HomeMy WebLinkAbout2019 CAFRComprehensive Annual
Financial Report
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City of Cottage Grove
Minnesota
Year Ended
December 31, 2019
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Comprehensive
Annual Financial Report
of the
CITY OF COTTAGE GROVE,
MINNESOTA
For the Year Ended
December 31, 2019
Prepared by
City's Finance Department
City of Cottage Grove
12800 Ravine Parkway South
Cottage Grove, MN 55016
City of Cottage Grove
Table of Contents
Introductory Section Page
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 7
Elected Officials and Administration 8
Organization Chart 9
Financial Section
Independent Auditor's Report
13
Management's Discussion and Analysis
17
Basic Financial Statements
Government -Wide Financial Statements
Statement of Net Position
31
Statement of Activities
32
Fund Financial Statements
Balance Sheet — Governmental Funds
34
Reconciliation of the Balance Sheet to the Statement of Net Position —
Governmental Funds
37
Statement of Revenues, Expenditures, and Changes in Fund Balances —
Governmental Funds
38
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances to the Statement of Activities — Governmental Funds
40
Statement of Net Position — Proprietary Funds
41
Statement of Revenues, Expenses, and Changes in Fund Net Position —
Proprietary Funds
44
Statement of Cash Flows — Proprietary Funds
44
Notes to Financial Statements
45
Required Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — General Fund
86
Schedule of Changes in Total OPEB Liability and Related Ratios
88
Schedule of City's Proportionate Share of Net Pension Liability
— General Employees Retirement Fund
89
Schedule of City's Proportionate Share of Net Pension Liability
— Police and Fire Retirement Fund
89
Schedule of City Contributions — General Employees Retirement Fund
90
Schedule of City Contributions — Police and Fire Retirement Fund
90
Schedule of Changes in Net Pension Liability and Related Ratios
— Fire Relief Association
91
Schedule of City and Non -Employer Contributing — Fire Relief Association
93
Notes to Required Supplementary Information
94
Combining and Individual Fund Statements and Schedules
Nonmaj or Governmental Funds 103
Combining Balance Sheet — Nonmajor Governmental Funds 105
City of Cottage Grove
Table of Contents
Financial Section (Continued)
Page
Combining and Individual Fund Statements and Schedules (Continued)
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances — Nonmajor Governmental Funds
106
Nonmajor Special Revenue Funds
107
Subcombining Balance Sheet — Nonmajor Special Revenue Funds
108
Subcombining Statement of Revenues, Expenditures, and Changes in
Fund Balances — Nonmajor Special Revenue Funds
110
Nonmajor Debt Service Funds
113
Subcombining Balance Sheet — Nonmajor Debt Service Funds
114
Subcombining Statement of Revenues, Expenditures, and Changes in
Fund Balances — Nonmajor Debt Service Funds
116
Nonmajor Capital Projects Funds
119
Subcombining Balance Sheet — Nonmajor Capital Projects Funds
120
Subcombining Statement of Revenues, Expenditures, and Changes in
Fund Balances — Nonmajor Capital Projects Funds
122
Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget
and Actual
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — Recycling Special Revenue Fund
124
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — Storm Water Maintenance Special Revenue Fund
125
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — Forfeiture/Seizure Special Revenue Fund
126
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — Ice Arena Special Revenue Fund
127
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — Golf Course Special Revenue Fund
128
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual — HERO Center Operations Special Revenue Fund
129
Internal Service Funds
131
Combining Statement of Net Position — Internal Service Funds
132
Combining Statement of Revenues, Expenses, and Changes in Net
Position — Internal Service Funds
133
Combining Statement of Cash Flows — Internal Service Funds
134
Economic Development Authority Component Unit
135
Combining Balance Sheet — All Governmental Fund Types — Economic
Development Authority Component Unit
136
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances — All Governmental Fund Types — Economic
Development Authority Component Unit
137
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City of Cottage Grove
Table of Contents
Supplementary Financial Information
Page
Combined Schedule of Bonded Indebtedness
140
Debt Service payments to Maturity
142
Deferred Tax Levies
145
Subcombining Balance Sheet — Pavement Management Debt Service Schedule
146
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance
—
Pavement Management Debt Service Schedule
148
Subcombining Balance Sheet — Tax Increment Construction Revolving Schedule
150
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balance
—
Tax Increment Construction Revolving Schedule
152
Subcombining Balance Sheet — TIF Debt Service Revolving Schedule
154
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
— TIF Debt Service Revolving Schedule
155
Statistical Section Section
Page
Net Position by Component
1
160
Changes in Net Position
2
162
Fund Balances of Governmental Funds
3
166
Changes in Fund Balances of Governmental Funds
4
168
Assessed and Estimated Actual Value of Taxable Property
5
170
Property Tax Rates Direct and Overlapping Governments
6
172
Principal Property Taxpayers
7
173
Property Tax Levies and Collections
8
174
Ratios of Outstanding Debt by Type
9
176
Ratios of General Bonded Debt Outstanding
10
178
Direct and Overlapping Governmental Activities Debt
11
179
Legal Debt Margin Information
12
180
Demographic and Economic Statistics
13
182
Principal Employers
14
183
Full -Time Equivalent City Government Employees by Function
15
184
Operating Indicators by Function/Program
16
185
Capital Asset Statistics by Function/Program
17
186
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INTRODUCTORY SECTION
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May 15, 2020
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, 2019.
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, 2019. 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 2019 population at
38,175.
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.
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.
CITY OF COTTAGE GROVE • 12800 Ravine Parkway • Cottage Grove, Minnesota 55016 3
www.cottage-grove.org • 651-458-2800 • Fax 651-458-2897 • Equal Opportunity Employer
Profile of the City (Continued)
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. 2019 continued with steady employment
growth in the region and the Washington County unemployment rate at 2.0%, compared to the national
rate of 3.9%. 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 2019 was $3.4 billion. Growth in taxable value for 2020 is expected at 9% due to new
construction and increases in property values of existing building stock.
The City of Woodbury and the City of Cottage Grove were awarded a $9.5 million grant from the State
of Minnesota for construction of the HERO Center on a 9-acre parcel of land adjacent to Cottage Grove
City Hall. This $19 million integrated public safety training facility was conceived in 2011 and had
previously received a $1.46 million grant for planning and architectural design. Construction of the
facility was completed in late 2019 and opened to police, fire, and EMS regional users in January 2020.
2019 also saw a development proposal for a market rate apartment building to be located on the site of
the "old" City Hall. This building on a 3.2-acre site in the heart of Cottage Grove had housed the
municipal offices and police station from 1968 to 2012. After the city offices had relocated, the building
provided a site for a business incubator project and a temporary facility for the Fire department while the
new Central Fire Station was constructed in 2017-2018. A letter of intent was signed, and the building
was demolished in advance of the sale of the land and construction of the 120 unit building in 2020.
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, Modern Automotive
Performance, Renewal by Andersen, North Star Sheets 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.
The Business Park saw three major additions in 2019: two expansions and a new heavy industrial user.
Up North Plastics, one of the original occupants of the business park, began construction of a 428,000
square foot addition to their building on land they owned. This manufacturer of plastic sheeting had
conducted a nationwide search for their expansion before deciding to more than double their capacity at
their current site. The construction will be complete in 2020.
Renewal by Andersen is also expanding in Cottage Grove with a $35 million investment in a 350,000
square foot manufacturing transportation addition on 28 acres adjacent to their current site. The addition
will increase their workforce by another 125 employees in the next three years.
C!
Local Economy (Continued)
Our heavy industrial occupant is AirGas who is constructing an air -separation plant on 8.5 acres in the
business park. This $54 million facility will provide 35 high paying jobs in a unique industry which
turns the air around us into specialty gases (oxygen, nitrogen, and argon) for use by manufacturing and
medical users. Construction will be complete in fall 2020
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 2040 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.
Pavement Management projects are not full road reconstruction projects 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. Two
pavement projects of a significant nature are planned for 2020 along 80th Street and West Point Douglas
Road which will require over $8 million in financing.
Relevant Financial Policies
The City has financial policies and plans which establish the principles that guide staff and Council
members to make consistent and informed financial decisions. These policies and plans include:
• Fund balance policy
• Cash and investment management policy
• Debt management policy
• Capital improvements plan
• Infrastructure Maintenance Task Force (IMTF) policy
It is important for the financial stability of the City to maintain reserve funds for unanticipated
expenditures or unforeseen emergencies as well as to provide adequate working capital for current
operations without short term borrowing. The City's fund balance policy identifies that the unassigned
fund balance in the General Fund shall be no less than 55% of annual budgeted expenditures.
Major Initiatives
The population of Cottage Grove has increased from 833 in 1950 to 34,589 per the 2010 census. Most of
the population of the City concentrates in two age groups 0 - 19 years, 32.5% and 30 - 50 years, 38.1%.
According to the 2010 census, the average age is 35 years and the median family income is $80,830.
This median family income is 141% higher than the Twin Cities Metro Area.
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.
5
Major Initiatives (Continued)
Residential development slowed significantly subsequent to the Great Recession of 2007. The real estate
slowdown affected over five years of new home construction in the community. However, since 2015,
the City has seen a consistent year over year increase in construction of single family and multifamily
homes. In 2019, 284 permits were issued for new construction of residential housing units. More than
500 lots with completed infrastructure await construction at the end of 2019.
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. Construction of Phase 1 of the
Ravine Parkway which connects these developments was completed in 2019.
The City strategy of growth in the residential and commercial/industrial areas, providing more homes
and jobs, has begun to 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, 2018. This was the twenty-
ninth 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 dedication 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.
Respectfully Submitted,
CITY OF COTTAGE GROVE, MINNESOTA
Robin Roland
Finance Director
G•.
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Government Fi nce Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cottage Grove
Minnesota
For its Comprehensive Annual
Financial Deport
for the Fiscal Year Ended
December 31,2018
OA66��� P,;014t�
Executive Director/CEO
City of Cottage Grove
Elected Officials and Administration
December 31, 2019
Elected Officials Position Term Expires
Myron Bailey Mayor December 31, 2020
Steve Dennis Council Member December 31, 2022
Justin Olsen Council Member December 31, 2020
La Rae Mills Council Member December 31, 2020
Dave Thiede Council Member December 31, 2022
Appointed Personnel
Jennifer Levitt City Administrator
Robin Roland Finance Director
Joe Fischbach City Clerk
Ben Boike Community and Economic Development Director
Ryan Burfeind Public Works Director and City Engineer
Peter Koerner Director of Public Safety
Zac Dockter Parks and Recreation Director
City of Cottage Grove Organizational Chart
F,a,tg,e,7,r-,r,1D
Advisory
CityCouncil Commissions
City City Attorney
Administrator
Administratior
C�E',e.;;i~-ert o..
Planning Parks} (it; C1-2
Horti€ti't~irE I H EIv. _ . -~s
Building/Code
Human
Recreation
Inspections
ResoLlr[es
Historic
Community
Ice Aren=
' Programs
Preservation
ocmmunicac .ans
Economic
Ricer Oaksaevelopmen.
=iranf-v I r--j Public Works I r--j Public Safety
Accounting I I--r{ {._..33-s I I� Patrol
Enterprise �f Forestry �—r� Investigations
Billing � "� I I
Fleet/Building Public Safety
Maintenance I H Programs
T Utilities Animal Contol
Fire &
Engineering Emergency
Management
EMS/Medical
Services
Fire
Inspections
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FINANCIAL SECTION
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,berganKov
Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Cottage Grove
Cottage Grove, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, the discretely presented component unit, each major fund, and the aggregate remaining
fund information of the City of Cottage Grove, Minnesota, as of and for the year ended December 31,
2019, and the related notes to financial statements, which collectively comprise the City's basic financial
statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the City's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
BERGANKDV, LTD. I BERGANKDV.COM I DO MORE. 13
Opinions
In our opinion, the financial statements referred to in the first paragraph present fairly, in all material
respects, the respective financial position of the governmental activities, the business -type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund information of
the City of Cottage Grove, Minnesota, as of December 31, 2019, and the respective changes in financial
position and, where applicable, cash flows thereof, for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis, which follows this report letter, and Required Supplementary Information as
listed in the Table of Contents be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board (GASB), who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the Required Supplementary Information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Cottage Grove's basic financial statements. The introductory section,
combining and individual fund statements and schedules, supplementary financial information, and
statistical section are presented for purposes of additional analysis and are not a required part of the
basic financial statements.
The combining and individual fund statements and schedules and supplementary financial information
are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the combining and individual fund statements
and schedules and supplementary financial information are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
BERGANKDV, LTD. I BERGANKDV.COM I DO MORE. 14
Other Matters (Continued)
Other Information (Continued)
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on them.
Report on Summarized Comparative Information
The financial statements include partial prior year comparative information. Such information does not
include all of the information required to constitute a presentation in accordance with accounting
principles generally accepted in the United States of America. Accordingly, such information should be
read in conjunction with the City's basic financial statements for the year ended December 31, 2018,
from which such partial information was derived.
We have previously audited the City's 2018 financial statements and our report, dated May 30, 2019,
expressed unmodified opinions on the respective financial statements of the governmental activities, the
business -type activities, the discretely presented component unit, each major fund, and the aggregate
remaining fund information. In our opinion, the summarized comparative information presented herein
as of and for the year ended December 31, 2018, is consistent, in all material respects, with the audited
financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 15, 2020,
on our consideration of the City of Cottage Grove's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
the effectiveness of internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the City of
Cottage Grove's internal control over financial reporting and compliance.
Minneapolis, Minnesota
May 15, 2020
BERGANKDV, LTD. I BERGANKDV.COM I DO MORE. 15
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City of Cottage Grove
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, 2019. 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 6 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 $287,270,069 (net position). Of this amount, $34,138,861 (unrestricted net
position) may be used to meet the government's ongoing obligations to citizens and creditors in
accordance with the City's fund designations and fiscal policies.
• The City's total net position increased by $31,967,760. 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 funds
reported combined ending fund balances of $29,464,120 a decrease of $362,752 compared to the
previous year. Approximately 87% or $25,513,847 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
$10,224,988 (56%) of the total subsequent year General fund expenditures.
• At the end of the current fiscal year, the City of Cottage Grove had total long-term debt
outstanding of $43,576,327, an increase of $4,657,223 or 11.9% compared to the previous year.
In 2019, the City issued $4,090,000 in General Obligation Capital Improvement Plan bonds and
$2,845,000 in Equipment Certificates.
OVERVIEW OF 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
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).
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City of Cottage Grove
Management's Discussion and Analysis
OVERVIEW OF FINANCIAL STATEMENTS (CONTINUED)
Government -Wide Financial Statements (Continued)
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 31 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.
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 eight 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
City of Cottage Grove
Management's Discussion and Analysis
OVERVIEW OF FINANCIAL STATEMENTS (CONTINUED)
Governmental Funds (Continued)
• Closed Debt Fund —Debt service fund
• Future Projects Fund - Capital project fund
• 2016 Improvement Projects — 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 34 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 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 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
43 of this report.
Other Information
The combining statements referred to earlier in connection with non -major governmental funds and
internal service funds are presented immediately following the required supplementary information.
Combining and individual fund statements and schedules start on page 105 of this report.
19
City of Cottage Grove
Management's Discussion and Analysis
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 $286,859,721 at the
close of the most recent fiscal year.
The largest portion of the City of Cottage Grove's net position ($244,544,781 or 85%) 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
2019
2018
2019
2018
2019
2018
Current and other assets
$ 51,208,180
$ 46,297,128
$ 14,922,460
$ 13,650,907
$ 66,130,640
$ 59,948,035
Capital assets
217,747,574
191,175,338
70,373,534
63,822,257
288,121,108
254,997,595
Total assets
268,955,754
237,472,466
85,295,994
77,473,164
354,251,748
314,945,630
Deferred outflows of resources
4,778,293
7,155,481
725,043
939,200
5,503,336
8,094,681
Long-term liabilities outstanding
42,576,327
37,007,491
84,990
58,723
42,661,317
37,066,214
Pension liability
8,714,390
8,756,790
1,240,444
1,168,520
9,954,834
9,925,310
Other liabilities
11,068,757
9,908,367
519,967
398,881
11,588,724
10,307,248
Total liabilities
62,359,474
55,672,648
1,845,401
1,626,124
64,204,875
57,298,772
Deferred inflows of resources
7,306,480
9,268,674
1,059,367
1,256,263
8,365,847
10,524,937
Net position
Net investment in capital assets
174,171,247
152,256,234
70,373,534
63,822,257
244,544,781
216,078,491
Restricted
8,500,720
6,177,599
-
-
8,500,720
6,177,599
Unrestricted
21,396,126
21,252,792
12,742,735
11,707,720
34,138,861
32,960,512
Total net position
$ 204,068,093
$ 179,686,625
$ 83,116,269
$ 75,529,977
$ 287,184,362
$ 255,216,602
An additional portion of the City's net position ($8,500,720 or 3%) represents resources that are subject
to external restrictions on how they may be used. The balance of unrestricted net position, $34,138,861
may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Cottage Grove is able to report positive balances in all
three categories of net position; for the government as a whole, as well as for its separate governmental
and business -type activities. The same situation held true for the prior fiscal year.
GOVERNMENTAL ACTIVITIES
Governmental activities increased the City's net position by $24,381,468 in 2019.
• Program revenue increased overall by $14,460,741. This is primarily related to increased capital
grants and contributions from the state and county for construction of the HERO Center and road
projects.
20
City of Cottage Grove
Management's Discussion and Analysis
GOVERNMENTAL ACTIVITIES (CONTINUED)
• Investment income increased by $463,137 due to the unrealized gain in the value of investments
which are annually adjusted in accordance with accounting standards.
Capital Grants
Contnbutioi
49%
Other Taxes
Tax Increm(
3%
Revenues by Source - Government Activities
L %0
Operating Grants
nnrd Cnntnblit10ine
/o
Charges for
Services
16%
,rty Taxes
26%
21
City of Cottage Grove
Management's Discussion and Analysis
GOVERNMENTAL ACTIVITIES (CONTINUED)
City of Cottage Grove's Changes in Net Position
Governmental Activities
Business -Type
Activities
Total Primary
Government
2019
2018
2019
2018
2019
2018
Revenues
Program revenues
Charges for services
$ 9,803,605
$ 9,747,795
$ 8,494,677
$ 7,658,327
$ 18,298,282
$ 17,406,122
Operating grants and contributions
2,231,407
3,710,686
23,409
2,350
2,254,816
3,713,036
Capital grants and contributions
29,783,591
13,899,381
2,700,615
4,488,437
32,484,206
18,387,818
General revenues
-
Property taxes
15,608,602
15,171,020
-
-
15,608,602
15,171,020
Other taxes
1,691,323
1,358,141
1,691,323
1,358,141
Grants and contributions not
restricted to specific programs
113,435
-
113,435
-
Umestricted investment earnings
982,812
519,675
261,525
152,466
1,244,337
672,141
Gain on sale of asset
49,186
71,631
49,186
71,631
Total revenues
60,263,961
44,478,329
11,480,226
12,301,580
71,744,187
56,779,909
Expenses
General government
2,704,159
2,573,693
-
-
2,704,159
2,573,693
Community development
1,524,566
1,626,960
1,524,566
1,626,960
Economic development
492,107
275,927
492,107
275,927
Public safety
9,272,317
9,353,309
9,272,317
9,353,309
Public works
10,062,896
8,559,929
10,062,896
8,559,929
Culture and recreation
5,566,175
5,055,903
5,566,175
5,035,903
Interest on long-term debt
1,286,632
1,037,986
1,286,632
1,037,986
Streetlights
-
-
1,073,480
991,041
1,073,480
991,041
Cottage Grove EMS
1,750,771
1,605,779
1,750,771
1,605,779
Water operating
2,904,174
2,980,080
2,904,174
2,980,080
Sewer operating
3,139,150
2,881,446
3,139,150
2,881,446
Total expenses
30,908,852
28,483,707
8,867,575
8,458,346
39,776,427
36,922,053
Increase (decrease)in net position before
transfers and special items
29,355,109
15,994,622
2,612,651
3,843,234
31,967,760
19,857,856
Transfers
(4,973,641)
(4,126,962)
4,973,641
4,126,962
Increase (decrease) in net position
24,381,468
11,867,660
7,586,292
7,970,196
31,967,760
19,857,856
Net position— beginning, previously stated
179.686.625
168,000,121
75,529,977
67,589,004
255,216,602
235,589,125
Change in accounting principle
-
(201,156)
-
(29,223)
-
(230,379)
Net position - beginning
179,686,625
167,798,965
75,529,977
67,559,781
255,216,602
235,358,746
Net position - ending
$ 204,068,093
$ 179,666,625
$ 83,116,269
$ 75,529,977
$ 287,184,362
$ 255,216,602
22
City of Cottage Grove
Management's Discussion and Analysis
GOVERNMENTAL ACTIVITIES (CONTINUED)
The following chart illustrates the City's expenses and corresponding program revenues for its
governmental activities.
$22,000,000
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
General Community Economic Public Safety Public Works Culture and Interest on Debt
Government Development Development Recreation
■ Revenue ■ Expenses
Business -Type Activities
Business -type activities increased net position by $7,586,292. Below are graphs showing the business -
type activities revenue and expense comparisons.
• The majority of the increase in net position is due to capital contributions in water and sewer
infrastructure due to residential and commercial development.
Revenues - Business -Type Activities
Unrestricted
Invest
Earn
29
Charges for
Services
74%
Capital Grants and
C'ontributions
4%
Operating Grants
and Contributions
kk,� .0%
23
City of Cottage Grove
Management's Discussion and Analysis
GOVERNMENTAL ACTIVITIES (CONTINUED)
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1.000.000
$ 500.000
Street Lights EMS Water Sewer
■ Revenue ■ Expenses
In business type activities, changes in net position were positive for all funds.
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 $29,464,120 a decrease of $362,752. Committed, assigned and unassigned fund
balance which is available for spending at the government's discretion has a balance of $25,513,847 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.
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 $10,224,988 while total fund balance was
$11,691,378. As a measure of the general fund's liquidity, it may be useful to compare both unassigned
fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 56%
of total subsequent year General fund expenditures, while total fund balance represents 64% of the same
amount.
24
City of Cottage Grove
Management's Discussion and Analysis
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED)
Governmental Funds (Continued)
The General fund balance increased by $445,832. This increase is primarily due to an increase in
charges for services resulting from development activity in the city. Revenues exceeded budget by
$772,040 due to higher than expected building permit revenues and charges for services from
development and infrastructure projects. Expenditures were $505,180 over budget due to costs of
retirement payouts in the police and public works departments and overtime and commodity purchases
incurred during a particularly long and harsh snow removal season.
• The Closed Debt Fund increased by $329,187 due special assessment collections from retired
bonds previously assigned to the Closed Debt Fund.
• The Municipal Building Fund increased $136,606 due to completion of the Central Fire Station
Proj ect.
• The MSA Construction Fund decreased by $1,022,250 due to construction project costs related
to the Ravine Parkway project phase 2.
• The Future Projects Fund increased $1,711,416 due to bonding for and cost reimbursement of the
HERO public safety training center which is a collaboration by the State of Minnesota, City of
Cottage Grove and City of Woodbury.
• The 2016 Improvement Projects Fund decreased by $1,029,015 due to construction of Summers
Landing phase three and Parkview Pointe developments. Special Assessments were levied and
will be collected over the next three years to reimburse these 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 increased the City's net position by $7,693,651 in 2019 due to increased
charges for services resulting from increased water and sewer rates and capital contributions
from completed infrastructure projects in new residential developments.
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 $153,070 more than budgeted due to increased
commercial/institutional building permitting in 2019.
• Intergovernmental revenues were $110,413 more than budget due to unanticipated Federal and
State grant revenues and public safety aids.
• Charges for services were $469,197 more than budgeted due to increased engineering fees
resulting from increased construction and development activity.
• General government expenditures were $14,392 more than budgeted amounts due to additional
salary costs resulting from the replacement of the city administrator.
• Community development expenditures were $16,361 more than budgeted amounts due to
additional salary and overtime costs related to development projects.
25
City of Cottage Grove
Management's Discussion and Analysis
BUDGETARY HIGHLIGHTS (CONTINUED)
General Fund (Continued)
• Public safety expenditures were $226,812 more than budgeted amounts due to personnel and
schedule changes combined with additional repair and maintenance costs on fire vehicles.
• Public works expenditures were $255,189 greater than budget due to personnel costs, supplies
and contractual services related to the effects of another challenging snow and ice removal
season.
• Culture and recreation expenditures were $6,426 less than final budget due to reduced
operational costs in Park Maintenance.
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, 2019, amounts to $288,121,108. 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
2019
2018
2019
2018
2019
2018
Land and land improvements
$ 18,105,944
$ 18,105,944
$ 506,460 $
479,785 $
18,612,404
$ 18,585,729
Easements
1,157,202
1,157,202
-
-
1,157,202
1,157,202
Construction in progress
20,352,945
13,473,244
-
-
20,352,945
13,473,244
Buildings and improvements
29,534,649
27,187,661
3,379,814
1,393,624
32,914,463
28,581,285
Equipment and furniture
100,931
191,418
-
-
100,931
191,418
Machinery and equipment
5,789,346
4,976,273
814,416
975,910
6,603,762
5,952,183
Other improvements
4,514,658
4,798,661
6,079,311
5,516,922
10,593,969
10,315,583
Infrastructure
-
-
Streets
103,753,684
91,863,264
-
-
103,753,684
91,863,264
Storm sewers
29,545,603
24,138,580
29,545,603
24,138,580
Sidewalks/trails
4,892,612
5,283,091
-
-
4,892,612
5,283,091
Water and sewer lines
-
-
59,593,533
55,456,016
59,593,533
55,456,016
Ending balance
$ 217,747,574
$ 191,175,338
$ 70,373,534 $
63,822,257 $
288,121,108
$ 254,997,593
The largest addition to capital assets in 2019 were the streets and other infrastructure added due to the
Ravine Parkway and 95d' and Jamaica road projects, Kingston fields 2nd, Calarosa 2nd and 3rd, Hamlet
Heights, Parkview Pointe, and Summers Landing 3rd residential housing developments.
Additional information on the City of Cottage Grove's capital assets can be found in Note 3.
Long-term debt
At the end of the current fiscal year, the City of Cottage Grove had total long-term debt outstanding of
$44,668,412 an increase of $4,734,522. $3,233,015 of the debt outstanding is due within one year.
$22,455,000 of bonds payable is for pavement management debt being repaid by a combination of
special assessments and property tax levies.
26
City of Cottage Grove
Management's Discussion and Analysis
CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED)
Long-term debt (Continued)
City of Cottage Grove's Outstanding Debt
Governmental Activities
Bonds payable, net
Compensated absences
Total governmental activities
Business -Type Activities
Compensated absences
Total primary government
2019 2018
$ 43,576,327 $ 38,919,104
982,917 922,085
44,559,244 39,841,189
109,168 92,701
$ 44,6682412 $ 39,933,890
The City of Cottage Grove holds a general obligation debt rating of Aal from Moody's (2010 Global
Ratings Scale) and of AA+/Stable from Standard and Poor's. According to S&P, Cottage Grove has "a
strong financial profile, anchored by a very strong general fund balance; and good management
practices that have contributed to the city's ongoing financial health."
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total
Estimated Market Value. The current debt limitation for the City of Cottage Grove is $117,125,325. Of
that limit, $11,690,000 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 4.
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 S., Cottage Grove, Minnesota 55016.
