenues: Charges for services $6,463,450 $6,106,184 $6,405,041 $6,130,724 $12,868,491 $12,236,908
Operating grants and contributions 1,676,805 1,237,805 - - 1,676,805 1,237,805
Capital grants and contributions 10,284,047 5,861,631 196,671 361,762 10,480,718 6,223,393
General revenues: Property taxes 13,956,582 13,394,585 - - 13,956,582 13,394,585
Other taxes 1,332,740 1,274,317 - - 1,332,740 1,274,317
Grants and contributions not restricted to specific programs 126,058 99,137 7,736 - 133,794 99,137
Unrestricted investment earnings 285,494 357,170 96,851 137,896 382,345 495,066
Gain on sale of capital assets - - 1,988 - 1,988 -
Total revenues 34,125,176 28,330,829 6,708,287 6,630,382 40,833,463 34,961,211
Expenses:
General government 3,450,479 2,346,805 - - 3,450,479 2,346,805
Community development 1,173,071 1,086,197 - - 1,173,071 1,086,197
Economic development 2,257,548 1,460,114 - - 2,257,548 1,460,114
Public safety 10,153,726 7,662,393 - - 10,153,726 7,662,393
Public works: Regular operations 4,583,513 4,713,100 - - 4,583,513 4,713,100
Construction 5,039,822 2,712,945 - - 5,039,822 2,712,945
Culture and recreation 5,340,558 5,153,844 - - 5,340,558 5,153,844
Interest on long-term debt 875,642 1,029,228 - - 875,642 1,029,228
Street lights - - 746,005 746,794 746,005 746,794
Cottage Grove EMS - - 1,688,041 1,507,766 1,688,041 1,507,766
Water operating - - 2,370,466 2,438,166 2,370,466 2,438,166
Sewer operating - - 2,727,188 2,448,283 2,727,188 2,448,283
Total expenses 32,874,359 26,164,626 7,531,700 7,141,009 40,406,059 33,305,635
Increase (decrease) in net position before transfers and special items 1,250,817 2,166,203 (822,413) (510,627) 428,404 1,655,576
Transfers (330,219) 613,878 330,219 (613,378) - -
Increase (decrease) in net position 920,598 2,780,081 (492,194) (1,124,505) 428,404 1,655,576
Net position - January 1 158,614,850 162,508,871 68,183,680 70,328,422 226,798,530 232,837,293 Cumulative effect of change in accounting principle - (6,674,102) - (1,020,237) - (7,694,339)
Net position – January 1 as restated 158,614,850 155,834,769 68,183,680 69,308,185 226,798,530 225,142,954
Net position - December 31 $159,535,448 $158,614,850 $67,691,486 $68,183,680 $227,226,934 $226,798,530
The following chart illustrates the City’s expenses and corresponding program revenues for its governmental activities.
24
Management’s Discussion and Analysis (continued)
Business-Type Activities. Business-type activities decreased net position by $492,194. Below are graphs showing the business-type activities revenue and expense comparisons.
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Revenue
Expense
Charges for
services
95%
Capital grants &
contributions
3%Unrestricted
investment
earnings
2%
Revenues -Business type Activities
25
Management’s Discussion and Analysis (continued)
In business type activities, changes in net position were negative for all funds except Cottage Grove EMS.
Financial Analysis of the Government's Funds
Governmental Funds. The focus of the City of Cottage Grove’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information
is useful in assessing the City of Cottage Grove’s financing requirements. In particular, unassigned
fund balance may serve as a useful measure of a government’s net resources available for spending
at the end of the fiscal year.
At the end of the current fiscal year, the City of Cottage Grove’s governmental funds reported
combined ending fund balances of $27,186,955 a decrease of $5,546,334. Committed, assigned
and unassigned fund balance which is available for spending at the government’s discretion has a
balance of $23,940,568 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 ($3,055,317) 2) for prepaid items ($16,945) 3) for inventory ($28,750) 4) to pay
for capital improvements ($117,610) and 5) for future expenditures ($27,765).
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 $9,036,425 while total fund balance was $10,440,847. As a measure of the general fund’s liquidity, it may be useful to compare both
unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund
balance represents 55% of total subsequent year General fund expenditures, while total fund
balance represents 64% of the same amount.
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Expenses and Program Revenues -Business-Type Activities
Expenses Program revenues
26
Management’s Discussion and Analysis (continued)
The General fund balance increased by $187,410. This increase is primarily due to an increase in
charges for services resulting from development activity in the city. Revenues exceeded budget by
$424,088 due to higher than expected building permit revenues and charges for engineering services
from development and infrastructure projects. Expenditures were $139,849 under budget due to reduced public works expenses for snow and ice control resulting from a mild winter.
The Municipal Building Fund increased $229,068 due to property tax revenues collected for
repayment of the interfund loan which funded the Public Safety/City Hall project in 2012.
The MSA Construction Fund decreased by $4,791,350 due to construction project costs on 70th
Street and Jamaica Avenue and Hadley Avenue.
The Closed Debt Fund increased by $185,557 due to interfund loan interest and special assessment
revenues.
The Pavement Management Debt Service Fund increased by $506,697 due to special assessment
revenues collected in excess of debt service requirements.
The Pavement Management Capital Project Fund decreased by $183,986 due to 2016 Pavement Management project costs prior to the issuance of municipal bonds which financed the 2016 and
2017 Pavement Management project 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 $472,649 in 2016.
Budgetary Highlights
General Fund. The General Fund actual results were different than the final budget amounts due to the following:
• Licenses and Permits categories were $200,105 more than budgeted due to increased commercial/institutional building permitting in 2016.
• Intergovernmental revenues were $82,721 more than budget due to unanticipated Federal
and State grant revenues and public safety aids.
• Charges for services were $155,955 more than budgeted due to increased engineering fees resulting from increased construction and development activity.
• Fines revenues were $21,360 more than budgeted due to increased revenues passed through
to the City from the state and county.
• General government expenditures were $35,409 more than budgeted amounts due to additional salary, benefits and professional service expenditures related to unanticipated
personnel changes.
• Public safety expenditures were $53,630 more than budgeted amounts due to personnel
changes.
27
Management’s Discussion and Analysis (continued)
•Public works expenditures were $209,066 lower 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 $44,002 less than final budget due to reduced
operational costs in the Recreational 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, 2016, amounts to $214,334,461 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery
and equipment.
City of Cottage Grove's Capital Assets
(Net of Depreciation)
Governmental Activities Business-type Activities Total Primary Government
2016 2015 2016 2015 2016 2015
Land and land improvements $17,927,787 $17,927,787 $354,057 $354,852 $18,281,844 $18,282,639
Easements 1,157,202 1,157,202 - - 1,157,202 1,157,202
Construction in progress 9,248,106 500,898 - - 9,248,106 500,898
Buildings and improvements 20,086,952 20,890,355 1,595,131 1,712,619 21,682,083 22,602,974
Equipment and furniture 244,095 314,540 - - 244,095 314,540
Machinery and equipment 4,687,142 4,667,519 511,756 615,843 5,198,898 5,283,362
Other improvements 4,389,591 3,032,731 4,577,885 4,578,962 8,967,476 7,611,693
Infrastructure:
Streets 76,438,326 75,893,083 - - 76,438,326 75,893,083
Storm sewers 21,669,116 22,439,016 - - 21,669,116 22,439,016
Sidewalks/trails 4,422,674 3,855,506 - - 4,422,674 3,855,506
Water and sewer lines - - 47,024,641 47,550,290 47,024,641 47,550,290
Ending balance $160,270,991 $150,678,637 $54,063,470 $54,812,566 $214,334,461 $205,491,203
The largest addition to capital assets in 2016 were the improvements to streets and other
infrastructure due to the 2016 Pavement Management project, reconstruction of the Hadley and 95th
Street intersection and the Jamaica and 70th Street intersection, and construction of the infrastructure in the Summers Landing residential housing development.
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 $28,470,265, an increase of $1,748,033. $2,622,837 of the debt outstanding is due within one year. $20,441,447 of bonds payable is for pavement management
debt being repaid by a combination of special assessments and property tax levies.
28
Management’s Discussion and Analysis (continued)
City of Cottage Grove's Outstanding Debt
2016 2015
Governmental activities:
Bonds payable, net $27,436,124 $20,273,235
Capital lease payable - EDA - 4,805,000
Capital lease payable – golf carts - 37,432
Other postemployment benefits 72,888 65,521
Compensated absences 875,507 857,206
Total governmental activities 28,384,519 26,038,394
Business-type activities:
Bonds payable, net - 609,856
Other postemployment benefits 10,645 9,555
Compensated absences 75,101 64,364
Total business-type activities 85,746 683,775
Total primary government $28,470,265 $26,722,169
The City of Cottage Grove holds a general obligation debt rating of Aa1 from Moody’s (2010 Global Ratings Scale) and of AA+/Stable from Standard and Poor’s. According to S&P, Cottage Grove has “a strong financial profile, anchored by a very strong general fund balance; and good
management practices that have contributed to the city’s ongoing financial health.”
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Market Value. The current debt limitation for the City of Cottage Grove is $93,740,412.
Of that limit, $4,660,000 of the City's outstanding debt is counted within the statutory limitation
because all other debt is either wholly or partially repaid by revenues other than general property
tax levies. Additional information on the City of Cottage Grove’s long-term debt can be found in Note 6.
Requests for information: This financial report is designed to provide a general overview of the
City of Cottage Grove’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Finance Director, 12800 Ravine Parkway St, Cottage
Grove, Minnesota 55016.
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BASIC FINANCIAL STATEMENTS
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CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31, 2016
With Comparative Data as of December 31, 2015
Component Unit
Total Economic
Governmental Business-Type Primary Development
Activities Activities Government Authority 2016 2015
Assets:
Cash and investments 38,211,919$ 9,785,961$ 47,997,880$ -$ 47,997,880$ 48,021,439$
Accrued interest receivable 156,712 - 156,712 - 156,712 201,553
Due from other governmental units - net 1,300,298 18,730 1,319,028 - 1,319,028 291,026
Accounts receivable - net 530,190 1,415,712 1,945,902 13,817 1,959,719 1,832,445 Prepaid items 200,047 158,155 358,202 - 358,202 342,954
Delinquent property taxes receivable 125,927 - 125,927 1,073 127,000 127,560
Due from county 85,417 - 85,417 - 85,417 93,051
Special assessments receivable 7,615,533 - 7,615,533 - 7,615,533 5,993,117
Inventories - at cost 120,053 - 120,053 - 120,053 91,636
Internal balances (4,095,957) 4,095,957 - - - -
Lease receivable - - - - - 4,805,000
Loan receivable - - - 384,608 384,608 - Properties held for resale 267,498 - 267,498 311,718 579,216 2,529,216
Fire relief pension asset 1,000,396 - 1,000,396 - 1,000,396 729,701
Capital assets not being depreciated:
Land and land improvements 17,927,787 325,000 18,252,787 - 18,252,787 18,252,787
Easements 1,157,202 - 1,157,202 - 1,157,202 1,157,202
Construction in progress 9,248,106 - 9,248,106 - 9,248,106 500,898
Capital assets (net of accumulated depreciation):
Land improvements - 29,057 29,057 - 29,057 29,852 Buildings and improvements 20,086,952 1,595,131 21,682,083 - 21,682,083 22,602,974
Equipment and furniture 244,095 - 244,095 - 244,095 314,540
Machinery and equipment 4,687,142 511,756 5,198,898 - 5,198,898 5,283,362
Other improvements 4,389,591 4,577,885 8,967,476 - 8,967,476 7,611,693
Infrastructure 102,530,116 47,024,641 149,554,757 - 149,554,757 149,737,895
Total assets 205,789,024 69,537,985 275,327,009 711,216 276,038,225 270,549,901
Deferred outflows of resources:
Deferred outflows related to city pensions 14,149,118 1,771,666 15,920,784 56,379 15,977,163 1,844,188
Deferred outflows related to fire relief pension 207,865 - 207,865 - 207,865 290,662
Total deferred outflows of resources 14,356,983 1,771,666 16,128,649 56,379 16,185,028 2,134,850
Total assets and deferred outflows of resources 220,146,007$ 71,309,651$ 291,455,658$ 767,595$ 292,223,253$ 272,684,751$
Liabilities:
Accounts payable 4,025,114$ 162,095$ 4,187,209$ 5,995$ 4,193,204$ 1,001,745$
Salaries payable 674,240 73,649 747,889 8,401 756,290 605,881
Contracts payable 445,043 - 445,043 - 445,043 235,778
Due to other governmental units 253,194 188,940 442,134 470,271 912,405 36,758
Deposits payable 1,778,349 - 1,778,349 2,000 1,780,349 474,182 Unearned revenue 32,214 32,214 - 32,214 40,100
Accrued interest payable 256,216 - 256,216 - 256,216 393,329
Compensated absences payable:
Due within one year 644,332 63,505 707,837 1,075 708,912 668,952
Due in more than one year 231,175 11,596 242,771 6,261 249,032 257,242
Other postemployment benefits:
Due in more than one year 72,888 10,645 83,533 911 84,444 75,887
Net pension liability: Due in more than one year 22,034,267 2,778,185 24,812,452 135,049 24,947,501 9,693,991
Capital lease payable:
Due within one year - - - - - 327,432
Due in more than one year - - - - - 4,515,000
Bonds payable (net of unamortized premiums):
Due within one year 1,915,000 - 1,915,000 - 1,915,000 2,109,856
Due in more than one year 25,521,124 - 25,521,124 - 25,521,124 23,578,235
Total liabilities 57,883,156 3,288,615 61,171,771 629,963 61,801,734 44,014,368
Deferred inflows of resources:
Unavailable revenue - other - - - - - 1,384
Deferred inflows related to pension 2,727,403 329,550 3,056,953 16,839 3,073,792 1,299,724
Total deferred inflows of resources 2,727,403 329,550 3,056,953 16,839 3,073,792 1,301,108
Net position:
Net investment in capital assets 132,834,867 54,063,470 186,898,337 - 186,898,337 179,765,680
Restricted for: Forfeiture and seizure 23,308 - 23,308 - 23,308 39,166
Charitable gambling 4,457 - 4,457 - 4,457 9,405
Debt retirement 7,492,592 - 7,492,592 - 7,492,592 7,218,052
Tax increment purposes 88,781 - 88,781 - 88,781 2,011,222
Unrestricted 19,091,443 13,628,016 32,719,459 120,793 32,840,252 38,325,750
Total net position 159,535,448 67,691,486 227,226,934 120,793 227,347,727 227,369,275
Total liabilities, deferred inflows of resourcesand net position 220,146,007$ 71,309,651$ 291,455,658$ 767,595$ 292,223,253$ 272,684,751$
Primary Government Totals
Reporting Entity
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34
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF ACTIVITIES Statement 2
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Component
Unit
Operating Capital Economic
Charges For Grants and Grants and Governmental Business-Type Development
Expenses Services Contributions Contributions Activities Activities 2016 2015 Authority
Functions/Programs
Primary government:
Governmental activities:
General government 3,450,479$ 665,193$ 169,159$ -$ (2,616,127)$ -$ (2,616,127)$ (2,091,148)$ -$
Community development 1,173,071 1,660,365 - - 487,294 - 487,294 441,639 -
Economic development 2,257,548 5,210 333,834 1,048,871 (869,633) - (869,633) (631,751) -
Public safety 10,153,726 431,862 597,621 137,343 (8,986,900) - (8,986,900) (6,662,989) -
Public works:
Regular operations 4,583,513 975,532 125,990 46,944 (3,435,047) - (3,435,047) (3,601,831) -
Construction 5,039,822 - - 8,449,128 3,409,306 - 3,409,306 2,627,121 -
Culture and recreation 5,340,558 2,725,288 450,201 601,761 (1,563,308) - (1,563,308) (2,010,819) -
Interest on long-term debt 875,642 - - - (875,642) - (875,642) (1,029,228) -
Total governmental activities 32,874,359 6,463,450 1,676,805 10,284,047 (14,450,057) - (14,450,057) (12,959,006) -
Business-type activities:
Street lights 746,005 530,905 - 81,157 - (133,943) (133,943) (172,290) -
Cottage Grove EMS 1,688,041 1,766,236 - - - 78,195 78,195 (76,759) -
Water operating 2,370,466 1,817,862 - 13,920 - (538,684) (538,684) (404,065) -
Sewer operating 2,727,188 2,291,038 - 101,594 - (334,556) (334,556) 4,591 -
Total business-type activities 7,531,700 6,406,041 - 196,671 - (928,988)(928,988)(648,523)-
Total primary government 40,406,059$ 12,869,491$ 1,676,805$ 10,480,718$ (14,450,057) (928,988) (15,379,045) (13,607,529) -
Component Unit:
Economic Development Authority 928,903$ 367,458$ -$ -$ - - - - (561,445)
Total component unit 928,903$ 367,458$ -$ -$ - - - - (561,445)
General revenues:
Property taxes 13,956,582 - 13,956,582 13,394,585 110,967
Franchise taxes 516,931 - 516,931 526,643 -
Aggregate taxes 39,748 - 39,748 37,133 -
Tax increment collections 776,061 - 776,061 710,541 -
Grants and contributions not
restricted to specific programs 126,058 7,736 133,794 99,137 526
Unrestricted investment earnings 285,494 96,851 382,345 495,066 -
Gain on sale of capital assets 1,988 1,988 - -
Transfers (330,219) 330,219 - - -
Total general revenues, transfers, and special items 15,370,655 436,794 15,807,449 15,263,105 111,493
Change in net position 920,598 (492,194) 428,404 1,655,576 (449,952)
Net position - beginning 158,614,850 68,183,680 226,798,530 232,837,293 570,745
Cumulative effect of change in
accounting principle - - - (7,694,339) -
Net position - beginning, as restated 158,614,850 68,183,680 226,798,530 225,142,954 570,745
Net position - ending 159,535,448$ 67,691,486$ 227,226,934$ 226,798,530$ 120,793$
Totals
Program Revenues
Net (Expense) Revenue and
Changes in Net Position
Primary Government
35
CITY OF COTTAGE GROVE, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2016
With Comparative Data as of December 31, 2015
Municipal MSA
Building Construction
General Capital Project Capital Project Closed Debt
Assets:Fund Fund Fund Fund
Cash and investments 10,798,684$ 294,198$ -$ 1,853,916$
Accrued interest receivable 156,712 - - -
Interfund receivable - - - 405,131
Interfund loan receivable - - - 2,000,000
Due from other governmental units - net 233,564 - 87,417 -
Accounts receivable - net 36,517 - 5,944 -
Prepaid items 11,222 - - -
Inventories - at cost - - - -
Delinquent property taxes receivable 112,653 4,420 - 1,277
Due from county 85,417 - - -
Special assessments receivable:
Deferred 6,885 - 620,780 112,626
Delinquent 442 - 1,714 4,091
Special deferred - - 33,155 4,893
Property held for resale - - 267,498 -
Total assets 11,442,096$ 298,618$ 1,016,508$ 4,381,934$
Liabilities:
Accounts payable 150,967$ 154,893$ 183,400$ -$
Salaries payable 575,222 - - -
Interfund payable - - 405,131 -
Contracts payable - - 339,524 -
Due to other governmental units 52,165 - 329 -
Deposits payable 72,127
Unearned revenue 30,788 - - -
Interfund loan payable - 7,425,000 - -
Total liabilities 881,269 7,579,893 928,384 -
Deferred inflows of resources:
Unavailable revenue - property taxes 112,653 4,420 - 1,277
Unavailable revenue - special assessments 7,327 - 655,649 121,610
Unavailable revenue - intergovernmental - - 87,417 -
Unavailable revenue - other - 1,426 - -
Total deferred inflows of resources 119,980 5,846 743,066 122,887
Fund balances (deficit): Nonspendable: Prepaid items 11,222 - - - Inventory - - - - Restricted for: Forfeiture and seizure - - - - Charitable gambling - - - - Debt retirement - - - - Tax increment purposes - - - - Committed - - - - Assigned 1,393,200 - - 4,259,047 Unassigned: General Fund 9,036,425 - - - Special Revenue Fund - - - - Capital Project Funds - (7,287,121) (654,942) - Total fund balances (deficit)10,440,847 (7,287,121) (654,942) 4,259,047
Total liabilities, deferred inflows of resources,
and fund balances 11,442,096$ 298,618$ 1,016,508$ 4,381,934$
36
Statement 3
Pavement Pavement
Management Management Other
Debt Service Capital Project Governmental
Fund Fund Funds 2016 2015
3,056,049$ 2,000,646$ 17,777,037$ 35,780,530$ 35,726,937$
- - - 156,712 147,130
- - 2,194,153 2,599,284 1,626,227
- - 2,645,804 4,645,804 4,261,758
- 52,027 927,290 1,300,298 286,815
- - 483,488 525,949 593,383
- - 5,723 16,945 22,726
- - 28,750 28,750 20,696
4,813 - 2,764 125,927 126,473
- - - 85,417 93,051
4,589,433 - 2,196,978 7,526,702 5,916,160
8,746 - 6,220 21,213 12,084
29,570 - - 67,618 64,873
- - - 267,498 2,217,498
7,688,611$ 2,052,673$ 26,268,207$ 53,148,647$ 51,115,811$
900$ 710,684$ 2,557,422$ 3,758,266$ 605,137$
- - 69,451 644,673 514,218
- - 2,194,153 2,599,284 1,626,227
- 56,331 49,188 445,043 235,778
- - 199,662 252,156 12,208
1,706,222 1,778,349 466,679
- - - 30,788 40,100
- - 1,145,804 8,570,804 8,621,758
900 767,015 7,921,902 18,079,363 12,122,105
4,813 - 2,764 125,927 126,473
4,627,749 - 2,203,198 7,615,533 5,993,117
- 52,026 - 139,443 139,443
- - - 1,426 1,384
4,632,562 52,026 2,205,962 7,882,329 6,260,417
- - 5,723 16,945 22,726 - - 28,750 28,750 20,696
- - 23,308 23,308 39,166 - - 4,457 4,457 9,405 3,055,149 - 168 3,055,317 2,766,643 - - 117,610 117,610 2,042,151 - - 731,090 731,090 394,204 - 1,233,632 17,527,670 24,413,549 27,731,074
- - - 9,036,425 8,829,697 - - (302,002) (302,002) (283,216) - - (1,996,431) (9,938,494) (8,839,257) 3,055,149 1,233,632 16,140,343 27,186,955 32,733,289
7,688,611$ 2,052,673$ 26,268,207$ 53,148,647$ 51,115,811$
Fund balance reported above 27,186,955$ 32,733,289$
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources, and therefore,
are not reported in the funds 159,236,454 149,646,231
Other long-term assets are not available to pay for current-period expenditures, and therefore,
are deferred in the funds 8,881,299 6,988,734
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 (2,667,412)(1,105,920)
Deferred outflows of resources related to pensions 14,156,127 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.(50,136,728)(34,455,583)
Internal service funds are used by management to charge the cost of insurance to individual funds.