27
%re po an6
Cottage
Grove
V,iyrity Meet
BASIC FINANCIAL STATEMENTS
29
%re po an6
Cottage
Grove
V,iyrity Meet
30
City of Cottage Grove
Statement of Net Position
December 31, 2019
With Comparative Totals for December 31, 201E
Component
Unit
Primary Government
Economic
Totals
Governmental
Business -Type
Total Primary
Development
Reporting Entitiy
Activities
Activities
Government
Authority
2019
2018
Assets
Cash and investments (including
cash equivalents)
$ 37,567,348
$ 9,281,355
$ 46,848,703
$
$ 46,848,703
$ 47,630,252
Interest receivable
134,166
-
134,166
134,166
173,384
Due from other governments
3,376,693
23,608
3,400,301
3,400,301
907,968
Accounts receivable
599,749
2,351,522
2,951,271
4,596
2,955,867
2,591,598
Prepaid items
339,137
171,570
510,707
-
510,707
507,450
Property tax receivable
130,157
-
130,157
1,031
131,188
154,209
Loan receivable
-
-
99,741
99,741
130,679
Special assessments receivable
10,069,089
10,069,089
-
10,069,089
6,936,460
Inventories
121,200
121,200
121,200
146,261
Internal balances
(3,094,405)
3,094,405
-
-
-
-
Property held for resale
592,231
-
592,231
311,718
903,949
576,216
Fire relief pension asset
1,372,815
-
1,372,815
-
1,372,815
822,968
Capital assets not being depreciated
Land
18,105,944
479,785
18,585,729
18,585,729
18,585,729
Easements
1,157,202
-
1,157,202
1,157,202
1,157,202
Construction in progress
20,352,945
-
20,352,945
20,352,945
13,473,244
Capital assets net of accumulated depreciation
Land improvements
-
26,675
26,675
26,675
27,469
Buildings and improvements
29,534,649
3,379,814
32,914,463
32,914,463
28,553,816
Equipment and furniture
100,931
-
100,931
100,931
191,418
Machinery and equipment
5,789,346
814,416
6,603,762
6,603,762
5,952,183
Other improvements
4,514,658
6,079,311
10,593,969
10,593,969
10,315,583
Infrastructure
138,191,899
59,593,533
197,785,432
197,785,432
176,740,951
Total assets
268,955,754
85,295,994
354,251,748
417,086
354,668,834
315,575,040
Deferred Outflows of Resources
Deferred outflows of resources
related to OPEB
33,956
4,929
38,885
550
39,435
-
Deferred outflows of resources
related to pensions
4,744,337
720,114
5,464,451
13,520
5,477,971
8,119,370
Total deferred outflows of resources
4,778,293
725,043
5,503,336
14,070
5,517,406
8,119,370
Total assets and deferred outflows
ofresources
$ 273,734,047
$ 86,021,037
$ 359,755,084
$ 431,156
$ 360,186,240
$ 323,694,410
Liabilities
Accounts payable
$ 3,894,501
$ 183,558
$ 4,078,059
$ 23,899
$ 4,101,958
$ 3,487,767
Salaries and benefits payable
958,220
219,560
1,177,780
12,121
1,189,901
870,999
Contracts payable
909,377
-
909,377
-
909,377
569,015
Due to other governments
56,350
46,622
102,972
140,667
243,639
281,930
Deposits payable
2,302,736
-
2,302,736
10,000
2,312,736
1,573,325
Unearned revenue
48,508
48,508
-
48,508
47,913
Interest payable
598,897
598,897
598,897
468,364
Bonds payable, net of unamortized premium
Due within one year
2,435,000
2,435,000
2,435,000
2,420,000
Due in more than one year
41,141,327
41,141,327
41,141,327
36,499,104
Compensated absences payable
-
Due within one year
719,083
70,227
789,310
8,705
798,015
740,047
Due in more than one year
263,834
38,941
302,775
-
302,775
280,252
Net pension liability
8,714,390
1,240,444
9,954,834
121,804
10,076,638
10,040,794
Total OPEB liability
317,251
46,049
363,300
5,140
368,440
330,577
Total liabilities
62,359,474
1,845,401
64,204,875
322,336
64,527,211
57,610,087
Deferred Inflows of Resources
Deferred inflows of resources related to pensions
7,288,548
1,056,764
8,345,312
22,822
8,368,134
10,540,737
Deferred inflows of resources related to OPEB
17,932
2,603
20,535
291
20,826
12,982
Total deferred inflows of resources
7,306,480
1,059,367
8,365,847
23,113
8,388,960
10,553,719
Net Position
Net Investment in capital assets
174,171,247
70,373,534
244,544,781
-
244,544,781
216,078,491
Restricted for
Forfeiture and seizure
75,106
-
75,106
75,106
36,443
Debt retirement
7,854,584
7,854,584
7,854,584
6,032,331
Tax increment purposes
571,030
571,030
571,030
108,825
Economic development
-
-
85,707
85,707
314,002
Unrestricted
21,396,126
12,742,735
34,138,861
34,138,861
32,960,512
Total net position
204,068,093
83,116,269
287,184,362
85,707
287,270,069
255,530,604
Total liabilities, deferred inflows of resources,
and net position
$ 273,734,047
$ 86,021,037
$ 359,755,084
$ 431,156
$ 360,186,240
$ 323,694,410
The notes to financial statements are an integral part of this statement. 31
City of Cottage Grove
Statement of Activities
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Program Revenues
Operating Capital Grants
Charges for Grants and and
Functions/Programs Expenses Services Contributions Contributions
Primary Government
Governmental activities
General government
$ 2,704,159
$ 196,283
$ 80,551
$ -
Community development
1,524,566
2,424,030
-
-
Public safety
9,272,317
409,463
673,302
12,908,777
Economic Development
492,107
572,983
339,752
-
Public works
10,062,896
3,106,452
627,535
16,260,071
Culture and recreation
5,566,175
3,094,394
510,267
614,743
Interest and fiscal charges on long-term debt
1,286,632
-
-
-
Total governmental activities
30,908,852
9,803,605
2,231,407
29,783,591
Business -type activities
Street lights
1,073,480
825,587
- 246,165
Cottage Grove EMS
1,750,771
2,066,733
- -
Water operating
2,904,174
2,537,654
23,409 1,233,890
Sewer operating
3,139,150
3,064,703
- 1,220,560
Total business -type activities
8,867,575
8,494,677
23,409 2,700,615
Total primary government
$ 39,776,427
$ 18,298,282
$ 2,254,816 $ 32,484,206
Component unit
Economic Development Authority
$ 4,098,929 $ 3,717,907 $ - $ -
General revenues
Property taxes
Franchise taxes
Aggregate taxes
Tax increment collections
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Gain on sale of asset
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning, as previously stated
Change in accounting principle
Net position - beginning, as restated
Net position - ending
The notes to the financial statements are an integral part of this statement. 32
Net (Expense) Revenues and Changes in Net Position
Primary Government
Governmental Business -Type
Activities Activities 2019 2018
Component
r T_;«
Development
Authority
$ (2,427,325)
$ -
$ (2,427,325)
$ (2,047,309) $ -
899,464
-
899,464
131,136 -
4,719,225
-
4,719,225
(6,766,855) -
420,628
-
420,628
67,956 -
9,931,162
-
9,931,162
9,010,506 -
(1,346,771)
-
(1,346,771)
(463,293) -
(1,286,632)
-
(1,286,632)
(1,037,986) -
10,909,751
-
10,909,751
(1,105,845) -
-
(1,728)
(1,728)
176,713 -
-
315,962
315,962
403,126 -
-
890,779
890,779
1,349,781 -
-
1,146,113
1,146,113
1,761,148 -
-
2,351,126
2,351,126
3,690,768 -
10,909,751
2,351,126
13,260,877
2,584,923 -
(381,022)
15,608,602
-
15,608,602
15,171,020
124,760
583,715
-
583,715
567,875
-
22,250
-
22,250
20,791
-
1,085,358
-
1,085,358
769,475
-
113,435
-
113,435
-
-
982,812
261,525
1,244,337
672,141
27,967
49,186
-
49,186
71,631
-
(4,973,641)
4,973,641
-
-
-
13,471,717
5,235,166
18,706,883
17,272,933
152,727
24,381,468
7,586,292
31,967,760
19,857,856
(228,295)
179,686,625
75,529,977
255,216,602
235,589,125
314,002
-
-
-
(230,379)
-
179,686,625
75,529,977
255,216,602
235,358,746
314,002
$ 204,068,093
$ 83,116,269
$ 287,184,362
$ 255,216,602
$ 85,707
33
City of Cottage Grove
Balance Sheet - Governmental Funds
December 31, 2019
With Comparative Totals for December 31, 2018
Assets
Cash and investments
Interest receivable
Interfund receivable
Interfund loan receivable
Due from other governments
Accounts receivable
Prepaid items
Inventories
Taxes receivable - delinquent
Special assessments receivable
Deferred
Delinquent
Special deferred
Property held for resale
Total assets
Liabilities
Accounts payable
Salaries and benefits payable
Interfund payable
Contracts payable
Due to other governments
Deposits payable
Unearned revenue
Interfund loan payable
Total liabilities
Deferred Inflows of Resources
Unavailable revenue - tax increment
Unavailable revenue - property taxes
Unavailable revenue - special assessments
Unavailable revenue - intergovernmental
Unavailable revenue - other
Total deferred inflows of resources
Fund Balances
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities, deferred inflows of
resources, and fund balances
Debt Service Capital Projects
Municipal MSA
General Fund Closed Debt Building Fund Construction
(100) Fund(300) (525) (520)
$ 12,408,180 $ 311,912 $ 451,476 $ -
134,166 - - -
- 1,780,215 -
205,570 - - 399,989
30,253 - 993 -
33,719 - - -
113,578 927 2,907 -
4,482 235,581 - 288,728
890 5,423 - 6,983
- 5,427 - -
- - - 267,498
$ 12,930,838 $ 2,339,485 $ 455,376 $ 963,198
$ 245,408 $ - $ 32,469 $ 305,064
777,752 - - -
- - - 1,780,215
- - - 45,952
47,210 - - 2,191
3,190 - 2,000 -
46,950 - 1,558 -
- - 3,070,000 -
1,120,510 - 3,106,027 2,133,422
113,578 927 2,907 -
5,372 246,431 - 295,711
- - - 176,175
118,950 247,358 2,907 471,886
33,719 - - -
1,432,671 2,092,127 - -
10,224,988 - (2,653,558) (1,642,110)
11,691,378 2,092,127 (2,653,558) (1,642,110)
$ 12,930,838 $ 2,339,485 $ 455,376 $ 963,198
The notes to the financial statements are an integral part of this statement. 34
Capital Projects
Totals
2016
Nonmajor
Future Projects
Improvement
Governmental
(510, 810)
Projects (568)
Funds
2019
2018
$
808,650
$ -
$
21,697,409
$
35,677,627
$
37,101,697
-
-
-
134,166
173,384
2,099,497
-
612,644
4,492,356
2,211,418
-
-
759,864
759,864
837,232
2,035,727
-
735,407
3,376,693
890,461
24,206
-
538,123
593,575
762,533
-
-
14,933
48,652
58,421
-
-
25,601
25,601
30,297
38
-
12,707
130,157
152,921
-
3,731,723
3,228,151
7,488,665
6,782,171
-
67,501
5,003
85,800
21,401
36,519
-
2,452,678
2,494,624
132,888
-
-
324,733
592,231
267,498
$
5,004,637
$ 3,799,224
$
30,407,253
$
55,900,011
$
49,422,322
$
1,225,793
$ 40,321
$
1,691,204
$
3,540,259
$
3,058,452
-
-
104,529
882,281
701,467
-
2,099,497
612,644
4,492,356
2,211,418
411,311
250,059
202,055
909,377
569,015
-
-
5,688
55,089
51,073
2,046,882
227,441
23,223
2,302,736
1,573,325
-
-
-
48,508
46,400
-
-
759,864
3,829,864
4,117,232
3,683,986
2,617,318
3,399,207
16,060,470
12,328,382
-
-
2,802
2,802
519
38
-
9,905
127,355
152,402
36,519
3,799,224
5,685,832
10,069,089
6,936,460
-
-
-
176,175
176,174
-
-
-
-
1,513
36,557
3,799,224
5,698,539
10,375,421
7,267,068
-
-
40,534
74,253
88,718
-
-
3,876,020
3,876,020
3,515,300
-
-
1,736,590
1,736,590
1,383,402
1,284,094
-
16,207,515
21,016,407
20,828,559
-
(2,617,318)
(551,152)
2,760,850
4,010,893
1,284,094
(2,617,318)
21,309,507
29,464,120
29,826,872
$
5,004,637
$ 3,799,224
$
30,407,253
$
55,900,011
$
49,422,322
M
%re po an6
Cottage
Grove
V,iyrity Meet
36
City of Cottage Grove
Reconciliation of the Balance Sheet to
the Statement of Net Position - Governmental Funds
December 31, 2019
With Comparative Totals for December 31, 2018
2019 2018
Total Fund Balances - Governmental Funds $ 29,464,120 $ 29,826,872
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported as assets in governmental funds.
Cost of capital assets 284,972,162 256,738,675
Less accumulated depreciation (68,249,071) (66,646,519)
Long-term liabilities, including bonds payable, are not due and payable in
the current period and, therefore, are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of:
Bond principal payable
(42,440,000)
(37,925,000)
Unamortized bond premium
(1,136,327)
(994,104)
Net pension liability
(8,331,746)
(8,412,847)
Compensated absences payable
(927,071)
(877,715)
Total OPEB liability
(301,284)
(273,624)
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.
Property taxes
130,157
152,921
Special assessments
10,069,089
6,936,460
Deferred intergovernmental grants receivable
176,175
176,174
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 fire relief pensions
(309,852)
(10,290)
Deferred inflows of resources related to city pensions
(6,907,000)
(9,161,890)
Deferred outflows of resources related to fire relief pensions
-
227,890
Deferred outflows of resources related to city pensions
4,701,864
6,854,061
Deferred outflows of resources related to OPEB
32,247
-
Deferred inflows of resources related to OPEB
(17,030)
(10,745)
The Fire Relief Association net pension asset created through contributions
to a defined benefit pension plan which is not recognized in the
governmental funds.
1,372,815
822,968
Governmental funds do not report a liability for accrued interest
due and payable.
(598,897)
(468,364)
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
activities Statement of Net Position 2,367,742 2,731,702
Total net position - governmental activities $ 204,068,093 $ 179,686,625
The notes to financial statements are an integral part of this statement. 37
City of Cottage Grove
Statement of Revenues, Expenditures, and
Changes in Fund Balances - Governmental Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Revenue
General property taxes
Franchise taxes
Aggregate taxes
Tax increment collections
Special assessments
Licenses and permits
Direct charges to developers
Intergovernmental
Charges for services
Rent
Fines and forfeitures
Investment earnings
Interest on interfund loan
Connection charges
Park dedication fees
Donations
Miscellaneous
Total revenues
Expenditures
Current
General government
Community development
Public safety
Public works
Culture and recreation
Economic development
Capital outlay
Public safety
Public works
Culture and recreation
Debt service
Principal retirement
Interest and other charges
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources (Uses)
Proceeds from sale of capital asset
Bond issuance
Bond premium
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund Balances
Beginning of year
End of year
Debt Service
Capital Projects
Municipal
MSA
General Fund
Closed Debt
Building Fund
Construction
(100)
Fund (300)
(525)
(520)
$ 13,791,739
$ 823
$ 250,675
$
4,520
98,157
365,114
2,277,642
-
-
886,563
1,722,450
1,207,867
-
-
-
58,774
158,093
-
-
167,958
49,261
15,647
16,450
-
133,108
-
-
721,856
18,643,940
148,241
325,096
2,809,420
2,423,387 1,321 33,554
1,486,081 - -
8,189,797 -
3,359,417 93,444
2,136,814 -
152,180 201,300 -
27,717 - 6,338,611
43,117 -
- - 31,750 -
17,818,510 1,321 266,604 6,432,055
825,430 146,920 58,492 (3,622,635)
563,050 182,267 78,114 2,600,385
(942,648) - - -
(379,598) 182,267 78,114 2,600,385
445,832 329,187 136,606 (1,022,250)
11,245,546 1,762,940 (2,790,164) (619,860)
$ 11,691,378 $ 2,092,127 $ (2,653,558) $ (1,642,110)
The notes to financial statements are an integral part of this statement. 38
Capital Projects
Totals
2016
Nonmajor
Future Projects
Improvement
Governmental
(510, 810)
Projects (568)
Funds
2019
2018
$ 29
$ -
$ 1,587,867
$ 15,631,133 $
15,166,368
-
583,715
583,715
567,875
22,250
22,250
20,791
-
-
1,085,358
1,085,358
769,475
35,172
2,782,805
996,417
4,282,185
2,482,866
-
-
-
2,277,642
1,773,543
231,894
67,789
299,683
132,385
12,884,571
2,223,141
17,716,725
5,283,405
-
3,780,213
4,988,080
4,903,311
-
416,220
474,994
486,270
-
61,931
220,024
208,744
55,130
636,400
924,396
460,856
-
23,903
23,903
26,474
1,932,844
1,932,844
2,776,937
472,500
472,500
853,659
-
357,003
373,453
376,398
24,206
617,921
1,497,091
1,648,594
13,231,002
2,782,805
14,865,472
52,805,976
37,937,951
30,460
2,488,722
2,453,986
-
1,486,081
1,594,534
203,958
142,241
8,535,996
8,660,273
-
641
1,316,230
4,769,732
4,066,609
17,290
-
2,859,701
5,013,805
4,627,375
-
447,061
447,061
230,615
15,091,098
-
38,321
15,482,899
5,109,180
4,452
3,811,179
5,544,707
15,726,666
14,463,070
36,192
-
3,497,263
3,576,572
1,347,360
2,420,000
2,420,000
3,595,000
80,186
1,141,249
1,253,185
1,123,547
15,433,176
3,811,820
17,437,233
61,200,719
47,271,549
(2,202,174)
(1,029,015)
(2,571,761)
(8,394,743)
(9,333,598)
35,932
35,932
20,563
3,956,613
2,978,387
6,935,000
7,620,000
127,319
111,990
239,309
111,630
1,884,697
5,308,513
5,149,453
(170,342)
(3,373,773)
(4,486,763)
(4,649,003)
3,913,590
1,637,233
8,031,991
8,252,643
1,711,416
(1,029,015)
(934,528)
(362,752)
(1,080,955)
(427,322)
(1,588,303)
22,244,035
29,826,872
30,907,827
$ 1,284,094
$ (2,617,318)
$ 21,309,507
$ 29,464,120 $
29,826,872
M
City of Cottage Grove
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances to
the Statement of Activities - Governmental Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019 2018
Total net change in fund balances - governmental funds $ (362,752) $ (1,080,955)
Amounts reported for governmental activities in the Statement of Activities are different
Capital outlays are reported in governmental funds as expenditures. However,
in the Statement of Activities, the cost of those assets is allocated over the
estimated useful lives as depreciation expense.
Capital outlays
34,051,897
15,719,296
Developer contributed assets
4,245,294
5,705,740
Depreciation expense
(5,710,679)
(5,144,639)
Loss on disposal
(160,186)
(309,442)
Assets contributed to business -type activities
(5,795,391)
-
Compensated absences are recognized as paid in the governmental funds but
recognized as the expense is incurred in the Statement of Activities.
(49,356)
4,965
OPEB expenses are recognized as paid in the governmental funds but recognized
as the expense is incurred in the Statement of Activities.
(1,698)
(4,993)
Principal payments on long-term debt are recognized as expenditures in the
governmental funds but as an increase in the net position in the Statement of Activities.
2,420,000
3,595,000
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds.
Accrued interest payable (130,533) (17,668)
Amortization of bond discounts, premiums and issuance costs 97,086 103,229
Proceeds from long-term debt are recognized as an other financing source in the
governmental funds but as a decrease in net assets in the Statement of Activities. (6,935,000) (7,620,000)
The governmental funds report the effect of premiums, discounts and
similar items when debt is first issued, whereas these amounts are deferred and
amortized in the Statement of Activities.
Bond discounts and premiums (239,309) (111,630)
Governmental funds recognized pension contributions as expenditures at the time
of payment whereas the Statement of Activities factors in items related to pensions 206,189 447,803
on a full accrual perspective.
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.
Property taxes (22,531) 4,652
Special assessments 3,132,396 724,446
Loans and grants receivable 1 47,808
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 funds. (363,960) (175,952)
Change in net position - governmental activities $ 24,381,468 $ 11,887,660
The notes to financial statements are an integral part of this statement. 40
City of Cottage Grove
Statement of Net Position - Proprietary Funds
December 31, 2019
Business -Type
Activities - Enterprise Funds
Governmental
Cottage Grove
Activities -
Street Light
EMS Fund
Water
Sewer
Internal Service
Fund (630)
(660)
Operating (610)
Operating (620)
Total
Funds
Assets
Current assets
Cash and investments
$ 462,427
$ 745,584
$ 5,676,678
$ 2,396,666 $
9,281,355
1,889,721
Accounts receivable
128,205
1,265,655
396,685
560,977
2,351,522
6,174
Interfund loan receivable
-
-
237,500
-
237,500
-
Due from other governments
11,216
12,392
23,608
-
Inventories
-
-
-
-
95,599
Prepaid items
1,133
2,054
168,383
171,570
290,485
Total current assets
590,632
2,012,372
6,324,133
3,138,418
12,065,555
2,281,979
Noncurrent assets
Interfimd loan receivable
-
2,832,500
2,832,500
-
Capital assets
Land and land improvements
364,803
154,785
519,588
424,665
Buildings and improvements
6,272,428
-
6,272,428
928,870
Equipment and furniture
-
-
-
171,318
Machinery and equipment
109,567
888,140
1,059,015
269,175
2,325,897
373,277
Other improvements
9,155,623
-
-
-
9,155,623
-
Water and sewer lines
-
-
48,929,031
33,179,142
82,108,173
-
Total capital assets
9,265,190
888,140
56,625,277
33,603,102
100,381,709
1,898,130
Accumulated depreciation
(3,141,073)
(379,914)
(17,707,852)
(8,779,336)
(30,008,175)
(873,647)
Net capital assets
6,124,117
508,226
38,917,425
24,823,766
70,373,534
1,024,483
Total noncurrent assets
6,124,117
508,226
38,917,425
27,656,266
73,206,034
1,024,483
Total assets
6,714,749
2,520,598
45,241,558
30,794,684
85,271,589
3,306,462
Deferred Outflows of Resources
Deferred outflows of resources related to OPEB
to pensions
6,374
658,335
44,572
10,833
720,114
42,473
Deferred outflows of resources related to OPEB
272
2,315
1,801
541
4,929
1,709
Total deferred outflows of resources
6,646
660,650
46,373
11,374
725,043
44,182
Total assets and deferred outflows
ofresources
$ 6,721,395
$ 3,181,248
$ 45,287,931
$ 30,806,058
$ 85,996,632
$ 3,350,644
Liabilities
Current liabilities
Accounts payable
$ 71,878
$ 17,616
$ 63,627
$ 30,437
$ 183,558
$ 385,945
Salaries payable
5,175
86,724
87,511
40,150
219,560
44,236
Due to other governments
520
5,476
21,033
19,593
46,622
1,261
Compensated absences payable
-
33,172
27,677
9,378
70,227
38,082
Total current liabilities
77,573
142,988
199,848
99,558
519,967
469,524
Noncurrent liabilities
Compensated absences payable
4,577
19,223
11,356
3,785
38,941
17,764
Net pension liability
57,427
683,871
401,554
97,592
1,240,444
382,644
Total OPEB liability
2,538
21,633
16,824
5,054
46,049
15,967
Total noncurrent liabilities
64,542
724,727
429,734
106,431
1,325,434
416,375
Total liabilities
142,115
867,715
629,582
205,989
1,845,401
885,899
Deferred Inflows of Resources
Deferred inflows of resources related to pensions
10,760
952,479
75,239
18,286
1,056,764
71,696
Deferred inflows of resources related to OPEB
143
1,223
951
286
2,603
902
Total deferred inflows of resources
10,903
953,702
76,190
18,572
1,059,367
72,598
Net Position
Net investment in capital assets
6,124,117
508,226
38,917,425
24,823,766
70,373,534
1,024,483
Unrestricted
444,260
851,605
5,664,734
5,757,731
12,718,330
1,367,664
Total net position
6,568,377
1,359,831
44,582,159
30,581,497
83,091,864
2,392,147
Total liabilities, deferred inflows
of resources, and net position
$ 6,721,395
$ 3,181,248
$ 45,287,931
$ 30,806,058
$ 85,996,632
$ 3,350,644
Net position proprietary funds 83,091,864
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. 24,405
Net position business -type activitie<. $ 83,116,269
The notes to financial statements are an integral part of this statement. 41
%re po an6
Cottage
Grove
V,iyrity Meet
42
Operating Revenue
Charges for services - user fees
Water meter/street light material sales
Insurance refunds and reimbursements
Total operating revenues
Operating Expenses
Personal services
Commodities
Commodities - items for resale
Contractual services
Disposal - contractual services - MCES
Claims
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating Revenues (Expenses)
Investment earnings
Interest on interfand debt
Loss on disposal of property
Miscellaneous
Total nonoperating revenues
(expenses)
Income (loss) before capital
contributions and transfers
Capital contributions
Transfers out
Change in net position
City of Cottage Grove
Statement of Revenues, Expenses, and Changes
in Fund Net Position - Proprietary Funds
For the Year Ended December 31, 2019
Business -Type Activities - Enterprise Funds
Cottage Grove Water Sewer Governmental
Street Light EMS Fund Operating Operating Activities - Internal
Fund (630) (660) (610) (620) Total Service Funds
$ 638,015
$ 2,066,733
$ 2,401,597 $
3,064,579
$ 8,170,924 $
3,926,737
148,400
-
103,949
-
252,349
-
54,647
786,415
2,066,733
2,505,546
3,064,579
8,423,273
3,981,384
125,686
1,385,658
777,991
195,978
2,485,313
2,562,604
89,136
59,230
221,247
3,117
372,730
717,877
162,980
-
-
-
162,980
-
491,434
176,330
793,381
444,187
1,905,332
962,454
-
-
-
1,907,659
1,907,659
-
-
-
-
-
-
204,025
193,387
87,273
1,076,764
556,830
1,914,254
72,636
1,062,623
1,708,491
2,869,383
3,107,771
8,748,268
4,519,596
(276,208)
358,242
(363,837)
(43,192)
(324,995)
(538,212)
21,203
18,284
129,904
60,384
229,775
58,416
-
-
3,425
28,325
31,750
-
-
(18,473)
-
-
(18,473)
-
39,172
62,042
124
101,338
8,477
60,375
(189)
195,371
88,833
344,390
66,893
(215,833)
358,053
(168,466)
45,641
19,395
(471,319)
743,766
-
5,446,888
2,305,352
8,496,006
(348,650)
(94,500)
(186,000)
(192,600)
(821,750)
179,283
263,553
5,092,422
2,158,393
7,693,651
(471,319)
Net Position
Beginning ofyear 6,389,094 1,096,278 39,489,737 28,423,104 75,398,213 2,863,466
End of year $ 6,568,377 $ 1,359,831 $ 44,582,159 $ 30,581,497 $ 83,091,864 $ 2,392,147
Change in net position reported above $ 7,693,651
Adjustment to reflect the consolidation of internal service fund activity related to enterprise funds (107,359)
Change in net position of business -type activities 7,586,292
The notes to financial statements are an integral part of this statement. 43
Cash Flows - Operating Activities
Receipts from customers and users
Receipts from insurance refunds
and reimbursements
Payments to suppliers
Payments to employees
Miscellaneous revenue
Net cash flows - operating activities
Cash Flows - Noncapital
Financing Activities
Transfer to other funds
Cash Flows - Capital Related
Financing Activities
Gain on disposal of capital assets
Acquisition of capital assets
Net cash flows - capital related
financing activities
Cash Flows - Investing Activities
Interest and dividends received
Interest on interfund loan
Payment received on interfund loan
Net cash flows - investing activities
Net change in cash and cash equivalents
Cash and Cash Equivalents
January 1
December 31
Reconciliation of Operating Income (Loss)
to Net Cash Flows - Operating Activities
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash
flows - operating activities
Depreciation expense
Miscellaneous revenue
Pension expense
Receivables
Prepaid items
Inventory
Accounts payable
Due to other governmental units
Salaries payable
Compensated absences payable
OPEB expense
Total adjustments
Net cash flows - operating activities
Noncash Investing, Capital, and
Financing Activities
Capital asset contributions from
governmental activities
Capital asset contributions from developers
Loss on disposal of capital asset
City of Cottage Grove
Statement of Cash Flows -
Proprietary Funds
For the Year Ended December 31, 2019
Business -Type Activities - Enterprise Funds
Governmental
Cottage Grove
Water
Sewer
Activities -
Street Light
EMS Fund
Operating
Operating
Internal Service
Fund (630)
(660)
(610)
(620)
Total
Fund
$ 808,654
$ 1,597,611
$ 2,476,821
$ 3,009,060
$ 7,892,146
$ 3,920,563
-
-
-
-
-
54,647
(725,822)
(226,479)
(1,008,993)
(2,397,630)
(4,358,924)
(1,765,827)
(105,231)
(1,256,446)
(706,636)
(175,918)
(2,244,231)
(2,486,393)
39,172
62,042
124
101,338
8,477
16,773
114,686
823,234
435,636
1,390,329
(268,533)
(348,650)
(94,500)
(186,000)
(192,600)
(821,750)
12,001 12,001
12,001
- (13,937)
12,001 (13,937)
21,203
18,284
129,904
60,385
229,776
58,416
-
-
3,425
28,325
31,750
-
-
210,000
-
210,000
-
21,203
18,284
343,329
88,710
471,526
58,416
(310,674)
50,471
980,563
331,746
1,052,106
(224,054)
773,101
695,113
4,696,115
2,064,920
8,229,249
2,113,775
$ 462,427 $
445,584
$ 5, 776,678
$ 2, 996,666
$ 9, 881,355
$ 1, 889,721
$ (276,208) $ 358,242 $ (363,837) $ (43,192) $ (324,995) $ (538,212)
193,387
87,273
1,076,764
556,830
1,914,254
72,636
39,172
-
62,042
124
101,338
8,477
14,597
78,296
12,082
(11,835)
93,140
56,167
22,239
(469,122)
(28,725)
(55,519)
(531,127)
(6,174)
-
3,056
676
(9,411)
(5,679)
(7,972)
-
-
-
-
20,365
17,208
6,173
2,827
(3,149)
23,059
105,468
520
(148)
2,132
(30,107)
(27,603)
668
927
41,902
56,764
31,251
130,844
5,641
4,577
11,760
127
3
16,467
11,476
354
(2,746)
2,382
641
631
2,927
292,981
(243,556)
1,187,071
478,828
1,715,324
269,679
$ 16,773
$ 114,686 $
223,234 $
335,636 $
1,390 329
$ (268,533)
$ 497,601 $ $ 4,199,059 $ 1,084,792 $ 5,781,452 $
246,165 1,247,829 1,220,560 2,714,554
- (18,473) - - (18,473)
The notes to financial statements are an integral part of this statement. 44
City of Cottage Grove
Notes to Financial Statements
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 consist 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 generally
accepted accounting principles in the United States of America, 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.