The assets and liabilities are included in the governmental statement of net position 2,878,753 2,948,838
Net position of governmental activities 159,535,448$ 158,614,850$
Totals
Governmental Funds
37
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Municipal MSA
Building Construction
General Capital Project Capital Project Closed
Revenues:Fund Fund Fund Debt Fund
General property taxes 12,573,607$ 497,543$ -$ 418$
Franchise taxes - - - -
Aggregate taxes - - - -
Tax increment collections - - - -
Special assessments 5,703 - 127,251 95,425
Licenses and permits 1,323,680 - - -
Direct charges to developers - - - -
Intergovernmental 1,019,971 - 3,210,444 -
Charges for services 672,555 - - -
Rent - 16,652 - -
Fines and forfeits 196,360 - - -
Investment earnings (loss)51,980 961 36,055 10,801
Interest on interfund loan - - - 19,480
Connection charges - - - -
Park dedication fees - - - -
Other sales - - - -
Donations 7,193 - - -
Miscellaneous 166,149 52,507 46,944 -
Total revenues 16,017,198 567,663 3,420,694 126,124
Expenditures:
Current:
General government 2,180,719 28,073 - 1,233
Community development 1,117,760 - - -
Economic development - - - -
Public safety 7,301,048 - - -
Public works 2,407,299 - 15,242 -
Culture and recreation 1,942,191 - - -
Capital outlay:
General government - - - -
Public safety 184,782 284,364 - -
Public works 20,310 - 8,196,802 -
Culture and recreation 148,792 - - -
Debt service:
Principal retirement - - - -
Capital lease payment - - - -
Interest and fiscal charges - 75,610 - -
Total expenditures 15,302,901 388,047 8,212,044 1,233
Revenues over (under) expenditures 714,297 179,616 (4,791,350) 124,891
Other financing sources (uses):
Transfers in 525,713 49,452 - 115,388
Transfers out (1,052,600) - - (54,722)
Bonds issued - - - -
Premium on debt issued - - - -
Proceeds from the sale of capital assets - - - -
Total other financing sources (uses)(526,887) 49,452 - 60,666
Net increase (decrease) in fund balance 187,410 229,068 (4,791,350) 185,557
Fund balance - January 1 10,253,437 (7,516,189)4,136,408 4,073,490
Fund balance - December 31 10,440,847$ (7,287,121)$ (654,942)$ 4,259,047$
38
Statement 4
Pavement Pavement
Management Management Other
Debt Service Capital Project Governmental
Fund Fund Funds 2016 2015
596,919$ -$ 288,641$ 13,957,128$ 13,465,987$
- - 516,931 516,931 526,643
- - 39,748 39,748 37,133
- - 776,061 776,061 710,541
1,172,153 - 603,664 2,004,196 1,499,796
- - - 1,323,680 1,305,442
- - 277,860 277,860 307,971
- - 1,412,036 5,642,451 2,415,754
- - 3,388,746 4,061,301 3,808,618
- - 447,426 464,078 450,428
- - 39,900 236,260 228,642
9,072 10,904 100,190 219,963 262,799
- - 32,560 52,040 74,340
- - 649,489 649,489 318,092
- - 212,865 212,865 9,010
- - 1,048,871 1,048,871 469,454
- - 449,745 456,938 378,013
- - 93,452 359,052 290,807
1,778,144 10,904 10,378,185 32,298,912 26,559,470
6,547 - 926,564 3,143,136 2,155,327
- - - 1,117,760 1,058,537
- - 2,236,464 2,236,464 1,456,306
- - 146,010 7,447,058 6,751,804
- 1,782 1,709,336 4,133,659 4,344,837
- - 2,496,437 4,438,628 4,154,992
- - 24,709 24,709 -
- - 88,648 557,794 284,237
- 4,527,820 3,244,017 15,988,949 5,865,238
- - 480,975 629,767 887,327
755,000 - 5,815,000 6,570,000 1,320,000
- - 327,432 327,432 316,235
509,900 71,176 367,035 1,023,721 912,107
1,271,447 4,600,778 17,862,627 47,639,077 29,506,947
506,697 (4,589,874) (7,484,442) (15,340,165) (2,947,477)
- 32,968 924,737 1,648,258 3,049,657
- - (55,242) (1,162,564) (2,362,952)
- 4,275,000 4,660,000 8,935,000 5,700,000
- 97,920 259,764 357,684 254,245
- - 15,453 15,453 53,267
- 4,405,888 5,804,712 9,793,831 6,694,217
506,697 (183,986) (1,679,730) (5,546,334) 3,746,740
2,548,452 1,417,618 17,820,073 32,733,289 28,986,549
3,055,149$ 1,233,632$ 16,140,343$ 27,186,955$ 32,733,289$
Totals
Governmental Funds
39
CITY OF COTTAGE GROVE, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
2016 2015
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)(5,546,334)$ 3,746,740$
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.9,443,674 2,223,716
The effect of various miscellaneous transactions involving capital assets is to decrease net position
(i.e. sales, and trade-ins).(36,464) (67,488)
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.183,013 357,546
Revenues in the statement of activities that do not provide current financial resources 1,621,870 1,346,349
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. (2,412,713) (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.(2,320,457) (4,299,367)
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.(70,085) (81,706)
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.58,094 (163,994)
Change in net position of governmental activities (page 35)920,598$ 2,780,081$
40
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF NET POSITION Statement 6
PROPRIETARY FUNDS
December 31, 2016
Governmental
Total Activities -
Street Light Cottage Grove Water Sewer Enterprise Internal
Fund EMS Fund Operating Operating Funds Service Funds
Assets:
Current assets:
Cash and investments 1,169,399$ 1,058,157$ 4,584,135$ 2,974,270$ 9,785,961$ 2,431,389$
Interfund loan receivable - - 1,092,500 2,832,500 3,925,000 -
Due from other governmental units-net - - 11,422 7,308 18,730 -
Accounts receivable:
Customers 91,489 538,819 230,056 348,792 1,209,156 -
Certified to County - - 95,035 95,035 190,070 -
Other 15,998 - 488 - 16,486 4,241
Prepaid items 299 1,455 2,598 153,803 158,155 183,102
Inventories - at cost - - - - - 91,303
Total current assets 1,277,185 1,598,431 6,016,234 6,411,708 15,303,558 2,710,035
Noncurrent assets:
Capital assets:
Land and land improvements - - 364,803 - 364,803 424,665
Buildings and improvements - - 4,089,713 - 4,089,713 928,870
Equipment and furniture - - - - - 184,227
Machinery and equipment 139,222 665,147 1,032,174 269,175 2,105,718 255,972
Other improvements 7,146,099 - - - 7,146,099 -
Water and sewer lines - - 39,227,449 26,346,417 65,573,866 -
Total capital assets 7,285,321 665,147 44,714,139 26,615,592 79,280,199 1,793,734
Less: Accumulated depreciation (2,655,183) (420,206) (14,887,976) (7,253,364) (25,216,729) (759,197)
Net capital assets 4,630,138 244,941 29,826,163 19,362,228 54,063,470 1,034,537
Total noncurrent assets 4,630,138 244,941 29,826,163 19,362,228 54,063,470 1,034,537
Total assets 5,907,323 1,843,372 35,842,397 25,773,936 69,367,028 3,744,572
Deferred outflows:
Deferred outflows related to pension 30,919 1,474,692 208,083 57,972 1,771,666 200,856
Total deferred outflows 30,919 1,474,692 208,083 57,972 1,771,666 200,856
Liabilities:
Current liabilities:
Accounts payable 34,746 12,372 98,397 16,580 162,095 266,848
Salaries payable 4,279 38,783 23,747 6,840 73,649 29,567
Due to other governmental units - 8,055 1,209 179,676 188,940 1,038
Compensated absences payable 5,416 18,386 28,670 11,033 63,505 28,725
Total current liabilities 44,441 77,596 152,023 214,129 488,189 326,178
Noncurrent liabilities:
Compensated absences payable 1,304 6,428 3,596 268 11,596 25,868
Other postemployment benefits 499 5,857 3,273 1,016 10,645 2,557
Net pension liability 74,062 2,066,825 498,434 138,864 2,778,185 481,124
Total noncurrent liabilities 75,865 2,079,110 505,303 140,148 2,800,426 509,549
Total liabilities 120,306 2,156,706 657,326 354,277 3,288,615 835,727
Deferred inflows:
Deferred inflows related to pension 9,235 240,851 62,149 17,315 329,550 59,991
Total deferred inflows 9,235 240,851 62,149 17,315 329,550 59,991
Net position:
Net investment in capital assets 4,630,138 244,941 29,826,163 19,362,228 54,063,470 1,034,537
Unrestricted 1,178,563 675,566 5,504,842 6,098,088 13,457,059 2,015,173
Total net position 5,808,701$ 920,507$ 35,331,005$ 25,460,316$ 67,520,529 3,049,710$
Some amounts reported for business-type activities in the statement of net position are different
because certain internal service fund assets and liabilities are included with business-type activities.170,957
67,691,486$
Business-Type Activities - Enterprise Funds
41
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 7
CHANGES IN FUND NET POSITIONPROPRIETARY FUNDS
For The Year Ended December 31, 2016
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 530,905$ 1,766,236$ 1,783,025$ 2,291,038$ 6,371,204$ 3,207,689$
Water meter/ street light material sales - - 34,837 - 34,837 -
Insurance refunds and reimbursements - - - - - 144,271
Total operating revenues 530,905 1,766,236 1,817,862 2,291,038 6,406,041 3,351,960
Operating expenses:
Personal services 89,817 1,368,199 619,699 216,576 2,294,291 2,140,498
Commodities 50,116 79,280 174,024 12,841 316,261 492,761
Commodities - items for resale 54,970 - - - 54,970 -
Contractual services 387,849 169,613 680,174 333,705 1,571,341 606,855
Claims - - - - - 163,454
Disposal:
Contractual services - MCES - - - 1,713,284 1,713,284 -
Depreciation 162,533 65,313 889,476 444,686 1,562,008 59,403
Total operating expenses 745,285 1,682,405 2,363,373 2,721,092 7,512,155 3,462,971
Operating income (loss)(214,380) 83,831 (545,511) (430,054) (1,106,114) (111,011)
Nonoperating revenues (expenses):
Investment earnings 6,544 5,002 30,653 13,322 55,521 13,491
Interest on interfund debt - - 13,290 28,040 41,330 -
Intergovernmental 288 416 6,492 540 7,736 1,873
Gain (loss) on fixed asset disposal 4,988 (3,000) 1,988
Miscellaneous 81,157 13,920 101,594 196,671 6,017
Total nonoperating revenues (expenses)87,989 10,406 61,355 143,496 303,246 21,381
Income (loss) before
contributions and transfers (126,391) 94,237 (484,156) (286,558) (802,868) (89,630)
Capital contributions 154,566 - 502,349 158,998 815,913 -
Transfer to General Fund (45,846) (91,683) (166,554) (181,611) (485,694) -
Transfer to Capital Project Fund - - - - - -
Total transfers (45,846) (91,683) (166,554) (181,611) (485,694) -
Change in net position (17,671) 2,554 (148,361) (309,171) (472,649) (89,630)
Net position - January 1 5,826,372 917,953 35,479,366 25,769,487 67,993,178 3,139,340
Net position - December 31 5,808,701$ 920,507$ 35,331,005$ 25,460,316$ 67,520,529$ 3,049,710$
Change in net position reported above (472,649)
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (19,545)
Change in net position of business-type activities (page 35)(492,194)$
Business-Type Activities - Enterprise Funds
42
CITY OF COTTAGE GROVE, MINNESOTA
STATEMENT OF CASH FLOWS Statement 8
PROPRIETARY FUNDS
For The Year Ended December 31, 2016
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 516,509$ 1,600,812$ 1,814,747$ 2,273,592$ 6,205,660$ -$
Receipts from interfund services provided - - - - - 3,207,689
Receipts from insurance refunds and reimbursements - - - - - 144,271
Payment to suppliers (486,715) (255,850) (853,652) (1,889,045) (3,485,262) (1,268,700)
Payment to employees (88,020) (1,167,669) (557,072) (178,812) (1,991,573) (2,096,121)
Miscellaneous revenue 81,157 - 13,920 101,594 196,671 6,017
Net cash flows from operating activities 22,931 177,293 417,943 307,329 925,496 (6,844)
Cash flows from noncapital financing activities:
Intergovernmental revenue 288 416 6,492 540 7,736 1,873
Transfers out (45,846) (91,683) (166,554) (181,611) (485,694) -
Net cash flows from
noncapital financing activities (45,558) (91,267) (160,062) (181,071) (477,958) 1,873
Cash flows from capital and related
financing activities:
Acquisition of capital assets - - - - - (61,534)
Proceeds from disposal of capital asset - 4,989 - - 4,989 -
Interest paid on debt - - (19,262) - (19,262) -
Principal paid on debt - - (600,000) - (600,000) -
Net cash flows from capital
and related financing activities - 4,989 (619,262) - (614,273) (61,534)
Cash flows from investing activities:
Investment earnings 6,544 5,002 30,653 13,322 55,521 13,491
Interest on interfund loan - - 13,290 28,040 41,330 -
Payment received on interfund loan - - 435,000 - 435,000 -
Net cash flows from investing activities 6,544 5,002 478,943 41,362 531,851 13,491
Net increase (decrease) in cash and cash equivalents (16,083) 96,017 117,562 167,620 365,116 (53,014)
Cash and cash equivalents - January 1 1,185,482 962,140 4,466,573 2,806,650 9,420,845 2,484,403
Cash and cash equivalents - December 31 1,169,399$ 1,058,157$ 4,584,135$ 2,974,270$ 9,785,961$ 2,431,389$
Reconciliation of operating income/(loss) to net cash
from operating activities:
Operating income (loss) (214,380)$ 83,831$ (545,511)$ (430,054)$ (1,106,114)$ (111,011)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 162,533 65,313 889,476 444,686 1,562,008 59,403
Pension expense 837 194,335 53,358 32,902 281,432 -
Miscellaneous revenue 81,157 - 13,920 101,594 196,671 6,017
Changes in assets and liabilities:
Decrease (increase) in receivables (14,396) (165,424) 885 (17,446) (196,381) (4,241)
Decrease (increase) in prepaid items (299) 3,007 (172) (11,029) (8,493) (14,036)
Decrease (increase) in inventory - - - - - (20,363)
(Decrease) increase in payables 7,479 (3,769) 5,987 186,676 196,373 77,387
Total adjustments 237,311 93,462 963,454 737,383 2,031,610 104,167
Net cash flows from operating activities 22,931$ 177,293$ 417,943$ 307,329$ 925,496$ (6,844)$
Noncash investing, capital and financing activities:
Capital asset contributions from governmental activities 154,566$ -$ 502,349$ 158,998$ 815,913$ -$
Loss on disposal of capital asset - - 3,000 - 3,000 -
Business-Type Activities - Enterprise Funds
43
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
44
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Cottage Grove was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form
of government. The governing body consists of a five member City Council elected by voters of the City.
The financial statements of the City of Cottage Grove have been prepared in conformity with U.S. generally accepted
accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity
include those of the City of Cottage Grove (the primary government) and its component unit. The component unit discussed below is included in the City’s reporting entity because of the significance of its operational and financial relationship with the City.
COMPONENT UNIT
The Economic Development Authority (EDA) is considered a component unit of the City because the Council
appoints the members of the governing authority and because the EDA is in a relationship of financial benefits or burden to the City. It is governed by a board which is made up of two City council members and five
other members. The EDA provides services to the City and to potential future business owners within the City. The financial position and results of operations of the EDA component unit is discretely presented in the primary government’s basic financial statements. The EDA is reported in a separate column to emphasize that it is legally separate from the City. The component unit activity is reported on the modified accrual basis
of accounting. Separate financial statements are not prepared for the EDA.
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component unit. For the most
part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
In the government-wide statement of net position, both the governmental and business-type activities columns: (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic
resource basis, which recognizes all long-term assets and receivables as well as long-term debt and
obligations. The City’s net position is reported in three parts: (1) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position. The City first utilizes restricted resources to finance
qualifying activities.
The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function or business-type activity. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given
function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included
among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
45
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The Municipal Building Capital Project Fund accounts for the accumulation of resources and
construction or remodeling costs of municipal buildings and facilities.
The MSA Construction Capital Project Fund accounts for projects related to Municipal State Aids.
The Closed Debt Fund accounts for the accumulation of residual resources from debt funds that have been closed as the associated debt has been satisfied.
The Pavement Management Debt Service Fund accounts for debt service payments used to finance the
City’s various pavement management projects. Revenue is accumulated from both special assessments and property taxes.
The Pavement Management Capital Project Fund accounts for pavement management construction
projects.
The government reports the following major proprietary funds:
The Street Light Fund accounts for customer street light and service charges which are used to finance street light operating expenses.
The Cottage Grove EMS Fund accounts for the operation of the Cottage Grove ambulance service that
serves the cities of Cottage Grove, Newport, Saint Paul Park, and Grey Cloud Island.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
46
The Water Operating fund accounts for customer water service charges which are used to finance water operating expenses.
The Sewer Operating fund accounts for customer sewer service charges which are used to finance sewer operating expenses.
Additionally, the government reports the following fund type:
Internal service funds account for the City’s self-insurance, fleet maintenance, and information services
provided to other departments of the government on a cost reimbursement basis.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Cottage Grove. Elimination of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including
special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the
water, sewer, ambulance, and street light enterprise funds are charges to customers for sales and services. The ambulance fund operating revenues are net of write offs mandated by various government agencies
(including Medicare and Medicaid). Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed.
D. BUDGETS
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual
appropriated budgets are adopted for the General and Special Revenue Funds.
Budgeted amounts are reported as originally adopted, and as amended by the City Council. Individual amendments were not material in relation to the original appropriations which were adjusted. Budgeted
expenditure appropriations can be carried forward to the next budget year subject to City Council approval.
E. LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1.The City Administrator submits to the City Council a proposed operating budget for the fiscal yearcommencing the following January 1. The operating budget includes proposed expenditures and the
means of financing them.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
47
2. The City Council reviews the proposed budget and makes appropriate changes. Per Statute, public meetings are held to receive taxpayer comments.
3. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts.
4. The City Administrator is authorized to transfer appropriations within any department budget up to $2,500. Additional interdepartmental or interfund appropriations and deletions are authorized by the City Council with expenditure reductions, fund (contingency) reserves or additional revenues. The City
Council may authorize transfers of budgeted amounts between City funds.
5. 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.
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These are not reflected in the financial statements.
7. A capital improvement program is reviewed annually by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the
improvement. The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropriations at the total fund level. The legal level of budgetary control is at the expenditure category level (i.e., personal services, commodities, contractual
services and capital outlay) within each activity. All amounts over budget have been approved by the City Council through the disbursement approval process.
The following is a listing of expenditure categories that exceed budget appropriations for non-major funds:
Final Budget Actual Over Budget Nonmajor Funds:
Special Revenue Funds: Recycling:
Public works: Personnel services $ 32,700 $ 33,534 $ 834
Storm Water Maintenance: Public works:
Personnel services 255,600 290,223 34,623 Forfeiture/Seizure:
Public works: Commodities 4,500 6,613 2,113
Contractual services 14,620 21,824 7,204 Capital outlay 15,000 27,506 12,506
Ice Arena: Culture and recreation:
Commodities 31,200 33,279 2,079 Contractual services 322,750 367,098 44,348
Golf Course:
Culture and recreation: Personnel services 781,000 952,766 171,766
Contractual services 479,980 490,650 10,670
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
48
F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized
investments. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool.
The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received.
Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. Certain investments for the City are reported at fair value as disclosed in Note 3. The City categorizes its fair value
measurements with the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 are significant unobservable inputs.
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 activities and business-type activities are reported in the government-wide financial statements as “internal balances.”
Property taxes, special assessments, and ambulance receivables have been reported net of estimated
uncollectible accounts. (see Note 1 H, I and L) Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables
and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all
property taxes for itself, the City, the local school district and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable
(by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted
to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes
by property owners; the County possesses this authority.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible
property taxes are not material and have not been reported.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
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GOVERNMENTAL FUND FINANCIAL STATEMENTS The City recognizes property tax revenue when it becomes both measurable and available to finance
expenditures of the current period. In practice, current and delinquent taxes received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year-end are
classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred inflows of resources because they are not available to finance current expenditures.
I. SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes.
Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property
until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of
sales from tax forfeited properties are allocated first to the County’s costs of administering all tax forfeit properties. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected
by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in
governmental funds are completely offset by deferred inflows of resources. J. INVENTORIES
Inventories are stated at cost, which approximates market, using the first-in, first-out (FIFO) method and consist of items for resale, expendable supplies, and vehicle repair parts. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased in both government-wide
and fund financial statements. K. PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items are recorded as
expenditures/expenses when consumed rather than when purchased.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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L. ALLOWANCE FOR UNCOLLECTIBLE The City directly bills individuals for ambulance services. The City reserves an amount as uncollectible
based on historical collection rates. The amounts of the estimated uncollectible ambulance billings to individuals as of December 31, 2016 were $328,200.
M. PROPERTIES HELD FOR RESALE Property is acquired by the City for redevelopment purposes and subsequent resale. Properties held for resale
is reported as an asset at the lower of cost or estimated fair value. Fair value estimates have been based on estimated realizable sales proceeds net of selling expenses.
N. CAPITAL ASSETS Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns
in the government-wide financial statements. Infrastructure assets have been capitalized retroactively to 1980. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repair which do not add to the value of the asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the
capitalized value of the assets constructed. For the year ended December 31, 2016, no interest was capitalized
in connection with construction in progress.
Capital assets not being depreciated include land, easements and construction in progress. Property, plant and equipment of the primary government, as well as the component units, is depreciated using the straight-line method over the following estimated useful lives: Assets Years
Buildings and improvements 20-50 Equipment and furniture 3-10
Machinery and equipment 5-20 Other improvements 5-20
Streets 50 Storm sewers 50
Sidewalks 50 Trails 20
Street lights 50 Water and sewer lines 50
Capital assets of the water and sewer utility operations include the water distribution system and sewage
collection system. These systems have been wholly (or substantially) financed by non-operating funds (special assessments, general taxes, federal and state grants, and other sources) and contributed to the sewer
and water operating funds. City policy is to finance these assets by the sources indicated rather than by user charges. Accordingly, the water and sewer user rates are not established at levels sufficient to cover depreciation on these assets.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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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 time. 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 that 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 sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position
that applies to future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) 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 collective bargaining agreements, city employees are granted annual leave
benefits in varying amounts based on length of service. Annual Leave accruals vary from 18 to 26 days per year.
As benefits accrue to employees, the accumulated leave amounts are reported as an expense and liability in the proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance
with the provisions of GASB 16, Accounting for Compensated Absences, no liability is recorded for non-vesting accumulating rights to receive accumulated leave benefits. However, a liability is recognized for that
portion of accumulating leave benefits that is vested as severance pay.
Q. LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund type statement of net position. Bond premiums are deferred and amortized over the life of the bonds.
In the fund financial statements, governmental fund types recognize bond premiums during the current
period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources. Issuance costs whether or not withheld from the actual
debt proceeds received, are reported as debt service expenditures.
R. PENSION
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association
(PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA except that 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.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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S. FUND BALANCE In the fund financial statements, governmental funds report fund balances in classifications that disclose
constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable – Amounts that cannot be spent because they are not in spendable form, such as prepaid items
and inventory. Restricted – Amounts related to externally imposed constraints established by creditors, grantors or
contributors; or constraints imposed by state statutory provisions.
Committed – Amounts constrained for specific purposes that are internally imposed by formal action
(resolution) of the City Council. Committed amounts cannot be used for any other purpose unless the Council modifies or rescinds the commitment by resolution. Assigned – Amounts constrained for specific purposes that are internally imposed. The Council has adopted
a fund balance policy which delegates the authority to assign fund balances to the City Administrator and/or Finance Director.
Unassigned – The residual classification for the General fund and also negative residual amounts in other
funds.
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made.
The City formally adopted a fund balance policy for the General Fund. The policy establishes an unassigned fund balance range of no less than 55% of the subsequent year’s budgeted expenditures to provide sufficient
working capital and margin of safety to address local emergencies without borrowing.
T. NET POSITION
Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources in the government-wide financial statements. Net investment in capital assets
consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net position is reported as restricted in the government-
wide financial statement when there are limitations on use through external restrictions imposed by creditors, grantors or laws or regulations of other governments.
U. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions
that constitute reimbursements to a fund for expenditures/expenses initially made from it are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions
of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions
are reported as transfers.
V. USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. generally accepted accounting principles (GAAP) requires management to make estimates that affect the amounts reported in the financial statements
during the reporting period. Actual results could differ from such estimates.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
53
W. COMPARATIVE DATA Summarized comparative data for the prior year has been presented only for certain sections of the
accompanying financial statements in order to provide an understanding of the changes in the City’s financial position and operations. Certain reclassifications have been made to prior year data to conform to the current year presentation. The reclassifications had no effect on the change in net position or total net position as
previously reported. Note 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET POSITION
The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide
statement of net position. One element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this $(50,675,002) difference are as follows:
Bonds payable $ (26,660,000)
Accrued interest payable (256,216) Compensated absences payable (820,914)
Other post employment benefits (70,331)
Net pension liability (21,553,143) Unamortized premium on bonds (776,124)
Net adjustment to reduce fund balance - total
governmental funds to arrive at net position -
governmental activities $ (50,136,728)
B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful
lives and reported as depreciation expense.” The details of this $9,443,674 difference are as follows: Capital outlay $ 13,964,549 Depreciation expense (4,520,875)
Net adjustment to increase net changes in fund
balances - total governmental funds to arrive at changes in net position of governmental activities $ 9,443,674
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
54
Another element of that reconciliation states that “revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.” The details of this $1,621,870 difference are as follows:
General property taxes:
At December 31, 2015 $ (126,473)
At December 31, 2016 125,927 Special assessments:
At December 31, 2015 (5,993,117) At December 31, 2016 7,615,533
Intergovernmental: At December 31, 2015 (139,443) At December 31, 2016 139,443
Net adjustments to increase net changes in fund balances - total governmental funds to arrive at changes in net
position of governmental activities $ 1,621,870
Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the long-term debt
consumes the current financial resources of governmental funds.” Neither transaction, however, has any effect on net position. The details of this $(2,320,457) difference are as follows:
Debt issued: Issuance of general obligation bonds $ (8,935,000)
Plus premium on debt issued (357,684) Principal repayments:
General obligation debt 6,570,000 Capital leases 327,432
Amortization of deferred premiums 74,795
Net adjustments to increase net changes in
fund balances - total governmental funds to arrive at changes in net position of
governmental activities $ (2,320,457)
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
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Another element of that reconciliation states that “some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this $58,094 difference are as follows:
Compensated absences:
At December 31, 2015 $ 812,746
At December 31, 2016 (820,914) Accrued interest:
At December 31, 2015 329,500 At December 31, 2016 (256,216)
Other post-employment benefits At December 31, 2015 63,309 At December 31, 2016 (70,331)
Net adjustment to increase net changes in fund balances - total governmental funds to arrive at
changes in net position of governmental
activities $ 58,094
Note 3 DEPOSITS AND INVESTMENTS
A. DEPOSITS
The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the statement of net position and balance sheets as “Cash and Investments.”
Custodial Credit Risk – Custodial credit risk for deposits is the risk that in the event of a bank failure, the City will not be able to recover its deposits. Neither the City nor the Cottage Grove Economic Development Authority, a discretely presented component unit, has a deposit policy for custodial credit risk – deposits beyond the requirements of state statutes. As of December 31, 2016 all of the deposits were insured or
collateralized by securities held by the City or its agent in the City’s name.
In accordance with Minnesota Statutes, the City maintains deposits at financial institutions which are
authorized by the City Council. Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or
bonds; issues of a U.S. government agency; general obligations of a state or local government rated “A” or better; revenue obligations of a state or local government rated “AA” or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota
statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial bank or other financial institution not owned or controlled by the depository.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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B. INVESTMENTS
Minnesota Statutes and the City’s investment policy authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities
or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) General Obligations of the State of Minnesota or any of its municipalities as follow:
1) general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; 2) revenue obligation of any state or local government with taxing powers which is rated
“AA” or better by a national bond rating service; and
3) general obligation of the Minnesota Housing Finance Agency rated “A” or better by a national bond rating agency.
c) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. d) Commercial paper of the highest quality (A1, P1), and maturing in 270 days or less. e) Repurchase agreements from national or state banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government
securities to the Federal Reserve Bank of New York. f) Certificates of Deposit collateralized by FDIC or FSLIC insurance. Deposits exceeding $250,000 insurance shall be covered by a surety bond or collateralized with U.S. Treasury or agency securities
computed at market value which shall be at least 10% more than the amount of each deposit in
excess of the insured portions. All collateral shall be assigned to the City from the depository. g) Shares of mutual funds holdings pursuant to M.S. 118A.04. The City participates in the Minnesota
Municipal Money Market Fund (4M Fund) whereby, the fair market value of the position in the pool is the same as the value of the pool shares owned. Interest rate risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair value
of an investment. The City’s formal investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The policy also states that no more
than 25% of total investments should extend beyond five years and in no circumstance should any extend beyond ten years.
Total Fair Investment maturities in Years Credit Risk Investment type Market Value Less than 1 1 – 5 More than 5 Rating Agency
U.S. Agencies
Federal Home Loan Bank-FHLB $6,020,297 - $5,023,378 $996,919 AA/Aaa S&P/Moody’s Fannie Mae–FNMA 6,171,310 1,751,815 2,991,800 1,427,695 AA/Aaa S&P/Moody’s Freddie Mac-FHLMC 8,178,910 1,002,190 5,721,265 1,455,455 AA/Aaa S&P/Moody’s
Federal Farm Credit Bank 2,989,810 1,001,770 1,500,365 487,675 AA/Aaa S&P/Moody’s Municipal Obligations 4,841,434 100,399 3,645,385 1,095,650 AA/Aa S&P/Moody’s Negotiable CD’s 15,063,920 12,130,605 2,695,547 237,768 NR N/A
Total Investments 43,265,681 $15,986,779 $ 21,577,740 $5,701,162
Money Markets 3,833,987 Deposits 885,152 Petty Cash and Change 13,060 Total Cash and Investments $47,997,880
NR indicates “not rated” N/A indicates “not applicable
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
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Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of failure of the depository financial institution, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The City has no custodial credit risk for its investments since all the
City’s investments held in safekeeping by U.S. Trust in the City’s name are insured and registered. Credit Risk – Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. As indicated previously, Minnesota statute requires Commercial paper to be of the highest quality (A1, P1) and municipal general obligations need an “A” rating or better.
Concentration of Credit Risk – The City’s investment policy places no limit on the amount that may be
invested in any one issuer. The following is a list of investments by issuer which individually comprise more than 5 percent of the City’s total investments:
Credit
Type Amount Percent
Federal Home Loan Bank - FHLB $ 6,020,297 14%
Fannie Mae - FNMA 6,171,310 14%
Freddie Mac - FHLMC 8,178,910 19%
Federal Farm Credit Bank 2,989,810 7%
The City has the following recurring fair value measurements as of December 31, 2016:
• $43,265,681of $43,265,681 are valued using a matrix pricing model (Level 2 inputs).
Note 4 RECEIVABLES Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of deferred inflows and unearned revenue reported in the governmental funds were as follows:
Property Taxes Special Assessments Inter governmental Miscellaneous Revenue Total
Primary government:
Major funds:
General Fund $ 112,653 $ 7,327 $ - $ - $119,980 Municipal Building Capital Project Fund 4,420 - - 1,426 5,846
MSA Construction Capital Project Fund - 655,649 87,417 - 743,066
Closed Debt Fund 1,277 121,610 - - 122,887 Pavement Management Debt Service
Fund 4,813
4,627,749
-
-
4,632,562 Pavement Manage. Capital Project Fund - - 52,026 - 52,026
Nonmajor funds 2,764 2,203,198 - - 2,205,962
Total primary government 125,927 7,615,533 139,443 1,426 7,882,329
Component unit:
Economic Development Authority 1,073 - - - 1,073
Total reporting entity $127,000 $ 7,615,533 $ 139,443 $ 1,426 $ 7,883,472
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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Note 5 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2016 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Primary Government
Governmental activities:
Capital assets, not being depreciated:
Land $ 17,927,787 - - $ 17,927,787
Permanent easements 1,157,202 - - 1,157,202
Construction in progress 500,898 15,949,099 (7,201,891) 9,248,106
Total capital assets, not being depreciated 19,585,887 15,949,099 (7,201,891) 28,333,095
Capital assets, being depreciated:
Buildings and improvements 36,021,160 - - 36,021,160
Equipment and furniture 1,335,121 19,889 (108,873) 1,246,137
Machinery and equipment 11,302,784 797,635 (226,180) 11,874,239
Other improvements 6,285,232 1,630,183 - 7,915,415
Infrastructure:
Streets 97,657,702 2,512,372 - 100,170,074
Storm sewers 29,125,183 290,897 - 29,416,080
Sidewalks/trails 5,358,038 210,913 - 5,568,951
Total capital assets being depreciated 187,085,220 5,461,889 (335,053) 192,212,056
Less accumulated depreciation for:
Buildings and improvements 15,130,805 803,403 - 15,934,208
Equipment and furniture 1,020,581 63,351 (81,890) 1,002,042
Machinery and equipment 6,635,265 768,531 (216,699) 7,187,097
Other improvements 3,252,501 273,323 - 3,525,824
Infrastructure:
Streets 21,764,619 1,967,129 - 23,731,748
Storm sewers 7,158,659 588,305 - 7,746,964
Sidewalks/trails 1,030,040 116,237 - 1,146,277
Total accumulated depreciation 55,992,470 4,580,279 (298,589) 60,274,160
Total capital assets, being depreciated, net 131,092,750 881,610 (36,464) 131,937,896
Governmental activities capital assets, net $ 150,678,637 $16,830,709 $ (7,238,355) $ 160,270,991
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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Beginning Ending
Primary Government Balance Increases Decreases Balance
Business-type activities:
Capital assets, not being depreciated:
Land $ 325,000 $ - $ - $ 325,000
Construction in progress - - - -
Total capital assets, not being depreciated 325,000 - - 325,000
Capital assets, being depreciated:
Land improvements 39,803 - - 39,803
Buildings and improvements 4,101,713 - (12,000) 4,089,713
Machinery and equipment 2,233,395 - (127,677) 2,105,718
Other improvements 6,991,533 154,566 - 7,146,099
Water and sewer lines 64,912,519 661,347 - 65,573,866
Total capital assets, being depreciated 78,278,963 815,913 (139,677) 78,955,199
Less accumulated depreciation for:
Land improvements 9,155 794 - 10,745
Buildings and structures 2,289,094 114,488 (9,000) 2,494,582
Machinery and equipment 1,617,552 104,088 (127,677) 1,593,962
Other improvements 2,412,571 155,643 - 2,568,214
Water and sewer lines 17,362,229 1,186,995 - 18,549,226
Total accumulated depreciation 23,791,397 1,562,008 (136,677) 25,216,729
Total capital assets being depreciated - net 54,487,566 (746,095) (3,000) 53,738,470
Business-type activities capital assets - net $54,812,566 $ (746,095) $ (3,000) $54,063,470
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government $ 171,232
Community development 5,717
Public safety 631,080
Public works 2,960,515
Culture and recreation 752,331
Total depreciation expense governmental activities $ 4,520,875
Business-type activities:
Street lights $ 162,533
Cottage Grove EMS 65,313
Water operating 889,476
Sewer operating 444,686
Total depreciation expense before transfer $ 1,562,008
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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NOTE 6 LONG-TERM DEBT
A. GENERAL OBLIGATION DEBT
The City issues general obligation bonds to provide funds for the acquisition and construction of major capital improvements. The City issues special assessment bonds to finance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. The reporting
entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. As of December 31, 2016, the governmental long-term debt of the financial reporting entity consisted of the following:
Final
Interest Issue Maturity Original Payable
Rate Date Date Issue 12/31/2016
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 $ 1,025,000 GO Tax Increment Refunding Bonds of 2014A 2.0-2.50% 5/29/2014 2/1/2021 1,405,000 1,060,000
Total General Obligation Tax Increment Bonds 2,810,000 2,085,000 GO Refunding Bonds of 2016A 2.0-3.00% 1/28/2016 2/1/2027 4,660,000 4,660,000
Special Assessment Bonds with Government Commitment:
GO Improvement Bonds of 2009A 2.5-4.3% 4/16/2009 2/1/2024 3,650,000 1,940,000 GO Improvement Bonds of 2012A .30-2.2% 3/13/2012 2/1/2027 1,865,000 1,3855,000
GO Improvement Bonds of 2013A 3.0%-3.5% 9/26/2013 2/1/2029 7,345,000 6,615,000 GO Improvement Bonds of 2015A 2.5%-3.0% 5/27/2015 2/1/2031 5,700,000 5,700,000 GO Improvement Bonds of 2016B 2.5%-3.0% 5/27/2015 2/1/2031 4,275,000 4,275,000 Total Special Assessment Bonds 22,835,000 19,915,000 Bond premium - 776,124
Total Governmental Activities Bonds 30,305,000 27,436,124 Other postemployment benefits - 72,888 Compensated absences payable - 875,507 Total City indebtedness - governmental activities 30,305,000 28,384,519
BUSINESS TYPE ACTIVITIES Other postemployment benefits - 10,645 Compensated absences payable - 75,101 Total City indebtedness - business type activities - 85,746
Total City indebtedness - primary government $ 30,305,000 $ 28,470,265
Component Unit: EDA: Other postemployment benefits - 911 Compensated absences payable - 7,336
Total indebtedness - component unit $ - $ 8,247
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
61
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
2017 225,000 66,520 1,115,000 513,628
2018 240,000 61,030 1,280,000 504,715
2019 260,000 55,190 1,440,000 466,419
2020 275,000 48,820 1,465,000 425,447
2021 265,000 41,540 1,490,000 383,463
2022 255,000 31,872 1,515,000 340,325
2023 275,000 19,810 1,560,000 295,750
2024 290,000 6,743 1,580,000 249,823
2025 - - 1,350,000 208,395
2026 - - 1,380,000 172,230
2027 - - 1,330,000 136,469
2028 - - 1,280,000 99,973
2029 - - 1,315,000 61,986
2030 - - 710,000 34,153
2031 - - 685,000 17,210
2032 - - 300,000 5,670
2033 - - 120,000 1,260
Total $ 2,085,000 $ 331,525 $ 19,915,000 $ 3,916,916
G.O. Refunding Bonds
Year Ending Governmental Activities
December 31 Principal Interest
2017 575,000 119,775
2018 595,000 102,225
2019 610,000 84,150
2020 330,000 70,050
2021 340,000 60,000
2022 350,000 49,650
2023 355,000 39,075
2024 365,000 28,275
2025 375,000 19,050
2026 380,000 11,500
2027 385,000 3,850
Total $ 4,660,000 $ 587,600
It is not practicable to determine the specific year for payment of long-term accrued compensated absences.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
62
B. CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 31, 2016, was as follows:
Beginning Balance Additions Reductions Ending Balance Due Within One Year
Primary Government:
Governmental activities:
Bonds payable:
General obligation bonds $ 2,295,000 $4,660,000 $ (210,000) $ 6,745,000 $ 800,000
Special assessment bonds 17,485,000 4,275,000 (1,845,000) 19,915,000 1,115,000
Bond premiums 493,235 357,684 (74,795) 776,124 -
Total bonds payable 20,273,235 9,292,684 (2,129,795) 27,436,124 1,915,000
Capital lease payable-EDA component unit 4,805,000 - (4,805,000) - -
Capital lease payable-golf carts 37,432 - (37,432) - -
Other postemployment benefits 65,521 7,367 - 72,888 -
Compensated absences payable 857,206 737,875 (719,574) 875,507 644,332
Total government activities 26,038,394 10,037,926 (7,691,801) 28,384,519 2,559,332
Business-type activities:
Bonds payable:
Revenue bonds 600,000 - (600,000) - -
Bond premiums 9,856 - (9,856) - -
Total bonds payable 609,856 - (609,856) - -
Other postemployment benefits 9,555 1,090 - 10,645 -
Compensated absences payable 64,364 84,257 (73,520) 75,101 63,505
Total business-type activities 683,775 85,347 (683,376) 85,746 63,505
Total primary government $ 26,722,169 $ 10,123,273 $ (8,375,177) $ 28,470,265 $2,622,837
Component Unit:
Bonds payable:
Revenue bonds $ 4,805,000 $ - $ (4,805,000) $ - $ -
Total bonds payable 4,805,000 - (4,805,000) - -
Other postemployment benefits 811 100 - 911 -
Compensated absences payable 4,624 8,479 (5,767) 7,336 1,075
Total component unit $ 4,810,435 $ 8,579 $ (4,810,767) $ 8,247 $ 1,075
For the governmental activities, capital leases, other postemployment benefits and compensated absences
are generally liquidated by the general fund.
All long-term bonded indebtedness outstanding at December 31, 2016 is backed by the full faith and credit of the City, including special assessment and revenue bond issues. Delinquent assessments receivable at
December 31, 2016 totaled $21,213.
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.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
63
D. CAPITAL LEASES
In 2008, the City entered into a lease-purchase agreement with the EDA (a component unit) to finance the expansion of the ice arena. Per the agreement, the EDA issued $6,500,000 of revenue bonds and the proceeds were used by the City to finance the expansion. The lease qualified as a capital lease for accounting purposes,
and therefore, the construction costs were capitalized in the primary government. In January 2016, the City issued $4,660,000 in General Obligation Refunding Bonds, series 2016A the
proceeds of which were used to pay off the capital lease in its entirety.
In 2012, the City entered into a lease agreement for the purchase of 75 golf carts. The lease agreement
qualified as a capital lease for accounting purposes. This capital lease was paid off in 2016. Note 7 LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The limitation was 3 % of taxable market value and The City of Cottage Grove's legal debt
margin for 2016 and 2015 is computed as follows:
December 31, 2016 December 31, 2015
Market Value (after fiscal disparities) $ 3,124,680,400 $ 2,705,975,400 Debt Limit 93,740,412 81,179,262
Amount of debt applicable to debt limit: Total bonded debt $26,660,000 $25,185,000
Less: Special assessment bonds (19,915,000) (17,485,000) Proprietary bonds - (600,000)
Tax increment bonds (2,085,000) (2,295,000)
Total debt applicable to debt limit $4,660,000 $4,805,000
Legal debt margin $ 89,080,412 $ 76,374,262
Note 8 PENSION PLANS
The City participates in various pension plans, total pension expense for the year ended December 31, 2016 was $2,412,713. Components of pension expense are noted in the following plan summaries.
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 Minnesota (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 tax qualified plans under Section 401 (a) of the Internal Revenue
Code.
General Employees Retirement Plan (General Employees Plan(accounted for in the General Employees Fund))
All full-time and certain part-time employees of the City are covered by the General Employees Retirement Plan. General Employees Plan 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.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
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Public Employees Police and Fire Plan (Police and Fire Plan (accounted for in the Police and Fire Fund))
The Police and Fire Plan, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to
merge with and transfer assets and administration to PERA.
Benefits Provided PERA provides retirement, 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 that 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 section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service.
General Employees Plan 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 termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% 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 1.2% 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.
Police and Fire Plan Benefits Benefits for the Police and Fire Plan 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 Police and Fire Plan 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 each year of service. For Police and Fire Plan members 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 Chapter 353 sets the rates for employer and employee contributions. Contribution rates can
only be modified by the state legislature.
General Employees Fund 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 2016. The City was required to contribute
11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2016. The City’s contributions to the General Employees Fund for the year ended December 31, 2016, were $424,202. The City’s contributions were equal to the required contributions as set by state statute.
Police and Fire Fund Contributions
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
65
Plan members were required to contribute 10.8% of their annual covered salary in calendar year 2016. The City was required to contribute 16.20% of pay for Police and Fire Fund members in calendar year 2016. The City’s contributions to the Police and Fire Fund for the year ended December 31, 2016 were $718,935. The
City’s contributions were equal to the required contributions as set by state statute.
Pension Costs
General Employees Fund Pension Costs
At December 31, 2016, the City reported a liability of $7,128,925 for its proportionate share of the General
Employees Fund’s net pension liability. The City’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $6 million to the fund in 2016. The State of Minnesota is considered a non-
employer contributing entity and the State’s contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City totaled
$27,747. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s
proportion of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the City of Grove’s proportion share was 0.0878% which was a decrease of 4.5% from its proportion measured
as of June 30, 2015.
For the year ended December 31, 2016, the City of Cottage Grove recognized pension expense of $934,973 for its proportionate share of the General Employees Plan’s pension expense. In addition, the City recognized an additional $27,747 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $6 million to the General Employees Fund.
At December 31, 2016, the City of Cottage Grove reported its proportionate share of the General Employees Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following
sources:
$212,101 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences between expected and actual economic experience $ - $ 586,261
Difference between projected and actual investment earnings 1,368,185 -
Changes in actuarial assumptions 1,395,850 -
Changes in proportion - 302,637
Contributions paid to PERA subsequent to the measurement date 212,101 -
Total $ 2,976,136 $ 888,898
Year ended December 31: Pension Expense Amount
2017 $488,652 2018 488,650 2019 640,329
2020 257,506
2021 - Thereafter -
$1,875,137
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
66
Police and Fire Fund Pension Costs
At December 31, 2016, the City of Cottage Grove reported a liability of $17,818,574 for its proportionate share of the
Police and Fire Fund’s net pension liability. The net pension liability was measured as of June 30, 2016 and the total
pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date.
The City’s proportion of the net pension liability was based on the City’s contributions received by PERA during the
measurement period for employer payroll paid dates from July 1, 2015 through June 30, 2016, 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 .445 % which was an increase of 2.5% from its proportion measured at June 30, 2015.
For the year ended December 31, 2016, the City of Cottage Grove recognized pension expense of $3,057,502 for its
proportionate share of the Police and Fire Fund’s pension expense. The City of Cottage Grove also recognized
$40,050 for the year ended December 31, 2016, as pension expense (and grant revenue) for its proportionate share of
the State of Minnesota’s on-behalf contributions to the Police and Fire Fund. Legislation passed in 2013 required the
State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal 2014.
At December 31, 2016, the City of Cottage Grove reported its proportionate share of the Police and Fire Fund’s
deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
$359,468 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, 2017. Other amounts reported as deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows:
Actuarial Assumptions
The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions:
Inflation 2.50% per year Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences between expected and actual economic experience $ - $2,032,508
Difference between projected and actual investment earnings 2,709,024 -
Changes in actuarial assumptions 9,828,381
Changes in proportion 104,155 36,001
Contributions paid to PERA subsequent to the measurement date 359,468 -
Total $13,001,028 $2,068,509
Year ended December 31: Pension Expense Amount
2017 $2,269,968 2018 2,269,968
2019 2,269,979 2020 2,055,170
2021 1,707,966 Thereafter -
Total $10,573,051
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
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Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2014 tables for males or females, as appropriate, with slight adjustments. Cost of
living benefit increases for retirees are assumed to be: 1% for all future years for the General Employees Plan and Police and Fire Plan.
Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial experience studies. The most recent four year experience study in the General Employees Plan was for the period July 1, 2004, through June 30, 2009.
The following changes in actualrial assumptions occurred in 2016:
General Employees Fund
• The assumed post retirement benefit increase rate was changed from 1.0% per year through 2035
and 2.5% thereafter to 1.0% per year for all future years.
• The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%.
• Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth and inflaction were decreased by 0.25% to 3.25%
for payroll growth and 2.5% for inflation.
Police and Fire Fund
• The assumed post retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% thereafter to 1.0% per year for all future years.
• The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 5.6%.
• The assumed future salary increases, payroll growth and inflaction were decreased by 0.25% to
3.25% for payroll growth and 2.5% for inflation.
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building-block method in which
best-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 allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table:
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 in 2016 was 7.5%, a reduction from the 7.9% used in
2015. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on those assumptions, the fiduciary net position of the General Employees Fund was projected to be available to make all projected future benefit payments of current Plan members. 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.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
68
In the Police and Fire Fund, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2056. Beginning in fiscal uears ended June 2057 for the Police and Fire Fund, when projected benefit payments exceed the funds’ projected fiduciary net position,
benefit payments were discounted at the municipal bond rate of 2.85% based on an index of 20-year general obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount rate of 5.6% for the Police and Fire Fund was determined that produced approximately the same present value of projected
benefits using 7.50% applied to all years of projected benefits through the point of asset depletion and 2.85% after.
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 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 6.5% 7.5% 8.5%
City’s proportionate share of The General Employees Fund
net pension liability $10,125,186 $7,128,925 $4,660,821 City’s proportionate share of
The Police and Fire Fund net pension liability $24,959,654 $17,818,574 $11,983,770
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA
financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org .
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 Contribution
Plan, a multiple-employer deferred compensation plan administered by PERA. The Defined Contribution Plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of
employees are tax deferred until time of withdrawal.
The defined contribution plan consists of indibudual accounts paying a lump sum benefit. Plan benefits depend
solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Therefore, there is no future liablity to the employer. Minnesota Statutes, Chapter 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 contributions and twenty-five hundredths of 1% (.0025) of the assets in each member's account annually.
Pension expense for the year is equal to the contributions made. Total contributions made by the City during fiscal year 2016 were:
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
69
Contribution Amount Percentage of Covered Payroll Required Employee Employer Employee Employer Rate $1,157 $1,157 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 Association. The Cottage Grove Fire Relief Association is the administrator of a single employer defined
benefit pension plan established to provide benefits for members of the Cottage Grove Fire Department. The plan is established and administered in accordance with Minnesota State Statutes.
The Relief Association issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to Cottage Grove Volunteer Fire Relief Association, 7516 80th 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. Employees Covered by Benefit Terms
At December 31, 2016, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits - Inactive employees entitled to but not receiving benefits 18 Active employees 45 Total number of participants 63
Contributions
Minnesota Statutes Chapter 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 shall be used to amortize the unfunded liability of the relief association. The Association is comprised of
volunteers: therefore, there are no payroll expenditures (i.e. there are no covered payroll percentage
calculations). During the year, the City recognized as revenue and as an expenditure an on behalf payment of $193,481 made by the State of Minnesota for the Relief Association.
Net Pension Liability
The City's net pension liability was measured as of December 31, 2016, 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, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.75%
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
70
Salary increase N/A Investment rate of return 7.0%
The value of death benefits is similar to the value of the retirement pension. Because of low retirement
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 lifetime benefits.
The long-term return on assets has been set based on the plan's target investment allocation along with long-term return expectations by asset class. When there is sufficient historical evidence of market
outperformance, historical average returns may be considered. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation as of the measurement date are summarized in the table:
Asset Class Target Allocation Long-term Expected
Real Rate of Return Domestic equity 35% 5.58%
International equity 15% 5.71% Fixed income 45% 2.27%
Real estate and alternatives 0% 0.00% Cash 5% 0.84%
Discount rate
The discount rate used to measure the total pension liability was 7.0%. Assets were projected using
expected benefit payments and expected asset returns. Expected benefit payments by year were discounted using the expected 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 exhausted are discounted at
the municipal bond rate. The equivalent single rate is the discount rate.
Changes in the Net Pension Liability
Increase (Decrease)
Total Pension
Liability
Plan
Fiduciary Net
Position
Net Pension
Liability
Balances at December 31, 2015 $1,597,912 $2,327,613 $(729,701)
Changes for the year
Service cost 109,062 - 109,062
Interest 85,750 - 85,750
Changes of assumptions (130,240) - (130,240) Changes of benefit terms - - -
Contributions – State and local - 200,536 (200,536)
Net investment income - 146,660 (146,660)
Other additions - 210 (210)
Benefit payments, including member contribution refunds (295,760) (295,760) -
Administrative expense - (12,139) (12,139)
Net changes (231,188) 39,507 (270,695)
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
71
Balances at December 31, 2016 $1,366,724 $2,367,120 $(1,000,396)
Pension Liability Sensitivity
The following presents 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 6% 7% 8%
City’s proportionate share of
The net pension liability $(914,575) $(1,000,396) $(1,081,915)
Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position is
available in the separately issued relief association financial report.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
For the year ended December 31, 2016, the City of Cottage Grove recognized pension expense of $129,023.
At December 31, 2016, the City of Cottage Grove reported its proportionate share of the deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in
pension expense as follows:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences between expected and actual economic experience $- $-
Difference between projected and actual investment earnings 144,586 -
Changes in assumption 63,279 116,385
Total $207,865 $116,385
Year ended December 31: Pension Expense Amount
2017 $43,221
2018 43,221
2019 43,222
2020 (11,834)
2021 (6,689)
Thereafter (19,661)
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
72
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, 2016 were:
Fund Receivable Payable
Major Governmental Funds: Municipal Building Capital Project Fund $ - $ 7,425,000
Closed Debt Fund 2,000,000 - Nonmajor Governmental Funds 2,645,804 1,145,804
Major Business-Type Funds: Water Operating Enterprise Fund 1,092,500 -
Sewer Operating Enterprise Fund 2,832,500 -
Total $ 8,570,804 $ 8,570,804
Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and payable
balances at December 31, 2016 are as follows:
Fund Receivable Payable
Closed Debt Fund $ 405,131 $ -
Nonmajor Governmental Funds 2,194,153 2,599,284
Total $ 2,599,284 $ 2,599,284
Interfund transfers:
General Fund
Municipal
Bldg Capital
Project Fund
Closed
Debt Fund
Pavement
Mange. Capital
Project Fund
Nonmajor
Govern. Funds Total
Transfers Out
General Fund $ - $49,452 $ 115,388 $ 32,968 $ 854,792 $ 1,052,600
Closed Debt Fund - - - - 54,722 54,722 Nonmajor Governmental Funds 40,019 - - - 15,223 55,242
Major Business Fund Type:
Street Light Fund 45,846 - - - - 45,846 Cottage Grove EMS Fund 91,683 - - - - 91,683
Water Operating Fund 166,554 - - - - 166,554 Sewer Operating Fund 181,611 - - - - 181,611
Total transfers $ 525,713 $ 49,452 $ 115,388 $ 32,968 $ 924,737 $1,648,258
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. All transfers in 2016 were considered to be routine in nature.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
73
Note 10 TAX INCREMENT FINANCING The City of Cottage Grove is the administering authority for the following Tax Increment Financing Districts:
Cottages of
Cottage Grove #1-8
Gateway North District #1-12
Industrial Park #1-14
American Logistics #1-15 Gardenworld #1-16
Type of District
Housing Redevelop
Econ.
Develop.
Econ.
Develop.
Econ.
Develop.
Chapter 469.174 469.174 469.174 469.174 469.174
Established 1991 2001 2007 2015 2016
District Duration 25 years 25 years 9 years 9 years 9 years
Current tax capacity $ 33,253 $ 828,763 $ 131,250 $ 123,729 $ 4,650
Original tax capacity (1,268) (238,351) (5,226) (123,465) (4,650)
Captured tax capacity 31,985 590,412 126,024 264 -
Fiscal disparity deduction - - (44,599) - -
Total tax capacity retained by City $ 31,985 $590,413 $ 81,425 $ 264 $ -
Debt issued $ - $ 4,405,000 $ - $ - $ -
Amount redeemed - (2,320,000) - - -
Debt outstanding $ - $ 2,085,000 $ - $ - $ -
The City has entered into one Tax Increment Financing agreement which meets the criteria for disclosure under
Governmental Accounting Standards Board (GASB) Statement 77 - Tax Abatement Disclosures. The City’s authority to enter into this agreement comes from Minnesota Statute 469. The City entered into this agreement for the purpose
of economic development.
Under the agreement, the City and developer agree on an amount of development costs to be reimbursed to the developer by the City through tax revenues from the additional taxable value of the property generated by the
development (tax increment). A “pay as you go” note is established for this amount, on which the City makes payments for a fixed period of time with available tax increment revenue after deducting certain administrative costs.
During the year ended December 31, 2016 the City generated $776,061 in tax increment revenue and made $114,849
in payments to developers.
• TIF District #1-12 was established in 2001 for the purpose of redeveloping certain blighted properties into retail, commercial and senior housing developments. An agreement with
PHS/Cottage Grove Inc. called for up to $2.8 million to be reimbursed through tax increment over a ten year period. During the year ended December 31, 2016 the district generated $348,981 of tax
increment and $114,849 in payments on the pay as you go note were made. The balance due on the note at year end was $1,507,186.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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74
Note 11 DEFICIT FUND BALANCES/NET POSITION The City has deficit fund balances/net position at December 31, 2016 as follows:
Fund Amount The deficit fund balances will be resolved through
Major Governmental Funds: Municipal Building Capital Project Fund $ 7,287,121 Future tax levies
MSA Construction Capital Project Fund 654,942 Future MSA revenues Nonmajor Governmental Funds:
Golf Course Fund 268,134 Future excess revenues and transfers from other City resources
Park Trust Fund 212,971 Future developer charges
Sewer Connection and Area fund 669,764 Future special assessments and developer charges
2016 Improvements Capital Project Fund 1,016,643 Future special assessments and developer charges
Tax Increment Construction Revolving Fund 97,053 Future tax increments
Note 12 CONTINGENCIES A. RISK MANAGEMENT The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and omissions and natural disasters for which the City carries commercial insurance policies. The City retains risk for the deductible portions of the insurance policies. The amount of these deductibles is
considered immaterial to the financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years.
Workers compensation coverage is provided through a pooled self-insurance program through the League of
Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to supplemental assessments as deemed necessary by the LMCIT. The LMCIT reinsures through Worker’s Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is subject to a $10,000 medical expense deductible. The City’s premiums are determined after loss experience
is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid.
Property and casualty insurance coverage is provided through a pooled self-insurance program through LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments as deemed necessary by the LMCIT.
The City established the Self Insurance Fund in 1986 to account for and finance its uninsured risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees;
and natural disasters. Under this program, the Self Insurance Fund provides coverage for losses up to $50,000 for each claim (annual aggregate is $100,000). The City purchases commercial insurance for claims in excess of coverage provided by the Fund and for any risk of loss not covered. Settled claims have not exceeded the
commercial coverage in any of the past three fiscal years.
This fund is presented as an internal service fund type. All funds of the City participate in the program and
make payments to the Self Insurance Fund based on historical cost information. The claims liability of $159,741 reported in the Fund at December 31, 2016 is based on the requirements of Governmental Accounting Standards Board Statement Number 10, which requires that a liability for claims be reported if
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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75
information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.
Changes in the fund's claims liability amounts were as follows:
Beginning Claims and End
of Year Changes in Claim of Year Year Liability Estimates Payments Liability
2016 $ 143,708 $ 165,035 $ (149,002) $ 159,741
2015 158,905 125,171 (140,368) 143,708
2014 130,039 172,634 (143,768) 158,905
B. LITIGATION
The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City
attorney, remotely recoverable by plaintiffs.
C. FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and
conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion
of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31,
2016. D. TAX INCREMENTS The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund.
Note 13 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold,
specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to cancellation when and if
the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31,
2016 and 2015. Future scheduled tax levies for all bonds outstanding at December 31, 2016 totaled $14,483,090.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
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76
Note 14 FUND BALANCES At December 31, 2016 the City had various fund balances through legal restriction and City Council authorization.
Fund balance appropriations at December 31, 2016 are shown on the various balance sheets as segregations of the fund balance. The fund balance classifications for governmental funds are as follows:
Non-spendable Restricted Committed Assigned Unassigned Total
General Fund: $ - $ - $ - $ - $ 9,036,425 $ 9,036,425
Prepaid items 11,222 - - - - 11,222
Compensated absences - - - 828,250 - 828,250
2016 budget - - - 520,000 - 520,000
Emerald ash borer program - - - 40,200 - 40,200
School bus safety - - - 4,750 - 4,750
Total General Fund 11,222 - - 1,393,200 9,036,425 10,440,847
Municipal Building Capital Project Fund (7,287,121) (7,287,121)
MSA Construction Capital Project Fund:
MSA construction activities - - - - (654,942) (654,942)
Closed Debt Fund: Debt retirement - - - 4,259,047 - 4,259,047
Pavement Management Debt Service Fund:
Debt retirement - 3,055,149 - - - 3,055,149
Pavement Management Capital Project Fund:
Pavement management construction activities - - - 1,233,632 - 1,233,632
Total Other Major Funds - 3,055,149 - 5,492,679 (7,942,063) 605,765
Nonmajor Governmental Funds:
Prepaid items 5,723 - - - - 5,723
Inventory 28,750 - - - - 28,750
Forfeiture and seizure - 23,308 - - - 23,308
Charitable gambling - 4,457 - - - 4,457
Debt retirement - 168 - - - 168
Tax increment purposes - 117,610 - - - 117,610
Ice Arena - - 59,550 - - 59,550
Recycling program - - 57,523 - - 57,523
Storm water activities - - 614,017 - - 614,017
Equipment replacement - - - 1,792,092 - 1,792,092
Street sealcoating - - - 858,030 - 858,030
Economic development - - - 3,337,189 - 3,337,189
Future pavement management - - - 1,431,412 - 1,431,412
Tree mitigation - - - 364,676 - 364,676
Future roads and trails - - - 970,182 - 970,182
Capital improvements - - - 8,774,089 - 8,774,089
Deficit Fund Balance - - - - (2,298,433) (2,298,433)
Total Nonmajor Funds 34,473 145,543 731,090 17,527,670 (2,298,433) 16,140,343
Total Fund Balances Governmental Funds $ 45,695 $ 3,200,692 $ 731,090 $ 24,413,549 $(1,204,071) $ 27,186,955
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
77
Note 15 OTHER POSTEMPLOYMENT BENEFIT PLAN At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City engaged an actuary to determine the City’s liability for postemployment healthcare benefits other than pensions.
A. PLAN DESCRIPTION
The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees, who retire from the City when over age 50 and with 20 years of service, may continue coverage
with respect to both themselves and their eligible dependent(s) under the City’s health benefits program until age 65. Pursuant to the provisions of the plan, retirees are required to pay the total premium cost. As of
December 31, 2016 there were approximately 114 active participants, 2 retired participants and 1 disabled participant receiving benefits from the City’s health plans. The Plan does not issue a separate report.
B. FUNDING POLICY
The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2016, the City contributed
$13,469 to the plan.
C. ANNUAL OPEB COST AND NET OPEB OBLIGATION
The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB
Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any un-funded actuarial liabilities over a period not to exceed thirty years.
The following table shows the components of the City’s annual OPEB costs for the year, the amount actually paid from the plan, and changes in the City’s net OPEB obligation:
Annual required Contribution $ 24,194
Interest on Net OPEB Obligation 759
Adjustment to Annual Required Contribution (2,927)
Annual OPEB Cost (Expense) 22,026
Contributions Made (13,469)
Increase in Net OPEB Obligation 8,557
Net OPEB Obligation- Beginning of Year 75,887
Net OPEB Obligation- End of Year $ 84,444
The City’s annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation for 2016:
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
12/31/2016 $22,026 61.2% $ 84,444
12/31/2015 22,212 67.2% 75,887
12/31/2014 22,533 53.7% 68,614
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2016
78
D. FUNDED STATUS AND FUNDED PROGRESS
As of January 1, 2014, the most recent actuarial valuation date, the City’s unfunded actuarial accrued liability (UAAL) was $324,523. The annual payroll for active employees covered by the plan in the actuarial
valuation was $9,765,700 for a ratio of UAAL to covered payroll of 3.3%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results
are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
E. ACTUARIAL METHODS AND ASSUMPTIONS
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the
effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the January 1, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 1% investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer’s own
investments calculated based on the funded level of the plan at the valuation date. The inflation assumption
was 1%. The initial healthcare trend rate was 8%, reduced by decrements to an ultimate rate of 3% after five years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis. The
remaining amortization period at December 31, 2016 was 21 years.
Note 16 OPERATING LEASES
The City leases land for the golf course under an operating 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 extension option to 2020.
In 2015, $60 was paid under this lease arrangement for the entire five year extension.
The City had a lease for eight copiers under an operating lease and the EDA component unit leased one copier. These leases ended in October 2016. Total 2016 payments for these leases were $16,743 for the primary government and
$2,085 for component unit.
The City entered into two operating leases during 2007 for the leasing of ice time for the Ice Arena with Independent School District 833 and the Cottage Grove Athletic Association. The lease payments began in 2008 when the new ice
arena expansion project opened. The future minimum annual lease payments that the City will receive are as follows:
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
79
Independent Cottage Grove
Year Ended School District Athletic
December 31 833 Association
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 COMMITTED CONTRACTS
At December 31, 2016, the City had commitments of $1,755,142 for uncompleted construction contracts.
Note 18 CONDUIT DEBT OBLIGATIONS
The City has issued Industrial Revenue Bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The
bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the
bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of December 31, 2016, a series of Industrial Revenue Bonds were outstanding.
Bond Issue Date
Original Issue
Amount 12/31/16 Balance Maturity Date Industrial Revenue Bonds-Allina Health Systems 08/05/1998 $4,100,000 Not available 08/05/2018 Commercial Development Revenue Note-HSI 12/22/2004 935,000 463,830* 12/01/2024
Commercial Development Revenue Note-ESR, Inc. 11/22/2005 76,500 32,126 11/22/2025 Commercial Development Revenue Note-ESR, Inc. 05/19/2005 853,000 511,070 12/19/2025 Subordinate Senior Housing Revenue Bonds-PHS 12/01/2006 21,105,000 19,925,000 12/01/2046
Subordinate Senior Housing Revenue Bonds-PHS 12/01/2006 8,075,000 7,695,000 12/01/2046 Variable Rate Revenue Bonds-Allina Health System 11/01/2009 6,100,000 6,100,000 11/15/2022
Multifamily Housing Note-Legends of Cottage Grove 10/07/2016 18,422,000 18,422,000 05/01/2034 Multifamily Housing Note-Legends of Cottage Grove 10/07/2016 6,118,000 6,118,000 05/01/2034 $65,784,500 $59,267,026 *Per original conduit debt bond schedule
Note 19 PROPERTIES HELD FOR RESALE The City purchased land in 2010 to be resold to a future industrial occupant in the City’s industrial park. The occupant
is not known at this time.
The EDA component unit purchased land in 2011 to be resold for possible future development. The occupant is not known at this time.
CITY OF COTTAGE GROVE, MINNESOTA NOTES TO FINANCIAL STATEMENTS
December 31, 2014
80
The City purchased the Home Depot parcel in 2015 to be resold for future development. The City sold this parcel in 2016 for $1,950,000 to a private developer.
Note 20 SUBSEQUENT EVENT
Subsequent to December 31, 2016, the City Council authorized the issuance and public sale of $9,155,000 General Obligation Capital Improvement Plan Bonds, Series 2017A the proceeds of which are to be used in the construction of a Central Fire Station in Cottage Grove. The bonds were issued and dated May 11, 2017.
Note 21 NEW STANDARD ISSUED BUT NOT YET IMPLEMENTED
GASB has issued GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. This new statement requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about OPEB liabilities. This statement is effective for
financial statements for fiscal years beginning after June 15, 2017.