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, service 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 in program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statements.
45
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 the
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 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 except for debt service expenditures,
as well as expenditures related to compensated absences, 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 City.
The government reports the following major governmental funds:
General Fund — This fund is the City's primary operating fund. It accounts for all financial resources
of the general government, except those required to be accounted for in another fund.
Municipal Building Capital Project Fund — This fund accounts for the accumulation of resources and
construction or remodeling costs of municipal buildings and facilities.
MSA Construction Capital Project Fund — This fund accounts for projects related to Municipal State
Aids.
Closed Debt Fund — This fund accounts for the accumulation of residual resources from debt funds
that have been closed as the associated debt has been satisfied.
Future Projects Fund— This fund accounts for the preliminary expenditures of projects which do not
have a source of funding or which have most of their funding from non -city sources.
2016 Improvement Projects — This fund accounts for the 2016 improvement projects.
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
The government reports the following major proprietary funds:
Street Light Fund — This fund accounts for customer street light and service charges which are used
to finance street light operating expenses.
Cottage Grove EMS Fund — This 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.
Water Operating Fund — This fund accounts for customer water service charges which are used to
finance water operating expenses.
Sewer Operating Fund — This 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 similarity 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 revenue 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 nonoperating revenues and expenses.
47
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, and then unrestricted resources as needed.
D. Budgets
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Budgeted
amounts are reported as originally adopted, and as amended by the City Council. Individual amendments
were not material in relation to the original appropriations which were adjusted. Budgeted expenditure
appropriations can be carried forward to the next budget year subject to City Council approval.
E. Legal Compliance — Budgets
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal
year commencing the following January 1. The operating budget includes proposed expenditures
and the means of financing them.
2. The City Council reviews the proposed budget and makes appropriate changes. 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 bud 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.
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Legal Compliance — Budgets (Continued)
The following is a listing of expenditure categories that exceed budget appropriations for nonmajor
funds:
Nonmajor Funds
Storm Water Maintenance
Ice Arena
Golf Course
HERO Center Operations
F. Deposits and Investments
Final Budget Actual Over Budget
$ 519,545 $ 598,999 $ 79,454
1,009,320 1,031,536 22,216
1,885,525 1,971,070 85,545
- 155,680 155,680
Cash and investments include balances from all funds and are pooled and invested to the extent available
in authorized investments. Earnings from investments are allocated to the 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 within 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 inputs 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 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, 2019, are planned to be eliminated in 2020. Long-
term interfund loans are classified as "interfund loans 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.
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 I and are recorded as receivables by the City at that date. Real
property taxes are payable (by property owners) on May 15 and October 15 of each calendar year.
Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes
are collected by the County and remitted to the City on or before July 7 and December 2 of the same
year. Delinquent collections for November and December are received the following January. The City
has no ability to enforce payment of property taxes by property owners; the County possesses this
authority.
Government -wide Financial Statements
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible
property taxes are not material and have not been reported.
Governmental Fund Financial Statements
The City recognizes property tax revenue when it becomes both measurable and available to finance
expenditures of the current period. In practice, current and delinquent taxes received by the City in July,
December and January are recognized as revenue for the current year. Taxes collected by the County by
December 31 (remitted to the City 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 cost of
administering all tax forfeit properties. Pursuant to State Statues, 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.
50
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Special Assessment Revenue Recognition (Continue)
Governmental Fund Financial Statements
Revenue from special assessments is recognized by the City when it becomes measurable and available
to finance expenditures of the current fiscal period. In practice, current and delinquent special
assessments received by the City are recognized as revenue for the current year. Special assessments that
are collected by the County by December 31 (remitted to the City the following January) are also
recognized as revenue for the current year. All remaining delinquent, deferred and special deferred
assessments receivable in governmental funds are completely offset by deferred inflows of resources.
J. Inventories
Inventories are stated at cost, which approximates market, using the first -in, first -out (FIFO) method and
consist of items for resale, expendable supplies, and vehicle repair parts. The cost of such inventories is
recorded as expenditures/expenses when consumed rather than when purchased in both government -
wide and fund financial statements.
K. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government -wide and fund financial statements. The cost of prepaid items are
recorded as expenditures/expenses when consumed rather than when purchased.
L. Allowance for Uncollectible
The City directly bills for 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, 2019, were $321,700.
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 government 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 more than one year. Such
assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at acquisition 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, 2019, no interest was
capitalized in connection with construction in progress.
51
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. Capital Assets (Continued)
Capital assets not being depreciated include land, easements and construction in progress. Property,
plant and equipment of the primary government, as well as the component units, is depreciated using the
straight-line method over the following estimated useful lives:
Assets Years
Buildings and improvements
20-50
Equipment and furniture
3-10
Machinery and equipment
5-20
Other improvements
5-20
Streets
50
Storm sewers
50
Sidewalks
50
Trails
20
Street lights
50
Water and sewer lines
50
Capital assets of the water and sewer utility operations include the water distribution system and sewage
collection system. These systems have been wholly (or substantially) financed by non -operating funds
(special assessments, general taxes, federal and state grants, and other sources) and contributed to the
sewer and water operating funds. City policy is to finance these assets by the sources indicated rather
than by user charges. Accordingly, the water and sewer user rates are not established at levels sufficient
to cover depreciation on these assets.
O. Deferred 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 became available. The
City presents deferred inflows of resources on the Statements of Net Position for amounts related to
pensions and OPEB.
In addition to assets, the statements 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.
52
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
R. Pensions
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.
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 internal 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.
53
City of Cottage Grove
Notes to Financial Statements
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
S. Fund Balance (Continued)
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.
W. Comparative Data
Summarized comparative data for the previous 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 — 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."
54
City of Cottage Grove
Notes to Financial Statements
NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
A. Deposits (Continued)
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, 2019, 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 includes: U.S. government
treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or local
government rated "A" or better; revenue obligations of a state or local government rated "AA" or better;
irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a
federal agency. Minnesota Statutes require securities pledged as collateral be held in safekeeping in a
restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial
bank or other financial institution not owned or controlled by the depository.
B. Investments
Minnesota Statutes and the City's investment policy authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities
or organizations created by an act of congress, excluding mortgage -backed securities defined as high
risk.
b) General Obligations of the State of Minnesota or any of its municipalities as follow:
1) General obligation of any state or local government with taxing powers which is rated "A"
or better by a national bond rating service;
2) Revenue obligation of any state or local government with taxing powers which is rated
"AA" or better by a national bond rating service; and
3) General obligation of the Minnesota Housing Finance Agency rated "A" or better by a
national bond rating agency.
c) Bankers' acceptance of United States banks eligible for purchase by the Federal Reserve System.
d) Commercial paper of the highest quality (A I, 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 fair 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.
55
City of Cottage Grove
Notes to Financial Statements
NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
B. Investments (Continued)
g) Shares of mutual funds holdings pursuant to Minnesota Statute 118A.04. The City participates in the
Minnesota Municipal Money Market Fund (4M Fund) whereby, the fair value of the position in the
pool is the same as the value of the pool shares owned.
Interest rate risk — Interest rate risk is the risk that changes in interest rates will adversely affect the fair
value of an investment. The City's formal investment policy limits investment maturities as a means of
managing its exposure to fair value losses arising from increasing interest rates. The policy also states
that no more than 25% of total investments should extend beyond five years and in no circumstance
should any extend beyond ten years.
Investment Maturities
Credit Risk
Fair
Less than
Investment Type
Value
One Year
1-5 Years
6-10 Years Rating
Agency
U.S. Agencies
Federal Home Loan Bank - FHLB
$ 1,260,513
$ 1,260,513
$ -
$ - AA+/Aaa
S&P/Moody's
Freddie Mac - FHLMC
1,994,615
500,015
996,850
497,750 AA+/Aaa
S&P/Moody's
Federal Farm Credit bank
1,998,710
999,850
998,860
- AA+/Aaa
S&P/Moody's
US Treasury
2,767,140
1,757,960
1,009,180
NR/Aaa
S&P/Moody's
Municipal Obligations
3,662,483
2,116,798
1,545,685
AA+/Aaa
S&P/Moody's
Pooled Money Markets
15,362,785
15,362,785
-
NR
N/A
Negotiable CD's
15,763,928
9,837,848
5,926,080
NR
N/A
Total Pooled Investments
42,810,174
$ 31,835,769
$ 10,476,655
$ 497,750
Non -Pooled Money Markets
1,060,217
Deposits
2,963,172
Petty Cash and Change
15,141
Total Cash and Investments
$ 46,848,704
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% of the City's total investments:
Type
Freddie Mac - FHLMC
US Treasury
Value Percent
$ 1,994,615 5%
2,538,211 6%
56
City of Cottage Grove
Notes to Financial Statements
NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
B. Investments (Continued)
The City has the following recurring fair value measurements as of December 31, 2019:
• $2,767,140 of $43,870,390 are valued using quoted market prices (Level 1 inputs).
• $41,103,250 of $43,870,390 are valued using a matrix pricing model (Level 2 inputs).
NOTE 3 — CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2019, was as follows:
Beginning
Ending
Balance Increases Decreases
Balance
Primary Government
Governmental activities
Capital assets not being depreciated
Land
$ 18,105,944 $ - $ -
$ 18,105,944
Permanent easements
1,157,202 - -
1,157,202
Construction in progress
13,473,244 32,439,763 25,560,062
20,352,945
Total capital assets
not being depreciated
32,736,390 32,439,763 25,560,062
39,616,091
Capital assets being depreciated
Buildings and improvements
43,034,445
3,453,150
2,602,445
43,885,150
Equipment and furniture
1,279,489
-
106,771
1,172,718
Machinery and equipment
12,856,263
1,775,483
1,073,304
13,558,442
Other improvements
8,992,721
97,050
579,607
8,510,164
Infrastructure
Streets
120,015,391
14,424,005
-
134,439,396
Storm sewers
33,119,740
5,555,928
-
38,675,668
Sidewalks/trails
6,682,243
330,420
-
7,012,663
Total capital assets
being depreciated
225,980,292
25,636,036
4,362,127
247,254,201
Less accumulated depreciation for
Buildings and improvements
15,846,784
1,106,162
2,602,445
14,350,501
Equipment and furniture
1,088,071
90,487
106,771
1,071,787
Machinery and equipment
7,879,990
857,895
968,789
7,769,096
Other improvements
4,194,060
325,382
523,936
3,995,506
Infrastructure
Streets
28,152,127
2,533,585
-
30,685,712
Storm sewers
8,981,160
148,905
-
9,130,065
Sidewalks/trails
1,399,152
720,899
-
2,120,051
Total accumulated
depreciation
67,541,344
5,783,315
4,201,941
69,122,718
Total capital assets being
depreciated, net
158,438,948
19,852,721
160,186
178,131,483
Governmental activities capital
assets, net
$ 191,175,338
$ 52,292,484
$ 25,720,248
S 217,747,574
57
City of Cottage Grove
Notes to Financial Statements
NOTE 3 — CAPITAL ASSETS (CONTINUED)
Primary Government
Business -type activities
Capital assets not being depreciated
Land
Capital assets being depreciated
Land improvements
Building and improvements
Machinery and equipment
Other improvements
Water and sewer lines
Total capital assets
being depreciated
Less accumulated depreciation for
Land improvements
Building and improvements
Machinery and equipment
Other improvements
Water and sewer lines
Total accumulated
depreciation
Total capital assets being
depreciated, net
Business -type activities
capital assets, net
Beginning Ending
Balance Increases Decreases Balance
$ 479,785
$ - $
-
$ 479,785
39,803
-
-
39,803
4,089,713
2,182,715
-
6,272,428
2,479,011
-
153,114
2,325,897
8,411,857
743,766
-
9,155,623
76,538,648
5,569,525
-
82,108,173
91,559,032
8,496,006
153,114
99,901,924
12,334
794
-
13,128
2,723,558
169,056
-
2,892,614
1,503,101
131,019
122,639
1,511,481
2,894,935
181,377
-
3,076,312
21,082,632
1,432,008
-
22,514,640
28,216,560
1,914,254
122,639
30,008,175
63,342,472
6,581,752
30,475
69,893,749
$ 63,822,257
$ 6,581,752 $
30,475
$ 70,373,534
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities
General government
Economic development
Public safety
Public works
Culture and recreation
Total depreciation expense - governmental activities
Business -type activities
Street lights
Cottage Grove EMS
Water operating
Sewer operating
Total depreciation expense - business -type activities
$ 152,233
45,046
912,946
3,803,134
869,956
$ 5.783,315
$ 193,387
87,273
1,076,764
556,830
$ 1,914,254
9.
City of Cottage Grove
Notes to Financial Statements
NOTE 4 — 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, 2019, the governmental long-term debt of the financial reporting entity consisted of the
following:
Interest
Issue
Final
Original
Principal
Rate
Date
Maturity
Issue
Outstanding
Primary government:
Governmental Activities
General Obligation Tax Increment Bonds
G.O. Tax Increment Bonds of 2004A
3.00-4.65%
7/l/2004
2/l/2024
$ 1,405,000
$ 920,000
G.O. Tax Increment Refunding Bonds of 2014A
2.00-2.50%
5/29/2014
2/1/2021
1,405,000
440,000
Total General Obligation Tax Increment Bonds
2,810,000
1,360,000
General Obligation Capital Improvement Bonds
G.O. CIP Bonds of 2017A
2.50-3.25%
5/11/2017
2/l/2038
9,155,000
8,810,000
G.O. CIP Bonds of 2019A
3.00-4.00%
2/14/2019
2/l/2040
4,090,000
4,090,000
Total General Obligation Capital Improvement Bonds
13,245,000
12,900,000
G.O. Refunding Bonds of 2016A
2.00-3.00%
1/28/2016
2/l/2027
4,660,000
2,880,000
Equipment Certificate 2019B
3.00%
2/14/2019
2/l/2029
2,845,000
2,845,000
Special Assessment Bonds with Government Commitment
G.O. Improvement Bonds of 2012A
0.30-2.20%
3/13/2012
2/l/2027
1,865,000
1,020,000
G.O. Improvement Bonds of 2013A
3.00-3.50%
9/26/2013
2/l/2029
7,345,000
5,305,000
G.O. Improvement Bonds of 2015A
2.50-3.00%
5/27/2015
2/1/2031
5,700,000
4,660,000
G.O. Improvement Bonds of 2016B
2.00-2.10%
11/16/2016
2/l/2033
4,275,000
3,850,000
G.O. Improvement Bonds of 2018A
3.00%
6/26/2018
2/l/2035
7,620,000
7,620,000
Total Special Assessment Bonds
26,805,000
22,455,000
Bond premium
1,136,327
Total Governmental Activities Bonds
50,365,000
43,576,327
Compensated absences payable
982,917
Total - governmental activities
$ 50,365,000
44,559,244
Business Type Activities
Compensated absences payable
109,168
Total - primary government
$ 44,668,412
Component Unit - EDA
Compensated absences payable
Total indebtedness - component unit
$ 8,705
59
City of Cottage Grove
Notes to Financial Statements
NOTE 4 - LONG-TERM DEBT (CONTINUED)
B. Minimum Debt Payments
Annual debt service requirements to maturity for general obligation bonds are as follows:
Year Ending
December 31,
2020
2021
2022
2023
2024
Total
Year Ending
December 31,
Principal
Tax Increment Bonds
Governmental Activities
Interest Total
$ 275,000 $
48,820
$ 323,820
265,000
41,540
306,540
255,000
31,872
286,872
275,000
19,810
294,810
290,000
6,743
296,743
$ 1,360,000 $
148,785
$ 1,508,785
Special Assessment Bonds
Governmental Activities
Principal Interest Total
2020
$ 1,225,000
$ 607,522
$ 1,832,522
2021
1,655,000
569,088
2,224,088
2022
1,685,000
523,525
2,208,525
2023
1,740,000
476,605
2,216,605
2024
1,775,000
428,240
2,203,240
2025-2029
9,105,000
1,385,553
10,490,553
2030-2034
4,650,000
368,868
5,018,868
2035
620,000
9,300
629,300
Total
Year Ending
December 31,
2020
2021
2022
2023
2024
2025-2027
Total
$ 22,455,000 $ 4,368,701 $ 26,823,701
G.O. Refunding Bonds
Governmental Activities
Principal Interest Total
$ 330,000 $
70,050
$ 400,050
340,000
60,000
400,000
350,000
49,650
399,650
355,000
39,075
394,075
365,000
28,275
393,275
1,140,000
34,400
1,174,400
$ 2,880,000 $
281,450
$ 3,161,450
City of Cottage Grove
Notes to Financial Statements
NOTE 4 - LONG-TERM DEBT (CONTINUED)
B. Minimum Debt Payments (Continued)
G.O. CIP Bonds
Year Ending
Governmental Activities
December 31,
Principal
Interest
Total
2020
$
355,000
$ 452,679 $
807,679
2021
510,000
374,783
884,783
2022
525,000
357,784
882,784
2023
545,000
340,209
885,209
2024
560,000
322,059
882,059
2025-2029
3,090,000
1,329,931
4,419,931
2030-2034
3,545,000
860,921
4,405,921
2035-2039
3,495,000
294,208
3,789,208
2040
275,000
4,640
279,640
Total
$
12,900,000
$ 4,337,214 $
17,237,214
Equipment Certificates
Year Ending
Governmental Activities
December 31,
Principal
Interest
Total
2020
$
250,000
$ 121,193 $
371,193
2021
255,000
74,025
329,025
2022
265,000
66,225
331,225
2023
270,000
58,200
328,200
2024
280,000
49,950
329,950
2025-2029
1,525,000
117,375
1,642,375
Total
$
2,845,000
$ 486,968 $
3,331,968
61
City of Cottage Grove
Notes to Financial Statements
NOTE 4 — LONG-TERM DEBT (CONTINUED)
C. Changes in Long -Term Liabilities
Beginning
Ending
Due Within
Balance
Additions
Retirements
Balance
One Year
Primary Government
Governmental activities
Bonds payable
General obligation bonds
$ 14,265,000
$ 4,090,000
$ 1,215,000
$ 17,140,000
$ 960,000
Special assessment bonds
23,660,000
-
1,205,000
22,455,000
1,225,000
Equipment certificate
-
2,845,000
-
2,845,000
250,000
Bond premiums
994,104
239,309
97,086
1,136,327
-
Total bonds payable
38,919,104
7,174,309
2,517,086
43,576,327
2,435,000
Compensated absences payable
922,085
867,026
806,194
982,917
719,083
Total governmental activities
39,841,189
8,041,335
3,323,280
44,559,244
3,154,083
Business -type activities
Compensated absences payable
92,701
133,900
117,433
109,168
70,227
Total primary government
$ 39,933,890
$ 8,175,235
$ 3,440,713
$ 44,668,412
$ 3,224,310
Component Unit
Economic Development Authority
Compensated absences payable $ 5,513 $ 13,641 $ 10,449 $ 8,705 $ 8,705
For the governmental activities, compensated absences are generally liquidated by the General Fund.
All long-term bonded indebtedness outstanding at December 31, 2019, is backed by the full faith and
credit of the City, including special assessment and revenue bond issues. Delinquent assessments
receivable at December 31, 2019, totaled $85,567.
NOTE 5 — PENSION PLANS
The City participates in various pension plans. Total pension expense for the year ended December 31,
2019, was $1,509,862. The components of pension expense are noted in the following plan summaries.
The General Fund and Water Operating, Sewer Operating, Street Light, Cottage Grove EMS and
Internal Service Funds typically liquidate the liability related to pensions.
Public Employees' Retirement Association
A. Plan Description
General Employees Retirement Plan
The City 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.
62
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
General Employees Retirement Plan (Continued)
All full-time and certain part-time employees of the City are covered by the General Employees Plan.
General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are
covered by Social Security.
Public Employees Police and Fire Plan
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 a local relief association
that elected to merge with and transfer assets and administration to PERA.
B. 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. 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
General Employees Plan benefits are based on a member's highest average salary for any 5 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 Plan members. Members hired prior to July 1, 1989, receive
the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30,
1989. Under Method 1, the accrual rate for a Coordinated members is 1.2% of average salary for each of
the first 10 years of service and 1.7% of average salary for each additional year. Under Method 2, the
accrual rate for Coordinated members is 1.7% of average salary for all years 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.
Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning
January 1, 2019, the postretirement increase will be equal to 50% of the cost -of -living adjustment
(COLA) announced by the SSA, with a minimum increase of at least 1% and a maximum of 1.5%.
Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before
the effective date of the increase will receive the full increase. For recipients receiving the annuity or
benefit for at least one month but less than a full year as of the June 30 before the effective date of the
increase will receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the
increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for
individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay
to normal retirement.
63
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
B. Benefits Provided (Continued)
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 10 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
10 years up to 100% after 20 years of credited service. The annuity accrual rate is 3% of average salary
for each year of service. A full, unreduced pension is earned when members are age 55 and vested, or
for members who were first hired prior to July 1, 1989, when age plus years of service equal at least 90.
Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning
January 1, 2019, the postretirement increase will be fixed at 1%. Recipients that have been receiving the
annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will
receive the full increase. For recipients receiving the annuity or benefit for at least 25 months but less
than 36 months as of the June 30 before the effective date of the increase will receive a reduced prorated
increase.
C. 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 Plan Contributions
Coordinated Plan members were required to contribute 6.5%, of their annual covered salary in calendar
year 2019 and the City was required to contribute 7.5% for Coordinated Plan members. The City's
contributions to the General Employees Fund for the year ended December 31, 2019, were $508,963.
The City's contributions were equal to the required contributions as set by state statute.
Police and Fire Fund Contributions
Police and Fire member's contribution rates increased from 10.8% of pay to 11.3% and employer rates
increased from 16.2% to 16.95% on January 1, 2019. The City's contributions to the Police and Fire
Fund for the year ended December 31, 2019, were $976,911. The City's contributions were equal to the
required contributions as set by state statute.
Ell
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs
General Employees Fund Pension Costs
At December 31, 2019, the City reported a liability of $5,119,647 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 $16 million to the fund in 2019. 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 $159,160. The net pension liability was measured as of June 30, 2019,
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 proportionate share 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, 2018, through June 30, 2019, relative to the total employer contributions received from all
of PERA's participating employers. At June 30, 2019, the City's proportionate share was 0.0926%,
which was a decrease of 0.0011% from its proportionate share measured as of June 30, 2018.
City's proportionate share of the net pension liability
$ 5,119,647
State of Minnesota's proportionate share of the net pension
liability associated with the City 159,160
Total
$ 5,278,807
For the year ended December 31, 2019, the City recognized pension expense of $655,754 for its
proportionate share of General Employees Plan's pension expense. Included in the amount, the City
recognized $11,920 as pension expense (and grant revenue) for its proportionate share of the State of
Minnesota's contribution of $16 million to the General Employees Fund.
65
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
General Employees Fund Pension Costs (Continued)
At December 31, 2019, the City 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:
Differences between expected and actual economic experience
Changes in actuarial assumptions
Difference between projected and actual investment earnings
Changes in proportion
Contributions paid to PERA subsequent
to the measurement date
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 139,408 $ -
- 396,170
- 517,324
174,381 45,768
ARI _
$ 568,271 $ 959,262
The $254,482 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, 2020. Other amounts reported as deferred outflows and
deferred inflows of resources related to pensions will be recognized in pension expense as shown on the
following page:
Pension
Year Ending
Expense
December 31,
Amount
2020
$ (190,142)
2021
(344,563)
2022
(119,019)
2023
8,251
Total
$ (645,473)
me me
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
Police and Fire Fund Pension Costs
At December 31, 2019, the City reported a liability of $4,956,992 for its proportionate share of the
Police and Fire Fund's net pension liability. The net pension liability was measured as of June 30, 2019,
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 proportionate share 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, 2018, through June 30, 2019, relative to the total employer contributions received from all
of PERA's participating employers. At June 30, 2019, the City's proportionate share was 0.4716%,
which was an increase of 0.0134% from its proportionate share measured as of June 30, 2018. The City
also recognized $63,666 for the year ended December 31, 2019, as revenue and an offsetting reduction
of the net pension liability 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 until the plan is 90% funded or until the
State Patrol Plan (administered by the Minnesota State Retirement System) is 90% funded, whichever
occurs later. In addition, the state will pay $4.5 million on October 1, 2018 and October 1, 2019 in direct
state aid. Thereafter, by October 1 of each year, the state will pay $9 million until full funding is reached
or July 1, 2048, whichever is earlier.
For the year ended December 31, 2019, the City recognized pension expense of $882,894 for its
proportionate share of the Police and Fire Plan's pension expense
At December 31, 2019, the City reported its proportionate share of the Police and Fire Plan's deferred
outflows of resources and deferred inflows of resources related to pensions from the sources shown on
the following page.
Differences between expected and actual economic
experience
Changes in actuarial assumptions
Difference between projected and actual investment earnings
Change in proportion
Contributions paid to PERA subsequent to the measurement
date
Total
Deferred
Deferred
Outflows of
Inflows of
Resources
Resources
$ 204,972
$ 717,038
3,931,352
5,246,395
-
986,125
342,503
149,460
430,872 -
$ 4,909,699 $ 7,099,018
67
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
Police and Fire Fund Pension Costs (Continued)
The $430,872 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, 2020. Other amounts reported as deferred outflows and inflows
of resources related to pensions will be recognized in pension expense as follows:
Pension
Year Ending Expense
December 31, Amount
2020
$ (257,320)
2021
(604,530)
2022
(1,843,368)
2023
65,471
2024
19,556
Total
$ (2,620,191)
E. Actuarial Assumptions
The total pension liability in the June 30, 2019, actuarial valuation was determined using an individual
entry -age normal actuarial cost method and the following actuarial assumptions:
Inflation
Active Member Payroll Growth
Investment Rate of Return
2.50% per year
3.25% per year
7.50%
Salary increases were based on a service -related table. Mortality rates for active members, retirees,
survivors, and disabilitants for all plans were based on RP 2014 tables for males or females, as
appropriate, with slight adjustments to fit PERA's experience. Cost of living benefit increases after
retirement for retirees are assumed to be 1.25% per year for the General Employees Plan and 1.0% per
year for the Police and Fire Plan.