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF COTTAGE GROVE, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 5
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget - 2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenue:
General property taxes:
Current and delinquent 12,610,100$ 12,610,100$ 12,573,607$ (36,493)$ 12,078,076$
Special Assessments 19,500 19,500 5,703 (13,797) 15,787
Licenses and permits:
General government 75,350 75,350 80,225 4,875 86,338
Community development 519,125 1,019,125 1,207,047 187,922 1,191,976
Engineering - - 9,460 9,460 5,420
Public safety 29,100 29,100 26,948 (2,152) 21,708
Total licenses and permits 623,575 1,123,575 1,323,680 200,105 1,305,442
Intergovernmental:
Federal:
Safe and sober - public safety 22,000 22,000 23,296 1,296 21,561
Assistance to firefighters grant - public safety - - - - 4,224
Ballistic vest grant - public safety - - 3,717 3,717 3,836
Misc. grant - general government - - - - 550
State:
Local government aid 75,000 75,000 75,362 362 72,518
Market value homestead credit - - 5,210 5,210 5,171
MSA maintenance - public works 42,000 42,000 43,245 1,245 43,245
PERA aid 21,450 21,450 43,613 22,163 21,448
Fire relief aid - public safety 123,000 193,000 193,271 271 191,183
Police relief aid - public safety 270,000 315,000 319,038 4,038 307,725
Conservation grant - culture and recreation - 150,000 150,277 277 22,135
Other - public safety 16,000 16,000 38,826 22,826 30,795
Other - planning - - 9,731 9,731 -
Local:
SRO program - public safety 75,000 75,000 75,000 - 75,000
Narcotics officer program - public safety 4,000 4,000 1,841 (2,159) 653
Other - public safety 4,000 4,000 21,074 17,074 4,689
Other - public works - - 1,750 1,750 18,930
Other - culture and recreation 19,800 19,800 14,720 (5,080) 18,995
Total intergovernmental 672,250 937,250 1,019,971 82,721 842,658
Charges for services:
Administration charges - general government:
Investment charge - general government 13,800 13,800 8,691 (5,109) 11,201
Other - general government 300 300 341 41 722
Other - community development 35,500 35,500 84,083 48,583 62,815
Other - engineering 229,000 229,000 357,277 128,277 267,625
Other - public safety 48,500 48,500 53,836 5,336 43,561
Other - public works 33,600 33,600 25,518 (8,082) 24,459
Other - culture and recreation 155,900 155,900 142,809 (13,091) 147,074
Total charges for services 516,600 516,600 672,555 155,955 557,457
Budgeted Amounts
82
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, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget - 2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenue: (continued)
Fines and forfeits - public safety 175,000$ 175,000$ 196,360$ 21,360$ 210,802$
Investment earnings (loss)60,000 60,000 51,980 (8,020) 69,257
Donations:
Donations - public safety - - 4,418 4,418 13,750
Donations - culture and recreation 5,000 5,000 2,775 (2,225) 6,022
Total donations 5,000 5,000 7,193 2,193 19,772
Miscellaneous:
Other - general government 133,685 133,685 106,858 (26,827) 140,679
Other - public safety 12,000 12,000 37,589 25,589 25,010
Other - public works - - 21,543 21,543 12,963
Other - culture and recreation 400 400 159 (241) 345
Total miscellaneous 146,085 146,085 166,149 20,064 178,997
Total revenues 14,828,110 15,593,110 16,017,198 424,088 15,278,248
Expenditures:
General government:
Mayor and city council:
Personal services 40,050 40,050 38,942 1,108 38,942
Commodities 1,200 1,200 626 574 911
Contractual services 73,950 73,950 91,721 (17,771) 57,551
Total mayor and city council 115,200 115,200 131,289 (16,089) 97,404
Administrative:
Personal services 266,300 335,635 353,733 (18,098) 333,846
Commodities 1,550 1,550 496 1,054 1,699
Contractual services 10,535 10,535 11,426 (891) 11,566
Total administrative 278,385 347,720 365,655 (17,935) 347,111
Finance:
Personal services 509,200 509,200 479,710 29,490 493,885
Commodities 2,500 2,500 751 1,749 911
Contractual services 43,025 43,025 37,393 5,632 34,134
Total finance 554,725 554,725 517,854 36,871 528,930
Personnel:
Personal services 145,500 110,835 117,240 (6,405) 104,568
Commodities 200 200 - 200 76
Contractual services 11,025 11,025 14,079 (3,054) 36,340
Total personnel 156,725 122,060 131,319 (9,259) 140,984
Professional services:
Contractual services 155,600 155,600 157,345 (1,745) 153,248
City clerk/elections:
Personal services 164,700 130,035 145,181 (15,146) 144,181
Commodities 2,300 2,300 720 1,580 587
Contractual services 15,875 15,875 18,909 (3,034) 13,112
Total City clerk/elections 182,875 148,210 164,810 (16,600) 157,880
Budgeted Amounts
83
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, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget - 2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Expenditures: (continued)
General government: (continued)
Legal:
Contractual services 190,950$ 190,950$ 199,160$ (8,210)$ 218,843$
Community and employee programs:
Personal services 3,600 3,600 2,350 1,250 2,852
Commodities 500 500 580 (80) 42
Contractual services 59,730 59,730 52,284 7,446 63,567
Total community and employee programs 63,830 63,830 55,214 8,616 66,461
Government buildings:
Personal services 126,900 126,900 137,719 (10,819) 80,741
Commodities 16,070 16,070 28,663 (12,593) 35,758
Contractual services 292,295 292,295 282,096 10,199 293,390
Total government buildings 435,265 435,265 448,478 (13,213) 409,889
Historic preservation:
Personal services 11,000 11,000 9,438 1,562 900
Commodities 250 250 40 210 49
Contractual services 500 500 117 383 850
Total historic preservation 11,750 11,750 9,595 2,155 1,799
Total general government 2,145,305 2,145,310 2,180,719 (35,409) 2,122,549
Community Development:
Planning and zoning:
Personal services 292,200 292,200 306,807 (14,607) 298,255
Commodities 1,000 1,000 2,299 (1,299) 997
Contractual services 44,985 44,985 42,168 2,817 29,108
Total planning and zoning 338,185 338,185 351,274 (13,089) 328,360
Building inspections:
Personal services 464,800 449,800 441,646 8,154 437,487
Commodities 8,250 8,250 6,988 1,262 9,113
Contractual services 86,930 101,930 108,916 (6,986) 89,203
Total building inspections 559,980 559,980 557,550 2,430 535,803
Engineering:
Personal services 147,700 147,700 173,269 (25,569) 153,784
Commodities 1,900 1,900 1,986 (86) 978
Contractual services 45,815 45,815 33,681 12,134 39,612
Total engineering 195,415 195,415 208,936 (13,521) 194,374
Total community development 1,093,580 1,093,580 1,117,760 (24,180) 1,058,537
Public safety:
Police protection:
Personal services 5,216,340 5,216,340 5,248,945 (32,605) 4,812,418
Commodities 281,450 281,450 280,013 1,437 269,378
Contractual services 444,100 444,100 462,527 (18,427) 438,318
Capital outlay 182,500 182,500 184,782 (2,282) 196,324
Total police protection 6,124,390 6,124,390 6,176,267 (51,877) 5,716,438
Fire protection:
Personal services 678,100 678,100 739,297 (61,197) 632,451
Commodities 78,780 78,780 54,828 23,952 60,497
Contractual services 241,940 241,940 244,582 (2,642) 230,128
Total fire protection 998,820 998,820 1,038,707 (39,887) 923,076
Fire relief:
Contractual services 123,000 193,000 193,481 (481) 196,512
Budgeted Amounts
84
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, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget - 2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Expenditures: (continued)
Public safety: (continued)
Emergency preparedness:
Personal services 30,900$ 30,900$ 16,297$ 14,603$ 27,700$
Commodities 100 100 4,176 (4,076) 1,700
Contractual services 45,345 45,345 29,900 15,445 28,649
Total civil defense 76,345 76,345 50,373 25,972 58,049
Animal control:
Personal services 15,045 15,045 14,633 412 14,600
Commodities 3,700 3,700 3,171 529 3,808
Contractual services 20,900 20,900 9,198 11,702 10,526
Total animal control 39,645 39,645 27,002 12,643 28,934
Total public safety 7,362,200 7,432,200 7,485,830 (53,630) 6,923,009
Public works:
Public works administration:
Personal services 298,400 298,400 313,884 (15,484) 292,351
Commodities 22,225 22,225 16,809 5,416 16,544
Contractual services 162,675 162,675 151,490 11,185 142,536
Total public works administration 483,300 483,300 482,183 1,117 451,431
Streets:
Personal services 615,200 615,200 637,322 (22,122) 582,552
Commodities 300,250 300,250 221,065 79,185 233,916
Contractual services 379,420 379,420 336,329 43,091 381,667
Capital outlay 9,000 9,000 8,598 402 6,239
Total streets 1,303,870 1,303,870 1,203,314 100,556 1,204,374
Snow and ice control:
Personal services 200,800 200,800 161,721 39,079 135,820
Commodities 285,825 285,825 225,141 60,684 200,833
Contractual services 146,000 146,000 158,465 (12,465) 98,318
Capital outlay 5,000 5,000 11,712 (6,712) -
Total snow and ice control 637,625 637,625 557,039 80,586 434,971
Street signs/striping:
Personal services 119,100 119,100 110,062 9,038 115,063
Commodities 33,530 33,530 42,011 (8,481) 33,077
Contractual services 59,250 59,250 33,000 26,250 64,911
Capital outlay - - - - 5,899
Total street signs/striping 211,880 211,880 185,073 26,807 218,950
Total public works 2,636,675 2,636,675 2,427,609 209,066 2,309,726
Budgeted Amounts
85
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, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget - 2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Expenditures: (continued)
Culture and recreation:
Forestry:
Personal services 93,560$ 93,560$ 115,413$ (21,853)$ 106,911$
Commodities 19,450 19,450 6,827 12,623 7,572
Contractual services 219,290 219,290 238,670 (19,380) 206,515
Total forestry 332,300 332,300 360,910 (28,610) 320,998
Recreation programs:
Personal services 271,600 271,600 266,178 5,422 254,209
Commodities 9,850 9,850 5,165 4,685 5,926
Contractual services 88,105 88,105 68,484 19,621 81,407
Total recreation programs 369,555 369,555 339,827 29,728 341,542
Parks maintenance:
Personal services 762,860 762,860 784,986 (22,126) 713,474
Commodities 182,600 182,600 138,904 43,696 153,894
Contractual services 302,670 302,670 317,564 (14,894) 282,325
Capital outlay 10,000 185,000 148,792 36,208 22,135
Total parks maintenance 1,258,130 1,433,130 1,390,246 42,884 1,171,828
Total culture and recreation 1,959,985 2,134,985 2,090,983 44,002 1,834,368
Total expenditures 15,197,745 15,442,750 15,302,901 139,849 14,248,189
Revenues over (under) expenditures (369,635) 150,360 714,297 563,937 1,030,059
Other financing sources (uses):
Transfer from Special Revenue Fund - - 5,000 5,000 40,020
Transfer from Enterprise Fund 525,710 525,710 520,713 (4,997) 488,690
Transfer to Debt Service Fund - - (115,388) (115,388) (404,522)
Transfer to Special Revenue Fund - (100,000) (100,000) - -
Transfer to Capital Project Fund (672,375) (672,375) (837,212) (164,837) (412,951)
Total other financing sources (uses):(146,665) (246,665) (526,887) (280,222) (288,763)
Net increase (decrease) in fund balance (516,300)$ (96,305)$ 187,410 283,715$ 741,296
Fund balance - January 1 10,253,437 9,512,141
Fund balance - December 31 10,440,847$ 10,253,437$
Budgeted Amounts
86
City's Covered-
Employee Payroll
2016 0.0878%7,128,925$ 43,058$ 7,221,983$ 5,447,306$ 132.58%68.91%2015 0.0919%4,762,735$ -$ - 5,401,220$ 88.18%78.19%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
For Fiscal Year Ended June 30,
City's Proportion
of the Net Pension Liability (Asset)
City's
Proportionate
Share of the Net Pension Liability (Asset) City's Covered-Employee Payroll
City's
Proportionate
Share of the Net
Pension Liability
(Asset) as a
Percentage of its Covered-Employee Payroll
Plan Fiduciary
Net Position as a
Percentage of the Total Pension Liability
2016 0.4450%17,818,574$ 4,286,586$ 415.68%63.88%
2015 0.4340%4,931,256 3,970,895 124.19%86.61%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
Plan Fiduciary
Net Position as a
Percentage of the
Total Pension
Liability
Last Ten Years
For Fiscal Year
Ended June 30,
Public Employees Police and Fire Retirement Fund
State's Proportionate Share (Amount)
of the Net
Pension Liability
Associated with
the City
City's
Proportionate
Share of the Net
Pension Liablility and the State's Proportionate
Share of the Net
Pension Liablility
Associated with
the City
of Net Pension Liability
City of Cottage Grove
Schedule of City's Proportionate Share
of Net Pension Liability
Last Ten Years
Schedule of City's Proportionate Share
General Employees Retirement Fund
City's Proportionate
Share
(Percentage) of
the Net Pension
Liability (Asset)
City's Proportionate
Share (Amount)
of the Net
Pension Liability
(Asset)
City's
Proportionate Share of the Net Pension Liability
(Asset) as a
Percentage of its
Covered-
Employee Payroll
87
2016 424,202$ 424,202$ -$ 5,656,027$ 7.5%
2015 403,964$ 403,964$ -$ 5,401,220$ 7.5%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
2016 718,936$ 718,936$ -$ 4,437,877$ 16.2%
2015 664,300$ 664,300$ -$ 4,100,617$ 16.2%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
City of Cottage Grove
Schedule of City ContributionsGeneral Employees Retirement Fund
Last Ten Years
Contribution
Deficiency
(Excess)
City's Covered-
Employee Payroll
Last Ten Years
Contributions as a
Percentage of
Covered-
Employee Payroll
Statutorily
Required
Contribution
Statutorily
Required
Contribution
Contributions in
Relation to the
Statutorily
Required
Contributions
Contribution
Deficiency
(Excess)
Contributions in
Relation to the
Statutorily
Required
Contributions
Fiscal Year
Ending
December 31,
City's Covered-
Employee Payroll
Contributions as a
Percentage of
Covered-
Employee Payroll
Schedule of City Contributions
Public Employees Police and Fire Retirement Fund
Fiscal Year
Ending
December 31,
88
2014 2015 2016
Employer
Statutorily determined contribution (SDC)-$ -$ -$
Contribution in relation to the SDC 5,155 5,329 5,265
Contribution deficiency (excess)(5,155)$ (5,329)$ (5,265)$
Non-employer
2% aid 177,804$ 191,183$ 195,271$
Covered employee payroll n/a n/a n/a
Contributions as a percentage of covered employee payroll n/a n/a n/a
City of Cottage Grove
Schedule of City Contributions
and Non-employer Contributing
Entities - Fire Relief Association
The City implemented the provisions of Governmental Accounting Standards Board Statement No. 68 for the year ended
December 31, 2015. The schedules within the Required Supplementary Information section required a ten-year presentation, but
does not required retroactive reporting. Information prior to 2014 is not available. Additional years will be reported as they
become available.
89
2014 2015 2016
Total pension liability (TPL)
Service cost 77,691$ 79,827$ 109,062$
Interest 85,148 88,550 85,750
Differences between expected and actual experience - - -
Changes of assumptions - 77,611 (130,240)
Changes of benefit terms - 139,930 -
Benefit payments, including refunds or member contributions (84,321) (140,973) (295,760)
Net change in total pension liability 78,518 244,945 (231,188)
Beginning of year 1,274,449 1,352,967 1,597,912
End of year 1,352,967$ 1,597,912$ 1,366,724$
Plan fiduciary net pension (FNP)
Contributions - employer 5,155$ 5,329$ 5,265$
Contributions - non-employer 177,804 191,183 195,271
Net investment income 98,130 (117,642) 146,660
Benefit payments, including refunds of member contributions (84,321) (140,973) (295,760)
Administrative expense (11,193) (15,165) (12,139)
Other (23,403) - 210
Net change in plan fiduciary net position 162,172 (77,268) 39,507
- -
Beginning of year 2,242,564 2,404,881 2,327,613
End of year 2,404,736$ 2,327,613$ 2,367,120$
..
Net pension liability (NPL)(1,051,769)$ (729,701)$ (1,000,396)$
Plan fiduciary net position as a percentage of the total
pension liability 177.7%145.7%173.2%
Covered employee payroll n/a n/a n/a
Net pension liability as a percentage of covered payroll n/a n/a n/a
City of Cottage Grove
Schedule of Changes in Net Pension Liability
and Related Ratios - Fire Relief Association
Measurement Date
The City implemented the provisions of Governmental Accounting Standards Board Statement No. 68 for the year ended
December 31, 2015. The schedules within the Required Supplementary Information section required a ten-year
presentation, but does not required retroactive reporting. Information prior to 2014 is not available. Additional years will
be reported as they become available.
90
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$ 3.30%
1/1/2011 - 108,298 108,298 - 8,887,000 1.20%
1/1/2008 - 146,597 146,597 - 8,750,900 1.70%
City of Cottage Grove, Minnesota
Required Supplementary Information
Funding Progress Schedule
Other Post Employment Health Care Benefits
December 31, 2016
91
-This Page Intentionally left Blank -
92
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
93
-This Page Intentionally left Blank -
94
NONMAJOR GOVERNMENTAL FUNDS
95
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources that
are legally restricted to expenditures for specified purposes.
DEBT SERVICE FUNDS
The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal and related costs on general long-term debt.
CAPITAL PROJECT FUNDS
The Capital Project Funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds).
96
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET Statement 10
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2016
With Comparative Data as of December 31, 2015
Special Debt Capital
Revenue Service Project 2016 2015
Assets:
Cash and investments 287,274$ 1,042,801$ 16,446,962$ 17,777,037$ 15,054,522$
Interfund receivable 332,850 - 1,861,303 2,194,153 1,221,111
Interfund loan receivable - - 2,645,804 2,645,804 2,261,758
Due from other governmental units - net 26,565 - 900,725 927,290 84,166
Accounts receivable - net 317,023 - 166,465 483,488 565,071
Prepaid items 5,723 - - 5,723 7,343
Inventories - at cost 28,750 - - 28,750 20,696
Delinquent property taxes receivable 2,661 - 103 2,764 2,793
Special assessments receivable:
Deferred - - 2,196,978 2,196,978 1,129,114
Delinquent - - 6,220 6,220 101
Property held for resale - - - - 1,950,000
Total assets 1,000,846$ 1,042,801$ 24,224,560$ 26,268,207$ 22,296,675$
Liabilities:
Accounts payable 85,516$ 925,023$ 1,546,883$ 2,557,422$ 316,318$
Salaries payable 69,451 - - 69,451 58,642
Interfund payable 332,850 - 1,861,303 2,194,153 1,626,227
Contracts payable - - 49,188 49,188 188,437
Due to other governmental units 11,287 - 188,375 199,662 6,160
Deposits payable 7,755 - 1,698,467 1,706,222 387,052
Interfund loan payable - - 1,145,804 1,145,804 761,758
Total liabilities 506,859 925,023 6,490,020 7,921,902 3,344,594
Deferred inflows of resources:
Unavailable revenue - property taxes 2,661 - 103 2,764 2,793
Unavailable revenue - special assessments - - 2,203,198 2,203,198 1,129,215
Total deferred inflows of resources 2,661 - 2,203,301 2,205,962 1,132,008
Fund balance:
Nonspendable:
Prepaid items 5,723 - - 5,723 7,343
Inventory 28,750 - - 28,750 20,696
Restricted for:
Forfeiture and seizure 23,308 - - 23,308 39,166
Charitable gambling 4,457 - - 4,457 9,405
Debt retirement - 168 - 168 218,191
Tax increment purposes - 117,610 - 117,610 2,042,151
Committed 731,090 - - 731,090 394,204
Assigned - - 17,527,670 17,527,670 16,695,201
Unassigned (302,002) - (1,996,431) (2,298,433) (1,606,284)
Total fund balance 491,326 117,778 15,531,239 16,140,343 17,820,073
Total liabilities, deferred inflows of resources,
and fund balance 1,000,846$ 1,042,801$ 24,224,560$ 26,268,207$ 22,296,675$
Totals
Nonmajor
Governmental Funds
97
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, 2016
With Comparative Data for the Year Ended December 31, 2015
Special Debt Capital
Revenues:Revenue Service Project 2016 2015
General property taxes 288,607$ -$ 34$ 288,641$ 292,458$
Franchise taxes - - 516,931 516,931 526,643
Aggregate taxes - - 39,748 39,748 37,133
Tax increment collections - 313,000 463,061 776,061 710,541
Special assessments - - 603,664 603,664 137,955
Direct charges to developers - - 277,860 277,860 307,971
Intergovernmental 134,495 565,562 711,979 1,412,036 157,465
Charges for services 3,208,519 - 180,227 3,388,746 3,685,422
Rent - - 447,426 447,426 -
Fines and forfeits 39,900 - - 39,900 17,840
Investment earnings (loss)1,376 20,711 78,103 100,190 134,109
Interest on interfund loan - - 32,560 32,560 45,599
Connection charges - - 649,489 649,489 318,092
Park dedication fees - - 212,865 212,865 9,010
Other sales - - 1,048,871 1,048,871 469,454
Donations - - 449,745 449,745 358,241
Miscellaneous 10,692 - 82,760 93,452 104,760
Total revenues 3,683,589 899,273 5,795,323 10,378,185 7,312,693
Expenditures:
Current:
General government - 926,473 91 926,564 1,726
Economic development - - 2,236,464 2,236,464 1,456,306
Public safety 28,437 - 117,573 146,010 25,119
Public works 525,905 - 1,183,431 1,709,336 1,146,897
Culture and recreation 2,344,491 - 151,946 2,496,437 2,342,759
Capital outlay:
General government - - 24,709 24,709 -
Public safety 27,506 - 61,142 88,648 87,913
Public works - - 3,244,017 3,244,017 749,116
Culture and recreation 76,457 - 404,518 480,975 865,192
Debt service:
Principal retirement - 5,815,000 - 5,815,000 450,000
Capital lease payment 327,432 - - 327,432 316,235
Interest and fiscal charges 109,614 239,661 17,760 367,035 373,990
Total expenditures 3,439,842 6,981,134 7,441,651 17,862,627 7,815,253
Revenues over (under) expenditures 243,747 (6,081,861) (1,646,328) (7,484,442) (502,560)
Other financing sources (uses):
Transfers in 100,000 54,722 770,015 924,737 1,612,951
Transfers out (40,019) - (15,223) (55,242) (1,398,914)
Bonds issued - 4,660,000 - 4,660,000 -
Premium on debt issued - 259,764 - 259,764 -
Proceeds from the sale of capital assets - - 15,453 15,453 53,267
Total other financing sources (uses)59,981 4,974,486 770,245 5,804,712 267,304
Net increase (decrease) in fund balance 303,728 (1,107,375) (876,083) (1,679,730) (235,256)
Fund balance - January 1 187,598 1,225,153 16,407,322 17,820,073 18,055,329
Fund balance - December 31 491,326$ 117,778$ 15,531,239$ 16,140,343$ 17,820,073$
Nonmajor
Totals
Governmental Funds
98
NONMAJOR SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources that
are legally restricted to expenditures for particular purposes. The City maintained the following Special Revenue Funds during the year:
Recycling – Established to account for recycling advertising, promotion, and
capital expenditures.
Storm Water Maintenance – Established to account for the receipt of storm water
fees to be used for storm water maintenance activities.
Forfeiture/Seizure – Established to account for Police Department proceeds from
property seized under MS 609.53.
Ice Arena Fund – Established to account for operating the City's ice arena.
Golf Course Fund – Established to account for the City's eighteen hole golf course
and banquet facility.
Charitable Gambling – Established to account for the 3% tax on charitable
gambling operations.
99
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2016
With Comparative Data as of December 31, 2015
Storm
Water Forfeiture/
Recycling Maintenance Seizure
Assets:
Cash and investments 70,511$ 178,863$ 33,443$
Interfund receivable - 332,850 -
Due from other governmental units - net - - -
Accounts receivable - net - 120,534 -
Prepaid items - - -
Inventories - at cost - - -
Delinquent property taxes receivable - - -
Total assets 70,511$ 632,247$ 33,443$
Liabilities:
Accounts payable 12,419$ 1,323$ 10,135$
Salaries payable 569 16,770 -
Interfund payable - - -
Contracts payable - - -
Due to other governmental units - 137 -
Deposits payable - - -
Total liabilities 12,988 18,230 10,135
Deferred inflows of resources:
Unavailable revenue - property taxes - - -
Total deferred inflows of resources - - -
Fund balance:
Nonspendable:
Prepaid items - - -
Inventory - - -
Restricted for:
Forfeiture and seizure - - 23,308
Charitable gambling - - -
Committed for:
Ice arena - - -
Storm water activities - 614,017 -
Recycling program 57,523 - -
Unassigned - - -
Total fund balance 57,523 614,017 23,308
Total liabilities, deferred inflows of resources,
and fund balance 70,511$ 632,247$ 33,443$
100
Statement 12
Ice Golf Charitable
Arena Course Gambling 2016 2015
-$ -$ 4,457$ 287,274$ 344,057$
- - - 332,850 -
26,565 - - 26,565 34,495
196,489 - - 317,023 321,490
605 5,118 - 5,723 7,343
- 28,750 - 28,750 20,696
2,661 - - 2,661 2,663
226,320$ 33,868$ 4,457$ 1,000,846$ 730,744$
31,041$ 30,598$ -$ 85,516$ 55,633$
21,502 30,610 - 69,451 58,642
106,816 226,034 - 332,850 405,116
- - - - 833
4,145 7,005 - 11,287 5,511
- 7,755 - 7,755 14,748
163,504 302,002 - 506,859 540,483
2,661 - - 2,661 2,663
2,661 - - 2,661 2,663
605 5,118 - 5,723 7,343
- 28,750 - 28,750 20,696
- - - 23,308 39,166
- - 4,457 4,457 9,405
59,550 - - 59,550 -
- - - 614,017 337,614
- - - 57,523 56,590
- (302,002) - (302,002) (283,216)
60,155 (268,134) 4,457 491,326 187,598
226,320$ 33,868$ 4,457$ 1,000,846$ 730,744$
Totals
Special Revenue Funds
Nonmajor
101
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCENONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Storm
Water Forfeiture/
Recycling Maintenance Seizure
Revenues:
General property taxes -$ -$ -$
Intergovernmental:
Local:
Washington county 77,495 - -
School district - - -
Other - - -
Charges for services - 756,126 -
Fines and forfeits - - 39,900
Investment earnings (loss)340 799 185
Miscellaneous 3,500 - -
Total revenues 81,335 756,925 40,085
Expenditures:
Current:
Public safety - - 28,437
Public works 80,402 445,503 -
Culture and recreation - - -
Capital outlay:
Public safety - - 27,506
Public works - - -
Culture and recreation - - -
Debt service:
Capital lease payment - - -
Interest and fiscal charges - - -
Total expenditures 80,402 445,503 55,943
Revenues over (under) expenditures 933 311,422 (15,858)
Other financing sources (uses):
Transfer from General Fund - - -
Transfer from Capital Project Fund - - -
Transfer to General Fund - (35,019) -
Transfer to Capital Project Fund - - -
Total other financing sources (uses)- (35,019) -
Net increase (decrease) in fund balance 933 276,403 (15,858)
Fund balance - January 1 56,590 337,614 39,166
Fund balance - December 31 57,523$ 614,017$ 23,308$
102
Statement 13
Ice Golf Charitable
Arena Course Gambling 2016 2015
288,607$ -$ -$ 288,607$ 291,955$
- - - 77,495 82,494
57,000 - - 57,000 57,000
- - - - 6,493
987,895 1,464,498 - 3,208,519 3,062,368
- - - 39,900 17,840
- - 52 1,376 2,558
14 7,178 - 10,692 7,929
1,333,516 1,471,676 52 3,683,589 3,528,637
- - - 28,437 23,683
- - - 525,905 521,748
751,835 1,592,656 - 2,344,491 1,998,951
- - - 27,506 8,495
- - - - 12,215
27,446 49,011 - 76,457 255,666
290,000 37,432 - 327,432 316,235
108,846 768 - 109,614 225,258
1,178,127 1,679,867 - 3,439,842 3,362,251
155,389 (208,191) 52 243,747 166,386
- 100,000 - 100,000 -
- - - - 1,200,000
- - (5,000) (40,019) (40,020)
- - - - (158,894)
- 100,000 (5,000) 59,981 1,001,086
155,389 (108,191) (4,948) 303,728 1,167,472
(95,234) (159,943) 9,405 187,598 (979,874)
60,155$ (268,134)$ 4,457$ 491,326$ 187,598$
Totals
Nonmajor
Special Revenue Funds
103
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 three types of bonded indebtedness:
•Improvement Bonds
•Refunding Bonds
•Tax Increment Bonds
Developer Financed Revolving – (2008A Improvements Bonds) we r e refinanced in
2016.
Refunding Bonds – these General Obligation bonds were issued to refinance the 2008A
Improvement bonds and to provide funds to pay off the Capital Lease-purchase agreement
with the EDA for the expansion of the Ice Arena. These bonds will be repaid using special
assessments from new developments, a general tax levy and dedicated revenues from the Ice
Arena.
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.
104
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 14
NONMAJOR DEBT SERVICE FUNDS
December 31, 2016
With Comparative Data as of December 31, 2015
Developer G.O. Refunding
Financed Bonds of Tax Increment
Revolving Funds 2016A Funds 2016 2015
Assets:
Cash and investments -$ 168$ 1,042,633$ 1,042,801$ 1,225,153$
Total assets -$ 168$ 1,042,633$ 1,042,801$ 1,225,153$
Liabilities:
Accounts payable -$ -$ 925,023$ 925,023$ -$
Total liabilities -$ -$ 925,023$ 925,023$ -$
Fund balance:
Restricted for:
Debt retirement -$ 168$ -$ 168$ 218,191$
Tax increment purposes - - 117,610 117,610 1,006,962
Total fund balance - 168 117,610 117,778 1,225,153
Total fund balance -$ 168$ 1,042,633$ 1,042,801$ 1,225,153$
Totals
Nonmajor
Debt Service Funds
105
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Statement 15
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Developer G.O. Refunding Tax
Financed Bonds of Increment
Revolving Funds 2016A Funds 2016 2015
Revenues:
Tax increment collections -$ -$ 313,000$ 313,000$ -$
Intergovernmental - 565,562 - 565,562 -
Investment earnings (loss)- 14,930 5,781 20,711 10,823
Total revenues - 580,492 318,781 899,273 10,823
Expenditures:
Current:
General government:
Contractual services - 950 925,523 926,473 1,400
Debt service:
Principal retirement 1,090,000 4,515,000 210,000 5,815,000 205,000
Interest and fiscal charges 42,894 124,157 72,610 239,661 81,704
Total expenditures 1,132,894 4,640,107 1,208,133 6,981,134 288,104
Revenues over (under) expenditures (1,132,894) (4,059,615) (889,352) (6,081,861) (277,281)
Other financing sources (uses):
Transfers in (out)54,722 - - 54,722 -
Bonds issued 825,000 3,835,000 - 4,660,000 -
Premium on debt issued 34,981 224,783 - 259,764 -
Total other financing sources (uses)914,703 4,059,783 - 4,974,486 -
Net increase (decrease) in fund balance (218,191) 168 (889,352) (1,107,375) (277,281)
Fund balance - January 1 218,191 - 1,006,962 1,225,153 1,502,434
Fund balance - December 31 -$ 168$ 117,610$ 117,778$ 1,225,153$
Totals
Debt Service Funds
Nonmajor
106
NONMAJOR CAPITAL PROJECT FUNDS
Capital Project Funds are used to account for the acquisition and construction of major capital facilities other than those financed by Proprietary Funds and Trust Funds.