Actuarial assumptions used in the June 30, 2019, valuation was based on the results of actuarial
experience studies. The most recent four-year experience study in the General Employees Plan was
completed in 2019. The most recent four-year experience study for Police and Fire Plan was completed
in 2016. Economic assumptions were updated in 2018 based on a review of inflation and investment
return assumptions.
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
E. Actuarial Assumptions (Continued)
The following changes in actuarial assumptions occurred in 2019:
General Employees Fund
Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State's special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
Police and Fire Fund
Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
There have been no changes since the prior valuation
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return 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 table on the following
page.
Long -Term
Target Expected Real
Asset Class Allocation Rate of Return
Domestic equity
35.5 %
5.10
Private markets
25.0
5.90 %
Fixed income
20.0
0.75
International equity
17.5
5.90
Cash equivalents
2.0
0.00
Total
100 %
.'
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
F. Discount Rate
The discount rate used to measure the total pension liability in 2019 was 7.5%. 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 these assumptions, the fiduciary net positions
of the General Employees Fund and the Police and Fire Fund were 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.
G. Pension Liability Sensitivity
The following presents the City'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'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:
City's proportionate share of
the General Employees Fund
net pension liability
City's proportionate share of
the Police and Fire Fund
net pension liability (asset)
H. Pension Plan Fiduciary Net Position
1 % Decrease in 1 % Increase in
Discount Rate Discount Rate Discount Rate
(6.5%) (7.5%) (8.5%)
$ 8,416,423
1 % Decrease in
Discount Rate
$ 5,119,647
Discount Rate
$ 2,397,502
1 % Increase in
Discount Rate
(6.5%) (7.5%) (8.5%)
$ 10,883,560 $ 4,956,992 $ (63,569)
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.nmpera.org.
Public Employees Defined Contribution Plan (Defined Contribution Plan)
Five council members of the City of Cottage Grove are covered by the 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.
70
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Public Employees Defined Contribution Plan (Defined Contribution Plan) (Continued)
H. Pension Plan Fiduciary Net Position (Continued)
The defined contribution plan consists of individual 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 liability to the City. 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. For ambulance service personnel, employer contributions
are determined by the employer, and for salaried employees must be a fixed percentage of salary.
Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty.
Employees who are paid for their services may elect to make member contributions in an amount not to
exceed the employer share. 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 2019 were:
Contribution Amount
Employee Employer
$ 1,700 $ 1,700
Percentage of Covered Payroll
Employee Employer
5% 5%
Defined Benefit Pension Plan — Volunteer Fire Relief Association
A. Plan Description
Required
Rate
5%
The City of Cottage Grove participates in the Statewide Volunteer Firefighter Retirement Plan
(Volunteer Firefighter Plan accounted for in the Volunteer Firefighter Fund), an agent multiple -
employer lump -sum defined benefit pension plan administered by the Public Employees Retirement
Association of Minnesota (PERA). The Volunteer Firefighter Plan covers volunteer firefighters of
municipal fire departments that have elected to join the plan. As of December 31, 2019, the plan covered
41 active firefighters and 21 vested terminated firefighters whose pension benefits are deferred. The plan
is established and administered in accordance with Minnesota Statutes, Chapter 353G.
B. Benefits Provided
The Volunteer Firefighter Plan provides retirement, death, and supplemental benefits to covered
firefighters and survivors. Benefits are paid based on the number of years of service multiplied by a
benefit level approved by the City of Cottage Grove. Members are eligible for a lump -sum retirement
benefit at 50 years of age with five years of service. Plan provisions include a pro -rated vesting schedule
that increases from 5 years at 40% through 20 years at 100%.
71
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan — Volunteer Fire Relief Association (Continued)
C. Contributions
The Volunteer Firefighter Plan is funded by fire state aid, investment earnings and, if necessary,
employer contributions as specified in Minnesota Statutes. The State of Minnesota contributed $209,430
in fire state aid to the fund for the year ended December 31, 2019. Required employer contributions are
calculated annually based on statutory provisions. The City of Cottage Grove's statutorily -required
contributions to the Volunteer Firefighter Fund for the year ended December 31, 2019, were $0.
D. Pension Costs
At December 31, 2019, the City of Cottage Grove reported a net pension asset of $1,372,815 for the
Volunteer Firefighter Fund. The net pension asset was measured as of December 31, 2019. The total
pension liability used to calculate the net pension asset in accordance with GASB 68 was determined by
PERA applying an actuarial formula to specific census data certified by the fire department as of
December 31, 2019. The following table presents the changes in net pension liability during the year.
Balances at January 1, 2019
Changes for the year
Service cost
Interest cost
Actuarial expenses (gains)/losses
State contributions
Projected investment return
Adj. to initial asset transfer
Asset (gain)/loss
Benefit payments
Administrative expense
Net changes
Balances at December 31, 2019
Increase (Decrease)
Net Pension
Total Pension Plan Fiduciary Net Liability (Asset)
Liability (a) Position (b) (a) - (b)
$ 1,988,607 $
2,811,575 $
(822,968)
97,985
-
97,985
115,532
-
115,532
(45,681)
-
(45,681)
-
209,430
(209,430)
-
168,695
(168,695)
-
79
(79)
-
341,634
(341,634)
(322,109)
(322,109)
-
-
(2,155)
2,155
(154,273)
395,574
(549,847)
$ 1,834,334 $
3,207,149 $
(1,372,815)
72
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan — Volunteer Fire Relief Association (Continued)
D. Pension Costs (Continued)
There were no benefit provision changes during the measurement period
For the year ended December 31, 2019 the City of Cottage Grove recognized pension expense of a
negative $30,486.
At December 31, 2019 the City of Cottage Grove reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Actuarial experience gain/loss
Difference between projected and actual investment earnings
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 36,545
273,307
$ 309,852
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Year Ending
December 31,
2020
2021
2022
2023
Total
E. Actuarial Assumptions
Pension
Expense
Amount
$ (77,463)
(77,463)
(77,463)
(77,463)
$ (309,852)
The total pension liability at December 31, 2019, was determined using the entry age normal actuarial
cost method and the following actuarial assumptions:
• Retirement eligibility at the later of age 50 or 20 years of service
• Investment rate of return of 6.0%
• Inflation rate of 3.0%
73
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan — Volunteer Fire Relief Association (Continued)
F. Discount Rate
The discount rate used to measure the total pension liability was 6.0%. The projection of cash flows
used to determine the discount rate assumed that contributions to the Volunteer Firefighter Fund will be
made as specified in statute. Based on that assumption and considering the funding ratio of the plan, the
fiduciary net position was projected to be available to make all projected future benefit payments of
current active and inactive 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.
G. Pension Liability Sensitivity
The following presents the net pension liability for the Volunteer Firefighter Fund, calculated using the
assumed discount rate, as well as what the City of Cottage Grove's net pension asset 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 Current 1 % Increase in
Discount Rate Discount Rate Discount Rate
(5.00%) (6.00%) (7.00%)
City's net pension liability (asset) $ (1,295,735) $ (1,372,815) $ (1,446,115)
H. Plan Investments Investment Policy
The Minnesota State Board of Investment (SBI) is established by Article XI of the Minnesota
Constitution to invest all state funds. Its membership as specified in the Constitution is comprised of the
governor (who is designated as chair of the board), state auditor, secretary of state and state attorney
general.
All investments undertaken by the SBI are governed by the prudent person rule and other standards
codified in Minnesota Statutes, Chapter I IA and Chapter 353G.
Within the requirements defined by state law, the SBI, with assistance of the SBI staff and the
Investment Advisory Council, establishes investment policy for all funds under its control. These
investments policies are tailored to the specific needs of each fund and specify investment objectives,
risk tolerance, asset allocation, investment management structure and specific performance standards.
Studies guide the on -going management of the funds and are updated periodically.
I. Asset Allocation
To match the long-term nature of the pension obligations, the SBI maintains a strategic asset allocation
for the Volunteer Firefighter Plan that includes allocations to domestic equity, international equity,
bonds and cash equivalents. The long-term target asset allocation and long-term expected real rate of
return on the following page:
74
City of Cottage Grove
Notes to Financial Statements
NOTE 5 — PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan — Volunteer Fire Relief Association (Continued)
I. Asset Allocation (Continued)
Asset Class
Domestic equity
International equity
Bonds
Cash
Target Allocation
35 %
15
45
Total 100 %
Expected
Return
of Return
5.10 %
5.90
0.75
0.00
The 6% long-term expected rate of return on pension plan investments was determined using a building
block method. Best estimates for expected future real rates of return (expected returns, net of inflation)
were developed for each asset class using both long-term historical returns and long-term capital market
expectations from several investment management and consulting organizations. The asset class
estimates, and the target allocations were then combined to produce a geometric, long-term expected
real rate of return for the portfolio. Inflation expectations were applied to derive the nominal rate of
return for the portfolio.
J. Description of significant investment policy changes during the year
The SBI made no significant changes to their investment policy during fiscal year 2019 for the
Volunteer Firefighter Fund.
K. Pension Plan Fiduciary Net Position
Detailed information about the Volunteer Firefighter Fund's fiduciary net position as of June 30, 2019, is
available in a separately -issued PERA financial report that includes financial statements and required
supplementary information. That report may be obtained at www.mnpera.org.
75
City of Cottage Grove
Notes to Financial Statements
NOTE 6 — INTERFUND LOANS AND TRANSFERS
The City uses interf ind loans when possible to finance construction activities to avoid costs associated
with issuing bonds. These loans are for this purpose. The interfund loan receivable and payable balances
at December 31, 2019, were:
Fund
Major Governmental Funds
Municipal Building Capital Projects Fund
Nonmajor Governmental Funds
Major Business -Type Funds
Water Operating Enterprise Fund
Sewer Operating Enterprise Fund
Total
Receivable
Payable
$ - $ 3,070,000
759,864 759,864
237,500 -
2,832,500 -
$ 3,829,864 $ 3,829,864
Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and
payable balances at December 31, 2019, are as follows:
Fund
Major Government Funds
Closed Debt Fund
MSA Construction Fund
Future Projects Fund
2016 Improvement Projects Fund
Nonmajor Governmental Funds
Total
Receivable
Payable
$ 1,780,215 $ -
- 1,780,215
2,099,497 -
- 2,099,497
612,644 612,644
$ 4,492,356 $ 4,492,356
Interfund transfers during the year ended December 31, 2019, were as follows:
Transfers In
Municipal
MSA
Nonmajor
General
Building
Construction
Closed Debt
Governmental
Fund (100)
Fund (525)
(520)
Fund (300)
Funds
Total
Transfers Out
General Fund (100)
$ -
$ 78,114
$ -
$ 182,267
$ 682,267
$ 942,648
Future Projects Fund (510, 810)
-
-
170,342
-
-
170,342
Nonmajor Governmental Funds
41,300
-
2,430,043
-
902,430
3,373,773
Street Light (630)
48,650
-
-
-
300,000
348,650
Cottage Grove EMS (660)
94,500
-
-
-
-
94,500
Water Operating (610)
186,000
-
-
-
-
186,000
Sewer Operating (620)
192,600
-
-
-
-
192,600
Total
$ 563,050
$ 78,114
$ 2,600,385
$ 182,267
$1,884,697
$ 5,308,513
76
City of Cottage Grove
Notes to Financial Statements
NOTE 6 — INTERFUND LOANS AND TRANSFERS (CONTINUED)
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from
services provided by another fund. All transfers in 2019 were considered to be routine in nature.
NOTE 7 — TAX INCREMENT FINANCING
The City has entered into one Tax Increment Financing agreement which meets the criteria for
disclosure under GASB Statement No. 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
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 with available tax increment revenue after deducting
certain administrative costs.
During the year ended December 31, 2019, the City generated $1,085,358 in tax increment revenue and
made $293,232 in payments to developers.
TIF District #1-12 was established in 2001 for redevelopment of 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, 2019, the district generated $497,537 of tax increment and
$161,053 in payments on the pay as you go note were made. The balance due on the note at year
end was $943,521.
NOTE 8 — DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2019, as follows:
Fund
Major Governmental Funds
Municipal Building Fund (525)
MSA Construction (520)
2016 Improvement Projects
Nonmajor Governmental Funds
Ice Arena (250)
Golf Course Fund (255)
HERO Center Operations (290)
2016A G.O. Refunding Bonds (369)
Tax Increment Funds
Ice Arena Construction (526)
2019B Equipment Certificates (305)
Amount The deficit fund balances will be resolved through
$ 2,653,558 Future tax levies
1,642,110 Future MSA revenues
2,617,318 Future special assessments
368,307 Future excess revenues and transfers from other City resources
17,701 Future excess revenues and transfers from other City resources
57,290 Future excess revenues
12,236 Future tax levies
23,542 Future tax increments
31,192 Future bond proceeds
350 Future tax levies
77
City of Cottage Grove
Notes to Financial Statements
NOTE 9 — CONTIGENCIES
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 more than
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 $25,000 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 more than 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 $201,608 reported in the Fund at December 31, 2019, is based on the requirements of GASB
Statement No. 10, which requires that a liability for claims be reported if information prior to the
issuance of the financial statements indicates that it is probable that a liability has been incurred at the
date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the
fund's claims liability amounts were as follows:
Beginning
of Year
Year Liability
2019 $ 170,124
2018 171,752
2017 159,741
Claims and
Changes in
Estimates
End
Claim of Year
Payments Liability
$ 200,669 $ (169,185) $ 201,608
231,966 (233,594) 170,124
74,026 (62,015) 171,752
City of Cottage Grove
Notes to Financial Statements
NOTE 9 — CONTIGENCIES
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, 2019.
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 10 — FUND BALANCES
At December 31, 2019, the City had various fund balances through legal restriction and City Council
authorization. Fund balance appropriations at December 31, 2019, are shown on the various balance
sheets as segregations of the fund balance. The fund balance classifications for governmental funds are
as follows:
Fund Balances
Nonspendable
Prepaid items
Inventory
Restricted
Debt retirement
Forfeiture and seizure
Tax increment purposes
Committed
Recycling program
Storm water activities
Assigned
Compensated absences
Future budgets
School bus safety
Debt retirement
Future pavement management
Tree mitigation
Future roads and trails
Equipment replacement
Street sealcoating
Economic decvelopment
Capital improvements
Unassigned
Total fund balances
Major Funds
Municipal Closed Future 2016 Nonmajor
General Building MSA Debt Projects Improvement Governmental
Fund (100) Fund (525) Construction (520) Fund (300) (510, 810) Projects Funds Total
$ 33,719 $ $ $ $ $ $ 14,933 $ 48,652
- 25,601 25,601
3,229,884 3,229,884
75,106 75,106
571,030 571,030
72,170 72,170
1,664,420 1,664,420
927,071
927,071
500,000
500,000
5,600
5,600
- 2,092,127
-
2,092,127
-
870,664
870,664
371,438
371,438
41,992
41,992
-
884,853
884,853
1,626,194
1,626,194
4,864,572
4,864,572
8,831,896
8,831,896
10,224,988 (2,653,558) (1,642,110) -
(2,617,318) (551,152)
2,760,850
$11,691,378 $ (2,653,558) $ (1,642,110) $ 2,092,127
$ 1,284,094
$ (2,617,318) $21,309,507
$29,464,120
79
City of Cottage Grove
Notes to Financial Statements
NOTE 11— POST EMPLOYMENT HEALTH CARE PLAN
A. Plan Description
The City provides health benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b.
Pursuant to the provisions of the plan, retirees are required to pay the total premium cost. No assets are
accumulated in a trust.
B. Benefits Provided
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.
C. Contributions
Retirees contribute to the health care plan at the same rate as City employees. This results in the retirees
receiving an implicit rate subsidy. Contribution requirements are established by the City, based on the
contract terms with Medica. The required contributions are based on projected pay-as-you-go financing
requirements. For the year 2019, the City contributed $27,782 to the plan.
D. Members
As of December 31, 2019, the following were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 7
Inactive employees entitled to but not yet receiving benefit payments -
Active employees 135
Total 142
E. Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of January 1, 2019, using the
following actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Key Methods and Assumptions Used in Valuation of Total OPEB Liability
Discount rate 2.74%
Inflation 2.50%
Healthcare cost trend increases 6.75% initially decreasing
to an ultimate rate of 4.0%
Mortality assumption RP 2014 employee mortality table, adjusted for white collar
and mortality improvements
City of Cottage Grove
Notes to Financial Statements
NOTE 11— POST EMPLOYMENT HEALTH CARE PLAN
E. Actuarial Assumptions (Continued)
The actuarial assumptions used in the January 1, 2019, valuation was based on the results of an actuarial
experience study dated June 30, 2015, for PERA's General Employees Retirement Plan and dated
August 30, 2016, for PERA's PEPFF Plan.
The discount rate used to measure the total OPEB liability was 2.74% based on the Bond Buyer 20-
Bond Obligation Index.
F. Total OPEB Liability
The City's total OPEB liability of $368,440 was measured as of December 31, 2019, and was
determined by an actuarial valuation as of January 1, 2019.
Changes in the total OPEB liability are as follows:
Balance at January 1, 2019
Changes for the year
Service cost
Interest
Change in assumption
Difference between expected and
actual experience
Benefit payments
Administrative expense
Other charges
Net changes
Balance at December 31, 2019
Total
OPEB
Liability
$ 330,577
16,325
15,807
(10,656)
44,169
(27,782)
37,863
$ 368,440
Changes of assumptions and other inputs reflect a change in the discount rate from 4.11% in 2018 to
2.74% in 2019 to reflect recent rate changes in the Bond Buyer 20-Bond General Obligation Index.
The general inflation rate was changed to the 2.50% used in the June 30, 2019 GERF and June 30, 2019,
PEPFF actuarial valuations.
City of Cottage Grove
Notes to Financial Statements
NOTE 11— POST EMPLOYMENT HEALTH CARE PLAN
F. Total OPEB Liability (Continued)
Changes of assumptions also reflect a change to 25.0% of GERF employees are assumed to elect
coverage at retirement, an increase from 20.0% based on recent experience.
The General Fund and Water Operating, Sewer Operating, Street Light, Cottage Grove EMS and
Internal Service Funds typically liquidate the liability related to OPEB.
G. OPEB Liability Sensitivity
The following presents the City's total OPEB liability calculated using the discount rate of 2.74% as well
as the liability measured using 1% lower and 1% higher than the current discount rate.
Total OPEB Liability
1% decrease Current 1% increase
(1.74%)
391,440
(2.74%)
$ 368,440
(3.74%)
$ 346,891
The following presents the total OPEB liability of the City, as well as what the City's total OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1 % lower and 1 % higher
than the current healthcare cost trend rates.
1% decrease
Total OPEB Liability
Current
339,614 $ 368,440
1% increase
402,087
H. OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources
Related to OPEB
For the year ended December 31, 2019, the City recognized OPEB expense of $34,054. At
December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Differences between expected and actual economic experience
Changes of assumptions and other inputs
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
39,435
20,826
$ 39,435 $ 20,826
City of Cottage Grove
Notes to Financial Statements
NOTE 11— POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
H. OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources
Related to OPEB (Continued)
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB
will be recognized in OPEB expense as follows:
Year Ending
December 31,
2020
2021
2022
2023
2024
Thereafter
Total
NOTE 12 — OPERATING LEASES
Total
$ 1,922
1,922
1,922
1,922
1,922
8,999
$ 18,609
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 entered into two operating leases during 2007 for the leasing of ice time for the Ice Arena with
Independent School District No. 833 and the Cottage Grove Athletic Association. The lease payments
began in 2008 when the new ice arena expansion project opened. The future minimum annual lease
payments that the City will receive are as follows:
Year Ended
December 31
2020
2021
2022
2023
2024
2025-2029
Total
Independent
Cottage Grove
School District
Athletic
No. 833
Association
$ 104,250
104,250
104,250
104,250
104,250
521,250
$ 1,042,500
$ 400,000
400,000
400,000
400,000
400,000
2,000,000
$ 4,000,000
City of Cottage Grove
Notes to Financial Statements
NOTE 13 — COMMITTED CONTRACTS
At December 31, 2019, the City had commitments of $756,254 for uncompleted construction contracts.
NOTE 14 — 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, 2019, a series of Industrial Revenue Bonds
were outstanding.
Original Issue 12/31/2019
Bond Issue Date Amount Balance
Maturity Date
Commercial Development Revenue Note - ESR, Inc.
11/22/05
$ 76,500
$ 22,230
11/22/25
Commercial Development Revenue Note - ESR, Inc.
05/19/05
853,000
295,991
12/19/25
Variable Rate Revenue Bonds - Allina Health Syystem
11/01/09
6,100,000
6,100,000
11/15/22
Multifamily Housing Note - Legends of Cottage Grove
10/07/16
18,422,000
18,402,891
05/01/34
Multifamily Housing Note - Legends of Cottage Grove
10/07/16
6,118,000
6,093,644
05/01/34
Total
$ 31,569,500
$ 30,914,756
NOTE 15 — SUBSEQUENT EVENTS
On March 13, 2020, a national emergency was declared for the COVID-19 outbreak in the United States
of America. This event affects the economy and financial markets. The extent of the impact on the City
may be both direct and indirect and will vary based on the duration of the outbreak and various other
factors. An estimate of the financial effect on the City's financial statements at December 31, 2019
cannot be determined at this time.
NOTE 16 — NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 87, Leases establishes a single model for lease accounting based on the
foundational principle that leases are financings of the right to use an underlying asset. Under this
statement, a lessee is required to recognize a lease liability and an intangible right -to -use lease asset, and
a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing
the relevance and consistency of information about governments' leasing activities. This statement will
be effective for the year ending December 31, 2020.
GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period
enhances the relevance and comparability of information about capital assets and the cost of borrowing
for a reporting period and simplifies accounting for interest cost incurred before the end of a
construction period. This statement will be effective for the year ending December 31, 2020.
REQUIRED SUPPLEMENTARY INFORMATION
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019
2018
Variance with
Budgeted Amounts
Actual
Final Budget -
Original
Final
Amounts
Over (Under)
Actual
Revenues
General property taxes
$ 13,790,000
$ 13,790,000 $
13,791,739
$ 1,739
$ 13,382,247
Special assessments
3,000
3,000
4,520
1,520
5,005
Licenses and permits
General government
81,150
81,150
80,025
(1,125)
72,099
Community development
1,375,250
1,972,250
2,125,320
153,070
1,636,656
Engineering
33,000
33,000
54,606
21,606
41,073
Public safety
30,000
30,000
17,691
(12,309)
23,715
Total licenses and permits
1,519,400
2,116,400
2,277,642
161,242
1,773,543
Intergovernmental revenues
Federal grants and aids
22,000
22,000
52,235
30,235
20,880
State grants and aids
Local government aid
86,200
86,200
87,494
1,294
86,218
Market value homestead credit
-
-
4,493
4,493
5,425
MSA maintenance - public works
43,000
43,000
43,245
245
43,245
PERA Aid
21,450
21,450
21,448
(2)
21,448
Police relief aid - public safety
340,000
375,000
378,594
3,594
350,904
Other - public safety
24,000
24,000
75,423
51,423
52,899
Other - planning
-
-
-
-
19,500
Local
SRO program - public safety
175,000
175,000
180,508
5,508
75,000
Other - public safety
11,000
11,000
15,810
4,810
17,191
Other - public works
-
-
18,419
18,419
2,188
Other - culture and recreation
18,500
18,500
8,894
(9,606)
15,186
Total intergovernmental
741,150
776,150
886,563
110,413
710,084
Charges for services
Investment charge - general government
10,000
10,000
38,368
28,368
19,092
Other - general government
100
100
412
312
59
Other - community development
45,000
75,300
298,710
223,410
140,740
Other - engineering
300,000
390,000
612,630
222,630
914,324
Other -public safety
45,200
45,200
56,326
11,126
64,274
Other -public works
30,100
30,100
24,838
(5,262)
32,209
Other - culture and recreation
147,000
188,000
176,583
(11,417)
175,455
Total charges for services
577,400
738,700
1,207,867
469,167
1,346,153
Fines and forfeitures - public safety
175,000
150,000
158,093
8,093
146,250
Investment earnings
75,000
142,550
167,958
25,408
87,402
Donations
General government
100,000
100,000
14,250
(85,750)
8,040
Public safety
-
-
-
1,350
Culture and recreation
5,100
5,100
2,200
(2,900)
10,175
Total donations
105,100
105,100
16,450
(88,650)
19,565
Miscellaneous
General government
25,000
25,000
79,171
54,171
159,917
Public safety
25,000
25,000
21,236
(3,764)
26,315
Public works
-
-
32,701
32,701
40,439
Total miscellaneous
50,000
50,000
133,108
83,108
226,671
Total revenues
17,036,050
17,871,900
18,643,940
772,040
17,696,920
Me
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019
2018
Budgeted Amounts
Variance with
Actual
Final Budget -
Original
Final
Amounts
Over (Under)
Actual
Expenditures
General government
Mayor and city council
$ 99,070
$ 99,070 $
93,574
$ (5,496)
$ 92,701
Administrative
337,830
410,590
459,749
49,159
347,542
Finance
577,865
577,865
580,009
2,144
567,197
Personnel
171,135
171,135
177,640
6,505
176,712
Assessing services
175,000
175,000
178,301
3,301
169,881
City clerk/elections
152,780
152,780
144,687
(8,093)
191,007
Legal
200,000
200,000
210,621
10,621
200,978
Community and employee programs
143,350
143,350
96,185
(47,165)
61,604
Government buildings
479,205
479,205
482,621
3,416
464,427
Total general government
2,336,235
2,408,995
2,423,387
14,392
2,272,049
Community development
Planning and zoning
384,975
384,975
397,181
12,206
380,357
Building inspections
709,310
709,310
754,593
45,283
808,547
Engineering
375,435
375,435
334,307
(41,128)
405,630
Total community development
1,469,720
1,469,720
1,486,081
16,361
1,594,534
Public safety
Police protection
6,842,150
6,842,150
6,951,130
108,980
6,690,070
Fire protection
1,183,485
1,183,485
1,291,031
107,546
1,218,316
Emergency preparedness
69,460
69,460
71,208
1,748
49,897
Animal control
34,070
34,070
28,608
(5,462)
25,453
Total public safety
8,129,165
8,129,165
8,341,977
212,812
7,983,736
Public works
Public works administration
599,165
699,860
668,007
(31,853)
574,873
Streets
1,469,940
1,469,940
1,496,249
26,309
1,449,932
Snow and ice control
678,925
725,000
981,754
256,754
686,724
Street signs/striping
237,145
237,145
241,124
3,979
209,754
Total public works
2,985,175
3,131,945
3,387,134
255,189
2,921,283
Culture and recreation
Forestry
365,845
365,845
339,879
(25,966)
384,070
Recreation programs
392,945
392,945
406,340
13,395
393,247
Parks maintenance
1,414,715
1,414,715
1,433,712
18,997
1,314,922
Total culture and recreation
2,173,505
2,173,505
2,179,931
6,426
2,092,239
Total expenditures
17,093,800
17,313,330
17,818,510
505,180
16,863,841
Excess of revenues over
(under) expenditures
(57,750)
558,570
825,430
266,860
833,079
Other Financing Sources (Uses)
Transfers in
557,750
557,750
563,050
5,300
541,750
Transfers out
(500,000)
(500,000)
(942,648)
(442,648)
(960,275)
Total other financing sources (uses)
57,750
57,750
(379,598)
(437,348)
(418,525)
Net change in fund balances
$ -
$ 616,320
445,832
$ (170,488)
414,554
Fund Balances
Beginning of year
End of year
11,245,546
$ 11,691,378
10,830,992
$ 11,245,546
City of Cottage Grove
Schedule of Changes in Total OPEB Liability
and Related Ratios
December 31,
December 31,
2018
2019
Total OPEB Liability
Service cost
$ 14,560
$ 16,325
Interest
11,794
15,807
Differences between expected and actual experience
-
44,169
Changes of assumptions
(14,652)
(10,656)
Changes of benefit terms
-
-
Benefit payments
(18,651)
(27,782)
Other changes
-
-
Net change in total OPEB liability
(6,949)
37,863
Beginning of year
337,526
330,577
End of year
$ 330,577
$ 368,440
Covered payroll
$ 9,103,225
$ 10,569,669
Total OPEB liability as a percentage of covered payroll
3.63%
3.49%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
See notes to required supplementary information. 88
City of Cottage Grove
Schedule of City's Proportionate Share
of Net Pension Liability
General Employees Retirement Fund
Last Ten Years
City's
Proportionate
Share of the
State's
Net Pension
City's
City's
City's
Proportionate
Liability and
Proportionate
Proportionate
Proportionate
Share
the State's
Share of the
Plan Fiduciary
Share
Share
(Amount) of
Proportionate
Net Pension
Net Position
(Percentage)
(Amount) of
the Net
Share of the
Liability
as a
of the Net
the Net
Pension
Net Pension
(Asset) as a
Percentage of
For Fiscal
Pension
Pension
Liability
Liability
Percentage of
the Total
Year Ended
Liability
Liability
Associated
Associated
City's Covered
its Covered
Pension
June 30,
(Asset)
(Asset)
with the City
with the City
Payroll
Payroll
Liability
2019
0.0926%
$ 5,119,647
$ 159,160
$ 5,278,807
$ 6,555,453
78.1%
80.23%
2018
0.0937%
5,198,092
170,553
5,368,645
6,298,520
82.5%
79.53%
2017
0.0890%
5,681,701
71,469
5,753,170
5,887,025
96.5%
75.90%
2016
0.0878%
7,128,925
43,058
7,171,983
5,447,306
130.9%
68.91%
2015
0.0919%
4,762,735
-
4,762,735
5,401,220
88.2%
78.19%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
Schedule of City's Proportionate Share
of Net Pension Liability
Public Employees Police and Fire Retirement Fund
Last Ten Years
City's
Proportionate
Share of the
Plan Fiduciary
City's
City's
Net Pension
Net Position
Proportion of
Proportionate
Liability
as a
the Net
Share of the
(Asset) as a
Percentage of
For Fiscal
Pension
Net Pension
Percentage of
the Total
Year Ended
Liability
Liability
City's Covered
its Covered
Pension
June 30,
(Asset)
(Asset)
Payroll
Payroll
Liability
2019
0.4716%
$ 4,956,992
$ 4,864,909
101.89%
89.26%
2018
0.4582%
4,842,702
4,829,432
100.27%
88.84%
2017
0.4380%
5,913,521
4,495,914
131.53%
85.43%
2016
0.4450%
17,818,574
3,867,466
460.73%
63.88%
2015
0.4340%
4,931,256
3,665,120
134.55%
86.61%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
See notes to required supplementary information. 89
City of Cottage Grove
Schedule of City Contributions -
General Employees Retirement Fund
Last Ten Years
Contributions
in Relation to
Fiscal Year
Statutorily
the Statutorily
Ending
Required
Required
December 31,
Contribution
Contributions
2019
$ 508,963
$ 508,963
2018
482,521
482,521
2017
458,971
458,971
2016
424,202
424,202
2015
403,964
403,964
Contributions
Contribution
as a Percentage
Deficiency City's Covered
of Covered
(Excess) Payroll
Payroll
$ - $ 6,786,173
7.50%
- 6,433,613
7.50%
- 6,119,613
7.50%
- 5,656,027
7.50%
- 5,386,187
7.50%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
Schedule of City Contributions -
Public Employees Police and Fire Retirement Fund
Last Ten Years
Contributions
in Relation to
Fiscal Year
Statutorily
the Statutorily
Ending
Required
Required
December 31,
Contribution
Contributions
2019
$ 976,911
$ 976,911
2018
803,145
803,145
2017
778,070
778,070
2016
718,936
718,936
2015
664,300
664,300
Contributions
Contribution
as a Percentage
Deficiency City's Covered
of Covered
(Excess) Payroll
Payroll
$ - $ 5,763,487
16.95%
- 4,957,685
16.20%
- 4,802,901
16.20%
- 4,437,877
16.20%
- 4,100,617
16.20%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
See notes to required supplementary information. 90
Total pension liability (TPL)
Service cost
Interest
Differences between expected and actual experience
Changes of assumptions
Changes of benefit terns
Benefit payments, including refunds or member contributions
Net change in total pension liability
Beginning of year
End of year
Plan fiduciary net pension (FNP)
Contributions - employer
State contributions
Net investment income
Benefit payments, including refunds of member contributions
Administrative expense
Other
Net change in plan fiduciary net position
Beginning of year
End of year
Net pension liability (NPL)
Plan fiduciary net position as a percentage of the total
pension liability
Covered payroll
City of Cottage Grove
Schedule of Changes in Net Pension Liability
and Related Ratios - Fire Relief Association
Measurement Date
December 31, December 31, December 31, December 31, December 31, December 31,
2014 2015 2016 2017 2018 2019
$ 77,691 $ 79,827 $ 109,062 $ 118,915 $ 102,569 $ 97,985
85,148 88,550 85,750 100,267 117,070 115,532
- - - 329,484 (12,862) (45,681)
77,611 (130,240) - -
139,930 - -
(84,321) (140,973) (295,760) - (133,560) (322,109)
78,518 244,945 (231,188) 548,666 73,217 (154,273)
1,274,449 1,352,967 1,597,912 1,366,724 1,915,390 1,988,607
$ 1,352,967 $ 1,597,912 $ 1,366,724 $ 1,915,390 $ 1,988,607 $ 1,834,334
$ 5,155 $ 5,329 $ 5,265 $ 2,081 $ - $ -
177,804 191,183 195,271 192,139 198,977 209,430
98,130 (117,497) 146,660 316,265 (113,085) 510,329
(84,321) (140,973) (295,760) - (133,560) (322,109)
(11,193) (15,165) (12,139) (12,334) (3,709) (2,155)
(23,403) - 210 (2,319) 79
162,172 (77,123) 39,507 495,832 (51,377) 395,574
2,242,564 2,404,736 2,327,613 2,367,120 2,862,952 2,811,575
$ 2,404,736 $ 2,327,613 $ 2,367,120 $ 2,862,952 $ 2,811,575 $ 3,207,149
$ (1,051,769) $ (729,701) $ (1,000,396) $ (947,562) $ (822,968) $ (1,372,815)
177.7%
145.7%
173.2%
149.5%
141.4%
174.8%
n/a
n/a
n/a
n/a
n/a
n/a
Net pension liability as a percentage of covered payroll n/a n/a n/a n/a n/a n/a
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 require a ten-year presentation, but does not require retroactive reporting. Information prior to 2014 is not available. Additional years will be reported as they become available.
110
I- See notes to required supplementary information.
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City of Cottage Grove
Schedule of City and Non -Employer Entity Contributions -
Fire Relief Association
December 31, December 31, December 31, December 31, December 31, December 31,
2014 2015 2016 2017 2018 2019
Employer
Statutorily determined contribution (SDC) $ - $ - $ - $ - $ - $ -
Contribution in relation to the SDC 5,155 5,329 5,265 2,081 - -
Contribution deficiency (excess) $ (5,155) $ (5,329) $ (5,265) $ (2,081) $
Non -employer
2% state aid $ 177,804 $ 191,183 $ 195,271 $ 192,139 $ 198,977 $ 209,430
Covered payroll n/a n/a n/a n/a n/a n/a
Contributions as a percentage of covered payroll n/a n/a n/a n/a n/a n/a
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 require a ten-year presentation, but does not require retroactive reporting. Information prior to 2014 is not available. Additional years will be reported as
they become available.
110
W See notes to required supplementary information.
City of Cottage Grove
Notes to Required Supplementary Information
GENERAL EMPLOYEES FUND
2019 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
• The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State's special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
2018 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2015 to MP-2017.
• The assumed benefit increase was changed from 1.0% per year through 2044 and 2.5% per year
thereafter to 1.25% per year.
Changes in Plan Provisions
• The augmentation adjustment in early retirement factors is eliminated over a five-year period
starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024.
• Interest credited on member contributions decreased from 4.00% to 3.00%, beginning July 1,
2018.
• Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation that has
already accrued for deferred members will still apply.
• Contribution stabilizer provisions were repealed.
• Postretirement benefit increases were changed from 1.00% per year with a provision to increase
to 2.50% upon attainment of 90.00% funding ratio to 50.00% of the Social Security Cost of
Living Adjustment, not less than 1.00% and not more than 1.50%, beginning
January 1, 2019.
• For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree
reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients,
or survivors.
• Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017 Changes
Changes in Actuarial Assumptions
• The CSA loads were changed from 0.8% for active members and 60% for vested and non -vested
deferred members. The revised CSA loads are now 0.0% for active member liability, 15% for
vested deferred member liability and 3% for non -vested deferred member liability.
• The assumed post -retirement benefit increase rate was changed from 1.0% per year for all years
to 1.0% per year through 2044 and 2.5% per year thereafter.
Changes in Plan Provisions
The State's contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in
2017 and 2018, and $6,000,000 thereafter.
Ell
City of Cottage Grove
Notes to Required Supplementary Information
GENERAL EMPLOYEES FUND (CONTINUED)
2017 Changes (Continued)
Changes in Plan Provisions (Continued)
• The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund
changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The State's
contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031.
2016 Changes
Changes in Actuarial Assumptions
• The assumed post -retirement benefit increase rate was changed from 1.0% per year through 2035
and 2.5% per year 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, the inflation were decreased by 0.25% to 3.25%
for payroll growth and 2.50% for inflation.
2015 Changes
Changes in Actuarial Assumptions
• The assumed post -retirement benefit increase rate was changed from 1.0% per year through 2030
and 2.5% per year thereafter to 1.0% per year through 2035 and 2.5% per year thereafter.
Changes in Plan Provisions
On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General
Employees Fund, which increased the total pension liability by $1.1 billion and increased the
fiduciary plan net position by $892 million. Upon consolidation, state and employer
contributions were revised; the State's contribution of $6.0 million, which meets the special
funding situation definition, was due September 2015.
95
City of Cottage Grove
Notes to Required Supplementary Information
POLICE AND FIRE FUND
2019 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2017 to MP-2018.
2018 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2016 to MP-2017.
Changes in Plan Provisions
• Postretirement benefit increases were changed to 1.00% for all years, with no trigger.
• An end date of July 1, 2048 was added to the existing $9.0 million state contribution.
• New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million
thereafter until the plan reaches 100% funding, or July 1, 2048, if earlier.
• Member contributions were changed from 10.80% to 11.30% of pay, effective January 1, 2019
and 11.80% of pay, effective January 1, 2020.
• Employer contributions were changed from 16.20% to 16.95% of pay, effective January 1, 2019
and 17.70% of pay, effective January 1, 2020.
• Interest credited on member contributions decreased from 4.00% to 3.00%, beginning July 1,
2018.
• Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation that has
already accrued for deferred members will still apply.
• Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017 Changes
Changes in Actuarial Assumptions
• Assumed salary increases were changed as recommended in the June 30, 2016 experience study.
The net effect is proposed rates that average 0.34% lower than the previous rates.
• Assumed rates of retirement were changed, resulting in fewer retirements.
• The CSA load was 30% for vested and non -vested deferred members. The CSA has been
changed to 33% for vested members and 2% for non -vested members.
• The base mortality table for healthy annuitants was changed from the RP-2000 fully generational
table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted
by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-
2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled
mortality table to the mortality tables assumed for healthy retirees.
• Assumed termination rates were decreased to 3% for the first three years of service. Rates
beyond the select period of three years were adjusted, resulting in more expected terminations
overall.
• Assumed percentage of married female members was decreased from 65% to 60%.
• Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
City of Cottage Grove
Notes to Required Supplementary Information
POLICE AND FIRE FUND (CONTINUED)
2017 Changes (Continued)
Changes in Actuarial Assumptions (Continued)
• The assumed percentage of female members electing Joint and Survivor annuities was increased.
• The assumed post -retirement benefit increase rate was changed from 1% for all years to 1% per
year through 2064 and 2.5% thereafter.
• The single discount rate was changed from 5.6% per annum to 7.5% per annum.
2016 Changes
Changes in Actuarial Assumptions
• 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
changed from 7.9% to 5.6%.
• The single discount rate changed from 7.90% to 5.60%.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
2015 Changes
Changes in Actuarial Assumptions
• The assumed post -retirement benefit increase rate was changed from 1.0% per year through 2030
and 2.5% per year thereafter to 1.0% per year through 2037 and 2.5% per year thereafter.
Changes in Plan Provisions
• The post -retirement benefit increase to be paid after attainment of the 90% funding threshold was
changed, from inflation up to 2.5%, to a fixed rate of 2.5%.
OTHER POST EMPLOYMENT BENEFITS
2019 Changes
Changes in Actuarial Assumptions
• The Discount rate decreased from 4.11 % in 2018 to 2.74% in 2019.
• The general inflation rate was changed to the 2.50% used in the June 30, 2019 GERP and June
30, 2019 PEPFF actuarial valuations.
• Changes of assumptions also reflect a change to 25.0% of GERP employees are assumed to elect
coverage at retirement, an increase from 20.0% based on recent experience.
2018 Changes
Changes in Actuarial Assumptions
• The discount rate increased from 3.44% in 2017 to 4.11 % in 2018.
There are no assets accumulated in a trust
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COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
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NONMAJOR GOVERNMENTAL FUNDS
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City of Cottage Grove
Nonmajor Governmental Funds
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 PROJECTS FUNDS
The Capital Projects Funds account for financial resources to be used for the acquisition or construction
of major capital facilities (other than those financed by Proprietary Funds).
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City of Cottage Grove
Combining Balance Sheet -
Nonmajor Governmental Funds
December 31, 2019
With Comparative Totals for December 31, 2018
Totals
Nonmajor Governmental Funds
Special
Revenue
Debt Service
Capital Projects
2019
2018
Assets
Cash and investments
$
930,590
$ 3,224,138
$
17,542,681
$ 21,697,409 $
21,863,175
Interfundreceivable
600,058
12,236
350
612,644
475,622
Interfund loan receivable
-
-
759,864
759,864
837,232
Due from other governments
353,017
-
382,390
735,407
201,122
Accounts receivable
383,177
-
154,946
538,123
577,743
Prepaid items
14,933
-
-
14,933
10,889
Inventories
25,601
-
-
25,601
30,297
Taxes receivable - delinquent
-
9,905
2,802
12,707
11,769
Special assessments receivable
Deferred
-
21666,891
561,260
3,228,151
3,811,268
Delinquent
-
5,003
-
5,003
8,613
Special deferred
-
2,447,663
5,015
2,452,678
23,973
Land held for resale
-
-
324,733
324,733
-
Total assets
$
2,307,376
$ 8,365,836
$
19,734,041
$ 30,407,253 $
27,851,703
Liabilities
Accounts payable
$
225,622
$ -
$
1,465,582
$ 1,691,204 $
345,457
Salaries and benefits payable
104,529
-
-
104,529
69,677
Interfund payable
600,058
12,586
-
612,644
475,622
Contracts payable
-
-
202,055
202,055
-
Due to other governments
5,688
-
-
5,688
7,928
Deposits payable
3,081
-
20,142
23,223
16,129
Interfund loan payable
-
30,032
729,832
759,864
837,232
Total liabilities
938,978
42,618
2,417,611
3,399,207
1,752,045
Deferred Inflows of Resources
Unavailable revenue - tax increment
-
-
2,802
2,802
519
Unavailable revenue - property taxes
-
9,905
-
9,905
11,250
Unavailable revenue -
special assessments
-
51119,557
566,275
5,685,832
3,843,854
Total deferred inflows
ofresources
-
5,129,462
569,077
5,698,539
3,855,623
Fund Balances
Nonspendable
40,534
-
-
40,534
41,186
Restricted
75,106
3,229,884
571,030
3,876,020
3,515,300
Committed
1,736,590
-
-
1,736,590
1,383,402
Assigned
-
-
16,207,515
16,207,515
17,682,554
Unassigned
(483,832)
(36,128)
(31,192)
(551,152)
(378,407)
Total fund balances
1,368,398
3,193,756
16,747,353
21,309,507
22,244,035
Total liabilities, deferred
inflows of resources, and
fund balances
$
2,307,376
$ 8,365,836
$
19,734,041
$ 30,407,253 $
27,851,703
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City of Cottage Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Governmental Funds
For the Year Ended December 31, 2019
With Compartive Totals for the Year Ended December 31, 2018
Totals
Nonmajor Governmental Funds
Special
Revenue
Debt Service
Capital Projects
2019
2018
Revenue
General property taxes
$
$ 1,587,867
$ -
$ 1,587,867 $
1,530,241
Franchise taxes
-
583,715
583,715
567,875
Aggregate taxes
-
22,250
22,250
20,791
Tax increment collections
320,000
765,358
1,085,358
769,475
Special assessments
-
755,784
240,633
996,417
1,031,899
Direct charges to developers
-
-
67,789
67,789
99,270
Intergovernmental
278,347
-
1,944,794
2,223,141
607,359
Charges for services
3,760,500
-
19,713
3,780,213
3,557,158
Rent
-
-
416,220
416,220
433,713
Fines and forfeitures
61,931
-
-
61,931
62,494
Investment earnings
39,334
54,657
542,409
636,400
282,523
Interest on interfund loan
-
-
23,903
23,903
26,474
Connection charges
1,932,844
1,932,844
2,776,937
Park dedication fees
472,500
472,500
853,659
Donations
-
-
357,003
357,003
356,833
Miscellaneous
67,341
-
550,580
617,921
237,251
Total revenues
4,207,453
2,718,308
7,939,711
14,865,472
13,213,952
Expenditures
Current
General government
21,997
8,463
30,460
72,589
Economic development
-
-
447,061
447,061
230,615
Public safety
142,241
-
142,241
66,556
Public works
635,345
680,885
1,316,230
834,330
Culture and recreation
2,690,757
168,944
2,859,701
2,524,135
Capital outlay
Public safety
38,321
-
38,321
-
Public works
13,354
5,531,353
5,544,707
2,813,942
Culture and recreation
311,849
-
3,185,414
3,497,263
1,341,548
Debt service
Principal retirement
-
2,420,000
-
2,420,000
3,595,000
Interest and other charges
-
1,064,830
76,419
1,141,249
992,169
Total expenditures
3,831,867
3,506,827
10,098,539
17,437,233
12,470,884
Excess of revenues over
(under) expenditures
375,586
(788,519)
(2,158,828)
(2,571,761)
743,068
Other Financing Sources (Uses)
Proceeds from sale of capital asset
-
35,932
35,932
20,563
Bond issuance
133,387
2,845,000
2,978,387
365,125
Bond premium
- -
111,990
111,990
-
Transfers in
- 493,550
1,391,147
1,884,697
3,457,654
Transfers out
(241,300) -
(3,132,473)
(3,373,773)
(1,508,885)
Total other financing sources (uses)
(241,300) 626,937
1,251,596
1,637,233
2,334,457
Net change in fund balances
134,286 (161,582)
(907,232)
(934,528)
3,077,525
Fund Balances
Beginning of year 1,234,112 3,355,338 17,654,585 22,244,035 19,166,510
End of year $ 1,368,398 $ 3,193,756 $ 16,747,353 $ 21,309,507 $ 22,244,035
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City of Cottage Grove
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 18-hole golf course and banquet facility.
HERO Center Operations Fund — Established to account for the HERO Center operations.
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City of Cottage Grove
Subcombining Balance Sheet -
Nonmajor Special Revenue Funds
December 31, 2019
With Comparative Totals For December 31, 2018
Assets
Cash and investments
Interfund receivable
Due from other governments
Accounts receivable
Prepaid items
Inventories
Total assets
Liabilities
Accounts payable
Salaries and benefits payable
Interfund payable
Due to other governments
Deposits payable
Total liabilities
Fund Balances
Nonspendable
Restricted
Committed
Unassigned
Total fund balances
Total liabilities and fund balances
Storm Water
Maintenance Forfeiture/
Recycling (215) (230) Seizure (240) Ice Arena (250)
$ 83,892 $ 765,444 $ 75,403 $ -
- 600,058 - -
219,111 - 35,516
144,722 - 224,846
- - - 6,244
$ 83,892 $ 1,729,335 $ 75,403 $ 266,606
11,722 37,861 297 89,965
- 26,379 - 28,768
- - - 513,701
- 675 - 2,479
- - 6,244
- - 75,106 -
72,170 1,664,420 - -
- - - (374,551)
72,170 1,664,420 75,106 (368,307)
$ 83,892 $ 1,729,335 $ 75,403 $ 266,606
T:
HERO Center
Golf Course Operations
Fund (255) (290)
Totals
Nonmajor Special Revenue Funds
2019 2018
$ 5,851 $
-
$ 930,590
$ 912,197
-
-
600,058
337,693
-
98,390
353,017
185,237
13,609
-
383,177
433,018
8,689
-
14,933
10,889
25,601
-
25,601
30,297
$ 53,750 $
98,390
$ 2,307,376
$ 1,909,331
25,763
60,014
225,622
254,343
40,073
9,309
104,529
69,677
-
86,357
600,058
337,693
2,534
-
5,688
7,928
3,081
-
3,081
5,578
71,451
155,680
938,978
675,219
34,290
-
40,534
41,186
-
-
75,106
36,443
-
-
1,736,590
1,383,402
(51,991)
(57,290)
(483,832)
(226,919)
(17,701)
(57,290)
1,368,398
1,234,112
$ 53,750 $
98,390
$ 2,307,376
$ 1,909,331
MUS
City of Cottage Grove
Subcombining Statement of Revenues,
Expenditures, and Changes in Fund Balances -
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Revenues
Intergovernmental
Charges for services
Fines and forfeitures
Investment earnings
Miscellaneous
Total revenues
Expenditures
Current
Public safety
Public works
Culture and recreation
Capital outlay
Public safety
Public works
Culture and recreation
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund Balances
Beginning of year
End of year
Storm Water
Maintenance
Forfeiture/
Recycling (215)
(230)
Seizure (240)
Ice Arena (250)
$ 54,466
$ 66,611
$ -
$ 57,000
-
884,674
-
908,230
-
-
61,931
-
2,191
35,101
1,614
-
144
-
-
64,827
56,801
986,386
63,545
1,030,057
- - 24,882 -
49,700 585,645 - -
- - - 842,389
13,354 - -
- - - 189,147
49,700 598,999 24,882 1,031,536
7,101 387,387 38,663 (1,479)
- (41,300) - (200,000)
(41,300) - (200,000)
7,101 346,087 38,663 (201,479)
65,069 1,318,333 36,443 (166,828)
$ 72,170 $ 1,664,420 $ 75,106 $ (368,307)
110
Totals
HERO Center
Golf Course
Operations
Fund (255)
(290)
2019
2018
$ 1,880
$ 98,390
$ 278,347 $
248,751
1,967,596
-
3,760,500
3,539,198
-
-
61,931
62,494
428
-
39,334
17,753
2,370
-
67,341
211,772
1,972,274
98,390
4,207,453
4,079,968
-
117,359
142,241
66,556
-
-
635,345
479,995
1,848,368
-
2,690,757
2,456,990
- 38,321 38,321 -
- 13,354 26,097
1,204 (57,290) 375,586 523,077
190,000
- - (241,300) (261,300)
- - (241,300) (71,300)
1,204 (57,290) 134,286 451,777
(18,905) - 1,234,112 782,335
$ (17,701) $ (57,290) $ 1,368,398 $ 1,234,112
111
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Grove
,?m5pefty Meet
112
City of Cottage Grove
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
113
City of Cottage Grove
Subcombining Balance Sheet -
Nonmajor Debt Service Funds
December 31, 2019
With Comparative Totals for December 31, 2018
Assest
Cash and investments
Interfund receivable
Taxes receivable - delinquent
Special assessments receivable
Deferred
Delinquent
Special deferred
Total assets
Liabilities
Accounts payable
Interfund payable
Interfund loan payable
Total liabilities
Deferred Inflows of Resources
Unavailable revenue - property taxes
Unavailable revenue - special assessments
Total deferred inflows of resources
Fund Balances
Restricted
Unassigned
Total fund balances
Total liabilities, deferred inflows
of resources, and fund balances
2019B
2017A G.O.
2019A G.O.
Equipment
2018A G.O.
Capital
CIP Bonds
Certificate
Improvement
Improvement
(315)
(305)
Bonds (310)
Bonds (371)
$ 136,009
$
-
$ 417,729
$ 448,336
-
-
-
12,236
-
-
-
3,004
-
-
98,984
-
-
-
233
-
-
-
2,427,937
-
$ 136,009
$
-
$ 2,944,883
$ 463,576
-
350
-
-
350
-
-
-
-
-
3,004
-
-
2,527,154
-
-
-
2,527,154
3,004
136,009
-
417,729
460,572
-
(350)
-
-
136,009
(350)
417,729
460,572
$ 136,009
$
-
$ 2,944,883
$ 463,576
114
Totals
Nonmajor Debt Service Funds
Pavement
Management
2016A G.O. Debt Service
Refunding (490, 491, 492, Tax Increment
Bonds(369) 493) Funds 2019 2018
$ -
$
2,215,574
$
6,490
$
3,224,138
$
3,381,548
-
-
-
12,236
1,135
2,109
4,792
-
9,905
11,250
-
2,567,907
-
2,666,891
3,039,809
-
4,770
-
51003
8,613
-
19,726
-
2,447,663
19,112
$ 2,109
$
4,812,769
$
6,490
$
8,365,836
$
6,461,467
$ -
$
-
$
-
$
-
$
6,210
12,236
-
-
12,586
1,135
-
-
30,032
30,032
20,000
12,236
-
30,032
42,618
27,345
2,109
4,792
-
9,905
11,250
-
2,592,403
-
5,119,557
3,067,534
2,109
2,597,195
-
5,129,462
3,078,784
-
2,215,574
-
3,229,884
3,370,032
(12,236)
-
(23,542)
(36,128)
(14,694)
(12,236)
2,215,574
(23,542)
3,193,756
3,355,338
$ 2,109
$
4,812,769
$
6,490
$
8,365,836
$
6,461,467
115
City of Cottage Grove
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Debt Service Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019B
2017A G.O.
2019A G.O.
Equipment
2018A G.O.
Capital
CIP Bonds
Certificate
Improvement
Improvement
(315)
(305)
Bonds (310)
Bonds (371)
Revenues
General property taxes
$ - $
-
$ 129,474
$ 598,599
Tax increment collections
-
-
-
-
Special assessments
-
-
156,057
-
Investment earnings
2,967
-
8,184
3,001
Miscellaneous
-
-
-
-
Total revenues
2,967
-
293,715
601,600
Expenditures
Current
General government
$ 345 $
350
$ 354
$ 344
Debt service
Principal retirement
-
-
-
345,000
Interest and other charges
-
-
251,300
261,075
Total expenditures
345
350
251,654
606,419
Excess of revenues over
(under) expenditures
2,622
(350)
42,061
(4,819)
Other Financing Sources
Bond issuance
133,387
-
-
Transfers in
-
-
-
-
Total other financing sources
133,387
-
-
-
Net change in fund balances
136,009
(350)
42,061
(4,819)
Fund Balances
Beginning of year
-
-
375,668
465,391
End of year
$ 136,009 $
(350)
$ 417,729
$ 460,572
116
Pavement
Management
2016A G.O. Debt Service
Refunding (490, 491, 492, Tax Increment
Bonds (369) 493) Funds
Totals
Nonmajor Debt Service Funds
2019 2018
$ 190,319
$ 669,475 $
-
$ 1,587,867
$ 1,530,241
-
-
320,000
320,000
305,000
-
599,727
-
755,784
770,056
-
40,426
79
54,657
30,255
-
-
-
-
10,000
190,319
1,309,628
320,079
2,718,308
2,645,552
$ -
$ 5,732 $
14,872
$ 21,997
$ 42,372
610,000
1,205,000
260,000
2,420,000
3,595,000
84,970
412,295
55,190
1,064,830
965,695
694,970
1,623,027
330,062
3,506,827
4,603,067
(504,651)
(313,399)
(9,983)
(788,519)
(1,957,515)
-
-
133,387
365,125
493,550
-
-
493,550
1,666,247
493,550
-
-
626,937
2,031,372
(11,101)
(313,399)
(9,983)
(161,582)
73,857
(1,135)
2,528,973
(13,559)
3,355,338
3,281,481
$ (12,236)
$ 2,215,574 $
(23,542)
$ 3,193,756
$ 3,355,338
117
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Grove
,?m5pefty Meet
118
City of Cottage Grove
NONMAJOR CAPITAL PROJECTS FUNDS
Capital Projects Funds are used to account for the acquisition and construction of major capital
facilities other than those financed by Proprietary 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.