Equipment Replacement Fund – Established to accumulate monies for the replacement
of capital equipment.
Street Sealcoating – Established to account for the receipt of franchise fees to be used for
sealcoating activities.
Future Economic Development Fund – Established to account for the receipt and use of monies for economic development purposes.
Future Projects – to account for the preliminary expenditures of projects which do not have a
source of financing.
Completed Construction – to account for the various surpluses (deficits) of other Special
Assessment Construction Funds.
Park Trust – to account for capital projects in new municipal parks.
Inclusive Playground – to account for inclusive playground project.
Park Capital Improvements – to account for capital projects in existing municipal parks.
Water Connection and Area – to account for water connection and area charges.
Sewer Connection and Area – to account for sewer connection and area charges.
Future Storm Sewer Improvements – to collect storm sewer area charges which are designated for future construction.
Tax Increment Construction Revolving Fund – to account for construction projects that are
financed with tax increments.
107
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2016
With Comparative Data as of December 31, 2015
Future
Equipment Street Economic Future Completed Park
Replacement Sealcoating Development Projects Construction Trust
Assets:
Cash and investments 1,920,980$ 516,056$ 3,034,720$ 3,814,002$ 515,592$ -$
Interfund receivable - - - 962,175 - -
Interfund loan receivable - - 1,145,804 - 1,500,000 -
Due from other governmental units - net - 208,484 - 77,723 - 11,478
Accounts receivable - net - 133,490 - 784 - 6,253
Delinquent property taxes receivable - - - 103 - -
Special assessments receivable:
Deferred - - 37,400 124,796 4 139,582
Delinquent - - - - - -
Property held for resale - - - - - -
Total assets 1,920,980$ 858,030$ 4,217,924$ 4,979,583$ 2,015,596$ 157,313$
Liabilities:
Accounts payable 128,888$ -$ 654,960$ 51,925$ -$ -$
Interfund payable - - - - - 230,702
Contracts payable - - - - - -
Due to other governments - - 188,375 - - -
Deposits payable - - - 1,698,216 - -
Interfund loan payable - - - - - -
Total liabilities 128,888 - 843,335 1,750,141 - 230,702
Deferred inflows of resources:
Unavailable revenue - property taxes - - - 103 - -
Unavailable revenue - special assessments - - 37,400 124,796 4 139,582
Total deferred inflows of resources - - 37,400 124,899 4 139,582
Fund balance:
Restricted for:
Tax increment purposes - - - - - -
Assigned for:
Equipment replacement 1,792,092 - - - - -
Street sealcoating - 858,030 - - - -
Economic development - - 3,337,189 - - -
Future pavement management - - - 1,431,412 - -
Tree mitigation - - - 364,676 - -
Future roads and trails - - - 970,182 - -
Capital improvements - - - 338,273 2,015,592 -
Unassigned - - - - - (212,971)
Total fund balance 1,792,092 858,030 3,337,189 3,104,543 2,015,592 (212,971)
Total liabilities, deferred inflows of resources,
and fund balance 1,920,980$ 858,030$ 4,217,924$ 4,979,583$ 2,015,596$ 157,313$
108
Statement 16
Tax Increment
Park Water Sewer Future 2016 Construction
Inclusive Capital Connection Connection Storm Sewer Improvement Revolving
Playground Improvements and Area and Area Improvements Projects Fund 2016 2015
86,496$ 219,654$ 2,057,471$ -$ 2,948,741$ -$ 1,333,250$ 16,446,962$ 13,485,312$
- 230,702 668,426 - - - - 1,861,303 1,221,111
- - - - - - - 2,645,804 2,261,758
- - 2,320 720 600,000 - - 900,725 49,671
- 25,938 - - - - - 166,465 243,581
- - - - - - - 103 130
- - 146,282 87,582 245,908 1,415,424 - 2,196,978 1,129,114
- - 1,334 3,088 1,798 - - 6,220 101
- - - - - - - - 1,950,000
86,496$ 476,294$ 2,875,833$ 91,390$ 3,796,447$ 1,415,424$ 1,333,250$ 24,224,560$ 20,340,778$
-$ 6,161$ 3,236$ 2,058$ 409,876$ 5,280$ 284,499$ 1,546,883$ 260,685$
- - - 668,426 - 962,175 - 1,861,303 1,221,111
- - - - - 49,188 - 49,188 187,604
- - - - - - - 188,375 649
- 251 - - - - - 1,698,467 372,304
- - - - - - 1,145,804 1,145,804 761,758
- 6,412 3,236 670,484 409,876 1,016,643 1,430,303 6,490,020 2,804,111
- - - - - - - 103 130
- - 147,616 90,670 247,706 1,415,424 - 2,203,198 1,129,215
- - 147,616 90,670 247,706 1,415,424 - 2,203,301 1,129,345
- - - - - - - - 1,035,189
- - - - - - - 1,792,092 1,579,583
- - - - - - - 858,030 650,156
- - - - - - - 3,337,189 3,772,549
- - - - - - - 1,431,412 1,431,412
- - - - - - - 364,676 338,495
- - - - - - - 970,182 860,691
86,496 469,882 2,724,981 - 3,138,865 - - 8,774,089 8,062,315
- - - (669,764) - (1,016,643) (97,053) (1,996,431) (1,323,068)
86,496 469,882 2,724,981 (669,764) 3,138,865 (1,016,643) (97,053) 15,531,239 16,407,322
86,496$ 476,294$ 2,875,833$ 91,390$ 3,796,447$ 1,415,424$ 1,333,250$ 24,224,560$ 20,340,778$
Capital Project Funds
Nonmajor
Totals
109
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Future
Equipment Street Economic Future Completed Park
Replacement Sealcoating Development Projects Construction Trust
Revenues:
General property taxes -$ -$ -$ 34$ -$ -$
Franchise taxes - 516,931 - - - -
Aggregate taxes - 39,748 - - - -
Tax increment collections - - - - - - Special assessments:
Current - - 11,687 38,999 - 43,619
Delinquent - - - - 97 -
Prepayments on deferred - - - - - -
Penalties - - - - 23 -
Direct charges to developers - 20,437 - 257,423 - -
Intergovernmental:
State - - - 111,979 - - Other - - - - - - Charges for services - 180,227 - - - -
Rent - - - - - -
Investment earnings (loss)7,456 4,014 6,552 16,057 2,354 -
Interest on interfund loan - - 17,760 - 14,800 -
Connection charges - - - - - -
Park dedication fees - - - - - 212,865
Other sales - - 118,966 - - -
Donations 10,000 - 333,834 - - - Miscellaneous - - 210 - 34,417 -
Total revenues 17,456 761,357 489,009 424,492 51,691 256,484
Expenditures:
Current:
General government 5 - - - 86 - Economic development - - 924,369 - - - Public safety - - - 117,573 - -
Public works - 553,483 - 157,984 684 -
Culture and recreation - - - 31,623 - 12,465
Capital outlay:
General government 24,709 - - - - -
Public safety 61,142 - - - - -
Public works 421,564 - - - - -
Culture and recreation 67,772 - - - - 79,747 Debt service:
Principal retirement - - - - - -
Interest and fiscal charges - - - - - -
Total expenditures 575,192 553,483 924,369 307,180 770 92,212
Revenues over (under) expenditures (557,736) 207,874 (435,360) 117,312 50,921 164,272
Other financing sources (uses):
Transfer from General Fund 754,792 - - - - -
Transfer from Capital Project Fund - - - - - 15,223
Transfer to Special Revenue Fund - - - - - -
Transfer to Capital Project Fund - - - (15,223) - -
Proceeds from the sale of capital assets 15,453 - - - - - Total other financing sources (uses)770,245 - - (15,223) - 15,223
Net increase (decrease) in fund balance 212,509 207,874 (435,360) 102,089 50,921 179,495
Fund balance - January 1 1,579,583 650,156 3,772,549 3,002,454 1,964,671 (392,466)
Fund balance - December 31 1,792,092$ 858,030$ 3,337,189$ 3,104,543$ 2,015,592$ (212,971)$
110
Statement 17
Tax IncrementParkWaterSewerFuture2016Construction
Inclusive Capital Connection Connection Storm Sewer Improvement Revolving
Playground Improvements and Area and Area Improvements Projects Fund 2016 2015
-$ -$ -$ -$ -$ -$ -$ 34$503$
- - - - - - - 516,931 526,643
- - - - - - - 39,748 37,133
- - - - - - 463,061 463,061 710,541
- - 61,607 60,492 95,874 206,415 - 518,693 101,197
- - - - - - - 97 433
- - 24,737 38,826 21,288 - - 84,851 36,188
- - - - - - - 23 137
- - - - - - - 277,860 307,971
- - - - - - - 111,979 -
- - - - 600,000 - - 600,000 11,478 - - - - - - - 180,227 172,626
- 447,426 - - - - - 447,426 450,428
(86) 2,458 13,878 - 14,618 - 10,802 78,103 120,728
- - - - - - - 32,560 45,599
- - 211,875 176,637 260,977 - - 649,489 318,092
- - - - - - - 212,865 9,010
- - - - - - 929,905 1,048,871 469,454
105,911 - - - - - - 449,745 358,241 - 43,133 - - - - 5,000 82,760 96,831
105,825 493,017 312,097 275,955 992,757 206,415 1,408,768 5,795,323 3,773,233
- - - - - - - 91 326- - - - - - 1,312,095 2,236,464 1,456,306 - - - - - - - 117,573 1,436
- - 36,060 15,117 420,103 - - 1,183,431 625,149
20,379 87,479 - - - - - 151,946 343,808
- - - - - - - 24,709 -
- - - - - - - 61,142 79,418
- - 174,289 - 213,951 1,223,058 1,211,155 3,244,017 736,901
- 256,999 - - - - - 404,518 609,526
- - - - - - - - 245,000
- - - - - - 17,760 17,760 67,028
20,379 344,478 210,349 15,117 634,054 1,223,058 2,541,010 7,441,651 4,164,898
85,446 148,539 101,748 260,838 358,703 (1,016,643) (1,132,242) (1,646,328) (391,665)
- - - - - - - 754,792 412,951
- - - - - - - 15,223 -
- - - - - - - - (1,200,000)
- - - - - - - (15,223) -
- - - - - - - 15,453 53,267 - - - - - - - 770,245 (733,782)
85,446 148,539 101,748 260,838 358,703 (1,016,643) (1,132,242) (876,083) (1,125,447)
1,050 321,343 2,623,233 (930,602) 2,780,162 - 1,035,189 16,407,322 17,532,769
86,496$ 469,882$ 2,724,981$ (669,764)$ 3,138,865$ (1,016,643)$ (97,053)$ 15,531,239$ 16,407,322$
TotalsNonmajor
Capital Project Funds
111
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - RECYCLING Statement 18
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget-2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Intergovernmental:
Local:
Washington County recycling grant - public works 57,140$ 57,140$ 77,495$ 20,355$ 82,494$
Investment earnings (loss)- - 340 340 336
Miscellaneous - public works 20,350 20,350 3,500 (16,850) 3,500
Total revenues 77,490 77,490 81,335 3,845 86,330
Expenditures:
Public works:
Current:
Personal services 32,700 32,700 33,534 (834) 31,527
Commodities 9,100 9,100 4,349 4,751 10,269
Contractual services 43,880 43,880 42,519 1,361 41,886
Capital outlay 15,000 15,000 - 15,000 -
Total expenditures 100,680 100,680 80,402 20,278 83,682
Revenues over (under) expenditures (23,190)$ (23,190)$ 933 24,123$ 2,648
Fund balance - January 1 56,590 53,942
Fund balance - December 31 57,523$ 56,590$
Budgeted Amounts
112
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - STORM WATER MAINTENANCE FUND Statement 19
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget-2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenue:
Intergovernmental:
Local:
Other - public works -$ -$ -$ -$ 5,574$
Charges for services 749,000 749,000 756,126 7,126 721,744
Investment earnings (loss)1,000 1,000 799 (201) 1,477
Total revenue 750,000 750,000 756,925 6,925 728,795
Expenditures:
Public works:
Current:
Personal services 255,600 255,600 290,223 (34,623) 268,577
Commodities 51,180 51,180 12,395 38,785 10,918
Contractual services 302,960 302,960 142,885 160,075 158,571
Capital outlay - - - - 12,215
Total expenditures 609,740 609,740 445,503 164,237 450,281
Revenue over (under) expenditures 140,260 140,260 311,422 171,162 278,514
Other financing sources (uses):
Transfer to General Fund (172,420) (172,420) (35,019) 137,401 (35,020)
Transfer to Capital Project Fund - - - - (158,894)
Total other financing sources (uses):(172,420) (172,420) (35,019) 137,401 (193,914)
Net increase (decrease) in fund balance (32,160)$ (32,160)$ 276,403 308,563$ 84,600
Fund balance - January 1 337,614 253,014
Fund balance - December 31 614,017$ 337,614$
Budgeted Amounts
113
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - FORFEITURE/SEIZURE Statement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget-2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Intergovernmental:
County 8,000$ 8,000$ -$ (8,000)$ 919$
Forfeitures and seizures 21,000 21,000 39,900 18,900 17,840
Investment earnings (loss)500 500 185 (315) 410
Total revenues 29,500 29,500 40,085 10,585 19,169
Expenditures:
Public safety:
Current:
Commodities 4,500 4,500 6,613 (2,113) 6,820
Contractual services 14,620 14,620 21,824 (7,204) 16,863
Capital outlay 15,000 15,000 27,506 (12,506) 8,495
Total expenditures 34,120 34,120 55,943 (21,823) 32,178
Revenues over (under) expenditures (4,620)$ (4,620)$ (15,858) (11,238)$ (13,009)
Fund balance - January 1 39,166 52,175
Fund balance - December 31 23,308$ 39,166$
Budgeted Amounts
114
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - ICE ARENA Statement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget-2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
General property taxes:
Current and delinquent 290,000$ 290,000$ 288,607$ (1,393)$ 291,955$
Intergovernmental:
Local:
School district 57,000 57,000 57,000 - 57,000
Charges for services 963,000 963,000 987,895 24,895 883,558
Investment earnings (loss)6,000 6,000 - (6,000) 230
Miscellaneous - - 14 14 1,938
Total revenues 1,316,000 1,316,000 1,333,516 17,516 1,234,681
Expenditures:
Culture and recreation:
Current:
Personal services 376,300 376,300 351,458 24,842 349,671
Commodities 31,200 31,200 33,279 (2,079) 33,822
Contractual services 322,750 322,750 367,098 (44,348) 346,035
Capital outlay 32,000 32,000 27,446 4,554 120,955
Debt Service:
Capital lease payment 245,000 245,000 290,000 (45,000) 280,000
Interest and fiscal charges 172,700 172,700 108,846 63,854 223,293
Total expenditures 1,179,950 1,179,950 1,178,127 1,823 1,353,776
Revenues over (under) expenditures 136,050$ 136,050$ 155,389 19,339$ (119,095)
Fund balance - January 1 (95,234) 23,861
Fund balance - December 31 60,155$ (95,234)$
Budgeted Amounts
115
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - GOLF COURSE Statement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget-2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Charges for services 1,504,000$ 1,504,000$ 1,464,498$ (39,502)$ 1,457,066$
Miscellaneous 1,500 1,500 7,178 5,678 2,491
Total revenues 1,505,500 1,505,500 1,471,676 (33,824) 1,459,557
Expenditures:
Culture and recreation:
Current:
Personal services 781,000 781,000 952,766 (171,766) 742,162
Commodities 168,650 168,650 149,240 19,410 119,359
Contractual services 479,980 479,980 490,650 (10,670) 407,902
Capital outlay 169,000 169,000 49,011 119,989 134,711
Debt Service:
Capital lease payment 37,400 37,400 37,432 (32) 36,235
Interest and fiscal charges 800 800 768 32 1,965
Total expenditures 1,636,830 1,636,830 1,679,867 (43,037) 1,442,334
Revenues over (under) expenditures (131,330) (131,330) (208,191) (76,861) 17,223
Other financing sources (uses):
Transfer from General Fund - - 100,000 (100,000) -
Transfer from Capital Project Fund - - - - 1,200,000
Total other financing sources (uses)- - 100,000 (100,000) 1,200,000
Net increase (decrease) in fund balance (131,330)$ (131,330)$ (108,191) 23,139$ 1,217,223
Fund balance - January 1 (159,943) (1,377,166)
Fund balance - December 31 (268,134)$ (159,943)$
Budgeted Amounts
116
CITY OF COTTAGE GROVE, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING Statement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Variance with
2016 Final Budget-2015
Actual Positive Actual
Original Final Amounts (Negative)Amounts
Revenues:
Investment earnings (loss)-$ -$ 52$ 52$ 105$
Total revenues - - 52 52 105
Other financing sources (uses):
Transfer to General Fund (5,000) (5,000) (5,000) - (5,000)
Total other financing sources (uses):(5,000) (5,000) (5,000) - (5,000)
Revenues over (under) expenditures -$ -$ (4,948) 52$ (4,895)
Fund balance - January 1 9,405 14,300
Fund balance - December 31 4,457$ 9,405$
Budgeted Amounts
117
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118
INTERNAL SERVICE
Self Insurance Fund – Established to provide self insurance for the City and its officers, employees and agents for claims in excess of standard deductibles and to
account for the City flexible spending program and purchase of insurance.
Fleet Maintenance Fund – Established to account for costs related to repair and maintenance of City equipment and vehicles. Revenues received from departments are based on level of service performed.
Information Services Fund – Established to account for costs related to accessing
information electronically and maintaining technology services including phone, voicemail and internet services. Revenues received from departments are based on usage of those technology services.
119
CITY OF COTTAGE GROVE, MINNESOTACOMBINING STATEMENT OF NET POSITION Statement 24
INTERNAL SERVICE FUNDS
December 31, 2016With Comparative Data as of December 31, 2015
Self Fleet Information
Insurance Maintenance Services 2016 2015
Assets:
Current assets:
Cash and investments 2,058,604$ 276,465$ 96,320$ 2,431,389$ 2,484,403$
Accounts receivable 4,241 - - 4,241 -
Prepaid items 159,815 - 23,287 183,102 169,066
Inventory - at cost - 91,303 - 91,303 70,940
Total current assets 2,222,660 367,768 119,607 2,710,035 2,724,409
Noncurrent assets:
Capital assets:
Land - 424,665 - 424,665 424,665
Buildings and improvements - 928,870 - 928,870 928,870
Equipment and furniture - - 184,227 184,227 164,338
Machinery and equipment - 255,972 - 255,972 214,326
Total capital assets - 1,609,507 184,227 1,793,734 1,732,199
Less: Accumulated depreciation - (671,416) (87,781) (759,197) (699,793)
Total noncurrent assets - 938,091 96,446 1,034,537 1,032,406
Total assets 2,222,660$ 1,305,859$ 216,053$ 3,744,572$ 3,756,815$
Deferred outflows:
Deferred outflows related to pension - 137,784 63,072 200,856 45,063
Total deferred outflows - 137,784 63,072 200,856 45,063
Liabilities:
Current liabilities:
Accounts payable 14,858$ 33,974$ 37,338$ 86,170$ 69,752$
Health care benefits payable 20,937 - - 20,937 18,163
Unpaid claims 159,741 - - 159,741 143,708
Salaries payable 551 20,889 8,127 29,567 23,603
Due to other governmental units - 1,038 - 1,038 479
Compensated absences payable - 21,292 7,433 28,725 32,201
Total current liabilities 196,087 77,193 52,898 326,178 287,906
Noncurrent liabilities:
Compensated absences payable - 21,860 4,008 25,868 12,259
Other post employment benefits - 2,132 425 2,557 2,212
Net pension liability - 330,043 151,081 481,124 328,752
Total noncurrent liabilities - 354,035 155,514 509,549 343,223
Total liabilities 196,087 431,228 208,412 835,727 631,129
Deferred inflows:
Deferred inflows related to pension - 41,153 18,838 59,991 31,409
Total deferred inflows - 41,153 18,838 59,991 31,409
Net position:
Net investment in capital assets - 938,091 96,446 1,034,537 1,032,406
Unrestricted 2,026,573 33,171 (44,571) 2,015,173 2,106,934
Total net position 2,026,573$ 971,262$ 51,875$ 3,049,710$ 3,139,340$
Totals
Internal Service Funds
120
CITY OF COTTAGE GROVE, MINNESOTA
INTERNAL SERVICE FUNDS Statement 25
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Self Fleet Information
Insurance Maintenance Services 2016 2015
Operating revenues:
Charges for services:
User fees -$ 945,389$ 425,000$ 1,370,389$ 1,429,596$
Employee benefits 1,616,650 - - 1,616,650 1,357,600
Property insurance 220,650 - - 220,650 220,650
Insurance refunds and reimbursements 144,271 - - 144,271 104,083
Total operating revenues 1,981,571 945,389 425,000 3,351,960 3,111,929
Operating expenses:
Operating and maintenance:
Personal services - 393,424 170,528 563,952 510,547
Commodities - 447,215 45,546 492,761 652,954
Contractual services - 121,862 232,038 353,900 219,992
Total operation and maintenance - 962,501 448,112 1,410,613 1,383,493
Administrative and general:
Personal insurance benefits 1,576,546 - - 1,576,546 1,432,083
Contractual services 252,955 - - 252,955 249,518
Claims 163,454 - - 163,454 125,171
Total administrative and general 1,992,955 - - 1,992,955 1,806,772
Depreciation - 30,345 29,058 59,403 49,791
Total operating expenses 1,992,955 992,846 477,170 3,462,971 3,240,056
Operating income (loss)(11,384) (47,457) (52,170) (111,011) (128,127)
Nonoperating revenues:
Investment earnings (loss)11,423 1,542 526 13,491 20,031
Intergovernmental 1,285 588 1,873 -
Miscellaneous 3,854 986 1,177 6,017 13,057
Total nonoperating revenues 15,277 3,813 2,291 21,381 33,088
Change in net position 3,893 (43,644) (49,879) (89,630) (95,039)
Net position - January 1 2,022,680 1,014,906 101,754 3,139,340 3,538,877
Cumulative effect of change in accounting principle - - - - (304,498)
Net position - January 1, as restated 2,022,680 1,014,906 101,754 3,139,340 3,234,379
Net position - December 31 2,026,573$ 971,262$ 51,875$ 3,049,710$ 3,139,340$
Totals
Internal Service Funds
121
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS Statement 26
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
Self Fleet Information
Insurance Maintenance Services 2016 2015
Cash flows from operating activities:
Receipts from interfund services provided 1,837,300$ 945,389$ 425,000$ 3,207,689$ 3,007,846$
Receipts from insurance refunds and reimbursements 144,271 - - 144,271 104,083
Payment to suppliers (411,918) (616,625) (240,157) (1,268,700) (1,278,818)
Payment to employees (1,573,758) (361,940) (160,423) (2,096,121) (1,957,146)
Miscellaneous revenue 3,854 986 1,177 6,017 13,057
Net cash flows from operating activities (251) (32,190) 25,597 (6,844) (110,978)
Cash flows from noncapital financing activities:
Intergovernmental revenue - 1,285 588 1,873 -
Cash flows from capital and related financing activities:
Acquisition of capital assets - (41,646) (19,888) (61,534) (138,312)
Cash flows from investing activities:
Investment earnings (loss)11,423 1,542 526 13,491 20,031
Net increase (decrease) in cash and cash equivalents 11,172 (71,009) 6,823 (53,014) (229,259)
Cash and cash equivalents - January 1 2,047,432 347,474 89,497 2,484,403 2,713,662
Cash and cash equivalents - December 31 2,058,604$ 276,465$ 96,320$ 2,431,389$ 2,484,403$
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss)(11,384)$ (47,457)$ (52,170)$ (111,011)$ (128,127)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation - 30,345 29,058 59,403 49,791
Miscellaneous revenue 3,854 986 1,177 6,017 13,057
Pension expense - - - - 10,600
Changes in assets and liabilities:
Decrease (increase) in receivables (4,241) - - (4,241) 560
Decrease (increase) in prepaid items (15,842) - 1,806 (14,036) (38,717)
Decrease (increase) in inventory - (20,363) - (20,363) (1,242)
Increase (decrease) in payables 27,362 4,299 45,726 77,387 (16,900)
Total adjustments 11,133 15,267 77,767 104,167 17,149
Net cash flows from operating activities (251)$ (32,190)$ 25,597$ (6,844)$ (110,978)$
Totals
Internal Service Funds
122
ECONOMIC DEVELOPMENT AUTHORITY
COMPONENT UNIT
Established to account for the receipt and use of monies for economic purposes.