Completed Construction — to account for the various surpluses (deficits) of other Special
Assessment Construction Funds.
Park Trust— to account for capital projects in new municipal parks.
Park Capital Improvements — to account for capital projects in existing municipal parks.
Water Connection and Area — to account for water connection and area charges.
Future Storm Sewer Improvements — to collect storm sewer area charges which are designated for
future construction.
Sewer Connection and Area — to account for sewer connection and area charges.
Pavement Management Capital Project Fund — to account for pavement management construction
projects.
Tax Increment Construction Revolving Fund — to account for construction projects that are financed
with tax increments.
Ice Arena Construction Fund — to account for construction projects related to the Ice Arena.
119
City of Cottage Grove
Subcombining Balance Sheet -
Nonmajor Capital Projects Funds
December 31, 2019
With Comparative Totals for December 31, 2018
Future
Equipment
Street
Economic
Completed
Replacement
Sealcoating
Development
Construction
Park Trust
(210)
(235)
(286)
(500)
(570)
Assets
Cash and investments
$ 1,525,700
$ 1,448,618
$ 3,619,975
$ 470,834 $
1,273,821
Interfund receivable
-
-
-
-
-
Interfund loan receivable
-
759,864
Due from other governments
32,973
-
Accounts receivable
147,100
Taxes receivable - delinquent
-
-
-
Special assessments receivable
Deferred
9,350
34,895
Special deferred
-
-
Land held for resale
-
324,733
Total assets
$ 1,525,700
$ 1,628,691
$ 4,713,922
$ 470,834 $
1,308,716
Liabilites
Accounts payable
$ 640,847
$ 2,497
$
$ - $
100,744
Interfund payable
-
-
-
Contracts payable
10,871
Deposits payable
20,000
-
Interfund loan payable
-
-
Total liabilities
640,847
2,497
20,000
111,615
Deferred Inflows of Resources
Unavailable revenue - tax increment
-
-
-
-
Unavailable revenue - special assessments
9,350
34,895
Total deferred inflows of resources
9,350
34,895
Fund Balances
Restricted - - - - -
Assigned 884,853 1,626,194 4,684,572 470,834 1,162,206
Unassigned - - -
Total fund balances 884,853 1,626,194 4,684,572 470,834 1,162,206
Total liabilities, deferred inflows
of resources, and fund balances $ 1,525,700 $ 1,628,691 $ 4,713,922 $ 470,834 $ 1,308,716
120
Totals
Nonrnajor Capital Projects Funds
Future Storm Pavement Tax Increment
Park Capital Water Sewer Sewer Management Construction Ice Arena
Improvement Connection and Improvements Connection and Capital Project Revolving Construction
Fund(515) Area(575) (585) Area(580) (560) Fund (526) 2019 2018
$ 1,217,317 $ 995,568 $ 3,891,656 $ 20,424 $ 1,670,132 $ 1,301,976 $ 106,660 $ 17,542,681 $ 17,569,430
- - - - - - 350 350 136,794
- - - 759,864 837,232
- 347,977 1,440 382,390 15,885
7,846 - - - 154,946 144,725
- 2,802 2,802 519
36,570 61,477 21,896 397,072 561,260 771,459
- - - 51015 5,015 4,861
- 324,733 -
$ 1,225,163 $ 1,380,115 $ 3,953,133 $ 43,760 $ 2,072,219 $ 1,304,778 $ 107,010 $ 19,734,041 $ 19,480,905
$ 8,111 $ 453,750 $ 257,519 $ $ $ 1,114 $ 1,000 $ 1,465,582 $ 84,904
- - - - - - 136,794
- 53,982 137,202 202,055 -
142 - - - 20,142 10,551
729,832 729,832 817,232
8,253 453,750 311,501 730,946 138,202 2,417,611 1,049,481
- - - - 2,802 2,802 519
36,570 61,477 21,896 402,087 566,275 776,320
36,570 61,477 21,896 402,087 2,802 569,077 776,839
- - - - - 571,030 571,030 108,825
1,216,910 889,795 3,580,155 21,864 1,670,132 - 16,207,515 17,682,554
(31,192) (31,192) (136,794)
1,216,910 889,795 3,580,155 21,864 1,670,132 571,030 (31,192) 16,747,353 17,654,585
$ 1,225,163 $ 1,380,115 $ 3,953,133 $ 43,760 $ 2,072,219 $ 1,304,778 $ 107,010 $ 19,734,041 $ 19,480,905
121
Revenues
Franchise taxes
Aggregate taxes
Tax increment collections
Special assessments
Direct charges to developers
Intergovernmental
Charges for services
Rent
Investment earnings
Interest on interfund loan
Connection charges
Park dedication fees
Donations
Miscellaneous
Total revenues
Expenditures
Current
General government
Economic development
Public works
Culture and recreation
Capital outlay
Public works
Culture and recreation
Debt service
Interest and other charges
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources (Uses)
Proceeds from sale of capital assets
Bond Issuance
Bond Premium
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund Balances
Beginning of year
End of year
City of Cottage Grove
Subcombining Statement of Revenues,
Expenditures, and Changes in Fund Balances -
Nonmajor Capital Projects Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Future
Equipment
Street
Economic
Completed
Replacement
Sealcoating
Development
Construction
Park Trust
(210)
(235)
(286)
(500)
(570)
$
$ 583,715
$
$
$
22,250
-
10,285
38,385
67,789
-
19,713
42,105
32,682
83,078
12,796
34,412
-
-
23,903
-
-
-
472,500
339,752
-
-
549,080
42,105
726,149
1,006,098
12,796
545,297
-
-
8,463
-
-
-
153,829
-
2,638
168,297
-
-
-
-
49,067
1,714,235
-
-
326,222
1,716,873
168,297
153,829
8,463
375,289
(1,674,768)
557,852
852,269
4,333
170,008
35,932
630,191
666,123
(1,008,645)
(100,000)
(100,000)
557,852 852,269 4,333 70,008
1,893,498 1,068,342 3,832,303 466,501 1,092,198
$ 884,853 $ 1,626,194 $ 4,684,572 $ 470,834 $ 1,162,206
122
Totals
Nonmajor Capital Projects Funds
Future Storm
Pavement
Tax Increment
Park Capital
Water
Sewer
Sewer
Management
Construction
Ice Arena
Improvement
Connection and
Improvements
Connection and
Capital Project
Revolving
Construction
Fund(515)
Area(575)
(585)
Area(580)
(560)
Fund
(526)
2019
2018
$
$
$
$
$
$
$
$ 583,715
$ 567,875
22,250
20,791
765,358
765,358
464,475
40,228
67,625
24,085
60,025
-
240,633
261,843
67,789
99,270
444,794
1,500,000
-
-
1,944,794
358,608
-
-
-
19,713
17,960
416,220
-
-
-
-
-
416,220
433,713
27,042
53,234
145,291
11,297
44,382
13,982
42,108
542,409
234,515
-
-
-
-
-
-
-
23,903
26,474
650,926
774,080
507,838
1,932,844
2,776,937
-
-
-
-
472,500
853,659
17,251
357,003
356,833
1,500
550,580
15,479
462,013
1,189,182
2,486,996
543,220
104,407
779,340
42,108
7,939,711
6,488,432
-
-
-
-
-
-
-
8,463
30,217
-
-
-
-
293,232
447,061
230,615
-
403,784
34,689
732
70,745
-
-
680,885
354,335
119,794
-
-
-
-
83
168,944
67,145
-
644,401
3,172,485
232
-
5,531,353
2,787,845
14,000
-
-
4,295
-
2,840,897
3,185,414
814,295
23,903
52,516
76,419
26,474
133,794
1,048,185
3,207,174
732
75,272
317,135
2,893,496
10,098,539
4,310,926
328,219
140,997
(720,178)
542,488
29,135
462,205
(2,851,388)
(2,158,828)
2,177,506
-
-
-
-
-
-
35,932
20,563
2,845,000
2,845,000
-
111,990
111,990
-
100,000
608,880
52,076
-
1,391,147
1,601,407
-
(983,243)
(1,415,790)
(633,440)
(3,132,473)
(1,247,585)
100,000
(983,243)
(806,910)
(633,440)
52,076
-
2,956,990
1,251,596
374,385
428,219
(842,246)
(1,527,088)
(90,952)
81,211
462,205
105,602
(907,232)
2,551,891
788,691
1,732,041
5,107,243
112,816
1,588,921
108,825
(136,794)
17,654,585
15,102,694
$ 1,216,910
$ 889,795
$ 3,580,155
$ 21,864
$ 1,670,132
$ 571,030
$ (31,192)
$ 16,747,353
$ 17,654,585
123
Revenues
Intergovernmental
Investment earnings
Miscellaneous
Total revenues
Expenditures
Current
Public works
Excess of revenues over
(under) expenditures
Fund Balances
Beginning of year
End of year
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
Recycling Special Revenue Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019
Budgeted Amounts
Original Final
$ 58,000 $ 58,000
$ 4,210 $ 4,210
2018
Variance with
Actual
Final Budget -
Amounts
Over (Under)
Actual
$ 54,466
$ (3,534)
$ 58,880
2,191
2,191
1,708
144
144
-
56,801
(1,199)
60,588
49,700 (4,090) 69,410
7,101 $ 2,891 (8,822)
65,069 73,891
$ 72,170 $ 65,069
124
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual -
Storm Water Maintenance Special Revenue Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019
2018
Budgeted Amounts
Variance with
Actual
Final Budget -
Original
Final
Amounts
Over (Under)
Actual
Revenues
Charges for services
$ 806,000
$ 806,000 $
884,674
$ 78,674
$ 841,140
Investment earnings
2,000
2,000
35,101
33,101
13,598
Intergovernmental
-
-
66,611
66,611
118,141
Miscellaneous
-
-
-
-
9,328
Total revenues
808,000
808,000
986,386
178,386
982,207
Expenditures
Current
Public works
508,545
508,545
585,645
77,100
410,585
Capital outlay
Public works
11,000
11,000
13,354
2,354
26,097
Total expenditures
519,545
519,545
598,999
79,454
436,682
Excess of revenues over
expenditures
288,455
288,455
387,387
98,932
545,525
Other Financing Uses
Transfers out
(41,300)
(41,300)
(41,300)
-
(41,300)
Net change in fund balance
$ 247,155
$ 247,155
346,087
$ 98,932
504,225
Fund Balances
Beginning of year
1,318,333
814,108
End of year
$
1,664,420
$ 1,318,333
125
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual -
Forfeiture/Seizure Special Revenue Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019
2018
Budgeted Amounts
Variance with
Actual
Final Budget -
Original Final
Amounts
Over (Under)
Actual
Revenues
Fines and forfeitures
$ 21,200 $ 21,200 $
61,931
$ 40,731
$ 62,494
Intergovernmental
8,000 8,000
-
(8,000)
14,730
Investment income
200 200
1,614
1,414
1,053
Total revenues
29,400 29,400
63,545
34,145
78,277
Expenditures
Current
Public safety
Capital outlay
Public safety
Total expenditures
Excess of revenues over
(under) expenditures
Fund Balance
Beginning of year
End of year
69,000 69,000 24,882 (44,118) 66,556
10,200 10,200 - (10,200)-
79,200 79,200 24,882 (54,318) 66,556
$ (49,800) $ (49,800) 38,663 $ 88,463 11,721
36,443 24,722
$ 75,106 $ 36,443
126
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual -
Ice Arena Special Revenue Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019
2018
Budgeted Amounts
Variance with
Actual
Final Budget -
Original
Final
Amounts
Over (Under)
Actual
Revenues
Intergovernmental
$ 57,000
$ 57,000 $
57,000
$ -
$ 57,000
Charges for services
953,500
953,500
908,230
(45,270)
969,213
Investment earnings
6,000
6,000
-
(6,000)
534
Contributions and donations
-
-
25,500
25,500
200,000
Miscellaneous
-
-
39,327
39,327
504
Total revenues
1,016,500
1,016,500
1,030,057
13,557
1,227,251
Expenditures
Current
Culture and recreation
834,320
834,320
842,389
8,069
817,931
Capital outlay
Culture and recreation
175,000
175,000
189,147
14,147
416,672
Total expenditures
1,009,320
1,009,320
1,031,536
22,216
1,234,603
Excess of revenues over
(under) expenditures
7,180
7,180
(1,479)
(8,659)
(7,352)
Other Financing Uses
Transfers out
(200,000)
(200,000)
(200,000)
-
(220,000)
Net change in fund balances
$ (192,820)
$ (192,820)
(201,479)
$ (8,659)
(227,352)
Fund Balance
Beginning of year
(166,828)
60,524
End of year
$
(368,307)
$ (166,828)
127
Revenues
Intergovernmental
Charges for services
Investment earnings
Miscellaneous
Total revenues
Expenditures
Current
Culture and recreation
Capital outlay
Culture and recreation
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources
Transfers in
Net change in fund balances
Fund Balance
Beginning of year
End of year
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual -
Golf Course Special Revenue Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019 2018
Budgeted Amounts Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
$ - $ - $ 1,880 $ 1,880 $ -
1,766,700 1,766,700 1,967,596 200,896 1,728,845
- - 428 428 860
1,636,525 1,636,525 1,848,368 211,843 1,639,059
249,000 249,000 122,702 (126,298) 110,581
(118,825) (118,825) 1,204
120,029 (17,995)
- 190,000
$ (118,825) $ (118,825) 1,204 $ 120,029
(18,905)
$ (17,701)
172,005
(190,910)
$ (18,905)
128
Revenues
Intergovernmental
Expenditures
Current
Public safety
Capital outlay
Public safety
Total expenditures
Excess of revenues
under expenditures
Fund Balances
Beginning of year
End of year
City of Cottage Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
HERO Center Operations Special Revenue Fund
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
2019 2018
Budgeted Amounts Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
98,390 $ 98,390 $ -
- 117,359 117,359
- 38,321 38,321
- - 155,680 155,680
$ - $ - (57,290) $ (57,290)
$ (57,290)
129
%re Pride an4
Cottage
Grove
,?m5pefty Meet
130
City of Cottage Grove
INTERNAL SERVICE FUNDS
Internal Service Funds account for the financing of goods or services provided by one
department or division to other departments or divisions of the city and to other governmental
units, on a cost reimbursement basis.
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.
131
City of Cottage Grove
Combining Statement of Net Position -
Internal Service Funds
December 31, 2019
With Comparative Totals for December 31, 2018
Totals
Fleet
Self Insurance
Maintenance
Information
(700)
(710)
Services(720)
2019
2018
Assets
Current assets
Cash and investments
(Including cash equivalents)
$
1,852,906
$
36,815
$
$
1,889,721 $
2,113,775
Accounts receivable
5,894
280
6,174
-
Interfund receivable
79,877
-
79,877
-
Inventories
-
95,599
95,599
115,964
Prepaid items
250,029
-
40,456
290,485
282,513
Total current assets
2,188,706
132,694
40,456
2,361,856
2,512,252
Noncurrent assets
Capital assets
Land
-
424,665
-
424,665
424,665
Buildings and improvements
928,870
-
928,870
928,870
Equipment and furniture
-
171,318
171,318
245,550
Machinery and equipment
373,277
-
373,277
378,922
Total capital assets
1,726,812
171,318
1,898,130
1,978,007
Accumulated depreciation
(777,603)
(96,044)
(873,647)
(894,825)
Total noncurrent assets
949,209
75,274
1,024,483
1,083,182
Total assets
2,188,706
1,081,903
115,730
3,386,339
3,595,434
Deferred Outflows of Resources
Deferred outflows of resources related to pensions
-
25,303
17,170
42,473
73,530
Deferred outflows of resources related to OPEB
981
728
1,709
-
Total deferred outflows of resources
-
26,284
17,898
44,182
73,530
Total assets and deferred outflows of resources
$
2,188,706
$
1,108,187
$ 133,628
$
3,430,521 $
3,668,964
Liabilities
Current liabilities
Accounts payable
$
5,024
$
101,090
$ 46,520
$
152,634 $
78,650
Salaries payable
406
27,128
16,702
44,236
31,279
Health care benefits payable
31,703
-
-
31,703
39,019
Interfund payable
-
79,877
79,877
-
Unpaid claims
201,608
-
-
201,608
170,124
Due to other governments
39
1,222
-
1,261
593
Compensated absences payable
-
22,559
15,523
38,082
30,599
Total current liabilities
238,780
151,999
158,622
549,401
350,264
Noncurrent liabilities
Compensated absences payable
-
11,057
6,707
17,764
13,771
Net pension liability
227,957
154,687
382,644
343,943
Total OPEB liability
9,167
6,800
15,967
11,771
Total noncurrent liabilities
-
248,181
168,194
416,375
369,485
Total liabilities
238,780
400,180
326,816
965,776
719,749
Deferred Inflows of Resources
Deferred inflows of resources related to pensions
-
42,712
28,984
71,696
85,287
Deferred inflows of resources related to OPEB
518
384
902
462
Total deferred inflows of resources
43,230
29,368
72,598
85,749
Net Position
Net investment in capital assets
-
949,209
75,274
1,024,483
1,083,182
Unrestricted
1,949,926
(284,432)
(297,830)
1,367,664
1,780,284
Total net position
1,949,926
664,777
(222,556)
2,392,147
2,863,466
Total liabilities, deferred inflows of
resources, and net position
$
2,188,706
$
1,108,187
$ 133,628
$
3,430,521 $
3,668,964
132
City of Cottage Grove
Combining Statement of Revenues, Expenses, and
Changes in Net Position - Internal Service Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Totals
Fleet
Self Insurance
Maintenance
Information
(700)
(710)
Services(720)
2019
2018
Operating Revenues
Charges for services
User fees
$ -
$ 1,185,847
$ 684,245
$ 1,870,092 $
1,648,281
Employee benefits
2,056,645
-
-
2,056,645
2,058,535
Insurance refunds and reimbursements
54,647
-
-
54,647
128,806
Total operating revenues
2,111,292
1,185,847
684,245
3,981,384
3,835,622
Operating Expenses
Operating and maintenance
Personal services
-
408,972
315,850
724,822
553,550
Contractual services
-
191,963
505,219
697,182
425,707
Commodities
-
635,749
82,128
717,877
780,533
Administrative and general
Personal insurance benefits
1,837,782
-
-
1,837,782
1,797,263
Contractual services
265,272
-
-
265,272
276,778
Claims
204,025
-
-
204,025
194,706
Depreciation
-
46,296
26,340
72,636
69,173
Total operating expenses
2,307,079
1,282,980
929,537
4,519,596
4,097,710
Operating loss
(195,787)
(97,133)
(245,292)
(538,212)
(262,088)
Nonoperating Revenues
Investment income
57,207
113
1,096
58,416
30,645
Miscellaneous
5,894
2,583
-
8,477
6,524
Total nonoperating revenues
63,101
2,696
1,096
66,893
37,169
Change in net position
(132,686)
(94,437)
(244,196)
(471,319)
(224,919)
Net Position
Beginning of year, as previously stated
2,082,612
759,214
21,640
2,863,466
3,096,682
Change in accounting principle
-
-
-
-
(8,297)
Beginning of year, as restated
2,082,612
759,214
21,640
2,863,466
3,088,385
End of year
$ 1,949,926
$ 664,777
$ (222,556)
$ 2,392,147
$ 2,863,466
133
City of Cottage Grove
Combining Statement of Cash Flows -
Internal Service Funds
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Totals
Fleet
Self Insurance
Maintenance
Information
(700)
(710)
Services (720)
2019
2018
Cash Flows - Operating Activities
Receipts from interfund services provided
$ 2,050,751
$ 1,185,567
$ 684,245
$ 3,920,563
$ 3,706,816
Receipts from insurance refunds
and reimbursements
54,647
-
-
54,647
128,806
Payments to suppliers
(431,242)
(764,486)
(570,099)
(1,765,827)
(1,782,415)
Payments to employees
(1,845,170)
(386,157)
(255,066)
(2,486,393)
(2,351,519)
Miscellaneous revenue
5,894
2,583
8,477
6,524
Net cash flows - operating activities
(165,120)
37,507
(140,920)
(268,533)
(291,788)
Cash Flows - Noncapital
Financing Activities
Advances to/from other funds (79,877) 79,877 -
Cash Flows - Capital and Related
Financing Activities
Acquisition of capital assets - (13,937) - (13,937) (89,023)
Cash Flows - Investing Activities
Interest and dividends received 57,207 113 1,096 58,416 30,645
Net change in cash and cash equivalents (187,790) 23,683 (59,947) (224,054) (350,166)
Cash and Cash Equivalents
January 1
2,040,696
13,132
59,947
2,113,775
2,463,941
December 31
$ 1,852,906 $
36,815
$
$ 1,889,721
$ 2, 113,775
Reconciliation of Operating Loss
to Net Cash Flows - Operating Activities
Operating loss
$ (195,787) $
(97,133)
$ (245,292)
$ (538,212)
$ (262,088)
Adjustments to reconcile operating
loss to net cash
flows - operating activities
Depreciation expense
-
46,296
26,340
72,636
69,173
Miscellaneous revenue
5,894
2,583
-
8,477
6,524
Pension expense
-
8,820
47,347
56,167
(4,685)
Receivables
(5,894)
(280)
-
(6,174)
-
Prepaid items
11,245
-
(19,217)
(7,972)
(89,813)
Inventory
-
20,365
-
20,365
(18,934)
Accounts payable
(4,713)
42,232
36,465
73,984
5,973
Unpaid claims
31,484
-
-
31,484
(1,628)
Due to other governmental units
39
629
-
668
(289)
Salaries payable
(72)
7,006
6,023
12,957
4,790
Health care benefits payable
(7,316)
-
-
(7,316)
7,137
Compensated absences payable
-
6,962
4,514
11,476
(8,162)
OPEB expense
-
27
2,900
2,927
214
Total adjustments
30,667
134,640
104,372
269,679
(29,700)
Net cash flows -operating activities
$ (165,120) $
37,507
$ (14Q920)
$ (268,533)
$ (291,788)
134
City of Cottage Grove
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
Established to account for the receipt and use of monies for economic development purposes.
135
City of Cottage Grove
Combining Balance Sheet - All Governmental Fund Types -
Economic Development Authority Component Unit
December 31, 2019
With Comparative Totals for December 31, 2018
Assets
Cash and investments
Accounts receivable
Prepaid items
Taxes receivable - delinquent
Loan receivable
Property held for resale
Total assets
Liabilities
Accounts payable
Salaries and benefits payable
Due to other governments
Deposits Payable
Total liabilities
Deferred inflows of resources
Unavailable revenue - property taxes
Fund balances
Nonspendable
Restricted
Total fund balances
Total liabilities, deferred inflows of
resources, and fund balances
Fund balance reported above
Other long-term assets, including property taxes receivable, are not availabl
to pay for current -period expenditures, and therefore, are deferred ii
the governmental funds.
Deferred outflows of resources and deferred inflows of resources are create,
as a result of various differences related to pensions that are not recognized
in the governmetnal funds.
Deferred inflows of resources related to pension,
Deferred outflows of resources related to pension,
Deferred inflows of resources related to OPEE
Deferred outflows of resources related to OPEE
Long-term liabilties, including bonds payable, compenstated absences, ne
pension liability, and other post employment benefits, are not due and payable
in the current period and therefore are not reported in the funds.
Net position of component unit
Economic
Development
Authority (285)
Totals
Economic Development Authority
Component Unit
2019 2018
$ -
$
- $
185,531
4,596
4,596
2,569
-
-
625
1,031
1,031
1,288
99,741
99,741
130,679
311,718
311,718
308,718
$ 417,086
$
417,086 $
629,410
23,899
23,899
20,042
12,121
12,121
10,518
140,667
140,667
156,039
10,000
10,000
-
186,687
186,687
186,599
1,031
1,031
1,288
-
-
625
229,368
229,368
440,898
229,368
229,368
441,523
$ 417,086
$
417,086 $
629,410
$
229,368
1,031
(22,822)
13,520
(291)
550
(135,649)
$
85,707
136
City of Cottage Grove
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances - All Governmental Fund Types -
Economic Development Authority Component Unit
For the Year Ended December 31, 2019
With Compartive Totals for the Year Ended December 31, 2018
Revenues
General property taxes
Charges for services
Investment earnings
Interest on loan to primary governmenl
Miscellaneous
Total revenues
Expenditures
Current
General government
Personal services
Commodities
Contractual services
Capital outlay
General government
Total expenditures
Excess of revenues over
(under) expenditures
Fund Balances
Beginning of year
End of year
Net decrease in fund balance reported above
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, 2018
At December 31, 2019
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.
Governmental funds recognize OPEB activity as expenditures at the time
of payment whereas the Statement of Activties factors in items related to
pensions on a full accrual perspective.
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
governmetnal funds:
Compensated absences:
At December 31, 2018
At December 31, 2019
Change in net position of component unit
Totals
Economic
Development
Authority (285) 2019 2018
$ 125,017
$ 125,017
$ 125,033
3,716,644
3,716,644
1,452,293
27,967
27,967
7,193
1,263
1,263
1,460
-
-
986
3,870,891
3,870,891
1,586,965
213,832
213,832
194,012
-
-
214
1,774,880
1,774,880
237,876
2,094,334
2,094,334
709,074
4,083,046
4,083,046
1,141,176
(212,155)
(212,155)
445,789
441,523
441,523
(4,266)
$ 229,368
$ 229,368
$ 441,523
$ (212,155)
(1,288)
1,031
(11,675)
(1,016)
5,513
(8,705)
$ (228,295)
137
%re Pride an4
Cottage
Grove
,?m5pefty Meet
138
SUPPLEMENTARY FINANCIAL INFORMATION
139
City of Cottage Grove
Combined Schedule of Bonded Indebtedness
December 31, 2019
Interest Rate
Dated
Final Payment
Primary Government
General Obligation Bonds
$1,405,000 Tax Increment Bonds of 2004A
3.00%-4.65%
7/l/2004
2/l/2024
$1,405,000 Tax Increament Refunding Bonds of 2014A
2.00%-2.50%
5/29/2014
2/l/2021
$4,660,000 G.O. Refunding Bonds of 2016A
2.00%-3.00%
1/28/2016
2/l/2027
$9,155,000 G.O. CIP Bonds of 2017A
2.50%-3.25%
5/11/2017
2/1/2038
$4,090,000 G.O. CIP Bonds of 2019A
3.00%-4.00%
2/14/2019
2/l/2040
Total General Obligation Bonds
Equipment Certificate
$2,845,000 Equipment Certificate of 2019B
3.00%
2/14/2019
2/l/2029
Special Assessment Debt
Improvement Bonds of 2012A
0.30%-2.20%
3/13/2012
2/l/2027
Improvement Bonds of 2013A
3.00%-3.50%
9/26/2013
2/l/2029
Improvement Bonds of 2015A
2.50%-3.00%
5/27/2015
2/l/2031
Improvement Bonds of 2016B
2.00%-2.10%
11/16/2016
2/l/2033
Improvement Bonds of 2018A
3.00%
6/26/2018
2/l/2035
Total Special Assessment Debt with
Governmental Commitment
Total Bonded Indebtedness - Primary Government
Total Bonded Indebtedness - Reporting Entity
140
Authorized
Principal due
Interest due
and Issued
Retired
Outstanding
in 2020
in 2020
$ 1,405,000
$ 485,000
$ 920,000
$ 35,000
$ 41,240
1,405,000
965,000
440,000
240,000
7,580
4,660,000
1,780,000
2,880,000
330,000
70,050
9,155,000
345,000
8,810,000
355,000
250,100
4,090,000
-
4,090,000
-
202,579
20,715,000
3,575,000
17,140,000
960,000
571,549
2,845,000
-
2,845,000
250,000
121,193
1,865,000
845,000
1,020,000
130,000
18,002
7,345,000
2,040,000
5,305,000
465,000
159,840
5,700,000
1,040,000
4,660,000
355,000
126,410
4,275,000
425,000
3,850,000
275,000
74,670
7,620,000
-
7,620,000
-
228,600
26,805,000
4,350,000
22,455,000
1,225,000
607,522
50,365,000
7,925,000
42,440,000
2,435,000
1,300,264
$ 50,365,000
$ 7,925,000
$ 42,440,000
$ 2,435,000
$ 1,300,264
141
City of Cottage Grove
Debt Service Payments to Maturity
December 31, 2019
Primary Government
General Obligation
Bonds
Tax Increment
Revenue
Bonds
$1,405,000 Tax
$4,660,000
$1,405,000
Tax
Increment
G.O.
$9,155,000
$4,090,000
Increment
Refunding
Total Tax
Refunding
G.O. CIP
G.O. CIP
Total General
Bonds of
Bonds of
Increment
Bonds of
Bonds of
Bonds of
Total Revenue
Obligation
2004A
2014A
Bonds
2016A
2017A
2019A
Bonds
Bonds
Bonds payable
$
920,000
$ 440,000
$
1,360,000
$ 2,880,000
$ 8,810,000
$ 4,090,000
$
15,780,000
$ 17,140,000
Future interest payable
138,705
10,080
148,785
281,450
2,658,400
1,678,818
4,618,668
4,487,812
Totals
$
1,058,705
$ 450,080
$
1,508,785
$ 3,161,450
$ 11,468,400
$ 5,768,818
$
20,398,668
$ 21,627,812
Payments to maturity
2020
$
76,240
$ 247,580
$
323,820
$ 400,050
$ 605,100
$ 202,578
$
1,207,728
$ 1,531,548
2021
104,040
202,500
306,540
400,000
604,299
280,484
1,284,783
1,591,323
2022
286,872
-
286,872
399,650
603,200
279,584
1,282,434
1,569,306
2023
294,810
-
294,810
394,075
606,725
278,484
1,279,284
1,574,094
2024
296,743
-
296,743
393,275
604,875
277,184
1,275,334
1,572,077
2025
-
-
-
394,050
602,725
280,584
1,277,359
1,277,359
2026
-
-
-
391,500
605,200
278,684
1,275,384
1,275,384
2027
-
-
-
388,850
603,388
276,584
1,268,822
1,268,822
2028
-
-
-
-
607,325
280,134
887,459
887,459
2029
-
-
-
605,950
279,359
885,309
885,309
2030
-
-
-
603,738
278,434
882,172
882,172
2031
-
-
-
605,607
277,359
882,966
882,966
2032
-
-
-
602,131
276,134
878,265
878,265
2033
-
-
-
602,675
279,684
882,359
882,359
2034
-
-
-
-
602,151
278,009
880,160
880,160
2035
-
-
-
-
601,175
276,040
877,215
877,215
2036
-
-
-
-
599,750
278,486
878,236
878,236
2037
-
-
-
-
602,799
275,484
878,283
878,283
2038
-
-
-
-
599,587
277,234
876,821
876,821
2039
-
-
-
-
-
278,654
278,654
278,654
2040
-
-
-
-
-
279,641
Totals $
1,058,705
$ 450,080
$
1,508,785
$ 3,161,450
$ 11,468,400
$ 5,768,818
$
20,119,027
$ 21,627,812
Primary Government
Equipment Special Assessment Bonds
Certificate Pavement Management
$2,845,000
Equipment
$1,865,000
$7,345,000
$5,700,000
$4,275,000
$7,620,000
Total Pavement
Certificate of
Bonds of
Bonds of
Bonds of
Bonds of
Bonds of
Management
2019B
2012A
2013A
2015A
2016B
2018A
Bonds
$ 2,845,000
$
1,020,000
$ 5,305,000
$ 4,660,000
$ 3,850,000
$ 7,620,000
$ 22,455,000
486,968
78,985
901,086
789,760
530,370
2,068,500
4,368,701
$ 3,331,968
$
1,098,985
$ 6,206,086
$ 5,449,760
$ 4,380,370
$ 9,688,500
$ 26,823,701
$ 371,193
$
148,002
$ 624,840
$ 481,410
$ 349,670
$ 228,600
$ 1,832,522
329,025
146,118
620,740
480,610
344,170
632,450
2,224,088
331,225
144,005
621,265
474,585
338,670
630,000
2,208,525
328,200
146,685
621,340
473,335
343,070
632,175
2,216,605
329,950
149,070
620,965
461,935
337,370
633,900
2,203,240
326,475
146,200
620,140
460,385
331,670
630,250
2,188,645
327,775
148,135
618,590
459,535
325,970
631,225
2,183,455
328,775
70,770
620,944
449,535
325,220
631,750
2,098,219
329,475
-
616,587
443,966
319,420
631,825
2,011,798
329,875
-
620,675
442,691
313,620
631,450
2,008,436
-
-
-
431,383
312,770
630,625
1,374,778
-
-
-
390,390
311,820
629,350
1,331,560
-
-
-
-
305,670
627,625
933,295
-
-
-
-
121,260
630,375
751,635
-
-
-
-
-
627,600
627,600
-
-
-
-
-
629,300
629,300
$ 3,331,968
$
1,098,985
$ 6,206,086
$ 5,449,760
$ 4,380,370
$ 9,688,500
$ 26,823,701
%re po an6
Cottage
Grove
V,iyrity Meet
144
City of Cottage Grove
Deferred Tax Levies
December 31, 2019
Special Assessment Bonds
Pavement Management
$1,865,000
$7,345,000
$5,700,000
$4,275,000
$7,620,000
Total Special
Year of Tax
Bonds of
Bonds of
Bonds of
Bonds of
Bonds of
Assessment
Levy/Collection
2012A
2013A
2015A
2016B
2018A
Bonds
2019/20
$ 84,753
$ 410,363
$ 321,054
$ 194,579
$ 383,494
$ 1,394,243
2020/21
82,638
411,150
319,863
192,598
381,079
1,387,328
2021/22
85,567
411,466
323,765
201,117
383,599
1,405,514
2022/23
88,266
411,308
316,853
198,926
385,646
1,400,999
2023/24
85,326
410,678
320,440
196,736
381,971
1,395,151
2024/25
87,489
409,576
323,712
194,545
383,231
1,398,553
2025/26
42,424
412,673
318,269
197,604
384,019
1,354,989
2026/27
-
409,271
318,076
195,308
384,334
1,306,989
2027/28
-
414,022
321,939
193,013
384,176
1,313,150
2028/29
-
-
315,014
195,967
383,546
894,527
2029/30
-
-
328,911
198,816
382,444
910,171
2030/31
-
-
-
196,310
380,868
577,178
2031/32
-
-
-
70,082
384,071
454,153
2032/33
-
-
-
-
381,393
381,393
2033/34
-
-
-
-
383,493
383,493
Totals
$ 556,463
$ 3,700,507
$ 3,527,896
$ 2,425,601
$ 5,747,364
$ 15,957,831
145
City of Cottage Grove
Subcombining Balance Sheet -
Pavement Management Debt Service Schedule
December 31, 2019
With Comparative Totals for December 31, 2018
Assets
Cash and investments
Taxes receivable - delinquent
Special assessments receivable
Deferred
Delinquent
Special deferred
Total assets
Deferred Inflows of Resources
Unavailable revenue - property taxes
Unavailable revenue - special assessments
Total deferred inflows of resources
Fund Balances
Restricted
G.O.
G.O.
G.O.
G.O.
Improvement
Improvement
Improvement
Improvement
Bonds 2012A
Bonds 2013A
Bonds 2015A
Bonds 2016B
(490)
(491)
(492)
(493)
$ 296,544
$ 556,245
$ 982,402
$ 380,383
624
2,452
1,215
501
167,070
780,825
937,661
682,351
-
2,795
1,603
372
-
5,378
5,584
8,764
$ 464,238
S 1,347,695
$ 1,928,465
$ 1,072,371
624
2,452
1,215
501
167,070
788,998
944,848
691,487
167,694
791,450
946,063
691,988
296,544
556,245
982,402
380,383
Total liabilities, deferred inflows of
resources, and fund balances $ 464,238 $ 1,347,695 $ 1,928,465 $ 1,072,371
Totals
Pavement Management Debt
Service Schedule
2019 2018
$ 2,215,574 $ 2,528,973
4,792 5,604
2,567,907 3,039,809
4,770 8,613
19,726 19,112
$ 4,812,769 $ 5,602,111
4,792 5,604
2,592,403 3,067,534
2,597,195 3,073,138
2,215,574 2,528,973
$ 4,812,769 $ 5,602,111
147
City of Cottage Grove
Subcombining Statement of Revenues,
Expenditures, and Changes in Fund Balances -
Pavement Management Debt Service Schedule
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
G.O.
G.O.
G.O.
Improvement
Improvement
Improvement
Bonds 2012A
Bonds 2013A
Bonds 2015A
(490)
(491)
(492)
Revenues
General property taxes
$ 70,045
$ 300,004
$ 199,659
Special assessments
53,499
170,694
256,327
Investment earnings
5,884
7,985
19,078
Total revenues
129,428
478,683
475,064
Expenditures
Current
General government
600
1,588
1,893
Debt service
Principal
125,000
450,000
355,000
Interest and other charges
20,075
174,040
137,535
Total expenditures
145,675
625,628
494,428
Excess of revenues
under expenditures
(16,247)
(146,945)
(19,364)
Other Financing Sources
Transfers in
-
-
-
Net change in fund balances
Fund Balances
Beginning of year
End of year
(16,247) (146,945) (19,364)
312,791 703,190 1,001,766
$ 296,544 $ 556,245 $ 982,402
148
G.O.
Improvement
Bonds 2016B
(493)
Totals
Pavement Management Debt
Service Schedule
2019 2018
$ 99,767 $ 669,475 $ 743,165
119,207 599,727 763,887
7,479 40,426 24,069
226,453 1,309,628 1,531,121
1,651 5,732 12,232
275,000 1,205,000 2,760,000
80,645 412,295 476,203
357,296 1,623,027 3,248,435
(130,843) (313,399) (1,717,314)
1,159,367
(130,843) (313,399) (557,947)
511,226 2,528,973 3,086,920
$ 380,383 $ 2,215,574 $ 2,528,973
149
Assets
Cash and investments
Interfund receivable
Taxes receivable - delinquent
Total assets
Liabilities
Accounts payable
Interfund payable
Interfund loan payable
Total liabilities
Deferred Inflows of Resources
Unavailable revenue - tax increment
Fund Balances
Restricted
Unassigned
Total fund balances
Total liabilities, deferred
inflows of resources, and
fund balances
City of Cottage Grove
Subcombining Balance Sheet -
Tax Increment Construction Revolving Schedule
December 31, 2019
With Comparative Totals for December 31, 2018
TIF 1-12 (532,
TIF 1-8 (533) 534) TIF 1-15 (529) TIF 1-16 (528)
$ 403,909 $ 855,294 $ 14,775 $ 763
- 2,802 - -
$ 403,909 $ 858,096 $ 14,775 $ 763
- 1,114 - -
- - 425,261 250,187
1,114 425,261 250,187
2,802
403,909 854,180 - -
- - (410,486) (249,424)
403,909 854,180 (410,486) (249,424)
$ 403,909 $ 858,096 $ 14,775 $ 763
150
Totals
TIF Revolving Capital
TIF 1-17 Reconciliation Project Schedule
Dominium to Nonmajor
(540) TIF 1- 18 (542) Fund 2019 2018
$ 27,235 $ - $ - $ 1,301,976 $ 926,057
284 - (284) - -
- - - 2,802 519
$ 27,519 $ - $ (284) $ 1,304,778 $ 926,576
- - - 1,114 -
- 284 (284) - -
33,908 20,476 - 729,832 817,232
33,908 20,760 (284) 730,946 817,232
- 2,802
(687,059) 571,030 108,825
(6,389) (20,760) 687,059 - -
(6,389) (20,760) - 571,030 108,825
$ 27,519 $ - $ (284) $ 1,304,778 $ 926,576
151
City of Cottage Grove
Subcombining Schedule of Revenues,
Expenditures, and Changes in Fund Balances -
Tax Increment Construction Revolving Schedule
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Revenues
Tax increment collections
Investment earnings
Miscellaneous
Total revenues
Expenditures
Current
Economic development
Debt service
Interest and other charges
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources
Transfers in
Net change in fund balances
Fund Balances
Beginning of year
End of year
TIF 1-12 (532,
TIF 1-8 (533) 534) TIF 1-15 (529) TIF 1-16 (528)
$ - $ 497,537 $ 71,124 $ 33,167
12,205 946 268
509,742 72,070 33,435
161,053 340 380
- 14,474 8,247
161,053 14,814 8,627
348,689 57,256 24,808
- 348,689 57,256 24,808
403,909 505,491 (467,742) (274,232)
$ 403,909 $ 854,180 $ (410,486) $ (249,424)
152
Totals
TIF Revolving Capital
Project Schedule
TIF 1-17
Dominium
(540) TIF 1- 18 (542) 2019 2018
$ 163,514 $ 16 $ 765,358 $ 464,475
563 - 13,982 6,497
- - - 5,000
164,077 16 779,340 475,972
131,159 300 293,232 194,029
1,182 - 23,903 26,474
132,341 300 317,135 220,503
31,736 (284)
31,736 (284)
462,205 255,469
- 234,655
462,205 490,124
(38,125) (20,476) 108,825 (381,299)
$ (6,389) $ (20,760) $ 571,030 $ 108,825
153
Assets
Cash and investments
Liabilities
Accounts payable
Interfund loan payable
Total liabilities
Fund Balances
Restricted
Unassigned
Total fund balances
Total liabilities and
fund balances
City of Cottage Grove
Subcombining Balance Sheet -
TIF Debt Service Revolving Schedule
December 31, 2019
With Comparative Totals for December 31, 2018
Totals
TIF Debt Service
Revolving Schedule
2014A Taxable
Tax Increment
2014A Exempt Refunding
Increment Bonds TIF 1-12 Reconciliation
Bonds TIF 1-12 (341) to Nonmajor
(338) Fund 2019 2018
$ 3,891 $ 2,599 $ - $ 6,490 $ 12,651
$ 6,210
- 30,032 - 30,032 20,000
30,032 - 30,032 26,210
3,891 - (3,891) - -
- (27,433) 3,891 (23,542) (13,559)
3,891 (27,433) - (23,542) (13,559)
$ 3,891 $ 2,599 $ - $ 6,490 $ 12,651
154
City of Cottage Grove
Subcombining Statement of Revenues,
Expenditures, and Changes in Fund Balances -
TIF Debt Service Revolving Schedule
For the Year Ended December 31, 2019
With Comparative Totals for the Year Ended December 31, 2018
Revenues
Tax increment collections
Investment earnings
Miscellaneous
Total revenues
Expenditures
Current
Economic development
Debt service
Principal retirement
Interest and other charges
Total expenditures
Excess of revenues
under expenditures
Fund Balances
Beginning of year
End of year
Totals
TIF Debt Service
Revolving Schedule
2004A Tax 2014A Taxable
Exempt Tax Increment
Increment Refunding
Bonds TIF 1- Bonds TIF 1-
12 (338) 12 (341) 2019 2018
$ 85,000 $ 235,000 $ 320,000 $ 305,000
53 26 79 -
- - - 10,000
85,053 235,026 320,079 315,000
4,020
10,852
14,872
30,140
35,000
225,000
260,000
240,000
42,780
12,410
55,190
61,030
81,800
248,262
330,062
331,170
3,253
(13,236)
(9,983)
(16,170)
638
(14,197)
(13,559)
2,611
$ 3,891 $
(27,433) $
(23,542) $
(13,559)
155
%re po an6
Cottage
Grove
V,iyrity Meet
156
STATISTICAL SECTION (UNAUDITED)
157
City of Cottage Grove
Statistical Section (Unaudited)
This part of the City of Cottage Grove' comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the City's overall financial health.
Financial Trends
These schedules contain trend information to help the reader understand how the government's
financial performance and well-being have changed over time.
Table 1 — Net Position by Component
Table 2 — Changes in Net Position
Table 3 — Fund Balances of Governmental Funds
Table 4 — Changes in Fund Balances of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the government's most significant local
revenue source, property taxes.
Table 5 — Assessed and Estimated Actual Value of Taxable Property
Table 6 — Property Tax Rates Direct and Overlapping Governments
Table 7 — Principal Property Taxpayers
Table 8 — Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the government's
current level of outstanding debt and the government's ability to issue additional debt in the future.
Table 9 — Ratios of Outstanding Debt by Type
Table 10 — Ratios of General Bonded Debt Outstanding
Table 11 — Direct and Overlapping Governmental Activities Debt
Table 12 — Legal Debt Margin Information
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the government's financial activities take place.
Table 13 — Demographic and Economic Statistics
Table 14 — Principal Employers
158
City of Cottage Grove
Statistical Section (Unaudited) (Continued)
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the
information in the government's financial report relates to the services the government provides and
activities itperforms.
Table 15 — Full-time Equivalent City Government Employees by Function
Table 16 — Operating Indicators by Function/Program
Table 17 — Capital Asset Statistics by Function/Program
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
159
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Restricted
Unrestricted
Total business -type activities net position
Primary Government
Net investment in capital assets
Restricted
Unrestricted
Total primary government net position
City of Cottage Grove, Minnesota
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Years
2010 2011 2012 2013
$
94,794,079
$
109,696,916
$
120,412,875
$
124,156,059
5,841,563
4,282,305
4,210,913
7,187,948
45,412,895
34,625,010
25,024,447
25,908,617
$
146,048,537
$
148,604,231
$
149,648,235
$
157,252,624
$
53,870,041
$
53,664,161
$
53,225,445
$
51,453,195
325,685
325,460
-
-
12,829,661
13,236,680
14,645,490
16,792,024
$
67,025,387
$
67,226,301
$
67,870,935
$
68,245,219
$
148,664,120
$
163,361,077
$
173,638,320
$
175,609,254
6,167,248
4,607,765
4,210,913
7,187,948
58,242,556
47,861,690
39,669,937
42,700,641
$
213,073,924
$
215,830,532
$
217,519,170
$
225,497,843
160
Table 1
Fiscal Years
2014 2015 2016 2017 2018 2019
$ 127,260,042
$
125,562,970
$
132,834,867
$
140,298,832
$
152,256,234
$
174,171,247
6,971,432
8,766,706
7,609,138
2,855,507
6,177,599
8,500,720
28,277,397
24,285,174
19,091,443
24,845,782
21,252,792
21,396,126
$ 162,508,871
$
158,614,850
$
159,535,448
$
168,000,121
$
179,686,625
$
204,068,093
$ 54,432,059
$
54,202,710
$
54,063,470
$
56,060,163
$
63,822,257
$
70,373,534
15, 896,363
13,980,970
13,628,016
11, 528, 841
11,707,720
12,742,735
$ 70,328,422
$
68,183,680
$
67,691,486
$
67,589,004
$
75,529,977
$
83,116,269
$ 181,692,101
$
179,765,680
$
186,898,337
$
196,358,995
$
216,078,491
$
244,544,781
6,971,432
8,766,706
7,609,138
2,855,507
6,177,599
8,500,720
44,173,760
38,266,144
32,719,459
36,374,623
32,960,512
34,138,861
$ 232,837,293
$
226,798,530
$
227,226,934
$
235,589,125
$
255,216,602
$
287,184,362
161
Expenses
Governmental activities
General government
Regular operations
Community development
Economic development
Public safety
Public works
Culture and recreation
Interest on long-term debt
Total governmental activities expenses
Business -type activities
Golf course
Street lights
Cottage Grove EMS
Water operating
Sewer operating
Total business -type activities
Total primary government expenses
Program Revenues
Governmental activities
Charges for services
General government
Regular operations
Community development
Economic development
Public safety
Public works
Regular operations
Culture and recreation
Operating grants and contributions
Capital grants and contributions
Total governmental activities
program revenues
City of Cottage Grove, Minnesota
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Years
2010 2011 2012 2013
$ 2,125,407
$ 2,985,571
$ 2,997,825
1,140,456
-
-
-
1,110,214
362,009
5,888,224
6,252,530
7,069,301
5,911,193
6,688,115
6,609,111
2,992,620
2,948,075
3,059,273
1,056,110
846,258
827,645
19,114,010
20,830,763
20,925,164
1,447,849
1,504,006
1,614,321
534,206
625,312
659,869
975,560
1,038,972
1,109,809
1,891,752
1,901,985
2,049,877
2,150,795
2,223,749
2,242,778
7,000,162
7,294,024
7,676,654
$ 26,114,172
$ 28,124,787
$ 28,601,818
$ 2,270,332
903,180
61,302
6,949,225
8,121,230
4,768,181
976,891
24,050,341
742,410
1,322,635
2,341,555
2,278,958
6,685,558
$ 30,735,899
$ 224,719 $
764,185 $
883,272 $
238,721
944,278
-
-
1,115,203
-
175
210
7,626
396,887
444,039
429,646
353,130
710,341
845,315
880,095
797,432
1,178,977
1,024,516
1,026,685
2,413,744
1,210,249
1,084,928
1,075,529
1,211,506
2,464,782
5,118,546
3,064,292
10,370,972
7,130,233
9,281,704
7,359,729
16,508,334
162
Table 2
Fiscal Years
2014 2015 2016 2017 2018 2019
$ 2,229,518 $
2,346,805
$ 3,450,479 $
2,398,669
$ 2,573,693
$ 2,704,159
946,001
1,086,197
1,173,071
1,527,549
1,626,960
1,524,566
545,646
1,460,114
2,257,548
740,668
275,927
492,107
7,212,998
7,662,393
10,153,726
9,308,430
9,353,309
9,272,317
7,599,182
7,426,045
9,623,335
8,413,073
8,559,929
10,062,896
5,119,093
5,153,844
5,340,558
5,137,951
5,035,903
5,566,175
808,642
1,029,228
875,642
962,772
1,037,986
1,286,632
24,461,080
26,164,626
32,874,359
28,489,112
28,463,707
30,908,852
867,690
746,794
746,005
882,660
991,041
1,073,480
1,412,855
1,507,766
1,688,041
1,571,044
1,605,779
1,750,771
2,216,819
2,438,166
2,370,466
2,789,792
2,980,080
2,904,174
2,428,944
2,448,283
2,727,188
2,879,119
2,881,446
3,139,150
6,926,308
7,141,009
7,531,700
8,122,615
8,458,346
8,867,575
$ 31,387,388 $
33,305,635
$ 40,406,059 $
36,611,727
$ 36,922,053
$ 39,776,427
$ 138,768
$ 117,636
$ 665,193 $
108,808
$ 319,999
$ 196,283
989,140
1,527,836
1,660,365
2,240,628
1,758,096
2,424,030
1,771
3,467
5,210
210
210
572,983
325,368
394,574
431,862
363,782
360,609
409,463
1,010,695
971,599
975,532
1,099,690
3,932,082
3,106,452
2,448,968
3,091,072
2,725,288
2,682,090
3,376,799
3,094,394
1,545,268
1,237,805
1,676,805
1,408,099
3,710,686
2,231,407
9,401,775
5,861,631
10,284,047
13,805,696
13,899,381
29,783,591
15,861,753
13,205,620
18,424,302
21,709,003
27,357,862
41,818,603
163
Program Revenues (continued)
Business -type activities
Charges for services
Golf course
Street lights
Cottage Grove EMS
Water operating
Sewer operating
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
Net (Expense)/Revenue
Governmental activities
Business -type activities
Total primary government net expense
General Revenues and Other Changes in Net Position
Governmental activities
Property taxes
Franchise taxes
Aggregate taxes
Tax increment collections
Grants and contributions not restricted to
specific programs
Unrestricted investment earnings (loss)
Gain on sale of capital assets
Transfers
Special item -golf course loan forgiveness
Total governmental activities
Business -type activities
Grants and contributions not restricted to
specific programs
Unrestricted investment earnings (loss)
Gain on sale of capital assets
Transfers
Total business -type activities
Total primary government
Change in Net Position
Governmental activities
Business -type activities
Total primary government
City of Cottage Grove, Minnesota
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
$ 1,583,098
$
1,399,204
$
1,566,035
$
-
494,162
532,607
540,696
580,837
1,068,953
1,114,226
1,528,756
1,569,017
2,161,076
2,249,926
2,773,937
2,369,570
2,202,013
2,208,014
2,207,363
2,175,479
165,266
267,465
-
1,051,532
7,674,568
7,771,442
8,616,787
7,746,435
$ 14,804,801
$
17,053,146
$
15,976,516
$
24,254,769
$ (11,983,777)
$
(11,549,059)
$
(13,565,435)
$
(7,542,007)
674,406
477,418
940,133
1,060,877
$ (11,309,371)
$
(11,071,641)
$
(12,625,302)
$
(6,481,130)
$ 11,427,029
$
11,494,758
$
12,330,135
$
12,096,046
517,391
535,188
537,682
540,767
30,554
26,131
26,180
26,135
1,253,414
946,603
892,438
939,314
27,050
26,146
29,742
29,060
502,721
624,785
368,821
(149,614)
23,872
12,342
10,546
3,997
428,270
438,800
413,895
375,266
-
-
-
1,020,000
14,210,301
14,104,753
14,609,439
14,880,971
119,772
162,296
118,396
(45,902)
(428,270)
(438,800)
(413,895)
(375,266)
(308,498)
(276,504)
(295,499)
(421,168)
$ 13,901,803
$
13,828,249
$
14,313,940
$
14,459,803
$ 2,226,524
$
2,555,694
$
1,044,004
$
7,338,964
365,908
200,914
644,634
639,709
$ 2,592,432
$
2,756,608
$
1,688,638
$
7,978,673
164
Table 2 (Continued)
Fiscal Year
2014 2015 2016 2017 2018 2019
658,810
549,005
530,905
685,560
821,512
825,587
1,626,320
1,431,007
1,766,236
1,510,101
2,006,555
2,066,733
1,868,942
1,840,088
1,817,862
1,664,292
2,144,652
2,537,654
2,151,756
2,310,624
2,291,038
2,294,714
2,685,608
3,064,703
-
-
-
-
2,350
23,409
1,783,762
361,762
196,671
441,738
4,488,437
2,700,615
8,089,590
6,492,486
6,602,712
6,596,405
12,149,114
11,218,701
$ 23,951,343
$
19,698,106
$
25,027,014
$
28,305,408
$
39,506,976
$
53,037,304
$ (8,599,327)
$
(12,959,006)
$
(14,450,057)
$
(6,780,109)
$
(1,105,845)
$
10,909,751
1,163,282
(648,523)
(928,988)
(1,526,210)
3,690,768
2,351,126
$ (7,436,045)
$
(13,607,529)
$
(15,379,045)
$
(8,306,319)
$
2,584,923
$
13,260,877
$ 12,616,267
$
13,394,585
$
13,956,582
$
14,483,061
$
15,171,020
$
15,608,602
542,689
526,643
516,931
560,492
567,875
583,715
26,236
37,133
39,748
28,442
20,791
22,250
711,628
710,541
776,061
1,002,046
769,475
1,085,358
83,682
99,137
126,058
126,670
-
113,435
551,910
357,170
285,494
330,903
519,675
982,812
43,904
(15,157)
-
-
71,631
49,186
(720,742)
613,878
(330,219)
(1,286,832)
(4,126,962)
(4,973,641)
13, 855,574
15,723,930
15,370,655
15,244,782
12,993,505
13,471,717
-
-
7,736
17,161
-