123
CITY OF COTTAGE GROVE, MINNESOTA
COMBINING BALANCE SHEET - ALL GOVERNMENTAL FUND TYPES Statement 27
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31, 2016
With Comparative Data as of December 31, 2015
Special Debt
Revenue Service 2016 2015
Assets:
Cash and investments -$ -$ -$ 389,254$
Interfund receivable - - - 176,308
Loan receivable 384,608 - 384,608 -
Accounts receivable 13,817 - 13,817 5,212
Capital lease receivable from primary government - - - 4,805,000
Prepaid items - - - 1,500
Delinquent property taxes receivable 1,073 - 1,073 1,087
Property held for resale 311,718 - 311,718 311,718
Total assets 711,216$ -$ 711,216$ 5,690,079$
Liabilities:
Accounts payable 5,995$ -$ 5,995$ 17,108$
Salaries payable 8,401 - 8,401 3,870
Interfund payable - - - 176,308
Due to other governmental units 470,271 - 470,271 -
Deposits Payable 2,000 - 2,000 3,503
Total liabilities 486,667 - 486,667 200,789
Deferred inflows of resources:
Unavailable revenue - property taxes 1,073 - 1,073 1,087
Total deferred inflows of resources 1,073 - 1,073 1,087
Fund balance:
Nonspendable:
Prepaid items - - - 1,500
Assets for resale 311,718 - 311,718 311,718
Restricted for:
Debt service reserve - - - 5,370,562
Unassigned (88,242) - (88,242) (195,577)
Total fund balance 223,476 - 223,476 5,488,203
Total liabilities, deferred inflows of resources,
and fund balance 711,216$ -$ 711,216$ 5,690,079$
Fund balance reported above 223,476$
1,073
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 (16,839)
Deferred outflows of resources related to pensions 56,379
(143,296)
Net position of component unit (page 33)120,793$
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.
Totals
Economic Development Authority
Component Unit
Other long-term assets, including property taxes receivable, are not available to pay for current-period
expenditures, and therefore, are deferred in the funds.
124
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, 2016
With Comparative Data for the Year Ended December 31, 2015
Special Debt
Revenue Service 2016 2015
Revenues:
General property taxes:
Current and delinquent 110,981$ -$ 110,981$ 112,497$
Charges for service 29,997 - 29,997 30,000
Investment earnings (loss)- - - 4,133
Interest on loan to primary government 1,947 108,846 110,793 223,293
Miscellaneous 281,091 - 281,091 102,375
Total revenues 424,016 108,846 532,862 472,298
Expenditures:
General government:
Current:
Personal services 151,497 - 151,497 183,791
Commodities 3,703 - 3,703 12,345
Contractual services 162,981 565,562 728,543 187,020
Debt service:
Principal retirement - 4,805,000 4,805,000 280,000
Interest and fiscal charges - 108,846 108,846 223,293
Total expenditures 318,181 5,479,408 5,797,589 886,449
Revenues over (under) expenditures 105,835 (5,370,562) (5,264,727) (414,151)
Net increase (decrease) in fund balance 105,835 (5,370,562) (5,264,727) (414,151)
Fund balance - January 1 117,641 5,370,562 5,488,203 5,902,354
Fund balance - December 31 223,476$ -$ 223,476$ 5,488,203$
Net decrease in fund balance reported above (5,264,727)$
Revenues in the statement of activities that do not report current financial resources are not
reported as revenues in the funds:
General property taxes unavailable revenue:
At December 31, 2015 (1,087)
At December 31, 2016 1,073
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 4,805,000
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. 12,601
Some expenses reported in the statement of activities do not require the use of current
financial resources and therefore are not reported as expenditures in governmental
funds:
Compensated absences:
At December 31, 2015 4,624
At December 31, 2016 (7,336)
Other post employment benefits:
At December 31, 2015 811
At December 31, 2016 (911)
Change in net position of component unit (page 35)(449,952)$
Totals
Economic Development Authority
Component Unit
125
-This Page Intentionally left Blank -
126
SUPPLEMENTARY FINANCIAL INFORMATION
127
CITY OF COTTAGE GROVE, MINNESOTA
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
December 31, 2016
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
$4,660,000 G.O.Refunding Bonds of 2016A 2.0-3.00%1/28/2016 2/1/2027
Total General Obligation Bonds
Special Assessment Debt:
Improvement Bonds of 2009A 2.50-4.30%4/16/2009 2/1/2024
Improvement Bonds of 2012A 0.30-2.20%3/13/2012 2/1/2027
Improvement Bonds of 2013A 3.00-3.50%9/26/2013 2/1/2029
Improvement Bonds of 2015A 2.50-3.00%5/27/2015 2/1/2031
Improvement Bonds of 2016B 2.00-2.10%11/16/2016 2/1/2033
Total Special Assessment Debt with Governmental Commitment
Total Bonded Indebtedness - Primary Government
Total Bonded Indebtedness - Reporting Entity
128
Exhibit 1
Authorized Principal Due Interest Due
And Issued Retired Outstanding In 2017 In 2017
1,405,000$ 380,000$ 1,025,000$ 35,000$ 45,860$
1,405,000 345,000 1,060,000 190,000 20,660
4,660,000 - 4,660,000 575,000 119,775
7,470,000 725,000 6,745,000 800,000 186,295
3,650,000 1,710,000 1,940,000 230,000 73,375
1,865,000 480,000 1,385,000 120,000 21,818
7,345,000 730,000 6,615,000 425,000 199,740
5,700,000 - 5,700,000 340,000 157,835
4,275,000 - 4,275,000 - 60,860
22,835,000 2,920,000 19,915,000 1,115,000 513,628
30,305,000 3,645,000 26,660,000 1,915,000 699,923
30,305,000$ 3,645,000$ 26,660,000$ 1,915,000$ 699,923$
129
CITY OF COTTAGE GROVE, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY Exhibit 2December 31, 2016
$1,405,000
$1,405,000 Tax $4,660,000
Tax Increment Total G.O.Total Total Total
Increment Refunding Tax Refunding General 3,650,000$ 1,865,000$ 7,345,000$ 5,700,000$ 4,275,000$ Pavement Special
Bonds Bonds Increment Bonds Obligation Bonds Bonds Bonds Bonds Bonds Management Assessment
of 2004A of 2014A Bonds of 2016A Bonds of 2009A of 2012A of 2013A of 2015A of 2016B Bonds Bonds
Bonds payable 1,025,000$ 1,060,000$ 2,085,000$ 4,660,000$ 6,745,000$ 1,940,000$ 1,385,000$ 6,615,000$ 5,700,000$ 4,275,000$ 19,915,000$ 19,915,000$
Future interest payable 271,665 59,860 331,525 587,600 919,125 326,390 141,260 1,461,231 1,232,215 755,820 3,916,916 3,916,916
Totals 1,296,665$ 1,119,860$ 2,416,525$ 5,247,600$ 7,664,125$ 2,266,390$ 1,526,260$ 8,076,231$ 6,932,215$ 5,030,820$ 23,831,916$ 23,831,916$
Payments to maturity:2017 80,860 210,660 291,520 694,775 986,295 303,375 141,818 624,740 497,835 60,860 1,628,628 1,628,628
2018 79,320 221,710 301,030 697,225 998,255 295,037 140,858 621,840 492,560 234,420 1,784,715 1,784,715
2019 77,780 237,410 315,190 694,150 1,009,340 291,025 144,599 623,565 492,060 355,170 1,906,419 1,906,419
2020 76,240 247,580 323,820 400,050 723,870 286,525 148,002 624,840 481,410 349,670 1,890,447 1,890,447
2021 104,040 202,500 306,540 400,000 706,540 281,825 146,118 620,740 480,610 344,170 1,873,463 1,873,463
2022 286,872 - 286,872 399,650 686,522 276,800 144,005 621,265 474,585 338,670 1,855,325 1,855,325
2023 294,810 - 294,810 394,075 688,885 271,320 146,685 621,340 473,335 343,070 1,855,750 1,855,750
2024 296,743 - 296,743 393,275 690,018 260,483 149,070 620,965 461,935 337,370 1,829,823 1,829,823 2025 - - - 394,050 394,050 - 146,200 620,140 460,385 331,670 1,558,395 1,558,395
2026 - - - 391,500 391,500 - 148,135 618,590 459,535 325,970 1,552,230 1,552,230
2027 - - - 388,850 388,850 - 70,770 620,944 449,535 325,220 1,466,469 1,466,469 2028 - - - - - - - 616,587 443,966 319,420 1,379,973 1,379,973
2029 - - - - - - - 620,675 442,691 313,620 1,376,986 1,376,986
2030 - - - - - - - - 431,383 312,770 744,153 744,153
2031 - - - - - - - - 390,390 311,820 702,210 702,210
2032 - - - - - - - - - 305,670 305,670 305,670
2033 - - - - - - - - - 121,260 121,260 121,260
Totals 1,296,665$ 1,119,860$ 2,416,525$ 5,247,600$ 7,664,125$ 2,266,390$ 1,526,260$ 8,076,231$ 6,932,215$ 5,030,820$ 23,831,916$ 23,831,916$
Pavement ManagementTax Increment
General Obligation Bonds Special Assessment Bonds
Primary Government
Revenue Bonds
130
CITY OF COTTAGE GROVE, MINNESOTA
DEFERRED TAX LEVIES Exhibit 3
December 31, 2016
Total
$3,650,000 $1,865,000 $7,345,000 $5,700,000 $4,275,000 Pavement
Local Local Local Local Local Management
Year of Improvement Improvement Improvement Improvement Improvement Special
Tax Levy/Bonds Bonds Bonds Bonds Bonds Assessment Total
Collection of 2009A of 2012A of 2013A of 2015A of 2016B Bonds All Levies
2016/17 175,529 78,739 410,888 318,114 170,420 1,153,690 1,153,690 2017/18 178,243 82,855 412,936 322,804 198,540 1,195,378 1,195,378 2018/19 180,144 86,596 414,511 316,679 196,559 1,194,489 1,194,489
2019/20 181,834 84,753 410,363 321,054 194,579 1,192,583 1,192,583
2020/21 183,314 82,638 411,150 319,863 192,598 1,189,563 1,189,563
2021/22 184,322 85,567 411,466 323,765 201,117 1,206,237 1,206,237
2022/23 179,596 88,266 411,308 316,853 198,926 1,194,949 1,194,949
2023/24 - 85,326 410,678 320,440 196,736 1,013,180 1,013,180
2024/25 - 87,489 409,576 323,712 194,545 1,015,322 1,015,322
2025/26 - 42,424 412,673 318,269 197,604 970,970 970,970 2026/27 - - 409,271 318,076 195,308 922,655 922,655
2027/28 - - 414,022 321,939 193,013 928,974 928,974
2028/29 - - - 315,014 195,967 510,981 510,981
2029/30 328,911 198,816 527,727 527,727
2030/31 - - - - 196,310 196,310 196,310
2031/32 - - - - 70,082 70,082 70,082
1,262,982$ 804,653$ 4,938,842$ 4,485,493$ 2,991,120$ 14,483,090$ 14,483,090$
Pavement Management
Special Assessment Bonds
131
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 4
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
December 31, 2016
With Comparative Data as of December 31, 2015
2009A 2012A 2013A 2015A 2016B
Improvement Improvement Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds 2016 2015
Assets:
Cash and investments 501,451$ 331,072$ 938,997$ 902,220$ 382,309$ 3,056,049$ 2,548,452$
Delinquent property taxes receivable 1,685 734 2,325 69 -4,813 4,656
Special assessments receivable:
Deferred 489,831 284,136 1,197,750 1,588,317 1,029,399 4,589,433 4,145,148
Delinquent 2,530 980 1,839 3,397 -8,746 6,404
Special deferred -7,565 9,049 4,993 7,963 29,570 28,210
Total assets 995,497$ 624,487$ 2,149,960$ 2,498,996$ 1,419,671$ 7,688,611$ 6,732,870$
Liabilities:
Accounts payable -$ 450$ -$ 450$ -$ 900$ -$
Total liabilities -450 -450 -900 -
Deferred inflows of resources:
Unavailable revenue - property taxes 1,685 734 2,325 69 -4,813 4,656
Unavailable revenue - special assessments 492,361 292,681 1,208,638 1,596,707 1,037,362 4,627,749 4,179,762
Total deferred inflows of resources 494,046 293,415 1,210,963 1,596,776 1,037,362 4,632,562 4,184,418
Fund balance:
Restricted for debt retirement 501,451 330,622 938,997 901,770 382,309 3,055,149 2,548,452
Total fund balance 501,451 330,622 938,997 901,770 382,309 3,055,149 2,548,452
Total liabilities, deferred inflows of resources,
and fund balance 995,497$ 624,487$ 2,149,960$ 2,498,996$ 1,419,671$ 7,688,611$ 6,732,870$
Totals
Pavement Management
Debt Service Schedule
132
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Exhibit 5
EXPENDITURES AND CHANGES IN FUND BALANCE
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
2009A 2012A 2013A 2015A 2016B
Improvement Improvement Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds 2016 2015
Revenues:
General property taxes:
Current and delinquent 149,332$ 49,790$ 298,360$ 99,437$ -$ 596,919$ 587,925$
Special assessments:
Current 111,670 54,495 164,975 251,611 383,219 965,970 963,208
Delinquent 1,275 37 1,139 243 - 2,694 3,291
Prepayments on deferred 20,701 13,554 69,903 98,195 - 202,353 135,475
Penalties 330 93 411 302 - 1,136 989
Investment earnings (loss)2,113 1,451 3,726 2,692 (910) 9,072 10,490
Total revenues 285,421 119,420 538,514 452,480 382,309 1,778,144 1,701,378
Expenditures:
Current:
Contractual services 2,017 763 2,419 1,348 - 6,547 11,462
Debt service:
Principal retirement 225,000 120,000 410,000 - - 755,000 870,000
Interest and fiscal charges 81,337 23,497 212,265 192,801 - 509,900 341,273
Total expenditures 308,354 144,260 624,684 194,149 - 1,271,447 1,222,735
Revenues over (under) expenditures (22,933) (24,840) (86,170) 258,331 382,309 506,697 478,643
Other financing sources (uses):
Transfer from Debt Service Fund - - - - - - 146,565
Total other financing sources (uses)- - - - - - 146,565
Net increase (decrease) in fund balance (22,933) (24,840) (86,170) 258,331 382,309 506,697 625,208
Fund balance - January 1 524,384 355,462 1,025,167 643,439 - 2,548,452 1,923,244
Fund balance - December 31 501,451$ 330,622$ 938,997$ 901,770$ 382,309$ 3,055,149$ 2,548,452$
Totals
Pavement Management
Debt Service Schedule
133
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 6
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
December 31, 2016
With Comparative Data as of December 31, 2015
Reconciliation
TIF TIF TIF TIF TIF TIF to Nonmajor
1-8 1-12 1-14 1-15 1-16 1-17 Fund 2016 2015
Assets:
Cash and investments 440,869$ 890,056$ 1,333$ 992$ -$ -$ -$ 1,333,250$ 1,857,769$
Total assets 440,869$ 890,056$ 1,333$ 992$ -$ -$ -$ 1,333,250$ 1,857,769$
Liabilities:
Accounts payable -$ 276,980$ -$ 41$ -$ 7,478$ -$ 284,499$ 60,822$
Interfund loan payable - - 236,000 573,547 299,887 36,370 - 1,145,804 761,758
Total liabilities - 276,980 236,000 573,588 299,887 43,848 - 1,430,303 822,580
Fund balance (deficit):
Restricted for:
Tax increment purposes 440,869 613,076 - - - - (1,053,945) - 1,035,189
Unassigned - - (234,667) (572,596) (299,887) (43,848) 1,053,945 (97,053) -
Total fund balance (deficit)440,869 613,076 (234,667) (572,596) (299,887) (43,848) - (97,053) 1,035,189
Total liabilities, deferred inflows of resources,
and fund balance 440,869$ 890,056$ 1,333$ 992$ -$ -$ -$ 1,333,250$ 1,857,769$
TIF Revolving Capital
Project Schedule
134
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING SCHEDULE OF REVENUES, Exhibit 7
EXPENDITURES AND CHANGES IN FUND BALANCE
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
TIF TIF TIF TIF TIF TIF
1-8 1-12 1-14 1-15 1-16 1-17 2016 2015
Revenues:
Tax increment collections 35,346$ 348,981$ 78,438$ 296$ -$ -$ 463,061$ 710,541$
Investment earnings (loss)2,102 8,739 (125) - 86 - 10,802 10,079
Sale of Property - - - - 929,905 - 929,905 469,454
Miscellaneous - - - - - 5,000 5,000 -
Total revenues 37,448 357,720 78,313 296 929,991 5,000 1,408,768 1,190,074
Expenditures:
Current:
Contractual services 220 223,215 300 1,168 341,428 48,848 615,179 292,296
Land purchase - 696,916 - 696,916 724,948
Construction costs:
Contractual services 921,816 133,700 155,639 1,211,155 100,000
Debt service:
Interest and fiscal charges - - 17,760 - - - 17,760 24,300
Total expenditures 220 1,145,031 18,060 134,868 1,193,983 48,848 2,541,010 1,141,544
Revenues over (under) expenditures 37,228 (787,311) 60,253 (134,572) (263,992) (43,848) (1,132,242) 48,530
Fund balance (deficit) - January 1 403,641 1,400,387 (294,920) (438,024) (35,895) - 1,035,189 986,659
Fund balance (deficit) - December 31 440,869$ 613,076$ (234,667)$ (572,596)$ (299,887)$ (43,848)$ (97,053)$ 1,035,189$
Totals
TIF Revolving Capital
Project Schedule
135
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING BALANCE SHEET Exhibit 8
TIF DEBT SERVICE REVOLVING SCHEDULE
December 31, 2016
With Comparative Data as of December 31, 2015
2004A Tax 2004A 2014A Taxable
1985 Tax Increment Tax Exempt Tax Increment
Increment Refunding Increment Refunding
Bonds Bonds Bonds Bonds
TIF 1-1 TIF 1-3 TIF 1-12 TIF 1-12 2016 2015
Assets:
Cash and investments 357,684$ 566,889$ 79,070$ 38,990$ 1,042,633$ 1,006,962$
Total assets 357,684$ 566,889$ 79,070$ 38,990$ 1,042,633$ 1,006,962$
Liabilities:
Accounts payable 357,684$ 566,889$ -$ 450$ 925,023$ -$
Total liabilities 357,684$ 566,889$ -$ 450$ 925,023$ -$
Fund balance:
Restricted for tax increment purposes -$ -$ 79,070$ 38,540$ 117,610$ 1,006,962$
Total fund balance - - 79,070 38,540 117,610 1,006,962
Total fund balance 357,684$ 566,889$ 79,070$ 38,990$ 1,042,633$ 1,006,962$
Revolving Schedule
TIF Debt Service
Totals
136
CITY OF COTTAGE GROVE, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Exhibit 9
EXPENDITURES AND CHANGES IN FUND BALANCE
TIF DEBT SERVICE REVOLVING SCHEDULE
For The Year Ended December 31, 2016
With Comparative Data for the Year Ended December 31, 2015
2004A Tax 2004A 2014A Taxable
1985 Tax Increment Tax Exempt Tax Increment
Increment Refunding Increment Refunding
Bonds Bonds Bonds Bonds
TIF 1-1 TIF 1-3 TIF 1-12 TIF 1-12 2016 2015
Revenues:
Tax increment collections -$ -$ 140,000$ 173,000$ 313,000$ -$
Investment earnings (loss)1,904 3,018 (180) 1,039 5,781 9,229
Total revenues 1,904 3,018 139,820 174,039 318,781 9,229
Expenditures:
Current:
Contractual services 357,684 566,889 475 475 925,523 1,400
Debt service:
Principal retirement - - 35,000 175,000 210,000 205,000
Interest and fiscal charges - - 47,400 25,210 72,610 81,704
Total expenditures 357,684 566,889 82,875 200,685 1,208,133 288,104
Revenues over (under) expenditures (355,780) (563,871) 56,945 (26,646) (889,352) (278,875)
Fund balance - January 1 355,780 563,871 22,125 65,186 1,006,962 1,285,837
Fund balance - December 31 -$ -$ 79,070$ 38,540$ 117,610$ 1,006,962$
Totals
TIF Debt Service
Revolving Schedule
137
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138
III. STATISTICAL SECTION (UNAUDITED)
139
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140
CITY OF COTTAGE GROVE, MINNESOTA NET POSITION BY COMPONENT Table 1
Last Ten Fiscal Years(accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Governmental activities
Net investment in capital assets 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$ 132,834,867$
Restricted 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 7,609,138 Unrestricted 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 19,091,443
Total governmental activities net position 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$ 159,535,448$
Business-type activitiesNet investment in capital assets 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$ 54,063,470$ Restricted 260,365 262,375 269,195 325,685 325,460 - - - - -
Unrestricted 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 13,628,016
Total business-type activities net position 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$ 67,691,486$
Primary Government
Net investment in capital assets 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$ 186,898,337$
Restricted 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 7,609,138 Unrestricted 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 32,719,459
Total primary government net position 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$ 227,226,934$
Fiscal Year
141
CITY OF COTTAGE GROVE, MINNESOTACHANGES IN NET POSITION Table 2
Last Ten Fiscal Years(accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Expenses
Governmental activities:
General government Regular operations 1,907,725$ 2,155,101$ 1,868,582$ 2,125,407$ 2,985,571$ 2,997,825$ 2,270,332$ 2,229,518$ 2,346,805$ 3,450,479$ (1)
Land Sales 2,273,696 - - - - - - - - -
Payment to component unit - 678,880 - - - - - - - - Community development 803,916 893,468 1,106,256 1,140,456 - - 903,180 946,001 1,086,197 1,173,071 (1)
Economic development - - - - 1,110,214 362,009 61,302 545,646 1,460,114 2,257,548
Public safety 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 10,153,726 Public works:
Regular operations 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 4,583,513 Construction 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 5,039,822
Culture and recreation 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 5,340,558 (2)
Interest on long-term debt 1,278,801 1,163,542 1,548,704 1,056,110 846,258 827,645 976,891 808,642 1,029,228 875,642 Total governmental activities expenses 19,078,654 18,586,036 18,575,208 19,114,010 20,830,763 20,925,164 24,050,341 24,461,080 26,164,626 32,874,359
Business-type activities:
Golf course 1,616,541 1,617,708 1,553,921 1,447,849 1,504,006 1,614,321 - - - - (2)Street lights 567,966 459,314 508,615 534,206 625,312 659,869 742,410 867,690 746,794 746,005
Cottage Grove EMS 951,159 768,240 920,991 975,560 1,038,972 1,109,809 1,322,635 1,412,855 1,507,766 1,688,041
Water operating 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 2,370,466 Sewer operating 1,806,750 1,953,985 2,079,127 2,150,795 2,223,749 2,242,778 2,278,958 2,428,944 2,448,283 2,727,188
Total business-type activities 7,430,526 6,896,318 6,863,724 7,000,162 7,294,024 7,676,654 6,685,558 6,926,308 7,141,009 7,531,700 Total primary government expenses 26,509,180$ 25,482,354$ 25,438,932$ 26,114,172$ 28,124,787$ 28,601,818$ 30,735,899$ 31,387,388$ 33,305,635$ 40,406,059$
Program RevenuesGovernmental activities:
Charges for services:
General government: Regular operations 324,315$ 288,502$ 246,027$ 224,719$ 764,185$ 883,272$ 238,721$ 138,768$ 117,636$ 665,193$ (1)
Land sales 2,265,963 - - - - - - - - -
Community development 884,977 959,800 852,453 944,278 - - 1,115,203 989,140 1,527,836 1,660,365 (1)Economic development - - - - 175 210 7,626 1,771 3,467 5,210
Public safety 372,491 363,046 391,593 396,887 444,039 429,646 353,130 325,368 394,574 431,862 Public works:
Regular operations 748,267 818,692 720,397 710,341 845,315 880,095 797,432 1,010,695 971,599 975,532
Construction 130,073 237 17,273 - - - - - - - Culture and recreation 616,602 779,941 980,003 1,178,977 1,024,516 1,026,685 2,413,744 2,448,968 3,091,072 2,725,288 (2)
Operating grants and contributions 1,216,184 1,252,052 1,192,559 1,210,249 1,084,928 1,075,529 1,211,506 1,545,268 1,237,805 1,676,805
Capital grants and contributions 12,787,794 6,156,916 2,941,206 2,464,782 5,118,546 3,064,292 10,370,972 9,401,775 5,861,631 10,284,047 Total governmental activities program revenues 19,346,666 10,619,186 7,341,511 7,130,233 9,281,704 7,359,729 16,508,334 15,861,753 13,205,620 18,424,302
Fiscal Year
142
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Program Revenues (continued)Business-type activities:
Charges for services:
Golf course 1,645,832 1,557,213 1,563,399 1,583,098 1,399,204 1,566,035 - - - - (2) Street lights 915,074 691,384 596,703 494,162 532,607 540,696 580,837 658,810 549,005 530,905
Cottage Grove EMS 1,158,397 876,762 1,130,948 1,068,953 1,114,226 1,528,756 1,569,017 1,626,320 1,431,007 1,766,236
Water operating 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 1,817,862 Sewer operating 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 2,291,038
Capital grants and contributions - - - 165,266 267,465 - 1,051,532 1,783,762 361,762 196,671
Total business-type activities program revenues 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 6,602,712 Total primary government program revenues 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$ 25,027,014$
Net (Expense)/Revenue
Governmental activities 268,012$ (7,966,850)$ (11,233,697)$ (11,983,777)$ (11,549,059)$ (13,565,435)$ (7,542,007)$ (8,599,327)$ (12,959,006)$ (14,450,057)$
Business-type activities 750,789 706,154 795,976 674,406 477,418 940,133 1,060,877 1,163,282 (648,523) (928,988) Total primary government net expense 1,018,801$ (7,260,696)$ (10,437,721)$ (11,309,371)$ (11,071,641)$ (12,625,302)$ (6,481,130)$ (7,436,045)$ (13,607,529)$ (15,379,045)$
General Revenues and Other Changes in Net PositionGovernmental activities:
Property taxes 11,113,215$ 11,535,320$ 11,808,510$ 11,427,029$ 11,494,758$ 12,330,135$ 12,096,046$ 12,616,267$ 13,394,585$ 13,956,582$
Franchise taxes 390,901 396,173 399,588 517,391 535,188 537,682 540,767 542,689 526,643 516,931 Aggregate taxes 9,494 13,489 24,234 30,554 26,131 26,180 26,135 26,236 37,133 39,748
Tax increment collections 904,836 909,434 1,123,774 1,253,414 946,603 892,438 939,314 711,628 710,541 776,061 Grants and contributions not restricted to
specific programs 637,663 324,378 202,751 27,050 26,146 29,742 29,060 83,682 99,137 126,058
Unrestricted investment earnings (loss)2,316,104 1,864,048 998,846 502,721 624,785 368,821 (149,614) 551,910 357,170 285,494 Gain on sale of capital assets 20,634 - 4,227 23,872 12,342 10,546 3,997 43,904 (15,157) -
Transfers (4,312,159) (3,459,013) (1,134,566) 428,270 438,800 413,895 375,266 (720,742) 613,878 (330,219)
Special item-golf course loan forgiveness - - - - - - 1,020,000 - - - Total governmental activities 11,080,688 11,583,829 13,427,364 14,210,301 14,104,753 14,609,439 14,880,971 13,855,574 15,723,930 15,370,655
Business-type activities:Grants and contributions not restricted to
specific programs - - - - - - - - - 7,736
Unrestricted investment earnings (loss)491,391 473,098 176,619 119,772 162,296 118,396 (45,902) 199,179 137,896 96,851 Gain on sale of capital assets - - - - - - - - - 1,988
Transfers 4,312,159 3,459,013 1,134,566 (428,270) (438,800) (413,895) (375,266) 720,742 (613,878) 330,219
Total business-type activities 4,803,550 3,932,111 1,311,185 (308,498) (276,504) (295,499) (421,168) 919,921 (475,982) 436,794 Total primary government 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$ 15,807,449$
Change in Net PositionGovernmental activities 11,348,700$ 3,616,979$ 2,193,667$ 2,226,524$ 2,555,694$ 1,044,004$ 7,338,964$ 5,256,247$ 2,764,924$ 920,598$
Business-type activities 5,554,339 4,638,265 2,107,161 365,908 200,914 644,634 639,709 2,083,203 (1,124,505) (492,194) Total primary government 16,903,039$ 8,255,244$ 4,300,828$ 2,592,432$ 2,756,608$ 1,688,638$ 7,978,673$ 7,339,450$ 1,640,419$ 428,404$
(2) Golf Course reclassified to a special revenue fund in 2013.Notes: (1) Community Development is in General Government in 2011 &
Fiscal Year
143
CITY OF COTTAGE GROVE, MINNESOTAFUND BALANCES OF GOVERNMENTAL FUNDS Table 3Last Ten Fiscal Years
(modified accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General Fund
Reserved 7,326$ 8,060$ 35,038$ 33,905$ -$ -$ -$ -$ -$ -$
Unreserved 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 11,222
Assigned - - - - 1,611,427 1,695,203 1,443,243 1,380,698 1,408,357 1,393,200
Unassigned - - - - 7,178,108 7,449,565 7,775,548 8,113,424 8,829,697 9,036,425
Total general fund 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$ 10,440,847$
All other Governmental Funds
Reserved reported in:
Special Revenue Funds 1,475$ 1,225,825$ 1,076,850$ 1,273$ -$ -$ -$ -$ -$ -$
Debt Service Funds 8,735,656 9,587,587 6,076,380 8,716,563 - - - - - -
Capital Projects Funds 2,323,835 3,122,128 500,000 267,498 - - - - - -
Unreserved reported in:
Special Revenue Funds 5,876,378 5,494,321 6,058,259 6,366,077 - - - - - -
Debt Service Funds 3,016,733 1,658,843 4,071,740 4,726,677 - - - - - -
Capital Projects Funds 4,969,486 5,945,984 14,827,707 14,244,338 - - - - - -
Nonspendable:
Prepaid items - - - - 938 938 10,229 8,529 7,343 5,723
Inventory - - - - - - 31,617 24,434 20,696 28,750 Restricted - - - - 3,445,145 2,997,220 4,347,850 4,478,812 4,857,365 3,200,692 Committed - - - - 833,500 560,321 416,027 329,841 394,204 731,090
Assigned - - - - 21,540,577 20,240,161 22,936,733 25,591,181 26,322,717 23,020,349
Unassigned - - - - (2,174,299) (9,521,907) (10,379,965) (10,958,389) (9,122,473) (10,240,496) Total all other governmental funds 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$ 16,746,108$
Total all funds 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$ 27,186,955$
Notes:
The implementation of Governmental Accounting Standards Board Statement No. 54 in 2011 resulted in a significant change in the City's fund balance classifications.
Fiscal Year
144
CITY OF COTTAGE GROVE, MINNESOTACHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Table 4
Last Ten Fiscal Years
(modified accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenues
General property taxes 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$ 13,957,128$ Other taxes 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 1,332,740
Special assessments 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 2,004,196
Licenses and permits 1,013,351 1,029,559 683,204 753,468 593,272 831,687 860,954 904,400 1,305,442 1,323,680
Direct charges to developers 27,442 35,787 24,786 50,047 101,913 16,555 2,106,723 661,861 307,971 277,860 Intergovernmental 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 5,642,451
Charges for services 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 4,061,301
Rent - - - - - - - 435,975 450,428 464,078
Fines and forfeits 223,463 224,807 192,169 201,559 246,753 198,022 188,657 171,317 228,642 236,260 Investment earnings (loss)1,699,306 1,412,432 508,246 350,673 448,782 196,879 (173,267) 452,293 262,799 219,963
Interest on interfund loan 496,478 361,341 458,001 130,000 144,500 155,301 47,025 59,066 74,340 52,040
Connection charges 417,092 148,434 201,463 439,238 322,009 282,265 805,261 841,434 318,092 649,489
Park dedication fees 788,177 21,707 64,584 145,640 62,198 41,990 252,386 63,595 9,010 212,865 Miscellaneous 2,980,621 705,107 674,038 609,809 595,218 601,255 705,409 1,005,867 1,138,274 1,864,861
Total revenues 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 32,298,912
ExpendituresCurrent:General government 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 3,143,136
Community development 788,811 894,642 1,102,740 1,132,127 - - 892,699 919,126 1,058,537 1,117,760 (1)
Economic development - - - 299,614 793,046 491,040 151,562 541,838 1,456,306 2,236,464
Public safety 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 7,447,058 Public works 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 4,133,659
Culture and recreation 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 4,438,628
Capital outlay 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 17,201,219
Debt Service:Principal retirement 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 6,570,000
Capital lease payment 3,374 3,627 158,900 239,189 245,000 250,000 293,953 305,076 316,235 327,432
Debt payment to component unit - 678,880 - - - - - - - -
Interest and fiscal charges 1,308,876 1,158,708 1,640,143 1,101,145 906,910 849,046 769,129 882,508 912,107 1,023,721 Total expenditures 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 47,639,077
Excess revenues over (under) expenditures 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) (15,340,165)
Other Financing Sources (Uses)Transfers in 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 1,648,258
Transfers out (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) (1,162,564)
Bonds issued - 3,370,000 3,685,000 - - 1,865,000 7,345,000 1,405,000 5,700,000 8,935,000
Capital lease issued - 6,500,000 - - - - - - - - Premium on debt issued - 27,946 22,705 - - - 211,507 18,461 254,245 357,684
Discount on debt Issued - - (2,906) - - (15,852) - - - -
Proceeds from sale of capital assets 22,412 43,175 49,694 71,506 12,344 10,546 27,195 67,120 53,267 15,453
Total other financing sources (uses)22,412 10,306,386 3,754,493 59,264 15,944 2,148,973 7,704,774 2,118,517 6,694,217 9,793,831
Net change in fund balances 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$ (5,546,334)$
Debt service as a percentage ofnoncapital expenditures 21.1%21.5%28.9%16.8%34.6%13.4%10.2%16.5%11.3%26.0%
Note: (1) Community Development is in General Government in 2011 & 2012
Fiscal Year
145
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 TaxablePayableResidentialCommercialAgriculturalNon-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
2016 21,377,754$ 5,203,657$ 767,424$ 2,749,793$ 678,862$ 30,777,490$ 3,557,397$ 34,334,887$ 1.23%2,790,852,600$ 43.140
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
Source: Washington County
Notes:
(1) The tax capacity (assessed taxable value) of the property is calculated by applying a
statutory formula to the estimated market value of the property.
146
CITY OF COTTAGE GROVE, MINNESOTA
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS Table 6
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
General Debt Service
Total City
Direct Rate
Washington
County
School
District (2)Other (4)
Total
Overlapping
Total Direct and
Overlapping Tax
Rate
2016 40.422 2.717 43.139 30.564 36.812 4.568 71.944 115.083
2015 38.886 2.705 41.591 30.186 35.675 4.182 70.043 111.634
2014 40.976 2.836 43.812 32.811 39.169 5.401 77.381 121.193
2013 42.665 2.381 45.046 34.225 41.285 5.637 81.147 126.193
2012 39.065 2.381 41.446 31.939 37.894 5.139 74.972 116.418
2011 34.500 3.755 38.255 29.772 35.216 4.715 69.703 107.958
2010 31.780 3.635 35.415 27.775 31.650 4.499 63.924 99.339
2009 30.825 3.807 34.632 26.371 30.708 4.268 61.347 95.979
2008 31.548 3.641 35.189 25.936 29.841 4.206 59.983 95.172
2007 32.022 3.791 35.813 25.673 31.101 4.093 60.867 96.680
Source: Washington County
Overlapping rates are those of local and county governments that apply to property owners within the City of Cottage Grove.
Not all overlapping rates apply to all City of Cottage Grove property owners.
(1) The City Direct Rate is the Urban based rate.
(2) Independent School District 833
(4) Includes Metropolitan Transit Commission, Metropolitan Council, and South Washington Watershed
City Direct Rate(1)Overlapping Rates
147
CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS Table 7
Current year and nine years ago
2016 2007
Percentage Percentage
of Total of Total
City City
Net Tax Tax Net Tax Tax
Capacity Capacity Capacity Capacity
Taxpayer Value Rank Value Value Rank Value
Xcel Energy/NSP 652,898$ 1 1.98%477,209$ 2 1.38%
3M Company 625,241 2 1.90%570,732 1 1.65%
Menard Inc.178,806 3 0.54%188,272 5 0.54%
Mars II Inc.169,544 4 0.51%200,342 3 0.58%
Dayton-Hudson Corporation 154,230 5 0.47%167,904 6 0.49%
Wal-Mart Real Estate Business Trust 149,612 6 0.45%- -
Renewal by Andersen Corporation 144,534 7 0.44%193,136 4 0.56%
PHM/Cottage Grove Inc 187,420 8 0.57%- -
Grove-Rainbow LP 135,516 9 0.41%- -
Wer Dis LLC 131,250 10 0.40%- -
Home Depot USA, Inc - - 136,006 7 0.39%
South St Paul Agri-Properties - - 130,800 8 0.38%
Kohl's Department Stores Inc.- - 125,694 9 0.36%
First Trust Co. of St. Paul - - 135,589 10 0.39%
Total 2,529,051$ 7.67%2,325,684$ 6.72%
Source: Washington County
148
CITY OF COTTAGE GROVE, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS Table 8Last Ten Fiscal Years
Collected within the
Taxes Levied for the Fiscal Year Fiscal Year of Levy Total Collections to DatePercentageCollectionsPercentage
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
2016 13,174,084$ 890,000$ (9,707)$ -$ 14,054,377$ 13,991,560$ 99.55%6,717$ -$ 13,991,560$ 99.55%
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%
Notes:
(1) In 2009 a property tax classification appeal for one property owner resulted in a large abatement.
149
CITY OF COTTAGE GROVE, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE Table 9
Last Ten Fiscal Years
General Obligation
General General Special Other Other Total Percentage
Fiscal Obligation Tax Obligation Assessments Capital Long-Term Revenue Capital Long-Term Primary of Personal PerYearIncrement Bonds(1)Bonds(1)Bonds(1)Leases Debt Bonds(1)Lease Debt Government Income (2)Capita(2)
2016 2,096,395$ 4,660,000$ 20,679,730$ -$ -$ -$ -$ -$ 27,436,125$ 1.42%770$ 2015 2,309,130 - 17,964,105 4,842,432 - 609,856 - - 25,725,523 1.34%722
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
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.(2) See the Demographic and Economic Statistics schedule for personal income and population data.
Governmental Activities Business-Type Activities
150
CITY OF COTTAGE GROVE, MINNESOTA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 10
Last Ten Fiscal Years
General Obligation Percentage of
General General Special Less: Amounts Estimated
Fiscal Obligation Tax Obligation Assessments Available in Debt Actual Taxable Per
Year Increment Bonds(1)Bonds(1)Bonds(1)Service Funds Total Market Value (2)Capita (3)
2016 2,096,395$ -$ 20,679,729$ 4,098,850$ 18,677,274$ 0.67%522$
2015 2,309,130 - 17,964,105 3,773,605 16,499,630 0.61%463
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
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.
(2) See the Assessed and Estimated Actual Value of Taxable Property for estimated actual taxable market value.
(3) See the Demographic and Economic Statistics schedule for population data.
151
CITY OF COTTAGE GROVE, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 11
As of December 31, 2016
City of Cottage Grove
% of Debt Share of
Net Debt Applicable Overlapping
Outstanding to City Debt
Overlapping:
Washington County 129,790,000$ 12.3667%16,050,740$
School Districts
ISD No. 200 (Hastings)33,990,000 13.8583%4,710,436
ISD No. 833 (South Wash. County)309,245,000 30.8415%95,375,797
Metro Council 146,405,000 1.1108%1,626,267
Total Overlapping 117,763,240
City of Cottage Grove Direct Debt 22,776,125$ 100.00%22,776,125
Total Direct and Overlapping Debt:642,206,125$ 140,539,365$
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.
152
CITY OF COTTAGE GROVE, MINNESOTALEGAL DEBT MARGIN INFORMATION Table 12Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Debt limit 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$ 93,740,412$
Total net debt applicable to limit 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 4,660,000
Legal debt margin 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$ 89,080,412$
Total net debt applicable to the limit
as a percentage of debt limit 0.87%7.54%6.92%6.96%7.25%7.59%7.84%7.07%5.92%4.97%
Legal Debt Margin Calculation for Fiscal Year 2016
Market Value (after fiscal disparities)2,790,852,600$
Debt limit (3% of assessed value)83,725,578 Debt applicable to limit 4,660,000
Legal debt margin 79,065,578$
Fiscal Year
153
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)
2016 36,062 2,105,690,772$ 58,392$ 17,794 3.4%
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%
Sources:
(1) Metropolitan Council-2002-2009 & 2012-2013. Census-2010. Cottage Grove Planning Department-2014-2016.
(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.
154
CITY OF COTTAGE GROVE, MINNESOTA
PRINCIPAL EMPLOYERS Table 14
Current year and nine years ago
2016 2007
Percentage Percentage
of Total of Total
Taxpayer Employees Rank Employment Employees Rank Employment
School District 833 2,513 1 32%1,149 1 17%
3M Cottage Grove 750 2 10%750 2 11%
Renewal by Andersen 450 3 6%250 4 4%
Walmart 335 4 4%- - -
Up-North Plastics 300 5 4%280 3 4%
Cub Foods 200 6 3%141 8 2%
City of Cottage Grove 176 7 2%119 10 2%
Werner Electric 170 8 2%- - -
Menard's 150 9 2%200 7 3%
Target 130 10 2%212 5 3%
Commercial Carriers Inc.- - - 200 6 3%
Rainbow Foods - - - 136 9 2%
Total 5,174 67%3,437 52%
Sources:
City of Cottage Grove Annual Municipal Disclosure Reporting and Cottage Grove Economic Development Department.
155
CITY OF COTTAGE GROVE, MINNESOTA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Table 15
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General Government
Total General Government 23.03 22.48 21.76 21.76 21.76 22.06 23.38 23.40 23.25 25.70
Public Safety
Police/Cottage Grove EMS
Officers 39.00 39.00 39.00 39.00 39.00 39.00 39.00 40.00 40.00 43.56
Civilians*9.40 9.10 7.25 7.25 7.25 8.46 8.09 8.26 7.56 7.56
Fire/Emergency Management 4.00 4.00 4.00 4.00 4.00 4.00 5.00 7.00 9.00 11.75
Total Public Safety 52.40 52.10 50.25 50.25 50.25 51.46 52.09 55.26 56.56 62.87
Public Works 22.56 21.56 21.56 21.56 21.56 20.83 21.68 23.68 24.08 22.12
Recreation and Swimming Pool 3.00 3.00 2.50 2.50 2.50 2.50 2.55 2.55 2.55 2.55
Ice Arena 2.60 2.60 2.60 2.60 2.60 3.20 3.65 3.65 3.65 3.55
Water/Sewer 10.04 9.36 8.36 8.36 8.36 8.23 8.18 8.18 8.28 9.28
Storm Sewer 3.40 3.40 3.40 3.40 3.40 3.54 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 1.06 1.06 1.06 1.06 1.06
Fleet Maintenance 3.84 3.84 3.84 3.84 3.84 4.04 4.04 4.04 4.04 4.04
Total 126.91 124.38 120.31 120.31 120.31 121.92 125.17 130.36 132.01 139.71
Source: City of Cottage Grove Finance Office
*Dispatch services were transferred to Washington County in 2007. Six positions were
transferred to the County as part of this transition.
Budgeted Full-time Equivalent Employees as of December 31
156
CITY OF COTTAGE GROVE, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM Table 16
Last Ten Years
Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General Government
Elections 2 2 2 2 2Registered voters as of 7 am election day 20,358 20,607 21,119 20,780 21,594
Number of votes cast 19,050 13,345 19,727 11,166 19,799
Voter participation (registered)93.58%64.76%93.41%53.73%84.50%(elections are held every other year)
Community DevelopmentInspections
Building Permits (New Dwelling Units)67 89 66 89 49 53 56 77 65 99
Code Enforcement Inspections 1,032 1,777 1,759 1,447 1,276 2,407 2,826 1,482 1,013 841
Public Safety
PoliceCrimes - Part I 892 850 743 674 694 756 783 774 719 673
Crimes - Part II 2,883 2,472 2,478 2,055 2,117 1,614 1,473 1,434 1,419 1,424
Total Calls for Service 20,469 20,356 19,434 20,104 20,707 17,348 18,151 18,448 20,576 21,331Fire
Medical 1,250 1,442 1,765 1,968 2,000 2,347 2,437 2,562 2,464 2,681
Fire 580 553 556 643 456 295 280 301 290 279Avg Response Time (minutes) Medical*n/a n/a n/a n/a 8:38 6:51 6:15 6:19 6:13 6:21
Avg Response Time (minutes) Fire* n/a n/a n/a n/a 8:24 8:04 7:25 7:34 7:06 6:54
Avg Response Time (minutes) Both*8.57 8:54 8:59 9:01 8:36 6:59 6:22 6:27 6:16 6:24
*Entire service area
Public Works
Sq. Yards of Streets Sealcoated 404,821 425,577 352,953 349,349 382,374 488,210 457,275 199,725 118,159 193,249
Miles of Streets New Construction 0.73 0.00 0.00 0.26 1.12 0.30 1.23 1.99 0.56 1.11Miles of watermain added 2.06 1.68 0.00 0.39 0.63 0.79 2.42 1.84 1.06 1.20
Source: Various City of Cottage Grove Departments
Notes:(1) Information not available is labeled n/a.
Fiscal Year
157
CITY OF COTTAGE GROVE, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 17
Last Ten Years
Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Public SafetyPolice
Stations 1 1 1 1 1 1 1 1 1 1 1
Patrol Units 12 12 12 12 12 12 12 13 13 13 13
Fire
Stations 4 4 4 4 4 4 4 4 4 4 4Fire Trucks 6 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 2,592
Xcel owned Lights 301 301 301 301 301 301 301 301 301 301 301Streets (miles)154.72 155.45 155.45 155.45 155.71 156.83 157.13 158.36 160.35 160.91 162.02
Sidewalks/trails (miles)39.01 41.35 44.23 44.27 46.40 48.25 48.61 53.82 57.83 59.56 61.98
Parks (acreage)
Community Parks 330 368 377 377 377 377 377 377 377 400 400Neighborhood Parks 201 201 201 201 201 201 244 275 303 275 275
Recreation facilities 21 21 21 21 21 21 21 21 21 15 15
County Parks 539 552 571 571 571 571 571 571 571 569 569
State Scientific and Nature Area 238 238 238 238 238 238 238 238 238 238 238
Golf Course 219 219 219 219 219 219 219 219 219 219 219Other Open Space 406 450 453 453 453 453 453 581 581 961 961
Water
Number of Connections 10,056 10,056 10,298 10,381 10,423 10,474 10,538 10,573 10,640 10,706 10,789Miles of Water Mains and Laterals 139.11 141.17 142.85 142.85 143.24 143.87 144.66 147.08 148.92 149.98 151.18
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 10,733
Miles of Sanitary Sewer Mains and Laterals 124.00 126.72 126.72 126.72 127.02 127.58 127.99 129.32 131.11 131.45 132.81
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 93.94
Source: Various City Departments
Fiscal Year
158