-
199,179
137,896
96,851
119,735
152,466
261,525
-
-
1,988
-
-
-
720,742
(613,878)
330,219
1,286,832
4,126,962
4,973,641
919,921
(475,982)
436,794
1,423,728
4,279,428
5,235,166
$ 14,775,495
$
15,247,948
$
15,807,449
$
16,668,510
$
17,272,933
$
18,706,883
$ 5,256,247
$
2,764,924
$
920,598
$
8,464,673
$
11,887,660
$
24,381,468
2,083,203
(1,124,505)
(492,194)
(102,482)
7,970,196
7,586,292
$ 7,339,450
$
1,640,419
$
428,404
$
8,362,191
$
19,857,856
$
31,967,760
165
General Fund
Reserved
Unreserved
Nonspendable
Prepaid items
Assigned
Unassigned
Total general fund
All other Governmental Funds
Reserved reported in
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Unreserved reported in
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Nonspendable
Prepaid items
Inventory
Restricted
Committed
Assigned
Unassigned
Total all other governmental funds
Total all funds
City of Cottage Grove, Minnesota
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
$
33,905
$
-
$
-
$
-
9,105,235
-
-
-
-
24,382
5,764
13,175
-
1,611,427
1,695,203
1,443,243
-
7,178,108
7,449,565
7,775,548
$
9,139,140
$
8,813,917
$
9,150,532
$
9,231,966
$
1,273
$
-
$
-
$
-
8,716,563
-
-
-
267,498
-
-
-
6,366,077
-
-
-
4,726,677
-
-
-
14,244,338
-
-
-
-
938
938
10,229
-
-
-
31,617
-
3,445,145
2,997,220
4,347,850
-
833,500
560,321
416,027
-
21,540,577
20,240,161
22,936,733
-
(2,174,299)
(9,521,907)
(10,379,965)
$
34,322,426
$
23,645,861
$
14,276,733
$
17,362,491
$
43,461,566
$
32,459,778
$
23,427,265
$
26,594,457
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
2014 2015 2016 2017 2018 2019
18,019
15,383
11,222
8,750
47,532
33,719
1,380,698
1,408,357
1,393,200
1,589,169
1,383,065
1,432,671
8,113,424
8,829,697
9,036,425
9,233,073
9,814,949
10,224,988
$ 9,512,141
$ 10,253,437
$ 10,440,847 $
10,830,992
$ 11,245,546 $
11,691,378
8,529
7,343
5,723
2,827
10,889
14,933
24,434
20,696
28,750
30,625
30,297
25,601
4,478,812
4,857,365
3,200,692
3,306,203
3,515,300
3,876,020
329,841
394,204
731,090
947,486
1,383,402
1,736,590
25,591,181
26,322,717
23,020,349
21,301,562
19,445,494
19,583,736
(10,958,389)
(9,122,473)
(10,240,496)
(5,511,868)
(5,804,056)
(7,464,138)
$ 19,474,408 $
22,479,852
$ 16,746,108 $
20,076,835 $
18,581,326 $
17,772,742
$ 28,986,549 $
32,733,289
$ 27,186,955 $
30,907,827 $
29,826,872 $
29,464,120
Table 3
167
City of Cottage Grove, Minnesota
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Revenues
General property taxes
Othertaxes
Special assessments
Licenses and permits
Direct charges to developers
Intergovernmental
Charges for services
Rent
Fines and forfeits
Investment earnings (loss)
Interest on interfund loan
Connection charges
Park dedication fees
Miscellaneous
Total revenues
Expenditures
Current
General government
Community development
Economic development
Public safety
Public works
Culture and recreation
Capital outlay
Debt Service
Principal retirement
Capital lease payment
Interest and fiscal charges
Total expenditures
Excess revenues over (under) expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Bonds issued
Premium on debt issued
Discount on debt Issued
Proceeds from sale of capital assets
Total other financing sources (uses)
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
Fiscal Year
2010
2011
2012
2013
$ 11,456,224
$ 11,539,640
$ 12,367,978 $
12,081,764
1,801,359
1,507,922
1,456,300
1,513,749
2,899,954
1,875,486
1,153,019
1,575,736
753,468
593,272
831,687
860,954
50,047
101,913
16,555
2,106,723
1,166,785
3,879,411
2,684,040
4,642,768
2,668,428
2,494,018
2,467,187
4,023,844
201,559
246,753
198,022
188,657
350,673
448,782
196,879
(173,267)
130,000
144,500
155,301
47,025
439,238
322,009
282,265
805,261
145,640
62,198
41,990
252,386
609,809
595,218
601,255
705,409
22,673,184
23,811,122
22,452,478
28,631,009
2,071,715
2,942,106
2,689,156
2,071,272
1,132,127
-
-
892,699
299,614
793,046
491,040
151,562
5,493,307
5,827,572
6,151,677
6,297,323
3,337,054
3,774,559
4,059,582
4,271,651
2,330,909
2,326,733
2,387,655
3,954,968
3,3 83,343
10,877,928
15,420,808
12,274,561
1,625,000
7,135,000
1,335,000
950,000
239,189
245,000
250,000
293,953
1,101,145
906,910
849,046
769,129
21,013,403
34,828,854
33,633,964
31,927,118
1,659,781
(11,017,732)
(11,181,486)
(3,296,109)
1,233,938
3,052,403
2,171,149
759,446
(1,246,180)
(3,048,803)
(1,881,870)
(638,374)
-
-
1,865,000
7,345,000
-
-
-
211,507
-
-
(15,852)
-
71,506
12,344
10,546
27,195
59,264
15,944
2,148,973
7,704,774
$ 1,719,045
$ (11,001,788)
$ (9,032,513) $
4,408,665
16.8%
34.6%
13.4%
10.2%
Note: (1) Community Development is in General Government in 2011 & 2012
•i
Fiscal Year
2014 2015 2016
2017 2018 2019
$ 12,687,917 $
13,465,987
$ 13,957,128 $
14,649,224 $
15,166,368 $
15,631,133
1,292,229
1,274,317
1,332,740
1,402,475
1,358,141
1,691,323
1,326,017
1,499,796
2,004,196
2,715,466
2,482,866
4,282,152
904,400
1,305,442
1,323,680
1,922,934
1,773,543
2,277,642
661,861
307,971
277,860
273,200
132,385
299,683
3,932,021
2,415,754
5,642,451
8,077,051
5,283,405
17,716,725
3,572,351
3,808,618
4,061,301
4,140,390
4,903,311
4,988,080
435,975
450,428
464,078
435,688
486,270
474,994
171,317
228,642
236,260
184,942
208,744
220,024
452,293
262,799
219,963
310,579
460,856
924,396
59,066
74,340
52,040
52,206
26,474
23,903
841,434
318,092
649,489
2,050,958
2,776,937
1,932,844
63,595
9,010
212,865
526,936
853,659
472,500
1,005,867
1,138,274
1,864,861
1,982,338
2,024,992
1,870,544
27,406,343
26,559,470
32,298,912
38,724,387
37,937,951
52,805,943
2,025,709
2,155,327
3,143,136
2,200,031
2,453,986
2,488,722
919,126
1,058,537
1,117,760
1,304,601
1,594,534
1,486,081 (1)
541,838
1,456,306
2,236,464
695,356
230,615
447,061
6,484,552
6,751,804
7,447,058
7,798,262
8,660,273
8,535,996
4,306,068
4,344,837
4,133,659
3,900,347
4,066,609
4,769,732
4,169,469
4,154,992
4,438,628
4,303,051
4,627,375
5,013,805
5,028,422
7,036,802
17,201,219
22,426,545
20,919,610
34,786,137
2,470,000
1,320,000
6,570,000
1,915,000
3,595,000
2,420,000
305,076
316,235
327,432
-
-
-
882,508
912,107
1,023,721
900,240
1,123,547
1,253,185
27,132,768
29,506,947
47,639,077
45,443,433
47,271,549
61,200,719
273,575
(2,947,477)
(15,340,165)
(6,719,046)
(9,333,598)
(8,394,776)
1,840,995
3,049,657
1,648,258
7,111,644
5,149,453
5,308,513
(1,213,059)
(2,362,952)
(1,162,564)
(6,135,532)
(4,649,003)
(4,486,763)
1,405,000
5,700,000
8,935,000
9,155,000
7,620,000
6,935,000
18,461
254,245
357,684
289,321
111,630
239,309
67,120
53,267
15,453
19,485
20,563
35,932
2,118,517
6,694,217
9,793,831
10,439,918
8,252,643
8,031,991
$ 2,392,092 $
3,746,740
$ (5,546,334) $
3,720,872 $
(1,080,955) $
(362,785)
16.5%
11.3%
26.0%
12.2%
17.9%
13.9%
Table 4
•E
City of Cottage Grove, Minnesota
Assessed and Estimated Actual Valeu of Taxable Property
Last Ten Fiscal Years
Residential
Payable
Residential
Commercial
Agricultural
Non -homestead
Personal
Year
Property
Property
Property
and Other
Property
2019
$ 26,295,544
$ 6,402,547 $
764,841
$ 3,320,374 $
775,659
2018
23,982,857
6,113,919
747,876
$ 3,020,198
789,240
2017
22,141,063
5,623,028
785,628
2,740,566
716,347
2016
21,377,754
5,203,657
767,424
2,749,793
678,862
2015
20,730,170
5,093,035
776,575
2,609,305
633,787
2014
18,114,214
5,001,690
761,279
2,207,013
622,578
2013
17,241,606
5,076,716
700,036
1,920,395
612,076
2012
19,042,270
5,094,236
724,887
2,010,313
568,078
2011
21,316,906
5,120,056
778,196
2,003,968
550,999
2010
23,326,829
5,557,410
672,344
2,231,128
502,282
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.
170
Total Taxable
Real and
Personal
Property
$ 37,558,965
34,654,090
32,006,632
30,777,490
29,842,872
26,706,774
25,550,829
27,439,784
29,770,125
32,289,993
Fiscal Disparity
Contribution (Net)
and TIF
$ 4,619,334
4,094,931
3,967,785
3,557,397
3,544,899
2,264,989
2,134,831
2,626,702
2,775,315
2,268,060
Total Adjusted
Taxable
Value
i 42,178,299
38,749,021
35,974,417
34,334,887
33,387,771
28,971,763
27,685,660
30,066,486
32,545,440
34,558,053
Taxable
Assessed
Value as a
Percentage of
Taxable Value
1.24 %
1.24
1.25
1.23
1.23
1.21
1.22
1.22
1.21
1.10
Estimated
Actual Taxable
Market
Value
$ 3,407,440,600
3,125,587,600
2,889,152,300
2,790,852,600
2,705,975,400
2,396,493,700
2,277,900,700
2,464,372,900
2,695,641,900
2,924,191,800
Total Direct
Tax Rate
38.959 %
40.580
43.010
43.140
41.591
43.812
45.046
41.446
38.255
35.415
Table 5
171
City of Cottage Grove, Minnesota
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
(rate per 51,000 of assessed value)
City Direct Rate(1)
Overlapping Rates
Total City Direct
Washington
Fiscal Year
General
Debt Service
Rate
County
School District (2)
Other (4)
Total Overlapping
2019
35.025 %
3.933 %
38.958 %
26.682 %
34.926 %
3.994 %
65.602 %
2018
36.509
4.075
40.583
29.983
33.303
4.175
67.461
2017
40.156
2.856
43.012
30.448
34.309
4.345
69.101
2016
40.422
2.717
43.139
30.564
36.812
4.568
71.944
2015
38.886
2.705
41.591
30.186
35.675
4.182
70.043
2014
40.976
2.836
43.812
32.811
39.169
5.401
77.381
2013
42.665
2.381
45.046
34.225
41.285
5.637
81.147
2012
39.065
2.381
41.446
31.939
37.894
5.139
74.972
2011
34.500
3.755
38.255
29.772
35.216
4.715
69.703
2010
31.780
3.635
35.415
27.775
31.650
4.499
63.924
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
J
N
Table 6
Total Direct and
Overlapping Tax
Rate
104.560 %
108.044
112.113
115.083
111.634
121.193
126.193
116.418
107.958
99.339
Xcel Energy/NSP
3M Company
Hinton Heights -Minneapolis LLC
Wal-Mart Real Estate Business Trust
MN Pipeline Co
Mars II Inc.
Renewal by Andersen Corporation
PHS/Cottage Grove Inc
Menard Inc.
Hy-Vee Inc
Wag Farms Inc
Dayton -Hudson Corporation
Grove -Rainbow LP
Home Depot USA, Inc
Exchangeright Net Leased Portfolio 27
Soo Line Railroad Co
First Trust Co. of St. Paul
Total
Source: Washington County
J
w
City of Cottage Grove, Minnesota
Principal Property Taxpayers
Current year and nine years ago
Table 7
2019 2010
Percentage
Percentage
of Total
of Total
City
City
Net Tax
Tax
Net Tax
Tax
Capacity
Capacity
Capacity
Capacity
Value
Rank
Value
Value
Rank
Value
$ 707,224
1
1.76 %
$ 464,954
2
1.35 %
651,942
10
1.62
644,088
1
1.86
398,213
7
0.99
-
-
261,480
2
0.65
-
-
218,604
5
0.54
-
-
239,550
6
0.60
170,584
6
0.49
237,526
3
0.59
175,510
5
0.51
394,068
4
0.98
187,246
4
0.54
-
-
193,170
3
0.56
-
-
167,904
8
0.49
199,242
8
0.50
143,268
9
0.41
-
-
137,446
9
0.40
207,442
9
0.52
-
-
-
-
170,134
7
0.49
$ 3,515,291
8.75 %
$ 2,454,304
7.10 %
City of Cottage Grove, Minnesota
Property Tax Levies and Collections
Last Ten Fiscal Years
Taxes Levied for the Fiscal Year
Fiscal
Gross Operating
Debt
MVHC1
Year
Tax Levy
Tax Levy
Ag Credit (1)
2019
$ 14,100,682
$ 1,590,000 $
(7,213) $
2018
13,700,988
1,535,000
(7,072)
2017
13,798,587
985,000
(8,890)
2016
13,174,084
890,000
(9,707)
2015
12,526,600
875,500
(8,722)
2014
11,873,130
826,000
(5,947)
2013
11,585,100
656,150
(5,354)
2012
11,683,300
557,950
(4,762)
2011
11,035,100
1,206,150
(4,350)
2010
10,903,300
1,251,700
(4,637)
Notes:
(1) In 2009 a property tax classification appeal for one property owner resulted in a large abatement.
State Aid
Total Net
Cut
Tax Levy
-
$ 15,683,469
-
15,228,916
-
14,774,697
-
14,054,377
-
13,393,378
-
12,693,183
-
12,235,896
-
12,236,488
(690,152)
11,546,748
(629,015)
11,521,348
174
Collected within the
Fiscal Year of Levy
Percentage
of
Amount
Levy
$ 15,631,548
99.67 %
15,156,690
99.53
14,694,114
99.45
13,991,560
99.55
13,326,911
99.50
12,610,243
99.35
12,114,166
99.01
12,104,072
98.92
11,395,797
98.69
11,358,969
98.59
Total Collections to Date
Collections
Percentage
in Subsequent
of
Abatements
Years
Amount
Levy
$ (4,318)
$ -
$ 15,631,548
99.67 %
988
-
15,156,690
99.53
10,688
-
14,694,114
99.45
(6,717)
-
13,991,560
99.55
3,737
-
13,326,911
99.50
11,112
75,201
12,685,444
99.94
(21,952)
82,537
12,196,703
99.68
(23,267)
99,615
12,203,687
99.73
(25,901)
118,312
11,514,109
99.72
(33,547)
125,137
11,484,106
99.68
Table 8
175
City of Cottage Grove, Minnesota
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
General Obligation
General
General
Special
Other
Fiscal
Obligation Tax
Obligation
Assessments
Capital
Long -Term
Year
Increment Bonds(1)
Bonds(1)
Bonds(1)
Leases
Debt
2019
$ 1,363,191
$ 16,323,536
$ 22,941,943 $
-
$ 2,947,657
2018
1,625,926
13,103,649
24,189,529
-
-
2017
1,868,660
13,736,030
19,281,013
-
-
2016
2,096,395
4,660,000
20,679,730
-
-
2015
2,309,130
-
17,964,105
4,842,432
-
2014
2,516,865
-
13,140,768
5,158,667
-
2013
2,600,000
-
14,125,979
5,463,743
-
2012
2,735,000
-
7,332,245
5,615,000
-
2011
2,790,000
-
6,763,867
5,865,000
-
2010
2,830,000
-
13,832,649
6,110,000
-
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.
176
Table 9
Business -Type Activities
Other
Total
Revenue
Capital
Long -Term
Primary
Bonds(1)
Lease
Debt
Government
$
-
$ 43,576,327
-
-
-
38,919,104
-
-
-
34,885,704
-
-
-
27,436,125
609,856
-
-
25,725,523
717,221
-
-
21,533,521
824,586
-
-
23,014,308
1,036,584
142,696
900,000
17,761,525
1,456,067
-
900,000
17,774,934
1,814,178
-
900,000
25,486,827
Percentage
of Personal
Per
Income (2)
Capita(2)
2.07 %
$ 1,223
1.93
1,099
1.73
985
1.42
775
1.40
727
1.17
608
1.26
654
1.01
510
1.08
514
1.61
745
177
City of Cottage Grove, Minnesota
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
General Obligation
General
General
Special
Fiscal
Obligation Tax
Obligation
Assessments
Year
Increment Bonds(l)
Bonds(l)
Bonds(l)
2019
$ 1,363,191
$ 16,323,536
$ 22,941,943
2018
1,625,926
13,103,649
24,189,529
2017
1,868,660
13,736,030
19,281,013
2016
2,096,395
4,660,000
20,679,729
2015
2,309,130
-
17,964,105
2014
2,516,865
-
13,140,768
2013
2,600,000
-
14,125,979
2012
2,735,000
-
7,332,245
2011
2,790,000
-
6,763,867
2010
2,830,000
-
13,832,649
Table 10
Percentage of
Less: Amounts
Estimated
Available in Debt
Actual Taxable
Per
Service Funds
Total
Market Value (2)
Capita (3)
$ 3,224,138 $
37,404,532
1.10 %
$ 1,002
3,370,032
35,549,072
1.14
974
3,281,981
31,603,722
1.09
876
4,098,850
23,337,274
0.84
652
3,773,605
16,499,630
0.61
463
2,833,208
12,824,425
0.54
362
3,550,891
13,175,088
0.58
374
2,377,981
7,689,264
0.31
221
1,499,819
8,054,048
0.30
233
5,512,986
11,149,663
0.38
326
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.
J
00
City of Cottage Grove, Minnesota
Direct and Overlapping Governmental Activities Debt
As of December 31, 2019
Overlapping
Washington County
School Districts
ISD No. 200 (Hastings)
ISD No. 833 (South Wash. County)
Metro Council
Total Overlapping
City of Cottage Grove Direct Debt
Total Direct and Overlapping Debt:
Source: City of Cottage Grove Municipal Disclosure Reporting
Percentage of Debt
Net Debt Applicable
Outstanding to City
Table 11
City of
Cottage Grove
Share of
Overlapping
Debt
$ 136,685,000
12.5666 %
$ 17,176,670
78,137,524
13.5572
10,593,291
301,210,000
30.7839
92,924,225
178,860,000
0.9367
1,675,382
122,169,567
$ 43,576,327
100.0000
43,576,327
$ 738,468,851
$ 165,745,894
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.
179
Debt limit
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
City of Cottage Grove, Minnesota
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
2010 2011 2012 2013
$ 87,725,754 $
80,869,257 $
73,931,187 $
68,337,021
6,110,000
5,865,000
5,615,000
5,355,000
$ 81,615,754 $
75,004,257 $
68,316,187 $
62,982,021
6.96%
7.25%
7.59%
7.84%
Table 12
Fiscal Year
2014 2015 2016 2017 2018 2019
$ 71,894,811 $
81,179,262 $
83,725,578 $
86,674,569 $
93,767,628 $
102,223,218
5,085,000
4,805,000
4,660,000
13,240,000
12,645,000
11,690,000
$ 66,809,811 $
76,374,262 $
79,065,578 $
73,434,569 $
81,122,628 $
90,533,218
7.07%
5.92%
5.57%
15.28%
13.49%
11.44%
Legal Debt Margin Calculation for Fiscal Year 2019
Market Value (after fiscal disparities)
Debt limit (3% of assessed value)
Debt applicable to limit
Legal debt margin
$ 3,904,177,500
117,125,325
11,690,000
$ 105,435,325
181
City of Cottage Grove, Minnesota
Demographic and Economic Statistics
Last Ten Fiscal Years
Table 13
Per
Capita
Fiscal Personal Personal School Unemployment
Year Population(1) Income (2) Income (2) Enrollment (3) Rate (4)
2019
38,175
$ 2,500,210,040 $
65,493
18,554
2.7 %
2018
37,341
2,329,396,164
63,035
18,519
2.5
2017
36,492
2,213,900,353
60,669
18,165
3.3
2016
36,062
21105,690,772
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
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.
182
Taxpayer Employees
School District 833
1,591
3M Cottage Grove
730
Renewal by Andersen
700
Hy-Vee
340
Up -North Plastics
245
City of Cottage Grove
183
Werner Electric
180
American Distrinution & Manufacturing Co
163
Walmart
140
Target
135
Cub Foods
Menard's
Kohl's
Total
4,407
City of Cottage Grove, Minnesota
Principal Employers
Current year and nine years ago
Table 14
2019
2010
Percentage
Percentage
of Total
of Total
Rank
Employment
Employees
Rank
Employment
1
21 %
1,081
1
17 %
2
10
730
2
11
3
9
402
3
6
4
4
-
-
-
5
3
215
4
3
6
2
175
8
3
7
2
208
5
-
8
2
-
-
-
9
2
-
-
-
10
2
130
9
2
-
-
200
6
3
-
-
200
7
3
-
-
120
10
2
57 %
3,461
54 %
Sources:
City of Cottage Grove Annual Municipal Disclosure Reporting and Cottage Grove Economic Development Department.
00
W
City of Cottage Grove, Minnesota
Full -Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
Table 15
Budgeted Full-time Equivalent Employees as of December 31
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
General Government
Total General Government
21.76
21.76
22.06
23.38
23.40
23.25
25.70
27.60
28.20
28.20
Public Safety
Police/Cottage Grove EMS
Officers
39.00
39.00
39.00
39.00
40.00
40.00
43.56
46.84
46.84
46.84
Civilians
7.25
7.25
8.46
8.09
8.26
7.56
7.56
7.56
7.56
7.56
C Fire/Emergency Management
4.00
4.00
4.00
5.00
7.00
9.00
11.75
15.10
15.10
15.10
Total Public Safety
50.25
50.25
51.46
52.09
55.26
56.56
62.87
69.50
69.50
69.50
Public Works
21.56
21.56
20.83
21.68
23.68
24.08
22.12
23.73
23.49
23.49
Recreation
2.50
2.50
2.50
2.55
2.55
2.55
2.55
2.70
2.70
2.70
Ice Arena
2.60
2.60
3.20
3.65
3.65
3.65
3.55
2.60
2.60
2.60
Water/Sewer
8.36
8.36
8.23
8.18
8.18
8.28
9.28
10.08
10.08
10.08
Storm Sewer
3.40
3.40
3.54
3.54
3.54
3.54
3.54
3.50
3.50
3.50
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
1.06
1.06
1.06
1.06
1.06
1.23
1.23
1.23
Fleet Maintenance
3.84
3.84
4.04
4.04
4.04
4.04
4.04
4.00
4.00
4.00
Total
120.31
120.31
121.92
125.17
130.36
132.01
139.71
149.94
150.30
150.30
Source: City of Cottage Grove Finance Office
City of Cottage Grove, Minnesota
Operating Indicators by Function/Program
Last Ten Years
Table 16
Fiscal Year
Function/Program
2010
2011
2012 2013
2014
2015
2016
2017
2018
2019
General Government
Elections
2
2
2
2
4
1
Registered voters as of 7 am election day
20,607
21,119
20,780
21,594
22,076
22,689
Number of votes cast
13,345
19,727
11,166
19,799
17,369
2,559
Voter participation (registered)
64.76%
93.41%
53.73%
84.50%
75.00%
11.28%
(elections are held every other year)
Community Development
Inspections
Building Permits (New Dwelling Units)
89
49
53 56
77
65
99
255
185
284
Code Enforcement Inspections
1,447
1,276
2,407 2,826
1,482
1,013
841
1,018
1,119
803
Public Safety
Police
Crimes -Partl
674
694
756 783
774
719
673
767
619
619
Crimes - Part lI
2,055
2,117
1,614 1,473
1,434
1,419
1,424
1,471
1,358
948
Total Calls for Service
20,104
20,707
17,348 18,151
18,448
20,576
21,331
20,879
22,647
20,375
Fire
Medical
1,968
2,000
2,347 2,437
2,562
2,464
2,681
2,790
2,914
2,950
Fire
643
456
295 280
301
290
279
280
307
256
Avg Response Time (minutes) Medical*
n/a
8:38
6:51 6:15
6:19
6:13
6:21
6:25
6:25
7:17
Avg Response Time (minutes) Fire*
n/a
8:24
8:04 7:25
7:34
7:06
6:54
7:05
7:13
6:08
Avg Response Time (minutes) Both*
9:01
8:36
6:59 6:22
6:27
6:16
6:24
6:28
6:54
7:03
*Entire service area
Public Works
Sq. Yards of Streets Sealcoated 349,349 382,374 488,210 457,275 199,725 118,159 193,249 71,152 0 0
Miles of Streets New Construction 0.26 1.12 0.30 1.23 1.99 0.56 1.11 1.02 4.82 2.80
Miles of watermain added 0.39 0.63 0.79 2.42 1.84 1.06 1.20 3.64 4.30 4.52
Source: Various City of Cottage Grove Departments
Notes:
(1) Information not available is labeled n/a.
00
Function/Program 2010
Public Safety
Police
City of Cottage Grove, Minnesota
Capital Asset Statistics by Function/Program
Last Ten Years
Fiscal Year
2011 2012 2013 2014 2015
2016 2017 2018
Table 17
2019
Stations
1
1
1
1
1
1
1
1
1
1
Patrol units
12
12
12
13
13
13
13
13
16
17
Fire
Stations
4
4
4
4
4
4
4
4
3
3
Fire trucks
6
6
6
6
6
6
6
6
6
5
Public Works
City-ownedlLights
2,279
2,320
2,345
2,416
2,481
2,495
2,592
2,682
2,797
2,898
Xcel ownedlLights
301
301
301
301
301
301
301
301
301
301
Streets (miles)
155.71
156.83
157.13
158.36
160.35
160.91
162.02
163.04
167.87
170.67
Sidewalks/trails (miles)
46.40
48.25
48.61
53.82
57.83
59.56
61.98
64.87
70.06
75.55
Parks (acreage)
Community parks
377
377
377
377
377
400
400
400
400
400
Neighborhood parks
201
201
244
275
303
275
275
275
275
275
Recreation facilities
21
21
21
21
21
15
15
15
15
15
County parks
571
571
571
571
571
569
569
569
569
569
State scientific and nature area
238
238
238
238
238
238
238
238
238
238
Golf course
219
219
219
219
219
219
219
219
219
219
Other open space
453
453
453
581
581
961
961
961
961
969.8
Water
Number of connections
10,423
10,474
10,538
10,573
10,640
10,706
10,789
10,891
11,160
11,212
Miles of water mains and laterals
143.24
143.87
144.66
147.08
148.92
149.98
151.18
154.82
159.12
164.24
Sanitary Sewer
Number of connections
10,382
10,433
10,486
10,532
10,604
10,670
10,667
10,983
11,256
11,521
Miles of sanitary sewer mains and laterals
127.02
127.58
127.99
129.32
131.11
131.45
132.81
135.42
139.51
142.42
Storm Sewer
Miles of storm sewers
78.07
79.50
80.39
85.41
87.81
89.52
93.94
98.75
106.39
111.18
Source: Various City Departments
00